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Ford Acquires Chariot (YC W15)

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Re: Ford Acquires Chariot (YC W15)

#11

Post by JonFish85 »

birken wrote: post #9
JonFish85 wrote: post #5

Earlier quoted context omitted.

Almost certainly an amount that wipes out common stock holders. People they want to keep will get a retention offer, but with the acknowledgment that their stock in Chariot is now worth $0.

First of all, the story doesn't mention anything about the size of the deal. Second of all, the company is selling after ~2 years. The average employee has probably been there for less than 1 year. Excluding the common stock of the founders (since they are the ones who made the decision to sell), employee common stock grants and common stock options are all about ensuring employees get a share of blockbuster company…

I'm not saying anyone got screwed, I'm saying that common stock probably is worth $0 (for similar reasons: quick exit, not much time to really build value, etc). "Generous retention" can vary drastically.

The reason I mention it is because it's easy to get sucked into the trap of "hey they exited for $30m, and the person who gave up $40k/year salary for 2% ownership just got a check for $600k!" when that simply isn't realistic. Unless everything goes exactly right, common stock isn't really worth the risk. I think it's an important distinction to make.

Again, not saying anyone got "screwed", just that even in this case, an 8-figure exit could very well mean no common stock holders got a dime. I'm very curious about the terms of the Cruise deal as well -- a 10 figure exit (!), but I'm interested to find out how much the common stock there was actually worth.

Re: Ford Acquires Chariot (YC W15)

#12

Post by mox1 »

I find it very interesting and frankly quite stupid that Ford is attempting to become an Uber / Silicon Valley / Technology type company[1]. They practically made the auto industry and have been a leading manufacturer for ~100 years. But lets drop and forget all that, technology is cool!

I predict that in 5-10 years this will really come back to haunt them. I was planning to buy some Ford stock for a while, but after seeing this shift, not touching it with a 10ft pole.

1. http://www.bloomberg.com/news/videos/2016-09-09/ford-ceo-on-...

Re: Ford Acquires Chariot (YC W15)

#13

Post by rm_-rf_slash »

mox1 wrote: post #12

I find it very interesting and frankly quite stupid that Ford is attempting to become an Uber / Silicon Valley / Technology type company[1]. They practically made the auto industry and have been a leading manufacturer for ~100 years. But lets drop and forget all that, technology is cool! I predict that in 5-10 years this will really come back to haunt them. I was planning to buy some Ford stock for a while, but after…

Ford was also the only major American car company that didn't need a bailout when other auto Titans were groveling for cash. I wouldn't count them out of the race just yet.

Re: Ford Acquires Chariot (YC W15)

#14

Post by malchow »

mox1 wrote: post #12

I find it very interesting and frankly quite stupid that Ford is attempting to become an Uber / Silicon Valley / Technology type company[1]. They practically made the auto industry and have been a leading manufacturer for ~100 years. But lets drop and forget all that, technology is cool! I predict that in 5-10 years this will really come back to haunt them. I was planning to buy some Ford stock for a while, but after…

It was smart when semi companies became IP shops and outsourced fabrication, clambering up the value chain and expanding margins. I predict it will be seen as similarly smart for Ford to invest in software now.

Re: Ford Acquires Chariot (YC W15)

#15

Post by simonbarker87 »

mox1 wrote: post #12

I find it very interesting and frankly quite stupid that Ford is attempting to become an Uber / Silicon Valley / Technology type company[1]. They practically made the auto industry and have been a leading manufacturer for ~100 years. But lets drop and forget all that, technology is cool! I predict that in 5-10 years this will really come back to haunt them. I was planning to buy some Ford stock for a while, but after…

A couple of big auto companies are doing this in one form or another, GM have a start up arm based in Kitchener and Nissan are advertising for jobs at a new connected transport "start up" spread across SV, Paris and Tokyo. I'm sure there are plenty of others doing something similar.

Re: Ford Acquires Chariot (YC W15)

#16

Post by mkagenius »

mox1 wrote: post #12

I find it very interesting and frankly quite stupid that Ford is attempting to become an Uber / Silicon Valley / Technology type company[1]. They practically made the auto industry and have been a leading manufacturer for ~100 years. But lets drop and forget all that, technology is cool! I predict that in 5-10 years this will really come back to haunt them. I was planning to buy some Ford stock for a while, but after…

One of the biggest reason big companies fail is they get disrupted by smaller players mainly because they are not able to do new innovative things on their own because of drag of a giant company.

Re: Ford Acquires Chariot (YC W15)

#17

Post by pb »

mox1 wrote: post #12

I find it very interesting and frankly quite stupid that Ford is attempting to become an Uber / Silicon Valley / Technology type company[1]. They practically made the auto industry and have been a leading manufacturer for ~100 years. But lets drop and forget all that, technology is cool! I predict that in 5-10 years this will really come back to haunt them. I was planning to buy some Ford stock for a while, but after…

In ten years, all auto makers will either be tech companies, or they will be out of business. I'm impressed that GM and Ford have the foresight to understand this.

Re: Ford Acquires Chariot (YC W15)

#18

Post by mox1 »

pb wrote: post #17
mox1 wrote: post #12

I find it very interesting and frankly quite stupid that Ford is attempting to become an Uber / Silicon Valley / Technology type company[1]. They practically made the auto industry and have been a leading manufacturer for ~100 years. But lets drop and forget all that, technology is cool! I predict that in 5-10 years this will really come back to haunt them. I was planning to buy some Ford stock for a while, but after…

In ten years, all auto makers will either be tech companies, or they will be out of business. I'm impressed that GM and Ford have the foresight to understand this.

100% disagree. Manufacturing is hard, ask everyone who has done a physical product kick-starter.

Giving X people mac books and asking them to write a "Clone of X Tech Startup" is not that hard, just potentially time consuming.

Now, Ford may USE technology to improve their manufacturing and core product (a transportation device). They may become an ultra high-tech manufacturer (if they aren't already)..., but they will not magically become Google or Apple.

Re: Ford Acquires Chariot (YC W15)

#19

Post by pb »

mox1 wrote: post #18
pb wrote: post #17

Earlier quoted context omitted.

In ten years, all auto makers will either be tech companies, or they will be out of business. I'm impressed that GM and Ford have the foresight to understand this.

100% disagree. Manufacturing is hard, ask everyone who has done a physical product kick-starter. Giving X people mac books and asking them to write a "Clone of X Tech Startup" is not that hard, just potentially time consuming. Now, Ford may USE technology to improve their manufacturing and core product (a transportation device). They may become an ultra high-tech manufacturer (if they aren't already)..., but they wil…

It's not like they are going to suddenly lose their ability to manufacture products. The key is that their differentiation and survival will depend more on software and soft systems (such as bus lines) than it does on manufacturing prowess (where they are all quite good at this point).

It's also worth noting that Apple makes some impressively complex (and profitable!) hardware.

Re: Ford Acquires Chariot (YC W15)

#20

Post by discodave »

mox1 wrote: post #18
pb wrote: post #17

Earlier quoted context omitted.

In ten years, all auto makers will either be tech companies, or they will be out of business. I'm impressed that GM and Ford have the foresight to understand this.

100% disagree. Manufacturing is hard, ask everyone who has done a physical product kick-starter. Giving X people mac books and asking them to write a "Clone of X Tech Startup" is not that hard, just potentially time consuming. Now, Ford may USE technology to improve their manufacturing and core product (a transportation device). They may become an ultra high-tech manufacturer (if they aren't already)..., but they wil…

Just because manufacturing is hard, doesn't mean you should stick to it. Cars are already a commodity, if Uber/Google/Apple manage to deprecate car ownership in favour of centralized fleets then being a car manufacturer will be a low margin cut-throat business.

Think about how much of the machinery (and profits) of the car business would get eaten. No more annual model updates, no more advertising, much smaller luxury market and so on.

In that world it makes sense to try and move up the stack to own your own destiny and capture profits.

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