It’s normal for the financial opportunities in technology to appear endless. Tuesday alone saw news of venture capital stalwart Greylock raising a fresh $1 billion fund and hedge fund Renaissance Technologies, which relies on computer scientists to power its trading strategies, attracting $7 billion in additional capital.
And yet, tech is a fickle master. There’s so much money to be made, but also so many opportunities to squander it, and all because things change so quickly. I wrote just last week that it seemed Samsung couldn’t catch a break. Then things got worse. Again. Recalling 2.5 million smartphones wasn’t good enough. Now Samsung has shut down production on the Galaxy Note 7 altogether, causing shares of the Korean technology stalwart to plummet and hammering its quarterly profit expectations. (Samsung’s woes suddenly make Apple’s antenna woes or headphone-jack gripes seem quaint by comparison.)
Incumbents are disrupted in all industries. But it happens more quickly—and more ferociously—in tech. Jawbone was Silicon Valley’s “it” company for several years, making a string of hot, category-defining products from cellphone headsets to wireless speakers to fitness trackers. Yet Jawbone never quite converted its leadership into lasting success. In time, as I described in a feature last year, it became a long-in-the-tooth startup, surviving well past its sell-by date in a fast-moving community of innovators.
Bloomberg reported last week that Jawbone investor Blackrock wants to take control of its assets. The private company’s CEO, Hosain Rahman, told employees over the weekend he has arranged financing to stop this from happening but that he has to beat back one of Jawbone’s “largest constituents” first. (Blackrock has lent Jawbone $300 million; it would be common for Jawbone to pledge its intellectual property as collateral.)
Jawbone’s CEO told his employees he is considering a “number of options” that “would include the reincarnation of the business through a variety of means.” Reincarnation is what Silicon Valley does best. But no amount of hope or capital can make up for a missed product cycle, a craftier competitor, or a product that was rushed to market before it was ready.
Tech’s rewards are huge. Its punishments are just as brutal.