Hacker News

If that was good business then presumably the brand could have done it at some point during their long slow decline?

Arguably, they're a better choice for customers than a shutdown.

I mean, they're at least keeping the service alive for as long as possible.

Think of it as a perpetual bond with declining coupon payments.

Customer "inertia" or "lock-in" might be better terms to describe what the company is looking for in an acquisition.

Their ideal customer may well be someone who's forgotten they have a subscription on credit card auto-pay.

BendingSpoon isn't PE because they are not attempting a restructure to then exit out of the asset within a defined time period.

When BendingSpoon or IAC acquired an asset, it's meant to be held by them in order to augment their existing portfolio.

M&A isn't the hallmark of PE - restructuring an asset in order to exit out of it at a profit is.

The classic PE monetization strategy is to acquire an underperforming asset, restructure said asset, and then exit the asset at around 20% IRR.

BendingSpoons on the other hand is a holding company that is acquiring and consolidating stagnant but large SaaS platforms into a single mega-platform.

The economics are different as are the operational and organizational structures.

BendingSpoons isn't a PE fund. It's just loose terminology that has become rife on HN like the misuse of "VCs".

Pre-bending spoons Komoot was a beautiful app and community. You could operate it one handed with your brightness turned all the way down and easily get the info you needed. Now when I pull it up mid ride to route home I have to click through multiple upgrade to premium pop ups with tiny exit crosses. All good things etc etc

is firing staff after acquisition inherently bad if it's the same staff/management that led to the app being devalued and losing users in the first place though

I wish they'd buy Spotify...

Keep one SRE to keep the servers running, one guy to do security updates to the app, and the team that acquires rights to music.

They do claim to be shipping new features to their acquired apps. Look at their website. It's got lists of such things.

The steelman case for this is something like, mature apps that found product market fit are often over-staffed and doing a lot of duplicated work. You could get five of them together and consolidate their infrastructure/code to reduce costs, and have generalist devs who can work on any of those codebases. Then you need fewer people.

So this isn't an irrational thing to do. It's commonly done by firms like Google or Meta where they buy a small company and then rewrite it onto their own infrastructure to reduce costs. Sometimes the engineers are reallocated to other projects, or things drift and there are eventually layoffs. Google bought DoubleClick and then laid off 50% of the staff! Twitter didn't consolidate products but was clearly overstaffed, nobody imagines that Twitter was unique.

So the bull case for this is that it's finding efficiencies. The apps may not be the shiniest hottest things anymore, but they can still live on and be maintained if they're run more efficiently as a business. And yes this may involve layoffs or price rises, as often software startups hopelessly misprice their product and prefer to burn VC money than lose users or colleagues. Managers who aren't emotionally attached to the product or company can correct this, putting it on a long term stable path. That may suck for the user but probably sucks less than the company being under, or being acquihired and the product totally shut down.

While I agree that their specific approach sucks, I do wish more companies would declare products as "done" and stop messing with the UI and changing features every quarter, and just go into a long-term stability mode.