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> Make good hardware and sell it at a profit. It really isn't that simple, and I wish people would stop acting like making ANY profit is enough to keep a busin

> Make good hardware and sell it at a profit. It really isn't that simple, and I wish people would stop acting like making ANY profit is enough to keep a business around. First, making a profit isn't enough... you have to make more profit than the people investing money in the company could make elsewhere. If you make $1 for every $100 invested, and some other company can make $2 for every $100, why would anyone invest in the $1 maker? It isn't just about profit, it is about the opportunity cost of using capital on something that isn't as profitable as other capital uses. Second, let's say the profit margins are actually pretty good, and you make a nice return on this quality hardware you make. However, if the quality actually is really good, what do you do after everyone who needs your product buys it? You either have to build in obsolescence, which everyone rightly hates, or you have to switch to making another product. That switch is expensive, and cuts into your profit margin... assuming your new product is even successful. This is a lot of risk. What that risk means is that investors don't want to be left holding the bag when your product reaches market saturation and your pivot fails... which is going to make it harder to get investment. Really, Sonos is a great example of what happens when you follow your instructions to "make a good product and sell it at a profit"... they did that for many years, and made money.... but now most people who want a speaker like Sonos makes already have them, and their growth has stopped. They can still make money on each speaker sold, but they are selling fewer of them. So they are trying to pivot to make money some other way, and it sounds like it might not be going great. The only sustainable hardware business is to make and sell a huge amount of commodity hardware at small margins, and simply switch to the next thing once some OTHER company does the expensive research and experimentation to create the next thing people want to buy.

tomc1985 6y ago
All they have to do is survive. They do not need to take over the world. There are other boutique audio hardware companies that do not take such a data-heavy approach and they are doing fine. As I hinted in my other comment, Sennheiser or Klipsch are examples. Does Bose demand this much access to you and your data just to sell you a new WaveRadio or whatever? They even have a dedicated retail presence to maintain!
- lotsofpulp 6y ago
  > All they have to do is survive. They do not need to take over the world. Depends on their finances, and what the investors are looking to get out of it. And they may need to compete with the compensation offered by FAANG companies who can easily do it with perpetually rising market valuations. Ability to scale almost infinitely at almost zero marginal costs makes consumer tech products involving decent software quite a difficult business to be in.
- BostonEnginerd 6y ago
  Bose did get caught vacuuming up user data: https://www.reuters.com/article/us-bose-lawsuit/bose-headphones-spy-on-listeners-lawsuit-idUSKBN17L2BT https://www.reuters.com/article/us-bose-lawsuit/bose-headpho... I do agree with your overall point though!
- consumer451 6y ago
  > All they have to do is survive. They do not need to take over the world. The is generally the antithesis of funds that invest in tech, is it not?
  - tomc1985 6y ago
    It is. Grow to super huge or die. What really needs to die are all these damn investment funds
dreamcompiler 6y ago
> you have to make more profit than the people investing money in the company could make elsewhere. Bingo. That's precisely the reason we need legislation in the US similar to the GDPR. Until all companies are forbidden to collect customer data, companies that don't do so will always be at a profit disadvantage. Once all companies are forbidden from abusing their customers, investors won't have the option of investing in companies that abuse their customers. Which is exactly as it should be.
- Nextgrid 6y ago
  > companies that don't do so will always be at a profit disadvantage I would be really curious as to how data collected from a Sonos speaker (without the ability to directly monetize that data themselves for advertising, as nobody would be buying speakers that insert ads) can be worth anything more than a rounding error of their current revenue.
rsync 6y ago
"Really, Sonos is a great example of what happens when you follow your instructions to "make a good product and sell it at a profit"... they did that for many years, and made money.... but now most people who want a speaker like Sonos makes already have them, and their growth has stopped." No. Sonos has a very small market penetration and could have continued growing, modestly, with enthusiastic reviews and glowing recommendations forever. The problem was not that they did not have a business model - the problem was that nobody was going to get filthy rich with that business model. They found that to be unacceptable and did silly things - like an IPO. Now they're stuck on a path that requires rapid growth. You could have easily predicted, years ago, that any company in this position would do things like drop support for old devices and get pushy with people to adopt their app (although I have to admit, I never would have predicted that they would gut their desktop player and force people to use the app) ... and adopt sleazy and desperate relationships with data brokers, etc. Fuck them. I wish they knew how much I loved their company, and their product, and how much I hate them now.

tomc1985 6y ago

All they have to do is survive. They do not need to take over the world. There are other boutique audio hardware companies that do not take such a data-heavy approach and they are doing fine. As I hinted in my other comment, Sennheiser or Klipsch are examples. Does Bose demand this much access to you and your data just to sell you a new WaveRadio or whatever? They even have a dedicated retail presence to maintain!

lotsofpulp 6y ago
> All they have to do is survive. They do not need to take over the world. Depends on their finances, and what the investors are looking to get out of it. And they may need to compete with the compensation offered by FAANG companies who can easily do it with perpetually rising market valuations. Ability to scale almost infinitely at almost zero marginal costs makes consumer tech products involving decent software quite a difficult business to be in.
BostonEnginerd 6y ago
Bose did get caught vacuuming up user data: https://www.reuters.com/article/us-bose-lawsuit/bose-headphones-spy-on-listeners-lawsuit-idUSKBN17L2BT https://www.reuters.com/article/us-bose-lawsuit/bose-headpho... I do agree with your overall point though!
consumer451 6y ago
> All they have to do is survive. They do not need to take over the world. The is generally the antithesis of funds that invest in tech, is it not?
- tomc1985 6y ago
  It is. Grow to super huge or die. What really needs to die are all these damn investment funds

dreamcompiler 6y ago

> you have to make more profit than the people investing money in the company could make elsewhere. Bingo. That's precisely the reason we need legislation in the US similar to the GDPR. Until all companies are forbidden to collect customer data, companies that don't do so will always be at a profit disadvantage. Once all companies are forbidden from abusing their customers, investors won't have the option of investing in companies that abuse their customers. Which is exactly as it should be.

Nextgrid 6y ago
> companies that don't do so will always be at a profit disadvantage I would be really curious as to how data collected from a Sonos speaker (without the ability to directly monetize that data themselves for advertising, as nobody would be buying speakers that insert ads) can be worth anything more than a rounding error of their current revenue.

rsync 6y ago

"Really, Sonos is a great example of what happens when you follow your instructions to "make a good product and sell it at a profit"... they did that for many years, and made money.... but now most people who want a speaker like Sonos makes already have them, and their growth has stopped." No. Sonos has a very small market penetration and could have continued growing, modestly, with enthusiastic reviews and glowing recommendations forever. The problem was not that they did not have a business model - the problem was that nobody was going to get filthy rich with that business model. They found that to be unacceptable and did silly things - like an IPO. Now they're stuck on a path that requires rapid growth. You could have easily predicted, years ago, that any company in this position would do things like drop support for old devices and get pushy with people to adopt their app (although I have to admit, I never would have predicted that they would gut their desktop player and force people to use the app) ... and adopt sleazy and desperate relationships with data brokers, etc. Fuck them. I wish they knew how much I loved their company, and their product, and how much I hate them now.