I wrote a feature in early 2015 about a peculiar “unicorn”—a private company valued at more than $1 billion—called Jawbone. Jawbone was peculiar for several reasons. At 16 years of age, still private, still essentially a startup in that it didn’t make money, the company already was on its third product line. It pioneered Bluetooth headsets for phones. Then it created a niche for Internet-connected speakers. Finally, it made stylish “wearables,” a step counter masquerading as jewelry.
Jawbone had all the elements of Silicon Valley legend. Its CEO was a larger-than-life fellow named Hosain Rahman, who talked big and was a master at raising (and spending) money. Its top designer was a Jony Ive wannabe named Yves Behar, a stylish guy popular on the conference circuit. It products were popular in conference schwag bags and on retail shelves.
Jawbone had great investors too: Sequoia Capital, Kleiner Perkins, Silver Lake, Andreessen Horowitz. They remained publicly enthusiastic, despite Jawbone’s inability to convert its buzzy products into profits. “It’s a unique company that has a unique set of capabilities,” Ben Horowitz told me. As an example, he offered Jawbone’s intellectual property assets, a strange attribute for a would-be high-growth prospect.
In the end, neither brash talk nor savvy investors were enough for Jawbone. It spent too much, paid its bills too infrequently, missed too many product deadlines, and entered too many faddish markets where bigger players reaped whatever gains were to be had. In a move first reported by the scrappy subscription newsletter The Information, Jawbone has begun to liquidate its assets. Its $3 billion-valuation is now a thing of the past. Equity investors likely will be wiped out.
This startup thing is harder than it looks. What’s more, execution is as important as product innovation. Jawbone deserves credit for lasting as long as it did. Now it joins a long list of Silicon Valley might-have-beens that will be forgotten relatively quickly.
| Adam Lashinsky | |
| @adamlashinsky | |
| adam_lashinsky@fortune.com |
NEWSWORTHY
Scary times. The prime suspect in a series of hacking attacks on a dozen or more U.S. power plants, including the Wolf Creek nuclear facility in Kansas, is Russia, Bloomberg reported. The hackers only cracked administrative networks, not operational controls at the plants. But Russian hackers notoriously took down parts of Ukraine's electrical infrastructure in 2015.
Scary headlines. A double dose of bad news for Apple, the world's most valuable tech company, today. First, Qualcomm escalated its legal battle against Apple by seeking to have imports of some iPhones and iPads banned from the country. And then came word that rival Samsung will report a larger operating profit for the second quarter than Apple.
Redundancies. It was more than just bad headlines for another tech giant. Chatter earlier this week of a restructuring at Microsoft proved true and the company is laying off 3,000 to 4,000 sales and marketing employees, according to the New York Times.
Mechanized chitchat. Thursday marked a new level of credibility for months-old rumors that Amazon was talking to Dish Network about doing something together around wireless networks. As had been written earlier, the Wall Street Journal now reports that Amazon might help Dish finance the network it is building, not for phones and people, but for machine connectivity. Dish has to build out something by 2020 or risk having its airwave rights revoked.
Less red ink. Music and podcast streaming startup SoundCloud said it's laying off 173 people, or 40% of its workforce, to cut costs as it seeks to attain profitability. The company was facing a cash crunch earlier this year and could now be fodder for an acquisition by a larger company like European music service Deezer.
Virtual taxation. The Internal Revenue Service started probing the popular digital currency exchange Coinbase, which has half a million active users, after only 802 people in the entire country declared capital gains or losses related to bitcoin in 2015. But after asking for every customer's login and password, the agency is backing down under criticism and says it will now seek more targeted information to uncover possible unreported income.
IN CASE YOU MISSED IT
Why Are There More Potatoes in My Blue Apron Box? by Leigh Gallagher
Uber Enables Tipping for Drivers Across the U.S. and Canada by Kirsten Korosec
Toyota Just Tested Its New Robot With a Disabled War Veteran by Jonathan Vanian
Apple Could Make Change to Its News App Ads by Don Reisinger
‘CopyCat’ Malware Infected 14 Million Google Android Devices by Robert Hackett
This Sports Streaming Service Aims for the Mainstream With Football Games by Tom Huddleston, Jr.
Apple Might Have Big Plans for the 2018 iPhone Line by Don Reisinger
FOOD FOR THOUGHT
Never charge your phone again? Sounds great, too good to be true—almost. Researchers at the University of Washington say they've built a working prototype of just such a dream handset. Shyam Gollakota, an associate professor at UW and one of the phone's creators, says the device can be powered by wireless electrical transmissions, among other means, but has also has been re-engineered to use less electricity:
We've built what we believe is the first functioning cellphone that consumes almost zero power. To achieve the really, really low power consumption that you need to run a phone by harvesting energy from the environment, we had to fundamentally rethink how these devices are designed.
FOR YOUR WEEKEND READING PLEASURE
A few interesting longer reads I came across this week, suitable for perusing over the weekend:
The Story Behind the World’s Most Famous Desktop Background
It was this vision of Sonoma County that flashed by Charles O'Rear’s car window as he drove down Highway 121 in 1998. Although he was a professional photographer, with work featured in National Geographic and the Los Angeles Times, O'Rear wasn't on assignment that Friday afternoon. Instead, he was headed to visit his then-girlfriend (now-wife) near San Francisco.
Death By Bitcoin
When Portland Police Bureau detectives arrived at Aisha's townhouse, they were initially stymied. Their investigation would eventually lead them across the country and into the deepest recesses of the Internet: places where the common currency is Bitcoin, and where buyers and sellers are anonymous and far removed from each other.
Slow Crash: Economist Michael Hudson on the Future of the Stock Market
I'm not sure it'll be an explosion. It's more like a slow crash. It's more like people are getting desperate. They're having to live off their credit cards, not to buy luxuries but just simply to break even. They're falling further and further behind, and as they fall behind the interest rate rises, the penalties rise, so people are getting more and more squeezed.
In 1947, A High-Altitude Balloon Crash Landed in Roswell. The Aliens Never Left
Major Jesse Marcel, an intelligence officer from the base, returned to the site to investigate more thoroughly and collected all of the "wreckage." As they tried to ascertain what the materials were, Marcel chose to make a public statement. On July 8, Marcel's comments ran in the local afternoon newspaper, the Roswell Daily Record, alongside a headline stating "RAAF Captures Flying Saucer on Ranch in Roswell."
BEFORE YOU GO
David Bowie famously wondered if we'd ever know, in his 1973 hit, if there's life on Mars. The data this week isn't good. According to a new study published in the journal Nature, several substances found in the martian soil combined with high levels of UV radiation hitting the red planet's surface would be deadly for bacterial life. Or as the authors note:
These data show that the combined effects of at least three components of the Martian surface, activated by surface photochemistry, render the present-day surface more uninhabitable than previously thought, and demonstrate the low probability of survival of biological contaminants released from robotic and human exploration missions.
