peHub‘s Dan Primack spoke with Reuters about a new kind of startup that’s designed to develop an idea and then be snapped up by a larger company.
As Primack explains, these startups differ from the traditional sort in that they tend to be interested in creating targeted web services or applications rather than conventional companies with longer-term growth ambitions.
“The hope for these companies isn’t to create the next Google or the next Cisco, the goal is to create a little application that Google or Cisco or Facebook or Twitter wants and then will purchase,” he explains.
Primack says startups of this new variety are often cheaper to start and run, and tend to realize revenues very quickly because they are designed to create a one-off service.
Many have been reared by Y Combinator, a Silicon Valley-based venture outfit that invests in young startups and helps them fine tune their applications or services.