True VC stories here!!! 💆🏾♂️🍵💰This is one of the biggest bullets I dodged as an investor thanks to 1) Beats by Dre 2) intuition.
Jawbone was highly touted by Andreessen Horowitz and I was literally minutes from wiring them money in 2014 (see pic 3 of the list of companies I was investing in and how much that month) when I was running my fund, but the Beats By Dre sell to Apple changed my mind! Both were valued around the same but Beats had more revenue, was going to be in all Apple stores (in place of Jawbone) and the metrics didn’t work! So we passed. Fast forward 3 years I’m visiting tech companies with NBA players (see pic 2) and we visit Jawbone. I told a few players like @stafshakur and @rasualbutler8 exactly why I passed and what to look out for when the CEO presented to us. I said their pivot to health-tracking was killing them. Now, it’s the second largest unicorn collapse.
Let’s take a deeper dive. Why do you think they failed? What lesson did we learn? – 18 years of existence, raising hundreds of millions from Silicon Valley’s biggest firms, including Andreessen Horowitz, BlackRock, Khosla Ventures, Sequoia Capital, Kleiner Perkins, and Silver Lake Waterman. The company, which had amassed 450 employees and a valuation of $3 billion by early 2015, struggled to ship products on time and was outmaneuvered by rivals like Fitbit. Its failure stemmed from the company’s pivot to health and fitness-tracking devices in 2011. That began a plague of product failures and financial struggles, and then, in February 2017, Jawbone filed a lawsuit against its rival Fitbit. Jawbone sued Fitbit and five former employees in California state court over the alleged theft of trade secrets. Some of the legal proceedings are ongoing.