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The product was sold with the monitoring baked in. There was no expectation by consumers that they would have to pay an ongoing fee for functionality that was i

The product was sold with the monitoring baked in. There was no expectation by consumers that they would have to pay an ongoing fee for functionality that was included at the time of the purchase. I don't have the BOM either, but $400 is very much on the premium side for such a product. This included monitoring functionality is a large component of justifying that price. Without the monitoring, it's a $400 product with essentially the same functionality as a $30 one. Moreover, a $10/month subscription is far from selling things at cost. Maybe the company has too much overhead and they really need this revenue to stay afloat, but the bait and switch is still not to be excused. Given the sequence of events, it has the hallmark of a company purchasing another specifically with the intention of rent seeking. On a side note, I think startups are really doing themselves a disservice here. With stories like this, Nest, and others, I have very little interest in buying a product that isn't from an established player. Because the odds are really good that company is aiming to get acquired and then the nature of my device changes. Maybe it gets discontinued. Maybe the privacy policy changes. Maybe features get removed and replaced with subscription fees. It's not terribly often that I end up having the same experience I enjoyed when I purchased it. More often than not it ends up being e-waste because it won't even function without an always-on connection.

aeturnum 3y ago
> I don't have the BOM either, but $400 is very much on the premium side for such a product. That was really long-winded way to say, "I don't have any more info than you but it looks bad." Sure it looks bad! If I have to guess (and I do) I'd say they're not delivering good value. But this is supposed to be a website for people building companies! Hardware costs money and has ongoing support costs! These aren't shameful flaws, they're the nature of the business. It's not "more ethical" to use a model that hides the costs of ongoing support for a product by packing extra margin into each sale. I would not buy this product. I agree it's overpriced (and its subscription is poorly disclosed). I do not care about the high-end features it delivers. But the fact that it has a high cost (and a subscription for ongoing support) is not a problem by itself.
- nirvdrum 3y ago
  It doesn't really matter what the BOM is. The product was sold with that functionality built into it and it's now being removed. Sure, we can debate whether that's a lifeline or rent seeking. But, consumers are rightfully upset that functionality they already paid a premium for is being removed and will only be accessible through a subscription service they never had the opportunity to evaluate at purchase time because all of this happened well after the sale was completed. > But this is supposed to be a website for people building companies! I've built a hardware company before so I have a decent handle on what's involved. Pricing hardware is generally easier than SaaS because you know what your materials cost and you know what your distribution channel is going to cost. Macroeconomic events can be a problem, sure. In our case, a copper mine explosion really screwed up profit margin and ability to source material. But, I can't go back to people that already purchased my hardware, take away functionality they already paid for, and tell them they're going to have to pay me to get it back. The least scummy way would be to add a new value-added service and charge for access to that. It's through the lens of that background that I think we should critically look at what's going on here. Companies engaging in tactics like this make it harder for others to succeed. I don't think this should be viewed as some fantastic growth hack. > Hardware costs money and has ongoing support costs! I can't imagine what the support costs on a baby monitor would be. But, that's supposed to be baked into the cost of the product. There are established formulae for that process. It's a big part of why we don't have to pay support contracts on every piece of consumer hardware we purchase. I'll grant you that the web service aspect of this colors the picture slightly differently, but then the new $120/year fee seems excessive. > It's not "more ethical" to use a model that hides the costs of ongoing support for a product by packing extra margin into each sale. Ethics enters the picture because none of this was disclosed at the time of purchase. Instead, that functionality was sold as being included. Sure, their EULA almost certainly allows them to do whatever they want after the sale. But, that EULA is about the only form of actual disclosure involved. It's also fair to consider the wider context here. The company that made the monitor was acquired by another and the new company is now removing previously included functionality and charging for it. The acquiring company knew the numbers before they purchased the company. They didn't have to bear any of the R&D costs. It's really hard to evaluate this and not see it as rent seeking behavior. I think that's a big problem for any startups looking to get into hardware because people are going to stop taking risks on newcomers if they're likely to get screwed after an acquisition. As a start-up community, we should be critical of the actions taken here. Especially when no mea culpa has been issued that explains why the change was necessary for the company's survival.

aeturnum 3y ago

> I don't have the BOM either, but $400 is very much on the premium side for such a product. That was really long-winded way to say, "I don't have any more info than you but it looks bad." Sure it looks bad! If I have to guess (and I do) I'd say they're not delivering good value. But this is supposed to be a website for people building companies! Hardware costs money and has ongoing support costs! These aren't shameful flaws, they're the nature of the business. It's not "more ethical" to use a model that hides the costs of ongoing support for a product by packing extra margin into each sale. I would not buy this product. I agree it's overpriced (and its subscription is poorly disclosed). I do not care about the high-end features it delivers. But the fact that it has a high cost (and a subscription for ongoing support) is not a problem by itself.

nirvdrum 3y ago
It doesn't really matter what the BOM is. The product was sold with that functionality built into it and it's now being removed. Sure, we can debate whether that's a lifeline or rent seeking. But, consumers are rightfully upset that functionality they already paid a premium for is being removed and will only be accessible through a subscription service they never had the opportunity to evaluate at purchase time because all of this happened well after the sale was completed. > But this is supposed to be a website for people building companies! I've built a hardware company before so I have a decent handle on what's involved. Pricing hardware is generally easier than SaaS because you know what your materials cost and you know what your distribution channel is going to cost. Macroeconomic events can be a problem, sure. In our case, a copper mine explosion really screwed up profit margin and ability to source material. But, I can't go back to people that already purchased my hardware, take away functionality they already paid for, and tell them they're going to have to pay me to get it back. The least scummy way would be to add a new value-added service and charge for access to that. It's through the lens of that background that I think we should critically look at what's going on here. Companies engaging in tactics like this make it harder for others to succeed. I don't think this should be viewed as some fantastic growth hack. > Hardware costs money and has ongoing support costs! I can't imagine what the support costs on a baby monitor would be. But, that's supposed to be baked into the cost of the product. There are established formulae for that process. It's a big part of why we don't have to pay support contracts on every piece of consumer hardware we purchase. I'll grant you that the web service aspect of this colors the picture slightly differently, but then the new $120/year fee seems excessive. > It's not "more ethical" to use a model that hides the costs of ongoing support for a product by packing extra margin into each sale. Ethics enters the picture because none of this was disclosed at the time of purchase. Instead, that functionality was sold as being included. Sure, their EULA almost certainly allows them to do whatever they want after the sale. But, that EULA is about the only form of actual disclosure involved. It's also fair to consider the wider context here. The company that made the monitor was acquired by another and the new company is now removing previously included functionality and charging for it. The acquiring company knew the numbers before they purchased the company. They didn't have to bear any of the R&D costs. It's really hard to evaluate this and not see it as rent seeking behavior. I think that's a big problem for any startups looking to get into hardware because people are going to stop taking risks on newcomers if they're likely to get screwed after an acquisition. As a start-up community, we should be critical of the actions taken here. Especially when no mea culpa has been issued that explains why the change was necessary for the company's survival.