One problem with products made by startups is that they have short life-expectancy. Even if a startup succeeds and is acquired, often their products go into maintenance-mode and die. There are countless examples of successful startups whose products have stagnated and died: EtherPad, Stypi, Cloudkick, Slicehost, Sparrow. Just look at Google and Facebook’s acquisitions. These are successful acquisitions, but the percentage of dead products is startlingly high.
This problem doesn’t just affect the customers of these products, it poisons the well for all startups. It’s hard to get off the ground if people are worried your company will die. It’s harder still if they’re also worried you’ll leave them out to dry after acquisition.
Because of this, I’d like to suggest that startups have a responsible product sunset pledge. Here are some guidelines:
- If acquired, keep everything running for a while. For most products, a year makes sense.
- Give plenty of notice before shutting things down. 6 months seems reasonable.
- Make it possible for anyone to run a fully-featured instance of the product. This means releasing the source code and documenting how to set-up and run your product. I realize startup code and architectures are seldom clean, but you should work to make set-up reasonably painless.
- Liberate customers’ data. Build export APIs and scripts to consume them.
Pledge to do these things and you’ll probably help your own business. If enough companies have pledges, it will raise customers’ expectations for acquired startups. Of course none of this would be legally binding, but it’s better than no pledge. People don’t like to break their promises.
- I am not a lawyer and this is not legal advice.