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Wall Street ruined the Roomba and then blamed Lina Khan

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Re: Wall Street ruined the Roomba and then blamed Lina Khan

#91
post #46

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 fou…

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

Re: Wall Street ruined the Roomba and then blamed Lina Khan

#92
post #49

This is such a bad faith, and frankly dishonest take on the situation. As you know, Khan’s FTC worried it wouldn’t be able to prevent Amazon’s acquisition of iRobot in court, so instead it dragged out approval, which it never granted, while continuously threatening to block. Simultaneously, her FTC openly worked with the EU to convince the EU to use its more expansive antitrust regime to get the EU to block the deal.…

The point is that "sold to Amazon" or "sold to chinese competitors" being the only options is a false narrative. There was also the "do a good job" option which is being conveniently omitted by people who want to blame the FTC.

Re: Wall Street ruined the Roomba and then blamed Lina Khan

#93

To be honest the Roomba sucked and got eaten alive by better chinese competitors. I bought a top of the line expensive Roomba years ago and ended up switching to neato a year later, because I would just come home and it would be stuck on something.

Sucked not the ideal pejorative for a vacuum

Sucking is a good state for a vacuum. If Roomba sucked well enough, it wouldn't have gone bankrupt.

Re: Wall Street ruined the Roomba and then blamed Lina Khan

#94
post #63
post #61

Earlier quoted context omitted.

The article claims EU didn't challenge the deal, only requested information about the market and possible unfair practices. https://ec.europa.eu/commission/presscorner/detail/en/ip_23_...

Preparing all the requested information can be expensive. It is likely enough to kill many deals.

So then back to the original aricles implied take about the incompetence of these wall street investors. What kind of billion dollar deal doesn't have info on the deal?

Re: Wall Street ruined the Roomba and then blamed Lina Khan

#95
post #74
post #46

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 fou…

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.

Re: Wall Street ruined the Roomba and then blamed Lina Khan

#96
post #40

Earlier quoted context omitted.

In other words, they didn’t shut it down.

There are later press communications where Khan's FTC took credit for it. There was a strong implication they let the EU do the lifting but would have filed suit if they hadn't.

Indeed. Statement here: https://www.ftc.gov/news-events/news/press-releases/2024/01/...

Re: Wall Street ruined the Roomba and then blamed Lina Khan

#97
post #74
post #46

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 fou…

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.

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.

Re: Wall Street ruined the Roomba and then blamed Lina Khan

#98
post #9
post #4

This is a fantastic video essay on iRobot's strategy/leadership mistakes. The company was distracted and stubbornly out of tune with what consumers wanted: https://www.youtube.com/watch?v=44XYQepBF7g The patent expiry sealed the deal.

Why not let Amazon take a stab at turning things around, then? It's better that they fail? I don't get it.

According to the article, there is a defence invoking that exact sentiment if a merger is about to be blocked, bu iRobot decided not to invoke it (likely because it would have caused the price to be lower).

Re: Wall Street ruined the Roomba and then blamed Lina Khan

#99
post #68

Earlier quoted context omitted.

How much difference was made by the Chinese competitors being able to use whatever IP they wanted, and Roomba being constrained by law and licensing, and not being able to enforce their own IP? What were the consequences of having to engage with China for manufacturing, effectively giving them the capability to clone any R&D on the fly, without having to figure things out themselves? How much did regulation and taxat…

No one ever forced any company to work with China. They all went to China over decades because it was cheaper and made more profits, knowing full well there’d be technological transfer since it was always China’s goal and even explicit in contracts and agreements. Being surprised now that profits became technology transfer and China is now a real competitor is useless. They knew it, just didn’t think the Chinese coul…

Oh, for sure, I'm just highlighting that it's not like they're playing on a level field. The US marketplace is self defeating with asymmetric regulations, unenforceable patent and IP knowledge transfer with countries like China that just ignore it, effectively, with zero accountability. It's not all external though, they could have had a much better leadership team and used all sorts of things in their favor early on to really capture the market, despite anything and everything else that happened. Apathy, VC-style race to the bottom dynamics, probably went public too soon, and didn't build momentum and a culture of high quality R&D (a whole lot of drama every time they considered using private data and monetizing on their intimate in-home access.)

They also missed out on AI getting good - by the time transformers came around and people realized they'd be really useful for stuff like Roombas, it was too late, and with shareholders just looking to cash out and minimize their losses toward the end, there's not a lot that could have been done to save it. Even if they'd gone to Amazon, there wasn't a lot left that had value beyond the branding, imo.

I think American companies would be more successful and higher quality if the regulation and IP policy we embraced were reciprocal. As it stands, unless you're Apple or Samsung or a giant, you have to win the CCP PR lottery for any sort of accountability with Chinese companies. Most of the time they're going to ignore you, because there's no downside. It's only in those cases where there are political ramifications, individuals being embarassed, or they feel a need to trot out a "look how conscientious and good faith we are in the international markets!" piece useful for other wheeling and dealing.

Re: Wall Street ruined the Roomba and then blamed Lina Khan

#100
post #6

Earlier quoted context omitted.

Sure, but the author is arguing that the outcome you're describing is tightly coupled to the perverse incentives that he describes in the article. Investors pushed the company towards extraction over innovation and the end product suffered as a result.

That is probably true. But Roomba sucked in the early 2000's too. They never got better.

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