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So Close

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Re: So Close

#261

Post by bartread »

cocktailpeanuts wrote: post #148

Stuff like this--naive "CEO" making rookie decisions--happens all the time so I'm not surprised. However, I really don't understand what made him think it's OK to celebrate the failure going out, with such an idiotic blog post, pretending that everything is OK. That's the thing that makes people angry about stuff like this. If you failed, just acknowledge it and move on. Better yet, don't even proudly write a medium…

I found myself having to stop reading because the breathy tone was getting on my nerves so much. Honestly, so much verbal diarrhoea, so little taking of responsibility. I agree with you: I don't see any reason to celebrate. Company leadership failed spectacularly and left their workforce high and dry. :(

Re: So Close

#262

Post by bartread »

john_moscow wrote: post #206
_aarti wrote: post #192

Earlier quoted context omitted.

The product was built in China on the same lines that build the iPhone with the same detail. Manufacturing quality hardware is capital intensive, Finding people who can support that level of engineering is capital intensive, Hiring security engineers is capital intensive, they chose to go all in. The company was not wasting money. I have worked in Silicon Valley startups with lavish spending. This was not one of them…

I dunno. Going all in before you have validated the product/market fit sounds like a textbook rookie mistake. I don't understand how you can raise close to $50m while having a business aptitude of a 3 year old.

This has been blowing my mind for years, because I think it's surprisingly common.

I won't name the company because to my shock (and frankly vast horror) they're still chugging along and I don't especially want to get sued but, a few years ago when I was still working for Red Gate, one of the leadership of a local company - also significantly hardware driven - came in and told their story to anyone who wanted to listen.

Over a period of maybe a decade or so, through successive rounds of funding, they'd managed to raise about half a billion and had produced... nothing commercially viable. Zilch. This guy's job in the company had been and continued to be to raise the necessary funding from investors, and I have to say he was clearly pretty damn good at separating fools from their money.

So imagine the situation: this guy comes in to a bootstrapped software company that had always been profitable and acts like he's really pleased with himself for raising half a billion dollars and pissing it up the wall because they'd gone all in over and over again with no clear product market fit. (N.B., it may have been pounds, but it was years ago and I can't remember, so let's call it dollars to keep it less dramatic.)

The reaction was quite hostile: I don't think we knew whether to be befuddled or enraged.

I mean you literally could get a better ROI by handing me $50M or $500M or whatever it is and standing by whilst I try to blow it all on cocaine and high-end hookers because there's just no way I can snort my way through that much coke in an entire lifetime without overdosing so you'd at least get some, and probably most, of your money back.

Don't get me wrong: I understand that VCs expect most ventures to fail, and to an extent that's perhaps reasonable, but surely there comes a point where you stop throwing good money after bad?

Re: So Close

#263

Post by john_moscow »

bartread wrote: post #262
john_moscow wrote: post #206

Earlier quoted context omitted.

I dunno. Going all in before you have validated the product/market fit sounds like a textbook rookie mistake. I don't understand how you can raise close to $50m while having a business aptitude of a 3 year old.

This has been blowing my mind for years, because I think it's surprisingly common. I won't name the company because to my shock (and frankly vast horror) they're still chugging along and I don't especially want to get sued but, a few years ago when I was still working for Red Gate, one of the leadership of a local company - also significantly hardware driven - came in and told their story to anyone who wanted to list…

Could it have been a way of "privatizing" the institutional investors' funds? Invest a few mil in a startup, then spend a chunk of it on hefty consultancy fees to a company conveniently owned by the fund manager's wife and another chunk to the CEO's best friend's firm.

I'm wondering if the investment funds and startups provide enough transparency to the people whos money is actually invested to detect such schemes.

Re: So Close

#264

Post by kevinburke »

milkmilklemon wrote: post #260
kevinburke wrote: post #130

I worked on Otto's server side software as a contractor for five months. The company had some servers written in C and exchanging messages using a custom binary protocol, designed for millions of transactions per second, when they needed only 2-3tps, readability, and the ability to make fast changes. We rewrote those servers in Go, found and fixed consistency errors in them, and actually got to the point where you co…

Even if we assume that your code is infallible and that Go is a good choice for this purpose, a ground-up rewrite of the core service by an outside contractor with ~4 years of experience five months prior to launch is a pretty clear sign of absolute desperation amongst the upper echelons. It truly, truly sucks that you got bit at such a horrible time and it's virtually impossible that any part of it was your fault, b…

I’m confident in the choices I made, thanks.

Re: So Close

#265

Post by [deleted] »

milkmilklemon wrote: post #256

State filings pointing to the same entities make it look like the CEO might still have a dog in the great lock race: https://www.wedgetls.com Wonder why it's not full of bluetooths and clouds since that's clearly the way of the future.

[deleted]

Re: So Close

#266

Post by TeMPOraL »

adamweld wrote: post #91
twblalock wrote: post #10

If I understand the sequence of events properly, the company entered acquisition negotiations and agreed not to solicit other bids during that time. When the acquisition fell apart, the company was out of money and had to stop operations. If that's correct, it seems to me like it's something they should have known in advance -- if they knew they would be out of money by the end of the year, why would they enter acqui…

From the blog post: >I define startups as companies that don’t have control of their own destiny because they rely on investor cash infusions to operate. When asked, “How’s business?”, I always replied “I don’t have a business yet, we’re still a startup.” I despise this definition. I have grown my hardware startup sustainably while pursuing an engineering degree and maintaining full control of the company. I may soon…

I don't see the reason to hate that definition. It feels spot-on.

The defining characteristic of a startup - as the word is used in the real world - is being unprofitable and funded by investors. That literally means one doesn't have control over their company, because they've sold ownership to investors.

What you have is a sustainable, bootstrapped small business. It may not sound sexy, as 'dfcowell points out, but IMO, it should - it suggests that the company is actually doing something useful, unlike many startups, which exist only as long as they can keep the growth up to solicit more investments.

Re: So Close

#267

Post by TeMPOraL »

taberiand wrote: post #140
Stratoscope wrote: post #85

Earlier quoted context omitted.

And this: "Not to be outdone, the software team challenged themselves to complete the full user experience so that our customers would fall in love with the way they engaged the product and actually experience joy as they used it."

Seems like that's the goal of all companies today - turn everything into a skinner box aimed at directly stimulating the pleasure senses while stimulating a stream of money from your bank account. Maybe it failed because the lock was sold as a one off payment instead of a subscription model, and didn't sync (yet) with a dopamine-dosing brain implant.

Indeed. That's why I'm skeptical when they say they care about the customer. Most of the times, they don't give a flying fuck about the product itself and whether or not it actually does anything useful for customers - the whole point is to get into someone's wallet; the product is just a proxy (and often customers themselves are a proxy too, to get more money from the investors).

Getting paid for building something valuable seems to be a dead concept in the startup economy.

Re: So Close

#268

Post by TeMPOraL »

brucephillips wrote: post #48

> I define startups as companies that don’t have control of their own destiny because they rely on investor cash infusions to operate. By this definition, Microsoft wasn't a startup.

Did someone say they were?

Re: So Close

#269

Post by bartread »

john_moscow wrote: post #263
bartread wrote: post #262

Earlier quoted context omitted.

This has been blowing my mind for years, because I think it's surprisingly common. I won't name the company because to my shock (and frankly vast horror) they're still chugging along and I don't especially want to get sued but, a few years ago when I was still working for Red Gate, one of the leadership of a local company - also significantly hardware driven - came in and told their story to anyone who wanted to list…

Could it have been a way of "privatizing" the institutional investors' funds? Invest a few mil in a startup, then spend a chunk of it on hefty consultancy fees to a company conveniently owned by the fund manager's wife and another chunk to the CEO's best friend's firm. I'm wondering if the investment funds and startups provide enough transparency to the people whos money is actually invested to detect such schemes.

That's an interesting thought although in the case I was talking about all I can say, sadly, is I don't know. As outsiders we certainly didn't have any visibility. I suppose - working for different companies, mind - I've encountered enough of the whiff of low grade nepotism to imagine that on a larger scale that kind of thing does go on from time to time.

Re: So Close

#270

Post by rinsai »

_aarti wrote: post #200
dingo_bat wrote: post #189

Earlier quoted context omitted.

> and keep keys with us at all times Except this lock also has a key. It's the $1000 smartphone you carry everywhere. That is prone to running out of charge, getting stolen, getting broken, not being in range of a signal, etc. The whole idea was bullshit from the get-go.

> The whole idea was bullshit from the get-go. The market says otherwise - Amazon is all over this at the moment, so is Nest.

That's not a market, that's people with money in the bank and actual experience gambling on the future. If you and Burks hadn't spent all of yours rebuilding the same things over and over again for four years, you might have gotten to sit at the table with some of the people who buy Edison lightbulbs from Restoration Hardware in bulk to see if a market for Otto existed. Since that didn't happen, now you're pretty much just going to have to sit there and take the entire world's word for it that nobody wants a $700 lock that can be defeated with a $17 carbide-tipped drill bit just as quickly as a $29 lock from Home Depot that also looks less ridiculous and doesn't need its batteries changed every month.
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