Say Mark Zuckerberg called you one day and said he wanted to buy your startup. Here's the catch: Facebook was planning to kill your company's signature product because it was too competitive with something they were also building. What would you do?
If you were Dalton Caldwell, founder of App.net, you would reject the offer and follow up with a scathing letter accusing Facebook of bullying and back-stabbing.
In a missive Caldwell posted to his personal blog Wednesday, the 32-year old entrepreneur recounts a meeting on June 13 with a handful of senior Facebook execs. Leading up to meeting, Caldwell had spent a year building an app atop the Facebook platform that aims to help users find which apps their friends are using on Facebook.
He agreed to give the execs a gander, in the hopes that Facebook would assist him with the product's upcoming launch. Instead, they said the app was competitive to Facebook's newly released App Center. The execs then tried to give Caldwell an offer he couldn't refuse: Sell your business to Facebook, allow the App Center to swallow up your baby, or we'll crush your company.
"I was not interested in an acqui-hire," Caldwell wrote in his letter, titled "Dear Mark Zuckerberg." The irritated developer argued that the company's threatening "M&A formula" is poor form. “Bad-faith negotiations are inexcusable, and I didn’t want to believe your company would stoop this low,” Caldwell added. "My mistake."
Above all, Caldwell laments that social networks like Twitter and Facebook are no longer open platforms upon which entrepreneurs can build businesses. In their fight to gobble up revenue, Caldwell claims the sites are shutting down innovative apps that are lucrative for outside developers, but not for the companies themselves.
In the aftermath of Caldwell's missive, Marc Andreessen, a noted Silicon Valley venture capitalist who sat on the boards of both Facebook and App.net's parent company, reportedly removed himself from the latter to avoid conflicts of interest.
Facebook has previously convinced hot technology startups to join its growing empire. Check out some of the other Facebook talent grabs in this slideshow of Top Tech 'Acqui-Hires':