Which one of these will be the biggest “unicorn” failure ever?

https://statmodeling.stat.columbia.edu/2022/11/14/which-one-of-these-will-be-the-biggest-unicorn-failure-ever/

by jeffreyrogers • 4 years ago

136 187 4 years ago

statmodeling.stat.columbia.edu

fullshark2• 4 years ago

Need to add a column with the IPO valuation to answer this properly. I'm guessing when you add that column all of these were massive successes except WeWork which went public via SPAC and their IPO imploded.

Bubble_Pop_223• 4 years ago

Valuation is meaningless from the perspective of analyzing if a company has been a success or a failure. Valuation concerns the players who sit at the poker table and how each and everyone of them managed to fare during the game. The table being the company and the players being the investors.

The OP is right in accounting funds raised vs. losses incurred as the metric to watch for.

The funds raised belong mostly to public pension/private funds and insurance companies, with the intermediation of PE/VC funds.

fullshark2• 4 years ago

It was a half-joke, designed to illustrate that goals of successful company and successful IPO dump have been conflated the last several years. Ultimately the poker game as you call it is what the people holding the money care about so...

Ancient• 4 years ago

Surprising Magic Leap is not in the list which was a failed "unicorn".

IshKebab• 4 years ago

I imagine they're just losing their money slower because they aren't subsidising entire industries like Uber is.

umeshunni• 4 years ago

This list is only public companies

cryptoanon• 4 years ago

Brex

lordleft• 4 years ago

Teladoc Health 2002 $0.17 billion $11.2 billion

..how is this possible? Doesn't this suggest that Teladoc can cover their expenses pretty well via revenue (because how else are they in business?)

adventured2• 4 years ago

The losses they're showing aren't all cash / operating losses, which rather damages the article.

cragfar• 4 years ago

They used their high stock price to buy Livongo, and then did massive write downs on it when it ended up not being that great (~$9 billion in total). They had two quarters in a row where they did good will impairments of 30-40% of their market cap.

Bought Livongo October 2020 (stock price $200)for $18 billion- https://www.fiercehealthcare.com/finance/teladoc-finalizes-b...

Q1 2022 6.6 billion write down- https://www.fiercehealthcare.com/health-tech/teladoc-takes-6...

Q2 3 billion write down- https://www.insiderintelligence.com/content/teladoc-health-t...

yrgulation4• 4 years ago

Palantir is not going anywhere anytime soon. They are about to sleaze their way into the british healthcare system. Uber is likely to go under, sold for their rider and driver base at a discount value. Airbnb’s bubble has burst. Door dash? Why is even door dash such a popular thing. And why do these companies need so many people to maintain their apps? Should be max 100 devs and everyone else in sales and support.

kman82• 4 years ago

Sleaze?

yrgulation4• 4 years ago

In British English this means immorality, corruption.

I am referring to this: https://www.theguardian.com/society/2022/nov/13/controversia...

Please ignore the trump bit. It’s about what they will do to our data and how the corrupt tory government is turning a blind eye to it.

kornhole• 4 years ago

Yes and Palantir is deeply embedded into many US government agencies. They are somewhat protected by this, but they may need to slim down to justify the bailouts they might receive.

zh3• 4 years ago

Palantir and Peter Thiel remind me of Edward Heath's choice phrase "...the unpleasant and unacceptable face of capitalism".

adventured2• 4 years ago

Uber isn't likely going under; they're going to squeeze and squeeze and squeeze their way to getting by. Lyft is quasi going away (they'll be acquired), which will further benefit Uber's survival chances.

Uber's sales hit $29b with a $2.2b operating loss, over the past four quarters. It won't take much to keep squeezing that loss further downward to the point where they can trivially float it indefinitely. They continue to become more dominant in their space, not less. If the US economy crashes hard (and nobody can predict that accurately at this point), that would be the only serious risk to change that.

azylman3• 4 years ago

Should be max 100 devs and everyone else in sales and support.

People with no experience running systems at scale often underestimate the amount of effort required.

malfist• 4 years ago

Everything is simple if you ignore complexities.

fock• 4 years ago

and then there is basecamp and you wonder whether maybe there's "experience" and ... experience. (though I agree that regulations and fitting to markets just requires people)

ok_dad• 4 years ago

You can definitely run Uber-scale systems with <100 engineers. Whatsapp was famously run by like 30 people or something. The problem is when you expand your business at the rate Uber has, or any VC-funded startup, in which case you gain massive (absolutely massive) amounts of tech debt in the form of bandaging new features onto old code without proper refactoring. Then you start doing "microservices" and you hire 10k engineers and now you have even more problems, and your infrastructure and codebase expand exponentially.

I think for a good scaled architecture, the keys are: having at most ~30-50 developers, good planning by a few key architects, controlling what's in your database with an iron fist, knowing exactly which bits of data are where and what they are used for, and having strict codebase standards.

However, to really be successful in the goals above, the business needs to support a rigorous software process. Normally, this is where things fall apart, since business people and sales people (who are otherwise great people) will push you to work faster and cut corners to get things done. In the end, they also pay the bills, so if the business isn't run by people who understand why software development has to be strict, then you get sloppy software processes.

yrgulation4• 4 years ago

People with no experience running systems at scale often underestimate the amount of effort required.

A taxi app is basic in complexity. Now the feature creep around it, thats a different story. People without experience tend to overcomplicate things.

spaceman_20204• 4 years ago

Whatsapp was able to serve 500M users with like 30 engineers.

_ea1k3• 4 years ago

I'm pretty sure Uber is now cash flow positive. I doubt they are doing to fail either.

moralestapia3• 4 years ago

How come they can lose more money than they raised?

If that's because of revenue, why is that being accounted as a loss?

Is it because they spend it all? No real profits?

ygjb• 4 years ago

Raise money. Use raise as an asset to secure credit. Accrue liabilities during normal business operations. Fail to generate revenue and raise more money and credit. Demonstrate growth without profit. Rinse, repeat.

bobthepanda• 4 years ago

I could be wrong but I would imagine that funds raised would be the amount strictly raised from outside investors, not total revenues.

Example, Uber still makes revenue from its rides, just not enough for a profit and in this case funds raised would be making up the difference.

hn_throwaway_993• 4 years ago

But the whole point of "cumulative losses" is that one would assume losses means revenue - expenses. If "revenue - expenses" is a negative number that is far larger than the amount you have raised, how are you not bankrupt yet?

Expez• 4 years ago

How come they can lose more money than they raised?

The difference is debt they've taken on.

hn_throwaway_993• 4 years ago

I had a similar question, and I would really like to know how "cumulative losses" are calculated.

As someone else posted, it is possible that, in addition to equity financing (the "amount raised" number), the company also received debt financing, and they've spent most of that, but I don't think that can explain everything, e.g. the huge delta in Teladoc Health only raising $170 million but having $11.2 billion in cumulative losses.

Doing a little searching, it looks like Teladoc recently took a $6.6 billion goodwill impairment on its acquisition of Livongo in 2020 that it did for $18.5 billion. The original acquisition was for "Livongo shares will be exchanged for 0.5920 shares of Teladoc plus cash of $11.33 each consideration per share." So if a lot of the merger deal was done with inflated Teladoc stock, and then that stock fell, it would be considered a loss in a particular quarter, but I feel like it's weird to call the non-cash charge part of its "cumulative losses".

In any case, the numbers are at least "funny" in the sense that they're not comparing apples to apples (or, more accurately, "cash to cash").

tqi• 4 years ago

Yeah looking into it a bit, my guess is the real explanation is that this is due to sloppy math on the part of the original authors, especially since they neglected to even address this most obvious / basic question.

ojbyrne3• 4 years ago

Seems pretty obvious that the answer is debt. For example, Uber has $11 billion in long term debt as of 2021: https://www.marketwatch.com/investing/stock/uber/financials/...

ianai2• 4 years ago

Why does Uber need debt? They’re a software, logistics company. It makes sense for a real estate company to be loaded with debt as that’s the nature of the beast. But I don’t see an argument for logistics.

Patrick_Devine• 4 years ago

It's a combination of the two reasons cited by others here.

1. They may have revenue which is adding to total cash pile; and 2. They may have taken on additional debt

Maybe obvious, but probably worth repeating is that raising capital does not raise debt for your company (i.e. you're selling off a piece of your company, not taking on debt which you have to repay). I'm assuming that the "Funds raised" column is the amount they've taken in venture funding, and not debt. If it does include debt, you can ignore point #2.

bedhead• 4 years ago

A very large chunk of GAAP losses are attributable to stock comp expense (a quick and easy way to check cumulative profits/losses is looking at the balance sheet’s equity section for “accumulated deficit”) which still gets counted as an expense but since it’s non-cash it’s not a drain on whatever the company has raised. If you look at Uber’s last three FY’s, they’ve cumulatively reported losses of about $16 billion, and stock comp has been about $6.5 billion of that. For the vast majority of public companies this isn’t as material but for all these VC-backed, Bay Area-type tech companies they have this systemically dysfunctional culture where they dole out stock and options to no end.

lacker• 4 years ago

If stock-based compensation information is made public to investors, what's the problem with it? I don't see why compensating people in stock rather than cash makes it a "systemically dysfunctional culture".

fshbbdssbbgdd• 4 years ago

I think the right way to handle that in a chart like this would be to include the stock comp on both the “funds raised” and “cumulative losses” columns, or neither of the columns.

When you issue stock comp, you are trading dilution for money, just like you are when raising from VCs or doing an IPO. The money is just spent on paying an employee immediately instead of sitting in the corporate treasury for a while.

If you include the spending part of the stock comp as a “loss”, but don’t include the creation of that stock as a “raise”, you end up with these nonsensical results.

spaceman_20204• 4 years ago

Uber raised 25B in VC rounds, 8B in the IPO, iirc

xbar• 4 years ago

NetScape ~$8Billion, cumulative losses ~$8Billion

ChuckNorris89• 4 years ago

"Perfectly balanced, as all things should be"

whiplash451• 4 years ago

Hey, it’s called a balance sheet for a reason.

_448• 4 years ago

"...the business plan of some of these companies was to become so useful to the decision-making class (business executives, government officials, and rich people) that they’d ultimately get some sort of government support."

This! The speculative investors have tasted blood during the 2008 financial crisis and the general public has already been conditioned to accept the idea of "too big to fail". So this music chair game is going to be played for a long time.

pessimizer• 4 years ago

the general public has already been conditioned to accept the idea of "too big to fail".

No, the general public has been made aware that once businesses hit a sufficient level of financial entanglement with people in government, they will not be allowed to fail. The general public was not consulted on this, because it doesn't matter what the general public thinks when something is bipartisan (which is true for all but <10 "wedge" issues.) Handing wealthy people tax money is bipartisan, for example. Handing poor people tax money is a wedge issue.

woeirua2• 4 years ago

For those of you confused as to how these companies are running at all given that they have never turned a profit the answer is:

1 - they pretty much all raised a ton of capital by going public,

2 - they have all taken on significant amounts of debt. This was previously considered a good move because of low interest rates.

3 - some of these companies actually could be profitable, but only if they cut expenses, I.e. Layoff overpaid employees.

Now to be clear, some of these companies are hopelessly screwed.

lmarcos• 4 years ago

Now to be clear, some of these companies are hopelessly screwed.

I'm not sure about that. I imagine that for the founders and top executives of these "loser" companies, they are having the time of their lives: Earning top money fast without doing too much. So, from their point of view, the company is doing fine. Now, sure, employees are always screwed no matter what ;)

z9znz18• 4 years ago

There is a big distance between the unmentioned 0 and your 1.

0.1 - 0.999 - they raised round after round of VC, paying back the previous round with big profits.

1 - they sold the gullible public (which never should have happened - regulators should have prevented the IPO!) on a business model with no real hope of profit.

biggoodwolf• 4 years ago

Gullible indeed, all those ETFs investing by default in these? Check.

s1artibartfast8• 4 years ago

Regulators should just be there to ensure the financial statements are accurate, not that a company is a guaranteed safe bet.

KoftaBob• 4 years ago

In the case of rideshare/delivery companies on the list like Uber, Lyft, and Doordash, the bulk of their expenses/losses aren't salaries, it's in subsidizing every ride/delivery to compete on price while still compensating drivers enough for it to be worth it to them.

In other words, Uber didn't burn $30B on salaries, it burned it selling $1 bills for $0.70 over and over and over again.

treis• 4 years ago

This is just not true. Uber and Lyft definitely sell rides for more than they pay out to the driver. Lyft, as an example, has 3.9 billion in revenue against COGS of 2.2 billion.

motohagiography• 4 years ago

Given their debt levels, could some of these companies may take down financial companies with them though?

If these (and other unicorn companies) secured what could be some several billions of dollars in low interest debt with their stock as collateral, that means those loans have been securitized, resold, and leveraged again into the market using other derivatives. It also means that the interest rates hikes coming from the Fed may cause those companies to sell more stock to make their interest payments - which will drive their stock down, knocking the collateral out from under the loan, with a bazillion or so in derivatives hinging on it.

Totally hypothetical though. I am sure they have it under control.

It does sound like unicornageddon if interest rates jump though. The 2008-billion dollar question would be, who is holding the derivatives on those loans? It's probably different this time, it's not like 2008 could happen again, and we learned from history so much so that Margot Robbie in a bathtub explained it to us. The US could probably afford another bailout if it came to it, and it's not like the conseqeunt inflation would trigger rapid de-dollarization of the global economy as big national holders dumped their reserves and created huge bubbles in anything that facilitated capital flight out of USD - like oil, fertilizer, and other necessary things to keep whole continents of people from starving. Co-operation would need to persist instead of nations turning inward to solve their own problems and fend off internal strife, instead of co-ordinating a response. This is fine.

lordnacho• 4 years ago

Depends a bit on what failure means. "Sold for less than raise" perhaps counts?

My guess is one of the first two, Uber or WeWork. Uber doesn't seem like it's cheap anymore as a customer. How is that going to compete? And WeWork is already competing with standard rent-an-office businesses that are worth a lot less.

hedora• 4 years ago

The table really should include revenue, assets and debt columns, along with some notes about how any debt is structured. For instance, Nutanix has $1.6B in the bank, $1.2B in annual revenue, and their annual loss per share is trending down while sales trend up.

They also have a ton of debt. Hopefully there isn't a balloon payment / interest rate adjustment coming soon. Assuming they're not heading to some financing cliff, then borrowing at less than inflation rates, and using the money to buy market share was probably the right move.

bob1029• 4 years ago

Not sure about Robinhood being on this list. They actually have billions in cash on hand right now.

They also have some valuable IP that a lot of people don't give them much credit for. One example being a brand new, in-house trade clearing system. This is similar to rewriting an IBM core banking system from scratch.

https://www.cnbc.com/2018/10/10/robinhood-launches-its-own-t...

lake_vincent8• 4 years ago

Spoiler alert: they had help. Robinhood is a wolf in sheep's clothing - they are controlled by, and beholden to, criminal enterprises such as Citadel. This "in-house" trade clearing system is actually Ken Griffin's personal honeypot. It is built for one, and only one purpose, and that is to fleece retail investors at all costs while simultaneously creating the appearance of being retail's champion.

It's a neat trick, and I'd almost respect their enginuity if they weren't robbing people blind. I wouldn't touch Robinhood's products or common stock with a 100 foot pole, and neither should you.

Edit: See my other comments below for an idea of how/why this works.

MrMan• 4 years ago

I also would ever use Robinhood instead of a reputable broker like TD Fidelity Vanguard IB etc. But not for the reasons you stipulated. Back office systems aren't put in place to "fleece" anyone.

adrr2• 4 years ago

How ia a market maker robbing retail investors? Is that even possible?

cercatrova3• 4 years ago

This is straight out of /r/superstonk or /r/wallstreetbets. The conspiracy theories about Citadel, Ken Griffin and Robinhood rival QAnon levels of culting. I've heard it said that these theories, including GME, are like QAnon for people interested in personal finance rather than politics.

ojbyrne3• 4 years ago

The list isn’t subjective, it’s just “ Startups with $3 bllion or more in cumulative losses.”

panick21_4• 4 years ago

Rivian has like 12 billion $ in cash. But they are also losing billion+ lose per quarter.

kuwoze• 4 years ago

uber and door dash

_ea1k3• 4 years ago

I've alluded to this in other comments, but these fundraising numbers have to be incomplete. Rivian raised 10.7B, lost 11.1B, and yet they have close to 14B in cash on hand? They've overlooked a lot of fundraising. I'm guessing others have similar mistakes.

anonu2• 4 years ago

The tide is going out: higher interest rates mean the economic decisions of the last 15 years will need to be recomputed. Cheap money is no more. Easier to earn a good return with a CD or bank account even.

cma• 4 years ago

Where good return == lower than inflation rate. TIPS are positive rate now but unless in a tax advantaged account could fail to keep pace with inflation too.

dont__panic• 4 years ago

When stocks and real estate are inflated and you fear a crash, isn't it better to put your money in bonds, CDs, etc?

anonu2• 4 years ago

TIPS are not the everyday investor's product. You need to hold them to maturity to beat inflation - and few people are willing to lock up their money for 5, 10, or 30 years. In major market drawdowns like the ones we've seen, TIPS returns have not done well.

A high yield checking account is a better product for the typical investor - assuming they understand APY and that the yield resets periodically (monthly).

insane_dreamer2• 4 years ago

WeWork already failed so I guess it's them, for now

ajaskiewicz• 4 years ago

Why is it? It seems reasonable for them to grow after the pandemic ended and people switched to remote

paxys2• 4 years ago

"Cumulative losses" is meaningless in the way they are using the term. You need many, many more datapoints to judge the overall health and value of a company. And even after that you are likely going to be wrong in your prediction.

Uber raised $25 billion and is worth $60 billion in public markets today. By what criteria is it a bigger failure (or a failure at all) over Theranos, FTX and thousands of other companies that raised a significant amount of money and are worth exactly $0?

z9znz18• 4 years ago

worth $60 billion in public markets today

In the same way that Shibu Ino coin is "worth" 4.9 billion - ie, meaningless and entirely fictional; lacking any substantive value.

Uber stock is worth what it is because there are still more fools available to buy it. Theranos failed and was completely exposed, and even the fools are no longer interested.

That's not to suggest that Uber did not do some things very well. They identified a need and provided a solution (mostly software-based), but their actual on the ground solution wilfully ignored local laws globally. Even ignoring legislation and regulation which costs money, they still tried to use loss-leading tactics to win markets. So they burned vast amounts of money to undercut the market.

Had they ever rectified those two HUGE issues, they would be struggling to make a profit. Even not rectifying them, they are struggling. So holding them up as a success is just naive and wishful, but wrong.

z9znz18• 4 years ago

With all the unspoken but obvious disdain for the ridiculous cryptocurrency schemes, I wonder if the HN crowd will recognize the elephant in the room here.

TFA illustrates that the venture capital/startup tech scene is arguably the biggest Ponzi scheme in the last 20+ years.

Even ignoring the financial losses, most of these companies have operated in a gray or fully illegal manner. So imagine that the financials don't work and the legalities don't work... and yet this is our HN universe.

Edit: (added) sorry to offend those of you who work for Uber or other companies which operate on fantasy funding with no actual profitable business model; sometimes I forget the illusion is so strong and people immersed don't know better.

JumpCrisscross• 4 years ago

venture capital/startup tech scene is arguably the biggest Ponzi scheme in the last 20+ years

Between VC returns, at the top decile (where it outperforms) and broadly (where it simply performs), and the tangible track record of VC-backed companies from SpaceX to Moderna, this comparison is foundationally false.

p0pcult7• 4 years ago

Let's just ignore all the externalities created by market-breaking and law-ignoring, tho!

panick21_4• 4 years ago

SpaceX was overwhelmingly funded by Musk and his friends was it not?

p0pcult7• 4 years ago

The kool-aid is strong in here!

z9znz18• 4 years ago

Your comment adds nothing. Care to back up your comment with something of value?

bergenty2• 4 years ago

Uber, AirBnb, Door dash etc. have added tremendous value to my life and society in general. That’s not a Ponzi scheme. At worst you could call it a social wealth redistribution program of sorts.

p0pcult7• 4 years ago

have added tremendous value to ... society in general

[citation missing]

rjsw• 4 years ago

I live next to an AirBnB, it hasn't added tremendous value to my life.

spaceman_20204• 4 years ago

Value to your life but a lot of pain to locals of tourist heavy towns who have been outpriced out of their town by Airbnb investors

lmm13• 4 years ago

If you take out all the crime (unlicensed taxis/hotels) and subsidies, is there any value left? I never used them but I've seen a lot of people saying that e.g. airbnb isn't actually any cheaper or easier than a hotel nowadays.

z9znz18• 4 years ago

Look at Uber's funding rounds. They have had round after round, and each round increases the valuation such that previous rounds' investors make a "profit" (their stock value increases). Yet, Uber isn't making a profit.

Airbnb did the same on a much smaller scale.

Ignoring the investment round topics of both companies, they also both made their actual financial progress by blatantly ignoring local laws.

Airbnb walked right past hotel laws even though their hosts were clearly party to those laws. Uber drove right past the local taxi laws.

On the human side, life got far worse for people living in cities where Airbnb became popular. I lived in Amsterdam for a few years as Airbnb was growing, and very rapidly you started to see people buying apartment just to rent out for tourists through Airbnb. That pushed apartment rates up, and it added a lot of really shitty short term visitors to the neighborhoods.

Every tourist destination has confronted this problem, and now many laws exist specifically because of Airbnb. I would not tout this as a "success".

And in some parts of the world, the ability to sign up and become an Uber driver has resulted in harm to passengers. Prior to Uber, many of these places had regulations which made it difficult enough to become a commercial driver that no driver would risk their business for the opportunity to rob or rape a passenger.

cuteboy19• 4 years ago

The core of ponzi schemes is recruitment. There is no recruitment happening here, just terrible business

spaceman_20204• 4 years ago

Offering drivers generous bonuses to sign-up, encouraging them to take on loans to buy cars (even extending credit - as they did here in India) - and then pulling it all away, leaving poorly educated drivers with loans they can’t service anymore - that’s the definition of recruitment.

z9znz18• 4 years ago

The venture capital investment rounds are absolutely Ponzis.

Every round is for a higher valuation, and so every investory knows they are paying more for the same number of shares as a previous round. But they believe that a future scenario (investment round) will increase the valuation such that their investment will become profitable.

Show me _any_ startup where an investment round was at a lower valuation than the previous round. Unless you can do that, and show that the company was currently profitable, then it is a Ponzi scheme.

Why would an investor invest in something that has no profit? They would only do that if they believed that in the future there would be enough profit to increase their value given the time cost.

If you look at Uber, the amount of investment, and the 8+ years of zero profit, the only conclusion you could reach is that each round believed that there would be a subsequent round that would increase valuation and provide a profit for them.

legostormtroopr• 4 years ago

Seed, Series A, Series B, Series C, IPO - looks like there is plenty of recuitment happening.

lmm13• 4 years ago

I think/hope the crime companies are a minority. I wish the industry would do more to root them out, but I guess there's no profit motive in it. I've never understood why the government didn't come down hard on Uber/AirBNB/etc. and those who invested in them. (Isn't this why RICO exists?)

recuter2• 4 years ago

I propose a new term for these volatile times instead of unicorns: Wily Coyotes.

leobg• 4 years ago

I wonder how Stripe will do. HN is full of bitter stories.

paxys2• 4 years ago

HN is bitter about everything. Stripe – and really most companies on that list – are going to be just fine.

arcturus172• 4 years ago

Stripe is an outstanding set of products that are not, AFAIK, making a loss on every sale or in a yet-to-be-proven business model.

jiggawatts2• 4 years ago

Having worked with Nutanix, I would bet on them failing. Their products are consistently medium good. Not great, not terrible, just… “okay”.

The problem is that the competition is getting very good very fast. Nutanix competes with the cloud, which means that as Azure and Amazon get better they get less compelling.

Most of our customers that choose Nutanix previously are on Azure now.

robocat• 4 years ago

Their products are consistently medium good

Oddly enough, this can be a sign of an excellent business. Microsoft originally provided some very mediocre products, but in a world fulled with absolutely shit products, being predictably mediocre was astonishing! Before 2000, when Microsoft produced a lemon, they always seemed to recognise the problem and then replace it with something that was crappily useable (and they also had a few products that were actually good).

Your comment makes me think that products and services are higher quality now, so it is harder to compete by being merely mediocre or even “medium good” (as you point out).

Bubble_Pop_223• 4 years ago

Oddly enough, this can be a sign of an excellent business. Microsoft originally provided some very mediocre products, but in a world fulled with absolutely shit products, being predictably mediocre was astonishing! Before 2000, when Microsoft produced a lemon, they always seemed to recognise the problem and then replace it with something that was crappily useable (and they also had a few products that were actually good).

People in here including me dream of living in an era where there is such a giant leap such as the leap to GUI provided by Win95, or even the revolution of the chip.

If you didn't like being around when Win95 was coming out, I guess living in today's timeline where innovation has reached stagnation must be pure hell! /s

throwayyy479087• 4 years ago

Nutanix's website gives absolutely 0 real information about what they do. There's some fluff about apps, cloud, and transformation - are they a body shop? AWS competitor?

synicalx• 4 years ago

Back when I first looked at them 5 years or so ago, they were trying to sell me "hyperconverged infrastructure" which was basically just a thoughtfully designed blade chassis. Their software seemed very nice, kind of a software-defined-storage type thing that Just Worked and by all accounts it did work very nicely.

BUT, and this was a big but back then - their prices were obscene. Vaguely equivalent hardware from Dell was less than half the price and was readily available (Nutanix in my region had long lead times on gear at the time).

jiggawatts2• 4 years ago

Their core product is very comparable to VMware vSphere -- a system for managing virtual machines on a cluster of on-prem hardware. Nutanix was one of the first to do storage virtualisation, whereby each node provides some local storage that is shared across the whole pool. I believe they were one of the first (if not the first) to offer this as a turnkey product. The initial version was just an add-on to vSphere, but they now have their own hypervisor as well to make it a more complete offering.

These days you can achieve the same thing with VMware vSAN or Hyper-V on a Windows cluster using Storage Spaces Direct. The latter is practically free for organisations that use mostly Windows Server workloads, because those orgs typically license Windows Server Data Center Edition for every physical host anyway. In my experience Storage Spaces Direct was also much faster, especially when used with SSD disks. The protocols used by Nutanix were very inefficient compared to the RDMA and Infiniband capabilities in SMB3. Think millions of IOPS instead of tens of thousands.

In some sense, the cloud provides a similarly abstract view of storage. You ask for a 1 TB disk, you get a 1 TB disk. You don't have to worry about formatting a disk array or securing a fibre channel fabric. There's no "maintenance" tasks to be performed on cloud storage. It's just... there. All the time, with zero effort.

This is why I think Nutanix is in trouble. They provide a partial but good solution to a problem that the public cloud providers eliminated entirely.

abigail95• 4 years ago

This is FTX style accounting

insane_dreamer2• 4 years ago

Unless it shows the nature of the losses (opex losses? taking on low-interest debt? huge write-off of acquisitions made with stock?), this chart is somewhat unhelpful.

KaoruAoiShiho• 4 years ago

For sites like airbnb it's not possible for the story to be "not real". It's just a website guys, there is no per-unit costs that makes the economics not work out.

BeetleB• 4 years ago

Airbnb spends a lot for support, which doesn't scale (e.g. dispute resolution, etc).

Not saying they provide good support, but they have to staff for it.

arcturus172• 4 years ago

By that reasoning, all software plays must be profitable, but alas, zero marginal cost of distribution does not entail profitability.

suzzer99• 4 years ago

Twitter has entered the chat.

qqtt• 4 years ago

Would be interesting to see cash flow, which is probably more relevant when comparing against capital raised. If this is EBITDA, then included in those losses for these companies is a ton of stock based compensation which really has zero effect on cash flow.

Also, if we are talking EBITDA, Snap did hit a positive GAAP net income for a single quarter: https://techcrunch.com/2022/02/03/snap-finally-did-it-yall/

panick21_4• 4 years ago

People love to joke about Tesla and claim that 'they just threw cash at it' and the company was 'burning cash'.

Compare history of Tesla to that of Rivian and what kind financing and cash they operate with.

Which one of these will be the biggest “unicorn” failure ever?

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