Submitted via IRC for SoyCow1984
Drone operating system startup Airware today suddenly informed employees it will cease operations immediately despite having raised $118 million from top investors like Andreessen Horowitz, Google's GV, and Kleiner Perkins. The startup ran out of money after trying to manufacture its own hardware that couldn't compete with drone giants like China's DJI. The company at one point had as many as 140 employees, all of which are now out of a job.
A source sent TechCrunch screenshots from the Airware alumni Slack channel detailing how the staff was told this morning that Airware would shut down.
Source: https://techcrunch.com/2018/09/14/airware-shuts-down/
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Drone startup Airware crashes, will shut down after burning $118M –
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(Score: 2) by MichaelDavidCrawford on Sunday September 16 2018, @06:16AM (1 child)
FTFY
Yes I Have No Bananas. [gofundme.com]
(Score: 2) by JoeMerchant on Sunday September 16 2018, @11:55AM
I'd guess less than 10% of the money went on hookers and blow, although they did start an investment fund - so the percentage that went over there might have been higher.
The drone business involves expensive toys, $5K per unit for whatever fancy unit you think you want/need - not talking full system, just: gimbal pointer for camera $5K, software to control gimbal pointer for camera: $5K, software to interpret and store imagery acquired from gimbal camera $5K.
The only thing more expensive than blowing $5K on all these little chunks is hiring development staff to make the widgets in-house when you don't have a market to sell enough of the chunks yourself.
🌻🌻 [google.com]
(Score: 3, Informative) by anubi on Sunday September 16 2018, @07:50AM (13 children)
I think this just goes to show that even with impressive backers, its not easy to start up and run a business.
I have been trying to start off and am getting nowhere. All I have are designs and a few prototypes.
There is a lot to be said for the marketing, business, accounting, web design, all the other things besides engineering that it takes to run a viable business.
It takes a lot of parts to build a functional engine. Gasoline, spark plug, and piston isn't enough.
And competing with a commodity good with China? Don't think its gonna happen. Best I think we can do is offer a service. Very few people build stuff here, and that which they do build often exist only because of veblen effects.
That's my take on it, anyway. I am speculating based on watching several companies crater. The main culprits were executive complacency that comes with guaranteed golden parachutes and pay so high that by the time they sign on, they are set for life anyway, so its not like they are motivated anymore to produce - the company was just another rung on the ladder. The whole corporate mentality became a repeat of the cappuchin monkey, grape, and cucumber experiment, staged for the empowerment and ego needs of the leadership people. The other one was the decommittment and discouragement of the workforce with micromanagement. Once people discover that it doesn't matter if the produce or not, or worse, doing something creative will enrage the boss, people will slack off and just show up for work, being careful not to "rock the boat". Then the boat goes nowhere until it runs out of fuel.
"Prove all things; hold fast that which is good." [KJV: I Thessalonians 5:21]
(Score: 0) by Anonymous Coward on Sunday September 16 2018, @08:10AM (1 child)
What do they do?
(Score: 1) by anubi on Sunday September 16 2018, @10:04AM
See what I am doing since retirement from Aerospace [soylentnews.org].
"Prove all things; hold fast that which is good." [KJV: I Thessalonians 5:21]
(Score: 0) by Anonymous Coward on Sunday September 16 2018, @08:48AM (2 children)
That's why I think patents are overrated.
In too many cases coming up with the ideas is not the difficult part. It's actually implementing the ideas AND getting enough market adoption that's difficult.
But patents are allowed to be so vague and allow some incompetent person/organization to prevent/tax others who can actually turn the dreams into reality.
Look at The Mother of All Demos. By the time the market was ready for some of the ideas the original patents would have expired.
(Score: 1, Insightful) by Anonymous Coward on Sunday September 16 2018, @10:02AM (1 child)
And *patents* are suppose to be that *implementation* so you can get a jump start on the market adoption instead of getting swallowed by a giant instead. The problem is with *software* patents because the implementation is not the blueprint of the patent. It's the problem with adopting patents into the "new" instead of with the basis of the system itself.
(Score: 0) by Anonymous Coward on Sunday September 16 2018, @02:56PM
Really? How about this then? https://www.cnbc.com/2016/05/03/sony-applies-for-patent-on-contact-lens-camera-that-shoots-photos-in-a-blink.html [cnbc.com]
https://www.cnet.com/news/sony-patents-contact-lens-that-records-what-you-see/ [cnet.com]
But Sony isn't even close to having the tech yet!
Maybe in 10 years time someone else might actually have the tech but then Sony could slap them with a lawsuit. How does this encourage actual progress? The giants are the ones who can file thousands of bullshit patents. So even if the small guy has one real patent, to actually implement his stuff he might infringe on 10 bullshit patents.
I (and many other people) can produce plenty of pie-in-the-sky dreams/ideas. The hard bit is not dreaming shit up. Just because it seems hard to some other people (like those who have only one innovative idea in their lifetime) doesn't mean it is.
(Score: 0) by Anonymous Coward on Sunday September 16 2018, @10:06AM (4 children)
Is that why you are cratering? To me it seems not enough motivation and actual know-how how to run a business. Been there, done that. Running a business is not about technical side of things - it's about everything. That's why even strip clubs have accountants. But you can't run strip club with accountants alone.
(Score: 1) by anubi on Sunday September 16 2018, @10:27AM
It is exactly why I am cratering.... I am a one-trick pony... and one trick ain't enough!
Hence why I posted about so many factors having to be in play to make the whole shebang work. And I am about 50 cards short of a full deck.
"Prove all things; hold fast that which is good." [KJV: I Thessalonians 5:21]
(Score: 1) by anubi on Sunday September 16 2018, @11:07AM (1 child)
I re-read my original post about what you picked from it, and I had omitted that in the cases I had seen the management problems, it was subsequent to a buyout, where an investor group just thought they could buy their way into a fully functional business. The people who brought the business up in the first place were top notch... they knew exactly what they were doing.
The "investment people" who bought the place generally brought the place down. They did not seem to know what we did. We were a cash cow, and their paradigm seemed to be cut here, cut there, until the thing dies.
"Prove all things; hold fast that which is good." [KJV: I Thessalonians 5:21]
(Score: 2) by Phoenix666 on Monday September 17 2018, @10:47AM
That's valuable insight. I read a study in the Harvard Business Review about six months ago that found that in nearly every case MBAs drove companies into the ground; an MBA is good for the income of the person getting it, but for companies hiring an MBA is a net negative nearly 100% of the time. But the study was looking from the top down, and didn't have the bottom-up insight you gave.
Put together, it says that we don't have a technology or science problem, we have a management and financial problem. Plenty have tremendous technical skills and the creativity to go with them, but they keep falling prey to the vampire squid business and finance culture that has taken over.
Washington DC delenda est.
(Score: 1) by khallow on Sunday September 16 2018, @11:43AM
(Score: 3, Interesting) by JoeMerchant on Sunday September 16 2018, @11:58AM (2 children)
Drones were (and still are) a major competitive bloodbath. Anybody can buy semi-competent hardware for cheap from hobby stores, component suppliers, etc. but the integration is complex and the marketing is brutal.
If you have a staff of 5 engineers (net cost >$1M per year), how many drones do you have to sell, at what margin, to cover just that cost of development?
Now consider that there are thousands of "aerospace engineers" graduating around the world every semester, all thinking they can do it better and competing with you, putting pressure on your margins.
🌻🌻 [google.com]
(Score: 2) by crafoo on Sunday September 16 2018, @03:28PM (1 child)
It seems like the place to make money with drones is integrating them with other complex systems, such as what is happening in farming and forestry. Someone who is already an expert in those systems could do the systems integration, hire a marketing team, and make some money.
(Score: 3, Informative) by JoeMerchant on Sunday September 16 2018, @05:11PM
This _seems_ to be the way it is playing out. I briefly worked for a company that had some success selling drones to the military, but that became virtually impossible after the Gulf War ended. They tried to pivot and sell as a service to local law enforcement, but there were already competitors in that space which made for an "overserved" market....
The big thing 5 years ago was the virtual ban on US domestic use of UAVs, that made it very much like trying to build a marijuana business pre-legalization. At least possession of UAVs wasn't illegal, but using them for profit basically was.
🌻🌻 [google.com]