Acquired - Android

0:00We should like a fighter jet fly by if you guys heard that at all. The Seahawks game starting. Oh nice. That is a cool plane. Not a concord though. No. Welcome back to episode 20 of Acquired, the podcast about technology acquisitions. I'm Ben Gilbert. David Rosenthal.

0:35and we are your hosts. Today's episode is one that's been coming for a long, long time. It's a cornerstone of all of computing today. Google's 2005 acquisition of Android. I'm speechless. Yeah, it's interesting. I mean, 2005, when you think about the numbers doesn't feel that long ago, but when you think about the first time you saw an Android phone and heard about Google is working on it, it seems like the iPhone hadn't come out yet.

1:04Right? Yeah. This was pre- before iPhone was just a glimmer in Steve Jobs Eye. Yeah. All right listeners. Now is a great time to talk about a new partner of ours here on Acquired. LaGora, the agentic operating system that is redefining how the world's best legal teams work.

1:24Yup, it's sort of obvious that AI is going to completely change the legal industry. I bet most of you listening have dropped a contract into some sort of AI chatbot out there. LaGora took that insight and asked the question, what if you really built something with that power from the ground up for the legal industry? So the founders did exactly what great founders do, operate with obsessive customer focus.

1:47They embedded inside a massive law firm for months. They sat with the lawyers just watching how the work really gets done. And that's how you get features that customers love, like tabular review, where you...

2:00drop in a folder of hundreds of contracts and it pulls every key term into a grid a lawyer can actually work with. Lugora's bed here is interesting. Since it lets each lawyer handle more complexity, any given person can increase the quality of their work and do higher value work, and this means that the pie can grow even as each individual task takes less time.

2:20And they recently launched LaGora agent offering greater intelligence and performance. The agent lets lawyers set an objective. Then it can handle the planning and the execution and delivery of the final product. Legal teams get to maintain full control and transparency since they're still involved where judgment is required. And LaGora works where you already work. You can use it within Microsoft Word while redlining or drafting. The early LaGora numbers essentially speak for themselves when they have a head-to-head pilot with their top competitor, they win 70% of the time. Legora now has over a hundred thousand lawyers on the platform from 1200 legal teams in 50 countries. And crazily, they went from one million to a hundred million in ARR in about 18 months. Truly insane numbers. And that is the real test.

3:12Plenty of things demo well, but the question is whether a busy associate actually reaches for it during crunch time or whether a partner trusts it before going into a conversation with a major client. If your legal team wants to check it out, whether you're a law firm or you're in house at a company, you can learn more at logora.com slash acquired and just tell them that Ben and David sent you. So to all of our new listeners, welcome. We were featured on new and noteworthy and iTunes.

3:41over the past looks like week or two and about doubled our subscriber base. So thanks so much for everyone trying us out and giving us a shot. I think what I want to do is go over the format of the show since a lot of you are new and talk about what we'll cover today in reviewing and grading Google's Android acquisition. So the first thing is something sort of a new wish that we're trying called community showcase. And we felt it was important since we have so many listeners who are working on projects and building things a lot of entrepreneurs and We like to on each episode talk about something that one of those people is working on so that we'll do our our community showcase then we go into acquisition history and facts where David takes us through what actually happened. Yeah, yeah, what happened in wind yeah

4:30And then we get into the acquisition category where we decide if it's a people acquisition technology product business line. We recently added asset to our categories or the ever existing other. Yes. Then we talk about what would have happened otherwise. What tech themes this illustrates for us. We then formally give the grade of our acquisition from the episode.

4:53Then we have some follow ups and a section called the Carvout. This is where David and I grab something from our lives that we've seen with a book or a piece of software or anything in the media that we think is either related or completely unrelated to the topic at hand. So something fun that strikes our fancy. The other thing that we sometimes do now is hot takes. Hot takes. If something big in the M&A world or otherwise happened in the past week or two, we'll do a quick discussion. We will.

5:23So that's the show. Indeed. All right, so our community showcase this week. Listener Matt, I might butcher this morgante, released a book called Patagonia on a Budget. It's on Product Hunt right now. If you search on Amazon for Patagonia on a Budget, you can find it. And it's how to have your adventure in Patagonia on $30 a day. And there's a ton of cool photographs in there. I should go pick up a copy because it looks super cool. Patagonia is awesome.

5:51That brings us to also for our new listeners our Slack community. So we have a community channel on Slack. And if you'd like to join it, there's lots of great discussion going on there. Just go to our website acquired.fm and there's a sign up form there. And then you can hang out with the community throughout the week. Yeah. And if you want us to show off what you're working on, drop a link in and we'll check it out.

6:18So onto this week's topic, David, you want to hit it with the acquisition history and facts? As always, Ben. So, Android has been mentioned. This one has been a while coming. We've had a lot of requests for this. We've been saving it and we felt was time to finally dive in here. There is so much done back here, so we'll get into it. October 2003, Android is a startup company just founded in Palo Alto by Andy Rubin.

6:47Rich Miner, Nick Sears, and Chris White. And Andy Rubin, the CEO, was basically born to start this company. So Andy's career started at Carl Zeiss, the camera lens, camera technology and camera lens manufacturing company. Then he moved to Apple.

7:08At Apple, he met a bunch of folks. This was during the John Scully era. Wow, I did not know he was at Apple. He was at Apple, yep, there for a couple years. And he and a bunch of other people spun off from Apple and started a company called General Magic, which not a lot of people remember, but this was a spin-off from Apple actually went public itself. And the whole, they never launched a product. But what they were doing was they were building essentially a tablet.

7:37Like a personal communicator, you know, sort of a palm competitor, and a lot of that tech I believe ended up in the Newton. They went public. It was a public company. Yep. Then it ended up going bankrupt. Wow. It was super ambitious at the time. I believe also some of the technology that they developed there became the standard for USB. Huh, a lot of really cool stuff happened there. So he went from Apple to general magic and then a bunch of general magic alums went and started a company called web tv which probably do remember and web tv was part of this was in the kind of mid to late nineties vision that a lot of people in technology had at the time that the internet was not going to happen on computers

8:27in a big way, it was gonna happen on your TV. That's right. So this was a set top box, like your cable box. This is in the era that Microsoft's making the bet that they should do MSNBC, like a technology-enabled television channel joint venture. Yeah. This is the AOL time Warner days. It's like, it's all new media, old media, eyeballs, it's the eyeball economy. So web TV ends up getting acquired by Microsoft. And Andy and the team, go up to Seattle, work at Microsoft. I don't know if they actually ever came up to Seattle, but they build Microsoft TV, which, as we know now, was an object failure. But shortly thereafter, Andy leaves and he starts a new company called Danger. So Danger was founded in the late 90s, I believe, after Andy left Microsoft and they made a little device called the Sidekick. And this was sort of

9:24Rim already existed, so there were blackberries out there, but this was the first consumer-focused smartphone, really. Yeah, and it had like celebrities where it had a cool factor because they would show their danger in, you know, photo shoots, and like this was a thing. You wanted to have one of these. I remember the first time that I started hearing about the Sidekick in Danger was watching Entourage. Oh, man. And it was like, everybody on Entourage had a Sidekick. I think there's actually a...

9:54episode where this is a plot point, the turtle gets a sidekick and it's super cool. It's so recognizable too, the way that it spun out. The industrial design was crazy unique and super cool. There was very little on the market. Like I said, there were smartphones, they existed, but this was the Windows Mobile Days, there was Blackberry. It was for business people.

10:22And then the sidekick comes out and it's the first time like, oh, we can bring this technology to consumers as well. So Andy was the CEO of Danger and then he ends up leaving relatively early on in the life of the company. Oh, by the way, supposedly Larry Page and Sergey Bryn were huge sidekick users as well.

10:48And so he ends up leaving and starting a new company that he calls Android. And the vision for Android is- This is post acquisition. No, no, this is pre acquisition of Danger. Danger doesn't end up getting acquired by Microsoft until 2008. Oh, wow. Much later.

11:04But in 2003, Andy leaves and starts the Android. And whereas Danger was a full stack company, they were making the hardware, they were making the software that went on the sidekicks. They were dealing with carriers, everything. Android is an operating system company. And they want to take Linux and essentially make it into an operating system.

11:32capable of running on mobile devices. And the first sort of, we now know Android runs on so many devices today. The first target market that they're going to go after is digital cameras. That's right. That's right. I remember reading that. And I think what they assessed that it's not a big enough market. Yeah. Which is interesting because like it was a huge market at the time. I mean, this was 2003. Everybody had the point shoots. And it would be interesting to know like what the process they went through and deciding that that wasn't big enough, but fortunately, they made the right call and quickly pivot into focusing the device on mobile phones. Yeah, I wonder, it didn't, you know, the hindsight's 2020, but I don't think it was apparent in 2003 that point in shoots would go away and become part of phones. Like, could you, is there a world where you see that maybe the other way around that you're like, well, we should build a really great camera because at some point,

12:28cellular technology will become lightweight enough that we can put it into the camera. Yeah. It would certainly been hard to imagine cameras on phones, to the extent they even existed then, getting good enough that you could actually take real pictures on it. Yeah, I don't think I had a camera phone until 2005 or six. Yeah. Later than this time here. They were just horrendous. Oh, they were awful.

12:56awful I mean even the first iPhone in 2007 like the camera was part of it But it wasn't like that was a big selling point and contrast that now with I literally huge the camera is on the iPhone I literally just pre-ordered a form factor that I don't want because the camera is better like I the plus is too big for me and I just I You know I had this weird realization that while I use this thing more as a camera than a phone Maybe Andy and team were like more right than they thought at the time Anyway, getting back on track. So as far as we know, they never raised any venture capital that Android.

13:32but Steve Pearlman, who had been the CEO of WebTV and who had been a general magic with Andy, and Andy had worked for him at both places. At one point, there's in the lore of pre-Google Android. Apparently Andy was running low on cash, and Steve shows up at the office at Android with an envelope with $10,000 in cash in it, and he just gives it to Andy. And he refuses to take a share in the company.

14:01Andy tries to give him shares for it and he says no, no, this is just for you. He's just given him the cash. What a good friend. I know. That's awesome. I know. Steve, will you be our friend? So, um, so that happens. They're working away on this operating system. And as we mentioned a minute ago, Larry and Sergei had been big sidekick fans. They had actually met Andy back in back in the day when he was working on danger.

14:30And July 2005 comes along and Google ends up just acquiring Android before they've shipped anything their long way away from shipping anything Deal terms not announced this was a small team hadn't raised any venture in Palo Alto rumored to be about $50 million and what's interesting is that many years later David Lowey who was at one point head of Google's corporate development in 2010, he's being interviewed and he calls this, Google's quote, best deal ever. So they've acquired this company. It's Andy and team. They're working on this operating system. Immediately, you know, Google had just gone public a year before.

15:11Lots of rumors start circling about what Google is up to here. You know, are they working on the G phone? You know, this is kind of like the G drive that we talked about with Google Docs, the rightly acquisition. For years, people are speculating what is going on here, what is going on here, and there's no G phone, Andy and Tim are working away for years. And so pretty much nothing happens until 2007.

15:39In January 2007, the world changes. Steve Jobs announces the iPhone. The breakthrough internet communications device where nobody really understands what he's talking about. It's a phone. It's an iPod. It's a breakthrough internet communications device. One of the best product launches and speeches and presentations of all time.

16:06So that happens in January 2007. Meanwhile, Andy and team within Google had been working on the operating system, and they'd been working with hardware partners about what the phones that they would ultimately bring to market would look like, and they were working with HTC. And they had a prototype, and it looked a lot like the Palm Trio. If you remember that, it was not a touch screen, and it had blackberry like keys on it. Not sure if it had a stylus.

16:36And so then they watch the iPhone announcement which you know at the time it was it was amazing like I I lined up for the first iPhone like I couldn't wait to get it but like I lined up for the first iPhone and didn't buy one I was I was young and did not have any money and it was like I couldn't pay for the data plan but I wanted to be part of it That's amazing. So I was lucky. I had just graduated from college when it all when it came out that summer literally and this was the first cell phone I bought like I went off my parents plan Got my own plan just so I could get an iPhone. That's right cuz I launched special iPhone plans that didn't include family plans because it was will get back to this was an exclusive with AT&T and Which becomes quite important later so so this happened and

17:22You know, consumers were dying to get this thing. I think people were calling it the god phone, but this is also the time Steve Bommer is saying like, you know, literally laughing about it. Like a lot of corporate tech and big companies, you know, are really discounting the transformative power that the iPhone's about to have here. And meanwhile, the, there's a great story about a bunch of, uh, um, rim employees that were sitting around that watched the keynote and said it was fake.

17:50they were like, there is literally no way to do this that we've tried. You know, this is not, you can't get scroll performance like that. You can't make it, you can't make a screen like that. And it's amazing how, you know, you can get Steve Balmer dismissing it while simultaneously the blackberry guys don't even believe it's possible to do that stuff. It's interesting to look at the spectrum of reactions here. You've got Steve Balmer who just dismisses it. The blackberry guys are in denial. And the Google reaction says, an engineer later, an interview later with Google engineer, Chris to Salvo, who was working on Android at the time. And he said, he says, quote, what we had suddenly looked just so 90s. It's one of those things that are, it's one of those things that is so obvious when you see it. And they realized that they had to go back to the drawing board immediately. That this was game changing. Wow.

18:44So this was January 2007, and they had these prototypes that were pretty far along with HTC. And had they started the open handset alliance? That comes in a minute. But they scrap everything they realize, hey, the world has changed, we now need to compete with the iPhone. So later that year in November, Google, and it's interesting the timing here, we don't know when they were originally planning to do this, but they ended up doing it in November.

19:10after the iPhone had launched, they have a big event, and they announce the Android operating system, and they also announce equally importantly the Open Handset Alliance. And so the Open Handset Alliance, they have HTC, Sony, Samsung, Sprint, T-Mobile, and Qualcomm, so like the whole phone ecosystem, the whole stack. Manufacturer, they're the operating system, they have the carriers.

19:35Yep, and this is for all of these players in the ecosystem. If they don't realize already, this is the only way they're going to stand up to Apple, is they all need to work together, and there needs to be this open operating system tying it all together, which becomes Android. So they announce both at the same time, and what's...

19:53Super interesting is as part of the announcement they also have the $10 million Android challenge so they make it super clear Google does that Android is an open operating system and that means two things one it's open source So anybody can use it and later on this leads to forks of Android likes a hand a gin like the Kindle fire Xiaomi has become super important later But that's it's completely free anybody can take the Android software and do whatever they want with it The other part of Open that Google really focuses on is developers can develop for the platform. So this was before the iPhone, iOS was not yet open to developers. That's right. W-W-D-C in July or in June of 2008 is when Apple going to walk back there, you can make web apps and announce the app store. And Steve Jobs initially was, his posturing was, we don't want developers. We want to control everything in the software stack.

20:50Hard to imagine what the iPhone would be like today if there were not third-party developers not successful Well, it's interesting. I mean Google kind of pushes them towards this with when they make Android open right and developers start to realize the massive reach with you know, there are however many computers there are PCs there are in the world of web browsers But there's a lot more phones. Yeah, and they can reach this huge consumer base So this really is sort of like Google's kind of putting a flag in the ground and saying, hey, we're open. That means two things. We're open to the entire hardware and supply chain ecosystem, but much more importantly in the long term, we're open to developers. So that was November 2007. But remember, they realized they couldn't compete with the iPhone. So they end up not shipping the first Android phone until almost a year later in October 2008. And that's when the

21:47the HTC Dream slash in the US, the T-Mobile G1 is the first Android phone, the much-vonted anticipated Google phone. And that's still it comes out. That's still at a keyboard, right?

22:02Still a keyboard, so it was a touchscreen. And it had a scroll wheel on it. That's right. And physical hardware buttons, which were part of Android for a long time. And then it had a slide out full-cordy keyboard, much like the sidekick that slid out horizontally from the device. Super interesting. So it doesn't really look anything like the iPhone. It's kind of its own thing.

22:29But this is the first Android phone that finally comes to market, with T-Mobile made by HTC. And it comes out just in time for the holidays of 2008. It doesn't really make much of a splash. At this point, the iPhone, the growth in iPhone shipments by today's standards were slow, but at the time, it was like...

22:53Completely taking off clear that this was a hit and I remember Steve Jobs on stage saying that their goal for the I think was their goal for the first year of the iPhone was to capture 1% of phones I don't think he said smartphones. He intentionally I think he and I believe it was intentionally because they didn't want to acknowledge that smartphones were a category much like they never acknowledge netbooks or I think It's amazing looking back. Their hope was to get 1%. I think that's what they tracked that first year, but then the explosion after that never could have predicted. And then the market just completely exploded. So it wasn't actually then until around the holiday season of 2009 that Google, who knows how much Google drove this, but essentially the rest of the wireless phone industry ecosystem, except for Apple, realized they have a

23:48big problem. A big big problem because the iPhone is on its way, you know, at this point, 3G has been launched. So that was one of the big things with the original iPhone. Oh, like it's great, but like it's slow. And 3G was out, but Apple, it was one of those things where Apple had been working on the iPhone for so long that the only thing they could get to market by July of 2007 was an edge. Yeah. And then what, oh, wait, it was 3G. 2.5G. That's right. You remember Ben. That's right.

24:17and by 2009 Apple then opened up iOS to developers so that wasn't even an advantage anymore and the amount of, so remember iPhone was still exclusive to AT&T at this point in the US and AT&T is just raking in subscribers at this point. It was already, I believe it was already the largest phone network before the iPhone and at this point Verizon, Sprint, T-Mobile have huge issues. That's got to be one of the best partnership or exclusivity agreements in the history of the American corporation is AT&T strapping itself to the iPhone as a rocket. The thing that paint said in my mind for how...

25:05How big a deal that was is how big a deal the opposite was. Like how widely anticipated the Verizon iPhone was. And when the Verizon iPhone came out how crazy all my friends went that were non-AT&T with all this incredible pent up demand for it. Which is interesting that by holiday 2009, there's finally been enough time in the product cycle that Verizon, Google, everybody else, all the hands-up makers realized they got to do something.

25:31Verizon launches the droid in 2009. And they paid Lucasfilm every single time that were droid was mentioned. Isn't that amazing? It's at the bottom of every magazine ad. It's so awesome that they were like...

25:44Yeah, screw it. It's worth it. It's totally worth it. And I mean, this was, in a lot of ways, this was a phone ahead of its time. Yeah. But the whole positioning was against the iPhone here. It was, the campaign was called droid does. And this was like the old Mac and PC campaigns been in reverse. It was like, well, your iPhone doesn't do X, but droid does. That's right. And this is like the full swing of the smartphone wars heating up where now we sort of settled into this place where You know, Android's got about 80% of the people, iPhones got about 20% of the people, but iPhone people pay, you know, for apps, and much more so than Android people. And it's interesting how it's reached this almost like, like, not a piece treaty, but like, it's like...

26:25We thought there was gonna be one winner in this smartphone wars and it was gonna be a crazy five-year thing and one person We thought it was gonna be Microsoft and Apple all over again, right right and it's interesting how we've reached this equilibrium were like the world exists in a multi-platform way kind of sustainably for at least this this set of years this moment in time yep and and then the in that initial droid does thing They they intentionally like it was confusing to people that You could get an Android, but it wasn't from Google and it wasn't called an Android and so I think it was like an intentional move to say you know what We're just gonna like just like lean into that the phones gonna be called a droid. It's the main one We're gonna market. We're not gonna have Android be a consumer brand Yep, and it was amazing how an important remember to who made the the droid it was Motorola

27:17which we'll get to in a second. Oh yeah, yeah. But as I guess my point is like it's amazing how it was in most people's lexicon to ask to even iPhone or a droid. Yeah, it wasn't Android, it was a droid. So yeah, everything you're saying Ben, I mean, this was like, these were the holy wars of mobile that got kicked off with the droid. And so basically from 2010 to kind of 2012-ish, there's just this race where Everybody who's not Apple in the ecosystem is racing to copy Apple and then try and surpass if they can, but even just get to parity. And that's, you know, towards the end of that time, that's when you see Samsung really emerging. I mean, they were the most shameless, just literally ripped wholesale, everything from the iPhone, but it worked. And so fast, like two months after Apple would announce something, like...

28:09Some team at Samsung will get to it work all night and then they'd brush it to market and then they'd announce that it exists and then like, you know, there'd be Maybe you could get them from the supply chain. Maybe you couldn't but like they put a stake in the ground that like yes Samsung has this too And you see it all the way through like touch ID like they had slide the unlock like there was a big fight about that. Yep. Yep And the bitterness involved here, so Steve Jobs is towards the end of his life at this point. And the Walter Isaacson biography that comes out, which is this incredible book, he has this quote in there, he says, I will spend my last dying breath if I need to, and I will spend every penny of Apple's 40 billion in the bank.

28:54Funny that at the time, I've only had 40 billion in the bank. That's cute, right? To write this wrong, I'm going to destroy Android because it's a stolen product. I'm willing to go thermonuclear war on this. This is incredible. But this was the height. And so, that comes out and then, and then, and then, Vick and Guntor. I miss that guy. Incredible.

29:22It's amazing how much the world has changed, though, from his vision when he was alive and how different things are in it. The famous quote that Steve said, if you see a stylist, we blew it. Did you hear the interview with Tim Cook a couple of weeks ago that they asked, I forget who did it, but in Apple's recent little PR rush, they asked Tim Cook about that exact thing and they're trying to push him on the point that are you guys blowing it? And Tim starts with, Well, first of all, it's a pencil, not a stylus. I love Apple marketing. What would Steve have said? But Tim is in Steve, which is the point. And Apple is not. Tim did recently, in the last couple of years, refer to the Android ecosystem as a toxic hell stew. I think he pointed out it was like a quote from a writer that they put up on the stage of Apple. So, you know, Google doesn't just like

30:18Take this lying down, they strike back. And so Vic Gundotra, who was a longtime exec at Google, and I believe founder of or in charge of Google Plus at one point, so that was a low mark on his time there. But at IO, Google's big conference in 2010.

30:39Vicks you know asked about this and Steve's you know quote naples feelings about it and he says if Google did act this is a quote if Google did act we faced a draconian future a future where one man one company one device one carrier would be our only choice that's a future we don't want Yeah, it's a very noble way to approach this business. It's like the famous Apple 1984 commercial. Apple is now the man talking on the screen and Google and Android is throwing the hammer at it. Yeah, if you can find a way to position yourself as an underdog, even if you have a monopoly in search and one of the largest technology companies in the world, by God, you should do it. Absolutely. They're literally out-appling Apple at Apple's own game here.

31:26And so, you know, it was a war and at the time, you know, so many everybody in the press, everybody in the tech world was, you know, is it Android? Is it going to win? Is iOS going to win? What's going to happen? What should I then start up? See, you know, at the time, our portfolio companies and as we were talking to new investments, it's like, well, what are you going to develop for? Like, it was a...

31:46big question, then, because it was really hard to develop for both. Right. I guess it's probably a good time to say for new listeners. David's a VC here at Madrona Venture Group. We're recording out of their offices this weekend. And I'm over at Pioneer Square Labs just down the street and we're a start-up studio, so that's probably helpful to have some context, honey. We are in overdue. And a couple other side notes that one that is more a quirk of history, but is just...

32:14too fun not to talk about here. In August of 2010, HTC acquires a majority stake in beats, beats audio. And as a result of that from kind of, you know, 2011 to 2012, 2013-ish, you can still go buy these things on Amazon, which is amazing. We will link to this in the show notes. There are beats branded Android phones out there on the market, HTC phones. I kind of want to buy one and like, Bring it to my next meeting at Apple like pretending it's like my phone. Yeah, I would be amazing Total like quirk of history. I mean there were HTC was was bundling beats headphones with their Android phones for a while when they were selling them Hard to imagine that in today's world of you know beats being part of Apple. I know

33:05It also makes me realize just how small the technology world is. I feel like we talk about this a lot on the show, but whether it's Mark Laurie had worked at Amazon, and Amazon had acquired his last company, and then he's vowing to destroy them, or all the companies that came out of PayPal, or Photoshop and Pixar that came out of Lucasfilm. It's really a small world in this corner of the economy here. And the other, it's funny, these are not, I guess, their sort of tech themes. The themes of the show It's funny how long things seem in our mind and how short they were in number of years. When Apple launched the iPhone in 2007, Android had not been announced yet, and they were not at war.

33:55Eric Schmidt. Yeah, came on stage and at the launch of the iPhone and talked about how Google was going to be an integral part of the iPhone. And it was. I mean, Google Maps was a huge, like, that was a tent pole feature of not mentioning Google search, which we will get into in a minute. Indeed. But it's incredible how fast these companies became at each other's throats and completely separated. I mean, if you the The way that companies are direct competitors like if you go back 20 years Apple and Microsoft are direct competitors and hate each other and Google's like like this benevolent, you know hands-off we serve all group and in a very short order from 2007 to 2009 it became Apple and Google at each other's throats and fast forward to today where like

34:43Microsoft services are all over all these platforms and like Apple's partnering with Microsoft and a lot of things and another crazy example like Apple launching this big enterprise partnership with IBM like how fast the world changes Yeah, and you were in the middle of this I mean you were one of the original folks on office for iPad was I was yeah, that was a heck of a project So we'll get more into this in a minute, but I think it was I mean, this is a little flash forward detect the games for me, but I think the reason this was happening was like all these big tech companies realized all of a sudden that this was the opening of a new frontier and a new market, the mobile market that was going to be...

35:24literally the biggest market that technology and maybe the world had ever seen. Because Apple becomes the world's most valuable company during this time period. So all these companies are realizing that you're going to have first a couple hundred million people in the United States and then a billion people around the world and then multiple billions of people and ultimately every person in the world. When we get to the end state, still a couple of years hence from now, is going to be coming online.

35:51buying a smartphone having access to technology for the first time and you know as friendly as Apple and Google were before this all of a sudden it's a race to go capture this market but I think the mistake that they made is at least that I don't know there was a mistake but the fight that they were fighting at first wasn't the right fight they were fighting for the like hardware layer right and well was the question is was Google doing that at first why why did Google So this is sort of as we transition from the history and facts into more of our analysis portion. Where we are today, it's very clear that the reason that Android needs to exist is to prevent Apple from being the front door for users to use Google services. Google can't afford to give up that control. Number one, in case people are going to use other services instead of Google services, namely Google search, where all their money comes from, or all their revenue comes from.

36:50Secondarily, there is an agreement that gets signed with people who are sending traffic to Google and Amazon will just come out and start with this number right now. 34% of Google search revenue from their ad sense, right?

37:06What Ben's referring to, for our new listeners, one of the things that we love on this show is lawsuits, not targeted at us, but between the companies that we covered, because all sorts of really interesting things come out in lawsuits. Over the last few years, Oracle has been...

37:27waging a lawsuit against Google for Google's and Android's use of Java in creating and Java's APIs and creating Android. And one of the things that came out in that lawsuit is how much money Google pays Apple for having Google search as the default search on the iPhone and it's pretty incredible. Yeah, the amazing thing is David and I were Like looking pouring over the lawsuit and thinking about this. It's not a flat fee. Like Apple gets 34% of all the search revenue that comes from their platform. So somewhere in the neighborhood of 34%. It wasn't one time around that. It's a lot of this part of the lawsuit. Google freaked out about and had sealed. But for a moment, it was public how this worked.

38:13So in 2015 estimates from Goldman Sachs are that Google did about 15 billion dollars of revenue from their mobile search. And so Apple has about 18% of the global market share. So if you kind of figure out what that comes to, it's about 918 million by that calculation or as released in these documents about a billion dollars that Google paid to Apple for Apple to be using or directing people to Google search. So then you start thinking about okay, the strategy for Android as it is today is very clearly to basically get free customers. Basically, people that are already Google's customers to directly interface with Google and search and that way Google doesn't have to pay that revenue split to anybody else for access to those. This is something I didn't really realize until we started doing the research for this episode but is

39:09Kind of mind-blowing if you think about it. A, Apple is getting a percentage of Google AdWords revenue that happens on the iPhone. That's crazy. One, but two, it all makes sense for Google now. To the extent that people use Android phones or use the Chrome browser on the iPhone instead of Safari. Or any one of a number of ways that people are searching on platforms that are owned by Google versus or at least controlled by Google versus other platforms where they have to pay out, you know, revenue shares like it's just a, it's a no brainer. Yeah, the case for.

39:52Like basically Google is a company that makes money when people search and then click on ads like that is that is they do all these other things on properties that are not Google even indirectly like they're searching on Google but they're doing it in the Safari browser. Yeah Google has to pay attacks every time that happens Yeah, and so they're Google basically is is the entire reason that Android exists is so that Google doesn't need to pay for access to their own existing customers and what mobile did was it inserted this new wedge into you know Google already had this relationship where everybody you know opened up their computer and Google was their their home page and they would search or it was built into browsers through all these agreements they cut mobile opens this opportunity for all the sudden there's this whole new platform with with all these people that have switched over to it and all these people that are coming online for the first time yeah and

40:47Not only does Google have to make sure that those places don't use their competitors smaller as they may be, but they actually have to pay to get the pay a cut of their revenue for the privilege of being the default search there.

41:05When you take a step back, the strategy for Android, the reason Chrome exists, these things are all the same. It's to make sure that no one else is inserted between the revenue generated by clicking on ads from search and their customers. It's interesting, right? Wall Street and plenty of other...

41:25Analysts that are looking at Google they always throw stones at Google and they say like oh come on like this company can't succeeded anything except adwords like none of their products make any money Android doesn't make any money YouTube doesn't make any money as we talked about which I still feel good about our grade on YouTube, but Chrome doesn't make any money, but they're a C for the record. Yep, but But the reality is things like Android, things like Chrome are huge economic value to Google. Yeah. It's providing defensibility to Google's business. To carry out that calculation a little bit. Then if you run the flip side of that, since Google has 80% market share, so you look at the 80% of people

42:16that are searching on phones and generating that $15 billion of Google search revenue a year right now, if you take that 34% that they don't have to pay out to other people, Android is effectively saving them $4 billion a year just on that because Google doesn't have to pay for that traffic. Which is pretty incredible. All right, listeners. Now is a great time to tell you about a longtime friend of the show, Vanta. AI has scrambled the whole security picture.

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44:23All right two things real quick to wrap up history and facts and then we'll move on to the acquisition category one I mentioned Motorola earlier so Google makes this move that is in some ways completely brilliant and in other ways completely bone-headed where they buy Motorola in August of 2011 for 12 and a half billion dollars and they say at the time that the primary driver of this was Motorola's patent portfolio and this is the brilliant part of it. Apple Oracle as we've already talked about Microsoft many others the phone companies.

45:00there starts to be a lot of litigation happening in this space and people are enforcing patents and defending patents and Google being a much younger company than these other firms didn't have the kind of patent bench strength that they did. So Google buys Motorola, very old company, gets all of their patent portfolio and that helps defend Google in things like the Oracle case.

45:25But the second part of the deal was, oh, well now we're going to have a unified stack within Google from operating system up through the hardware. We're going to make these incredible phones. Didn't happen. It didn't go so well. It happened. So they end up selling the assets of Motorola to Lenovo for $2.9 billion, a lot less than 12.5. But to the extent, they saved themselves from multiple billion dollar judgments against them.

45:51May have been successful. The other interesting thing that's gonna become very relevant as we do the analysis here in 2010, a company in China is founded called Xiaomei, which I presume a lot of our listeners are familiar with, but for those who aren't, people refer to this as the quote-unquote apple of China. And if you've seen that written, that's x-i-a-o-m-i. Yep. And so at this point, sitting here in September 2016, Uber, I believe, is the most highly valued private technology company in the world. Xiaomi, I believe, is the second value that somewhere I believe between $40 and $50 billion in their last financing. And Xiaomi is interesting. Like, they much like Samsung and others have been accused of just copying the iPhone. But what Xiaomi did has done, Samsung was completely reliant on Google.

46:50You know, they just made the hardware and then they had some software, you know, skins quote-unquote that they would put on top of Android, but it's running Google Android. Xiaomi as we talked about completely forked Android.

47:03have taken over to have their own branch of android that they fully control. There's a startup called cyanogen that is also done the same thing that only distributes the operating system. And shall we. Kindle fire does the same thing. Kindle fire, Amazon does this with Kindle fire. And shall we basically leverage open source android to compete with Apple. And so they make.

47:25beautiful, relatively low cost devices, seldom in China, they're wildly popular. And they run a version of Android that Xiaomi is completely locked down in controls. And this is a good time to draw the line between what is the Android open source project and what is Android as licensed from Google. So you can get Android absolutely for free from Google.

47:50and it comes with all the services that Google does, Google Maps, Gmail, most of the access to the Play Store and all the apps in there, or you can go get the source code yourself and you can fork it and you can just use Android source code.

48:07the the major disadvantage there is you don't have access on your platform to the play store and you don't have access to all these services so you really have to not only go and build that yourself all those you know a mail or plug in other partners right right right But you actually have to build an entire new developer ecosystem. Amazon has to go around and convince everyone to submit to the Amazon App Store and the Google Play Store. And that requires a little bit of work from each developer. Generally worth it, but you kind of have this new cold start problem. And so what Google sort of has an advantage here is for people who care about, for manufacturers that care about having access to all the apps in the Play Store and all those services,

48:49They're just going to roll with stock Android and then Google gets to make sure that you don't change any of the search or services away from them. Yep. All right. Sorry, that was a long one. There is so much to cover here with Android. Yeah, David, do you think that, so we've kind of talked about like what the point of Android is right now? Do you think that was the strategy when they acquired it and when they started getting into the mobile game? Like why was mobile going to be important to Google in 2005? I don't, I don't know, but I don't think there was any way Anyone could have foretold what was going to happen, you know in this market. I think this was a Great buy by Google of a really talented team working on some really cool technology that had a lot of potential, but I mean Well, Google probably knew about the iPhone because Eric Schmidt was on Steve Jobs's board at Apple But I don't think anybody really could have figured out exactly how this was going to play out but but

49:47Major, you know, Google has done an amazing job with Android in terms of shepherding it through this wildly complex, you know, gyrations in the market that by the way completely killed Blackberry. So like a company that was many multi-billion dollar company that was the leader in smartphones just decimated gone. Yeah, you know, and and Microsoft in a lot of ways too. Obviously Microsoft is having a resurgence now and didn't wasn't destroyed, but they were the like one of the leading mobile operating system providers. And now that's gone. Google really has done a great job shepherding this. Yeah. That's a great point. All right. You want to move on to acquisition category? Absolutely. Awesome. I am going to go with technology here. Other choices, people, product, business line, asset, or other.

50:42I don't think my initial inclination was product, but this was so early that what they were acquiring was not a complete product and not something they could go to market with and something that didn't have its own independently fleshed out strategy. And what they were really buying was this core technology that has actually no one else really went out and tried to build that.

51:09It clearly is a difficult piece of technology to build because surprising though to because it like clearly it's difficult but it was it itself was based on Linux somebody else could have also taken Linux and You know the Android team was a super small team when hadn't raised any VC when Google bought it Yeah, and now there's no incentive to go out and build anything else, because if you were going to build anything else, you'd have the cold start problem on all those services. Well, everybody's already on iOS and Android. Right. But it is interesting how Google has this core technology and access to services that it licenses out. And the, I guess, there's a free license. But at the very core of that is this technology that they acquired. Yep.

51:52I basically gave my answer to this earlier, which I won't repeat all of it, but I completely agree this was a technology acquisition when they bought it. And then Google has done just this incredible job of shepherding it through. I actually wrote down that it was a technology acquisition with a little bit of some great talent when they bought it. But over time, this has gone from a technology to a product, to a business line, and now an asset at Google. And it's really been under the story ship of the whole company. And it's amazing how it's an asset of defensibility. I mean, really the core thing they get from Android, in my opinion, is making sure they don't lose access to all of those people searching. And for as many of these interesting moonshots as Google is working on, and self-driving cars truly could be a very

52:45different business for them and a very big and profitable one that actually rivals search, like Google makes money from having a marketplace of ads when you search. And sometimes on other websites. And I think that when you boil it down, they bought defensibility. And more importantly, it was a cheap buy. What they did was invest 10 years into building an entire arm of their business to provide defensibility.

53:12Totally green should we move on to what would have happened otherwise? Yeah, yeah, so I was thinking about this one earlier and my core Question is I guess it's two could and would Google have built themselves into the position that they're in today if they had not made the Android acquisition. Interesting. We usually think about what would have happened otherwise from the startups perspective. Where is that company going to land? Which here I think is an easy question answer because there's no way the playing field was so massive here as this market evolved. There's no way a small independent company could have had this scale of impact. So I don't think Android

53:56It probably would have been bought by somebody else or failed on its own. But yeah, for Google, could they have done this without buying Android? Let's say hypothetically they had the foresight to know that the world would be the way it is today, and they knew what Apple was up to. And they knew they would need a competitive mobile operating system, or maybe even actual phones, to make sure that they own that customer relationship to funnel people to search. Then you have a builder buy decision, and 50 million is like, you know, Let's say they were gonna staff a team to go and build basically Android and house It feels like it's close. Yeah, it feels like this was not an outlandish Well, especially back then. I mean Google was the darling of Silicon Valley like everybody wanted to work there. They just gone public yeah Certainly they could have done it. The question I think is would they have you know, they they bought Android

55:05At least part of it was you know Larry and Sergei were sidekick fans right and they knew Andy and Google's M&A strategy has always been about acquiring really talented teams and having those people come in to Google and see what they do And in this case they hit it out of the park would would anyone at Google have been enough of a champion and visionary about what was going to happen to do this. Did you need an Andy Rubin to kind of be at the helm of that? And like we said in the beginning, Andy was born to start this company. His whole career to this point, as Steve Jobs says, you can only connect the dots looking backwards, not forwards, but looking backwards. It's hard to imagine anyone more qualified or who had been

55:53Thinking about this problem about how do you create a really compelling mobile computer and operating system and experience than Andy? Yeah, you're right. And the thing that keeps tugging at me is you could see a very classic Microsoft way to go about this where Google says, okay, we gotta have phones. We're not gonna make the phones. We're gonna make the operating system. We're gonna charge for the operating system. But Android already had this whole open source thing going on.

56:22And they said, you know, we're going to be completely open source. We, they hadn't figured out the like, you know, license package with Google services. Built on Linux. But like, what was that? Yeah, built on Linux. Was that a forcing function to make Google go into this business strategy of give it away for free? Or would Google have arrived at this give it away for free business strategy on their own if they hadn't acquired Android? And one thing that just popped in my head is you could make the case that.

56:49Well, compared to the insane business that searches, they shouldn't be in the business of selling individual software licenses, right? But they're doing it with Google Apps. Like, if you're account, it's like tiny portion of their revenue, but they haven't like totally shied away from the traditional business model of like a. Yeah, and if you think about the grade that we gave Google Docs, which is a big part of Google Apps, I can't remember exactly what it was, but it was not an A. Yeah.

57:18We haven't created Android yet more to discuss, but I'm pretty confident I'm going to be higher than I was on Google to X. Yeah. Yeah, I guess the question in my mind that I don't think we can really answer is, yeah, would Google have done this very unique open source approach to grow insanely quickly and get on everyone's or get on 80% of the world's smartphones?

57:46without acquiring Android. Well, listeners, if any of you were at Google at this time, let us know. We'd love to know. All right, listeners. Now is a great time to thank our longtime friend of the show, ServiceNow. If you are running a large enterprise, AI agents are likely spread across every team and deploying them is no longer the hard part.

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59:35So if you're trying to turn AI ambition into real business outcomes and make it work safely, securely at scale, go check out servicenow.com slash acquired and tell them that Ben and David sent you. Okay. Tech themes. Um, we can't go an episode without bringing up Ben Thompson and then Stratekery, but you have to own the front door to the customer in this day and age. And the reason Ben and I were talking about this before the show too, I mean, I think the reason why that's important in the current, you know, internet information economy that we live in is what the internet has done is it has made distribution free and in the old world this is you know not taking credit for this this is Ben Thompson's insight here you know in the old industrial world distribution was really hard and so you had to aggregate distribution and if you control distribution the customer was your surf basically in your kingdom but now distributions free and anybody can build anything

1:00:31Like we were saying, anybody could have built something on top of Linux. A mobile operating system. So in that world, you need to win the customer and you need to have the best customer experience. Yep. That is one of mine too. And I think the spin that I had on that was if you think about what Microsoft was trying to do at that point in time with Windows Mobile, you know, the The Microsoft way of thinking, which is evolving now, but certainly still at that point in time, was we control everything you need to distribute a computing experience to a customer. We have a deep relationship with Intel. We have all the software developers that can make our own proprietary operating system. We don't use open source.

1:01:24and we have relationships with all the carriers, the phone carriers, and we can push this stuff out into market, and that's great, and people will use it, especially corporate customers, because they need it, but Windows Mobile, especially in that day and age, sucked. I believe I had one of those devices at one point in time, and it was very frustrating. They didn't approach it from this way that Ben, you're talking about now, of like, oh, hey, we can just take Linux and build this, you know, and let's build some awesome on top of it. So that's one, the other one that I wanted to talk about that I referenced earlier was thinking about how the mobile market has played out. It's interesting to see like, you kind of see this in technology that like the area of competition and like what's interesting kind of moves up the stack. So in, you know, in the old PC world, it was like the hardware, you know.

1:02:22You're going to buy a Mac or you're going to buy a PC. Right. And then in the beginning of the phone world, as we talked about, it wasn't really so much about the hardware, whether you're going to buy it because Google wasn't, and Android wasn't competing in hardware, but it was the services. You know, are you going to buy an Android phone that has Google services baked into it, or are you going to buy an Apple phone that has Apple services, and that Google can still participate in that, but they're paying the Apple tax.

1:02:47What's interesting is I think now that the you know the great mobile holy wars are Pretty much over as far as we think I mean who knows what will happen in the future The level of competition has kind of further elevated up the stack to the application layer, you know, and like now it's like and well services Some services right but like not core level services not like operating system level stuff, you know, it's like are you gonna use Uber or Lyft? Are you going to?

1:03:17spend your attention in Snapchat, or in Facebook, or in Instagram. These are where money is being made today, and this is where the playing field exists. It's not at the level of the operating system anymore. And additionally, people talk, I think this is kind of a red herring, at least in not in China.

1:03:42but people talked about like moving even further up into being on top of the messenger ecosystem. And maybe we'll see that happen. You know, people are talking about bots and Slack bots. Right. We're not really early stage of the hype cycle on those early stage of the hype cycle. But it is definitely a theme that you see in technology that like this level of play keeps getting further pushed up the stack. Yep. Yep. Okay. Totally agreed. Well, I think it's time to grade the acquisition. Before I throw out my grade, a couple of Here's my reasoning and logic. So Android makes money for Google in two ways. One is advertisement supplied by Google and shown on Android phones. And the other is revenue Google takes from its mobile app store, Google Play. And we haven't talked much about that yet. That's a non-trivial amount of money. If since we're going off of the data that Oracle opened up in this lawsuit, it's reported that they had $31 billion.

1:04:40of revenue per year from Android and so we we've seen the estimate that 15% of that or 15 billion dollars of that is from mobile search revenue between iOS and Android largely on I guess so it'd be about 12 billion dollars of that because it's all from Android and then you have like The rest of that is, you know, there's some amount from the actual phones that they're selling, because Google sells the Nexus phones, but then a lot of that, that top line, you know, ten to fifteen billion dollars of it, is from the Google Play Store, and Google keeps thirty percent of that. So let's say, three to four billion dollars a year is made from the actual Play Store. So that in itself, much like how the App Store for Apple is a great business.

1:05:28You know, compared to their other businesses, it's not, you know, it's not insane, but that in itself would, you know, on a $50 million acquisition would be great. But the thing that I think Android really did is ensure that Google was safe for the next decade or two as the world changed out from under them. And they were at great risk of losing access to their customers. And they engineered a strategy here where They not only went and got a lot of those customers kind of back and made sure that as they transitioned to mobile, they stayed with direct access to Google, but and actually even tighter since then everyone in the operating system on desktop, but really were the primary place to go for the developing world as people came online for the first time.

1:06:21And so I think Google's core asset marches on and is well protected and this is an A-plus. Yeah. For me, the question about grading this is question whether this is an A or an A-plus. No doubt this was, you know, $50 million for something that has achieved, even though it didn't start this way, but over time, achieved everything that we've talked about in this episode for Google.

1:06:48Absolutely fantastic. You know, as David Lowy said, you know, perhaps Google's best deal ever. Yeah, the Goldman numbers is $22 billion of profit last year from the Android division. Yeah, incredible. The thing that I'm wrestling with a little bit is in trying to determine whether to give the plus or not is this was In many ways again, I don't think they saw it this way at the time, but this was a defensive acquisition. This was not an offensive acquisition, and I'm comparing it with Instagram, which is kind of our gold standard here. Instagram is so much simpler than Android. I would still say defensive though. Well, it's interesting, right? Like defensive, yes, existentially. As I guess Android was in some ways too, but not really because...

1:07:39People are still going to keep using Google services, whether it was on a Google property or not. Like this was just like preventing them from paying the 30 whatever percent tax. And lots of other things too. But Instagram was much more about like, oh, we're going to up level the playing field now. Like I was talking about in tech themes, like we're going to move up the stack.

1:08:01I don't know. I'm struggling with that. Like part of me feels like I want to just the, you know, the like bold part of me wants to like reward offensive acquisitions and forward thinking acquisitions. Not that Android wasn't, you know, more than defensive. Um, well, I would still say that that Instagram was, was not a, uh, a bold offensive forward thinking. Like ultimately that they sell attention to advertisers and they were at risk of losing. Yep. Which is the same thing that advertised that Facebook sells. Yeah.

1:08:30Facebook and Instagram and Google all do the same thing. They all sell attention to advertisers. Yep. And I think they, they, it was interesting like Facebook's move was defensive in that they wanted to make sure that they captured Instagram's attention and could sell that to advertisers too. Google knew that they were going to keep getting the attention, but basically wanted to save their margin. A new, a new, yep. And platform on which to do it.

1:08:54Yeah, I'm struggling. I think it's an A-plus. He says in a very defeated tone. I'm defeated. I'm I'm limping into the A-plus here, Ben. But which makes me think I don't want to be limping into the A-plus. I want to be charging into the A-plus, you know? Okay, what acquisition ever is an A-plus? Instagram. I mean, Android has already made a lot more money for Google and Instagram has for Facebook. But I think I think this is what I'm having a hard time with and maybe it's just semantics. But like, Android has saved Google a lot of money. Instagram has made Facebook a lot of money. Yeah. Yeah. Yeah. Yeah. Yeah. Android is effectively a margin saver. Yeah. Whereas Instagram is like, this is a new revenue engine for

1:09:47For Facebook. Yeah, presuming that Google would have gotten the queries from all the new people that were lighting up and basically like new people coming online for the first time. All right. Here's what I'm going to say. Android is my new gold standard for defensive acquisitions and is an a plus in that regard. I still like to play offense more than defense. Yeah. All right. It's interesting because at the time we just keep going back to this. I don't think it was defensive when they bought it, but what it ends up turning out to be is one of the most incredible defensive plays of all time.

1:10:17All right, on that note. On that note, let's move quickly into follow-ups. So sticking with Google, a couple episodes we covered ways. This is one of those quirks of history on our show that I think we spoke to soon here. We are going to have to do a full follow-up episode on this, maybe on automotive technology generally at some point. But within the last couple weeks, Google and Waze announced that they are now doing ride sharing within Waze competing the product is slightly different but competing with Uber and Lift too but competing with Uber Interestingly of which Google is a major shareholder in Uber and David Drummond Google's head of corp dev and chief legal officer was on Uber's board and resigned after this happened What do you think?

1:11:15Yeah, I mean it shows that I mean we are assertion with the ways episode was that mostly they were using ways data But not like doing massive reinvestments in that product to make Google maps better and potentially Provide data for their self-driving car stuff and what they're showing now is that they're actually Using they're playing offense not just defense here to introduce new products and try new things and you know, not only is it a new thing that is interesting, it's probably the most interesting new thing that they're doing, that they're rolling out through, and they've chosen ways. And they've chosen ways, yeah, super interesting, not Google Maps. Yeah, the question is like, so when they, so that they're gonna do their car sharing through ways, right now they're self-driving cars are much more of an independent thing.

1:12:01Does that mean that they do a self-driving car service rolled out through ways instead of the other? Well, I wonder here too, how much the fact that Google is a huge shareholder in Uber and David Drummond was on Uber's board played into the decision to do this through ways here. Like, oh, you know, this is this company that is still standalone, they're based in Israel and ways had rolled out.

1:12:26right sharing in israel long ago the news was that they brought it to san francisco right um you know so this is sort of like our independent division doing this you know not related to google corporate you know it's sort of like a head fake here had if google were not an investor in uber would they have rolled this out through google maps huh i don't know uh and i'm really the question is is it actually that much different than what already existed in in their uh Israeli product and then they just decided like yeah, we'll try to your two because it actually has big a deal as the press and we are now making it out to be Well, Uber thinks it's a big deal for sure. Yeah. Yeah, that's true Yeah, it's it to continue our our mention from earlier about how fast things change like Friends become enemies very quickly when things like this happen as we saw with Apple and Google yep yep

1:13:19So who does new markets? Who does create a lot of competition? In five years, who is Uber using as their maps provider on Android? 100% Uber. Yeah. I mean, actually, a lot of Uber drivers writes that I take now. The drivers are using the native Uber navigation and not switching over to ways at Google Maps. But isn't it still, like you still need the core Maps product underneath, even if they're navigation? Yeah, but Uber bought.

1:13:45Oh, I'm blanking on who they bought, but they bought some assets from Nokia, I believe. I believe they brought. You're a map, you're a part of that conglomerate, yeah. All right. Quick hot take, not an acquisition, but we thought it'd be fun to talk about, especially given the content of this episode. Apple's big event, launching the iPhone 7 and AirPods. Or no, AirPods, yeah. AirPods, yeah. I mean, we're just seeing the full maturation of mobile. It's interesting to see.

1:14:15The phones are where laptops were 10 years ago. It starts to open the question for what's next. I got excited. I bought one. Of course, that was going to happen. It's going to be an incredible product. All the changes that are made are largely incremental, except for their continued breakthrough advancements with the cameras, which I'm super excited about. I heard another interesting point that this could be Apple's software into VR capture.

1:14:43That because of the dual camera system on the plus yeah, yeah, that's something that's kind of going Unset a little bit is you know Apple just launched a phone that'll be in you know hundreds of millions of people's hands that has two cameras and They can kind of do some interesting things with software with that later Who knows but wait, so here's what's really interesting to me about the Apple event last week and I'm really surprised that people aren't talking about this, or maybe just not people I'm following are talking about this. Apple is super secretive about their roadmap, what they do, they don't talk about anything. But they do drop these hints. If you listen closely to what they're saying, it's usually not a surprise what they end up doing. I was really struck when they were talking about

1:15:34AirPods and talking about the removal of the headphone jack and everybody's focusing on the courage, right? Yeah, that was probably a poor choice of words. But here's what I think they're saying. I think they're saying we are moving with our, maybe it's the next iPhone, maybe it's two down the road or maybe this happens incrementally, we're moving to a world where there are no wires. There's no cord to your earphones. There's no power cord. There's nothing tethering you. And that means that the device is actually kind of secondary. And if you look at the AirPods, you know, double tap to activate Siri, like we're moving to a world where computing is just on you part of you around you all the time. People have been talking about this. You know, this is part of what Amazon is doing with Alexa. But that to me was a really strong message from Apple that coming soon,

1:16:32Siri, which we've done our episode on Siri, and we are Ben and I are very skeptical of Apple on this. Siri is going to control your computing experience. It may or may not be through a screen. Yeah, expect more chips and AirPods 2 and AirPods 3 and then AirPods 7 get excited because you won't need a phone. Yep. And we'll go from there. We'll go from there. Alright, that's our hot take. Carve out.

1:16:55Yeah, mine's quick reading a really cool book right now. It's called Business Adventures by John Brooks. Oh, it's so good. It's short vignettes, maybe like 20 to 30 pages each that are stories of incredible things that happened in business over the last.

1:17:10100 years. The first couple are awesome. The 1962 stock market crash, talking about the impact of the fact that trades were happening at a higher velocity than could be printed out. So no one knew what price they were buying things for when they put in a buy order and a sell order on some of these crazy crash days. And the second chapter that I'm on right now is the colossal failure of the Ford Edsel. And that's a good one. And the kind of history and how that came to be. And just super great and really nice if you're doing a lot of short flights or something like that where you can go knock out 30 pages, but then you won't pick it up again for, you know, a month or something and don't want to forget their very kind of bites. This is a great book recommended to me a while back by my buddy Matt Nierlinger who said at AVP, which is a growth VC firm in San Francisco.

1:18:01This, I believe, is one of Bill Gates' favorite books and I think his favorite business book. Yeah, he's endorsed it on the cover. It's a pretty killer introduction. Hard to beat that. Mine is also quick. It is the ESPN OJ documentary. It is so good. Have you seen this pen? No, but you were telling me that. You got to, everybody's got to watch this. It is a five-part documentary series, Jenny, my wife and I are in the midst of watching it now.

1:18:29through the first three parts. So good. I'd say it's like it's like 30 to 40% about OJ and the rest, the majority of about like what was going on in America, you know, from the civil rights movement in the 60s up through the 90s and, you know, and then specifically like in LA, race relations in LA, the police in LA, you know, I mean, this is where NWA was, you know, There's so much deep history here that's not people know about, but like this is just such a fantastic job covering it. Also, I didn't realize like, for people kind of been in my age, OJ, just like, it's the trial, right? Like, that's all we think about him, but he was an incredible football player. Like, wait, like, head and shoulders above everybody else. So really great to watch. I highly recommend everybody. All right, listeners. Now is a great time to talk about one of our

1:19:27favorite companies, Statsig. Yes, there is a reason why the best product teams rely on Statsig, whether they are iterating on their core product features or shipping AI-powered experiences at scale. Yep. In the crazy speed of today's AI world, shipping fast is just table stakes now. It's basically trivial to build and deploy your app constantly.

1:19:50The real advantage is how quickly you learn what changes actually created value for customers, and how fast you can use that signal to guide what you shipped next. This is where Statsig comes in. It brings experimentation, feature flags, and product analytics into one unified system so teams can ship safely, test rigorously, and directly link what they changed to how users actually behaved.

1:20:12So if you want to make learning your competitive advantage, whether you're building new AI experiences, or just evolving your existing core product, go to statsig.com slash acquired to get started. All right, that's what we got for you. If you aren't subscribed and you want to hear more, you can subscribe from your favorite podcast client. And if you feel so inclined, we would love or review on iTunes. And if you want to share this episode, tweet about it, put it on Facebook, tell your co-workers. Yeah, really appreciate it as a listener. Thanks so much.

1:20:41Thanks to everybody. We'll see you next time. See you next time.