Why do startups struggle after being acquired by giant companies like Yahoo? They’re forced to focus on integration instead of innovation:
“When a new startup comes into an established company, the first wall it typically hits is CorpDev, or corporate development: the group within a business that manages change. CorpDev is usually charged with planning corporate strategy—where a business will grow or shrink, the markets it will enter or exit, and what kind of contracts and deals it may strike with other companies. It often oversees acquisitions. It plans them. Approves them. And then it sets the terms.
“When a big company gobbles up a smaller one, only a fraction of the money is handed over up front. The rest comes later, based on the acquisition hitting a series of deliverables down the road. It’s similar to how incentives are built into the contracts of professional athletes, except with engineering benchmarks instead of home runs.”