Guy Who 'Hates To Be A Curmudgeon' Explains Why Yahoo Buying A 17-Year-Old's Startup For $30 Million Makes No Sense

stressed, student, millennial, gen y, sad, angry, emotionalNote: This is not Vibhu Horby. He just looked very upset.

When a startup sells for multiple millions, other founders are left reeling.

“Why him, not me?” they wonder.

One Y Combinator founder, Origami’s Vibhu Horby, vented publicly about this in a post that rose to the top of Hacker News over night. His article, “The Summly deal makes no sense” details Yahoo’s acquisition of 17-year-old Nick D’Aloisio’s startup for $30 million.

“I hate to be a curmudgeon, but I think Yahoo shareholders deserve an explanation,” he wrote. “It’s not clear at all to me that they are getting their money’s worth.”

Although Horby is envious, he makes some valid points.

  • Summly doesn’t make any money
  • Summly doesn’t have one million users
  • Only two of its five employees passed a Yahoo technical/CS screening test.
  • Yahoo doesn’t plan to use Summly. It plans to shut down the app. So it really spent all that money to acquire a teenager and a colleague or two.

Understandably, Horby is confused.

“The craziest thing is that there are a lot of really qualified, CS-beefy teams doing really amazing things in the mobile news/discovery space these days – and that would definitely take a $30m acquisition offer or less,” he writes. “I don’t really understand why they picked this one.”

We’re not sure either. Here’s our best guess into Yahoo’s thought process.

  • D’Aloisio is a hustler. His investor list includes Airbnb CEO Brian Chesky, Zynga CEO Mark Pincus, Lady Gaga’s manager Troy Carter, Automattic’s Matt Mullenweg, Ashton Kutcher, Wendy Murdoch, and Yoko Ono. 
  • It’s possible that, in addition to wanting D’Aloisio’s hustle and teenage, One Direction-y good looks for a marketing spokesperson position, Yahoo wanted to make all those big names in California happy.
  • Yahoo also knew acquiring a 17-year-old’s startup would get a lot of press. 
  • Marissa Mayer has spoken publicly about her acquisition strategies, and Summly fits the bill. It’s a mobile app, and Mayer is looking to onboard mobile talent. It was also a relatively cheap acquisition.

Is Summly worth $30 million? Probably not. But that makes the win even better for D’Aloisio (who wasn’t even born yet when Yahoo was founded) and his investors.

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