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Comment by tekacs | Hacker News Reader

A huge fraction of the knee-jerk reactions here seem to miss the key point that the post is trying to get across:

> In the mid-2010s, during Furman’s tenure running economic policy under Obama, the company sold its defense business, offshored production, and slashed research, a result of pressure from financiers on Wall Street.

> Mesdag engaged in a proxy fight to wrest control of the company from its engineering founders, accusing one of its founders and iRobot Chairman Colin Angle of engaging in “egregious and abusive use of shareholder capital” for investing in research.

Yes Roomba sucks at this point. We get it. Thing is, if you slash research... that's what eventually becomes of your product.

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This is what's wrong with investing overall: 1Q future blindness.

We'd have almost nothing if it weren't for university partnerships and corporate R&D way back when. There's no way to accomplish this now except to stay private.

>There's no way to accomplish this now except to stay private.

cue all the lamentations about how evil private equity is.

A company who does cutting edge R&D for defense contracts and and consumer small appliances is destined for trouble. They are two very different lines of business. While you might make an argument about synergy, the problem stems from the investors who are investing in two very different lines of business. Ultimately one of them was going to win. The failure to realize that offshoring would turn suppliers into competitors is a known issue in the consumer small appliance world and it looks like they were not ready.

Interestingly enough the R&D portion that was sold off, became Endeavor Robotics which was sold to Teledyne FLIR Systems and seems to be doing fine.

Well, they took most of that money, and then just bought back their own stock. It's something more than just 1Q blindness and failure to understand the importance of research.

https://media.irobot.com/2016-02-04-iRobot-Announces-Sale-of...

Their research wasn't on vacuum cleaners. It was building robots for the military and space. That's exactly what investors were complaining about -- the research wasn't leading to better vacuum cleaners. It was a distraction and not what investors wanted their money being used for.

> Thing is, if you slash research

And if you dump your defence contracts you may have trouble paying for research.

I'd be interested in learning about how the US military uses Roombas (assuming it's not classified)

In the article it's mentioned. They have built robotic stuff to clear rubble for example.

Those vacuums are stronger than people realize.

Sucking taxpayer money into a black hole, of course.

It's crazy that the Dodge brothers destroyed the company/shareholder relationship for every contemporary and future US-based corporation and then died.

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