May the Salesforce (dot com) be with you
When Radian6 was acquired last year, a number of folks in government and in economic development fretted that Salesforce.com would end up shutting the NB operations down and moving what was left to its head office in the United States. In fact, I was in a meeting where a prominent government official was visibly upset by the acquisition. With a slightly different point of view, I said (in that meeting) that this was one of the most important FDI announcements in New Brunswick’s history.
This insular attitude is not new. I heard it when GTech bought Speilo – they would just close the Moncton operation down. They have expanded it. When Whitehill Technologies got acquired, we were told it would be shut down. Thomson Reuters just announced an expansion.
I could rhyme off a dozen examples but you get the point.
Now Salesforce.com planning to hire another 300 workers in New Brunswick.
There will be cases when multinational firms purchase a New Brunswick firm and eventually shut it down. That has happened before and it will happen again but I have crunched the numbers on this many times – companies that are started in New Brunswick and don’t get acquired by an outside firm are far more likely to go under than those that are acquired. The IT industry boneyard in New Brunswick is filled with big idea companies that did not survive. And that’s okay. Businesses fail all the time. But we need to understand the importance of New Brunswick linking into the global economy. If a firm can start here and go global – without being acquired – that’s great too but in many cases, the best path forward is through tying up with a bigger firm with established markets.
And, worst case scenario, a firm like Salesforce.com does shut down Radian6 in New Brunswick. The value created from the sale still remains. The tens of millions of dollars stays in New Brunswick and gets recirculated into other investments here. The big payout to the NBIF will be used to fund more new innovative startups.
And you can’t buy the brand building. George Donovan, CEO of Gogii Games, says his contacts in Silicon Valley are asking him “what’s going on in New Brunswick” – after the Radian6, Q1 Labs and other deals.
May the force be with you.