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This just demonstrates the "price gap" between virtual and "real world" companies. An app with a few thousand uses with worth more than one of the world's best

This just demonstrates the "price gap" between virtual and "real world" companies. An app with a few thousand uses with worth more than one of the world's best engineering companies. Even if either has a path to profitability.

ialyos 6y ago
Agreed. Robots are very hard, and Boston Dynamics has been around for almost 40 years and still isn't anywhere close to making a lot of money. Apps have added a lot more value to my life than BD ever has. Fwiw I interviewed with BD a few years ago, and am focusing on robotics, so I'd like the opposite to be true
- tibiahurried 6y ago
  > Apps have added a lot more value to my life than BD ever has. This thinking will never take humans on Mars! Someone must work on hard, expensive problems. Human race does won't move forward with a chat but with the hard work of scientist, engineers etc ...
  - jskajakzkjx 6y ago
    A lot of the hard work of scientists and engineers is enabled by chats, though.
    - jessaustin 6y ago
      "On the joyous and satisfying occasion of this, our first successful journey to Mars, we think back not only on all those who died along the way, but also on the Slack clone that allowed us avert disaster on this mission..."
      - teknopaul 6y ago
        I do wonder why we want humans on Mars. Given the huge amount of fossil fuels that must be burned on this planet to get us there. We may find Mars is dry and arid when we get there, and so is Earth.
- WhompingWindows 6y ago
  Computation existed for more than 40 years before apps started making a ton of money on it. If BD develops robotic platform-"workers" that can be trained in 5 seconds to do any manual labor, that's the new "app" that one would be making money off of in the future.
chadash 6y ago
a) Boston Dynamics might be a cool company, but they don't seem to have a widely used product on the market (and they were founded 28 years ago). b) Is there a specific app with just a few thousand users that sold for more than $1B?
- libra1 6y ago
  Clubhouse was worth ~$100m with only 1,500 users in May; might be more now: https://www.cnbc.com/2020/05/20/clubhouse-app-is-where-mc-hammer-and-jared-leto-chat-with-vcs.html#:~:text=Clubhouse%20is%20an%20audio%20app,yet%20have%20a%20public%20website https://www.cnbc.com/2020/05/20/clubhouse-app-is-where-mc-ha....
  - vonmoltke 6y ago
    Clubhouse was "worth" $100MM in the sense that A16z paid $12MM for 12% of it. That's not the same as someone paying $100MM for all of it.
    - hollerith 6y ago
      It's not exactly the same, but it is very similar.
Darmody 6y ago
We spend way more in software (also online services) than in hardware.
- mandelbrotwurst 6y ago
  Do cars count as hardware? People spend a lot on those.
  - chubot 6y ago
    Well, there seems to be a clear downward trend in car purchasing, if you look at demographics (e.g. the move from suburbs back to cities) Renting a service + car together via rideshare does have some fundamental economic efficiencies (depending on where you live, and other aspects the situation)
  - jayd16 6y ago
    Its about the margin though isn't it? They cost a lot to buy but they also cost a lot to make. How much value can Apple and Microsoft extract from you over the lifetime of a single car.
    - mywittyname 6y ago
      > How much value can Apple and Microsoft extract from you over the lifetime of a single car. Probably less than Toyota has extracted from me in my lifetime already. Cars are lower margin, but they are expensive in absolute dollars, and their purchase almost always involves leverage. A $35,000 car will typically earn the manufacture $3-7k in direct profits, the financing arm gets ~$1800, the dealership gets ~$600 (plus profits from extended warranties, service, etc). There's still a ton of money to be made in automobile manufacturing. And that's for an average car (actually, below average, the median new car price is nearly $40k). Vehicles like Porsches or an F-150s have insanely high margins. Porsche has the highest margins in the industry (50% for the 911) by a comfortable amount and Ford reports the percentage of F-150s sold for over $50k in their annual reports, and have for years, because it's the most critical aspect of their bottom line. Tech companies benefit from having really dispersed revenue streams: they make a few dollars off of billions of people while car companies make thousands of dollars off of a few million people.
ISL 6y ago
Without detailed understanding of BD's assets and liabilities, it is difficult to assess a single deal. If BD lives up to its perennial hype/technical-success and is not encumbered with significant liabilities, Hyundai may have gotten quite a deal.
SilasX 6y ago
I was going to cite concrete numbers for BD’s previous acquisitions — since I was certain I’d heard those figures being higher — but Wikipedia just gives the Google and SoftBank purchases as being undisclosed sums: https://en.wikipedia.org/wiki/Boston_Dynamics#Company_history https://en.wikipedia.org/wiki/Boston_Dynamics#Company_histor...
- agency 6y ago
  This Bloomberg article[1] claims the 2017 sale to Softbank was just $165 million. Compare that to SaaS valuations. Software is wild. [1] https://www.bloomberg.com/news/articles/2020-11-17/boston-dynamics-needs-to-start-making-money-off-its-robots https://www.bloomberg.com/news/articles/2020-11-17/boston-dy...
dalbasal 6y ago
I agree, and it's probably becoming a problem, but... I don't think this is a good example of that. I mean, we're talking about the value of a business. Boston Dynamics is more of a research lab. They don't really have much in the way of revenue streams, customers, products, etc.
- mywittyname 6y ago
  Cutting edge research is ultra-high risk-to-reward. Some of the scientist and engineers working there might invent/discover what could be the most significant thing in human history for the next hundred years. Leading to a fabulous amount of wealth creation. But there's no guarantee the company financing all of this will be able to capitalize on that invention. That's a lot of ifs. If people there invent something important; if the company sees the true value of the invention; if it is marketed in a way that makes money; if etc...
  - daotoad 6y ago
    True. Just ask Xerox. https://en.wikipedia.org/wiki/Xerox_Alto https://en.wikipedia.org/wiki/Xerox_Alto
gopi 6y ago
Bits > Atoms
pvarangot 6y ago
Boston Dynamics is a consulting company that uses some fun pet projects as PR. Consulting is a very tight margin business because it's used as some kind of arbitrage move between workforce and capabilities. It doesn't matter if you are doing consulting with the most specialized meditation app UI researchers or the most specialized cyber-biology engineers with experience in exobiology and colonizing other celestial bodies. It's still consulting.
formercoder 6y ago
Has everything to do with margin, one of the biggest drivers of value.
jcims 6y ago
The day Uber was 'worth' more than General Electric reformulated how I think about the stock market.

ialyos 6y ago

Agreed. Robots are very hard, and Boston Dynamics has been around for almost 40 years and still isn't anywhere close to making a lot of money. Apps have added a lot more value to my life than BD ever has. Fwiw I interviewed with BD a few years ago, and am focusing on robotics, so I'd like the opposite to be true

tibiahurried 6y ago
> Apps have added a lot more value to my life than BD ever has. This thinking will never take humans on Mars! Someone must work on hard, expensive problems. Human race does won't move forward with a chat but with the hard work of scientist, engineers etc ...
- jskajakzkjx 6y ago
  A lot of the hard work of scientists and engineers is enabled by chats, though.
  - jessaustin 6y ago
    "On the joyous and satisfying occasion of this, our first successful journey to Mars, we think back not only on all those who died along the way, but also on the Slack clone that allowed us avert disaster on this mission..."
    - teknopaul 6y ago
      I do wonder why we want humans on Mars. Given the huge amount of fossil fuels that must be burned on this planet to get us there. We may find Mars is dry and arid when we get there, and so is Earth.
WhompingWindows 6y ago
Computation existed for more than 40 years before apps started making a ton of money on it. If BD develops robotic platform-"workers" that can be trained in 5 seconds to do any manual labor, that's the new "app" that one would be making money off of in the future.

chadash 6y ago

a) Boston Dynamics might be a cool company, but they don't seem to have a widely used product on the market (and they were founded 28 years ago). b) Is there a specific app with just a few thousand users that sold for more than $1B?

libra1 6y ago
Clubhouse was worth ~$100m with only 1,500 users in May; might be more now: https://www.cnbc.com/2020/05/20/clubhouse-app-is-where-mc-hammer-and-jared-leto-chat-with-vcs.html#:~:text=Clubhouse%20is%20an%20audio%20app,yet%20have%20a%20public%20website https://www.cnbc.com/2020/05/20/clubhouse-app-is-where-mc-ha....
- vonmoltke 6y ago
  Clubhouse was "worth" $100MM in the sense that A16z paid $12MM for 12% of it. That's not the same as someone paying $100MM for all of it.
  - hollerith 6y ago
    It's not exactly the same, but it is very similar.

Darmody 6y ago

We spend way more in software (also online services) than in hardware.

mandelbrotwurst 6y ago
Do cars count as hardware? People spend a lot on those.
- chubot 6y ago
  Well, there seems to be a clear downward trend in car purchasing, if you look at demographics (e.g. the move from suburbs back to cities) Renting a service + car together via rideshare does have some fundamental economic efficiencies (depending on where you live, and other aspects the situation)
- jayd16 6y ago
  Its about the margin though isn't it? They cost a lot to buy but they also cost a lot to make. How much value can Apple and Microsoft extract from you over the lifetime of a single car.
  - mywittyname 6y ago
    > How much value can Apple and Microsoft extract from you over the lifetime of a single car. Probably less than Toyota has extracted from me in my lifetime already. Cars are lower margin, but they are expensive in absolute dollars, and their purchase almost always involves leverage. A $35,000 car will typically earn the manufacture $3-7k in direct profits, the financing arm gets ~$1800, the dealership gets ~$600 (plus profits from extended warranties, service, etc). There's still a ton of money to be made in automobile manufacturing. And that's for an average car (actually, below average, the median new car price is nearly $40k). Vehicles like Porsches or an F-150s have insanely high margins. Porsche has the highest margins in the industry (50% for the 911) by a comfortable amount and Ford reports the percentage of F-150s sold for over $50k in their annual reports, and have for years, because it's the most critical aspect of their bottom line. Tech companies benefit from having really dispersed revenue streams: they make a few dollars off of billions of people while car companies make thousands of dollars off of a few million people.

ISL 6y ago

Without detailed understanding of BD's assets and liabilities, it is difficult to assess a single deal. If BD lives up to its perennial hype/technical-success and is not encumbered with significant liabilities, Hyundai may have gotten quite a deal.

SilasX 6y ago

I was going to cite concrete numbers for BD’s previous acquisitions — since I was certain I’d heard those figures being higher — but Wikipedia just gives the Google and SoftBank purchases as being undisclosed sums: https://en.wikipedia.org/wiki/Boston_Dynamics#Company_history https://en.wikipedia.org/wiki/Boston_Dynamics#Company_histor...

agency 6y ago
This Bloomberg article[1] claims the 2017 sale to Softbank was just $165 million. Compare that to SaaS valuations. Software is wild. [1] https://www.bloomberg.com/news/articles/2020-11-17/boston-dynamics-needs-to-start-making-money-off-its-robots https://www.bloomberg.com/news/articles/2020-11-17/boston-dy...

dalbasal 6y ago

I agree, and it's probably becoming a problem, but... I don't think this is a good example of that. I mean, we're talking about the value of a business. Boston Dynamics is more of a research lab. They don't really have much in the way of revenue streams, customers, products, etc.

mywittyname 6y ago
Cutting edge research is ultra-high risk-to-reward. Some of the scientist and engineers working there might invent/discover what could be the most significant thing in human history for the next hundred years. Leading to a fabulous amount of wealth creation. But there's no guarantee the company financing all of this will be able to capitalize on that invention. That's a lot of ifs. If people there invent something important; if the company sees the true value of the invention; if it is marketed in a way that makes money; if etc...
- daotoad 6y ago
  True. Just ask Xerox. https://en.wikipedia.org/wiki/Xerox_Alto https://en.wikipedia.org/wiki/Xerox_Alto

gopi 6y ago

Bits > Atoms

pvarangot 6y ago

Boston Dynamics is a consulting company that uses some fun pet projects as PR. Consulting is a very tight margin business because it's used as some kind of arbitrage move between workforce and capabilities. It doesn't matter if you are doing consulting with the most specialized meditation app UI researchers or the most specialized cyber-biology engineers with experience in exobiology and colonizing other celestial bodies. It's still consulting.

formercoder 6y ago

Has everything to do with margin, one of the biggest drivers of value.

jcims 6y ago

The day Uber was 'worth' more than General Electric reformulated how I think about the stock market.