Will my startup make it big?

In current scenario, acquisitions is no more the magic word as it used to be till last year. I tried to think through some of the basics on why small and simple ideas make it big. I could come up with following two cases.

CASE 1

• Company A does not have a business model, but has users
• Company B has some users and a sound business model. The model works such that it is function of number of users.
• A’s product is not very effective standalone, but is very helpful if placed along with B’s. It is another cog in B’s wheel.
• B realizes that putting A in the wheel will increase the speed of the wheel.
• More the speed(user base) of wheel, more distance(revenues) it covers.
• Thus B should get A in its compund.

CASE 2

• Company A has users but no substantial revenues.
• The revenues of A are function of its users.
• A does not have bandwidth and muscle to monetize.
• Their revenues offer a proof of concept for the fact the users can generate some revenues.
• B has muscle and bandwidth to generate more revenues from these users.
• B can sustain that bar for the inflection point.
• B should be friendly with A.

Advice :-

With increasing user base, the cost of acquisition also increases. Thus the best thing is to spot A early and cheap.

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