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I'm shocked by this. We have an Instant Pot and use it. All. The. Time. It is a well made product that is simple to use, has a good feature set, is useful, and

• sp332 3y ago
  They merged with a private equity company. It got turned into a financial instrument instead of a business.
  • nathanaldensr 3y ago
    Yep. There's always the assumption that just because a business sells a product or service that it is in business to sell a product or service. This is not always true.
  • pessimizer 3y ago
    Like real estate.
  • wnevets 3y ago
    Isn't that what happened to Bed Bath & Beyond? Can someone explain to me why this happening isn't a bad thing?
    • katbyte 3y ago
      > explain to me why this happening isn't a bad thing because there is now a good change everyone with one of these devices is likely no longer going to get support, warranty, or updates. apps will become outdated and fall off the app store parts to repair will no longer be available etc devices/a brand people enjoyed using is now gone because PE did what PE does and destroyed the brand for a quick buck
      • wnevets 3y ago
        that sounds like a bad thing tho
        • katbyte 3y ago
          oh that is my bad, i read your comment on why this IS a bad thing not isn't :( sorry
  • dpflan 3y ago
    How does PE survive? If these companies become instruments and now forced into bankruptcy, the PE must write off the bankruptcy (some economic advantage must exist for this path). But then the PE has to move on and find another company to possess, right? I wish we had Instant’s financials, they did seem to be selling well, so their value was based on expected sales/profit in perpetuity…bankruptcy stops that because bankruptcy has a cap, right? I need help understanding how PE continues to exist, beyond the assumption that they got money out of the deal and will move on to another one…
    • dpflan 3y ago
      A basic HN Search yields some interesting top articles: https://hn.algolia.com/?dateRange=all&page=0&prefix=false&query=%22private%20equity%22&sort=byPopularity&type=story https://hn.algolia.com/?dateRange=all&page=0&prefix=false&qu... The Atlantic: When Private Equity Firms Bankrupt Their Own Companies https://www.theatlantic.com/ideas/archive/2023/05/private-equity-firms-bankruptcies-plunder-book/673896/ https://www.theatlantic.com/ideas/archive/2023/05/private-eq... > Interesting, "pension laundering" is a tactic that seems quite abusive.
      • robd003 3y ago
        Pensions should be outlawed. If employees want retirement savings they should be given money for 401k plans, not outdated and inefficient defined benefit plans.
        • Tuna-Fish 3y ago
          More importantly, company-ran pension plans should be outlawed because they are a morass of perverse incentives and opportunities for quasi-legal theft. To put it simply, it is often the incentive of the people who make decisions about the pensions to mismanage them.
          • jrockway 3y ago
            I suppose pensions take advantage of the time value of money; funding someone's 401k means you can't use the money to expand your business, but if you just pay them what they would have made 30 years later, you already expanded and that money is easy to come by because you're making so much now. But, it's difficult to enforce. The expansion plans could be "yacht for the CEO plans", and when retirement time comes, "oh sorry we don't have any money :(" is the likely excuse. So it doesn't seem to work anymore in practice; being optimistic about doing better than average long-term is not a viable financial strategy.
• bonniemuffin 3y ago
  Everyone who wants one already has one, and it's not the kind of thing you need to upgrade every year. I'll keep using my Instant Pot for the next 10 years, but that won't help Instant Brands make money.
  • Mimmy 3y ago
    By that logic, the following industries would not exist: automotive, furniture, computer, kitchen appliances, other home appliances, television, bicycle... The article itself and mikeyouse's comment explain the situation most clearly. Standard PE financial (over)-engineering was the primary cause of their problems. Slowing sales obviously don't help, but changes in the macro-environment can typically be weathered if the companies' financials are appropriately managed.
    • makeitdouble 3y ago
      > automotive, bicycle They're supposed to have recurring maintenance fees. One might do the maintenance themselve, but a significant part of the user base will ask a shop to do it, probably the dealer where they bought it. > furniture, kitchen appliances, other home appliances On the higher end it survives by charging years worth of purchase. Like a 4000 bucks oak dining table. Kitchen appliance also either cost an arm and a leg or won't last for 10 years (including buying replacement for the perishable parts) The lower end is the market IKEA dominates. > television They exactly saw this problem front and center and started pivoting to selling viewing data and pushing ads, getting "smart" > computers That's exactly why companies (the biggest cmputer purchasers) are led to leases instead of purchases, and those renew every 3 years. On the user side cheaper computers are also the mainstream, and people don't expect those to last 10 years.
    • juve1996 3y ago
      I completely disagree with your examples. Cars have massively changed over time - even in short intervals, cars today offer a lot of value you wouldn't get even just 5 years ago in many models. And they're priced accordingly. Computers? Laptops got smaller, graphics improved, performance improved, etc. And still is. Televisions went from CRT to LCD, SD to HD, to OLED. There were continual reasons to upgrade. The instant pot is like the Bialetti Moka pot - it's a simple device, that doesn't wear down quickly and isn't used enough to wear it down quickly. New devices don't differentiate nearly enough. And the used market is likely flooded with cheap ones that others stopped using.
• mikeyouse 3y ago
  Private Equity. Instant Pot had great cashflow but slowing sales, so the PE owners issued $450M in new debt and then immediately paid out $250M in dividends to themselves resulting in the company carrying 8x leverage compared to the 4x it had prior to the financial engineering. Further slowing sales and all the cash being stripped from the company ends up with bankruptcy every time.
  • youainti 3y ago
    Really disappointed that this happened.
  • falcolas 3y ago
    I'm apparently stupid. I can't understand how that can be even remotely legal.
    • soganess 3y ago
      I know basically nothing about this, but hear money peeps talking about it all the time like it is common practice. Some version of it happened to the B&M store Clarie's.
    • taylodl 3y ago
      The company's officers are in on the take. Legally they can take these actions on behalf of the company, as long it's clear and in the open.
      • pavon 3y ago
        It is the bankruptcy part that I don't understand the legality of. Parent company pulls a ton of money out of subsidiary, claims bankruptcy, then magically parent company isn't liable for subsidiary's debt?
        • Zigurd 3y ago
          PE isn't a parent company. LBO debt is debt carried by the acquired company. So there is no sleight of hand in bankruptcy. The poison is already in the acquired company's bloodstream.
• 0xffff2 3y ago
  Counterpoint, we were gifted an instant pot and used it about half a dozen times before realizing it was an extra piece of kitchen equipment that did absolutely nothing for us in terms of food quality or ease of cooking. It sat in the back of a deep cupboard for a couple of years until we threw it away when we moved.
  • irrational 3y ago
    That is interesting. Like OP, we use ours constantly. I consider it to be the kitchen appliance I would never do without. I wonder if it comes down to OP and we making more similar foods than what you eat.
    • nikole9696 3y ago
      This is quite possible. I use mine to cook wild rice, which takes awhile stovetop. And hard boiled eggs, which come out great. Everything else I've tried with it, I might as well just cook with the stove or oven. I don't like most recipes I've seen and am somewhat of a picky eater.
      • Eisenstein 3y ago
        It is wonderful to use instead of an oven since it doesn't heat up the whole room and you can pressure cook dry beans without soaking to fully done in about 20 - 30 minutes.
        • taylodl 3y ago
          > It is wonderful to use instead of an oven since it doesn't heat up the whole room Energy efficiency is a big point. Between my Instant Pot and Air Fryer I have few opportunities to turn on the oven. These devices heat up faster, cook faster, and provide more consistent results. This is especially true now that I'm an empty nester and no longer cooking for a large family. It also makes it easy to resist the temptation to rely on processed foods.
        • Marsymars 3y ago
• CPLX 3y ago
  The money was stolen. This is an utterly textbook private equity play, the kind of thing that has been wrecking American business and jobs. There's nothing subtle about this at all, it's looting with a pen. They acquire the business, load it down with massive amounts of debt, do reckless short term things to boost growth (aka "eating the seed corn") and then take the money and keep it leaving someone else holding the bag. It has nothing at all to do with how much people do or don't like cookware. It's a bust out, a racket, just an inch away from organized crime. It happens daily in this country.
  • coldpie 3y ago
    If that's true, I wonder why the article doesn't make this clear. All it says is the company has a half-billion in debt, without any explanation for how that came about. It doesn't even mention that the company is owned by a PE looter. Quotes from the article: > In 2019, his company merged with Illinois-based Corelle Brands, the owner of Pyrex, CorningWare, SnapWare and Corelle. > In 2021, at the height of its popularity, the company borrowed $450 million US worth of bonds, due in 2028, to expand its business. Is Corelle the PE firm? Is "expand its business" the standard figleaf PE firms use when looting a business?
    • CPLX 3y ago
      For some unknown reason this all still happens right out in the open without a major media narrative built around it. A few activists and lawmakers have tried but it's still not in the public consciousness. But it's constant and blatant and somehow seems to still be legal. The PE firm here is Cornell Capital.
    • anigbrowl 3y ago
      The business press is in on it. I don't mean in the sense that they get financial kickbacks, but business reporting is a cushy job where 90% of the work is rewriting press releases and boilerplate 'analysis' of stock movements.
  • clairity 3y ago
    to be clear, PE isn't always purely extractive, but when it is, it can be highly destructive. sometimes a business is so mismanaged that debt (and the pressure it adds) and new management is all that is needed to right the ship. PE itself is a bloated industry because we have too much money being extracted out of the real economy going into the pockets of the already wealthy who don't know what to do with it, so they hand it to a money manager (i.e., PE) to make more money for them, not knowing what to do with those potential future earnings either. this is the kind of economic inefficiency that concentrations of capital brings, in direct refutation of the common economic argument that the wealthy are better at investing money (i.e., more capital efficient, which in turn supposedly adds more real productivity to the economy). small, local amounts of wealth are more capital efficient, but large, distant amounts are not.
• dragonwriter 3y ago
  Instant Pots are awesome, broadly useful, and last a long time. They reached market saturation, though, and the company kept trying to find a way to keep up the growth curve it had when Instant Pot was being adopted. And then, of course, the Private Equity “extract money and load the firm up with debt” maneuver of death.
  • sgtnoodle 3y ago
    I recently bought their sous vide gadget and it seems pretty good. I wish it would remember its setting after erroring out, but that's very minor. It seems very accurate, within a degree.
  • gen220 3y ago
    > kept trying to find a way to keep up the growth curve it had when Instant Pot was being adopted I think if you're to pick a lesson to takeaway, this is it. There are other objectives to pursue, than "continue to grow as much or more this year as we did last year". That objective in particular is destined for eventual, guaranteed failure – and an outcome that leads to decomposition (by PE, bankruptcy, whatever). If you live by the sword of greed, you die by the sword of greed. It's tragic but banal in the 20th/21st Century US – great brands succumb to it every day.
• Alupis 3y ago
  > We have an Instant Pot and use it. All. The. Time. It is a well made product that is simple to use, has a good feature set, is useful, and relatively inexpensive You may have just described why they're filing for bankruptcy. While I do not own an Instant Pot, I do own an awful lot of Pyrex cookware that I bought well over a decade ago... My mother has Pyrex cookware she's owned for decades and will likely pass down one day. It's hard to build a lasting company when your customer's buy once and never again. Perhaps there's really such a thing as "too good".
  • Nifty3929 3y ago
    Not at all - as long as they're earning a profit on each one large enough to justify having produced it, then they lose nothing by their products lasting a long time. The worst outcome might be that the market becomes saturated and everybody already has one or two, in which case the business just scales down and goes away, having earned a lot of money. But I doubt even that outcome in this case.
    • Alupis 3y ago
      Maybe, but in the same time duration I've bought multiple sets of pots/pans, wooden spoons/spatulas, several wooden cutting boards, mixing bowls, etc. If the company drags on long enough, all that profit gets eroded away. Pyrex has been around since the early 1900's for instance. I agree, might not be 100% of what happened here, but it surely has to be a component.
• Nifty3929 3y ago
  It sounds like you're getting a lot of value from your purchase, which is great. But this doesn't mean that the company made any money by selling it to you. Maybe they did or not, but that's a different question.
• ChatGTP 3y ago
  Same, we have one, we use it probably at least 4-5 times a week, it's a great product.
• deleted 3y ago
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