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Businesses The Almighty Buck

Once Valued at $3.2B, Wearable Company Jawbone Shuts Down, CEO Launches New Startup: Report (axios.com) 92

Posted by msmash from the back-on-earth dept.
Consumer hardware company Jawbone is being liquidated, according to The Information. From a report: The San Francisco-based company, which once was valued at $3.2 billion by private investors, has hired Sherwood Partners to handle the wind-down process and assume its ongoing litigation with rival FitBit. Jawbone 2.0: Co-founder and CEO Hosain Rahman reportedly has formed a new company, named Jawbone Health Hub, that has hired many of Jawbone's employees and will take over servicing Jawbone's products. BlackRock, which loaned Jawbone $300 million in 2015, has a stake in the new company. No other existing Jawbone investor has a stake in the new startup, with one telling Axios that his firm has been kept in the dark.
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Once Valued at $3.2B, Wearable Company Jawbone Shuts Down, CEO Launches New Startup: Report More

Once Valued at $3.2B, Wearable Company Jawbone Shuts Down, CEO Launches New Startup: Report

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  • Looks like some VCs got suckered in for a second round of blowing money out the wazoo.

    • Re:If you don't succeed the first time... (Score:5, Funny)

      by Anonymous Coward on Friday July 07, 2017 @11:32AM (#54763911)

      Someone should make a computer they can wear on their wazoos to track the amount of money blown out of it.

      • Re: (Score:2)

        by Pascoea ( 968200 )
        Dammit where are my mod points? That's funny as hell. well done.

      • Someone should make a computer they can wear on their wazoos to track the amount of money blown out of it.

        Some VCs are starting to pull out from these unprofitable unicorns.

        • It is gambling in a way, though... for every 20 startups that you (intelligently and with forethought!) dump $1m into, one of them is fairly guaranteed to get you $25-30m back or more within five years.

          Obviously Jawbone could've been one of the moneymakers - if they IPO'd or sold to a bigger company like 3 years ago. :/

        • But most still subscribe to the "bigger fool" theory and hope to get out and leave someone else hold the bag.

          Judges 15:15

          And he found a new jawbone of an ass, and put forth his hand, and took it, and slew a thousand men therewith.

          That's nothing, this jawbone will slew the millions of dollars of any asses who invest in it.

          • Re:If you don't succeed the first time... (Score:4, Insightful)

            by Dunbal ( 464142 ) * on Friday July 07, 2017 @12:55PM (#54764597)

            hope to get out and leave someone else hold the bag.

            You just described the stock market. And the bond market. And the Federal Reserve...

            • Yep! The sad thing is that when all shakes out, it is the 1% that walks away with all the gains while leaving the 99% to eat all the losses. This is the purpose of the IPO. Go public and then trade your VC stake for other people's cash before the business model is known to be shit causing the supposed company value to drop back to zip.

            • Re: (Score:2)

              by Pascoea ( 968200 )
              Don't forget Social Security. I have no illusions that the bag will be empty in 30 years when I'm due to start drawing the money that I've been paying in since I was 16.

        • Some VCs are starting to pull out from these unprofitable unicorns.

          If they pull out early enough they will have an easier time fighting the paternity suits.

          • Some VCs are starting to pull out from these unprofitable unicorns.

            If they pull out early enough they will have an easier time fighting the paternity suits.

            They're pulling out alright, just not the head or the orifice you're thinking of.

        • Pull out from these unicorns? That's what she said?

      • Re: (Score:2)

        by Khyber ( 864651 )

        For that, you'd need to talk to WeVibe [npr.org] as I hear they have expertise in that area.

    • Agreed. Maybe the new investors should talk to the old investors.

      • Maybe the new investors should talk to the old investors.

        BlackRock is an old investor. They probably stayed in to avoid writing off their previous investment as a loss.

        • Yeah, but c'mon... sunk cost is sunk cost, I get that, but how much did they pitch in initially to make them throw that much money after it in 2015?

    • Actually, many entrepreneurs are more successful on subsequent startups (although, I believe it is usually the third or fourth business that they start which succeeds).
    • and again, investors to ceo, if you like your job, do something different.

    • Hey, if you've got money coming out the wazoo [youtube.com], you should do something with it.

      At least according to E-Trade.

  • I just invested 5 bucks in Turd, LLC. I deem it to be worth 5.7 billion dollars. Where's my payday?

  • Fitbit did this with Pebble. Why shouldn't their competitors get to do it too? Silly Valley is a special place with unicorns and the old rules do not apply there anymore.

    • Re:Pebble (Score:5, Informative)

      by Solandri ( 704621 ) on Friday July 07, 2017 @12:00PM (#54764171)
      Fitbit didn't do it with Pebble. Pebble's management spun it that way to try to shift blame away from themselves - making it sound like Fitbit was the one eliminating Pebble's jobs. Fitbit simply bought Pebble's IP, nothing more.

      • I have a Pebble watch on my wrist. I am the one abandoned, not some people who worked at Pebble. Who got new jobs at Fitbit anyway.

  • We need stories like this to remind investors, and people in general, that unicorns are made up. Especially the kind that come in startup form.
    • Read "Hatching Twitter: A True Story of Money, Power, Friendship, and Betrayal" [amzn.to] by Nick Bilton, which can be summed up in a Mark Zuckerburg quote: "[the four founders] drove a clown car into a gold mine and fell in." Twitter as a technology was an afterthought as the founders squabble over who would be CEO, spent investors' money out the wazoo and didn't bother finding a way to make money.

      • Abe.com has copies of that book for $2.99 [abebooks.com] Creimer, and you don't get your referral bonus if people buy the book there.

        • Abe.com has copies of that book for $2.99

          For one used copy of the dead tree edition for $6.48 (including shipping). Meanwhile, Amazon has 47 used copies starting at $6.46 (including shipping)

          Creimer, and you don't get your referral bonus if people buy the book there.

          Damn... I was counting on that half-penny.

          • I would still rather pay an extra two cents to a bookstore on a website completely unassocited with Amazon. You seem to consider Amazon a business partner. I consider them a sometimes necessary evil.

    • Wait, you mean a company that is losing $200 million a month, their only product is an app, and with a massive executive overturn recently isn't worth $60 billion? Unpossible!
    • google synthetoceras
    • I thought Unicorns were the big investors that came along?

    • No, we need stories like this to remind everyone that in life there are winners and losers. For sure some win through luck and good timing, and some lose through entirely external forces, but most of the time, companies (and people) win by making good choices, exercising restraint at the appropriate time, hard work, and learning from failures. Jawbone had terrible customer support, released products that were clearly not ready and that will kill a company about as fast as possible, especially when there i

      • Re: (Score:1)

        by AvitarX ( 172628 )

        I had two jawbone headsets, I was quite happy with them, what killed them was the march of tech.

        The last headset I owned was 90% as good and 1/5 the cost.

        I appreciated the good noise cancellation (when speaking) and AD2P streaming when it was rare, and it was easily worth the money, but it was never going to be worth the money a year later when Plantronics had decent sets at $20-30.

  • I really wanted to like Jawbone (Score:5, Informative)

    by SlaveToTheGrind ( 546262 ) on Friday July 07, 2017 @11:43AM (#54764041)

    The tech in the headset was fantastic for its time, but the wire ear loops repeatedly snapped off just from putting the unit on your ear. Their response to the raft of complaints was to put out a YouTube instructional video showing how to put a Jawbone on your ear "properly" (i.e., without breaking it), and to only sell replacements in 3-pack of different sizes -- use one, throw the other two away. This doesn't surprise me at all.

  • The per-item value of trinkets and doohikies is rapidly declining, as are the supposed values of some tacky, commercial online/web services and appy app-apps. Protonet just closed shop after being a big crown-funding darling child just 3 years ago. We're seeing the same with Rocket, errrm Rippoff Internet and countless other blowhard startup projects. Jawbone had their jawbone thingie but wanted to extend it beyond it as fast as possible and they failed. People don't seem to realise that it's mostly about b

  • Thanks for the money, now fuck off!

  • This is sort of sad. (Score:3)

    by pecosdave ( 536896 ) on Friday July 07, 2017 @12:21PM (#54764351) Homepage Journal

    There used to be some good premium Bluetooth headsets. Jawbone led the pack, BlueAnt had a good strong showing, and there were a couple of other also-rans that weren't so bad.

    Jawbone is gone, BlueAnt's inventory is drying up and getting dated.

    There's all sorts of stuff from China that's super cheap, and some of it isn't too bad, but there's nothing that reaches their reliability and has JawBone/BlueAnt noise cancellation. Motorola stuff has horrible background noise and it's actually painful for me to listen to when someone is using one on the other end. Jabra has gone desktop and never did have the noise cancellation down (but did have the most comfortable headset I ever wore). Plantronics, despite being known for indoor/desktop stuff is sort of stepping up to the plate. Still there's really nothing left that really fills the void being left by Jawbone.

    I personally consider talking on the phone an annoyance I can't avoid. I work, drive, and do chores with my hands. I started using headsets back when the only really good option was a Jabra with a wire, I even figured out how to integrate that wire and headset into my clothing so I never had to stop doing what I needed to get done for a phone call. Before that even as a teen I got a headset for my normal wired phone so I could keep doing what I needed to do.

    I'm really going to miss Jawbone for headsets. I don't think the fitness band was a bad idea, but the company shifting focus to it probably wasn't the greatest move they made. They should have focused on making cheaper but still high quality headsets, maybe even going binaural so the music people could get their fix. Had Jawbone kept their focus right they could have been the people who beat Apple to the market with their own Airpod.

    • Mentioned this in another thread, but jaybird's earbuds are great.

      Fit well, highly water resistant, good sound quality, mediocre battery life.

      (not affiliated with the company at all, just use their headphones, and they work great.)

      • I may give Jaybird a look-over, but I doubt they'll do it for me based on first glance. I have some binaural stuff, but they just don't have the "pull it out of your jeans 5th pocket and use it" simplicity.

    • Seconding pecosdave here. I used Jawbone earpieces for years and they were great. They even gave acceptable performance in my sports car with the top down. They last one I bought two years ago was a piece shit, however. It was allegedly the sam model as the one i lost, but it had a reduced feature set, the audio sucked, and the bluetooth connectivity was troublesome. Frustration pushed me to be an early adopter of AirPods, which are greatly superior to Jawbone. They were the top of the heap in their m

    • Re: (Score:2)

      by sl3xd ( 111641 )

      Your experience differs from mine. I loathed the Jawbone headset I was given - by a relative who absolutely hated it too.

      The only positive thing about the experience is that it didn't cost me anything.

      • I got someone else an Icon right after it came out and I regretted it. She liked, it, it didn't appeal to me.

        I've had the original, the Jawbone 2 (possibly the best model), the Prime, and I think the ERA. Had some mixed feelings about the ERA - let me guess, you had an Icon?

  • The UP 3 sounded really interesting when it was announced. I was on a fitness kick at the time, and my girlfriend ordered one for me for Christmas. At the time, Jawbone was saying it would deliver by December 22. December came and went. We called, and Jawbone gave no reason but said deliveries would be delayed, and that it should be shipping soon January came and went. We called again. Same answer. February, March... the device didn't come until April.

    When I had finally received it four months later, I

    • A little history from a consumer's perspective on Jawbone's fitness tracker foray-- Jawbone purchased and shut down BodyMedia; BodyMedia made arm-band fitness trackers that were worn on the tricep and were the only FDA-approved fitness tracker for use in a clinical setting -- the television show The Biggest Loser used BodyMedia armbands for many seasons (i.e. since before the iPhone existed.) BodyMedia had years of clinical data relating to accelerometer/heart rate/temperature/galvanic sensor readings, diet

  • So, this is how unicorns die - VC $$ blown then reincarnated into some other useless product.

  • They did it to themselves (Score:4, Interesting)

    by p51d007 ( 656414 ) on Friday July 07, 2017 @02:20PM (#54765307)
    When I bought my first Aliph Jawbone headset, I was amazed at the ability of the "noise assassin" to knock down noise. So much so, that I was on the phone during an ice storm, where we had part of our office running on two gasoline generators out in the parking lot. I was on the phone talking to a coworker and turned the noise canceling off and then on and he was amazed that if he didn't know any better, he would never have known the generators were running. Kept with them buying another one that was considerably smaller, but, by the time they came out with "the new era" one, it was a piece of junk. VERY poor battery life, kept disconnecting etc. Sent it back, the replacement didn't work, sent that one back, had poor battery and sound quality. I gave up on them and looked elsewhere. I think they stretched themselves with all the do-dads, speakers, fitness bands, and let their headset part falter. Yeah, a lot of people don't use these, but someone in my line of business NEEDS that type of headset working in a noisy environment and needing both hands free. Hopefully someone will buy/license their noise assassin technology and put it in their headset.

  • It had raised more than $580 million in funding from top investors like Khosla Ventures, Mayfield Fund, Andreessen Horowitz, Sequoia Capital, and Kleiner Perkins.... and... BlackRock, which loaned Jawbone $300 million in 2015, which has a stake in the new company

    Plus 14 rounds of funding. [crunchbase.com]

    How is this CEO still trusted with anybody's money if he blew through over half a billion dollars? #SuckerBornEveryMinute

  • Jawbone was once one of the top rated high end Bluetooth headset providers. They didn't adapt and expand as necessary to keep up with the shifting market.

    It's not like they didn't try (like Blockbusters) but their attempts were all failures.

    RIP... along with Blackberry, Palm, etc.

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