[Traster]

>Now the bad news: SiBeam was bought by Lattice Semiconductor, and right before I gave this talk, Lattice shut down the entire SiBeam organization and ended support and production of this part. I didn’t find out about this until months later, when I contacted the sales engineers I had been talking to about this part and they told me what happened.

This is one thing that really pisses me off. Time and time again you've got small(ish) companies doing interesting stuff, succeeding and then they step on a landline. They do something that gets them in the cross hairs of a big company and suddenly BOOM big company buys small company for ridiculous money and then inexplicably shuts down 90% of what the small company was doing. The sale happens for a nice premium and yet the second the sale is closed 90% of the things that the company did that made it valuable are jettisoned. How can it be that these companies can afford to buy companies at a premium, throw away massive parts of the value of the company and yet: this obvious value destruction seems to be standard operating procedure for large companies.

[ethbro]

> How can it be that these companies can afford to buy companies at a premium, throw away massive parts of the value of the company

It's almost like the lack of robust anti-trust prosecution by world governments have so enriched large, rent-seeking companies that they can literally afford to burn money and still come out ahead...

[big_chungus]

On the other hand, preventing acquisitions reduces available exits and might discourage future innovation (which in turn might promote more trusts).

[bordercases]

There needs to be a larger gradient of funding options than "Waste cash until unicorn" or "rent-seek until next bailout", and "dominate small-to-medium market niche" or "sponsor and penetrate next manufacturing commodity".

We've seen so much wastage from the prevailing financial model in SV tech.

[perl4ever]

I don't understand. Your options are (1) be small, try to grow fast, (2) be big, (3) be small, don't try to grow fast, and I'm not sure what (4) means. What else is there?

[bordercases]

What behavior would prevent a technology like ultra-cheap phased arrays from being locked up due to the corporation seeing some potential in either the technology or the team to buy them, but then not giving both the leeway to develop the market for the technology further?

In this specific case I guess we don't know the full picture of what Lattice Semiconductor intends to do, but there are many examples in software of startups getting acquihired and then the team dissolving into new projects that are more familiar or closely aligned with the pre-existing business model of the company.

Since it's always possible to just turn the startup into a subsidiary I'm sometimes confused as to why this happens, unless if it's an issue of maybe brand dilution or the market opportunity being too small to be worth the overhead of keeping a separate entity tied to a larger one. Which is a part of why more opportunities for low-growth or long-tail companies would be important, since now in the case where the means for bringing the IP to the market are eliminated no one gets anything at all.

[ethbro]

Use-it-or-lose-it provisions for all acquired technology, by entities over a certain size?

If you are demonstrably developing a piece of technology, kudos. It's yours, you bought its owner.

If you are not doing anything with it, you're required to offer FRAND license terms to anyone interested in the technology.

Would at least make the tech available that's currently getting tossed in a corporate closet in the basement.

[_2d30]

I can't believe this is getting downvoted. It's the equivalent of sticking your head in the sand and hoping that if you can't see a bad thing then that bad thing doesn't exist. This is a clear case of incentive design and too strong of an arm in preventing acquisitions can come back to bite you. Don't pretend this isn't the case, acknowledge it and factor it into your beliefs around optimal anti-trust law.

[ethbro]

That there exists a strictness of anti-trust law / prosection which is harmful does not opine on whether or not stricter anti-trust law would be harmful or beneficial.

So a bit of a red herring.

[TomMarius]

The founders obviously wanted to exit

[paulmd]

everyone wants to exit, the only question is how many zeroes it'll take for you to admit it. If I offered you a billion dollars for 100% of your startup today, would you really actually not exit?

what's the old saw? "now we're just haggling over the price"...

https://quoteinvestigator.com/2012/03/07/haggling/

[bordercases]

Then how do we realign capital to stop keeping large loss-running companies or now slow-growing companies on life support so that basic innovations can still penetrate the market?

IIRC Zuckerberg had the option to relinquish control of his company but other than taking that sweet sweet In-Q-Tel dollar still did his best to stay at the helm.

[nicoburns]

Agressively tax large organisations. There'd be a cost to that, but as this comment chain is discussing, there's also a cost to leaving them with the money and allowing them to use it to stifle innovation.

[hug]

Aggressive taxation is a prisoner's dilemma involving every government in the world.

Good luck solving that problem. (Honestly, I wish good luck to anyone trying to solve it. Corporate tax is fucked.)

[bsder]

I would instead move toward "aggressively tax passive investment above some limit."

The issue isn't large amounts of money. The issue is large amounts of idle money.

[nraynaud]

And in the end all those big companies become banks.

[ngvrnd]

This linked article says this chip was produced to support a standard that didn't catch on. It's not surprising that it's no longer in production if this is true.

[ChickeNES]

>yet the second the sale is closed 90% of the things that the company did that made it valuable are jettisoned

If it were valuable they wouldn't be jettisoned

[AaronFriel]

This is taken as axiomatic by people who believe in the efficient market hypothesis, but I don't think there's much reason to believe it's true.

[etrk]

This isn't new technology. SiBeam came out of Berkeley Wireless Research Center in the mid-2000s. They had mmWave phased arrays from the start (60 GHz is pretty much useless without a phased array, or a large dish antenna if you're outdoors), but in 15 years, they never managed to find a compelling consumer use case.

I think at that point, the burden is on the company to prove its value.

[SAI_Peregrinus]

The efficient market hypothesis implies that P==NP. There's a LOT of reason to believe it's false.

[vba]

How so? Can you elaborate? Genuinely interested

[aesthesia]

Well, a naive, overly strong formulation of the efficient markets hypothesis may imply that P=NP. Something like "an optimal trading strategy is a function depending on the entire market history, and in order to find an optimal trading strategy, one must check an exponentially large space of such functions."

The paper is here: https://arxiv.org/pdf/1002.2284.pdf. They do a sketchy reduction to an extremely stylized model of the market from the knapsack problem and 3-SAT.

[sudosysgen]

Here is a paper on it : https://arxiv.org/pdf/1002.2284.pdf

[novok]

Google 'likelihood of P = NP' or 'efficient market hypothesis P = NP'

[bordercases]

Rather than using the metaphors from one field in another field whose day-to-day has little to do with those concepts, try reading a book:

https://www.amazon.com/Efficiently-Inefficient-Invests-Marke...

[variaga]

Even if the EMH were true, it only says "_IF_ a market is efficient, THEN all <modifier depending on the EMH version> information is included in the price."

The EMH does not imply that any particular market is efficient, and if the market isn't efficient, the EMH doesn't apply.

Lots of people do appear to assume the axiom "All markets are efficient", but that is plainly incorrect.

[perl4ever]

I think there was some nobel prize winning refinement to the theory that basically said markets approach theoretical efficiency in the limit as transaction costs go to zero, and interesting deviations from efficiency happen because transaction costs are not zero. Like, the whole reason we have firms and markets in real life is because zero transaction costs don't exist globally and so it helps to have ways to reduce them here and there.

[philosopher1234]

Unless gasp people can make mistakes

[colechristensen]

Some companies are purchased only so they won't become major competitors.

[TomMarius]

Companies are not primarily purchased, but sold. The previous owner could've continued, but they've chosen not to. We can't dictate them what to do, right?

[colechristensen]

The people selling (or at least that have any say in making the sale) and the people doing are more or less always different sets of people.

It is not a matter of a blacksmith hanging up their hammer but boardrooms playing wealth games. I wouldn't shed any tears for restrictions and obligations on the actions put on the latter.

[gh02t]

I agree, but it isn't surprising that this part of the company was shut down. The article says the chip was designed to implement a protocol that ended up going nowhere (Wireless HD). Lattice was probably interested in the tech and patent portfolio more than the actual product, even though it was an impressive chip that doesn't mean it was profitable.

[azinman2]

Probably because the technology didn't make it as a standard but they wanted the expertise.

[dhon_]

Value to the end customer does not equate to value to the big company though. It could be that the products that were shut down were barely turning a profit.

[thfuran]

Was that actually a major part of the value of the company? It probably would've been if the standard the part was intended for ever became widespread, but it may well be that running the production primarily for the occasional single-part purchaser simply wasn't profitable.

[detaro]

Lattice didn't exactly buy SiBeam. They bought the company owning SiBeam.