In recent tweets from his heavily followed Twitter account, Shervin Pishevar, one of the most respected venture capitalists in the world of technology, said that the entire future of the U.S. tech startup economy is being put in peril by the heavy-handed tactics of the Big Five tech monopolies. He elaborated that one of the main ways that these monopolies were abusing their crushing power in order to annihilate startups before they become a threat is through the use of vicious lawfare tactics.
By deploying lawsuits against innocent victim firms, Shervin Pishevar says, these tech monopolies are able to use the court system as another one of their tentacles, suffocating the victim company of all of its operating capital and sucking the lifeblood out of its veins. This is, according to Shervin Pishevar, a form of economic and legalistic terrorism. And it is designed, in part, to prevent others from even attempting to start firms that could violate the hunting grounds of these rapacious predators.
But Shervin Pishevar also points to another area and a radically different tactic that is also deployed, with equally deadly effect, to the problem of snuffing out startups before they’ve left the crib.
Silent assassination through strategic acquisition
Pishevar says that greed and the lust for power and fame are sins that the tech monopolies often use to their advantage. The founders of startup companies are often still quite young. Many have never even held a job before. These young entrepreneurs who develop technologies that are viewed as potential competitive threats by the Big Five often find themselves being wooed with offers of buying their new startups for $5 or $10 million. To people fresh out of college or who have never made serious money, these seem like life-changing amounts. And that is because they are.
Such offers often result in startup firms being completely bought out by the monopolists. Then, the technologies that would have been competitive are either incorporated into the monopolies’ business or they are outright shelved. Both results typically result in a poorer customer experience and the loss of value.