Fab.com acquires True Sparrow - what it means for Indian web development businesses
9th November 2012

I first read this article a few days ago, an interview in Inc magazine of Jason Goldberg, founder of fab.com in which he mentions his Indian web development team several times.
http://www.inc.com/magazine/201210/liz-welch/the-way-i-work-jason-goldberg-fabcom.html

Today morning I read this story on Medianama
http://www.medianama.com/2012/11/223-fab-com-acquires-pune-based-true-sparrow-systems/

Why this interests me is that this might be a trend of big dotcoms buying out their Indian web design partners. This is, of course, quite common in the Indian software industry where large overseas companies gobble up smaller Indian tech cos but seeing the same with dotcoms and Indian web design firms is interesting.

Being an indispensible partner for the big dotcom can have big pay-offs

Judging from the above interview with Jason Goldberg, his Indian team is an indispensable part of Fab.com's growth and development process. One of the first things he does in the morning is spend time talking to the Indian team and planning strategy for the website. This means that the Indian team clearly has given top value to fab.com. Being acquired and assimilated into the mother company was the next natural step forward. Excellence has its rewards.

This is a different twist on outsourcing - outbuying perhaps??

Outsourced web development deals are one of the major sources of income for many Indian web design firms, some whom rely exclusively on these kinds of projects for sustenance. But this signify a trend where once the partner has proved themselves the foreign firm simply buys off the outsourcing firms and perhaps in the long run it might even turn out cheaper.

Will it work out in the long run? Will the motivation to perform remain?

As a small business owner I know how it important motivation is to running and growing a business. Founders thrive on the knife's edge with each project and each client being important to survival. Will being acquired affect the motivation factor to deliver at the same level or will it foster complacency? Will the Indian company's founders remain or will a new management team take their place? I guess only time will tell.

Selling out is perhaps not an option for many Indian web design firm owners

I must admit, many times, selling out and moving to the beach seems like such a great proposition. However MiracleworX has been our baby for 10 years and we've become used to doing things our way. Putting it under someone else's management seems weird. We also enjoy the variety of work that different clients provide us. Each one brings its unique challenges. Being beholden to a single client and a single website does not appeal. Although in the case of fab.com, the Indian partner was exclusive from the beginning.

Lesson for Indian web design and development owners?

I am reminded of the line from the movie 'Three Idiots', (I am paraphrasing here), "Don't strive for success, instead strive for excellence, if you strive for excellence, success has to follow eventually?. We need to be the best in the world, raise standards and become an indispensable part of our clients businesses. We may sell out, or get invested in or remain small and profitable, no matter the reward, excellence is a sweet reward in itself and at the end of the day if we can feel proud of our work and our contribution - then that's all you need.

Cheers,
Ron

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