Extremely useful article about nature of startups and hiring. Why big companies buy startups? Where are the benefits? Paul Graham thinks that this is one of the best way to do hiring and inject a fresh blood into the company.
"The central problem in big companies, and the main reason they're so much less productive than small companies, is the difficulty of valuing each person's work. Buying larval startups solves that problem for them: the acquirer doesn't pay till the developers have proven themselves."
"Buying startups also solves another problem afflicting big companies: they can't do product development. Big companies are good at extracting the value from existing products, but bad at creating new ones."