Nat Friedman: prediction

Transcript context

…The reason you acquired GitHub, as you said, is that there seems to be complementarity between Microsoft’s and GitHub's missions. And I guess that's been proven out over the last few years. Should there be more of these collaborations and acquisitions? Should there be more tech conglomerates? Would that be good for the system? I don't know if it's good but yes, it is certainly efficient in many ways. I think we are seeing a collaboration occur because the math is sort of pretty simple. If you are a large company and you have a lot of customers, then the thing that you've achieved is this very expensive and difficult thing of building distribution and relationships with lots of customers. And that is as hard or harder and takes longer and more money than just inventing the product in the first place. So if you can then go and just buy the product for a small amount of money and make it available to all of your customers, then there's often an immediate, really obvious gain from doing that. And so in that sense, like acquisitions make a ton of sense. And I've been surprised that the large companies haven't done many more acquisitions in the past until I got into a big company and started trying to do acquisitions. I saw that there are strong elements of the internal dynamics to make it hard. It's easier to spend $100 million on employees internally to do a project than to spend $100 million to buy a company. The dollars are treated differently. The approval processes are different. The cultural buy-in processes are different. And then to the point of the discussion we had earlier, many acquisitions do fail. And when an acquisition fails, it's somehow louder and more embarrassing than when some new product effort you've spun up doesn't quite work out as well. I think there's lots of internal reasons, some justified and some less so, that they haven't been doing it. But just from an economic point of view, it seemed like it makes sense to see more acquisitions than we've seen. Well, why did you leave?…

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