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In 2014, I was at Google and went to an open house event at the Google robotics lab in SF. The people I met there were nice. I almost applied for a job there.

In 2014, I was at Google and went to an open house event at the Google robotics lab in SF. The people I met there were nice. I almost applied for a job there. Then I looked up the person who would have been my boss. He was scowling in his Google profile photo. His LinkedIn showed him as founder of a robotics company, with no mention of Google. He obviously wanted to be the CEO of a robotics company, not a director in Google. Google acquired many robotics companies in 2013. I believe most of the acquired companies' leaders had contracts requiring them to stay at Google for 4 years. Did Google delay the progress of robotic technology by 4 years? The VC model obviously helps enable human progress in many situations. But surely not all situations. How can we know when the VC model will be a net loss for humanity? I'm glad to see those folks moving on and following their dreams.

edf13 6y ago
Interesting point - did Google delay robotics by 4 years. How many other areas are also effected by this 4 year lock-in period...
imtringued 6y ago
What if this created demand and funding for robotics companies? It's not like you are forced to sell your company to Google.
- frozenport 6y ago
  If you're the CEO and your investors want a soft landing, there is little you can do.
- enumjorge 6y ago
  You’re not forced to but few people won’t take a huge bag of money if offered one, especially if it’s their first one.
frozenport 6y ago
Google was also more against developing military applications which have been the historic routes for developing physically realizable but costly technologies (such as the computer).
kungato 6y ago
But how does Google force CEOs into a 4 year contract post acquisition?
- granshaw 6y ago
  It was probably in the terms of the acquisition itself
- PedroBatista 6y ago
  Easy, I give you X million dollars and take over your company if you stay at Google 4 years. Sign here:
- nradov 6y ago
  An acquirer can't literally force someone to stay on as an employee for 4 years. What they typically do is set up a deferred compensation scheme (golden handcuffs) with a large guaranteed bonus payment or stock vesting at the end of that period. In some cases they also include a non-compete clause in the agreement which leaves the employee with few other employment options, although those are only enforceable in certain jurisdictions.
slim 6y ago
4 years is nothing at the scale of human progress
- john4532452 6y ago
  If one is 40 and adding 4 years is 44, that's a lot of valuable years to be productive cognitively.
- smolder 6y ago
  4 years at peak human population means a lot of human-years have transpired. And we've only been doing this oil burning industry thing for a few hundred. I think 4 years is quite a long time because of the scale of human progress.
koheripbal 6y ago
Given the net number of massive companies that emerged from VCs, this is obviously not true.
- regularfry 6y ago
  It doesn't tell us anything one way or the other. That's survivorship bias talking.
  - koheripbal 6y ago
    Your sample is wrong. We are comparing the number of successful new companies that came out of VC vs the number of successful new companies that came without VC. ...and it's easily obvious that almost all of the new large tech companies emerged from VC.
    - regularfry 6y ago
      No, that's what you are doing. What I'm doing is comparing the number of successful companies that came out given that the VC system exists versus a situation where it doesn't. We don't know how many potentially successful companies haven't been started, or got strangled in the crib, because of the dynamics of the VC ecosystem and the fact that it exists. Also it's an error of remarkable proportions to assume that "massive company" is synonymous with "net positive to humanity", particularly in tech.
- enumjorge 6y ago
  A company reaching a massive size does not mean it’s been a net positive on society. In fact I’d argue that many previously beneficial companies have become net negatives once they got massive.
- mleonhard 6y ago
  Robotics technology is in the research phase. No big companies can be built from it yet. Researchers must do many more years of work before anyone can make useful robotics products. How can we get that work done faster? Compare two cases: 1. Founders spend 6 months setting up a company and selling it to VCs. Then they develop for 2 years. The VCs want an early exit so they shop the company around and Google decides to buy. The founders and all employees must sign a 4-year contract or walk away with nothing. They sign. They waste 6 months on the acquisition process. Google mismanages the new teams. Google's CEO fails to put someone with customer focus in a position with power. There is no SVP of Robotics Products. Morale dives and then productivity dives. After 4 years, they all leave and spend a year recovering from burnout and setting up a new company to finally get back focusing on research. In 8 years, they have spent 2 years on high-productivity robotics research, 4 years on low-productivity research, and 2 years on logistics. 2. Founders spend 6 months setting up a company and securing grants. Then they develop for 7.5 years. In those 8 years, they have spent 7.5 years on high-productivity robotics research. I believe there are other good ways to fund companies that have not yet been developed. VC does not fit all situations. Grants and bootstrapping have limitations. There are spaces for new funding models. What might they be?
ajmurmann 6y ago
Is the problem VCs or much deeper just the nature of acquisitions. The ideal acquisitions would least to synergy between the acquirer and acquiree. This would lead to a combination of reduced cost, improved products and the companies and consumers all win. Unfortunately, it seems to me like this might describe a minority of real acquisitions, at least in tech. It seems like many acquisitions get fumbled and the original company and their products are now bad and literally nobody won from this but the owner of the original company having a nice excited. In many cases tough the goal of the acquisition even seems to be to eliminate competition which is terrible for the consumer and hurts the market. In that scenario I'd rather see companies "fight to the death" or find their respective niches. I'm uncertain what impact it had on the market and industry that some companies now get started with the goal bring a acquisition by FAANG. I have no data or even anecdata, but intuitively it seems like something that would be interesting for an economist to do a study on.

edf13 6y ago

Interesting point - did Google delay robotics by 4 years. How many other areas are also effected by this 4 year lock-in period...

imtringued 6y ago

What if this created demand and funding for robotics companies? It's not like you are forced to sell your company to Google.

frozenport 6y ago
If you're the CEO and your investors want a soft landing, there is little you can do.
enumjorge 6y ago
You’re not forced to but few people won’t take a huge bag of money if offered one, especially if it’s their first one.

frozenport 6y ago

Google was also more against developing military applications which have been the historic routes for developing physically realizable but costly technologies (such as the computer).

kungato 6y ago

But how does Google force CEOs into a 4 year contract post acquisition?

granshaw 6y ago
It was probably in the terms of the acquisition itself
PedroBatista 6y ago
Easy, I give you X million dollars and take over your company if you stay at Google 4 years. Sign here:
nradov 6y ago
An acquirer can't literally force someone to stay on as an employee for 4 years. What they typically do is set up a deferred compensation scheme (golden handcuffs) with a large guaranteed bonus payment or stock vesting at the end of that period. In some cases they also include a non-compete clause in the agreement which leaves the employee with few other employment options, although those are only enforceable in certain jurisdictions.

slim 6y ago

4 years is nothing at the scale of human progress

john4532452 6y ago
If one is 40 and adding 4 years is 44, that's a lot of valuable years to be productive cognitively.
smolder 6y ago
4 years at peak human population means a lot of human-years have transpired. And we've only been doing this oil burning industry thing for a few hundred. I think 4 years is quite a long time because of the scale of human progress.

koheripbal 6y ago

Given the net number of massive companies that emerged from VCs, this is obviously not true.

regularfry 6y ago
It doesn't tell us anything one way or the other. That's survivorship bias talking.
- koheripbal 6y ago
  Your sample is wrong. We are comparing the number of successful new companies that came out of VC vs the number of successful new companies that came without VC. ...and it's easily obvious that almost all of the new large tech companies emerged from VC.
  - regularfry 6y ago
    No, that's what you are doing. What I'm doing is comparing the number of successful companies that came out given that the VC system exists versus a situation where it doesn't. We don't know how many potentially successful companies haven't been started, or got strangled in the crib, because of the dynamics of the VC ecosystem and the fact that it exists. Also it's an error of remarkable proportions to assume that "massive company" is synonymous with "net positive to humanity", particularly in tech.
enumjorge 6y ago
A company reaching a massive size does not mean it’s been a net positive on society. In fact I’d argue that many previously beneficial companies have become net negatives once they got massive.
mleonhard 6y ago
Robotics technology is in the research phase. No big companies can be built from it yet. Researchers must do many more years of work before anyone can make useful robotics products. How can we get that work done faster? Compare two cases: 1. Founders spend 6 months setting up a company and selling it to VCs. Then they develop for 2 years. The VCs want an early exit so they shop the company around and Google decides to buy. The founders and all employees must sign a 4-year contract or walk away with nothing. They sign. They waste 6 months on the acquisition process. Google mismanages the new teams. Google's CEO fails to put someone with customer focus in a position with power. There is no SVP of Robotics Products. Morale dives and then productivity dives. After 4 years, they all leave and spend a year recovering from burnout and setting up a new company to finally get back focusing on research. In 8 years, they have spent 2 years on high-productivity robotics research, 4 years on low-productivity research, and 2 years on logistics. 2. Founders spend 6 months setting up a company and securing grants. Then they develop for 7.5 years. In those 8 years, they have spent 7.5 years on high-productivity robotics research. I believe there are other good ways to fund companies that have not yet been developed. VC does not fit all situations. Grants and bootstrapping have limitations. There are spaces for new funding models. What might they be?

ajmurmann 6y ago

Is the problem VCs or much deeper just the nature of acquisitions. The ideal acquisitions would least to synergy between the acquirer and acquiree. This would lead to a combination of reduced cost, improved products and the companies and consumers all win. Unfortunately, it seems to me like this might describe a minority of real acquisitions, at least in tech. It seems like many acquisitions get fumbled and the original company and their products are now bad and literally nobody won from this but the owner of the original company having a nice excited. In many cases tough the goal of the acquisition even seems to be to eliminate competition which is terrible for the consumer and hurts the market. In that scenario I'd rather see companies "fight to the death" or find their respective niches. I'm uncertain what impact it had on the market and industry that some companies now get started with the goal bring a acquisition by FAANG. I have no data or even anecdata, but intuitively it seems like something that would be interesting for an economist to do a study on.