It's the people, stupid!

I was just reading an article about skype failing to meet Ebay's expectations. It seems that this aquisition was not such a good idea as it is not performing as much as expected. Mergers, acquisitions, fusions, partnerships... All the business development concepts more often fail than succeed. Why? here's my little explanation:

When you start a partnership with someone, you may have three different approaches:

it makes sense approach:
- I am selling flight tickets, you sell airport picks up => boom, let's partner and offer airport pickup once a ticket has been purchased
- I am selling coffee, you are selling music => let's have it together and create coffee shops with music you can buy on spot!
- I am renting ski chalets, you rent ski equipment => let's partner and cross sell our services

we like each other and we think we can go great things together approach
- You and I want to create a company. You're in IT, and I'm in marketing => boom, let's open up a business
- I define business this way, so you do => let's partner together on this

It's interesting to note that, for some logical reasons, we tend to go for the rational approach (approach#1): we have products that are similar/complementary, so let's work around this. The problem with this approach is that we do not take into account the people that are going to work together on the partnerhsip. And you can have the best idea ever, if the execution is less than average, then the results can be catastrophic. Were eBay and Skype 's company's cultures compatible? Future will tell. If you take the Apple+Motorola example (RockR mobile phone), the incompatibility was certain and the products failed miserably.

The other approach is probably what Google has been during over the last 36 months. Buying lots of startup companies with talented and entrepreneurial "geeks". Same people as Sergey and Larry in a way. I am not saying they buy the companies regardless of the startup itself, no. But I would bet that Google bets much more on the people "they are acquiring" than the idea.

I guess, the very best is to mix both approaches. If you manage to have complementary products and people with full compatibility, then you are highly likely to succeed.

A very complete article on this topic.