I looked at the rise and fall of Roomba not long ago.
Long story short, a bunch of MIT roboticists started it on personal credit cards and government contracts, and eventually launched the Roomba. It was a huge hit.
By the 2010s, the company was getting big, but their business was being commoditized by Chinese suppliers — including the company that actually made the Roomba for them.
By the 2020s, market share was collapsing. Then a savior stepped in: Amazon.
Amazon wanted to build the Roomba into its connected home strategy and offered $1.7 billion for the company. The Roomba CEO said it was the first time he felt someone had really understood the dream.
But governments didn't want Amazon owning these devices. The EU called it anti-competitive and blocked the deal.
Roomba, the American brand, ended up filing bankruptcy. Today the market's been taken over by Chinese suppliers selling directly into the U.S. — and Roomba itself got bought by its former Chinese manufacturer.
To me, this story shows something business owners have to understand:
Your business operates at the government's pleasure, not the other way around.
In a perfect world, government would exist to help our businesses get stronger. But the reality is, we're a source of tax dollars. The bureaucrats and politicians write the rules — that's how the game gets played.
So as you're planning for the coming years, don't just factor in markets, customers, and competition — also factor in how the legal landscape might shape your profitability.
That's my two cents. Good luck out there.
SPONSORED BY SHOPIFY
Boring advice that works: own your sales channel.
If you're building something, you want customers coming to you, not some middleman who can change the rules tomorrow.
That’s all for today. I’m trying some different formats for the newsletter. I’d love to hear from you.
How did you like today's newsletter?
Thanks for reading.
Michael
P.S. My book recommendation on today’s topic: The Founder's Dilemmas. It pays to know why founders lose control.