Wall Street Ruined the Roomba and Then Blamed Lina Khan
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The downfall of iRobot, the company behind Roomba, has sparked a lively debate about the role of Wall Street and regulatory bodies in its demise. While some commenters argue that iRobot's failure to innovate and its prioritization of short-term gains led to its downfall, others counter that the company's defense work and research capabilities were sacrificed for the sake of profit. The discussion also touches on the potential consequences of Amazon's attempted acquisition of iRobot, with some warning that it would have only enriched Bezos further, while others see it as a potential bailout. Amidst the debate, a consensus emerges that iRobot's own strategic missteps, such as being "distracted and stubbornly out of tune with what consumers wanted," were a major contributor to its decline.
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As for the rest of the article, it’s not Wall Street’s fault the government doesn’t pay iRobot enough for research (nor should it).
https://www.youtube.com/watch?v=44XYQepBF7g
The patent expiry sealed the deal.
- tbh, I think the Amazon deal doesn't matter much in the long run. The damage had been done earlier.
- why give Bezos any more free money? He's already rich enough.
The existing Roomba revenue stream probably doesn't matter. The expertise or maybe the brand (not a great brand imho) aligns with some company priority.
I now realized that I recently saw some old tweets from this guy where he first opposed this merger and then celebrated the cancellation of a deal as a win for the FTC. So it seems he's just grasping at straws to look less like an idiot.
Renegotiate the deal by threatening to walk away - or actually walking away[1] and buying the pieces from the bankruptcy sale.
1. Which Musk tried and failed to do when Twitter sued for specific performance. I suspect a company that's going out of business is far less fiesty.
The buyer and purchaser have to agree on which of the 2 options they publicly present to their shareholders and regulators - Amazon wouldn't be fooled because they had access to the financials and had its own judgement on viability (which may not be material Amazon's plans). However, the approach would decide the corresponding offer, and typically wouldn't be a retrospective decision, but would lock-in the higher or lower from the start.
The point the article is making is that iRobot's bad decisions are the reason the company was failing. Blaming regulators for a poor acquisition outcome may be fair, but they were a very minor part of the outcome.
I bought a top of the line expensive Roomba years ago and ended up switching to neato a year later, because I would just come home and it would be stuck on something.
In the 2000s, no one was doing what they were doing.
Well, sucking is the primary function of a Roomba. :-)
I’m sure they could have built more advanced robots, etc. If they had focused on research, but when virtually every competitor is cheaper and offers better technology. It seems like their competitors just applied something off the shelf and not some grand big brain advancement.
iRobot was far more than vacuums until they weren't.
Read the article. The author spells it out.
I lived it. I read about them and bought a Roomba back when they first sold them. They had so much in the pipeline, consumer and otherwise. Hell, they even had a STEM kit programmable Roomba.
History repeats itself because people forget.
They just aren’t consumer centric. The neato was so much better than the Roomba and that was so long ago
Let's run an expierement where we just run exploit forever, let's restrucute the private sector, our countries moral baselines and eventually our executive leadership to be maximally exploitive, lets do that for about 45 years and see where it lands us -Some greed is good guys in the 80s probably.
I now have 2x $150 iLifes and couldn't be happier. They're also imperfect, but they are affordable and simple.
From the article: Under a trade regime overseen by men like Furman, the company offshored production, thus teaching its future rivals in China how to make robot cleaners.
How much did regulation and taxation and red tape play into Roomba's inability to compete?
What sort of VC deals were they shackled by, in order to siphon off the data and abuse it for third party marketing, and other forms of enshittification?
There's a lot that American companies have been held back by. Some of it is actually good, consumer protective and well crafted, but it won't work if you allow other players in the same market to ignore the regulations and restrictions without consequences. Other policy is just stupid and self destructive, and other policies border on malignant, deliberately giving foreign companies significant advantages, directly and indirectly, without any other purpose.
American companies are way too easily forced into a race to the bottom dynamic, resulting in failure and huge wastes of money and effort.
Put enough sticky notes on a Tour De France rider and you'll eventually guarantee their loss. That's the one-sided policy problem with the US, internally. Now if other riders are doping and using secret electric motors, but the stickied up rider can't cheat in the same way, then you just guarantee their loss, even if it's only a little degrading.
We need a better, more accountable, and more transparent international trade framework. Something that shuts out bad faith players that use slave labor, child labor, exploitative wages, things like that, and appropriately scales tariffs and other mechanisms to penalize the violations appropriately.
I'd much rather the playing field be entirely fair and even than do the current US thing of "well, we're going to impose a lot of moralistic and patronizing rules on ourselves, but allow anyone anywhere else to ignore those rules, because it makes for good political theater back home, and it makes shareholders happy."
Being surprised now that profits became technology transfer and China is now a real competitor is useless. They knew it, just didn’t think the Chinese could be real players in tech, or didn’t care because short-term profit was more attractive.
So it was profits then, and if you’re asking “what sort of VC deals were they shackled by”, it’s profits now. So the point of the article still stands, Wall Street screwed them over.
They also missed out on AI getting good - by the time transformers came around and people realized they'd be really useful for stuff like Roombas, it was too late, and with shareholders just looking to cash out and minimize their losses toward the end, there's not a lot that could have been done to save it. Even if they'd gone to Amazon, there wasn't a lot left that had value beyond the branding, imo.
I think American companies would be more successful and higher quality if the regulation and IP policy we embraced were reciprocal. As it stands, unless you're Apple or Samsung or a giant, you have to win the CCP PR lottery for any sort of accountability with Chinese companies. Most of the time they're going to ignore you, because there's no downside. It's only in those cases where there are political ramifications, individuals being embarassed, or they feel a need to trot out a "look how conscientious and good faith we are in the international markets!" piece useful for other wheeling and dealing.
The problem is that US patent law stopped technological advancement. Why innovate if you can buy some patents, hire talented lawyers, and have them do their magic? It's strange that Chinese products changed from "cheap knock-offs" to "global leadership in innovation" and nobody stopped and asked themselves what exactly made US companies just give up on innovation.
"Forced" is a strong word here, but company's do need to compete or die. If your competitors are manufacturing in China and selling widgets at a price less than what an American factory can produce them for, what choices do they realistically have?
To expect merchants to get together and act according to some greater good is a pipe dream. Government should have stepped in and prevented the offshoring of American industry through policy
But this could have been managed. FDR managed it, other governments somewhat managed it with policy in times of war, like WW2.
The US had the technology edge for DECADES. More industrialization would lead to more inovation and more jobs. They could invest in factories and the like, and even marketing, since “american made” has always been a fine talking point for companies. But it was cheaper in the short term to ship it to China and just not care about the future.
The governments didn’t care, the companies (owners, shareholders) certainly didn’t care, and as a result, decades later, they’re stuck with fascism. Which I don’t think they care about either.
I have an old Roomba (980 perhaps) and I laud it as one of my best appliances. It’s a work horse!
We’re had it for five-six years and it still works great. Nowadays it sometimes needs to charge twice to finish, but I only notice if I’m home - and I could just replace the battery. Parts are so easy to replace, that my wife has replaced most, and she isn’t a tinkerer.
Maybe I just don’t know what I’m missing, but I love my Roomba.
Felt bad they went under as I would likely have purchased more of them forever. But maybe that's why they died? Kinda like appliances that last forever the company doesn't have financial incentives to make them last longer or are outcompeted by less reliable ones selling more often.
Gets stuck on cords and in corners. So does the one I bought in September 2025.
iRobot was remarkably innovative until they were enshittified decades before the term was coined.
I've read it's way worse nowadays, but if they stayed at their quality from back then, I'd have probably paid more for an offline workable repairable vacuum.
> The FTC didn’t bring a challenge, but nevertheless, in 2024, Amazon and iRobot called off the deal.
The smart thing to do in that environment isn't to push the issue so that years later someone can't write that there wasn't an official challenge. It's to read the room and abandon the deal.
"We were prevented from building a proper Windows phone because we already had such large market share on desktop, and already had an anti-trust against us so our hands were tied"
It's just an argument that creates a Kafka trap
Socialism is when the government owns businesses or entire industries.
Regulation is when the government has rules that companies have to play by.
The FTC is involved in regulation, not socialism.
Not all anti-capitalist actions are socialism. Not all socialism is anticapitalist.
You can disagree with a lot of things that the US government did under Biden. None of them were socialism. The closest recent example we have of socialism is the US government taking a 10% ownership stake in Intel. Which happened under Trump.
The previous best examples were all during the fall-out of the great financial crisis as part of TARP.
In retrospect, I think TARP was ultimately a pretty capitalist-friendly form of socialism. I am less sure about the Intel stake.
The FTC properly weighted known bads more highly than potential bads.
On the other hand, competition is good for consumers and letting Microsoft and Amazon use unfair tactics to crush the competition or their large revenues to just buy up all competition isn't good either. That is part of the problem today in that practically every industry is a monopoly or near total monopoly (maybe there are 2-3 firms colluding). There are no incentives to innovate or keep prices competitive in such a gilded-age system. There was a reason we broke up all the robber barons. There is also the hazard when you have businesses that are so large that they effectively control everything and the government can no longer regulate them. High inflation is at least partly coming from this lack of competition. There is also the issue of the money supply where we degrade our currency to make it easier to service the debt. That is also a really big component here.
How did they shut it down?
https://www.cnn.com/2022/09/20/tech/roomba-amazon-ftc-invest...
https://ec.europa.eu/commission/presscorner/detail/en/ip_23_...
So personally I think that finance guys should move their head from their asses and allow for inquiries, because their lies and deceit are damaging the society they live in. Maybe we should hold board members and C-suite all responsible when books are cooked, and maybe, when they're proven trustworthy, the red tape might decrease.
> Amazon's proposed acquisition of iRobot has no path to regulatory approval in the European Union ...
Just like you. When it happens to a person we call it "cancer".
I bought a top-of-line Dreame, Roborock, and Eufy recently for our place - we have lots of pets.
The Dreame is easily 10,000x better than Roomba ever was. It never makes mistakes. I'd advocate for Dreame for anyone in the market for a robot vacuum. The app is annoying, but everything else about it is sublime.
Eufy would be better if they'd fix their roller brush design and didn't lean so heavily into making you buy their replacement components. It's designed around buying Eufy refills. The Anker team nails user friendliness and design, though.
With the Eufy I had the brush needed to be cleared of hair fairly often, and that clearing took a bit of work. Often I had to use a utility knife to cut the hair out.
My Roomba, on the other hand, almost never gets hair caught in the brushes, and if it does it easily pulls right off by hand.
If I had a robot vacuum that could climb stairs, it would be a whole different ballgame, but no one has cracked that code so far to my knowledge.
0: The best effort I could make would be to edit "He is a founder and former Chief Technical Officer of iRobot" to say "He is a founder and former Chief Technical Officer of iRobot (manufacturer of the Roomba)"
I find this article a pretty compelling critique of the extractive incentives of Wall Street and a good argument for government stepping in from time to time to adjust those incentives. Where is the societal good in the engine of capitalism prioritizing short-term extraction over long-term value creation?
(I'm also not sure if putting a significant % of the population out of work will create long term value to society.)
Clearly not. The stock market has a correction at least every few years. So Wall Street only believes they can sell the stock for higher within a few years. Not very long term is it?
Same goes for if you can predict the price of a stock... but analysts do it anyway and set targets for stocks.
> The fact that corrections sometimes happen does not negate the existence of market-wide expectations for any given stock.
The crash or not is part of the expectation. Regardless of what you read on articles, those fund managers often sit out situations they don't deem worthy of investing.
Or they think the returns from holding the stock will be higher.
We're certainly seeing short term value at companies who grew profits by replacing workers with cheap AI tools. But the true cost of those AI tools is still being paid by investors, not customers. (Not to mention the indirect costs being paid by society, from the rising cost of RAM & electricity to global warming.)
In the long term these AI companies will need to raise their prices substantially if they're to break even. Will the value still be there for their customers when its no longer cheap?
And if AI puts enough people permanently out of work, the GDP will drop, leading to demand for any product made with AI dropping too. It is an industry that could eventually eat itself.
Short term extraction.
The long term value is in AI research not scaling LLMs.
Or... wait for it... Gamestop. Not just what happened in 2021. What happened in 2024. What's happening now. (Compare its market cap to its cash, and then how it compares to competitors, and then price-to-earnings, and then again to competitors).
Look at the market as-a-whole. Falling earnings, stock prices going up.
I wouldn't be surprised to find that iRobot was simply just marked for death. Any company not named Apple that is manufacturing in China, Wall Street has decided that they're going to face headwinds from IP theft and competitors backed by the full faith and force of the Chinese Communist Party, and they get busy squeezing every ounce of value out, potential be damned (because, as far as traders and shareholders are concerned, the company already is).
> In the mid-2010s, during Furman’s tenure running economic policy under Obama, the company sold its defense business, offshored production, and slashed research, a result of pressure from financiers on Wall Street.
> Mesdag engaged in a proxy fight to wrest control of the company from its engineering founders, accusing one of its founders and iRobot Chairman Colin Angle of engaging in “egregious and abusive use of shareholder capital” for investing in research.
Yes Roomba sucks at this point. We get it. Thing is, if you slash research... that's what eventually becomes of your product.
And if you dump your defence contracts you may have trouble paying for research.
We'd have almost nothing if it weren't for university partnerships and corporate R&D way back when. There's no way to accomplish this now except to stay private.
cue all the lamentations about how evil private equity is.
Interestingly enough the R&D portion that was sold off, became Endeavor Robotics which was sold to Teledune FLIR Systems and seems to be doing fine.
https://media.irobot.com/2016-02-04-iRobot-Announces-Sale-of...
As you know, Khan’s FTC worried it wouldn’t be able to prevent Amazon’s acquisition of iRobot in court, so instead it dragged out approval, which it never granted, while continuously threatening to block.
Simultaneously, her FTC openly worked with the EU to convince the EU to use its more expansive antitrust regime to get the EU to block the deal. That dragged the shot clock for the deal lower and lower (deals have backend dates contractually agreed to, after which the parties no longer are committed to work towards closing the deal and can walk).
Even as the EU was challenging the deal and the shot clock was approaching zero, her FTC was STILL not granting approval and threatened to block and drag it out another year in U.S. courts, all the way until Amazon threw in the towel.
After the deal collapsed, the FTC celebrated and took credit.
The fact iRobot later failed and was sold to Chinese competitors is directly attributable to that block, as it would otherwise be owned and supported by Amazon right now.
iRobot was mismanaged but if it weren't them it'd be someone else, e.g. Spirit Airlines or Warner Bros. I'd appreciate if the FTC didn't make the matter worse.
This is Matt Stoller throwing a bunch of dust in the air because he wants to have been right when he was glad Khan shut down the merger, and then right again when the husk of iRobot sold out to the Chinese.
...or "owned and neglected by Amazon right now". I'm not confident Amazon can maintain their IoT stuff adequately. Take their Alexa stuff. They have been having large problems with the Alexa mobile apps for months now.
For example the device list often shows up as either empty or the devices say an error occurred if you try to use them. Sometimes repeatedly trying will finally succeed and then they all work at least until next time you use the app.
The back end knows about the devices, and you can operate them all by voice just fine, through the app or an Echo device, so it looks like they just screwed up something in the app.
When I first hit this it wasn't working for so long that I assumed it must be a problem just affecting me because if it was widespread surely they would have fixed it. Eventually I described it to an LLM and it gave me links to a whole bunch of discussion on Reddit and other forums of people having the same problem, spanning something like the last year.
The Chinese company buying them is a robot vacuum company, and was already a manufacturer and supplier for iRobot. As it currently stands I'm more confident that they can keep my Roomba working than Amazon can.
Here's the thing: not every company needs to innovate technologically, and not every company should.
The financiers were almost certainly correct that iRobot would make more money focusing on selling vacuum cleaners, not developing military/space robots. Building fancy military and space robots is fun and cool, but if it's not producing profit or clearly leading to better consumer products that make money, then it's not the right company to be doing it. Plenty of other companies will do it better -- it makes sense to have one set of companies relying on grants and defense contracts that innovate and that aren't taking investor money, and another set of companies that take investor money and focuses on consumer products without expensive R&D. The idea that they have to be the same companies is silly.
https://oversight.house.gov/wp-content/uploads/2024/04/05012...
"We are pleased that Amazon and iRobot have abandoned their proposed transaction... The Commission’s investigation revealed significant concerns about the transaction’s potential competitive effects. The FTC will not hesitate to take action in enforcing the antitrust laws to ensure that competition remains robust."
https://www.ftc.gov/news-events/news/press-releases/2024/01/...
Yet everyone complains how they got slashed by their competition, and that is primarily because they didn’t innovate. Their product wasn’t better.
> It's about whether you think the FTC/Lina Khan was right to oppose Amazon acquiring iRobot, and whether they bear any responsibility for what happened after.
No, you fixate on 1% of the iRobot story. The real issue is that this wall-street mindset made the company a complete sell out, they squeezed every penny, stopped innovating, offshored manufacturing to China, and now they reaped the harvest of what they sowed.
Point a finger to Lina Khan and four of them point back. It’s the unsustainable economic games of the 1% that killed this company, just like many others.
In many cases (I suspect this is one of them) there is room for multiple bad guys. Why couldn't the FTC, Roomba Management, Wall Street, China, etc. all be at fault? Seems like it fits the evidence nicely.
Roomba maker goes bankrupt, Chinese owner emerges
https://news.ycombinator.com/item?id=46268854
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