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It blows my mind that a chat client is worth over 26 times what Boston Dynamics is.
by diveanon 6y ago
It blows my mind that a chat client is worth over 26 times what Boston Dynamics is.
- ZephyrBlu 6y agoWell to be fair BD's _first product_ was only released what, a year ago? If they continue chugging along I can see them generating many, many more billions of dollars of value.
- deleted 6y ago[deleted]
- api 6y agoA casino is more profitable than a hospital.
- simonh 6y agoAs a confirmed capitalist and free market believer, I have to say you've got me. There's not much I can say about that.
- IgorPartola 6y agoAs it should be. Hospitals being businesses is weird.
- orzig 6y agoTo extend this, a casino that has built a brand has a higher profit margin than a hospital. If I had $10 million to make something new, I might well build a hospital. I don’t claim deep knowledge of either industry, but I suspect that survivorship bias colors the lucrative casino examples we are thinking of. In contrast, a few hours with Google maps could probably turn up a reasonably profitable site for a new hospital, just based on ballpark supply and demand
- diveanon 6y agoHospitals shouldn't be profitable at all.
- thih9 6y agoCould you add context? What chat client?
- TheGallopedHigh 6y agoLikely WhatsApp
- voqv 6y agoSlack
- ZephyrBlu 6y agoSlack was recently acquired for $27 billion, so I assume they're referring to Slack.
- parsimo2010 6y agoSalesforce bought Slack for 27.7 billion dollars.
- macspoofing 6y agoIn this context, many tech chat/social products would fit the bill. Myspace was acquired for ~$600 million, Instagram and Tumblr for $1 billion, WhatsApp for $20 billion. The more recent acquisition was Slack for $27billion.
- nailer 6y agoSame here. I can imagine Boston Dynamics stepping into arbitrary dangerous situations ranging from construction to rescue to military to mining to anything else. Slack's tech moat is minor, network effects are not considerable (not enough companies using slack to connect to third parties) and Microsoft is destroying them.
- voqv 6y agoThey've been trying to sell their robots to all of those customers for years, but they're still way too expensive for the benefit. As I see it, they're a very risky venture with their value mostly being in a hypothetical bright future.
- deleted 6y ago[deleted]
- diveanon 6y agoSame could be said of tesla, yet they are one of the biggest companies on the planet now and just made Elon the richest man on the planet.
- pontifier 6y agoYeah, doesn't seem right. I have this same thought when I try to think about the scale of a lot of day to day things. It's bizarre how big something becomes when it gets popular, and how many awesome things struggle.
- abhiminator 6y agoIt's always easy to overvalue products/services that are based on number of users than on actual improvements in a narrow but highly technical field with a super-high barrier of entry. The number of active users is one of the most enticing metric a VC firm can lay its eyes on. Edit: For context, the parent comment is talking about Salesforces' acquisition of Slack [0] [0] https://techcrunch.com/2020/12/01/salesforce-buys-slack https://techcrunch.com/2020/12/01/salesforce-buys-slack
- brailsafe 6y agoAlright then. That's a lot.
- est31 6y agoBoston dynamics might indeed advance the state of the art but not be able to capture the value ther advancements bring. Also, how big is their competitive moat? Does, say Uber care if their deliveries are done via Boston Dynamics robots or via some competitor? What if in 10 years some research group makes a new company that can deliver the same dancing robots that Boston Dynamics can? The concept of how moats work in the context of a social app vs how to monetize it is well understood. Also I'm not saying that the price of Slack was fair. It's entirely possible that the purchase will be a regretful one for salesforce, similar to the regrets that Tumblr's buyer must have felt.
- pjc50 6y agoI guess that means that the buyers think the chat client will take over the world but the robots won't.
- usrusr 6y agoOr perhaps would-be buyers do think that maybe robots will eventually take over the world, but not before taking over the company. You surely don't want to be on the wrong side of negotiations that make up the inaugural campaign of the battlebot union.
- Dumblydorr 6y agoHow much value is created by the chat vs by the robots? How many more users does the chat have?
- KraftKacke 6y agoYes, "value". This is why making free market dynamics an ideology/religion is insane.
- varjag 6y agoThe value created by a new chat application is approximately zero. This is a problem solved since late 1990s and is now well into extracting the diminishing returns phase. The market for chat applications is nearly zero sum game for a while. In case of Slack, its continued losses every year is a good indicator of its zero value.
- znpy 6y agoIn pondering about this question one should keep in mind that economic value is not the same thing as financial value.
- formercoder 6y agoIn theory, it’s because the marginal cost of software is close to zero, and margin is the biggest driver of value. In practice most of these companies’ margins are negative.
- orzig 6y agoMe too, though I urge everyone to avoid jumping from a gut feeling to judgements about what each “should” be worth without being explicit about the philosophy that determines your “should”. There are lots of ways to determine value. I do not think that we are ever going to come to a consensus on the best one, but at least we can strive to understand and be understood.
- mytailorisrich 6y agoThis is a sale price, so the value is 'money value' and thus a financial issue. The 'philosophy' behind what determines it is quite clear: What's the balance sheet of the company? What's its profit? What's its potential for growth and rise in profit? How desperate are the current owners?
- tester34 6y agohow about researchers making less than jr dev barely out of school?
- dawkins 6y agoThat is a great point
- SoSoRoCoCo 6y agoHow to configure WebPack is worth more than how to compute a Z transform, apparently.
- diveanon 6y agoThis is why I have a hard time calling web developers "software engineers". There are definitely some exceptions, but most web devs I have met are glorified technicians stringing together apis while reading medium posts.
- FlyingSnake 6y ago... and unless the robots start sharing internet memes, it'll stay that way.
- _0ffh 6y agoEverything is worth as much as someone else is willing to give up for it.
- hehehaha 6y agoIt blows my mind that Hyundai was actually able to buy BD at a fair price in current environment. I don’t think it would surprise anyone even if they paid $5B for BD.
- dogma1138 6y agoNo real customers, no real products and no real revenue streams. I’m not even sure just how much IP BD actually has that is truly unique, this doesn’t seem to be something very easy to patent in an enforceable manner. BD isn’t something that’s easy to scale and dump on someone else this isn’t the type of company that VCs are really interested in these days.
- dguest 6y agoI can't help but read this with a negative tone. To put a more positive spin on it: for roughly 1/26th the cost of another chat client we could have twice the scary robots. There are a lot of similar things that we spend a relatively large amount of time talking about but don't actually cost that much in the grand scheme of things (fundamental science, alternative energy, and presidential elections, to name a few). Just to give some numbers: - SpaceX in 2019: 46 billion - ITER: 22-65 billion - LHC: around 20 billion - ISS: 150 billion (with the caveat that numbers for publicly funded projects are very difficult to pin down given the diversity of funding) Basically all the projects that are slowly pushing us toward the future we read read about in science fiction are on the order of the cost of a chat client (the ISS being the outlier as one of the most expensive public projects in history). To me that's cause for optimism.
- deleted 6y ago[deleted]
- ojnabieoot 6y agoI get your point, but a) Slack has 5x as many employees, global market share, consumer ubiquity, etc. It’s simply a bigger entity (in the same way that Home Depot is a more ‘boring’ business than slack but 15x larger in valuation) b) Boston Dynamics is in many ways a research lab rather than a for-profit company. In research and the arts, things might be nominally inexpensive but their real value is priceless.
- bombcar 6y agoThings have value for different reasons - Home Depot has value for its stores and employees: even though it is relatively conceptually simple to build retail outlets and hire people to staff them it still is a major undertaking that takes time. A place like BD is mainly valuable for the knowledge and capabilities of the existing employees/technology. Being bought for the users (as with Salesforce buying Slack) vs being bought for the knowledge and tooling (many of Apple’s acquihires come to mind).
- shripadk 6y agoIf you want to look at it that way then an aerated cold beverage is worth 219 times Boston Dynamics.
- johannes1234321 6y agoThere is value in Boston Dynamics, but will take long time till they create mass market products. They will have specialized products for special areas, but those will be small series, where running production is expensive and a high margin isn't possible. (If a human is cheaper than the machine there is little reason to buy the machine) Value for WhatsApp comes from the fact that it threatened Facebook's business model. If people use other than their products they have an issue. There is also an option for revenue growth (not only ads, but also payment processing etc.) Question is how that will play out with current outcry regarding Terms of service changes ... whether that will have an impact. But for Facebook certainly valuable decision. Slack and Salesforce is more interesting. There is of course the market - others tried to acquire Slack as well, driving the price up. How much it will bring Salesforce (also in Cross-Sales "hey, want some CRM which integrates well with Slack? We have something!") is to be seen ...
- pinky1417 6y agoI have no idea whether Hyundai made a good deal for itself, but I think it's healthy to approach any acquisition or valuation with skepticism. Corporate M&A seems especially affected by misperception and bad incentives. Executives often want to expand their kingdoms, even at the expense of shareholders. They also suffer from "shiny new object" syndrome - buying whatever's sexy. Potentially worse, there's the "winner's curse" in auctions. About 7 years ago, Joseph A. Bank tried to buy its larger competitor, Men's Wearhouse. Men's Wearhouse then surprised Bank's execs by making a counter-offer. They got into a bidding war against each other, neither side wanting to "lose," with Men's Wearhouse "winning" by buying its smaller competitor for $1.8B. And we know, even pre-pandemic, how that story turned out! Point is: don't weigh too heavily what other people will pay for a company today... weigh more what your analysis suggests the company will produce in the future (not what other people will pay in the future).
- SoSoRoCoCo 6y agoFunny I thought you meant when Facebook bought WhatsApp for $19B.
- mkohlmyr 6y agoI blows my mind that a company that's sold / leased a few hundred units (?) worth less than $100,000 each is valued at $1 billion.