It blows my mind that a chat client is worth over 26 times what Boston Dynamics is.
The number of active users is one of the most enticing metric a VC firm can lay its eyes on.
Edit: For context, the parent comment is talking about Salesforces' acquisition of Slack [0]
The concept of how moats work in the context of a social app vs how to monetize it is well understood.
Also I'm not saying that the price of Slack was fair. It's entirely possible that the purchase will be a regretful one for salesforce, similar to the regrets that Tumblr's buyer must have felt.
Value for WhatsApp comes from the fact that it threatened Facebook's business model. If people use other than their products they have an issue. There is also an option for revenue growth (not only ads, but also payment processing etc.) Question is how that will play out with current outcry regarding Terms of service changes ... whether that will have an impact. But for Facebook certainly valuable decision.
Slack and Salesforce is more interesting. There is of course the market - others tried to acquire Slack as well, driving the price up. How much it will bring Salesforce (also in Cross-Sales "hey, want some CRM which integrates well with Slack? We have something!") is to be seen ...
a) Slack has 5x as many employees, global market share, consumer ubiquity, etc. It’s simply a bigger entity (in the same way that Home Depot is a more ‘boring’ business than slack but 15x larger in valuation)
b) Boston Dynamics is in many ways a research lab rather than a for-profit company. In research and the arts, things might be nominally inexpensive but their real value is priceless.
Being bought for the users (as with Salesforce buying Slack) vs being bought for the knowledge and tooling (many of Apple’s acquihires come to mind).
Corporate M&A seems especially affected by misperception and bad incentives. Executives often want to expand their kingdoms, even at the expense of shareholders. They also suffer from "shiny new object" syndrome - buying whatever's sexy.
Potentially worse, there's the "winner's curse" in auctions. About 7 years ago, Joseph A. Bank tried to buy its larger competitor, Men's Wearhouse. Men's Wearhouse then surprised Bank's execs by making a counter-offer. They got into a bidding war against each other, neither side wanting to "lose," with Men's Wearhouse "winning" by buying its smaller competitor for $1.8B. And we know, even pre-pandemic, how that story turned out!
Point is: don't weigh too heavily what other people will pay for a company today... weigh more what your analysis suggests the company will produce in the future (not what other people will pay in the future).
There are lots of ways to determine value. I do not think that we are ever going to come to a consensus on the best one, but at least we can strive to understand and be understood.
What's the balance sheet of the company? What's its profit? What's its potential for growth and rise in profit? How desperate are the current owners?
To put a more positive spin on it: for roughly 1/26th the cost of another chat client we could have twice the scary robots.
There are a lot of similar things that we spend a relatively large amount of time talking about but don't actually cost that much in the grand scheme of things (fundamental science, alternative energy, and presidential elections, to name a few).
Just to give some numbers:
- SpaceX in 2019: 46 billion
- ITER: 22-65 billion
- LHC: around 20 billion
- ISS: 150 billion
(with the caveat that numbers for publicly funded projects are very difficult to pin down given the diversity of funding)
Basically all the projects that are slowly pushing us toward the future we read read about in science fiction are on the order of the cost of a chat client (the ISS being the outlier as one of the most expensive public projects in history). To me that's cause for optimism.
There are definitely some exceptions, but most web devs I have met are glorified technicians stringing together apis while reading medium posts.
I’m not even sure just how much IP BD actually has that is truly unique, this doesn’t seem to be something very easy to patent in an enforceable manner.
BD isn’t something that’s easy to scale and dump on someone else this isn’t the type of company that VCs are really interested in these days.
I can imagine Boston Dynamics stepping into arbitrary dangerous situations ranging from construction to rescue to military to mining to anything else.
Slack's tech moat is minor, network effects are not considerable (not enough companies using slack to connect to third parties) and Microsoft is destroying them.
If they continue chugging along I can see them generating many, many more billions of dollars of value.
This is a problem solved since late 1990s and is now well into extracting the diminishing returns phase. The market for chat applications is nearly zero sum game for a while.
In case of Slack, its continued losses every year is a good indicator of its zero value.
If I had $10 million to make something new, I might well build a hospital. I don’t claim deep knowledge of either industry, but I suspect that survivorship bias colors the lucrative casino examples we are thinking of. In contrast, a few hours with Google maps could probably turn up a reasonably profitable site for a new hospital, just based on ballpark supply and demand