Is this really all that significant? It seems that since the WeWork fiasco, all of SoftBank's failures are being covered by news organizations. But isn't that simply the nature of venture capital? Invest in a lot of different things, most of which will fail, and make up for the losses with the Ubers of the world. (edit: It sounds like Uber was a bad example to use)
$375 million sounds like a lot of money, but it's 0.3% of their investment fund.
I'm not sure if SoftBank is suddenly performing worse than they have been in the past or if people simply just care more about the losses since they had such a major one recently.
I think part of the problem is how uncritically tech journalism covers these companies pre-scandal.
Even call it a "robot" pizza company is strange...I can't imagine that the inside of any factory for frozen pizzas would look that different than what this company was offering.
Thanks for the links. Indeed, hilarious to watch it side-by-side for some extra entertainment! With the volume of pizza they're making in that Zume factory, it doesn't seem like there's even any extra benefits of using robots — and these robots seem to be placed there more as an obstacle to overcome than actual help; also, they didn't even use it for cheese dispersement, which was still done by hand? LOL, robots-made pizza!
The automation in that video seems less than helpful, all the labor-intensive steps are being done by the humans, all the super easy stuff done by robot.
The six-axis robot being used to move a pizza 2 feet was pretty amazing -- I have to imagine they had grander plans but had no idea how to utilize it yet.
The mobile ovens are kind of absurd. I mean, warming it doesn't seem like a bad idea. Maybe even baking it on the way is fine (so long as all the toppings didn't slide off), but what do they need 56 bays for? If they're planning on loading up 56 pizzas and baking them on the way, latency on orders will be horrible. Huge orders are like, 10 pizzas. Seems like if they just baked them and stuffed them right into a warming compartment that'd be more than sufficient.
I noticed the same thing! They just needed to move the pizza across a 90 degree angle so they used a robot arm? Why not just rearrange the conveyor belt a bit?
You want to be able to say you use $COOL_TECHNOLOGY, so you use it to move a pizza two feet and do all the actual work the traditional way. It's like AI or blockchain, but for pizza.
>The automation in that video seems less than helpful, all the labor-intensive steps are being done by the humans
The saucing of the dough in particular was absolutely slower than a reasonably experienced human worker. For a human worker in a typical pizzeria, the sauce takes two seconds.
I know that with repetition comes this kind of effeciency, but that's amazing to me, because when I make pizza it still takes me, like 45 seconds to really get it done...
You can see how quick they move in a typical pizzeria right at the beginning of this video. They are slinging sauce so fast, I wouldn't doubt it is about 2 seconds.
The robot is incredibly over-sized and under-utilized for this task and costs what you would pay for 5 employees in a year - not the best application. If the robot isn't tossing the pizza dough, then who cares haha!
Something I love about the frozen pizza setup is just how much of it is about being sloppy and recovering gracefully. Cut rectangular dough band into circles and circulate the off cuts back into the start. Rain cheese everywhere and let it fall into a recovery tray. These are techniques that also work well in software — it’s often easier to design a system that builds a bad result and fixes it after than it is to build a good result from first principles.
The brilliance of the cheese process struck me as well – we see a mess and then, the reveal of the amusingly simple cleanup. (This is an effectively edited promotional film, too. The story of the equipment is beautifully told.)
Your insight re: the parallel to software design is a valuable one, thank you.
Zume eliminated the two easiest steps with costly robots using needlessly complex technology and that was the basis for their business? What insanity would prompt someone to invest in that?
I had family working in a plant for one of the big name pizza places, and you can see the whole process for on-demand pizza at many brick oven pizza joints. I don't know how you could go to either of those places, look at zume, then conclude that zume had any advantage or was solving a problem from either side (on demand or automation).
I would think that the biggest problem in this type of old commoditized industry (food) the biggest problem is how to sell. The cost of making lots of pizzas, with robots or humans, should be less in total than the cost of marketing, delivery, etc. Maybe that's the answer to this question. These robots are there to make these pizzas appealing to investors (hi-tech something something), and then prospective customers (a hi-tech pizza that doesn't taste like shit)...
Pizza in particular is fiercly competitive. There are tiny Domino's Pizza places in every city and all over the place. Their overhead is low and you can carry out a large pizza for $8. And it is not a bad pizza. It's not an artisinal pizza but it's not bad.
The most painful part is the founder lingo all this technical superlative 6-axis factory line robot [0] and laser triggered faucets just to make your sad blind ambition sound valueable. Also patenting ovens in a van. Icing on the cake. Or should I say robotic top filling on the automated dough.
To honest though, they look like fresh pizzas. And if by some chance, the system yields stable long term value (happy employees and eaters) then.. why not.
That said anybody gets depressed by the dehumanizing aspect of this era ? drone delivering robotically made pizzas.. it looked funny in the jetsons but in reality I'd like to keep the good'ol restaurants with noisy people in it.
[0] "that we have yet to master" because it's so useless and we're so unqualified to understand it
Yes, that's nuts. That super expensive 6 axis robot is for what? If they just moved the oven, the pizza could transition to a wire conveyor right into the oven.
Not only that. There's already a pizza on demand system.[1] "Let's Pizza" has been around since 2011. From Italy.
Modestly successful. Softbank didn't do enough due diligence to find that?
Ah, that's disruptive I guess? You know, because old pizza is the non-digital incumbent and such? No idea, the more I think about it the more I prefer to not sell my business as a start-up. Because of stuff like that. And that dog walking company SoftBank invested in.
Perhaps that is the general difference between industrialization and AI based robots
Industrialization has pretty much solved mass production.
AI can automate intelligent decision making, but with industrialized production system the design has removed all need for intelligence.
An intelligent system will always be more expensive than a non intelligent system.
Robots could only become useful, once there are decisions to make. Like when you want to order truly customized pizzas, e.g., arrange the cheese such that it spells your name. Or give it a keyword, and then the robot should arrange all ingredients, such that the pizza looks like a painting about that keyword
Interesting trivia: Zume owns the patent for "cooking on the way". These days you can really patent everything (in USA only, I hope)... What about mobile hot dog stand? Isn't that prior art?
Pizza Hut had a 1984 patent for a mobile delivery/kitchen truck that would cook the pizza en route to the customer.[1] Zume's patent even cites it[1]. Just skimming over both filings, I'm kind of surprised it was issued in the first place.
I'm sure there's enough desperate money like Son's in the VC/PE world that a patent for anything and a decent story can get you a meeting and a term sheet.
Love the production line. I was especially impressed by the cheese application step.
I was like “oh these pizzas aren’t in a straight line, I wonder if a human needs to line them up now, or if there’s a visual sensor that detects edges”.
I don't think VCs care about that. In fact, they probably prefer that it has been done before. It's not like Amazon was the first company to sell things online. Nor was under the first to have an app to hail a ride.
> Sure, Rademaker doesn’t put their enormous frozen pizza technology in a van.
I bet if you gave them enough money to bother trying, they could squeeze a pizza machine into a van. Making a pizza in a van seems possible, but pointless.
How the hell can people controlling so much money be so ridiculously gullible? WTF did I just watch? A 6 axis factory robot who's sole purpose is to move a pizza 2 feet from a conveyor belt into an oven? Not only that but they're still relying on humans to actually place toppings? And they got $375MM for this bullshit?
Serious question: would this investment have been awarded if the cofounder weren't a minority female?
"Bruno is a very powerful robot. He's a 6-axis robot. You've seen this kind of robot mostly in manufacturing settings. We're using this robot to make pizza."
Especially since an oven is probably the simplest tech in the entire assembly line, and a relatively short distance (if not the shortest), so it seems kinda dumb to change the line's direction there, both in expense and complexity.
> A 6 axis factory robot who's sole purpose is to move a pizza 2 feet from a conveyor belt into an oven?
I have to believe they bought it with the idea of doing much much more but hadn't figured out how.
Overall, it seems they knew they wanted to "automate pizza" but really had no idea how. Another comment shows a real pizza assembly line that looks both simple and efficient.
Lets talk a minute about their "mobile ovens". WTH do they need 56 ovens for? It seems like assembly still has to happen at a "hub", but how many pizzas do you really need to bake on the way? Maybe a max of 10 for huge orders?
> Serious question: would this investment have been awarded if the cofounder weren't a minority female?
> I have to believe they bought it with the idea of doing much much more but hadn't figured out how.
The video gave me the impression of a kitchen designed by a chef or line cook, with a manufacturing robot tossed in there. If the goal was automated centralized production, any competent manufacturing engineer would have designed a radically simpler setup. Of course, finding machinery that didn't have a production capacity too far beyond Zume's needs would probably have been a challenge. Hundreds of pizzas an hour--let alone thousands--is well beyond anything Zume could have handled, because their biggest bottleneck would have always been delivery.
> Lets talk a minute about their "mobile ovens". WTH do they need 56 ovens for? It seems like assembly still has to happen at a "hub", but how many pizzas do you really need to bake on the way? Maybe a max of 10 for huge orders?
The entire concept is a bit wacky. You don't need to bake the pizza entirely on the way; just scale up how New York pizzerias handle pizza by the slice.[0] A plain pizza gets half-baked and when a customer orders a slice, toppings are added and it's put in the oven for a couple minutes until fully cooked. Prepping whole pizzas at a central kitchen and then putting them in a delivery van that finishes cooking the pizzas is something I could maybe see being viable with minimal investment. A very hesitant maybe.
But there are no robots and no wizards (er, machine learning some of Zume's early coverage discussed) for that kind of business. And that probably means no big investments as there are some articles where I can't help but substitute "magic" or "wizards" for certain words and think "yeah, that's probably closer to what some investors or journalists heard."
I saw an analysis of Shipley a couple of days ago. Apparently Shipley refused to hire people from the shipping industry. Because these people would refuse "innovation". Compare that to Amazon Logistics who hired a ton of people from other shipping companies. Maybe, just maybe, industry and domain knowledge are helpful. Even for disruptive start-ups.
Plus, many of those grizzled veterans would love to run with a green field project. They've been putting up with obvious inneffiencies for years because most of the time, it's not the experts that resist change, it's the inertia of a mega Corp that is doing so much business right now, that change is extremely difficult and disruptive.
Yeah, so true. Consider me one of them. Occassions like this, Shiply, often strike me as young, aspiring scientist using other peoples money to figure out the a wheel should be round.
Being a little bit more active in my local start-up scene now also means following stat-ups in general. And a lot of these companies, including one I used to work for for a short period, seem to ignore lessons other learned, the hard way. If these lessons are concerning your USP, ignore them, because it is where you inovate. regardless, you should have understood these lessons before ignoring them.
Ignoring these lessons in any other part of your company is just stupid. Like not managing your cash flow.
This thread made me think of Dr. Evil and his insistence on putting lasers on sharks. Some startups seem to think just throwing some more technology into an already refined process will somehow be “disruptive”. Solutions searching for problems is terrible way to streamline or even add value to an industry.
> But isn't that simply the nature of venture capital? Invest in a lot of different things, most of which will fail, and make up for the losses with the Ubers of the world.
One, if that's really the model, then founders had better stay as far away from venture capital as possible. Whether your motivation is "change the world"/"deliver on the vision you have" or "make money," that's not your investor's model. Your investor's model is to convince you and a hundred people like you that each of you is special and going to change the world, while expecting only one of you to succeed. Your investor's model is to push you to be Uber-scale even if you're overextending yourself and to convince you that you can do it even if you probably can't, because it's better to let you fail and cut you loose than to let you have a modest and small success that doesn't make a dent in the portfolio. If you and everyone else is aiming for safe successes instead of high-risk-high-reward gambles, then the let-a-thousand-startups-bloom approach stops being profitable for the investor, so investors can't let that happen.
Two, I think the rest of the world - and perhaps even the industry itself - doesn't quite intuitively understand that. If that's really the model, "We have $375M from SoftBank" isn't an indicator of anything, neither to other investors nor to potential employees.
One: It's really the model. There are almost 200 years of data on VC in the US. That's the model, I promise.
Two: It's not as simple as just throwing money at a bunch of random things and hoping one sticks. They work hard to invest in companies they think will make large returns, knowing that despite their best efforts a large portion likely won't. This is intuitively understood. But this more nuanced understanding leads to the conclusion that "[w]e have $375M from SoftBank" is meaningful because they're a successful entity in that space, with subject matter experts, and if they invest in you it indicates you're doing something right.
> then founders had better stay as far away from venture capital as possible
There's always tradeoffs. You seem to think that no VC money is safer, but that not necessarily true.
Without capital, you spend 10 years finding out that your bootstrapped robot pizza company is in fact utter garbage. With capital, that would have taken 2 years.
> that's not your investor's model
And it's not my customer's model either. Or my employee's model.
Just because we don't all have the same exact goals doesn't mean we can't create a mutually beneficial arrangement for all parties.
> Without capital, you spend 10 years finding out that your bootstrapped robot pizza company is in fact utter garbage. With capital, that would have taken 2 years.
I mean, that's one possibility. The other is that without capital, everyone looks at your robot pizza company and says "There's no way that's going to work" and you find out in 0 years and you go work on something else, like a normal pizza company (or a normal office-leasing company, or a normal blood-testing company, or a normal juice press, or whatever). My worry is that if a founder goes to a venture capitalist with an idea that's probably bonkers but might work, the VC's interest is in making the idea even more bonkers and saying "No way, man, you're gonna change the world" and not "Hey, here's how to make your idea a little more grounded so you actually deliver something successfully."
I guess it depends on what you want as a founder. If you want the best shot ever at making your world-changing robot pizza company work, sure, go for the VC - if you bootstrapped it, you'd spend 10 years worrying it wasn't taking off because you didn't have the resources. If you want to succeed at something, and you're okay with succeeding even if there aren't pizza robots on every corner, find a route where you're not working for mega-growth-or-bust. (Which could include modest amounts of venture capital! Or could include loans or whatever.) And honestly, if you really care about pizza robots and it doesn't matter to you how many pizza robots there are as long as you can work on pizza robots for ten years... bootstrap.
> Just because we don't all have the same exact goals doesn't mean we can't create a mutually beneficial arrangement for all parties.
My concern here is that it's in the VC's interest for you to be more ambitious and fail instead of staying cautious and succeeding. Nobody else has that in their goals. No (actual, paying) customer would say "Your product is great, but if you can't add these features, we'd prefer it if your product didn't exist." No (current) employee would say "I love this company, but if we can't hire ten times as many people, I want to be laid off." Everyone else has an interest in you staying afloat and alive, even if they have different opinions on what you do.
The economics on the Vision Fund are basically unprecedented. No one has ever managed a $100B "Venture" fund before so the fund economics are basically unknown at this point. That being said, it's much easier to return 100x on a seed fund than it is a late-stage fund. This is basically been proven over and over in the PE world.
> I'm not sure if SoftBank is suddenly performing worse than they have been in the past or if people simply just care more about the losses since they had such a major one recently.
The only reason people like talking about anything SoftBank is because (1) its so abnormal in the investing world...it's essentially an unproven model, (2) SoftBank's fund is basically "Masayoshi-son made the most significant investing venture bet ever in history with Alibaba and we want to try to do this 100x more" (3) the investing principles are so abnormal (Masayhoshi-son basically has to bless the founder/idea) that it makes for great headlines.
Masayoshi-son has proven he can throw he dice pretty well, however the jury is still out on whether this model will actually produce outsize returns.
I understand your point. My point (which I didn't really explain, so that's my fault) is that SoftBank is an especially terrible VC firm - at least when it comes to making money.
Eh, in general, but equating the reasonableness of a fund by the percentage of their total is not sound. $100B can still be dumb money, and inventing valuations as a product of this is actually harmful to actually-viable companies. It sucks the air out with bad money (if you can believe in such a thing).
"VC" is not a synonym for "smart money," and "the idea behind VC" being "everybody is betting tho" doesn't explain their outsized presence and outsized effects.
> “There were many naysayers when SoftBank invested last year at a valuation around $49 billion,” said Chris Lane, an analyst at Sanford C. Bernstein & Co. “The successful IPO of Uber at a valuation anywhere near $100 billion will be a strong validation for SoftBank and its Vision Fund. This is also very good news for SoftBank’s other ride-hailing investments.”
> But isn't that simply the nature of venture capital?
Venture capital isn't a monolith.
Investing in pre-seed, seed, or series A rounds are significantly different than coming in as an investor in a later round.
For Softbank to whiff so badly on such late stage investments is drastically different than an early stage investor failing with a similar portfolio. The risk and uncertainty profiles are starkly different for the early stage and late stage investor.
what loss? Looks like Softbank is already making small (by the tech standards) profit (if they had the stomach to make through the trough of course) - $7.6B invested for 220 million shares at the current stock price is more than $8.6B :
". The Japanese conglomerate spent about $6.6 billion to buy just over 200 million shares from existing investors, including former CEO Travis Kalanick, at around $32.87 a piece. It provided another $1.05 billion in fresh capital to Uber, buying 21.45 million shares at about $48.77 each."
Matt Levine's comments on this yesterday [1] are comic genius:
Presumably many local pizzeria owners have never heard of Masayoshi Son; presumably many more just would never have thought “oh we’re actually a pizza tech company and we need hundreds of millions of dollars of venture capital funding to scale.” But if you have the proper mindset, if you believe in yourself, if you are not a guy opening a pizza place but a founder who previously sold a tech company, if you hire a strategic and retail consultant, if you test out various combinations of “[giant tech company] of [broad category including pizza]” for the pitch, if you call your pizzeria “the Gigaranch” or “the Pizzaplex” rather than “Al’s Pizza & Subs,” and sure sure sure yes fine if you employ some robots to careen around town sloshing cheese around trucks, then maybe you can be the pizza proprietor to rake in Masayoshi Son’s millions.
You craft a pitch calculated to convince Masayoshi Son that your pizza delivery business will change the world. You meet with Masayoshi Son. He convinces you that you will change the world. Now you are all believers, all in it together. He hands you piles of money. You go home and weep to your friends, “I am going to change the world.” The friends are like “wait what with the pizzas?” But it is too late for skepticism, you have the money, the robots are in the trucks, they are fanning out across town, the cheese is everywhere, they cannot turn back.
Pizza reference and all. That book (along with a lot of his other writing) has really influenced the way I see group social dynamics, and the way technology influences them.
Domino's pizza was one of the fastest growing big companies in the world with a 30 minutes guarantee. It's quite similar to the pizza chain in Snow Crash actually. I would say Snow Crash predicted it before it became so successful.
I think you may have it backwards. Domino's was well known for their 30-minute guarantee when Snow Crash was written in 1992. Indeed, Domino's was in the midst of a lawsuit regarding it while the book was being written; it resulted in a $78 million verdict against Domino's. [0]
I give Stephenson credit for taking that guarantee to its logical extreme. And while I love the book, it's funny how basically none of the predictions in it came true. No computers that project images on eyeballs, no 'poon guns, no losers walking around scanning retinas with backpack-mounted lasers, and book features working payphone booths!
The tech is basically working, and they're ramping up to production this year.
And no, you can't just walk around arbitrarily, but you couldn't do that in the book either (you could walk out of range). Also, Stephenson didn't worry about just turning your back to the laser projector...
But, in this case, it sure seems, in hindsight, like it should have been predictable. My first thought when I heard about the company was, "How do they keep the toppings from flying all over the place if the truck hits a pothole or has to make as sudden stop or something, and the cheese hasn't softened enough to stick it in place? And how do they keep the cheese from sloshing all over the place after it melts?"
It would seem, based on what I'm reading now, that my error was assuming that they had thought of something clever and wondering what it was. Because the answers turn out to be (1) skimp on the toppings, and (2) you can't, it just plays out like a scene from Astérix chez les Helvètes† back there.
I can infer from this that I, a person who was just sitting on their armchair having a knee-jerk reaction, still managed to think more deeply about this business plan than any of the key figures or investors.
Starbucks, on the other hand, seems to have always had a basic grasp of how coffee behaves vis a vis Newton's First Law of Motion.
†(DDG image search seems to do a better job than Google at turning up the cheesiest panels.)
/u/graycat, although I’m unable to find any reference that the story is inaccurate from a quick HN and Google search. If you find it, feel free to reply with a link to correct me.
You may want to check out the Starbucks timeline. They did not raise an astronomical amount of money right off the bat. Blue Bottle is a closer comparison. They also grew organically for many years before raising a serious round. There must be an example of a successful food chain that raised a ton of money in their first few years but I can't think of it off the top of my head.
If Alfred Peet had pitched the founders of Starbucks on a bunch of robot baristas in the back of vans who would deliver your coffee, but which spilled half of it before it got to you, it would have been right to pour scorn on them.
I don't see the comparison. Starbucks is a successful, 50 year old, company with a good brand and always had a sane strategy. Failure or success aren't random.
What the author is alluding too is the fact that putting a bunch of robots into a pizza store isn't going to turn you into a technology company worth hundreds of millions, that is absurd right from the beginning.
Starbucks success imho was due to their having a sufficiently well controlled process to make a consistently decent (if not excellent) cup of coffee in _all_ their stores. Their competitors are all over the place in both the time and location axes.
They were the first to bring espresso and espresso drinks to a lot of locations. Plus their coffee, while not the greatest, is pretty standard across locations and is a "predictable" product.
That and the interior of the stores are typically more appealing than McDonalds.
OK that's weird. I was wrong to dispute it, but I think the story has gone around and around on my radar so many times that I was confused as to which was the right story. Kind of an "eggs are bad" "eggs are good" depending on which decade you're talking about. Mea culpa!
The quote really understates the sheer insanity of this all... Alex Garden cynically constructed a narrative for Masa Son that he [Garden] would change the world, and at the end of the meeting, _Son_ was the one convincing Garden that he’d change the world??!
There was a spoof book in 2008 called "Manifold Destiny," which consisted of dinner recipes that could be wrapped in aluminum foil and placed under your car hood, near some hot part of the engine -- to be nimbly cooked in the course of an hour's drive to your destination.
I skimmed it in a book store, back in the day. Quite funny! (Where else could you learn about Hyundai Halibut With Fennel -- cooking time 55-85 miles.)
Shoot me for not realizing that it was a visionary guide to getting funded by Softbank.
Except future robotic cars will mostly be electric I think, and you can't have engine block tv dinners anymore because evs don't generate waste heat like ice cars. But you could have electric ovens in them ;-)
> Some hires came directly from coding schools that specialize in quick boot-camp-style training courses. One adviser recalls being surprised to learn that some Zume coders had last worked at the porn-and-hookup site Adult FriendFinder, known for a security breach that exposed the data of 412 million users.
I kinda get the bootcamp concerns, but what's wrong with being a programmer at a porn site?
I also highly doubt the problems were with the software team either.
After the robotic delivery truck problem failed, which I think was a critical piece of the puzzle as they were essentially replacing retail pizza stores with mobile robotic food delivery machines. Which is something new - and critically something actually scalable with VC funding.
Instead this ended up requiring a sophisticated infrastructure if it was going to compete with pizza stores on every corner, who already have ovens and drivers close to the last mile customers + these old pizza companies already have central marketing funnels from mobile apps, phone calls, and online orders which then distributed "leads" to the various local franchise locations. So an Uber-style play is pretty pointless.
I'm curious if they should have tried a bit harder to solve the robotic pizza truck problem, so they didn't need to build out a centralized facility or a bunch of smaller delivery shops. Especially on the cusp on automated driving, these could just automatically pick-up food restocks at the central location and stay mobile as long as possible.
I'm convinced too many startups give up too easily as soon as they face hard problems then pivot to boring old-industry style companies that aren't real startups/VC companies. Replacing minimum wage workers with robots will never be exciting by itself.
Pizza chains haven't even displaced the local pizzeria who make a higher quality product. It's inherently a resturaunt business and resturaunt are a terrible proposition.
In SF the chains have terrible quality, but in other places you can actually get pretty good pizza from a chain, if the style you want is in their lineup.
Where I moved from the chain pizza was all pretty good. One day after I moved here I needed something quick and familiar so I ordered the same thing I used to get, and it was awful.
So it comes down to the local management, and in areas where management is sound, the pizza is fine and robots add no value in time or quality.
I don’t think the issue they worked on adult sites. I think the issue is they worked on AdultFriendFinder, who basically didn’t care about user privacy.
I still think that's a silly reason not to hire their programmers, unless they played a role in creating weak security.
Security is often a whole company exercise that needs to be prioritized by management, putting blame on some individual programmers seems to show a lack of understanding of how infosec works.
Yeah, that's not how infosec works. You've almost certainly written code that has exposed user information (unless you've written no user-facing code).
Are you, as an engineer, going to organize a pentest for the software? Even if you encourage management to do so, it's still up to management to actually book the deal.
At minimum, I'm going to design a user-facing system as correctly as I am able and to the maximal extent of my abilities, because holding data in trust for a user is a profoundly serious responsibility and it wouldn't be right to do otherwise. And, when user-identifying information is involved, every place I've ever worked has had an understanding that that kind of sensitive work will be done when it's done and they can fire my ass if they don't like it. Whether they've been happy about it or not, nobody has ever tried to fight me over it, let alone take me up on the "fire me" bit.
And when it is done, I will endeavor to hit it as absolutely hard as I can to break it. I will advocate for regular penetration tests and audits, and I will throw an absolute goddamned fit when they don't happen. (My current company retains very little personal information and we still put ourselves through a pretty rigorous security audit at least once a year. A measure of "do thou likewise" is fair.)
The fun part is I don't even call myself an "engineer", because I'm not and I can't be with the tools and practices I have at my disposal. I'm a software developer, just like about 99.9% of this industry. I just happen to care a little, and I just happen to try to do better.
The only part that matters is the penetration test bit. And it's out of your control as a rank-and-file engineer.
Those who don't accept this are like doctors who don't accept that washing their hands is the important part, not the care and emotional sensitivity that goes into treating a patient.
That's not true. Testing is reinforcement of that competence and that good design, it does not replace it. Relying on penetration tests to secure your systems has an implicit dependency on the completeness of those tests--and putting armor over the bullet holes isn't how you keep a plane in the air.
A pentest reports findings, and then regardless of how incompetent the programmers are, they are required to fix them. Then a retest happens, which verifies that the findings were fixed.
I've seen a trading application go from "typing ' will result inn SQL injection" to "basically bulletproof" due to this process.
Devs can become remarkably competent when their smugness is wiped away by finding some crucial vulnerabilities they overlooked.
I know it's tempting to believe that the design part matters, but it's also tempting to believe that a doctor's emotional support matters just as much as washing your hands.
Do a stint in the pentest industry. It's eye-opening. (Look into my eyes. I've seen things. Terrible... things...)
The AFF back to back breaches were interesting because there were faults to found at every level.
* The breach included PII from a property they had already sold, but held onto for some reason.
* SHA1. A good choice if you want to slightly inconvenience somebody with a GPU, while also increasing the odds of your hashes getting uploaded in full to one of many distributed cracking projects.
* No effective user input validation. The exploit was one step in sophistication beyond those ancient IIS ../../hue.txt attacks.
* No attempt at anything resembling principles of least privilege, exec whatever wherever.
So, everyone failed - executives to DBAs. Screw pentests, start by implementing best practices that have been around for 40 years.
>Are you, as an engineer, going to organize a pentest for the software?
Are you, as an engineer, going to sit back and watch the project you built (containing very personal information in this case) get compromised? Even if you know management isn't paying proper attention?
See, that's the problem with every developer in Silicon Valley calling themselves an "engineer"; they want the title without the obligations that a professional engineer has. "Not my problem" would cost you your designation.
> See, that's the problem with every developer in Silicon Valley calling themselves an "engineer"; they want the title without the obligations that a professional engineer has. "Not my problem" would cost you your designation.
All engineers make mistakes and misjudgements, even the ones working in long-established fields, as we can see from the 737MAX saga. It's management's job to design a organizational structure that puts enough safeguards in place that mistakes get captured before the product rolls out. That's what management literally means.
> Are you, [...] going to sit back and watch the project you built get compromised?
How does this work? Do you rip off your glasses, strike a manly pose and run for the data center, stopping only to force the infra team to give you the credentials?
More seriously...
Organize your own IR tiger team outside of management channels? Congrats, you're unemployed tomorrow, together with anyone silly enough to buy in.
Start making rogue code changes you think are appropriate? That would run in to "want[ing] the title without the obligations". Oh, and also probably end up with you unemployed.
> Are you, as an engineer, going to sit back and watch the project you built (containing very personal information in this case) get compromised? Even if you know management isn't paying proper attention?
I'm glad I'm not the only one who feels like this.
I nearly got fired by digging my heels in on a privacy/infosec flawed design... until CTO/CIO layer gleaned what I was freaking out about and the energy (angry, "wtf", etc) suddenly pivoted to the original architect and engineers who cooked up some half-baked stuff.
You don't want your name attached to bad stuff in life. You only have one reputation. Don't mis-spend your social (political) capital by letting dummies bully you into ignoring tangible security issues.
That is a load a bs. If anything, it has been enabling for me. Any business that wouldn't want to hire me based on the incredible scalability experience I gained from working on a super high traffic/revenue project, isn't a company I would want to work for anyway. Nothing I did was black hat.
Yes, we had to deal with all of that as well. Also built a lot of automated tools to deal with those sorts of things. My favorite one, I named 'the cockblocker'. ;-) This sort of experience you just can't get elsewhere and has been extremely valuable for me.
Wow a pizza compNy that delivers and cooks on the way to your house, all done by robots. I can see the pitch. All cooking is automated and in a few years we will become a self driving car company also and automate everything from taking order to cooking to even delivering to the door. There will be no human involved except to refresh the bank account to look at the money we are making!
Instead they ended up increasing their costs multiple times by cooking in parking lots and delivering over scooters. Wow. Classic example of not understanding what they are doing. Both the founders and investors have no understanding of either the tech or pizza marketplace and blindly jumped in. I guess it’s great for the founder. They make money almost for free.
> Classic example of not understanding what they are doing. Both the founders and investors have no understanding of either the tech or pizza marketplace and blindly jumped in.
>Wow a pizza compNy that delivers and cooks on the way to your house, all done by robots.
I am not sure I suppose in really high real estate cost areas that might be good, but it does not strike me as an obviously good idea with respect to capital usage.
And the employees too, they got fat severances. All of this reminds me of a government jobs program. Strange, isn’t it? If the free market wasn’t so distorted in the US (primarily because of government involvement), companies like this would never get funded in the first place. Instead we have government jobs programs popping up all over, due to QE by the Fed. Next time they should just helicopter the money directly to everybody. Way more efficient.
SoftBank is a Japanese company heavily invested in companies all over the world. I am not clear on the direct link between US Fed QE and SoftBank's Zume Pizza investment.
If you are going to blame the US government for this bad investment, then you'll also need to give them credit for all of SoftBank's good investments too, right?
AI is the biggest scam of all tech pitches. Get some data, make a neural network, slap a single-page app on front of it, and BOOM - disrupt [insert sector that employees N-thousands of people]. "Once we scale, we won't have employees - and you'll own a percentage of the black box that disrupts the whole industry."
The parts of any business that can actually be automated by "AI" (aka machine learning, aka automated statistical analysis) are not the pieces of the business that justify its existence and value to customers. Self-driving cars are the most obvious debacle, but it's the same story everywhere - enormous capital to get the data and engineers to automate, but even the "good" AI still gets it wrong much of the time, necessitating endless edge-cases, human intervention, and eventually it's a giant ball of poorly-understand and impossible to maintain pipelines that don't even provide a better result than a few humans with a spreadsheet. Imminent implosion to the AI sector is incoming, sell now before the hype completely wears off.
Yet AI _within_ large companies is producing enormous benefits. If your AI startup is helping customers implement AI on their own data, you may have something. A one page web site on top of your own startup data? Yeah that sounds risky.
Do you have any examples of "enormous", tangible benefits from machine learning own data? I can see some benefits on the margins, but I have not found any evidence of disruptive productivity enhancements.
I am honestly surprised that nobody mentioned the critical quote:
"The fund is less than three years old and we’ve already had eight IPOs and returned $10.6 billion to our limited partners."
I would be willing to believe that. Maybe SoftBank is making money and paying out profits, despite some of their companies publicly failing in spectacular ways. In that case, they are absolutely correct to ignore public opinion and continue doing what they were doing before.
It's worth remembering that Vision Fund's apparent thesis wasn't just to have a many-losers-compensated-by-a-big-winner portfolio like most VC funds, but that they would pick winners by sheer scale of their checks. That should imply a smaller shares of outright failures (if Uber, Wework et al can even be called that, which I'm not sure)
Unfortunately to test said thesis they HAD to raise that much money (maybe half was enough, but then again, if they could raise 100Bn, why not?) and HAD to burn it like they did.
Apparently the result is that scale alone can't bring the kind of outsized returns VCs rely on, even if they do end up creating juggernauts. But to learn that, someone had to try.
The way to do automated pizza is to miniaturize and streamline like what Wozniak was great at doing at Apple. Retain the storefront and physical location. Push the storefront to be more community driven as an open plan restaurant and pickup location. Develop tech to generalize automated food prep and inventory storage. Build up from the basics engineering disciplines for a fully custom assembly pipeline.
You don't want to lose the place in the community or the accountability of having humans to hold responsible for your food. A storefront can carry that. I don't understand buying a robot arm and calling it a day. Or cooking pizzas in black-box trucks that may arise suspicion in their cleanliness or quality. Being able to see your food being made adds a lot.
How you do all that and compete with the big dogs is an interesting question.
You're not really building a robot, instead filling in the line between already automated sequences like the oven and chiller. Costco has a saucing mechanism, the biggest transformations are storing delivered inventory, managing dough proofing, topping pizzas accurately and self-cleaning. Cutting, boxing, delivering and taking orders is all straightforward.
I know what a schedule looks like, I used to make them for some of the busiest pizza shops out there. Shops next to universities and large business districts are the easiest to make the financial savings argument. The shops that benefit from a 24/7 model can make savings and increase throughput. Delivering on-time and without error can be massively improved. Making a cost reduction on the huge amounts of tiny shops out there is a great place to prove the tech financially, not where you'll see the most dramatic impact.
There is another automated pizza startup out there that has taken big frozen pizza factory tech and shrunk it down to retail size. It's not the right answer either. That tech makes too much sacrifice in accuracy, flexibility and quality for quantity.
There are more factors that go into this, maybe something better pursued elsewhere than discussed here.
I've actually interviewed with Zume in winter 2017/2018, they've initiated the contact through one of the platforms that only accepts the top-5% of applicants in the first place.
They've set me up for a failure during the initial phone screen by asking a tricky set of two simple questions that noone else has ever asked together and in that order, where you have to answer the first question before you see the second one:
* “You've worked at company X. Rate your performance on a scale from 1 to 10 for how your supervisor would rate you.”
* “What is the reason for your separation from company X.”
(Try doing these two questions in the above order if you've ever been let go from any job, and when the answer to the first question is fixed before the second question is revealed.)
These bros then went ahead and made a hard rejection right there on the phone, waiting for my reaction as if I'm a zoo specimen (it was kind of a shock to me at that time, as I've never been hard-rejected and humiliated like that before or after this incident).
Am I now surprised or disappointed these folks have failed? Not really. You get what you preach. The whole idea seemed kind of stupid and overblown in the first place.
>(Try doing these two questions in the above order if you've ever been let go from any job, and when the answer to the first question is fixed before the second question is revealed.)
I just always assumed people made things up for these questions and rehearsed their fake story ahead of time.
> I just always assumed people made things up for these questions and rehearsed their fake story ahead of time.
How could you do that if you've never heard of the questions? (I did hundreds of screens, and it's never came up before.) Does everyone always research what questions each company asks? I guess if you're aware of the trap, it might be possible to avoid, indeed. Then it becomes a test on whether you've researched the company or not prior to the call; whether or not if have ever been fired; and whether or not you're a good liar.
Also, even if you're aware of the question — do you rate yourself below 7, or hide the fact that you've been let go by the person rating you 7 and above?
I've found questions about past jobs and why I left to be common enough. So I feel it's beneficial to have a narrative that paints one in the best light (ignores the negatives, promotes the positives, etc.).
>Also, even if you're aware of the question — do you rate yourself below 7, or hide the fact that you've been let go by the person rating you 7 and above?
That depends on your ethical views on lying. Personally, I don't owe companies anything and they will lie to my face about things if it benefits them (like layoffs, financial state, worth of options, etc.).
And how are you meant to know what your manager actually thought? And even so is it all that relevant? Maybe you are leaving due to a poor relationship with your manager, maybe internal politics. Plenty of reasons why a great candidate wouldn’t be thought of very highly by their current manager.
I wonder what they're looking for in those questions.
I did interviews for a while (granted that's not the same if you're pitching a startup). Man I hated it. All the recommended questions came with no real goal or anything to look for that I thought told me anything about what this person can do for me.
I guess maybe Zume they're just looking for a "good" answer to maybe indicate you could answer those kinds of questions in a pitch or whatever and not look bad... but what does that tell anyone anyway?
I asked other interviewers why they asked what they asked and what they thought it told them.
Everyone was just some myopic thing where they had a story where they had some bad employee and they think they're bad because X or good because Y and ask a question that they think shows them X or Y ... but nothing seemed to indicate that they really learned anything.
Sounds like they were "top grading" which is a interviewing technique promoted, among other places, in the "Who" book. (see https://whothebook.com/). An internet search will turn up the gist of what they're looking for.
Interestingly this technique is usually used for executives though, like all interview strategies, this one is also not perfect.
We use the technique - We find a lot of "diamonds in the rough" with it - people that have a low opinion of themselves but their coworkers love them and their work.
It also helps filter out people who can interview extremely well but can't work with other people.
I basically wound up throwing the interview 45 minutes in; I realized I didn't want to work at a place that was going to be so strict/formal for any position in their company.
Yes, I'd do 100 whiteboard interviews before I do another one of those.
Edit: I tried finding original emails, and it was actually a different food-robot startup, not Zume. It's funny how they all look alike. Original comment cannot be edited anymore, looks like, only 2 hours later.
Interesting hit piece. I know Alex from the gaming industry - he's very smart, very driven and very nice.
3 thoughts:
1. 375mm is a huge number. 375mm is also 1/3 of 1% of the fund... so small potatoes. Any numbers they throw around are going to look enormous and make great headlines.
2. If some of the investments don't sound a little crazy to you, then what is their differentiation or thesis? Remember PG's essay about good companies often start off sounding like terrible ideas.
3. Yes, anyone that can raise large amounts of money, well, that may be their core strength. Raising money. They need to pair that with someone that can build a team. It's not a bad thing to be able to raise funds.
Every SoftBank funded company must have an army of reporters looking for weakness. One of the cons of getting money too easily I suppose.
That said, I did not / do not understand Wag, and I have 3 dogs and I pay for dog walkers. Against my will, I'm married, she insists. I'm not totally craZy.
It's the cognitive dissonance of your Point 1 that makes this so fascinating. I think we're all at peace with the idea that a $100m venture fund will periodically write a $375,000 check to a couple crazy dreamers -- just to see if they can make their long-shot idea come good.
And when funding is tiny, it fits into our sense of what risk-taking should be. These are garage/spare bedroom startups with no salaries, a count-the-pennies reliance on AWS to get it going, and an MVP that's "brought to market" via some brave/crazy little scheme that's very dependent on other people's goodwill and tolerance.
If it works, hurray, and if not, everyone regroups fast and moves on.
Multiple all the numbers by 1000x, and the distortions get very strange. Yes, the fund is still making a "tiny bet." But the founders now can goof around with more money than most serious presidential candidates enjoy during primary season. And that feels like a pretty unfortunate misallocation of society's resources.
Are you saying lighting $375m on fire at the same time wealth inequality is imploding is not a newsworthy item? That a CASCADE of laughable investments by Softbank is not newsworthy to the VC/tech/software establishment?
Correct. You are not understanding the VC business model. It's only lighting money on fire if the fund as a whole fails to generate returns. The EXPECTATION is that many component investments will fail.
This is exactly the same model as YCombinator. Most of their individual investments fail and this isn't, nor should it be, news worthy.
Not according to YC’s own website [1]. YC’s average deal size is 150k. In order for YC to burn 135m they would have to invest in ~900 different companies compared to Softbanks one bet on robotic pizzas. Investing in 900 different companies is a much more diverse portfolio and an entirely different value proposition.
If you want to cheer on the intelligence of Softbank because they lucked out with an investment in Alibaba early on, you must still hold stock in Yahoo!...
> 2. If some of the investments don't sound a little crazy to you, then what is their differentiation or thesis? Remember PG's essay about good companies often start off sounding like terrible ideas.
It's very different when you're investing at the seed stage as opposed to putting in what would normally be considered late stage capital. By that point, your valuation should be justified by your numbers, not your dreams.
SoftBank sounds like they didn't get the memo startups involved in physical world don't really work because you can't "disrupt" complex logistics networks
Wouldn't it make more sense for the VCs to make 375 bets of $1M each rather than 1 bet of $375M?
Just the other day we heard about the troubles of 23andMe that had $786M in venture funding. Are there any examples of startups that got >$300M in early funding that went on to become a huge success?
I found them okay-ish. In fact, I felt the cooking was not uniform because it felt more "bready" towards the periphery (yes its supposed to be like that, but this was more than standard pizzas).
NB: things may have improved, I had ordered in Jan 2017, after seeing one of their vans going by in Mountain View.
So, hindsight is 20/20 and all that, but how was this supposed to work? The pizza assembly apparently was done at a central location, which means they can deliver to a limited area. Let's say max 30 minutes for delivery, how far is that in a metropolitan area? The factory is not going to be cheap.
It seems like they figured making pizzas was the bottleneck, when really delivery is it.
> In January, Zume cut 360 jobs, leaving a little over 300 employees, and said it would focus on packaging and efficiency gains for other food delivery companies.
Am I understanding correctly that they went from an idea to 660 employees in 2 years? How common is this in VC funded startups? I can't imagine this would be easy to manage effectively.
Where I live they have this TV show where startups have 2 minutes to pitch their idea to some investors. I remember people who built a fully automatic pizza machine. They asked for a few thousand euros and failed. I wonder how much money they would have got from Masayoshi Son. Somebody should make a TV show for/with him.
This is very odd to read as a founder. On one hand, you have VCs and Angels telling you you have to be "10x of everything's that's out there!" to get a 1M seed check. On the other, you see someone who's arguably 10x worse getting a medium sized bank given to them.
It's really peculiar. It's the nature of venture capital that your moonshots will pay off the dozens of trash companies you invested in, but what happens if some presidential candidate decides his media organisation is going to write an article about every single one of your investment failures? Is this a matter of a media eco-system that doesn't understand a business mdoel sticking an oar in where it doesn't belong?
I researched Zume quite deeply for interviewing with them and I never could figure out how they intended to make money. They had a vast plan that was way to big to execute all at once and none of it was ever going to be complete. I got the sense that they had received way too much funding and had gone on a feature-creep binge as a result. I learned a neat lesson from that: you can kill a startup with too much money up front.
Yes, they technically did. But they are congratulating themselves on an 18% gain, having invested in early 2018. The S&P 500, with reinvested dividends, is up 22% over the same period.
Right, we don’t. But no one buys the S&P500 because it’s the perfect investment. It’s diversified. Much less risky then buying an individual stock like Uber.
FYI: Uber is back to around $40 after a good earnings call. Softbank purchased most of their shares around $33 (though I think they also purchase some around $48), so they are mostly profitable on their Uber investment.
Not out of the question for Uber to reach $50+ by end of year.
I think you need to be seriously stupid to spend $375M on something like a pizza chain. To me it looks surreal seeing people giving somebody like him $100B
Is there a list of successful Softbank companies? It's starting to feel like the only time I ever hear about them is when some batshit Web 7.0 gig-economy company that should never have existed starts losing its shirt, and then it turns out that Softbank has invested hundreds of millions of dollars in it.
“I’ve never seen data to suggest that being charismatic
and confident and overly brash is linked to a
successful business,” says Kellie McElhaney, founding
director of the Center for Equity, Gender, and
Leadership at the University of California at
Berkeley’s business school.
$375 million sounds like a lot of money, but it's 0.3% of their investment fund.
I'm not sure if SoftBank is suddenly performing worse than they have been in the past or if people simply just care more about the losses since they had such a major one recently.