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NYT
SAN FRANCISCO
Pearl Automation, a Silicon Valley startup founded by former Apple employees who tried to combine Apple's dedication to quality with a more open corporate culture, has gone out of business. The 3-year-old company, which closed its doors last week, made $500 automotive backup cameras that transmitted data wirelessly to the driver's smartphone.
The devices were simple to install and were aimed at the tens of millions of older vehicles without preinstalled backup cameras. But the devices proved too expensive in a market with less elegant but cheaper alternatives."We ran out of money," said Bryson Gardner, Pearl's chief executive.
"We were probably two years ahead of our time." Gardner and his colleagues had hoped to build a company that adopted Apple's keen passion for design without its secrecy and top-down management style.
Pearl's failure shows that a positive corporate culture is not enough to escape the laws of economics.
The company had raised about $50 million from investors, including Venrock, Accel and Shasta Ventures, but it needed several hundred million dollars more to develop the market for its rear-facing camera, as well as a forward-facing camera that was in development.
With about 75 employees, about 50 of whom had worked at Apple, the company was burning through cash at a rate that venture investors were unwilling to continue funding without a clear path to a hit product.
"It was an ambitious and risky proposition from the beginning, with some great vision to try to revolutionize the automotive aftermarket," said David Pakman, a partner at Venrock who oversaw the Pearl investment.
"They are extraordinary product people, but none of us understood the market correctly."
Pearl's failure was first reported by Axios. Gardner said Pearl held talks with several potential acquirers in the automotive industry but could not reach an agreement.
It did find a company, American Road Products, to take over its RearVision backup camera so current customers will not be left in the lurch. While the company has failed, its employees are already fielding job offers.
