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Failed Palo Alto Startup Pivots From Trying To Be an 'Android Killer' To Self-driving Tech (bizjournals.com)

Posted by msmash on from the next-up dept.

A Palo Alto startup that stopped trying to be an "Android killer" last year after raising $185 million has apparently pivoted to developing autonomous vehicle technology. From a report: The company now known as Cyngn has changed its name from Cyanogen and recently got a permit to test its self-driving tech on California roads, according to a report Wednesday on Axios. It's being led by Lior Tal, the former chief operating officer who took over as CEO last fall when Kirt McMaster left. The rest of the startup's current team of about 30 people appear to have joined since the strategy shift, Axios reported, citing LinkedIn records. Some of them are former Facebook people, like Tal, and alumni of automakers who include Mercedes-Benz. No new funding has been disclosed for the reinvented company. It lists on its website investors who backed it before it pivoted, including Andreessen Horowitz, Benchmark Capital, Redpoint Ventures, Index Ventures, Qualcomm and Chinese social networking company Tencent. The company was the center of acquisition talk in 2014, when companies like Microsoft, Amazon, Samsung and Yahoo expressed interest in the company.

3 of 71 comments (clear)

  1. Ok, this makes no sense by ebrandsberg · · Score: 3, Insightful

    If a startup fails to come up with having a compelling profit-making story, but has money left, wouldn't it be the prudent thing to return the money to the investors, then decide, what should be done now. Not completely pivot to a new space that has zero relation to the original investment? If the team is basically one remaining guy, and a completely new team, how does this even fly with the investors?

    1. Re:Ok, this makes no sense by EndlessNameless · · Score: 4, Insightful

      The CEO decides what to do with the money---it's a corporate asset.

      If the board of directors doesn't like what he's doing, they can fire him.

      The board is elected by the shareholders, aka the investors.

      If they don't like the new direction, they can fix the problem. There's a process for that.

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      According to the latest ruleset, this post should be modded as Vorpal Flamebait +5.
    2. Re:Ok, this makes no sense by Faluzeer · · Score: 3, Insightful

      Rule 1: Investors are dumb.

      I believe the Ferengi (from Deep Space 9) rules of acquisition cover this :
      Rule 1 : Once you have their money, you never give it back.