Not an original thought but its fascinating how much extra information Amazon has in these acquisitions than a normal company. When such a big part of Ring's sales are through amazon they can figure out things like
* How many people search specifically for the brand Ring
* If a knockoff appears first do people buy that instead
* What is the growth in searches and purchases overall
* Why do people return the product
These are things even Ring wouldn't know. Its not too far fetched to think you could build a valuation engine off the information Amazon has and compare the cost of cloning the product line to acquiring the company automatically.
I suppose you could go even further with it if they had things like hosting with AWS. With the product information you mentioned and any technical information they could pick up through AWS I'm sure they know exactly what to pay for something. Just gotta hope that an employee doesn't leak it one day.
Manipulating search results for any reason is illegal and Google has faced heavy scrutiny for it in the past, so I would think it would be the same for Amazon.
Illegal? There may be scrutiny in a monopoly context, but there is no law that states that search results have to be fair and equitable.
How could they even be? For example Amazon might only stock four of six brands of video doorbell, so they're not going to be able to return neutral results.
>Not an original thought but its fascinating how much extra information Amazon has in these acquisitions than a normal company. When such a big part of Ring's sales are through amazon they can figure out things like
Ring was on the TV Show Shark Tank, and all the sharks passed on the deal. It was $700K for 10% of the company.
And now it sold for more than 1 billion $.
Yep. Richard Branson was the winner on this front. $28 million investment (with a few other investors?) at $60 million valuation (in 2015 ?)
> Siminoff says a Ring customer happened to be vacationing at Branson's island a couple of months ago. He used Ring to talk to a UPS delivery guy who was at his home in San Francisco. Branson, who happened to be next to that person, saw the interaction and was immediately hooked by the product.
> In fact, Branson liked it so much that he asked for Siminoff's email address and soon started talking business with Siminoff. He wanted to invest in the product.
> In less than 48 hours, Branson agreed to join the round. And on Wednesday, Ring made it official: a $28 million funding that gives it a $60 million valuation.
I think the $28 million was for the whole round, not just Branson's part. Though that would be quite the deal if he ended up netting $500 million from eavesdropping while on vacation.
There was just another example of this - A company called Plated, Cuban agreed to invest during the show then backed out during due diligence.
I guess Mr. Wonderful found out and called them up to invest later. Plated just got sold to Albertsons for 300m, and O’Leary claims to have made 1300%+ return on his investment.
Poor Mark.
I love the show, I don’t think any of the sharks are “dumb money,” but I don’t think it’s an accurate representation of what a good investment for most businesses should look like.
Kevin O'Leary is great. If you are on the benefitting side of what people call 'the worst deal of all time', you must be a pretty good businessman[1]. And I bet The Pitch host isn't a member of the Confrérie des Chevaliers du Tastevin.
> I don’t think it’s an accurate representation of what a good investment for most businesses should look like
So, honestly, what do "good investments" look like then?
If anything I think the only problem with shark tank's portrayal of investments is it that it doesn't explain to the audience that it's wide viewership is the largest return for most of the founders on the show. Every founder who goes on the show knows this, but it's the "dirty little secret" that the audience isn't aware of.
I think they have become a little bit better with letting the viewer know this. Cuban fought fairly publicly to retroactively void a term in the first few seasons of Shark Tank where even without an investment from the sharks ABC got a percentage of the company. They also call out pitches where the person has ridiculous terms and is obviously just trying to advertise for free.
One thing that they don't show is that the pitches are substantially longer than what's presented on the show. Much of the drama and speed is down to editing.
You have the wrong idea about the show. It exists to promote the shark's own businesses and products under the guise of a contest reality show. To keep up the facade, they allow other companies to put their products up for a price, and intersperse a couple of silly products to keep people watching.
It's just dressed up advertising, it's not about investing or business by any flip of the coin.
This isn't true, the only thing that is "fake" is how much time they spend asking questions. From speaking to a "dragon", they spend about 45-60 minutes assessing the product/idea. After that, if they choose to invest, they invest.
If that's true, it might not be very effective. Having seen the show a fair few times, I have only the vaguest idea of what the Sharks' interests are, other than FUBU--basketball owner? something to do with QVC?
Amazon and Google -- and Facebook and a handful of others -- seem to be in a never-ending race to learn everything about everyone everywhere: who you are, where you are, what you do, when you do it, and why do do it.
Having cameras and microphones in your house and your neighborhood is a small part of that.
Don't forget they're also monitoring people who interact with you (a.k.a. the user of services).
When I walk into a friends home who has an Alexa, or a Ring system, it is now tracking me too.
The purchaser consented, but I never consented to being monitored in a residence/dwelling where I would otherwise have the reasonable expectation of privacy!
There was a good Gizmodo article about this called The House That Spied on Me [1].
Do you have expectations of privacy on someone else’s private property? Seems fair to assume surveillance in retail establishments or banks. The only exception I can think of is rented private property (hotel rooms, airbnb’s).
You do not have any reasonable expectation of privacy when in someone else's private property. That's also why you can be videoed by security cameras in stores, hotels, casinos, etc.
And the panopticon grows... I'm not so concerned about Amazon or Google (though Facebook is creepy, even them).
I'm worried about the access that nation-states security teams have distributed across the entire set of poorly secured, 0-day infested monitoring devices everywhere.
20 years ago I laughed at how infeasible Enemy of the State was, but now it seems feasible (with added drones).
Even the "enhance/sharpen" part seems feasible if everything is packing HD/4k feeds.
It's too bad they didn't adequately consider the privacy backlash in the first place, but at least Microsoft is taking some steps in the right direction.
Crap. I guess I won't be buying one then. Amazon also just gobbled up the maker of my home security cameras (Blink). I really would prefer my home monitoring devices to be separate from the giant tech companies that I'm trusting less and less.
You could always invest in IP cameras, and manage where the data goes yourself. No reason a 24/7 video stream of your home needs to be sent to a big tech company's data centers, anyway, or any data center for that matter.
This is the approach I take. It’s not for everyone, but it can range from simple to complex depending on what you want to do.
I have a variety of WiFi cameras, all of which are on a dedicated WiFi network that cannot access the internet. I use Zoneminder to handle the recording, motion detection, etc. Zoneminder is pretty versatile, but it’s ultimately up to the camera to provide a compatible method of access - RTSP works well for cameras that support it, but if you have a URL on the camera that will return a JPEG that will work too.
Most of my cameras are low-end D-Link models, they work fine with Zoneminder. I recently got an Amcrest camera which, after some cajoling, works very well with Zoneminder. Using a JPEG URL that Zoneminder polls never worked for some reason, but RTSP worked perfectly.
If you want to go this route, look for evidence that other people have gotten the model you’re interested in to work with software like Zoneminder, Blue Iris, or iSpy. Generally this means that the camera supports open standards that you can use in your system.
If you don’t want to go the Zoneminder route, some cameras can do a lot of the work internally. All of my cameras, for example, have some degree of motion detection and the ability to upload files to an FTP server or send an email. The biggest challenge here is that none of these cameras can be configured to do this without either a Java Applet or a vendor-provided browser plugin to view the live video and define the detection zones and parameters.
I ended up using Synology to manage my IP cameras but came to similar conclusions. It certainly isn't for the faint of heart, though satisfying at the end of the day knowing who has access to your data. I've given up on viewing them from my phone (Synology's DSCam mobile app has been more trouble than it's worth), but I can access them from my laptop over VPN as long as I have a decent Internet connection.
For my wife, who's less tech saavy, I keep a couple nest cams handy :)
The email and FTP features are available on my cameras, but I don’t personally use them. I only included it as an option to use a camera without relying on the vendor’s cloud service and without setting up something like Zoneminder.
Upon rereading my comment, it could have been structured differently to make that clearer.
Amazon is typically a good steward in their acquisitions though. Twitch.tv, Zappos, imdb, audible as some examples of how they really do keep these purchases as pretty close to the original/successful idea of the company and sometimes even better. I'd say Amazon are maybe the best at not destroying what they buy. Amazon usually buys because the company is a success and not just for tech or to shut down / acquihire etc.
That's comforting from one angle, but I'm still concerned about the privacy implications. I feel like a giant megacorp like Amazon is in a much better position to both mine the data and also be more resistant to criticism.
True but as Ring progressed and the metrics guys come in, they would have been selling that data anyways. At least now you know what it will be used for, Amazon home delivery systems and to sell you products on Amazon.
Amazon is in that stage of power where they are still beneficial and innovating, kinda like Microsoft with the desktop/internet in the 90s and AT&T with their labs that made C++ and the modern application/software in the 80s, even Apple in the 00s with the smart phone and their power. I think when Amazon stops innovating or get to the state where they aren't fully research and development focused, that is where you have to worry when revenues get tight and they have to start selling your private data. Right now ONLY Amazon wants that from this acquisition, they don't want anyone else to have it, Ring probably would have had to let others have it earlier.
the main reason I bought Ring (avoided upcoming nest hello), now I am SOL. Should look closer at their privacy agreements. With Amazon a the helm, they can mine data much more effectively.
More details from Axios -
"..although a source calls this Amazon's second-largest acquisition of all time (behind Whole Foods). That would seemingly mean it's above $1.2 billion (the amount Amazon paid for Zappos), which is in line with earlier reports that Ring was fundraising at around a $1 billion valuation."
What does this mean for existing Ring customers? Considering the privacy implications and the fact that Amazon can/will do a lot more with this data than Ring did, is there a way for Ring customers to opt-out of future integration into the Amazon ecosystem?
I imagine there are a decent chunk of Ring customers who would have not purchased the device had it been sold by Amazon in the first place.
>I imagine there are a decent chunk of Ring customers who would have not purchased the device had it been sold by Amazon in the first place.
I have a hard time feeling too much sympathy for these people. The inevitable conclusion for most of these heavily-vc-funded home automation startups is an acquisition by one of the tech giants. If you are boycotting the tech giants for whatever reason, you should therefore be boycotting any startup that might be an acquisition target.
also, if you're putting video cameras in your home that push footage to a server you don't control (or even one that you do) i'm not sure you can call yourself privacy conscious.
> The inevitable conclusion for most of these heavily-vc-funded home automation startups is an acquisition by one of the tech giants.
You're right that this was an obvious outcome, in retrospect. I wonder what percent of their customers saw this coming. My sense is that they're not just selling to early adopters now—my retired aunt has been telling me about Ring for quite some time.
> If you are boycotting the tech giants for whatever reason, you should therefore be boycotting any startup that might be an acquisition target.
Huh, so if I avoid FB then I shouldn't use anything that they might acquire? Seems kind of tough, since they go out and buy things like Oculus, which was a bit out of left field.
if you're going to feel betrayed when a startup gets acquired by FB then you should avoid all startups.
if you can be understanding about a company you don't like acquiring one you do, then buy whatever. just don't be shocked when a startup follows the same route as literally every other startup.
I'm sure it's hundreds of people. But the majority of smart home fans have shown that they are more than comfortable with an amazon device in their homes.
And on a similar note, there are surely many people who will now buy Ring because it's owned by Amazon. A small startup can go away and leave me with an insecure piece of junk, but I have some faith that Amazon will keep things up to date.
Perhaps a stupid question, but where does the $1bn. valuation come from? Amazon already make hardware, including cloud cameras, would it have been so hard for them to make a doorbell in-house?
Companies generally make these types of acquisitions for two reasons: customers or technology. Since the technology Amazon already has for the most part, they're obviously acquiring them to leverage their customer set (... or prevent a competitor from doing the same).
Ring has some existing cash flow through their video monitoring business.
There’s also some premium to be had for tight integration options - current Ring doorbell owners would likely opt for a Ring indoor camera (if one existed) versus competitor’s, just to avoid the hassle of dealing with two apps and paying for two subscription plans.
Facial recognition is rather trivial and common-place these days I suppose but the association of that face with your neighbor's kid seems to take it a step further into invasive territory.
They also have the Dash buttons. The whole process is literally pressing the button next to where the TP is kept, going out to work, and coming back to find twelve rolls of your brand sat in your hallway.
Makes sense, as Amazon gets further into delivery this provides a complimentary service to help keep packages secure and let customers see who shows up at the door. It would be interesting if someday you could also let a courier in remotely.
Sudden vision: you request Amazon home delivery -- the delivery person comes to the door, holds up a smartphone showing a nonce QR code, the Ring doorbell checks the nonce with Amazon, says, "Checks out" and unlocks the door.
Didn't they just buy another remote video camera company?
Or was that Google? It's so hard to keep track of all the new toys that big tech companies keep buying. Either way, talk about a full-court press on getting devices into your home.
Perhaps it was about purchasing the copyrights and patents Ring controls, or purchasing the company most likely to cause problems for Amazon when Amazon rolls out more of their ridiculous home invasion plan marketed as an inside-the-home delivery service. This is the service apparently everyone has been perfectly fine to do without since Amazon began doing business.
This sucks...
Ring has been providing subpar service and promises that remain unfulfilled. It was Cleary working on cutting costs to get ready for a sale.
We were just talking about this at a lock picking meetup (lots programmers there too). The consensus seemed to be that if it has all the security problems of IoT plus all the security problems of doors... that would be a lot of fun for us.
I had just recently purchased a Ring doorbell. I debated between Ring and Skybell. I should have gone with Skybell. Trying not have 1 company know everything about me (I know...probably impossible).
I wonder if this is for their in home delivery. Have ring devices recognize valid amazon delivery employees and let them in to drop off packages/food. VIP service - stock your fridge.
I'm surprised this isn't at the top of the frontpage. This is big vindication of all hardware startups. Will VCs go big in this category after this series of exits?
I don't think this validates this space at all. If your only exit strategy is to get acquired by a big 5 you're already in trouble.
Hardware is pretty freaking hard. Just look at recent examples of public hardware companies: FitBit / GoPro. Both doing like crap, struggling to maintain their grab on the market and looking for acquirers.
Honestly, I think this is a very unattractive sector, at least in this side of the world. Most serious hardware contenders are and will keep coming from China (DJI, Xiaomi, Yi, etc).
Business is hard, whether it's hardware or software. I think a lot of software-based companies wish they were "doing like crap" the way Fitbit is -- navigating through a couple years of unprofitability using a large pile of cash gained through years of profit.
Disclaimer: I work for Fitbit but speak only for myself.
I've generally been impressed of FitBit's business savvy. They get hw well (keep BOM/per-unit costs under control). It was particularly instructive to see the fate that befell Pebble (glad that fitbit hired a lot of those folks, etc.).
Hardware startups have been bought before. This isn't a unique event.
I worked for a hardware startup for a couple of years and VCs being cautious about the category is very well deserved.
It is easily an order of magnitude harder to develop a successful hardware product than a success software product. And even after you've sold a million of them a design defect could show itself that makes all million of them break and destroys your entire company overnight.
Looking at that it looks like at least $200 million in funding was raised. The kinds of exits for software companies that have raised over $200 million generally look very different.
They push their monitoring plans pretty hard right after the user is done with the installation https://shop.ring.com/pages/protect-plans so it’s possible they’re more of a monitoring-service-by-subscription business than hardware business at this point.
To get a video and photo ID of every person, living at an address? Then they will run this through a face recognition deep learning AI, to get a digital facial ID of everyone.
Now, they just one-upped Facebook. Where they know who lives where, and what type of person they are. Male, female, young, old, skinny, fat, short, tall, ethnicity, clothing style preferences, music preferences, healthy or sick.
Now, you don't even need to fill out those advertising questionnaires on who you are. Amazon will just collect it automatically from this Ring doorbell camera.
Now, they have a definitive demographic information on you, for targeted advertising. They can either email you, or snail mail you. Since now, they know exactly who you are. As well as who else lives with you.
And when you sign onto Amazon, the ads will be targeted directly at you.
1. Hey, it looks like you have a daughter at home. Do you want to buy her a nice little necklace for Christmas? We have a nice selection on sale here.
2. Or if you are black. Hey, if you spend $20 on Amazon today, we can get you free movie tickets to see the new Black Panther movie.
3. Or if you are Asian. Hey, there is a new Chinese restaurant opening up in your area. Spend $50 on Amazon today, and we can get you a free lunch special.
While I do think I understand why Amazon would want to purchase Ring (the company), I don't fully understand why consumers would want to buy Ring (the product).
The number one use I seem to see from it is people taking video and posting it on nextdoor (package thief alert, car prowler alert, etc.) followed by other people talking about how the neighborhood is going downhill and lamenting about how the police don't do anything with their Ring video.
I guess this is my attitude on most of the home security field. It always seems like the devices have a ton of false positives that just give the owners something else to worry about, and the companies that sell these things continue to do so because it gives owners the illusion that buying these devices give them some sort of control.
Do you really not see the value of a live feed of who's at your door and a clear 2 way audio feed?
The current existing solution either have really poor quality, are complicated to install (require technician), and don't integrate with your smartphone.
I'm not talking about the Ring specifically, there are other competitors too such as Nest Hello, but the idea seems pretty straight-forward and valuable to anyone with a door.
1) Theft deterrent. Not getting your house broken into is more about not being the most attractive target than anything else. Video cameras, motion detector lights, no bushes blocking vision to windows, etc, all make an impact.
2) Seeing who is at the door without potentially having let them know that you're there. In my house, there are glass windows to both sides of the door. I cannot go look through the peep hole without them know I am there. I purchased one after I had several days of a person (people?) ringing my doorbell in between 3 AM and 5 AM, then driving around the neighborhood slowly in their car. I certainly wasn't going to go answer it or announce my presence in case something sketchy was going on.
3) Communicating with someone at the door if you need to. I sleep late on weekends - sometimes I need to sign for a package. With the ring, I can let them know that I'm there and just need to throw on some clothes, rather than them leaving. Or if I'm in the restroom.
4) I want to keep an eye on the front porch while I'm gone, and get alerts on motion detection. I can catch some neighborhood kids being stupid, or something stealing a package, etc etc.
5) If they're leaving a package that isn't signature required, and I'm not home, I can ask them to put it behind the bushes, etc.
the word 'privacy implications' gets thrown around here so much and I'm wondering what exactly can amazon do with a video of mailman walking up to your doorstep that could violate your privacy?
So in the future it won't even be possible to visit a friend's front door without being tracked by Google/Amazon/Facebook/etc?
A while back a friend of mine bought one of these "cloud"-connected doorbells, and hadn't even considered the privacy implications. After I explained it to him, he thankfully returned it and went back to using a normal doorbell.
People who install these should be forced to install a sign just outside of the camera's view informing visitors that, by proceeding to the door, they agree to Amazon/Google/whoever's privacy policy and ToS.
* How many people search specifically for the brand Ring
* If a knockoff appears first do people buy that instead
* What is the growth in searches and purchases overall
* Why do people return the product
These are things even Ring wouldn't know. Its not too far fetched to think you could build a valuation engine off the information Amazon has and compare the cost of cloning the product line to acquiring the company automatically.