Monday, April 30, 2012

Three Takeaways From the Instagram Deal

As the dust settles on the $1B Instagram deal, every entrepreneurial ecosystem is now reflecting on the impact of the deal and what it means for their local entrepreneurs. Yes, it is true that there will be a wide variety of unique perspectives on the deal, with different takeaway points. Here are a few that I think are relevant for the entrepreneurs and startups in the Research Triangle:

1. Corporations Seeking Acquisitions (not competition)

The previous batch of startups turned mega corporations (Think Facebook, and before that, Google, and their ilk) are all grown up and are geared for growth through acquisitions. This is great news for entrepreneurs. The deal signals to the market that these companies are serious about growth and are ready to put their money where their mouth is. Being closer to the startup mentality (more than the likes of Microsoft and Apple), these new titans are fighting for position and to stay ahead of the curve.

2. VCs See the Opportunity

VCs are surely taking note. There is serious value to be created in our current batch of sapling startups. One VC made 312 X their money (and, if you can believe it, many people were upset that they didn’t make more on the deal). This is something you don’t see everyday (kind of like pitching a perfect game in baseball). A $1 Billion acquisition could mean bubble, but I believe it means that large and mid-sized companies are willing to pony up to add value to their shareholders. This is an exciting trend for entrepreneurs and investors alike, knowing that the Facebook’s of the world are strategically willing to buy rather than compete.

3. Mobile is HERE. For good.

People used to say “mobile is arriving” or “mobile is growing.” Well, guess what: mobile has arrived. Whether you are a nonprofit, a startup, or a medium-to-large organization, you need to be planning your mobile strategy, and you need to be doing so pretty much last week. The future is in mobile computing. The very nature of how people interact with brands, products, and technology is shifting into the palm of our hands. A great primer piece with relation to this deal is contained in a wonderful article on TechCrunch, showing that this deal is more about mobile than it is about Instragram.  

What do you think? How has the Facebook-Instagram deal affected the way you are planning for your company’s future? Are you thinking about positioning to become an acquisition target?

About the Author

Nick Jordan is the founder and managing director at Smashing Boxes, his fifth company. Nick is a contributing writer for the CED Start Something Blog, and if he was a pirate he most definitely would say "ARRRRR." 

If you like this post, you may also enjoy Nick's other posts, like this one about his first startup in the Triangle and what he learned from failure.

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