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What's the story behind Otto? There are exactly two blog posts on the Otto blog- Otto launches and Otto sells to Uber. The line 'When we started Otto we commit

What's the story behind Otto? There are exactly two blog posts on the Otto blog- Otto launches and Otto sells to Uber. The line 'When we started Otto we committed to rethinking transportation' - what, three months ago? I hadn't heard of these guys before, but a business designed to be quick flipped? Was this business ever not part of Uber? What kind of three month old startup has a team that size? There doesn't seem to actually be even an MVP product there. How do businesses like this end up getting built and sold so quickly?

subdane 10y ago
Founded by four ex-Google engineers, including the guy that built Google's first self driving car https://backchannel.com/the-man-who-built-googles-first-self-driving-car-is-now-a-trucker-aa1726d3a36f https://backchannel.com/the-man-who-built-googles-first-self...
joeblau 10y ago
I don't know if this might be more help: https://newsroom.uber.com/rethinking-transportation/ https://newsroom.uber.com/rethinking-transportation/
Fricken 10y ago
This is from the big Bloomberg article/interview that came out today: 'Kalanick began courting Levandowski this spring, broaching the possibility of an acquisition during a series of 10-mile night walks from the Soma neighborhood where Uber is also headquartered to the Golden Gate Bridge. The two men would leave their offices separately—to avoid being seen by employees, the press, or competitors. They’d grab takeout food, then rendezvous near the city’s Ferry Building. Levandowski says he saw a union as a way to bring the company’s trucks to market faster.' Which implies to me that the plan was for Uber to acquire Otto all along. "Okay, Travis, but I don't want to just get hired on as another employee, I want to be cool like Kyle Vogt. Give me a few months to buy some trucks, rig them up with sensors, put splashy logos on them and get some press, and then you can acquire me using some of those Saudi gigabucks you picked up in your series F."
- wh-uws 10y ago
  Can you really blame a person if they could pull this off?
  - jessaustin 10y ago
    You're right it would be totally worth all the walking and bromancing.
  - NumberCruncher 10y ago
    I would do the same if I would have the opportunity.
  - twblalock 10y ago
    I see nothing wrong with it. Otto takes on the risk of developing a new business, and gets acquired if the risk pays off. Uber gets to benefit from Otto's efforts without taking the risk, but they have to pay for it in order to make it theirs. It's mutually beneficial, and risks get taken that probably wouldn't be taken otherwise, which is good for innovation. This kind of thing is pretty common at Adobe and Cisco as well. There is a bit of a revolving door of executives and senior engineers leaving to start companies, intending from the beginning of being acquired by their former employer if their business pans out. Many companies could not take the risk of running an innovative new business internally -- their board wouldn't let them, or their investors wouldn't. This kind of thing probably results in more research and innovation taking place that would have otherwise.
- JulianMorrison 10y ago
  Probably deliberate; probably sensible too. Package up a group of people capable, as scientists, of making auto-trucks work. And seek a company with deeper pockets that wanted to get into the auto-truck business, and that could take them on as a ready-to-go modular truck department.
- mbesto 10y ago
  This type of thing, which feels "insider" to most, is wayyyy more common than the average Joe thinks it does.
spbaar 10y ago
I'd love to know. Maybe if you gather enough phds in a hot industry into one room magical things happen?
- bigiain 10y ago
  Wasn't that Google's "growth strategy" a decade or so back?
notatoad 10y ago
"stealth mode" is a thing. just because they launched their website a couple months ago doesn't mean they haven't been working on this stuff for while longer.
- asimuvPR 10y ago
  "Stealth mode" may not even be the reason they had minimal web presence. Maybe it wasn't a priority. I personally help off doing a proper website for three years and it launched last week. Mind you, I don't run a startup, so web marketing is the least of my concerns.
alaskamiller 10y ago
https://backchannel.com/the-man-who-built-googles-first-self-driving-car-is-now-a-trucker-aa1726d3a36f#.41z5s9kh4 https://backchannel.com/the-man-who-built-googles-first-self... Uber acqui-hires ex-Googlers
blazespin 10y ago
Probably these people if they knew they were going to work for Uber, they wouldn't have signed on. But Otto, sure, why not. Otto really was, at the face of it, a recruiting agency for Uber. (An expensive one, I'm sure..)
- aantix 10y ago
  Exactly; given Uber's history of squeezing their drivers, minimizing their take home pay in an attempt to get the lowest ride rates in the market, I wouldn't be too quick to sign up either..
- shostack 10y ago
  Acquihires are interesting in that they might seem expensive, but might actually be cheap from the standpoint of mitigating the risk of an unknown and unproven team. This case might be a little different given the short time this team existed though.
  - vonmoltke 10y ago
    > Acquihires are interesting in that they might seem expensive, but might actually be cheap from the standpoint of mitigating the risk of an unknown and unproven team. Considering that, IMO, Valley companies severely overestimate that risk I think acquihires are a really expensive way to acquire people.
- gorkemyurt 10y ago
  but didn't Otto employees end up making a ton of money, way more than what they would have at Uber? given that otto was pretty young?
huehehue 10y ago
Funny enough, I was recently working with a startup that wanted to buy the ot.to domain. It looked like it was being used for directions to an event or someone's house no longer than a month ago. We were also thinking of branding as Otto, and had a hard time finding anything about a company named Otto -- stealth mode indeed.
- soared 10y ago
  Directions to a BBQ at someone's country house, phone number included. I bet they made a pretty penny selling that domain. MY GOD. The bbq was in 2002, and they kept the site up and running through 2015 before selling it. This is like a piece of history or something. https://web.archive.org/web/20150709120858/http://ot.to/ https://web.archive.org/web/20150709120858/http://ot.to/
  - JulianMorrison 10y ago
    Has anyone actually followed it? Did they find the remains of a barbecue - or vanish silently away?
  - JoblessWonder 10y ago
    Or if someone on Otto's management team has parents with a vacation house in NY.
    - soared 10y ago
      I thought about doing a little doxxing..
  - sethbannon 10y ago
    My goodness driving directions used to be such a nightmare!
- TheLML 10y ago
  Otto [1] is the world largest mail order company[2], so not really a good name to pick anyway [1] https://www.otto.de/ https://www.otto.de/ [2] https://en.wikipedia.org/wiki/Otto_GmbH https://en.wikipedia.org/wiki/Otto_GmbH
chubot 10y ago
I think you are assuming the worst without any information. It's not surprising in the least if you take a minute to find the back story: The founder started a company called 510 systems which was sold to Google, and years later he left Google to create another company focused on self-driving trucks. They obviously have deep experience in the area, and Uber obviously wants that expertise.
- forgotpwtomain 10y ago
  > They obviously have deep experience in the area, The area being flipping companies to large corporate buyers?
- fludlight 10y ago
  Uber could be buying the company not for the founder's experience, but for that of the team that said founder assembled. In real estate parlance this is called "land assemblage": a developer spends years buying up enough adjacent plots of land to build something useful, then he sells it at a substantial premium to someone with enough local political connections and/or capital to make that happen. There should be a subcategory of tech exits that's called "talent assemblage" where the CEO hires the right people to develop a product and sells it to someone with sufficient resources to see it through. While this isn't remotely as valuable as actually seeing the project through, it does still have considerable value. EDIT: this would be a subcategory of the acquihire
  - free2rhyme214 10y ago
    It's an acquirehire and for the technology.
  - bigiain 10y ago
    I wonder whether they were upfront during recruiting all those team members that the intention was to "sell them" to Uber? (You know, just like that real estate developer is always scrupulously honest when negotiating for that last plot of land, they always say something like "This is the last piece I need to make my seven digit profit! How much did you say you wanted for it?", and would _never_ try to tell the owner of that plot "This is exactly the same house design that my alzheimer's affected mother has lived in all her life - it'd make her last few years _so_ much more comfortable. Would you accept $market_rate*0.8?"...)
bogomipz 10y ago
I had the exact same reaction. My other thought was how can a brand new start up founder in SF have the time to take 10 mile walks? Consider the average walking speed is 3 miles an hour. It all feels very press-release ready - two car-based start up guys walking ...
- TheSpiceIsLife 10y ago
  This could definitely be spun in to a TED Talk, the script is pretty much written.
- cpeterso 10y ago
  If only there was a faster way for them to get to their destination! ;)

subdane 10y ago

Founded by four ex-Google engineers, including the guy that built Google's first self driving car https://backchannel.com/the-man-who-built-googles-first-self-driving-car-is-now-a-trucker-aa1726d3a36f https://backchannel.com/the-man-who-built-googles-first-self...

joeblau 10y ago

I don't know if this might be more help: https://newsroom.uber.com/rethinking-transportation/ https://newsroom.uber.com/rethinking-transportation/

Fricken 10y ago

This is from the big Bloomberg article/interview that came out today: 'Kalanick began courting Levandowski this spring, broaching the possibility of an acquisition during a series of 10-mile night walks from the Soma neighborhood where Uber is also headquartered to the Golden Gate Bridge. The two men would leave their offices separately—to avoid being seen by employees, the press, or competitors. They’d grab takeout food, then rendezvous near the city’s Ferry Building. Levandowski says he saw a union as a way to bring the company’s trucks to market faster.' Which implies to me that the plan was for Uber to acquire Otto all along. "Okay, Travis, but I don't want to just get hired on as another employee, I want to be cool like Kyle Vogt. Give me a few months to buy some trucks, rig them up with sensors, put splashy logos on them and get some press, and then you can acquire me using some of those Saudi gigabucks you picked up in your series F."

wh-uws 10y ago
Can you really blame a person if they could pull this off?
- jessaustin 10y ago
  You're right it would be totally worth all the walking and bromancing.
- NumberCruncher 10y ago
  I would do the same if I would have the opportunity.
- twblalock 10y ago
  I see nothing wrong with it. Otto takes on the risk of developing a new business, and gets acquired if the risk pays off. Uber gets to benefit from Otto's efforts without taking the risk, but they have to pay for it in order to make it theirs. It's mutually beneficial, and risks get taken that probably wouldn't be taken otherwise, which is good for innovation. This kind of thing is pretty common at Adobe and Cisco as well. There is a bit of a revolving door of executives and senior engineers leaving to start companies, intending from the beginning of being acquired by their former employer if their business pans out. Many companies could not take the risk of running an innovative new business internally -- their board wouldn't let them, or their investors wouldn't. This kind of thing probably results in more research and innovation taking place that would have otherwise.
JulianMorrison 10y ago
Probably deliberate; probably sensible too. Package up a group of people capable, as scientists, of making auto-trucks work. And seek a company with deeper pockets that wanted to get into the auto-truck business, and that could take them on as a ready-to-go modular truck department.
mbesto 10y ago
This type of thing, which feels "insider" to most, is wayyyy more common than the average Joe thinks it does.

spbaar 10y ago

I'd love to know. Maybe if you gather enough phds in a hot industry into one room magical things happen?

bigiain 10y ago
Wasn't that Google's "growth strategy" a decade or so back?

notatoad 10y ago

"stealth mode" is a thing. just because they launched their website a couple months ago doesn't mean they haven't been working on this stuff for while longer.

asimuvPR 10y ago
"Stealth mode" may not even be the reason they had minimal web presence. Maybe it wasn't a priority. I personally help off doing a proper website for three years and it launched last week. Mind you, I don't run a startup, so web marketing is the least of my concerns.

alaskamiller 10y ago

https://backchannel.com/the-man-who-built-googles-first-self-driving-car-is-now-a-trucker-aa1726d3a36f#.41z5s9kh4 https://backchannel.com/the-man-who-built-googles-first-self... Uber acqui-hires ex-Googlers

blazespin 10y ago

Probably these people if they knew they were going to work for Uber, they wouldn't have signed on. But Otto, sure, why not. Otto really was, at the face of it, a recruiting agency for Uber. (An expensive one, I'm sure..)

aantix 10y ago
Exactly; given Uber's history of squeezing their drivers, minimizing their take home pay in an attempt to get the lowest ride rates in the market, I wouldn't be too quick to sign up either..
shostack 10y ago
Acquihires are interesting in that they might seem expensive, but might actually be cheap from the standpoint of mitigating the risk of an unknown and unproven team. This case might be a little different given the short time this team existed though.
- vonmoltke 10y ago
  > Acquihires are interesting in that they might seem expensive, but might actually be cheap from the standpoint of mitigating the risk of an unknown and unproven team. Considering that, IMO, Valley companies severely overestimate that risk I think acquihires are a really expensive way to acquire people.
gorkemyurt 10y ago
but didn't Otto employees end up making a ton of money, way more than what they would have at Uber? given that otto was pretty young?

huehehue 10y ago

Funny enough, I was recently working with a startup that wanted to buy the ot.to domain. It looked like it was being used for directions to an event or someone's house no longer than a month ago. We were also thinking of branding as Otto, and had a hard time finding anything about a company named Otto -- stealth mode indeed.

soared 10y ago
Directions to a BBQ at someone's country house, phone number included. I bet they made a pretty penny selling that domain. MY GOD. The bbq was in 2002, and they kept the site up and running through 2015 before selling it. This is like a piece of history or something. https://web.archive.org/web/20150709120858/http://ot.to/ https://web.archive.org/web/20150709120858/http://ot.to/
- JulianMorrison 10y ago
  Has anyone actually followed it? Did they find the remains of a barbecue - or vanish silently away?
- JoblessWonder 10y ago
  Or if someone on Otto's management team has parents with a vacation house in NY.
  - soared 10y ago
    I thought about doing a little doxxing..
- sethbannon 10y ago
  My goodness driving directions used to be such a nightmare!
TheLML 10y ago
Otto [1] is the world largest mail order company[2], so not really a good name to pick anyway [1] https://www.otto.de/ https://www.otto.de/ [2] https://en.wikipedia.org/wiki/Otto_GmbH https://en.wikipedia.org/wiki/Otto_GmbH

chubot 10y ago

I think you are assuming the worst without any information. It's not surprising in the least if you take a minute to find the back story: The founder started a company called 510 systems which was sold to Google, and years later he left Google to create another company focused on self-driving trucks. They obviously have deep experience in the area, and Uber obviously wants that expertise.

forgotpwtomain 10y ago
> They obviously have deep experience in the area, The area being flipping companies to large corporate buyers?
fludlight 10y ago
Uber could be buying the company not for the founder's experience, but for that of the team that said founder assembled. In real estate parlance this is called "land assemblage": a developer spends years buying up enough adjacent plots of land to build something useful, then he sells it at a substantial premium to someone with enough local political connections and/or capital to make that happen. There should be a subcategory of tech exits that's called "talent assemblage" where the CEO hires the right people to develop a product and sells it to someone with sufficient resources to see it through. While this isn't remotely as valuable as actually seeing the project through, it does still have considerable value. EDIT: this would be a subcategory of the acquihire
- free2rhyme214 10y ago
  It's an acquirehire and for the technology.
- bigiain 10y ago
  I wonder whether they were upfront during recruiting all those team members that the intention was to "sell them" to Uber? (You know, just like that real estate developer is always scrupulously honest when negotiating for that last plot of land, they always say something like "This is the last piece I need to make my seven digit profit! How much did you say you wanted for it?", and would _never_ try to tell the owner of that plot "This is exactly the same house design that my alzheimer's affected mother has lived in all her life - it'd make her last few years _so_ much more comfortable. Would you accept $market_rate*0.8?"...)

bogomipz 10y ago

I had the exact same reaction. My other thought was how can a brand new start up founder in SF have the time to take 10 mile walks? Consider the average walking speed is 3 miles an hour. It all feels very press-release ready - two car-based start up guys walking ...

TheSpiceIsLife 10y ago
This could definitely be spun in to a TED Talk, the script is pretty much written.
cpeterso 10y ago
If only there was a faster way for them to get to their destination! ;)