
Be: Fundraising Misadventures - WoodenChair
https://mondaynote.com/50-years-in-tech-part-16-be-fundraising-misadventures-23c566b82085
======
ethanpil
This quote from the article stands out to me:

"A Pro invests as much money, as many times, for as long as required for the
situation to attain Clarity. This Clarity allows only two outcomes, Dead or
Liquid. When a Pro declines the invitation to invest in a follow-on round, it
means they’ve reached Clarity: In the eyes of the Pro who declines to invest,
the company is Dead, their initial stake is worthless. Write it off and move
on, no tears, no recriminations."

~~~
yellowstuff
I don't know much about VC, but it seems like this can't possibly be true.
Aren't there times when a VC invests, and then declines a followup round
because they still like the company but don't want any more exposure to their
industry or country? And if a company is doing a follow up round valued at $X,
any estimated valuation between $0 and $X-1 should be low enough that the VC
doesn't invest in that round. There's no reason to assume it's always $0.

~~~
erohead
I feel like the situation JLG is talking about is specifically a down-round

------
allenbrunson
I actually worked at Be, in 2000. I signed up knowing full well they were in
trouble: they were no longer selling BeOS as a standalone consumer product,
and had pivoted to "internet appliances."

At the time, I figured: yeah, they seem to be in a bit of a pickle, but
they've been in business for 10 or 11 years now. They will find a way to get
through this, like they have so many times before.

Seven months after I started, the company went out of business and I got laid
off. Shows how much I know!

~~~
jason_slack
I loved my BeBox and BeOS. Had I been braver at that time in my life I would
have relocated and taken a job there.

~~~
allenbrunson
well, i have to be honest and say that, if be had _not_ been on the ropes, i
would never have been hired. in the early days, the company was able to
attract the best of the best of the best. i am a pretty decent programmer, but
not at the AAAA level of the early guys. by the time of the internet appliance
pivot, the superstars had all left for greener pastures.

by the time i got there, the company was pretty much dead. we were working on
the Sony eVilla, which nobody believed in. it was a massive failure.

after that, i lost my taste for “the big leagues.” i am not willing to go
through the standard “implement a b-tree on a whiteboard” interview, and i
always want to work remotely, so no google, microsoft, facebook, amazon (etc)
jobs for me. i have been working in small shops since then.

------
adrianmsmith
The point of the article seems to be that spending your own money and raising
from friends is bad, and that professional investors are good.

But I didn't fully understand the justification for that, was it in the
article and I missed it?

Is it just that:

\- friends get annoyed with you if they get diluted,

\- and that eventually the money runs out and you'd want to have investors
with basically unlimited funds so you can go back to them for future rounds?

Or were there other reasons?

~~~
ddebernardy
The kicker is towards the end. Be gets saved, but the terms are usurious from
the early investors' viewpoint. And there's not much the latter can do about
it since their own pockets aren't deep enough. Ergo, better go straight for
the deep pocketed Pro, and stay friends with your relatives as a bonus.

His point on Clarity is also spot on:

> A Pro invests as much money, as many times, for as long as required for the
> situation to attain Clarity. This Clarity allows only two outcomes, Dead or
> Liquid. When a Pro declines the invitation to invest in a follow-on round,
> it means they’ve reached Clarity: In the eyes of the Pro who declines to
> invest, the company is Dead, their initial stake is worthless. Write it off
> and move on, no tears, no recriminations.

------
agumonkey
old retrieval of be memos
[http://testou.free.fr/www.beatjapan.org/mirror/www.be.com/ab...](http://testou.free.fr/www.beatjapan.org/mirror/www.be.com/aboutbe/benewsletter/Issue57.html)

featuring steve horowitz

~~~
adrianmsmith
I loved BeOS, I bought a copy in 1999 or thereabouts.

I would have loved BeOS to succeed, but perhaps that memo shows a lot about
why Be failed.

That note does seem totally cool on a technical level, but I wonder, was the
thing that Be needed (as a company) most, at the time that memo was written,
the things in that memo? I mean having "live drag" of folders is nice, but is
that the sort of reason someone choose an OS or a computer?

I mean, I reckon, when developing a product, you need to focus on the
"critical path" from where you are now to having a product everyone wants to
buy. Live folder dragging, while nice, isn't on it I reckon. Maybe MIME
content-types instead of file extensions isn't either. And while your
developers are working on things that aren't on the critical path, you have
the opportunity cost that they could have been working on something that was
on the critical path.

What do you think?

~~~
dnautics
Be fell victim to anticompetitive practices by Microsoft. There was a PC made
by Hitachi that dual booted beos, and the deal was that the user was supposed
to be able to choose windows or beos. Microsoft then forced Hitachi to single
boot windows and the user effectively wound up with a hard drive that was
literally half inaccessible to the OS because beos was there - it was
difficult to activate the beos partition.

Honestly my feeling as a developer is that go to market is really hard. I know
how to solve technical problems. I don't know that there is a consistent and
reliable way to get customers. Be's problem was that, plus more, because of
Microsoft. Microsoft is very much a different company now.

~~~
agumonkey
I wonder how much of the world comes back to this. The winner is the one who
is willing to cross the line just enough to do so.

~~~
watersb
A potential winner can't cross the line successfully unless they have
leverage. Microsoft had a heavy hammer: put up with us or lose access to the
mainstream market.

Disrupting such a market is of course the goal of any small innovator who
needs cooperation from the other market participants.

Hmm. Not sure this comment of mine advamces the conversation here. But anyway
"willingness to be a thug" is perhaps necessary to create a singularity like
Microsoft, Amazon, Google, but not sufficient. And I'm not sure it's even
necessary.

~~~
agumonkey
You're right, at least partially, they did so when in position of power.

But even then, their IBM deal was almost a scam (exagerating of course). They
sold something they didn't even have at the time.. high risk gambling
mentality. It's a bit similar to roughing competition up.

------
throwvc
I am not sure I understand why would a VC be suspicious of self-funding?

~~~
sdenton4
Roughly, "is this company so bad that they can't get any real investors?"

Sorta like a self published book, it looks like a vanity project more than a
thing that can survive in the world independent of its creator.

------
untilHellbanned
Without more context, this reads as failing upwards/humble bragging. All these
powerful people helping something that seems so tenuous? That’s not a common
outcome.

