Now Is the Summer of Our DiscontentBy
Hi all, it's Eric. Won't someone buy Soundcloud or Teespring and save them further embarrassment? What's to become of their beleaguered investors?
Help them so they won’t have to liquidate assets! Jawbone, the hardware company, is reportedly doing just that. After Jawbone failed to find a buyer, the company is starting anew. CEO Hosain Rahman will run a familiarly named company called Jawbone (surprise!) Health Hub. Most of Jawbone's investors —which include Andreessen Horowitz, Sequoia Capital, and Khosla Ventures— will be washed out, The Information reports.
Meanwhile, at Soundcloud, a startup that’s long been rumored to have been in acquisition talks with Spotify, is showing signs of weakness. The music-streaming company is cutting 40 percent of its workforce.
This year, Munchery, the Shervin Pishevar-backed food delivery startup, stiffed early investors, rejiggered the company's cap table and fired staff. Teespring, backed by Andreessen Horowitz and Khosla Ventures, acted similarly. The T-shirt seller shut down its Providence, Rhode Island office, fired workers and reportedly cut its valuation to $11 million from $650 million. Sprig, another food delivery startup, stopped operating in May.
This year the rental car company Beepi, and search startup Quixey folded. Yik Yak, the social network that raised about $75 million in funding, sold its engineers off to Square for $3 million. Seven startups that imploded this year together had raised more than $1.1 billion, according to reporter Eliot Brown.
What happened to the days when a company would scoop up a failing startup to shore up its tech cred, letting the company's founders and investors save face? Remember when Glam Media bought social network Ning? Or when PCH bought Fab in a fire sale. And when Unilever bought Dollar Shave Club for $1 billion?
What happened to megawatt acqui-hires, like when Facebook bought FriendFeed for a reported $47 million, or $4 million an employee. Or more recently, back in August, when Wal-Mart bought Marc Lore for $3.3 billion.
It's hard to see from the outside which startups will save face and find a buyer, and which ones will be left to implode.
As we've seen with spate of artificial intelligence acquisitions, it's definitely easier to find a buyer when most of a company's employees are software engineers.
Failed on-demand startups have generally imploded, rather than find a gracious acquisition. Homejoy folded, but Google hired its tech team. The on-demand laundry business Washio went bust. The food delivery business SpoonRocket imploded. Caviar, which Square purchased in 2014, is the exception —but then Square tried unsuccessfully to sell Caviar itself, and failed to land a buyer.
Or, as Shakespeare wrote in Taming of the Shrew: "I burn, I pine, I perish."
Sign up to receive the Fully Charged newsletter in your inbox, and follow Bloomberg Technology on Twitter and Facebook for more.
And here's what you need to know in technology news
Uh-oh. This isn't good. Hackers working for a foreign government recently breached at least a dozen U.S. power plants, including a nuclear facility in Kansas. The attackers were searching for vulnerabilities in the electrical grid and could be positioning themselves to eventually disrupt the nation’s power supply, warned officials.
Qualcomm wants the U.S. to block some iPhones from entering the United States. As part of the chipmaker's pitched patent-infringement fight with Apple, it wants the U.S. International Trade Commission to prevent Apple from bringing iPhones with other manufacturer's chips from entering the country.
Samsung isn't doing too bad, for a company still trying to shake off the Note 7 crisis and the ongoing trial of its de-facto chief Jay Y. Lee. The manufacturer posted preliminary operating income and revenue that topped estimates, thanks to strong global demand for semiconductors and the popular new Galaxy S8 flagship smartphone.
This surfer saved the world from WannaCry. Now he's trying to prevent the next big ransomware attack. (Well, after missing Petya)
Tesla's market capitalization has dropped by $12 billion since its June 23 peak. Still, the stock is still up almost 50 percent for the year.