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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.

8 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 sexconker · · Score: 2

      Rule 1: Investors are dumb.

    2. 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.

      --

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

      In most cases investors do now want the money back, especially traditional VC's. In one startup I did we established - after launch - that there wasn't the growth opportunity in the market that we expected. We were offered a price for the existing business that would have returned a high percentage of the initial investment back to the investor which we thought was a 'good thing to do'.

      In response the VC said: 'If this didn't work figure out what will and then spend all but the last dollar trying to get there. The last dollar we'll roll into a join and smoke it' ( we're in WA so this would have been a legal activity ).

    4. 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.

    5. Re:Ok, this makes no sense by Hognoxious · · Score: 2

      The fucking word's so overused it barely means anything any more.

      Like Kato Kaelin "pivoted" from an actor to a gardener.

      --
      Confucius say, "Find worm in apple - bad. Find half a worm - worse."
  2. In other words by JohnFen · · Score: 4, Funny

    They completed the task of destroying Cyanogenmod and are looking for what to destroy next.

  3. The story of startups by Reverend+Green · · Score: 2

    1. Fedgov prints a bunch of free money out of thin air, calling it "Quantitative Easing"

    2. Fedgov gives that free money to their friends / "campaign contributors" in the big banks

    2. The big banks bid up every asset they can find, but still have piles and piles of free money sitting around.

    3. Big banks can't figure or anything else to do with all that free public money - so they start giving a bunch of it to the bankers' inbred, half-wit cousins who run VC firms in Palo Alto

    4. The VCs discover they've been given more money than they can possibly waste on hookers & blow. So they hire a few of their butt-buddies from the Stanford dorms to found some "startups".

    5. The butt-buddies look at what other loss-making companies are doing, then do the same thing only with an even stupider company name.

    6. No business acumen, nor any actual talent, are required to get a leadership role at a startup. You just have to be from the "right schools". Consequently the startups have no business model and not much ability to execute. But hey - at least this time they didn't pay "outrageous" salaries to a bunch of filthy working class nerds!

    6. The startups make a handsome loss, undercut and bankrupt a few legitimate businesses, and keep on getting bigger and bigger valuations each time they return to the VC teat to suck more free public money.

    7. Somewhere way up the food chain, someone in DC or New Jack City gets a little nervous about propping up so many worthless loss-making "startup" companies.

    8. The steady stream of free public money starts to dry up

    9. The Crash!

    10. Somewhere in Palo Alto, a Stanford boy can no longer afford his Personal Ass Sanitation Assistant, and is forced to resume wiping his own butt.