Essential Raises $300M(bloomberg.com)
bloomberg.com
Essential Raises $300M
https://www.bloomberg.com/news/articles/2017-06-07/android-creator-s-phone-startup-raises-300-million
62 comments
This one honestly makes no sense to me. How is this company being valued at a Billion dollars with a flagship product that is indistinguishable in features and price from any of its competitors. Who the hell is going to gamble on a new, no name brand for a $700 product that is exactly like the very reputable products from Apple, Samsung, and 50 other phone manufacturers?!?
Basically the reason this thing gets $300 million is because Andy Rubin is at the helm:
https://en.wikipedia.org/wiki/Andy_Rubin
His track record is amazing (Danger/Android).
I agree 100% with everything you have said but I'm willing to see where this goes based solely on his reputation.
Surely their is something more to this than just building a high end Android phone with a little privacy tech thrown in.
https://en.wikipedia.org/wiki/Andy_Rubin
His track record is amazing (Danger/Android).
I agree 100% with everything you have said but I'm willing to see where this goes based solely on his reputation.
Surely their is something more to this than just building a high end Android phone with a little privacy tech thrown in.
I won't attack his history, I don't know it well. I will attack his sustainability, however. This phone won't sell. It is not innovative enough nor in touch with the market.
I will say I watched his interview at codecon, and he seemed completely self absorbed. It didn't help that he kept bragging about Android popularity, which he had little to do with, on top of its awful design.
I will say I watched his interview at codecon, and he seemed completely self absorbed. It didn't help that he kept bragging about Android popularity, which he had little to do with, on top of its awful design.
Providing a stock Android experience and timely updates is enough innovation when it comes to Android phones. If they manage that then I'll give them a shot.
The pixel and nexus phones did this. They, comparatively, did -not- sell well. Nokia is claiming to do this, but the jury is still out. I'm not saying it's a bad idea, but it's not novel, either.
> His track record is amazing (Danger/Android).
Let's not fool ourselves: Android gained momentum because it was what was there when Google needed it; it's not a particularly well engineered or cohesive system. Everything down to the very basics is rushed and haphazardly thrown together, and I cannot see any improvement (Kotlin is a smart move to exfiltrate from the legal corner Google has painted itself with Java-the-Language, but the fact that this came from a 3rd party is pretty telling).
Let's not fool ourselves: Android gained momentum because it was what was there when Google needed it; it's not a particularly well engineered or cohesive system. Everything down to the very basics is rushed and haphazardly thrown together, and I cannot see any improvement (Kotlin is a smart move to exfiltrate from the legal corner Google has painted itself with Java-the-Language, but the fact that this came from a 3rd party is pretty telling).
> Kotlin is a smart move to exfiltrate from the legal corner Google has painted itself with Java-the-Language, but the fact that this came from a 3rd party is pretty telling
Android is open, most good ideas come from the community. The fact that Google chose Kotlin over Go shows that there is very little politics in Android, the best technology often wins.
Android is open, most good ideas come from the community. The fact that Google chose Kotlin over Go shows that there is very little politics in Android, the best technology often wins.
>The fact that Google chose Kotlin over Go shows that there is very little politics in Android, the best technology often wins.
In what world is Go a realistic consideration in this discussion ? Android is built on top of a JVM - Go is a native language with no JVM access. Not to mention it has nothing to do with Go target domain.
Google already has an alternative mobile OS with Fuchsia and the front-end Flutter stack is built on their Dart language which can be viewed as a Java alternative without the JVM. Kotlin is the only practical alternative to Java on Android because of technical reasons (Scala stdlib is too big and the compile time ends up being too painful) - but I don't see how it has anything to do with the legal aspect (the entire platform is still built on top of JVM and tons of Java code).
In what world is Go a realistic consideration in this discussion ? Android is built on top of a JVM - Go is a native language with no JVM access. Not to mention it has nothing to do with Go target domain.
Google already has an alternative mobile OS with Fuchsia and the front-end Flutter stack is built on their Dart language which can be viewed as a Java alternative without the JVM. Kotlin is the only practical alternative to Java on Android because of technical reasons (Scala stdlib is too big and the compile time ends up being too painful) - but I don't see how it has anything to do with the legal aspect (the entire platform is still built on top of JVM and tons of Java code).
Hopefully we'll see Kotlin on Fuchsia too, the language is way to nice to break that relationship
IMO compared to Dart it's not (or at least that much of) an improvement like it is over Java.
> In what world is Go a realistic consideration in this discussion ?
It actually works rather well, specially as a C++ replacement.
https://talks.golang.org/2014/gothamgo-android.slide
https://github.com/golang/mobile
It actually works rather well, specially as a C++ replacement.
https://talks.golang.org/2014/gothamgo-android.slide
https://github.com/golang/mobile
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Because product sales are likely to be irrelevant.
Think of this company as a future acquihire for someone like LG who needs a better flagship phone or for companies who wish to have an experienced, design-savvy team capable of delivering on IoT and mobile products. Or there is even a free letter over in the Alphabet company for an in-house hardware player comparable to Microsoft's Surface strategy.
Think of this company as a future acquihire for someone like LG who needs a better flagship phone or for companies who wish to have an experienced, design-savvy team capable of delivering on IoT and mobile products. Or there is even a free letter over in the Alphabet company for an in-house hardware player comparable to Microsoft's Surface strategy.
I don't think Alphabet is keen on having him back after what he did with Replicant.
Somewhat flippantly: they bought the domain name. The investment is in a hardware/software services brand with a founder with expert experience of the field - the phone is a 0.1 product for the company.
The wider vision will be an (assuming) quick roll out of assorted smart home/business tech built around the "Essential" brand, with a nice proprietary software layer linking it all up.
With his experience, I highly doubt anything he creates at this point would be acquired for much less than $300m (in this day and age, a $300m acquihire doesn't seem so out of reach...), so if they have participation preferred, might not even lose out.
The wider vision will be an (assuming) quick roll out of assorted smart home/business tech built around the "Essential" brand, with a nice proprietary software layer linking it all up.
With his experience, I highly doubt anything he creates at this point would be acquired for much less than $300m (in this day and age, a $300m acquihire doesn't seem so out of reach...), so if they have participation preferred, might not even lose out.
That's true, depending on the terms of what happens in case of a flop, if investor's shares are realised at strike price with priority over other ones, than for investors risk is greatly reduced
Maybe investor expectation is that a company like HTC or LG or some other none-Samsung/Apple/Google/Amazon company will buy Essential in order to get a strong team that is building a suite of products that tries to compete with Samsung/Apple/Google/Amazon. Can that justify the valuation?
Just like Microsoft's acquisition of Danger established Microsoft as a power player.
Technically, it could have. Windows Phone 7.0 was a wonderful experience, dare I say, significantly better than what Android and iOS at that time.
Then Microsoft went ahead and shot itself in the foot, hang himself from the ceiling, commit harakiri, burned down the house and then jumped down a bridge.
Then Microsoft went ahead and shot itself in the foot, hang himself from the ceiling, commit harakiri, burned down the house and then jumped down a bridge.
I'm trying to understand what the appeal would be. Let's say you're LG. You're already doing pretty well as a company selling many types of consumer appliances and electronics.
You already know how to make really really good phones, too. Maybe not quite as good as Samsung, but still, very very good.
What does Essential bring to the table? Market share? Design skills? I mean, aren't they contracting out the manufacturing to some low-cost company?
I don't know. If you were LG and felt you needed marketing and design skills, wouldn't you just make a deal with some super star, internationally known design firms (or someone) and add them to your team somehow?
Why buy a whole expensive outside company when, at best, they know a few more things about phones than you do?
You already know how to make really really good phones, too. Maybe not quite as good as Samsung, but still, very very good.
What does Essential bring to the table? Market share? Design skills? I mean, aren't they contracting out the manufacturing to some low-cost company?
I don't know. If you were LG and felt you needed marketing and design skills, wouldn't you just make a deal with some super star, internationally known design firms (or someone) and add them to your team somehow?
Why buy a whole expensive outside company when, at best, they know a few more things about phones than you do?
1) The team has shown it can deliver, so there's a premium to be had.
2) Andy Rubin's personal net worth post-Danger and post-Android is in nine digits. He is likely to set the terms of the investment, and those who think it's too expensive have moved along.
2) Andy Rubin's personal net worth post-Danger and post-Android is in nine digits. He is likely to set the terms of the investment, and those who think it's too expensive have moved along.
Roll the dice. Why not? Maybe they get bought.
I didn't understand NextStep or BeOS. But they were the final two choices (to replace Mac System 9).
Sometimes the innovation, execution has to happen on its own.
I didn't understand NextStep or BeOS. But they were the final two choices (to replace Mac System 9).
Sometimes the innovation, execution has to happen on its own.
Andy created the extremely popular Sidekick phones and Android OS.
Would Android be a success if it hadn't been for Google's ability to push it very powerfully onto the market?
I'm not knocking Mr. Rubin and I'm not saying I could have done anything anywhere near as successful myself. I couldn't have. He's clearly more talented and motivated than I am.
But, I also wonder:
Is Android anything but the number one, huge outlier in his business life? Isn't it plainly evident, even now, that Android is the biggest business success Mr. Rubin will ever accomplish?
If Mr. Rubin is truly a powerful, free-thinking force for life-enhancing technological innovation, uh, why did he go away for multiple years and ... come back with ... another phone?
Again, I'm not saying I'm as good as he is. Very far from it. But, isn't way more skepticism in order?
I'm not knocking Mr. Rubin and I'm not saying I could have done anything anywhere near as successful myself. I couldn't have. He's clearly more talented and motivated than I am.
But, I also wonder:
Is Android anything but the number one, huge outlier in his business life? Isn't it plainly evident, even now, that Android is the biggest business success Mr. Rubin will ever accomplish?
If Mr. Rubin is truly a powerful, free-thinking force for life-enhancing technological innovation, uh, why did he go away for multiple years and ... come back with ... another phone?
Again, I'm not saying I'm as good as he is. Very far from it. But, isn't way more skepticism in order?
Well, when you're the creator of a the largest phone operating system on the planet it's probably pretty easy to raise some cash for a phone startup.
Also, what is the benefit of a "bezel-less" phone? I always put cases on my phones, ever since I dropped one and spider-webbed the screen some years back. Without a bezel, the case will be covering up part of the screen...
As it turns out, your preferences are not universal.
> I use a case, therefore no one would like a phone that looks good without a case.
Not all of us are clumsy with our expensive and fragile possessions.
Not all of us are clumsy with our expensive and fragile possessions.
Agreed. Modern phones are so fragile as to make cases mandatory for anyone that doesn't just sit around all day, and bezel-less designs make it even worse while adding zero practical value.
Fortunately there's a rather large portion of the population (myself included for 75% of the time) who do rarely more than sit around all day (staring at some form of screen or another).
But they have a notch in the screen and a snap-on camera!
I may be biased here, but I think almost everyone here is missing the point. Yes, Essential raised $300M because Andy Rubin is at the helm, but the bet is not on the phone they just launched. Its on the Smart Home. Here's a quote from Rubin himself:
[1] I mean truly open, the way he's done with Android. The Essential phone will already be more open that most phones on the market (unlocked bootloader), there's good reason to believe the Home will be too.
The long-term vision for Essential, Rubin said, is more closely aligned
with the Essential Home, which Rubin hopes you’ll put in your kitchen or
living room and use to control all the connected devices where you live.
[1] I mean truly open, the way he's done with Android. The Essential phone will already be more open that most phones on the market (unlocked bootloader), there's good reason to believe the Home will be too.
" If that's not a company that's worth $1B, especially led by someone with Andy Rubin's track record, I don't know what is."
With all due respect, there's zero justification in your statement for the $1B valuation. There is bias, of the favorable kind, towards Andy, nothing objective.
Remember that the open market doesn't trade on pure emotion/bias only. Otherwise, many statements like yours could've saved Lehman Brothers from hitting $0 in value
With all due respect, there's zero justification in your statement for the $1B valuation. There is bias, of the favorable kind, towards Andy, nothing objective.
Remember that the open market doesn't trade on pure emotion/bias only. Otherwise, many statements like yours could've saved Lehman Brothers from hitting $0 in value
That's good perspective. My followup question is: why build the phone, then...because it's the remote control?
He needs to show something tangible to investors and the world. He's a phone guy, so he starts here, knowing voice assistants are still a few years away from mainstream. That'll give him a customer base and some revenue, keeping investors off his back which extends his timeline as the voice assistant / smart home market develops over next five to ten years.
At the Code conference, Andy said that Ambiant OS will be open source.
Longtime Android user here. I would love to see this company succeed, but I don't see how it's possible.
Even if you can design a better phone, Apple has two massive moats protecting them, namely, iOS and their manufacturing prowess.
The investors in this are going to take a bath. Again, this isn't the outcome I want, but I think it's the outcome we'll get.
Even if you can design a better phone, Apple has two massive moats protecting them, namely, iOS and their manufacturing prowess.
The investors in this are going to take a bath. Again, this isn't the outcome I want, but I think it's the outcome we'll get.
I don't know... I didn't expect OnePlus to survive long either and yet here I am three years later seriously thinking of switching to Android and OnePlus 5.
I believe there is a space on the smartphone market for a new powerful player. Today there are two mainstream choices iPhone and Android. A significant portion of iPhone users are devoted fans, but Android is more often just a practical choice. The first Essential phone is just another Android device, but based on the investment and people involved I don't think this is a long term plan. If Essential releases a device that is clearly distinguishable from Android phones, they may win many Android users.
> If Essential releases a device that is clearly distinguishable from Android phones, they may win many Android users.
I don't know. HTC had some really high build quality models; did not do them much good (haptically, those were the best of their time). With Google beginning to crack down on vendors mangling the Android OS (part of the unified update strategy), differentiation from Android will be even more difficult.
I don't know. HTC had some really high build quality models; did not do them much good (haptically, those were the best of their time). With Google beginning to crack down on vendors mangling the Android OS (part of the unified update strategy), differentiation from Android will be even more difficult.
Software differentiation would more important and easier than hardware, so Android fork or completely new OS that could maybe support Android apps.
Who actually expects this to succeed? It's a mediocre flagship.
>It's a mediocre flagship.
So was Android.
It's a bet on Rubin himself and the team he's recruited, not on the current product.
So was Android.
It's a bet on Rubin himself and the team he's recruited, not on the current product.
But they have a product. It's a smartphone, in a saturated, downhill headed market.
They have another product as well, it's not a smartphone.
https://www.essential.com/home
https://www.essential.com/home
It's like Google Home, without the enormous company full of brilliant software engineers behind it?
But with the brilliant software engineer who played a large role in making that company enormous.
I agree. Plus, I don't think this is differentiated from other flagships. Some people will like it others won't and I'm not sure if there is a moonshot in there to justify $300m.
Yeah I dont think the "phone" is their main play. Feels like they are trying to become the "one" iot platform that other big vendors cannot be?
Perhaps Rubin's end-game is to do a fork of Android that would break away reliance on Google and then be acquired by Samsung for a few billions.
How? I can't see how fragmentation can be good for anyone. The web has made progress since the jar days but even if you go the web route, you are still a serf (to continue the analogy that we are all serfs sorry couldn't find the link).
I wouldn't support a different app store that competes with Google for control of Android.
I wouldn't support a different app store that competes with Google for control of Android.
Fragmentation isn't even a thing for most people in the market for a smartphone. Anecdotally, most of my friends who uses Android isn't even aware of Google, the search giant. Most of them are only aware of Google as the account provider that they use to sign in to their phone.
Sorry for not clarifying. I wasn't talking about consumers but rather service providers who have to maintain a presence in all major platforms. From what I understand, Android exists because Google was fed up trying to get Google maps and mail and search applications on all j2me, symbian, and what not devices.
> that would break away reliance on Google
There are substitutes for Search, Gmail, Apps Suite and Chrome, but the rest of the basic services are not that easy to replace. Maps with turn-by-turn directions, Google Translate, Google Photos with unlimited backup are all essentials for mobile consumers nowadays.
There are substitutes for Search, Gmail, Apps Suite and Chrome, but the rest of the basic services are not that easy to replace. Maps with turn-by-turn directions, Google Translate, Google Photos with unlimited backup are all essentials for mobile consumers nowadays.
Maps is doable, openstreetmaps is not bad or license from Here (or both). I'm not sure how many people need translate on a regular basis; I bet you could license that from someone though. Photos backup just takes money for storage, it's not particularly hard (you could instead work on making it easy to store with the end user's choice of provider, possibly with a revshare)
The real thing pulling to centralization is Google push, which requires play services, which requires playing by Google's rules.
If you don't have Google push on Android, you have to allow all the apps that want to get notifications from the server to keep open their own connections (which they may not have code for), which is going to kill battery life. The alternative is doing your own push services, but then you need to convince apps to support that, which generally requires apparent probable market share. Amazon managed to get some apps to do it for the Fire phone, but that didn't really go too well.
The real thing pulling to centralization is Google push, which requires play services, which requires playing by Google's rules.
If you don't have Google push on Android, you have to allow all the apps that want to get notifications from the server to keep open their own connections (which they may not have code for), which is going to kill battery life. The alternative is doing your own push services, but then you need to convince apps to support that, which generally requires apparent probable market share. Amazon managed to get some apps to do it for the Fire phone, but that didn't really go too well.
I actually think maps is the easiest to replace. We have bing maps, HERE, waze and multiple open source projects.
Waze is also owned by Google, but other than that I think it's a good point that there are a couple of other viable maps options. But still, you need something that actually works well, or you'll get to re-live the fiasco that was Apple Maps, so I don't think there are more than a couple viable options.
Is it me or investments like this should be better of some better startup ideas like solving global warming, crisis in other parts of the country. There are other parts of the world that needs more solutions than another phone.
The obvious answer is that the returns on global warming and solving crises is hard to quantify, and selling gadgets is easy(easier) to quantify.