In 2000 Reed Hastings flew to Dallas and offered to sell Netflix to Blockbuster for $50 million. Blockbuster's CEO laughed him out of the room. Why would the dominant video-rental empire pay for an unprofitable mail-order DVD startup? A decade later Blockbuster was bankrupt and Netflix was worth billions.
The principle: When a small threat asks to be bought, it is offering a much better price than it will charge later. Dismissing it from a position of strength is exactly the position from which the dismissal is most dangerous — because you can afford the deal and you assume you don't need it.