This week IBM announced that it has acquired two startups, Explorys and Phytel. These companies work in the area of health-focused data-analytics which is an area that IBM want to grow in. The terms were not disclosed. This sort of story is becoming increasingly common.
There has been a boom in startups around the world and particularly in the UK. Often people ask whether this is sustainable. However, it's not just as simple as startups either succeeding and continuing or failing and disappearing, along with the hopes and dreams of founders and investors. Sometimes they merge as markets mature and sometimes they are purchased by large corporates and brought into their structure.
In the old analogue days if you wanted to work for a large corporate you had to work hard in your education, choose the right degrees and get the best possible grades. This is how you proved that you were made of the right stuff and, in some cases, the best candidates could command superb packages from the employer and even a Golden Handshake - a bonus for joining.
That still exists, but there is now another way in to the top corporates. A start up does not need to be financially successful, it can simple own the rights to technology or intellectual capital that the corporate wants. In creating this the founders demonstrate their skills before the corporate commits to them. It is the perfect way to assess a potential employee.
Some ask whether entrepreneurs can make good employees, but that is an outdated way of thinking. Many modern corporates are very entrepeneurial environments and many founders are still so young that they are not habitually entrepreneurs.
Startups now are typically built on ideas rather than traditional assets. Things have changed, and old assumptions no longer work. We have moved on from the days of the entrepreneur passionately building their own dream over a lifetime and sometimes there is a different agenda. It makes a lot of sense.