I wouldn’t touch an iRobot (or any camera vacuum) after their camera scandal: https://www.technologyreview.com/2022/12/19/1065306/roomba-i...
The new Xiaomi versions now even sport extendible arms to reach corners fully.
If they work, you’d not feel the pressure to upgrade.
Includes robot vacuums: https://www.teslasmart.com/smart-vacuum-cleaners
Why assume that original comment was talking about the car manufacturer when there are robot vacuums from a much older company branded like that?
You have a whole bunch of Chinese companies fighting it out on the market (as the founding fathers would have wanted for US!), offering better and better products, leaving Roombas in the dust. While iRobot sleeps on their laurels, barely innovates and at best is only capable of solving their flaccid inability to compete by... being sold to a monopolist which can push it via their store. That's what they wanted.
If US would still have this kind of healthy market of multiple (smaller) companies competing on product, not IP lawsuits and patents, the government wouldn't have to enact foreign sanctions to defend the economy.
I feel there is a lot that can be done in US but the electronics industry is slowly eroding.
Or: The "electronics industry" (essentially contract manufacturing) is much too low margin to make economic sense in a highly developed country like the US. Have you seen the wages in the hyper competitive electronics industry in China? They are awful. Design and marketing is where most of the value can be captured. Look at Philips N.V. They are essentially strictly design in advanced countries, and manuf. in developing countries. They are doing well.
Hope it's just temporary.
If you work at a temporarily-not-an-unicorn, no antimonopoly institutions care about you.
So here’s one of those scenarios: you’re working at Figma. Perhaps you’re burned out or just want to try out something different. This acquisition deal with Adobe has been signed and you’re grinding through the days waiting for your chance to cash in on the years of work with Figma that have nearly paid off. Then this happens.
This affects startups similarly. The non IPO exit path got that much less attractive.
My ETFs are paying me every six months.
Equity ETFs or bond ETFs? If equity, I guess the max you can get is 4% yield, which is still worse that money market, plus you take equity risk. If bond ETFs, they will tank when rates fall. I never understand the appeal of bond ETFs; money market funds are enough for my fixed income needs. They are basic, easy to understand, liquid, etc.
you mean yields?
the etfs themselves will rocket up.
Which should be the goal. A major acquisition should have always been seen as a last resort, only preferable to going out of business.
Startups hoping to cash out by selling to a competitor is its own kind of silliness in the first place and was largely fueled by lax regulation environments and 0% interest cash.
What ever happened to building durable businesses as an explicit goal
Those mid sized companies you refer to did fine for three reasons:
* If they were competing against venture backed companies, they were likely playing in big markets. My bet is they are still alive today.
* They got acquired by the bigger companies and ended up capturing even more short term economic value than they would have otherwise.
* These venture backed companies expanded the market, actually helping smaller players. I would bet money that VRBO's business increased as AirBnB got bigger.
I agree that there's something sleazy about injecting a ton of capital in a niche space; at the very least, it's distorts all the dynamics in it. But you can't deny that this short term chaos creates long term economic value for everyone else.
Uber demonstrated you could add a tech layer to the taxi business and make it more efficient for riders + introduce a whole new set of people to the driver business. Did this harm existing taxi drivers? Unquestionably.
I know it's hard to look at that business model as innovation but it is because now there's extreme price pressure on these companies (esp Lyft) to remove the costliest part of the equation - the driver. So as a result, you have a ton of very motivated energy towards solving that, via autonomous driving.
It took mediocre business innovation[0] (uber) to drive meaningful tech innovation (autonomous driving).
[0] - Purposely differentiating the tech innovation (which Uber deserves a lot of credit for) vs the biz innovation (which last I read is getting better, though still shaky).
I asked what happened to building a durable business as a goal?
I understand the VC model enough to know that sometimes for years you run red because you need economies of scale or some other engine to finally turn over and then at scale the business will start to generate bigger cash flow once it reaches that tipping point. Even if a bit simplified as an explanation, this isn't what I'm talking about.
What I'm asking directly is why exiting to a big company became a goal in and of itself. Lots of VCs poured money into companies with the distinct hope that those businesses would at the very least be acquired. I think this is the silly part. Every investment should be from the perspective of can this be durable if standing on its own two feet? and a big acquisition is not something that should be taken into consideration as part of the investment and business building strategy of either the VC firms or the founders.
That all got lost. Building a durable business should be the ultimate goal, and selling the business to a big company should be seen as lower status than it currently is.
Its not that I'm saying acquisitions don't make sense sometimes, I'm not. However as far as goal setting and running a business is concerned, it shouldn't really be thought about as a viable fallback or exit strategy until its readily apparent and available, but that hasn't been true for some time now. VCs and founders often explicitly look at acquisition as one of their "success targets" and hopes for a business. Lots of people on HN have admitted that they started businesses with some hopes that they could possibly be acquired. That is the drift away from sanity I'm talking about.
Every single founder I know (and I know a lot of them) doesn't build a business for the specific reason to be acquired. Is it a thought that crosses their mind? Definitely. Is it something investors think about? Absolutely.
But the day-to-day, 12 hour+ grind for them is all about product-market fit and drawing revenue - the things that make a durable business.
The reason VC funding is drying up, big unicorns aren't going public and acquisitions are halted is that investors are actually starting to drill into the numbers now, and finding nothing but hot air.
There's just no world in which the market leader ought to be able to buy their #1 competitor, particularly in a deal where the economics ($10b on $300m rev) only make sense from an anticompetitive standpoint. I have no idea what these folks were thinking.
The next up cycle in speculative behavior won't follow until after interest rates hit the floor again (inevitable).
I think the ecosystem is healthier for Figma and Adobe remaining separate.
"We will acquire you for 2 million shares of VOO"
or something like that. If the only reason is that it's an unorthodox way of doing a deal, I say do it anyway and forge a way into the future of M&A.
Nasdaq is ~ flat since then, which also would not capture the economic dynamic desired (some tech valuations have fallen). The Nasdaq Tech 100 does an even worse job at capturing the dynamic: it's up nearly 50% since the deal was announced.
You'd have to use something a lot more specific, like a basket of specific stocks or some very small sub-index. But then a smaller basket could have a lot more volatility that may be endogenous to a small set of companies, and someone has to get paid for that volatility.
In private deals (one where the company being sold is not directly listed), the traditional way to solve this problem is via earn-outs.
In both public and private deals, using the purchasers' stock as the acquisition currency is also relatively common.
Easier to pretend they're doing it by choice rather than by force of law, which is finally able to reach them, due to the "social correction" of no longer worshiping tech companies.
Furthermore, it is just common sense. If you signed a purchase contract for $1.5 Billion, and it is now worth $0.5 billion, no rational actor would want that deal to go through.