Alphabet Winds Down Mineral, Licenses Ag Technology to Berry Producer Driscoll's | Hacker News Reader

Alphabet Winds Down Mineral, Licenses Ag Technology to Berry Producer Driscoll's

bloomberg.com

19 pointsrntn23 comments

One thing I don’t understand is that why Google doesn’t just spin-off these entities?

That is certainly better than killing thesee projects. Let the team take it and raise external funding with Google keeping some equity and assigning rest to the team.

Licensing the tech out is pretty close. It’s not clear they ever had customers beyond Driscoll anyways.

Despite having one good customer, it doesn’t sound like it was a promising business? Why would they do better at finding customers on their own?

Instead they licensed the technology to their main customer.

Fortune 500 companies love to vacuum up all of this IP. It’s a game of “it’s not really viable today, so shelve it and use archaic IP laws to prevent anybody else from using ‘our’ [bought] idea”

>That is certainly better than killing these projects?

You sure?

Google obfuscates these moonshots (Waymo, Verily) in the “Other Bets” line in their 10-K. They lose money in the aggregate and the detailed financials for each entity aren’t revealed.

If a company like Waymo looked like it were on the path to profitability, Google wouldn’t hide the financials. They report the bare minimum (jumbled up with a bunch of unrelated stuff) because the numbers are grim.

That’s sunk cost.

Not sure, maybe I’m missing it, how does that impact spinning-off a project that Google no longer considers financially fruitful (it could still be financially viable but not at Google scale)?

https://archive.is/AHfd3

I’m probably in the minority but current IP and copyright law is holding back progress. People are too afraid to step on the toes of IP owners thus creating this generic marketplace of mediocre trash. At this point, I am honestly surprised China or any other country hasn’t surpassed it.

Manufacturing is already dead in the US. I guess the only thing keeping it together is the all mighty USD being kept as the “reserve currency”

Having worked in the ag-tech space, there are few heavies in the room that are happy to just wait out the IP limits on promising technology held by a startup/competitor who hasn't figured out how to monetize it yet. This is exactly what Driscoll's has done here. They never invested much themselves, and now that the rights are going for fire-sale prices, they'll step in and start developing themselves. I have a pretty good guess about who will be working to extend the tech.

Monsanto, Driscoll's, Simplot, these are companies that have decades of proven revenue that is not going away until humanity evolves photosynthesis directly. They can afford to wait it out until the price drops, and they'll only clamor to acquire a "promising startup" when they think the price can't get any lower.

IP protection here specifically serves to prevent e.g. Monsanto from eating ZipGrow or whoever's lunch.

Mineral's rover really appeared to be a solution looking for a problem. Why do you need a giant, expensive vehicle to slowly roll through your fields and see how the crops are doing when you could fly over it with a $700 drone and just look at the video? "You can't see the berries from the air!" - OK, berries are perhaps a $40B market globally. Most of the rest of the $3T+ market you can see just fine from the air or even one of the many competitors offering satellite crop imagery. The rover doesn't even do anything in the field, unlike for example the LaserWeeder implement.

> "When Driscoll’s learned that Alphabet was changing course with Mineral, the berry producer was eager to find a way to keep using the technology, said Scott Komar, Driscoll’s senior vice president of global research and development. The company uses the startup’s technology to predict how many berries its crops will yield, which enables it to provide more accurate forecasts to its buyers and labor partners, Komar said."

> “We were really disappointed that Alphabet decided to change directions,” Komar said. “We have really had a great partnership with the Mineral team and from our vantage point they were just getting takeoff altitude. And then all of a sudden, you know, plans changed.”

Google is beyond parody with how they still continue to kill off promising products.

It's the curse of being a company with a $xxxB main product line. It becomes really hard to justify projects that could at best contribute a few million to your bottom line...

That doesn't track. As long as the project is generating at least a single dollar (TVM-adjusted) and you're not constrained on resources (SWEs, labs, etc.) that could be reassigned to higher yielding projects, that's all the justification you need.

... yeah, but that's just not how it works inside Alphabet. It's not rational but plenty of us would share that this is absolutely the logic that drives day-to-day business decisions across all of Alphabet's business units today.

This has no weight to it but is just sort of my anecdotal perception, my feeling from googlers I know directly or indirectly feels like, I guess I would say a lot are really vigilant of career risk?

The vibe I always get is that they won't hesitate to abandon stuff that doesn't get huge fast, but a big part is that the manager or teams don't want to get stuck with something that isn't a juggernaut or obviously on its way.

And heck, maybe that is just everywhere, but anecdotally at google, from an outside observer, it looks like the culture dictates being on the 'Big Thing' is how you succeed there.

This isn't true.

The market tracks how profitable you are as company. Tech companies get higher multiples on their valuation because they can be more profitable than a manufacturing company.

This was one big reason why the trend is for conglomerates got broken apart, it lets their high profitability companies get valued higher.

Google focusing on products that are break even or slightly profitable hurts them for this very reason.

So if you are the CFO of google the decision you make is do we keep some of these low profitability companies around and have them drag our multiples down or do we cut them when its clear they won't become high margin profitable businesses.

Given that the CFO of google gets most of their compensation in stock its not surprising that they chose to have a higher multiples applied to them, and therefor higher stock prices, than lower ones.

agreed - there is also opportunity cost. While that particular project - may be earning that dollar - putting those resources somewhere else might be more profitable....

A lot of what you said is accurate, but then the ideal play would not be to shut down non-core projects, but rather to sell them or spin them off into their own companies.

...which partly-happened via licensing in the article, but they didn't realize the full value of the working operation.

Spinning them off has a cost too; at least to Goog, potential sales proceeds don't seem to justify the sales costs, so they shut everything down.

Also, it may be slightly profitable when run under the umbrella, but not once you consider the cost of separate administration. That's especially true for things like Google Reader --- that project benefited enormously from living on Google Infra, behind Google Login, and you'd have to do a lot of refactoring and rebuilding to get it to run elsewhere, and then you'd have to get people to create new accounts, etc. And there wasn't much revenue there, certainly not enough to make it a viable standalone business.

There is a cost to managing a ton of projects that only yield a single dollar.

But also more realistically, Google reports their margins to wall street and a ton of barely profitable ventures would drag that down.

It should be illegal. Unfortunately archaic IP and copyright laws have created this market of build as much junk, hodl the ip until market viable, sue competition that tries to use ‘their’ [unused/under utilized] IP

I hear they are axing "Google" next, whatever that is.

Explains why none of my job apps were ever acknowledged.

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