Acquired - Writely (Google Docs)

0:10Welcome back to episode nine of acquired. The show where we talk about technology acquisitions that actually went well. I'm Ben Gilbert. I'm David Rosenthal. And we are your hosts. This week we're going to be covering an older acquisition but following a theme from our last episode in productivity software. We're going to be covering the What became the eventual suite known as Google Drive Google Docs Google Sheets and Google presentations Google slides slide I think it started as presentations. Yeah, and then it was the presentation spreadsheets and docs product of many names. Yes, we'll go through there were a whole ton of companies that actually contributed to this David will go through the acquisition history and facts but largely focused around rightly which eventually became Google Docs yes

1:17or a reminder that if you enjoy the show, leave us a review on iTunes. We would love any feedback. Or you can hit us up on Twitter. We've got acquired FM. 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.

1:39Yup, 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. Legora 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. They embedded inside a massive law firm.

2:06for 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 drop 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.

2:35and 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.

3:27Plenty 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 legora.com slash acquired and just tell them that Ben and David sent you. Now let's dive in the show. David, you want to do acquisition history in facts? As always, Ben. So...

3:55Dear listeners, let's transport back in time to the mid-2000s. Web 2.0 errors in full swing. Ajax, the browser technology that enabled live dynamic updating of websites, just come out. And a group of technologists from into it had decided to start a little crew to dabble.

4:25in what they could do with Ajax. And so they founded a company that they called UpStartle. I love that name. So bubble. So web 2.0. And they ran through a couple projects and landed on a product that they called rightly. And it was collaborative document editing in the cloud.

4:51I don't know if they called it that at the time. Yeah, which now seems so table stakes. Absolutely. Founded by Sam Chalasse, Claudia Carpenter, and Steve Newman. And they worked on it for a couple years. It was in beta. They had a few thousand users. And then in March 2006, Google announces that they had acquired the company for an undisclosed amount.

5:17rumored in the $10 million range. What's interesting, they'd only hired one person over those two years, so it was the three founders and one other into an employee, former into an employee, Jennifer Mazan. And they all joined Google and became PMs in Google Docs. And what's interesting is that this was actually the second acquisition that Google had made in their online office productivity suite.

5:45The first was another company, a smaller company in New York called TwoWeb, TwoWeb Technologies that they'd actually acquired in 2005 that was working on Excel TwoWeb. That was something that they brought into Google Labs, right? And I think Google Labs created the first Google Spreadsheets before Google Docs even launched. Yes. And this was all happening right around the same time. So Google Spreadsheet launched in Labs in June 2006. Rightly was acquired in March 2006.

6:15And then shortly thereafter, in the beginning of 2007, Google Docs, based on rightly, was released publicly. Yeah, I think it was Docs and Spreadsheets were actually merged right around that time. And you could go to doc.google.com. And I remember the header actually said, Google Docs and Spreadsheets, one big, long thing. And it looked like they just kind of like took the Spreadsheets view and just interjected some of your Docs in there and you could sort by date. But that was pretty much all the integration they had.

6:44Yep. And then shortly after that launched, two more companies, the Google acquired in 2007, Tonic Systems and Zenter, which is an early Y-combinator company, both of which were working on presentation software for the browser. That's right. Tonic largely the backend and Zenter largely the front end. And it's pretty amazing how quickly Google turned these acquisitions around. September 2007, presentations was launched. And finally, there is now a full Sweet of Microsoft office-esque productivity software in the cloud. That's right, but don't ask Eric Schmidt that when they announced Google Docs and spreadsheets. He definitely told a gigantic audience full of people that they were not indeed competing with Microsoft and it was not a competitor to office. I wonder if our last episode's guest Kurt Delbeni was listening.

7:39And then some might say, you know, the rest is history. However, interesting side note of history. 2007, the same year, these final acquisitions happened, and the full suite was released by Google. June of 2007, Dropbox is founded. Yeah. And that's interesting. I mean, you look at the bet that Google is making here. I mean, this happens so fast. This all happens within a year and a half span. And All of a sudden they have a full kind of suite here and they definitely went through and made very strategic acquisitions here, but built a lot of it in-house. I think what they acquired was super bare bones in each of these applications, all pretty inexpensive. I mean, there's are all rumored approximate $10 million acquisitions. You know, last episode we were talking with Kurt Delbeni and we were looking at what Microsoft paid for a complete and wonder list and sunrise. That, you know, totals somewhere around half a billion dollars.

8:38And when Google was getting into to dabble in this game, which is the, you know, really inventing the market for cloud productivity. Super cheap because that wasn't, you know, people weren't flocking there yet. People didn't realize that, oh, I need collaboration tools in real time where I can look at the other person's cursor in my document. It was it was largely a toy at that point. Yep. And I think these are all really interesting examples of the buy versus build that we were talking about with Kurt a little bit.

9:07last week. And what's interesting, and one of the reasons I brought up Dropbox, being founded around then, all of these companies, these five or so companies that Google acquired, that became the backbone of Google Docs. There were all these rumors, I don't know if you remember Ben, around the time, for years, about the mythical G drive. G drive. It was coming. It was coming. It was the Dropbox killer. It was the Dropbox killer, and it didn't launch until 2012.

9:36And, you know, and one can imagine we mentioned Zentair was an early Y Combinator company as well as Dropbox. You know, how might history have been different? Have Google had decided that they would accelerate their drive efforts by acquiring Dropbox or Box at the same time. Yeah, be interesting. Hmm. Very interesting. All right, with that, should we move on to acquisition category? Yeah, let's do it because I think there's a lot of this episode I'm most interested in.

10:06Fast forwarding to today and looking at, you know, how does this impact Google's business as a whole so I think Yeah, let's happy to just blow right through acquisition history in fact now on to acquisition category to me Technology I think all these acquisitions, you know primarily Rightly were these kind of experimental Ajax apps and everybody was seeing what they could do with Ajax at the time Google Maps I'm or was a very flashy demo example of that and You know, I think there are a few different people later on etherpad but a few different companies playing around with collaborative editing and I think content editable was the the new hottest thing in browser technology that they took advantage of and You know, this is this is just acquiring sort of that The people that were doing that right and so I think you know technology and a people acquisition knowing that

11:01there was a lot of technology to build and house to really turn it into a product that was marketable. Yep. It's interesting. I was going to go with business line for this category, but this is such, when we started doing this, talked about doing this episode, we said it was going to be on rightly, but as we were doing research, we realized there are these really fibrous companies. None of them too much further along than the other ones. Exactly.

11:30And I think this really, to me, crystallized this being a classic Google decided they wanted to get into the business of productivity apps. And they wanted to take a typically Google bent on it and put them in the browser instead of being installed software on your PC. And they decided to get into this business and made the judgment that buying was going to be a faster way to get there than building in-house. Yeah, it sure does feel like a case study in the buy versus build. I mean, I think that Dropping let's say $50 million short cut at their time to market dramatically and put all that right brain how brain power and house right away yep, and what's interesting is it's also You know, I think and blending a little bit kind of the tech themes here, but And I don't know what Google thought at the time in terms of their strategy, but as the the

12:26Battleground for productivity software has really evolved from you know at that time it was Word and Excel and PowerPoint installed on your computer to now It's this whole suite of you know not just those applications, but also your email also Your your cloud services as an as an organization. I mean what do your not only the?

12:49third party software you're running, which is your email, which is your word processing, which is your spreadsheets, but also your internal company apps that you're running on, whether that's AWS or Google Cloud Engine or Microsoft Azure, as that's really evolved in the last few years. It's almost been this mix within Google that they bought the traditional productivity software, but the email piece with Gmail and the cloud piece which we can argue about how much success they've had there relative to Amazon, they built in house. Interesting. All right, listeners. Now is a great time to tell you about a long time friend of the show, Vanta. AI has scrambled the whole security picture. It used to be that you proved that you were secure once a year on audit or a static PDF, then everyone would nod and you're done. But in an AI first world, that doesn't hold up anymore.

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15:18There's the question now of, before we get into what would have happened otherwise, David, do you think that Google should have gotten into productivity at all? Let's zoom out, look at Google as a business. It's an advertising business primarily driven by AdWords, and you search, and people click, and Google gets a cut. That has always been their cash cow, and for the foreseeable future, looks to be the largest source of their revenue.

15:47Working backwards from that you either have to believe that that is at some point not gonna become their largest room of revenue or that that's gonna rely on some data or some asset provided by could be customers by the productivity applications it Does it make sense for them to be in the productivity game at all? Yeah, it's a good question my sense is that Google for a long time has been looking for That what's next yeah, I mean in fact their their revenues now are reported since their alphabet now We should be saying alphabet alphabets revenues now are reported as Google and other bets like they're so fascinated with this what's the next you know widget that? They've restructured their entire company their reporting scheme and their leadership structure around it. It's it's interesting and

16:44Microsoft had this challenge too for a long time. I mean, they were the Windows company, the operating system company for a long time. And I think perhaps longer than a lot of people would have expected that has continued to be an incredible cash cow for them. But now we're in the throes as we talked with Kurt last week about what is Microsoft today? It's a mobile first cloud first company. It's not an operating system, an office company. And for Google, you know they're the search company they've been the search company now for nearly 20 years and when wow I feel old yeah not quite 20 years but 18 years Google is going to college you know Google graduating from high school this year and they're going to college if we had a coin aim for naming episodes that's what we named this one and and I think this is a big part of the question of what does Google want to be when it grows up

17:40And actually, I think a relevant other acquisition flashing forward to today, Google recently acquired a company called Bebop, which was founded by Diane Green, who was the founder of VMware, and Diane was on Google's board. And Bebop was nominal, they hadn't released their product, it was still in stealth, but nominally making...

18:06Productivity software for the enterprise now I don't think it was Word and Excel type productivity software, but it was software Helping about helping enterprises build their applications and Diane is now taking over the entire cloud business for Google Yeah includes all of Google apps and Google for work. Yeah, it's interesting well to two directions. I want to go with this the The first one is okay, maybe they clearly they've been obsessed with big bets the whole time I mean Google itself the core project back rub the whole academic research project into organizing the world's information and releasing the best search engine and the one that's the most sustainable on an ongoing basis You know that was an enormous bet and I think that now they're thinking totally crazy with these moonshot ideas

19:02when they started with Google Docs and 90 or sorry in 2006 like they weren't doing self-driving cars and they weren't doing balloons that deliver internet and they were doing a lot of these these these huge projects so maybe this felt like a possible big bet to them for the future of their company looking at Microsoft and seeing that productivity of that era was such a cash cow and is just now sort of dwarfed by how big they're thinking with all their current big bets. And this was sort of like an early on possible big big bet that we're seeing that's sort of legacy. Like I'm not sure Google would go into this space starting today. Yep. Yep. I agree. But it's interesting to go back to that time. And I wonder if Google... I mean sitting here today in 2016...

19:53Microsoft as much as they've had a resurgence in the last couple years, they're not as relevant in terms of the most important strategic players into landscape and technology but going back to the mid-2000s with Google looking at Microsoft and I wonder if they saw the Windows office two legs of the stool.

20:19the non-balancing stool and thought, gosh, those two core businesses in an operating system and productivity, and they thought about themselves and said, you know, if we want to be like Microsoft, our analogy for operating systems is search. You know, we're the operating system of the web. What is the productivity on the web? And when you think about when they started Google Docs, that was what it was, and still is to a large extent of this day.

20:47Yeah, it makes total sense in that context. And I think that if we're looking at this like three to five years ago, rather than looking at it today, I'd be sitting here preaching or singing the praises of Google as, this is one of the most classic examples ever of low end disruption. I mean, you have the big thing that the enterprise people are buying with these companies that need every single last feature of office, even though any given personally uses 5% of it.

21:17And most of them use the same 5% but you need all those features because that's how you get the big enterprise contract as you know well did you stuff all 100% of these features into office for iPad no it's fun we get to rethink rethink the the lightweight productivity we call it which is super fun but the the You know in low-end disruption you get this new income this new person that comes along Google in this case with Google Docs everything's a total toy It doesn't have any of the features at the enterprise need. They're giving it away for free But like at the end of the day there's so many people that look at that real-time collaboration available on the web cloud storage as like Wait, this is way more important to me than all those old things that colloquially everyone believed were necessary and I think the difference of where

22:10were sitting today from a few years ago is I don't think it fulfilled its low-end disruption promise of unseeding the incumbent. I mean, I was all braced and ready for office to become less relevant, and Google Docs to be the future, and them to slowly add on the rich feature set that people would call the new incumbent. Yeah. Let me ask you. I'm curious.

22:37You guys started paying near square labs in 2015. Uh-huh. Do you have on either your computers or via Office 365 Word Excel and PowerPoint? We do because of BizBark. BizBark is the Microsoft program that makes a lot of their software available for free to start-ups. Start-ups interesting. If you didn't have that, would you pay for those? Would you use just Google Docs? At least a couple of us would, just because Any of our legal documents are going to be changed in word and that needs to be have perfect rendering. They're definitely still industries that require high fidelity perfect rendering of documents. But you know like anything that I open that when I'm writing like a quick feature spec or like a one-pager on an idea or a welcome document that we're going to send out to new users of our application or anything like that

23:37It's all Google Docs. So I mean, really, I'd say like anything that I start from scratch these days is Google Docs. The other direction that I wanted to go with that is when we were talking with Kurt last week, and something that's become completely obvious with Amazon's earnings, breaking out AWS, that Azure is very much the future for Microsoft. AWS is already as profitable as an independent business.

24:05as their entire e-commerce business is in a much shorter time period. For Amazon. For Amazon. Sorry, yeah. Microsoft, which is it? Hard to Microsoft. Well, yeah. So Microsoft with Azure, Amazon with AWS, a lot of interesting news in the last couple of weeks with Google and Google Cloud Platform. I think there was some news that Apple was moving there. It's actually been a tremendous amount of news in the last couple of weeks. Apple developed their own internal cloud or their own cloud hardware.

24:34Apple developing their own hardware to put in their own data centers and run their own cloud infrastructure. Dropbox doing the same thing. But I guess where I'm going with this is in these cloud services, you kind of have these three layers. Infrastructure as a service, platform as a service, and then software as a service. Each of these three players, Microsoft, Amazon, and Google, Have all the layers of the stack they started in different places Amazon kind of with infrastructure Microsoft with all the way up with with software and Google with originally Google App Engine with platform as a service do you think that as all these businesses are betting on that being the cash cow of the future do all of them need all of the layers

25:21or would Google be fine without productivity software as a service? It's interesting. This gets a little bit into maybe I'll just jump into it my sort of tech theme as we've been describing you all of Google's strategic decisions around this business probably made perfect sense to them when they made them in the mid 2000s and even up until a few years ago but the landscape has changed.

25:49And the battleground has changed for what productivity is. And that's why I brought up. Why you brought this up now and why I was mentioning earlier, the sort of cloud and the infrastructure layer. And I think Ben, the answer to your question is no. And I think one need look no farther than AWS to see that. I mean, AWS started as infrastructure. That's what they do. And of course, they've moved up the stack and added other things, but that's they aren't offering email. I think there is some.

26:15Amazon email but like no serious yeah, and and yet they're still at least in you know inning number maybe we're in inning number two of the cloud now They're they're pretty far in a way, you know the leader And it would be it's interesting to think about like what could Google have done rather than? Copying the Microsoft strategy in the mid-2000s of okay, we've got the quote-unquote operating system now we're gonna do productivity What if they had instead fought Amazon more directly at that point on the infrastructure layer or gone with another another? Aspect entirely. Well, yeah, it's interesting. I think with Google Google App Engine you were locking yourself into like Google's proprietary data storage and you had to use Python it was like there when you were looking at the cloud services and inning number one or the top half the The choices it like wasn't apples to apples at all because you're like well, I'm gonna

27:15either build for Google App Engine or I'm not, I don't really get choices around that. Or Amazon, it looks like gives me just one level of abstraction about running my own server, which I think is what I want. And it was interesting how those two companies made enormously different bets there. And Amazon. And you look at the diversity of companies and enterprises and workloads that have adopted Amazon over the past few years. And you mentioned Dropbox moving off of Amazon.

27:45the longest time you know Dropbox Amazon kind of won the first round of this fight across productivity because everybody used AWS you know Dropbox paid the Amazon tax there's a great strategy article which you know as our listeners know we are both big fans of Ben Thompson but his article last week on the Amazon tax is just fantastic yeah Yeah, and I before we move off this point, I want to revisit when I say that the low end disruption machine sort of failed, obviously people use Google Docs all over the place. We even talked about how it's my go-to for the longest time, but it hasn't become a great business for you. No, that's the thing. There's been stagnation in Google the adoption of Google Apps in the enterprise in a way that if they were really

28:40Displacing the incumbent disrupting the incumbent the world would have moved to whatever their new set of features and new Sort of market they were creating the world would have needed those things and That's not necessarily true from a monetization perspective. Yeah, and instead actually I mean to bring back to our last episode what you've seen happen is this resurgence of Microsoft of the original winner in this space, you know with granted some expensive acquisitions that they've made, you know, as we discussed last week, half a billion or so in total. But Office 365 and now, you know, Outlook and Outlook mobile, through a company are winning huge share. Yep. Yep. There's a, I get to find this real quick. There was an interesting point made. Here we go.

29:38About a year and a half ago Google Apps had doubled the market share of Microsoft's cloud offering according to a Research report by Bitglas the 16% versus 8% then a whole bunch of people still using on-premise Productivity and email software more recently About six months ago Office 365 jumped ahead of Google Apps 25% versus 23% and it's a thing where Microsoft got their act together in office 365 and building the the cloud productivity tools. And to be honest, so I worked on what was then Office Web or Word Web app before they were called Office Online, it's actually my internship at Microsoft. And it was a joke compared to Google Docs. I mean, I was writing specs and looking at Google Docs for like, well, how did they do it as a reference? And then figuring out, can we do it better? Side note. Nope.

30:33Not a good place to be as a product team. No, we were totally trying to fast-follow but built on much older infrastructure and it was kind of a nightmare. What's happened is really the native clients on all platforms at Microsoft have become excellent through building and buying and the cloud applications have held their own and you can do real-time collaboration now with Microsoft's applications.

31:02And even if the user experience, which in my opinion, of their cloud applications is still below Google's, they're at least able to tell that story to the enterprise, and Google hasn't won out. What's really interesting here is that I don't think anyone would argue that the cloud versions of...

31:20Word and Excel and PowerPoint are, you know, greater beating, you know, a resurgent or beating Google Docs, but what is it? It doesn't matter. Yeah. It's the wrong battleground. It's the wrong battleground. You know, Microsoft is still capturing the majority of the value in productivity. Google is capturing almost zero right now in terms of the dollars being spent by enterprises and individuals on productivity. And Amazon is just taking attacks on everybody else. Yep.

31:48God, this is such a good case study and incentives. I mean, I think like if I'm ever struggling to understand a business, taking a step back and saying what does every party incentivize to do, brings instant clarity. Microsoft is a productivity company, operating system productivity company and you know, operating system broadly defined. That will become something much more cloud oriented. Google is an advertising company and it's not like This low-end disruption was coming from the company that represents the future of productivity. It was coming from an advertising company looking for their next thing. So when push comes to shove, Microsoft needs to defend their castle. And they weren't defending it against a productivity upstart. They were defending it against an advertising company that was looking at it as sort of an afterthought. So in my opinion, the atrophy of Google Docs in fighting that war or in fighting whatever were they should be fighting where it's going.

32:45is largely because they have problems to think about in the future their advertising business. What it means as they transition from desktop to mobile and I mean, we've even gotten into Android yet at all and I think we can kind of stay away from there but like. Future episode. Yeah, they have advertising problems that they need to address that are more serious. It's a great point. I mean, think about it this way. Like your Larry Page Jeff Bezos and Steve Bomber and then Satya Nadella.

33:15Like, how much is productivity on your mind? Like, what percentage of your mind share does that occupy? Jeff Bezos probably zero. And Larry Page, you know, I don't know, 10%, right? Like, and Bomber and then Nadella, like, you know, 90%. Yeah. Who's gonna win? Right. Right. Or maybe not who's gonna win, but who's going to, who's got their back against the wall?

33:45and has the most at stake to make sure that they give it their best shot. It's true. 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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35:28So 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. All right. Uh, what would have happened otherwise? Well, it's hard to say. Uh, this actually is a really interesting one. Um, had these companies, let's take rightly, for instance, um, had that been an independent company launched publicly and let's say they built Google docs. Um, What would that look like? Yeah, it's interesting and thinking about the incentives like then would we have had a true low-end disruption event where you know, you have a true new productivity company going after an old dinosaur or is Were they still fighting an unimportant battle? Yeah, like well, and let's look at you know, let's look at box-and-drop box here because these the closest cops we have would rightly have gone into storage. Yeah

36:30Or, you know, I mean, storage that Box and Dropbox obviously did. You know, today, who knows what will happen in the future, but I think with both of those companies... Apple should buy Dropbox. Well, there's history there. Well, it's a different person making that decision now. Yes. We're referring to Steve Jobs famously offered to buy Dropbox for...

36:58A billion dollars I believe something around that And then I don't know there was ever first to call that a feature not a not a company and then when he came back with his tail between his legs then drew house to tell them that You know politely declined But again, who knows what the future holds but sitting here March 2016 do we think box or drop box could ever be a company at the scale of Microsoft or Google or Amazon Personally, I think that's hard to see. Yeah. Yeah. Oh, man. If it does go that direction, it's box going to Microsoft route and drop box pioneering some new, well, they need consumers to pay, which is a really hard thing to do for utility file storage and like that. But if a mythical rightly or upstartle still existed. Yeah.

37:57Would that be more of a contender than a storage-focused company? Yeah, I mean, perhaps what happens is Dropbox buys upstartle. And then you have a true, you know, the Microsoft equivalent of one drive and word online. And that is sort of the prototype stack. Clearly Dropbox has, you know, had these thoughts as well. I mean, they bought mailbox and they bought several other companies. That is a company that's not good at acquisitions.

38:26Future episode. Yeah. All of Dropbox's body's buried. That's mean. Yeah. Yeah. All right. I already did my tech theme when you want to talk about them. Yeah. I'd written down that I wanted to draw the parallel. The parallel to classic low and disruption. So I think I think we've beat that one pretty good. All right. Should we do conclusion? Yeah.

38:56Yeah, then we've got one more section that we're adding on yes, we'll get to that in a minute. Yeah, stay tuned. Yeah, so We gave you to I gave you to the sea And that's that's become a money pit for Google at least to you know, I think it's a relatively breakeven business But God is that thing expensive to run. Yep. This not terribly expensive to run Not terribly expensive to buy to buy Probably expensive from a manpower perspective like it probably just takes a lot of a lot of engineers to keep this thing going and develop it but But give it I mean Google does make money on Yeah, so I think I think the business unit of of Google apps for businesses is Self-sustaining, you know I'm gonna also give it a C but more because I think it is a distraction for Google and less because I think it's it's not expensive in terms of

40:00Dollars, I think it's expensive in terms of opportunity cost of attention. Yeah Interesting so you're making an argument Not this specific argument, but a sort of category argument that by acquiring These companies and taking a productivity focus strategy for several years adopting that at Google It was actually a major distraction from either their core strategy within search or finding another sort of you know leg of the stool that would be a better fit with their core capabilities as a company versus trying to go down a path that They really weren't equipped to succeed in yeah, I mean, I think

40:55At the end of the day Google was looking for a second huge business much like for Microsoft they had Windows and then they had office and There's some argument that it contributes to their existing business, but they were going after selling productivity tools and That just didn't become a huge business for them. I mean, it's a it's a decent business. I think it's a self-sustaining business. That's a profitable business but it's Not a Google scale business. Yeah, it's not a huge business right and I think for many years that was where they were focusing energy When really you know, there's there's a big potential problem with with their current business as things go more mobile and Now they're looking at all these other moonshot opportunities, and I think for a long time they thought productivity could be a second huge business for them. Yeah, hmm

41:54So I was going to give this acquisition of BE. For many of the reasons you initially started talking about, well, it wasn't a huge success, but they didn't spend a lot of money and it's not losing a lot of money for them or consuming a lot of capital like YouTube. But I think I'm convinced by your argument because for technology companies where you operate in this battlefield every day where there's this huge fog of war and it's very, you know, uncertainty is a way of life. Those sort of one resource that you have that's most important for startups and big companies alike. Even Apple and Google and Microsoft and Amazon is your focus. And this was a pretty major delusion of focus for Google for a long time. Obviously they've been very, very successful and things like

42:53Search and Android and many others But that resource is very precious and for both of us working with startup sido. This is what we coach founders all the time, you know focus focus focus This is the most important thing. It's all that you have as a startup I think I'm I'm I'm convinced Ben I'm gonna go be minus Still more generous than me. All right, so we have a new section And this is a section where we talk about things that a media or a movie or a TV show or something we're reading or a book or a new publication or something, we find fascinating. And in true lingo, we're calling this the carve out. So I will start with my carve out from this week. And actually we'll call it since the last episode. Bill Simmons launched the ringer.

43:55And for for those of you who are not not subscribed to the ringer It's totally sports focused, but it's it's really the the Kind of Crown jewel of the Bill Simmons media empire I think after after grant land after his for those who you don't know Bill Simmons partnered with the SP and to launch grant land which was incredible long-form content about sports and it was like the most incredibly well-written pros about sports you could ever read that would take you on this journey and make comparisons to pop culture and an event that happened 50 years ago and truly relatable and Bill Simmons is a gift as a writer and we saw him launch a podcast and finally the ringer which is the the thing that has it's starting as an email newsletter and a website but it's a very small staff and it's a kind of a new media publication

44:50that Bill Simmons has launched after the tumultuous shutdown of Grantland by ESPN as probably made sense as a very expensive property. But I'm going to read a quote from the first email that went out Bill introducing the ringer. And he does this great little section where he talks about all the names that it could have been. And this is just one of the reasons why he's a great writer to read. But he's talking about several of the names and the paragraph ends with Upper R echelon.

45:20Sounds like a hedge fund bar and storm sounds like a horse that would be favored to win the Kentucky Derby side to to insider grant world to ludicrous f off ESPN too easy And I think just rarely rarely you ever get a startup talking about like their ridiculous naming meeting the first email includes the classic um Photograph of the of the whiteboard with all the potential names crossed off. It's just like It's some of the most relatable writing, even if you're not a sports person, it's just incredibly entertaining and a ropesy end. I love it. I love it. My, I should say to the part of the inspiration for the carve out was my wife Jenny introduced me to two of Slates podcast, the political gab fest and the culture gab fest, both of which are excellent. And they both do a segment like this.

46:15shout out to Slate, and thank you to them. So my carve out for the week is something that I think will, it picks up on a lot of themes from our show going back to our very first episode. And I just finally finished, crossed off my reading list, Creativity Inc, which is the Pixar book by Ed Catmull. It is fantastic. One of the best books I've read.

46:43Certainly this year, but in the past few years, best nonfiction books. And ordinarily, I'm pretty tough on sort of business books. And they can often be trite and repetitive. This was none of those things. And I think listeners, if you enjoy our show, you will love this book. And the one thing I would say from it, there's so many good stories from Steve Jobs' stories to...

47:12all the Pixar history, but antigeneral management lessons and startup lessons. But my favorite part of it is talking about the creative process and managing that creative process, which obviously Pixar is so good at. And one of the points that it makes in the book is that it is always a struggle. Even at Pixar, they've done this so many times.

47:40And there's this temptation for them even within the company to make it easier, to make it rinse and repeat. Why do they have to struggle every time? But if you don't have that struggle, you don't get something great. And I think that is so applicable to startups. I see it with the companies that I work with every day. They're good times and bad times. But even the companies wear it to the outside world. It looks like it's all...

48:08He's my least favorite phrase of up and to the right because it's always to the right but it looks like it's all up as it goes to the right You know inside like it's up and down every single day and there are periods of just huge existential challenges and and one of the book talks about like every Pixar film and every Disney film Since since the acquisition. It's just had you know if you don't have this crisis You know, it's very hard to make something great. Amen to that All right, listeners. Now is a great time to talk about one of our favorite 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.

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49:27So 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. Listeners, we'll leave you here. Thanks for tuning in this week. Visit us on iTunes, write a review if you like the show, tell your friends, and see you next time.