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Wall Street ruined the Roomba and then blamed Lina Khan
- 2OEH8eoCRo0 10mo agoOutstanding article. Our current goals and incentives are not sustainable.
- lotsofpulp 10mo agoI don’t see evidence that iRobot vacuums would have been competitive with Chinese ones, simply because the moat does not exist (there is no secret sauce that makes it difficult to make a competing product). As for the rest of the article, it’s not Wall Street’s fault the government doesn’t pay iRobot enough for research (nor should it).
- 2OEH8eoCRo0 10mo agoAs the article states they were more than vacuums- they also did defense work and research. They gutted that for higher short term gains. Offshoring to China also likely helped China learn to build their own.
- lotsofpulp 10mo agoIf they were getting paid enough for defense work and research, then they would not have gutted it. But the government should do R&D itself anyway.
- 2OEH8eoCRo0 10mo agoYou should try reading the article, it mentions that too.
- lotsofpulp 10mo agoIt only mentions a one sided view presuming an investor’s intentions. There is no numerical analysis on whether or not iRobot’s spending on various efforts was yielding or likely to yield a return.
- echelon 10mo agoThis is a fantastic video essay on iRobot's strategy/leadership mistakes. The company was distracted and stubbornly out of tune with what consumers wanted: https://www.youtube.com/watch?v=44XYQepBF7g https://www.youtube.com/watch?v=44XYQepBF7g The patent expiry sealed the deal.
- caesil 10mo agoWhy not let Amazon take a stab at turning things around, then? It's better that they fail? I don't get it.
- KerrAvon 10mo agocouple things - tbh, I think the Amazon deal doesn't matter much in the long run. The damage had been done earlier. - why give Bezos any more free money? He's already rich enough.
- dcgudeman 10mo agoFree money? I honestly don't understand comments like this. It's as if you aren't even trying to make sense. Amazon would have been bailing out Roomba so if anything this would have cost Bezos money.
- adamsb6 10mo agoThey'll just hire the engineers they need out of the failed iRobot and not compensate the investors / founders for building something worth acqui-hiring. The existing Roomba revenue stream probably doesn't matter. The expertise or maybe the brand (not a great brand imho) aligns with some company priority.
- BeetleB 10mo ago> Why not let Amazon take a stab at turning things around, then? The point the article is making is that iRobot's bad decisions are the reason the company was failing. Blaming regulators for a poor acquisition outcome may be fair, but they were a very minor part of the outcome.
- daft_pink 10mo agoTo be honest the Roomba sucked and got eaten alive by better chinese competitors. I bought a top of the line expensive Roomba years ago and ended up switching to neato a year later, because I would just come home and it would be stuck on something.
- km144 10mo agoSure, but the author is arguing that the outcome you're describing is tightly coupled to the perverse incentives that he describes in the article. Investors pushed the company towards extraction over innovation and the end product suffered as a result.
- Grosvenor 10mo agoThat is probably true. But Roomba sucked in the early 2000's too. They never got better.
- viscanti 10mo agoI believe the author's thesis is that if they had invested in innovation over a couple decades, the product probably would have sucked less.
- charcircuit 10mo agoThe innovation being shutdown wasn't innovation towards making robot vacuum cleaners better. It was innovation direct towards military applications like building robotic hands.
- crazygringo 10mo agoExactly this. If they had been innovating in vacuum technology then maybe this article would have a point. But they were building stuff for the military and for space, and there's a good reason investors wanted them to get out of that because it was sucking up money and not resulting in better vacuum cleaners.
- monero-xmr 10mo agoHard for me to understand how the consumer was protected by preventing Amazon from acquiring them. Only for Chinese firm to get for cheap in bankruptcy. But maybe I’m not educated enough in socialism to understand the nuances
- 7thaccount 10mo agoPossibly an unintended consequence. Those abound in our governing systems as you're rightfully complaining about. On the other hand, competition is good for consumers and letting Microsoft and Amazon use unfair tactics to crush the competition or their large revenues to just buy up all competition isn't good either. That is part of the problem today in that practically every industry is a monopoly or near total monopoly (maybe there are 2-3 firms colluding). There are no incentives to innovate or keep prices competitive in such a gilded-age system. There was a reason we broke up all the robber barons. There is also the hazard when you have businesses that are so large that they effectively control everything and the government can no longer regulate them. High inflation is at least partly coming from this lack of competition. There is also the issue of the money supply where we degrade our currency to make it easier to service the debt. That is also a really big component here.
- bryanlarsen 10mo agoAt the time the former was a known bad, and the latter was a potential bad. The FTC properly weighted known bads more highly than potential bads.
- csb6 10mo agoNot sure how you could construe U.S. anti-trust actions as socialist. They prevented Amazon from acquiring iRobot. That is government intervention in the free market, but that is not the same thing as socialism. In fact you could argue a socialist administration would have wanted the merger (large firms tend to make labor organizing more tractable since there is only one employer to negotiate with).
- NietzscheanNull 10mo agoDid you read the article? Amazon wasn't "prevented" from acquiring, they decided against proceeding: > The FTC didn’t bring a challenge, but nevertheless, in 2024, Amazon and iRobot called off the deal.
- xnx 10mo agoRoomba screwed up for sure, but they found a way out with Amazon until US consumer "protection" shut it down.
- BeetleB 10mo ago"The FTC didn’t bring a challenge, but nevertheless, in 2024, Amazon and iRobot called off the deal." How did they shut it down?
- xnx 10mo ago"On Monday, the FTC requested more information from both companies about the $1.7 billion deal, according to an investor filing from iRobot, in what’s known as a “second request” and an indicator of deeper scrutiny by antitrust officials." https://www.cnn.com/2022/09/20/tech/roomba-amazon-ftc-investigation https://www.cnn.com/2022/09/20/tech/roomba-amazon-ftc-invest...
- amanaplanacanal 10mo agoIRobot says it was the EU which killed the deal: https://media.irobot.com/2024-01-29-Amazon-and-iRobot-agree-to-terminate-pending-acquisition https://media.irobot.com/2024-01-29-Amazon-and-iRobot-agree-...
- orwin 10mo agoThe article claims EU didn't challenge the deal, only requested information about the market and possible unfair practices. https://ec.europa.eu/commission/presscorner/detail/en/ip_23_5990 https://ec.europa.eu/commission/presscorner/detail/en/ip_23_...
- bluGill 10mo agoPreparing all the requested information can be expensive. It is likely enough to kill many deals.
- BeetleB 10mo ago[flagged]
- geodel 10mo ago[flagged]
- kittikitti 10mo agoThank you for this article. It explains a phenomenon where many robotics and AI companies are actually failing in the current era. I learned so much from the reporting.
- amadeuspagel 10mo ago"Wall Street" is one entity, which first ruined the Roomba, then wanted to buy it, then blamed Lina Khan for not being allowed to buy it. Makes sense.
- margalabargala 10mo agoIt is a single entity that contains multitudes. Some of those multitudes have contradictory intentions. Just like you. When it happens to a person we call it "cancer".
- ToValueFunfetti 10mo agoTypically we don't say that someone with cancer is slowly committing suicide. Technically correct, perhaps, but it needlessly applies central autonomy where it doesn't really exist.
- SiempreViernes 10mo agoWall Street actors almost universally love to describe the market as a singular entity, so they can hardly complain righteously.
- amadeuspagel 10mo agoApparently it's not just "Wall Street" but "the market" which is a singular entity, which ruined the Roomba and then blamed Lina Khan and which can hardly complain about being described as a singular entity since it describes itself as such.
- ghaff 10mo agoRoombas just weren't that useful for most house layouts and situations (cords/toys/clutter/etc.) I seriously considered getting one and decided it just wouldn't be a win.
- echelon 10mo agoRoombas have always been terrible. I bought a top-of-line Dreame, Roborock, and Eufy recently for our place - we have lots of pets. The Dreame is easily 10,000x better than Roomba ever was. It never makes mistakes. I'd advocate for Dreame for anyone in the market for a robot vacuum. The app is annoying, but everything else about it is sublime. Eufy would be better if they'd fix their roller brush design and didn't lean so heavily into making you buy their replacement components. It's designed around buying Eufy refills. The Anker team nails user friendliness and design, though.
- drob518 10mo agoWhich does best with pets? We have a German shepherd that sheds like crazy. We vacuum every week and it will often fill a Dyson canister vac. We empty it every time we vacuum. We had a Roomba back in 2002 or so, but it was little more than a novelty (just wasn’t great vacuum and got hung up on too much stuff).
- stephenitis 10mo agoRegular brushing at least once weekly. Husky owner here. 2 roombas 2 dysons
- enraged_camel 10mo agoI just want one that removes the “gotta declutter all the floors and hide anything and everything that could possibly get stuck in the roller” prerequisite step completely. I’ve tried literally five different brands (including the top Chinese ones) and they all scream a variation of MAIN BRUSH JAMMED after running for a while.
- klabb3 10mo ago
- ChrisArchitect 10mo agoRelated: Roomba maker goes bankrupt, Chinese owner emerges https://news.ycombinator.com/item?id=46268854 https://news.ycombinator.com/item?id=46268854
- Animats 10mo agoIt's interesting that Rod Brooks has been erased from the history of Roomba. He's not even mentioned in the Wikipedia article.
- JKCalhoun 10mo agoI see him (Rodney) in both the Roomba and iRobot articles.
- Animats 10mo agoThe Roomba is not in the Rodney Brooks article.
- arjie 10mo agoWith Wikipedia, most things are less erasure and more incompleteness. I looked at the Rodney Brooks article and couldn't find an easy way to introduce the Roomba into it without sounding stilted[0] since I don't know how involved he was in the creation of the device and I don't know enough about the company to make an educated guess. If you know how he was involved perhaps you could share some links to news and so on that says so. I don't mind fixing the Wikipedia article to appropriately link. 0: The best effort I could make would be to edit "He is a founder and former Chief Technical Officer of iRobot" to say "He is a founder and former Chief Technical Officer of iRobot (manufacturer of the Roomba)"
- km144 10mo ago> “In my trips to Wall Street,” Dyer told the panel, “one of my analyst friends took me to lunch one day and said, ‘Joe, you have to get iRobot out of the defense business. It’s killing your stock price.’ And I countered by saying ‘Well, what about the importance of DARPA and leading-edge technology? What about the stability that sometimes comes from the defense industry? What about patriotism?’ And his response was, ‘Joe, what is it about capitalism you don’t understand?’” I find this article a pretty compelling critique of the extractive incentives of Wall Street and a good argument for government stepping in from time to time to adjust those incentives. Where is the societal good in the engine of capitalism prioritizing short-term extraction over long-term value creation?
- twoodfin 10mo agoWhat is the current AI/data center mega-boom if not forgoing short-term extraction for long-term value creation?
- randerson 10mo agoGiven how many people are getting rich from the inflated stock prices of every AI-adjacent company right now, including the ones with no obvious path to profitability, I could make the argument that they're already in a short term extraction phase. (I'm also not sure if putting a significant % of the population out of work will create long term value to society.)
- twoodfin 10mo agoThe stocks are inflated because Wall Street believes current $$$$$ capital investments will create massive long-term value!!
- re-thc 10mo ago> Wall Street believes current $$$$$ capital investments will create massive long-term value Clearly not. The stock market has a correction at least every few years. So Wall Street only believes they can sell the stock for higher within a few years. Not very long term is it?
- tekacs 10mo agoA huge fraction of the knee-jerk reactions here seem to miss the key point that the post is trying to get across: > In the mid-2010s, during Furman’s tenure running economic policy under Obama, the company sold its defense business, offshored production, and slashed research, a result of pressure from financiers on Wall Street. > Mesdag engaged in a proxy fight to wrest control of the company from its engineering founders, accusing one of its founders and iRobot Chairman Colin Angle of engaging in “egregious and abusive use of shareholder capital” for investing in research. Yes Roomba sucks at this point. We get it. Thing is, if you slash research... that's what eventually becomes of your product.
- JumpCrisscross 10mo ago> Thing is, if you slash research And if you dump your defence contracts you may have trouble paying for research.
- bogwog 10mo agoI'd be interested in learning about how the US military uses Roombas (assuming it's not classified)
- 4nonverbal-alit 10mo agoIn the article it's mentioned. They have built robotic stuff to clear rubble for example.
- mh- 10mo agoThose vacuums are stronger than people realize.
- faidit 10mo agoSucking taxpayer money into a black hole, of course.
- goodolddays9090 10mo ago
- hodder 10mo agoThis is such a bad faith, and frankly dishonest take on the situation. As you know, Khan’s FTC worried it wouldn’t be able to prevent Amazon’s acquisition of iRobot in court, so instead it dragged out approval, which it never granted, while continuously threatening to block. Simultaneously, her FTC openly worked with the EU to convince the EU to use its more expansive antitrust regime to get the EU to block the deal. That dragged the shot clock for the deal lower and lower (deals have backend dates contractually agreed to, after which the parties no longer are committed to work towards closing the deal and can walk). Even as the EU was challenging the deal and the shot clock was approaching zero, her FTC was STILL not granting approval and threatened to block and drag it out another year in U.S. courts, all the way until Amazon threw in the towel. After the deal collapsed, the FTC celebrated and took credit. The fact iRobot later failed and was sold to Chinese competitors is directly attributable to that block, as it would otherwise be owned and supported by Amazon right now.
- ajkjk 10mo agoThe point is that "sold to Amazon" or "sold to chinese competitors" being the only options is a false narrative. There was also the "do a good job" option which is being conveniently omitted by people who want to blame the FTC.
- throwaway382948 10mo agoThat's only an option if the FTC can rewind time. Can they?
- ajkjk 10mo agoer? No we are talking about the attribution of blame. If you're saying "what a shame that iRobot is being sold to Chinese competitors" and then you "...because of the FTC" you're essentially lying; it's because of incompetence and capitalism and then also maybe a little bit the FTC (although I'm very skeptical of that as well, because in this whole narrative the FTC is the only party that can be even claimed to be acting prosocially).
- crazygringo 10mo ago> Part of that collapse was a result of a phenomenon where financiers would force technology companies to stop innovating. Here's the thing: not every company needs to do deep tech innovation, and not every company should. The financiers were almost certainly correct that iRobot would make more money focusing on selling vacuum cleaners, not developing military/space robots on the side. Building fancy military and space robots is fun and cool, but if it's not producing profit or clearly leading to better consumer products that make money, then it's not the right company to be doing it. Plenty of other companies will do it better -- it makes sense to have one set of companies relying on grants and defense contracts that innovate and that do fundamental research and aren't taking investor money, and another set of companies that take lots of investor money and focus on consumer products without expensive R&D. The idea that they have to be the same companies is silly. The real story here is not about shutting down R&D -- that makes sense. It's about whether you think the FTC/Lina Khan was right to oppose Amazon acquiring iRobot, and whether they bear any responsibility for what happened after.
- y0eswddl 10mo agowhen and how did she do that exactly?
- crazygringo 10mo ago"On January 31, 2024, one of the FTC’s Commissioners spoke at an antitrust conference in Brussels and said the FTC had been prepared to block the transaction." https://oversight.house.gov/wp-content/uploads/2024/04/050124-FTC-Amazon-iRobot.pdf?utm_source=chatgpt.com https://oversight.house.gov/wp-content/uploads/2024/04/05012... "We are pleased that Amazon and iRobot have abandoned their proposed transaction... The Commission’s investigation revealed significant concerns about the transaction’s potential competitive effects. The FTC will not hesitate to take action in enforcing the antitrust laws to ensure that competition remains robust." https://www.ftc.gov/news-events/news/press-releases/2024/01/statement-regarding-termination-amazons-proposed-acquisition-irobot?utm_source=chatgpt.com https://www.ftc.gov/news-events/news/press-releases/2024/01/... "Amazon and robot vacuum maker iRobot (NASDAQ:IRBT) said Monday they would end their plans to merge in the face of opposition from EU and U.S. antitrust regulators." https://www.investing.com/news/economy/amazon-roombaparent-irobot-abandon-14-billion-merger-deal-3286315?utm_source=chatgpt.com https://www.investing.com/news/economy/amazon-roombaparent-i...
- MarkusQ 10mo agoNot every story needs to have a bad guy. In many cases (I suspect this is one of them) there is room for multiple bad guys. Why couldn't the FTC, Roomba Management, Wall Street, China, etc. all be at fault? Seems like it fits the evidence nicely.
- itopaloglu83 10mo agoOne thing I keep repeating is that Roomba subreddit was managed by the company and would ban people for life is they were to share any bad experiences or anything negative about the product.
- derbOac 10mo agoMaybe this is naive on my part but I find an argument like "the EU and FTC raised their metaphorical eyebrows at us and so we had to fold rather than merge" sort of pathetic. I think the idea of Amazon buying Roomba causing monopoly concerns is kinda weird. But I also think it's absurd for anyone to blame the FTC for this. Amazon had enough leverage and money to take on the FTC over this, and probably could have made the FTC look laughable in the process, if they pushed antitrust. The fact that they didn't says everything about the actual value of Roomba.
- sleight42 10mo agoYour point was most of my read on the article. Yet the root problem seems structural: the misplaced incentives of the quarterly earnings-driven stock market. Short term gains most often win over long term innovation.
- arjie 10mo agoThe article makes the case that iRobot mismanaged their business at the behest of investors. Suppose one grants that this mismanagement occurred[0]. Then years into the mismanagement, Amazon offers to buy them. At this point, whatever path the company has been doomed to by mismanagement has already been taken. In 2022, one cannot go back to the 2010s and repair whatever bad business decisions have been made. So the FTC decisions must then be seen in this light. Therefore, the case made by this article is made in the context that a dominant player in an industry has made decisions that slowly but surely doom them and seeing the imminent doom, they have found an acquirer who might be able to rescue them. The FTC is operating in a universe conditional on iRobot already having done what they've done. Consequently, even if you can blame iRobot for getting into the situation, you must also blame the FTC for closing off their escape route and de-facto enforcing the sell-off to the Chinese. As for the other thing about neither the FTC nor the EU actually bringing any proceedings against Amazon or iRobot and simply requesting information: this seems either naïve or a misrepresentation of how governments act to end deals. It's not that convincing to me that organizations that have expressly indicated that they want to break up the big companies are "just asking for information". One thing I find interesting about Western governments is that they're very similar to the Indian governments that I am familiar with. They employ the same tactics. Every immigrant knows to be rightfully fearful of the white, pink, blue, and yellow slips and the RFE notices they receive. A simple "Request For Evidence". A common strategy back home in India, too. I suppose the reason those in the West are less aware of these things is that the standard bureaucracy mostly works if you're a domestic W-2 employee. Interactions with the government are few and generally functional. So they come to believe that the government is a highly honest machine: if it asks for X, it does not indicate anything more than a request for X. Those interacting with the more politicised parts of Western government find that they strategically employ the usual tactics that Indian bureaucracies wield routinely at the lowest level. Overall, therefore, I don't find this convincing. Looking at the other things that Matt Stoller writes, I also suspect there is a partisan slant to this. 0: Businesses are hard. You operate in the fog of war. We could easily be telling a different tale if the bet paid off.
- themafia 10mo ago> closing off their escape route and de-facto enforcing the sell-off to the Chinese. There was only one escape route? And it happened to be the one they selected themselves? That seems dubious. > organizations that have expressly indicated that they want to break up the big companies We literally have laws which _require_ them to do this. This isn't ideological targeting it's the consequence of the "due care clause" of the constitution. You should ask why previous iterations of the FTC have ignored this responsibility not why the one in question actually tried to live up to it. > A simple "Request For Evidence". These are publicly traded corporations not hapless individuals. > I also suspect there is a partisan slant to this. You've tried to obscure yours but I suspect the same thing of you. > You operate in the fog of war. This is goalpost shifting to the level of propaganda. You operate in a market. If you fail your assets will be auctioned off. The death of a corporation is a natural consequence of the system we've developed. It's required. It caries none of the weight of the death of an individual or of war. > We could easily be telling a different tale if the bet paid off. > In 2022, one cannot go back to the 2010s and repair whatever bad business decisions have been made. This seems contradictory. We could easily be telling a different tale if the 2010s played out differently; however, as you say, one cannot go back.
- rsanek 10mo ago"We are pleased that Amazon and iRobot have abandoned their proposed transaction." https://www.ftc.gov/news-events/news/press-releases/2024/01/statement-regarding-termination-amazons-proposed-acquisition-irobot https://www.ftc.gov/news-events/news/press-releases/2024/01/...
- zaptheimpaler 10mo agoWe know the FTC blocked the deal. What is this quote supposed to be showing us?
- renewiltord 10mo agoThe 'we' is doing a lot of work there. 'You' might know, but many do not and explicitly have different views. An example thread: https://news.ycombinator.com/item?id=46330028 https://news.ycombinator.com/item?id=46330028
- zaptheimpaler 10mo agoOops, I just assumed everyone knows who Lina Khan is and would infer the rest because I'm such a big fanboy!
- piker 10mo agoI wasn’t aware. It’s kind of useful to imagine a world where those products and the backing of Amazon. I’m not familiar with the market, but I can imagine availability of cheap competitors was the proximate cause of this company’s demise.
- yftsui 10mo agoYou know Lina Khan lead FTC blocked the deal, but if you check the thread, huge amount of folks aren’t aware of this fact. As an owner of 2 iRobot Roomba I feel so “protected” now, they may become a brick or spy of a foreign company.
- ineedasername 10mo ago“what is it about capitalism you don’t understand?” This question, asked by the person wanting to not put capital into investing further in the company’s lucrative core competency, instead favoring dividends depriving capital and a slow death milking a product facing ever steeper competition. Capitalism has some awful failure modes, but I’m not sure what system of economics was on display in this case, but it doesn’t look like capitalism. Theft? That seems closer.
- disgruntledphd2 10mo agoRent extraction, beloved of economists from Smith to Marx.
- star-glider 10mo agoThis is literally what's happening to Apple right now. Instead of focusing on innovation and research, they're just skimming their 30%. Works out great for the share price until something like LLMs come along, and oops you have no innovation muscle left.
- asdff 10mo agoNot every company needs to participate in making llms. It isn't like apple consumers are going to ignore the smell that keeps them from android and pc and samsung headphones currently.
- brcmthrowaway 10mo agoApple == IBM?
- dyauspitr 10mo agoApple is innovating plenty.
- deleted 10mo ago[deleted]
- cameldrv 10mo agoI think that the difficulty is that Chinese companies both don't respect IP, but also move much faster than U.S. companies in the consumer electronics space. Part of the speed advantage is being physically close, linguistically close, and culturally close to the factories that are actually making the products, but there are other advantages as well.
- trinsic2 10mo agoHere is where the pressure needs to be placed: >To reverse this strategy, a more assertive antitrust regime is necessary, but it’s not enough. We also have to reduce the many other public levers of support for elevated returns on capital. Only then will it make sense for companies like iRobot to invest in robots instead of share buybacks. Call your state senators and let them know that enforcing anti-trust legislation and undoing citizens united need to be the primary focus
- yftsui 10mo agoRelated https://news.ycombinator.com/item?id=46326581 https://news.ycombinator.com/item?id=46326581 How Lina Khan Killed iRobot