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Amazon memo: Here’s why we should acquire Ring (2017)
- dmurray 4y ago> This approach appears to be resonating as all of Ring's products have at least 4 stars on Amazon.com I found it interesting that Amazon considers its public star ratings a high-signal indicator of customer satisfaction and product quality. Not everyone does!
- metaphor 4y agoI can't recall roughly when public sentiment of Amazon ratings really went south, but this was 5 years ago, and even if Ring product ratings were being gamed at the time, extending the benefit of the doubt to Amazon M&A staff in having done their SNR due diligence of ratings that they have full internal control over before committing over $1 bil doesn't strike me as charitable.
- deleted 4y ago[deleted]
- dgrin91 4y agohttps://nitter.net/i/status/1549489359459454976 https://nitter.net/i/status/1549489359459454976
- account-5 4y agoI need a TL;DR.
- krallja 4y agoThe first image actually provides a very good TL;DR. Here it is, OCR’d by my phone: > We will need a full suite of camera products as well as more traditional security products to succeed in the home protection market segment. Given our current position and desire to get a complete solution in a short amount of time, we believe that M&A is the best option to accelerate our progress. No single company would put us in a leadership position in the all of the areas where we are behind and need to accelerate. However, Ring and Blink each provide an opportunity to expand our offering and increase the likelihood of succeeding in cameras and home protection. We think that both have merit and are worth pursuing independently
- _ea1k 4y agotldr; they have cameras, we want cameras, we should buy them 1. Amazon would like to compete in home security, cameras, and doorbell cameras. 2. Amazon could build these themselves, but it'd be time consuming and costly. 3. Amazon would like to act fast. 4. Ring and Blink have wireless cameras and doorbells and they believe this is where the market is headed. That's about it, tbh. There's some stuff in there about how commoditized the hardware is and some fairly obvious details about the Ring and Blink business themselves, but its all fairly self-evident.
- qbrass 4y ago>We will add your biological and technological distinctiveness to our own. Your culture will adapt to service us. Resistance is futile.
- vorpalhex 4y agoThis is sort of oddly reassuring that they invested just because they think home protection is a good market and not because they value the generated data.
- dylan604 4y agoNo, that was just bonus
- ActorNightly 4y agoAs far as data goes, amazon only really cares about the stuff you buy. Their advertising segment is growing, but even then most of it is targeted towards things sold on Amazon.
- Apocryphon 4y agoAmazon wasn't one of the companies implicated in PRISM, so there's that. But then again the Snowden leaks came fairly early in AWS's existence.
- deleted 4y ago[deleted]
- walrus01 4y ago> because they think home protection is a good market it does say a lot, however, about the current state of community policing, the rise of private "neighborhood patrol" security services, gated communities, economic disparities between upper middle class and poor, in north american society as a whole. and what trends that investors in home security technology startups see it going in.
- iosono88 4y ago
- petra 4y agoWho knows? Let's say they wanted to do some shady shit, is writing an email(with the possibility of discovery) on that, is the only way to go about it?
- paxys 4y agoSeems...not really worth talking about. This is as normal as corporate emails get.
- GekkePrutser 4y agoYeah I was wondering what the point was. This all sounds pretty well thought-through and reasonable. I was expecting it to reveal something sinister. But this is just what I would have expected of an acquisition discussion. One thing I would be interested in and it doesn't elaborate on is why they are so focused on getting a foothold in the home security market and how this fits in to their strategy. But I guess this was a strategy defined at a higher level and these guys are just implementing it.
- mherdeg 4y agoI'm still amazed by how separate my Ring and Blink products are. The Blink app has an Amazon logo and a dormant Neighbors tag and that's .. that's it for integration?
- MerelyMortal 4y agoJust to clarify, that's a good amazing right? Edit: I guess from the downvotes, people want it to be more integrated?
- GekkePrutser 4y agoRing is also not really integrated. Even linking to an Amazon account is optional and I haven't actually done it. I like it this way.
- gnicholas 4y ago> We have been impressed with the Blink team's technical expertise and believe they are missionary about solving camera problems. What does "missionary" mean in this context? edit: thanks for the replies, this is what I would have guessed. Is this a common usage? I've never heard the word used this way before and am curious if it's a common usage in particular circles/industries/regions.
- mturmon 4y agoI assume "acting as if driven by a mission to do fundamental work in solving camera problems" -- as opposed to just looking for a quick product opportunity.
- tleilaxu 4y agoDedicated. Like a missionary must be to do the things they do.
- wheelinsupial 4y agoI think it’s common in tech. https://www.svpg.com/missionaries-vs-mercenaries/ https://www.svpg.com/missionaries-vs-mercenaries/
- gnicholas 4y agoNone other than John Doerr, wow! Good to know! I wonder how I've avoided the saying for so long, given that I live here and work in the industry...
- wahnfrieden 4y agomissionary as in not just mission-driven, but cult-entangled (aka more cheaply exploitable)
- gnicholas 4y ago> Discussions have pivoted recently as Jamie (CEO) has expressed interest in pursuing an acquisition with Amazon. He has been consistent from the beginning of our relationship [referring to a $1M investment via Amazon's Alexa Fund) that he sees Amazon as the preferred home for his company, with the only other path being an IPO. Is it normal/wise for a CEO to give a potential acquirer this vibe? I would be worried that it comes off as desperate. It's also possible that he said this to multiple potential acquirers, to make them all feel special. But if each suitor thinks that it is the preferred option, that might lead them to offer less than if they thought the CEO didn't have a preference.
- walrus01 4y agothe question I ask myself is, "did the CEO walk away from this with enough amazon stock/equity to buy a great house, live a very comfortable lifestyle and never have to work another day in his life unless he wants to for fun, even if he lives to age 95?" and the answer is almost certainly yes.
- gnicholas 4y agoAs a practical matter, that makes sense. But what about the employees who have 1% or .1% of the equity that the CEO has? Getting 20% more could lead to meaningful changes for them, even if it wouldn't materially affect the CEO's lifestyle.
- conductr 4y agoIt's easy to justify any decision you want to make. In this case - IPO is further away, difficult, risky, etc.
- Rastonbury 4y agoIf I were a long term employee with a lot locked into private stock I'd want an exit ASAP. I see employees upset about companies who stay private 'too long'. Secondly, I don't expect a VC funded company to prioritize their employees over the CEO or investors, I'm sure some companies are like that but joining a company thinking that would be very naïve.
- karmasimida 4y agoI was looking for some borderline criminal speech ... but get bored half way
- gnicholas 4y agoTo those saying this is boring, there are some interesting tidbits, like this one: > Should we decide to pursue an acquisition of Ring, we will need to move quickly. [redacted] and in order to pre-empt the closing of the Series E round, we will likely need to commit to making an investment [redacted] that converts into the next round of funding should we fail to close the acquisition. This may be required for two reasons: (i) Ring needs to raise capital by the end of the year, otherwise they will have to fund all of their Q4 with their revolver (projected to draw down $32MM by the end of November), and (ii) we will have to put some skin in the game to get them to walk away from the Series E investment. It's useful to know how potential acquirers see transactions, and what they might be willing to do to get you to walk away from another opportunity.
- ww520 4y ago"Skin in the game" = option to buy.
- gnicholas 4y agoI think it’s actually a reference to Amazon being forced to invest, in case the acquisition falls through. Otherwise Ring could have been left high and dry had they abandoned fundraising to pursue an acquisition that failed.
- mannymanman 4y agoWhat is a revolver?
- banana_giraffe 4y agoA revolving credit line
- Parmenidea 4y agoA revolver is a line of credit that companies use for financing. You can think of it almost like a credit card for a company — they make some general purpose agreement with a bank for $X of credit at y% interest, and can use that at their discretion. Companies generally raise debt through specific bond offerings, so this is just a quicker way for them to tap capital instead of going to market each time.
- deleted 4y ago[deleted]
- cncg 4y agoGreat doc, lets spend the first 20min of this meeting reading it and adding feedback
- josephpmay 4y agoAmazon is pretty famous for requiring everyone to read memos and provide feedback ahead of time to be able to talk in the meetings
- athrun 4y agoNo. People in the meeting are supposed to read the document _during_ the meeting—no pre-reading required. This does not mean there weren’t a lot of back and forth between a lot of people to come up with the final memo.
- jkingsbery 4y agoRight. Generally what happens is before a doc is presented to X level, it is reviewed with stakeholders at X-1 beforehand, they do a review and gather feedback, iterate, and then present to X level.
- cglong 4y agoI've been wondering why Amazon acquired and still maintains both Ring and Blink. The screenshots in the first tweet answer this quite well: > We also believe they are potentially complementary assets. Blink provides proprietary low-cost, long life wire-free camera IP that differentiates our offering, while Ring provides a more complete solution today and a head start via the larger existing installed base.
- TaylorAlexander 4y agoI am sure in a memo like this they need to lay out all the practical business reasons why their company should make this move, but ever since this news [1] came out in 2019 I've suspected that Ring had other uses to the then richest man in the world, as a massive private surveillance system. "Beginning in 2016, according to one source, Ring provided its Ukraine-based research and development team virtually unfettered access to a folder on Amazon’s S3 cloud storage service that contained every video created by every Ring camera around the world." Now, you can easily imagine that this started as some engineers' innocent attempt to improve their machine learning algorithms. But at the same time, this system was purportedly active at the time of the Amazon acquisition, and while there is no way to prove their motives, this seems to me like a huge perk for someone who is one of the most powerful people in the world. [1] https://theintercept.com/2019/01/10/amazon-ring-security-camera/ https://theintercept.com/2019/01/10/amazon-ring-security-cam...
- colineartheta 4y agoI’ve followed this story as well, and while I wouldn’t really put anything past Bezos (or any other member of a certain social class, really), I always interpreted this to be a simple Intelligence Community operation through-and-through. Select Amazon employees and Bezos having the (same?) access is the layer on top of the cake that is merely the continuation of PRISM (and all other “tailored” access programs i.e. mass data collection). AWS being awarded the recent DoD contract(s) for cloud service read to me that they were simply formalizing arrangements that had long been in place in the shadows.
- TaylorAlexander 4y agoIt's a fair point (which makes everything worse). It was illegal for the government to do a lot of the surveillance (which didn't exactly stop them) but having a private company do it insulates the intelligence community from backlash. Plus Amazon is needed to handle the actual production, sales, and marketing of the devices.
- autoexec 4y ago
- GekkePrutser 4y agoI'm quite happy with my Ring security system. I wish they had a real human alarm response here in Europe though like they have in the US. Here you can only get automated calls to 3 numbers and we pay the same as in the US. But still it managed to scare off the burglars that broke my door open 2 weeks ago. Nothing was taken, just the broken door. This was with the alarm. I have cameras too but I disconnected the microphone as I could hear myself word for word in the next room. I totally agree that Ring's mix of battery and mains cams is a great one and I have both types myself.