Dataguise Dying Giant IllustrationDying Giant Illustration (Courtesy of Steve Cox)

In the last three months, three of our top five competitors have been acquired.

Competitive acquisitions can be an earth-shattering event in the life of a startup. Perhaps not unlike Draft day speculation and mock-draft predictions in professional sports, the who’s gonna buy whom predictions, strategizing, and gameplay can leave you more up, down and spun around than even what the next six month sales pipeline looks like.

What can be devastating is when a key partner that you need to sell with (or through) buys your competitor. In one near-fatal blow, you lose your oxygen to selling to that market/customer base. Especially when that acquirer has a significant share of the market. For example, Salesforce’s 2014 acquisition of RelateIQ automated data collection meant very very bad things for other data optimization startups optimized for the world’s largest SaaS CRM platform. You’re screwed when this happens and you literally have to instantly examine drastic pivots, like how to immediately shop/sell yourself to Salesforce’s #2, or how to immediately grow/sell to new markets outside the reach of your primary newfound competitive enemy/giant.

Of course, what can be a sheer toe-tapping delight is when the opposite happens, a dying giant buys your competition. A dying giant in this case would be a large, unclear-what-to-call them, unclear how they will ever substantially grow again, or even simply stop the withering product and technology core. Think HP. Think CA. Think IBM. (And maybe in 3-5 years, SAP, Oracle, Teradata, and dare I say it, Cisco)

Like those traded athletes, no doubt there must be some internal rationalizing going on in both the dying giant and the acquiree, that these new combined forces will revitalize or accelerate sales paths, but for the employees headed there, it’s got to be tough. And for the customers (e.g. fans) who had staked a claim, took a risk on a small startup, with the expectation of fast, breakthrough, repeated innovation, BigCo acquisitions have to be a tremendous let down.

Consolidation and acquisition is a natural condition in the world of the venture backed enterprise software startup. But with dying giants buying three of our competitors, we couldn’t be happier. Our ability to compete, innovate, and win deals looks better than ever.