Google Maps

[0] Um, I have, I don't want to spoil.

[1] I have, like, some stuff that I could tell you, but I don't want to spoil it.

[2] Awesome.

[3] Well, Google Maps.

[4] Google Maps.

[5] Welcome to season five, episode three of Acquired, the podcast about great technology companies and the stories behind them.

[6] I'm Ben Gilbert, and I'm the co -founder of Pioneer Square Labs, a startup studio and early stage venture fund in Seattle.

[7] And I'm David Rosenthal, and I am a general partner at WaveCath.

[8] capital, a early stage venture firm focused on marketplaces based in San Francisco.

[9] And we are your hosts.

[10] Today we are talking about Google Maps and the acquisition of three companies, starting with where to technologies in 2004, that set the whole thing in motion.

[11] And David, I would not have guessed it when starting the research, but there's a chance this is as big of a success, but far less discussed than our shining example of an A -plus Instagram.

[12] And listeners, over the next hour or so, we, or at least I, am going to try and build that case.

[13] Oh, I can't wait to hear it.

[14] Well, that's actually a good question, which probably Instagram is used more, like, in terms of more individual, like, uses, sessions per day than Google Maps.

[15] But I don't know.

[16] If you count all the APIs of Google Maps, like, it might be close.

[17] Yeah, the dual revenue model as one, being a different front door to Google than search, and two actually now selling that API access.

[18] But we will get into all of that and more.

[19] Okay, listeners, now is a great time to thank one of our big partners here at Acquired, ServiceNow.

[20] Yes, ServiceNow is the AI platform for business transformation, helping automate processes, improve service delivery, and increase efficiency.

[21] 85 % of the Fortune 500 runs on them, and they have quickly joined the Microsoft's at the NVIDIAs as one of the most important enterprise technology vendors in the world.

[22] And, just like them, ServiceNow has AI baked in everywhere in their platform.

[23] They're also a major partner of both Microsoft and Nvidia.

[24] I was at Nvidia's GTC earlier this year, and Jensen brought up ServiceNow and their partnership many times throughout the keynote.

[25] So why is ServiceNow so important to both Nvidia and Microsoft companies we've explored deeply in the last year on the show?

[26] Well, AI in the real world is only as good as the bedrock platform it's built into.

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[28] Interestingly, employees can not only get answers to their questions, but they're offered actions that they can take immediately.

[29] For example, smarter self -service for changing 401K contributions directly through AI -powered chat, or developers building apps faster with AI -powered.

[30] code generation, or service agents that can use AI to notify you of a product that needs replacement before people even chat with you.

[31] With ServiceNow's platform, your business can put AI to work today.

[32] It's pretty incredible that ServiceNow built AI directly into their platform, so all the integration work to prepare for it that otherwise would have taken you years is already done.

[33] So if you want to learn more about the ServiceNow platform and how it can turbocharge, the time to deploy AI for your business.

[34] Go over to servicenow .com slash acquired, and when you get in touch, just tell them Ben and David sent you.

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[36] If you like the show, you should come join the other 2 ,500 plus acquired fans that are hanging out in there.

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[38] David and I release one LP show for every main show, and we use these episodes to go deeper on company building topics.

[39] The last of which was on a not very well -known topic with Andrew Abramson from Riviera Partners on how the best companies in tech search and recruit for product executives.

[40] You can get started with a seven -day free trial and listen right now here in the podcast player of your choice by clicking the link in the show notes or going to glow .fm slash acquired.

[41] All right, David, I'm pretty excited to do a classic acquired episode.

[42] I know this is going to be classic.

[43] I noticed in our LP show read, you no longer say how buttery smooth it is to subscribe because it is very buttery smooth, but we got a bunch of feedback in the survey that people didn't like that description.

[44] Yeah, I don't, we got a lot of funny feedback in the survey.

[45] I think actually, we should do an LP show on stuff we learned from the survey, because there's a lot of good.

[46] Of course, there's like interesting demographic stuff.

[47] For example, the top two types of people that listen to the show are product managers and engineers, but there's a lot of other really interesting data that I think we should tease out on an LP show.

[48] Yeah, we totally should do that.

[49] We had, what, almost 800 responses.

[50] Yep, which is great.

[51] Thank you for all the feedback and some great, helpful stuff, some really funny stuff.

[52] But mostly we just appreciate, you know, all of you for listening.

[53] It's super cool.

[54] So thank you.

[55] All right, David, you want to dive into the acquisition history and facts?

[56] Let's do it.

[57] So we go back to 2003, relatively recent by acquired standards.

[58] Yeah, we're not starting with like the original cartographers.

[59] No. someone thought of an idea of a map and it's been a busy week here at wave you know no we go back 16 years to 2003 to google in mountain view it is pre -IPO google as we're going to see just pre -IPO google they're starting to gear up they have found their business model of paid search inspired by overture which we covered the borrowed best business model of all time Yes.

[60] We covered with the Internet History podcast, right?

[61] Yep.

[62] Brian McCullough.

[63] Yeah.

[64] Thank you, Brian.

[65] So it's 2003 and a young product manager at Google, fresh out of Stanford, whose name is Brett Taylor, is working on a little and truly little feature of Google at the time called Search by Location.

[66] The idea is that you could enter searches into Google by location.

[67] But there's no maps.

[68] There's no maps.

[69] There's no. No, it's like completely useless.

[70] And in Brett's own words, it had zero users per day.

[71] And I think if I remember right, you had to like use a keyword, like you were typing in the search bar and it was like location colon or something like that to scope where you wanted to.

[72] I mean, it was like a command line function.

[73] I mean, I don't remember because I didn't use it.

[74] But for listeners, the name Brett Taylor might sound familiar.

[75] Ben, do you know what Brett Taylor went on to do?

[76] Is he CTO of Facebook now?

[77] Well, he went on to become CTO of Facebook.

[78] Well, he went on to first.

[79] Oh, through FennFrenFeed.

[80] He founded FriendFeed.

[81] Yes.

[82] He was acquired by Facebook.

[83] He became CTO of Facebook.

[84] Then he left, founded Quip, which was acquired by Salesforce.

[85] And he is now the chief product officer of Salesforce.

[86] They were going to have many illustrious Google Maps alumni as we continue throughout the episode here.

[87] FriendFeed was so awesome.

[88] That was that, like, time in social.

[89] where all of the platforms were similar enough that you could build an aggregator and that actually made sense.

[90] Like now Facebook posts have so much crazy metadata and different types associated with them, Twitter, everything has so sort of unique.

[91] But Friend Feed basically said, sure, connect with all your services and we'll create one feed of all your friends across all your services.

[92] That wildly defies the business models of all these companies now.

[93] So that would shut down immediately.

[94] But that was a really cool.

[95] Well, it was like, but you worked on with Red right of aggregating Uber and Lyft.

[96] Yep, they didn't like that either.

[97] Great idea, not anti -business model of big companies.

[98] Anyway, we digress.

[99] So it's 2003.

[100] Brett sits down with Larry Page, co -founder of Google, and recently hired VP of business development, Megan Smith, to talk about search by location, the state of the product, the state of the competitive market out there.

[101] And they realize, look, this is not, This feature is not cutting it.

[102] We need to do better.

[103] And what was going on out there, AOL a couple of years earlier, had bought MapQuest.

[104] MapQuest was the leading internet mapping product out there.

[105] And it was already public.

[106] They bought it after it was a public company.

[107] Yeah, that's right.

[108] They bought it for a billion dollars.

[109] I think that acquisition was pre bubble bursting.

[110] It was the most used product out there.

[111] Yahoo also had Yahoo Maps out there, which were quite popular.

[112] And Google found out that Yahoo was doing a bunch of work to adding a bunch of features to Yahoo Maps and really making a push on it.

[113] And so the three of them decide we need to really compete in this space.

[114] Fortuitously, right around that same time, they get a tip from their investors, Sequoia Capital, one of their investors, that there is an interesting little company down under in Australia that they might want to look at.

[115] In researching this, last night I discovered that MapQuest is still around.

[116] You can go to MapQuest .com.

[117] The logo is something that I've never seen in my life because, of course, it's owned by Verizon because the whole AOL to Yahoo Verizon thing.

[118] That's right.

[119] So it's like a still a thing you can use.

[120] It uses Mapbox and it licenses sort of maps and data.

[121] I couldn't believe it was still around because like the last time I used MapQuest, I was like printing out the directions so that when I was driving somewhere, I could look at the piece of paper and, you know.

[122] Yep.

[123] That's what you did.

[124] Well, we'll get to state of the art in a minute.

[125] Well, that was state of the art was you went on MapQuast or Yaku Maps, you got some directions, you printed them out.

[126] And as you drove along or walked along, you were like looking at the sheet of paper.

[127] And there was no dynamic.

[128] Look how cool it is.

[129] This was made just for me. Yeah, they were just static pages.

[130] You entered your starting point, your destination.

[131] And you got a static web page that you then printed out.

[132] So down in Australia, though, there is a motley crew of four people, two Danish brothers, Lars and Jens Rasmussen, who had recently moved there, they're Danish by birth.

[133] They had been in Silicon Valley in California.

[134] They had been working at a startup.

[135] That startup was called Digital Fountain.

[136] Well, it was a dot -com bust.

[137] I think it ended up surviving and maybe ended up getting acquired like in the mid -2000s or something.

[138] They laid off like most of the people.

[139] They laid off most of the people.

[140] And so the two brothers had gotten laid off.

[141] And they said, okay, well, you know, it's kind of nuclear winter here, Post .com bust, but let's start something.

[142] Like, you know, we've seen, we've been through this startup.

[143] We were interested in starting a company.

[144] Lars was dating a woman who, who ultimately marry, who was Cuban, and she couldn't immigrate to the U .S. And so she and he decided to move to Australia.

[145] So they moved to Australia, but he and his brother, Jens, are thinking about, you know, a product that they could build.

[146] And Jens had the idea that, that, you know, just like we were talking about this state of the art in mapping on MapQuest and Yahoo Maps, it kind of sucked.

[147] Like, it really kind of sucked.

[148] And maybe, like, they could build something that was better.

[149] And his idea was that, so if you go way back and try and remember using these sites, you would see a map.

[150] But the map wasn't, like, actually the key part of the experience.

[151] It was the list of turn -by -turn directions on the side of the map.

[152] And the map itself was, like, you'd get a tiny little, like, Just for fun, they generate you this tile that's like, look, this is sort of illustrative of where you're going.

[153] And so he had the idea that the map should be front and center, just like a map, and that the directions should be on the map.

[154] And the map should not be static, but it should be dynamic.

[155] And you could interact with it.

[156] You could zoom in.

[157] You can pan.

[158] You could do all of the things that we now think of as normal, modern mapping applications.

[159] The way he thought that you could do this was to make the map based on this concept.

[160] of tiles.

[161] And each tile, it would be dynamic tiles in the map and they represented a small part of it and that they could stitch it together so that whatever view you were looking at was an aggregated view of all the little mini tiles that made up the map and you could move it around and see different tiles and whatnot.

[162] That's a brilliant technological innovation that enables this.

[163] It's amazing to me that it both requires this sort of like breakthrough technology innovation, which is still how maps work today.

[164] I mean, there's a lot more vector stuff than just this sort of static tiles world, but that's what enabled this mapping revolution.

[165] But the vision innovation that he really nailed was if you made the map big and pretty and zoomable and searchable, it itself could be a platform for other services.

[166] Like the map itself could be a platform.

[167] Could be the mode of interaction.

[168] So Lars is like, well, yeah, okay, this is cool.

[169] Well, let's start a company around this and let's do this.

[170] So he's moved to Australia.

[171] He convinces Yenst to move to Australia.

[172] and he recruits two other engineers who are friends of theirs, Noel Gordon and Stephen Ma.

[173] And the four of them start working on this out of Noel's spare bedroom in Sydney in Australia.

[174] They decide the name of the company, Ben, as you said, where are two technologies, where and then the number two technologies.

[175] And they start talking about how they're going to do this.

[176] And like, the web isn't even on their mind.

[177] Clearly, the only way that you could build an application, this performance and dynamic would be with, desktop software, right?

[178] Like, this would be like, you know, the Encarta Encyclopedia.

[179] You know, you're going to install this on your desktop computer, and it would be super cool.

[180] And, you know, you can find what you want, panorama.

[181] Maybe you could still print out the directions eventually.

[182] How else could you do this?

[183] So they start working on it.

[184] They realize that, hey, this is, this is kind of cool.

[185] They might be onto something.

[186] They search for funding, VC funding for this.

[187] So Lars and Jens fly back to California.

[188] They meet with a former Cisco executive that they had known, who is a prolific angel investor, his name is Frank Marshall.

[189] Frank says, okay, like, this is cool.

[190] I'll introduce you to my network to a bunch of VCs, including Sequoia Capital.

[191] So they get introduced to Sequoia.

[192] And Sequoia gets pretty excited about this.

[193] Sequoia been, was investors in Google.

[194] They were investors in Yahoo, investors in, and in lots of, you know, great companies over the years, as we've seen many times on this show.

[195] They start talking terms and they give a, unclear if this is a verbal offer, they actually gave a term sheet to the company.

[196] to invest $2 million for 40 % of the company.

[197] It was a different time back then post -bubble bursting.

[198] So that would be a $5 million post -money valuation selling 40 % of the company for $2 million.

[199] Times have definitely changed in the seed market since then.

[200] However, before they ink a deal, and the brothers are excited about this, they're like, man, great, Sequoia Capital, one of the premier marquee venture firms out there.

[201] They're willing to fund us here in Sydney, Australia.

[202] this is great.

[203] They're excited to do it.

[204] Before they actually sign the deal, though, Yahoo! Releases what the Google folks know that they are about to do is a big update to Yahoo Maps.

[205] And they add local Yellow Pages listing.

[206] And it's clear that like, oh, okay, this is going to be the business model here of like, we're going to have local businesses on these maps.

[207] We're going to sell advertising around that.

[208] People are going to be able to find them.

[209] And this is kind of game changes in the industry.

[210] Sequoia sees this and they pull out of the deal.

[211] They say, yeah Yahoo's going to be the winner here we're not as excited about funding this startup company to try and compete with these giants anymore sequoia gets a lot of things right but uh well they still get something right though you know and this is one thing um they are in many of the best you know big platform companies out there and of course they're investors in yahoo and google sequoia does say as a kind of a parting gift to while passing with the brothers here and where, too, says, you know, with Yahoo launching this, Google is going to need to respond and, you know, we're investors.

[212] We're on the board of Google.

[213] We can introduce you to them.

[214] We'll broker an introduction.

[215] So they, as we alluded to earlier, make this introduction to Larry Page.

[216] Back in Mountain View, I don't know for sure, but I assume large and yen's fly over again, back to California.

[217] They meet with Larry and Megan.

[218] They pitch them, this company at the building, I think I didn't mention earlier.

[219] The name of the software, the desktop software, is expedit.

[220] They show them expedition, how cool it is.

[221] They pitch them.

[222] And Larry and Megan are interested, but there's kind of two problems.

[223] One, as we alluded to earlier, Google's in the middle of - It's a desktop.

[224] Well, the smaller problem is Google's in the middle of preparing for their IPO.

[225] So all deals are on hold, like, period, indefinitely.

[226] They're not doing any M &A during the quiet period while they're getting ready to go public.

[227] This is 2004 at this point.

[228] But two, yeah, it's a desktop.

[229] So like we're talking about Google here.

[230] Google doesn't make desktop software.

[231] Google makes web software.

[232] Did you see that Larry Page quote, we like the web?

[233] Yes, exactly.

[234] We like the web.

[235] That's all the end of the meeting.

[236] That's what Larry says.

[237] Like, you know, yeah, this is great.

[238] But we like the web.

[239] Of course, Lars and Jens in typical great entrepreneurial fashion, they say, well, we can do that.

[240] So they go back to Australia and the four of them, where to, only the four, they're still just for engineers.

[241] They work feverishly for three weeks.

[242] And at the end of three weeks, they come.

[243] back to Larry and Megan and they say, hey, remember how we had expedition running on the desktop last time?

[244] Well, here it is running on the web.

[245] And what they do, they have it running on a web browser.

[246] They use this idea that was as best as we can tell.

[247] And they've talked about it and Google's talked about it, kind of independently invented both by the Gmail team and Paul Buchite within Google and also where to while they're trying to get acquired by Google at the same time.

[248] And that's leveraging this kind of relatively unknown feature of JavaScript that Microsoft had added to Internet Explorer that allowed it to sync with, allowed a web page that was already loaded, to sync with XML data stored on a server.

[249] So like ordinarily, and at this time, like, webpages are static.

[250] You load a web page, everything is done.

[251] There's no processing happening on the web page.

[252] It's static.

[253] But there is this feature that you can dynamically fetch XML data in the background without refreshing the page.

[254] Asynchronous JavaScript and XML.

[255] Indeed.

[256] The wave of the future.

[257] The wave of the future.

[258] And for all of our engineering audience and probably some others, you're going to know exactly what we're talking about here.

[259] But for everyone else, you may have heard of the term Ajax, asynchronous JavaScript syncing with XML data stored on the server, short for, yeah, Ajax.

[260] We're coming to the, plumbing the depths of our engineering.

[261] abilities here.

[262] All I remember is this was like a couple years before I rewrote the Hudson High School website and I remember writing a lot of XML HTTP requests and being like, this is going to be cool like Google Maps was.

[263] So indeed, you know, I feel like we've been lately been on a web 2 .0 history kick here, but this is, becomes a killer key building block of the whole web 2 .0 era is the ability to have non -static web pages via this tech.

[264] technique.

[265] As part of the Slack episode, we talked about Flickr.

[266] That had just launched a couple months before.

[267] This is really like one of the key underlying technologies of the Web 2 .0 Renaissance.

[268] So the where to team, they come back.

[269] They present to Larry and Megan.

[270] And they're like, well, well, all right, this is, this is pretty good.

[271] And they were doubly impressed and Google was doubly impressed because again, Paul Buchgate on the Gmail team that was, I think, I don't think Gmail had come out publicly yet.

[272] I think it was still being worked on internally.

[273] They were like at the bleeding edge of building web applications.

[274] They were doing the same thing internally.

[275] So Google's like, wow, man, these engineers must be pretty good if they come up with this independently.

[276] So later that summer, in August, Google does complete the public offering on August 19th, 2004.

[277] And then very shortly thereafter, probably as soon as they can, once the dust settles from the IPO, in October 2004, Google acquires where to.

[278] Brett Taylor, moves over and becomes the first PM for this new team, which is rechristened from Where2 to Google Maps, very inventive name.

[279] So, you know, it was just over the summer while Where2 is building the web version of the product to try and impress Larry and Megan, Google Maps launches publicly in February 2005.

[280] So the acquisition is October 2004.

[281] The web product is only a couple months old, and within months, Google Maps is launched to the public.

[282] It's pretty incredible.

[283] I feel like we hear this story a bunch on Acquired of some of these totally world -changing products are built in just a matter of months by really, really talented engineers.

[284] One of the things that makes this story so common on this show is there was this time when web applications were so new that it was intuitive what was going to have product market fit because there were so few web applications.

[285] I mean, I think like, oh, the first really good interactive mapping software, the first really good interactive, you name it, like there was probably a big space for it.

[286] Photo software, Flickr, video software, YouTube, you know, all of these companies, yeah, it was the floodgates were opened to building these applications on the web and whoever could build them fastest and best.

[287] And the web was so slow at the time, too, that it's exactly yeah, fastest and best.

[288] Like there was, like, this was an era where technology innovations created a 100x better user experience for people that made them actually use those applications.

[289] So there was lots of people that would sort of like decide that they wanted to get into this, but it took real technical genius to, you know, work with the internet speeds we had at the time, the browser technologies, to be able to sort of like make that possible for people.

[290] Yeah.

[291] And what's interesting is like this is pre -Google Chrome days.

[292] So actually all of the browser technologies making this possible are coming out of Microsoft and internet.

[293] And Firefox.

[294] And Firefox, too.

[295] And Brazil.

[296] Yeah.

[297] Yeah.

[298] Pretty incredible.

[299] Okay.

[300] So rewind just slightly back to the end of 2004.

[301] Google also acquires two other companies in quick succession at the same time.

[302] One is a company called Keyhole.

[303] Keyhole was, unlike where two, was a well -funded startup, I believe, located in Silicon Valley in California.

[304] It also though made desktop software, and it was called Earth Viewer.

[305] And, of course, the listeners can probably guess that becomes Google Earth, which interestingly would remain desktop software for quite a number of years.

[306] And contain a flight simulator.

[307] That's right.

[308] That's right.

[309] The Microsoft parallels are just very, very important here.

[310] Ben, do you know who the CEO of Kehoe was?

[311] I do not.

[312] Well, it was, I'll give you his name, see if this rings any bells.

[313] John Hankey.

[314] Nothing.

[315] Oh, man. So John would ultimately, after a couple of years, become the VP of the geo group, quote unquote, within Google.

[316] So he would be taking over on Google Earth and Google Maps.

[317] The responsibility as an executive for that.

[318] But then, as oftentimes happens in big companies and at Google, he kind of got bored with this role and wanted to go back to doing something new and innovative.

[319] And he had come from the video game industry before he started Keyhole.

[320] and so he started a little project within Google that was referred to as Niantic Labs.

[321] No way!

[322] Yes, yes.

[323] And so John is the CEO.

[324] Boy, the geospatial stuff makes a lot of sense then.

[325] Indeed, John is now the CEO and co -founder of Niantic, which of course makes Pokemon Go and the new Harry Potter game and all of the...

[326] And Ingris.

[327] Well, started with Ingris, yeah.

[328] And all of...

[329] Well, actually, it started with, I think it was Field Trip, which was a application built on Google Maps, to that could show like interesting points of interest around you with you if you held up your phone and like panned it around but yeah certainly by far the most successful augmented reality uh game or probably application period out there right now yeah yeah yeah for sure i mean it is funny i think when people talk about the emerging ar market i i think that's the widest used that is the market yeah yeah Pokemon go that's the market uh that was keyhole a google also acquires a company called ZipDash, a very, very small company.

[330] I believe they paid $2 million for ZipDash.

[331] ZipDash was also based in Silicon Valley in California, and they were providing, creating real -time traffic data on streets, and they were getting that data both from and sending it to mobile phones, of course, like that is when you would want traffic data, is when you have your mobile phone with you while you're driving.

[332] There was a giant market of only for Nextel phones at the time of the acquisition.

[333] Did those had the sweet like walkie -talkie feature.

[334] Yeah, the push to connect.

[335] Oh man. I never had one of those, but I always wanted it.

[336] You ever have one?

[337] The commercials were great.

[338] I don't know.

[339] The commercials were awesome.

[340] So the zip dash team by far, you know, the most insignificant of the three of these acquisitions.

[341] To this day, the where to acquisition prices still undisclosed.

[342] It was a mix of cash in stock.

[343] That's the most we know.

[344] But I think it was less than 50 million.

[345] Like I think it was a really.

[346] I think that's a really.

[347] relatively small acquisition.

[348] I mean, great for four people.

[349] And I believe Keyhole was around 35 million, I think.

[350] I'm being sort of facetious about the total insignificance of the zip dash acquisition because Google would of course, you know, stick them in this backwater thing that they would work on that nobody would care about, which would be the mobile version of Google Maps, which of course is now like by far the, you know, 90 plus percent of the business and one of the most important applications in history.

[351] Back to the launch in February 2005 of Google Maps.

[352] The night before launch, it got slash dotted.

[353] Remember slash dot?

[354] Oh, man, yeah.

[355] That was like getting dug before dig.

[356] I know, I know.

[357] So great.

[358] Or tech memes now or, you know.

[359] I mean, it's still up.

[360] Like, you can, I think you can still, I don't know if there's traffic, but like, there's writers.

[361] Yeah, I remember going to slash dot, like, literally every day.

[362] It looks the same.

[363] I mean, this is crazy.

[364] Oh, man. It's not even the wayback machine.

[365] Yeah, like somebody published something this morning.

[366] This is like still a news site.

[367] Wow.

[368] So slash dot, of course, for listeners who don't remember or weren't alive, was sort of the tech meme equivalent.

[369] It was the user generated and posted news site for technology back during this era.

[370] Getting slash dotted, quote unquote, was if your application, or service or product or what have you made it to the top of the SlashDot boards, you would get just a ton of traffic.

[371] I'm reading the about.

[372] SlashDot was created in 1997 by Rob, Commander Taco, Molda.

[373] I remember Commander Taco.

[374] He was like the username on all the posts.

[375] Yes.

[376] Oh, so great.

[377] People find out about this impending, or kind of re, well, not even relaunch of where to because Expedition was, I don't believe, ever launched publicly and it was desktop software.

[378] but the launch of Google Maps coming the night before, it gets slash dotted with the URL of Google .com slash maps.

[379] And so when they launched the next day and announce the product, they just get a ton of traffic, ton of traffic.

[380] But that doesn't equate to immediate success for the product.

[381] And actually, according to Brett Taylor and many of the histories out there, for about a year, it was like, okay, it got some usage, but certain MapQuest and Yahoo Maps where, despite being obviously inferior in many ways, were still the leading products out there on the web.

[382] Over the next year, though, they do two things that are really important.

[383] One that is sort of like fundamental that was starting to be well known, and I feel like Google was way ahead of the curve, but now is like obvious, which is that they rewrote the app.

[384] It was really slow, and they rewrote it for speed.

[385] So like Google understood that speed of loading of web pages, search results, everything.

[386] I mean, it was one of their primary value propositions for why Google won.

[387] Not only was it the best results, but it was the fastest results.

[388] It was instant.

[389] And so they rewrote all the software.

[390] They made Google Maps actually performant and fast.

[391] And that certainly helped a lot, and especially as the product scaled, helped a lot.

[392] Two, though, on the distribution and sort of stunt side, they added satellite imagery to maps.

[393] And I vividly remember this.

[394] And the satellite imagery, the aerial imagery, they took.

[395] from the Google Earth team, from the keyhole acquisition, and they were able to bring it into maps and the web application.

[396] And so when this launched, it was such a novelty.

[397] And I remember doing this.

[398] I remember my parents doing this.

[399] Everybody would go find their home.

[400] Go to find my house.

[401] Go find my house and view it from a satellite.

[402] And that was like the key thing that like made sort of like the Zestimate for Zillow that like it got mainstream people using this.

[403] Yeah.

[404] It was like you were like, I saw this in a movie.

[405] Only the government can do this.

[406] And now I can do it Yeah, yeah.

[407] And there's a super, super fun story from Brett Taylor that he posted on Twitter that we'll link to about naming this product feature, which, of course, is, as we all know now, called satellite view.

[408] When they were working on it, the maps team called it satellite view.

[409] But apparently the Earth team got really upset about this because some of the images were from satellites.

[410] But most of the images...

[411] helicopters.

[412] Yeah, we're actually aerial from planes and helicopters.

[413] And so there was this kind of like holy war between the engineering teams about you can't call it satellite view.

[414] It's like most of it's from planes.

[415] And so they ended up having a product review in one of the product reviews before the feature shipped with Sergey Brand is in the in the product review where they like on the agenda was to finalize the name of this feature.

[416] And apparently in typical Larry and Sergey fashion and especially Sergei, They were always doing, you know, nutty stuff.

[417] And Sergei was on this kick that every meeting had to end on time.

[418] Every meeting he went to, he brought like a timer, like a countdown clock.

[419] And he would hit the countdown clock at the beginning of the meeting for, you know, 45 minutes or an hour or however long it was.

[420] And then when the clock reached zero, he got up and walked out, meeting was over.

[421] And whatever like decisions needed to be made, the current state of where things stood, that was the decision.

[422] So they're in this meeting and debating what to call it.

[423] and everybody's throwing out different names and Sergei's mostly in listen mode and then the clock hits like 10 seconds and Sergey says let's call it bird mode and then the buzzer like goes off and he walks out and everybody's looking around and they're like are we really going to call this bird mode so according to Brett the the maps team goes back to work on it and they're really debating like we can't call this bird mode that's ridiculous and so they decide just not to do it.

[424] And they just leave the satellite mode, you know, name in there.

[425] And then they ship the feature and nobody asked them ever again.

[426] And so they literally defied Sergei, and they just did it.

[427] And now satellite mode that we all know and love is satellite mode.

[428] This reminds me. Meanwhile, Microsoft shipped the org chart.

[429] I remember, I don't know what it looks like today, but I remember in Bing Maps for the longest time, there was both satellite, which was truly from satellites.

[430] But then there was also like, I don't know if they, called it birds eye or they called it helicopters but are aerial perspective or something like that and this was actually the helicopter shots which for nerds was pretty cool because then what you could do is they crisscrossed in the sky like north to south south to north east to west west to east and you could actually rotate the perspective that you were viewing and it it wasn't like at a 45 degree angle it was maybe like a 20 degree angle or something but you could actually like sort of see what it looked like viewing not directly down, but sort of like slightly at an angle down and see.

[431] I remember when they did this.

[432] Yeah.

[433] Yeah.

[434] I remember like, I'm like, this is cool, but like, is this useful at all?

[435] Right.

[436] And why would you have two different views for this?

[437] Yeah.

[438] But sure enough, I looked at my house and I looked at it from all four angles.

[439] And I was like, this is pretty cool.

[440] That's pretty good.

[441] Well, to be back in the mid -2000s.

[442] So by 2006, uh, why?

[443] once all these features is shipped, Google takes over MapQuest and Yahoo and becomes the largest internet mapping destination and provider in the world.

[444] In mid -2006, they release the Maps API.

[445] And this was another like watershed moment in Web2 .0 development is developers go nuts with access to the maps at Google Maps API and they start creating mashups.

[446] Do you remember mashups, Ben?

[447] No. Oh, Google Maps mashups were such a thing.

[448] It was like the tech world meme of 2006 to 2009.

[449] All sorts of applications get built showing, you know, overlaying crime data or, you know, any points of interest data or whatever.

[450] People are just like taking the underlying maps and the dynamic nature of it, embedding it in their web pages, layering data over it.

[451] Super cool stuff gets built.

[452] My favorite was, do you remember Padmapper?

[453] Did you ever?

[454] ever used that?

[455] Oh, yeah, for sure.

[456] Yeah, so Pat Mapper is a Google Maps mashup.

[457] Yeah, yeah, that makes sense.

[458] I mean, that's how, I found an apartment that way, like, until at least Craigslist got all Huffy in and shut them down for scraping.

[459] Yeah.

[460] And this was super, I mean, this is fun stories here, but like this released the API, the developer interest in mashups and people starting to do this, this leads to things like Trulia, things like Zillow, things like Uber.

[461] You know, none of this would be possible without the Google Maps API.

[462] Which for a while, we should say, was free.

[463] It was maybe a Google growth strategy, but maybe just Google saying, like, we love making things that make the web better.

[464] And so if you want to use Google Maps for your own thing, it's free.

[465] And then if you're really using it a lot, it's pretty cheap until recently.

[466] I remember I worked for a year at the Wall Street Journal after investment banking and before moving to Madrid, and getting into venture capital.

[467] And during that year, we started doing a bunch of mashups.

[468] work with Google on the uh with maps and we spent a ton of time with the maps biz dev team trying to figure out how we you know could we use this for free did we have to pay for it how much do we have to pay for it also it took google a little while to figure this out i think they've got a pretty good business model now also listeners a quick update on my last comment uh i'm on bing maps right now they no longer have the they have an aerial feature but it is effectively satellite view and there is not a way to rotate around your favorite buildings in four slightly different angles.

[469] Oh, sad.

[470] There's just one problem with all of this, though.

[471] This might actually be, I bet this is why it took so long for Google to fully iron out the API business model, which is that Google and Google Maps were completely dependent on mapping data from other data providers and satellite companies, the two largest of which were Teleatlas and Navtech.

[472] And in 2007, both of those companies got acquired.

[473] I may mix this up, but I think Navtech got acquired by Nokia and Tele Atlas got acquired by TomTom.

[474] It may be the other way around.

[475] But they were both fairly large acquisitions.

[476] And they had a duopoly on satellite map and navigation data providing.

[477] And so they would sell their data and images to all the car companies that were putting GPS and maps into screens in their vehicles.

[478] They would sell to Garmin.

[479] they would sell, TomTom, obviously, was making their own standalone GPS devices, and they would sell to MapQuest and Yahoo Maps and Google Maps.

[480] So Google knows that this is a dependency that they're not too excited about.

[481] Also in early 2007, Larry and Sergey are back on the Stanford campus, where, of course, they were PhD students and Google was started.

[482] And they meet up with someone who, I assume they knew and were friends with, who was computer science professor Sebastian Throon.

[483] who at the time was a computer science professor at Stanford, and he was running two really important projects.

[484] One was SAIL, the Stanford Artificial Intelligence Laboratory, and two was the Stanford's team in the DARPA Challenge.

[485] And he and Stanford's team had just won the 2005 DARPA Challenge.

[486] The DARPA Challenge, of course, was the challenge to create an autonomous vehicle that could navigate a preset -out course and terrain in the desert.

[487] And so Sebastian and his lab were like at the forefront of all of the things that would go into ultimately autonomous vehicles.

[488] But a huge component of that is mapping, navigation data, all of these things.

[489] Sebastian told Larry and Sergey that he is actually in the process of with a bunch of his grad students starting a startup to work on one aspect of this.

[490] It was going to be called V -U -T -O -O -L.

[491] Great, really great product name.

[492] And they had a crazy idea that they were going, based on their work in the DARPA challenge, they knew all these things that were important.

[493] They were going to drive around the streets of America with cars, driven by human drivers, but with big cameras on top.

[494] And they were going to use these cameras to take pictures of everything.

[495] And A, that was going to have pictures of everything.

[496] But B, it was going to be data that was going to be incredibly useful for this future of navigation and autonomous vehicles and all of that.

[497] Which was not a thing that the public was in any way talking about.

[498] about.

[499] That was five years out.

[500] I mean, I remember the DARPA Challenge from back when I was in school at Princeton at the same time.

[501] We had a DARPA Challenge team.

[502] I mean, all the major universities did.

[503] So it was something that like academics and engineers were thinking about, but just nowhere near mainstream.

[504] But it was like 2012, 2013 before the tech community started getting buzzy about, ooh, autonomous vehicles might be a thing sometime soon.

[505] Yeah, it was totally in science project territory.

[506] You could argue maybe it is.

[507] still in science project territory, but it definitely was then.

[508] So Larry and Sergey, they hear all this from, um, from Sebastian.

[509] And of course, they know on their minds is this dependency problem on teleatlas and Navtech.

[510] And, uh, they say, we're going to buy you immediately.

[511] So they do.

[512] And of course, this turns into Google Street View.

[513] But Street View itself, as we were talking about, was never the only goal of the project.

[514] Although Street View was super cool.

[515] And it was a whole other round of just like when there was satellite imagery.

[516] I went and looked at my house.

[517] Everybody goes and looks at their house.

[518] But so it was great marketing for Google Maps.

[519] Using that data, Google starts internally a project called Ground Truth.

[520] And this is led by Megan Quinn, who was a product manager at Google at the time.

[521] She would go on to Square and then Kleiner Perkins, and now she's a GP at Spark Capital and an investor and board member at Rover .com, one of the many illustrious Google Maps PM alumni.

[522] So she leads this project, and what they're doing with all the engineering talent at Google is basically taking the data and the images from the street view cars and using that and interpolating it in ways such that they can get everything they need from that, and they don't need to buy teleatlas and Navtech data anymore.

[523] Talk about another unique and amazing technology problem to solve is we're going to take these, whatever it is nine cameras or something that are mounted in this crazy way on top.

[524] of this car that are all taking these still images.

[525] And of course, like, there's the difficult thing of stitching them together nicely for street view.

[526] But we're going to be able to extrapolate structured data that serves to create our maps by taking these lat long coordinates from the moment that these pictures were taken and all these pictures and actually derive map data from that.

[527] Frickin amazing.

[528] Incredible engineering project.

[529] It takes a little bit of time, as you would imagine, but they have to drive the cars around all of America to get it.

[530] But by October 2009, so they acquire Voodool in early 2007, by October 2009, Google boots out Navtech and Teleatlas, and they are officially only using their own Google data for maps.

[531] And that then, and I think it was right around then, and now that I'm remembering, this is when I was at the Wall Street Journal, it was right around then that they open up the business side of the Google Maps API.

[532] and they start charging to license out the Maps API.

[533] Continuing Ben's quest of playing with mapping software in real time while doing the episode, there's a really cool feature you can do because, you know, these cars are still actively driving around all over the place, capturing all this data, where you can actually, in street view, go and change the year that you are looking at.

[534] So in the top left corner, if you hover over the little clock, you can adjust.

[535] I'm on Mercer right now in Seattle.

[536] You can adjust from 2015 to 2019.

[537] And even in those few years, it's crazy to watch how much the city gets built up and how much that road changes.

[538] And I think on average, roads tend to have four or five years of historical data there.

[539] But it is like the coolest thing to go in this time machine and look at what they captured today versus what they captured over.

[540] Let's see, I can go back to 2014 over here.

[541] And it's wild to watch the change over time.

[542] Wow.

[543] I didn't know you could do that.

[544] That's really cool.

[545] I found it in a deep, way too much time on the internet, Google Images, click -around session.

[546] Love it.

[547] Okay, so apologies for the multiple jumps around in timeline here, but as recently, Google Maps, like this becomes such a foundational product and technology to so many things.

[548] And of course, I'm sure what is on everybody's minds, and people probably remember going back to the Zip Dash acquisition is mobile.

[549] What's going on with mobile for Google Maps?

[550] so let's let's go back again to 2007 2007 great year year I graduated from college but it was also what else did happen in 2007 it was the year of the iPhone yeah remember it was called the Jesus phone I do oh my goodness I mean if any phone was a Jesus phone it was the iPhone um people probably remember when the iPhone shipped there were no third -party applications on it everything was built by Apple But there were two apps that weren't entirely built by Apple and did have third -party backends.

[551] And those were maps, powered by Google Maps, and YouTube, powered by YouTube.

[552] And those beautifully skeuomorphic images, like YouTube was that old TV instead of the YouTube logo.

[553] Oh, man. Well, we're going to be talking about Mr. Forrestall in a minute here.

[554] This must have been in 2006.

[555] By this time, John Hanky of Niantic fame had become the VP of the Geo Group.

[556] and so he both earth and maps were reporting up to him and so one day according to him he's at his desk at google and the phone rings and uh he picks it up and it's steve jobs just like the trip episode uh the EA episode with tripp hawkins steve just like so many episodes of steve calling people and acquired and so he says this is a quote from from john he says steve jobs called me at my desk to ask me to help out on a project he wouldn't tell me what it was but of course i knew uh we worked closely with Apple to get maps ready for the launch of the first iPhone, which opened up so many possibilities.

[557] So at iPhone launch, when Steve Jobs announces it on stage in January 2007, like we said, Maps and YouTube are the only third -party apps on the iPhone, except they're not really.

[558] So what happened was they work closely with Google and YouTube on these, but it's actually Apple engineers and Apple designers that are building the apps based on the backends and the APIs from Google.

[559] So Google has no control.

[560] Think about that time, like how there was no iPhone SDK.

[561] Everything was, there was no separation between being a platform engineer and being an application engineer as far as iPhone OS went.

[562] So of course it had to be Apple engineers because like there were no like APIs that were optimized for performance.

[563] You were writing like directly interfacing at a very direct level.

[564] I need to be very careful that you weren't doing anything that would, you know, just cause the app to crash every time or worse, you know, something in the operating system level.

[565] We'll have to see if we can find in link to in the show notes.

[566] There's great, great retrospectives and histories with people, I think on the 10th anniversary of the iPhone, talking about how duct tape it all was together in the first version.

[567] Especially that demo, that onstage demo, where it was actually like three different phones that were used during the course of it because it couldn't all work on the same phone.

[568] And they'd choreographed the entire thing.

[569] Like, if Steve touched one thing at the wrong time or went off script, like the whole demo would crash.

[570] Anyway, so Apple is controlling everything about the UI of maps on the phone.

[571] Google's just providing the data.

[572] But of course, Google is also working on the smartphone of operating system of their own in Android, which they acquired in 2005.

[573] 2005 was a big, 4 -5 was a big time of acquisitions for Google.

[574] We, of course, covered that on our Android episode.

[575] So then in 2008, when Android launches, of course, it has maps and Google Maps on it.

[576] And then when they update it in 2009, the next year with Android 2 .0, Google adds turn -by -turn navigation to maps on Android.

[577] And this is huge.

[578] I mean, people knew at the time.

[579] This was like the death knell of Garmin and TomTom and Navtech and all of these companies.

[580] Like they, I didn't go back and look it up, but I think their stocks dropped to like 30 % on the day of announcement and they're, you know, worthless now.

[581] Meanwhile, though, like Google Maps for the iPhone, you just see your blue dot.

[582] You know where you are.

[583] You can get a list of directions, but like you can't get anything live.

[584] Yeah, remember tapping through like, oh, I've made this turn now.

[585] Now I'm going to tap it.

[586] I'm going to go look what the next one is going.

[587] I'm going to tell the phone that I have moved.

[588] Barbaric.

[589] Who knows what was going on in discussions between the two companies.

[590] You could paint a picture where Google wanted to add turn -by -turn navigations to maps on the iPhone, but they couldn't because they didn't control.

[591] the UI.

[592] But then as the two companies start fighting over the smartphone wars in this era, the turn -by -turn navigation is a killer, killer feature for Android.

[593] There were turn -by -turn apps available on the app store for iOS, but they were like $50 or $100 that you had to pay.

[594] Remember that?

[595] That's right.

[596] Yeah.

[597] Because I think Tom Tom Tom had one of them.

[598] Yes, Tom Tom did.

[599] Maybe Garmin, too.

[600] We talked about this on the Ways episode, which we'll refer to in a minute, as all of this is deteriorating all else I have in my notes here.

[601] Remember when Microsoft bought Nokia as part of this?

[602] Oh my goodness.

[603] An era best forgotten in time.

[604] That was just like an arbitrary dig.

[605] Like you just dug that out of nowhere and just to have a dig.

[606] Well, I just, you know, we haven't talked about it unacquired yet and I feel like it had to come up at some point in time.

[607] Time marches on.

[608] We get to 2012.

[609] It's Dubdub, WWDC.

[610] And rumors are swirling.

[611] that Apple is going to make a major move in the wars with Android.

[612] They're going to release iOS 6, a major update, and the marquee feature is they are booting out Google.

[613] They are launching their own mapping service.

[614] Apple Maps.

[615] It's going to be insanely great.

[616] And who comes out on stage to introduce it?

[617] Scott Forrestall.

[618] Scott Forrestall.

[619] And we won't be hard to.

[620] I mean, it's so.

[621] hard to build a mapping service.

[622] I mean, I think, especially one where you're starting 10 years after your competitor.

[623] Yeah, I mean, not quite 10, but everything we've talked about on this episode, from where to, to keyhole, to zip dash, all the work internally, to Street View and Vood Tool, all of this over the years, all this engineering that Google was put into Maps and Apple, I don't know how long they were working on Apple Maps internally.

[624] I'm sure a couple years.

[625] And I'm sure that they realized it was a huge thing.

[626] And they, I mean, they had cars driving around.

[627] People sort of were posting pictures on macrumors .com of the Apple cars driving around.

[628] They were definitely putting in a huge amount of money and effort.

[629] But in the meantime, Google was doing not only all this engineering, but they had billions of people, well, probably hundreds of millions of people at this point in time, using their services and getting all that data back from them.

[630] And so when Apple Maps finally ships in September 2012 with the release of iOS 6, Google Maps is gone.

[631] So Google's completely booted out.

[632] You cannot get Google Maps on the iPhone anymore.

[633] Your only option is Apple Maps or a third -party application of which Google is not on there.

[634] And Apple Maps did have turn by turn.

[635] Apple Maps did have turn by turn.

[636] But if you followed the turn -by -turn directions, you might not necessarily end up where you wanted to go.

[637] It reminds me of that episode of the office Where Michael drives into the lake Yeah The machine says Totally And that I mean there were stories of this happening All over the world And the only thing worse Than not having turn by turn Navigation on your map app on your phone Is having turned by turn navigation That sends you to the wrong place Within days of Of this happening And we covered this on the Ways episode Apple apologizes Letter from Tim Cook Letter from Tim Cook, not from Scott Forrestall.

[638] The writing was on the wall.

[639] Yeah, the writing was on the wall there.

[640] Quickly, Scott is, and skeuomorphism in total, is removed from Apple.

[641] And as part of the letter, Tim says, we recognize this is unacceptable.

[642] We are working to make Apple Maps better.

[643] Here is a list of third -party applications that you can get in the App Store that are alternative mapping applications to use in the meantime.

[644] One of those that he lists is Ways, and of course we cover this on our Ways episode, which everybody can go listen to for the history there.

[645] What everybody wants is Google Maps.

[646] Google Maps is the best.

[647] Yeah, they hadn't done the rewrite for iOS yet.

[648] They had not.

[649] So it was, remember, Google was kind of caught flat -footed here.

[650] There was no team internally that had built Google Maps for iOS.

[651] So amazingly quickly, again, this was September 2012 when this happens on December 12, 2012.

[652] 12.

[653] So three months later, Google ships a third -party application to the App Store of Google Maps, and it's incredible.

[654] It's amazing.

[655] It's so good.

[656] It's so good.

[657] It is complete feature parity with Android Google Maps, including turn -by -turn navigation.

[658] In many ways, people think it was at the time better designed, better -looking, better flow.

[659] And within two days, it is installed on over 10 million iOS devices.

[660] It is like a tall, cool drink of water in a desert.

[661] So two quick personal stories on this.

[662] One, I remember like the halls of Office for iPad or the Apex team at Microsoft were a buzz when this came out because everyone's downloading it.

[663] Everyone's analyzing their user interface paradigms.

[664] This was the first time that Google had really nailed that tradeoff of distinctively Google, but sensibly iOS.

[665] And it was their sort of first of many really great iOS apps that felt Googly but also felt iPhoney.

[666] All of us were sort of like tearing it apart and trying to understand, you know, should we be taking cues from this in Office for iPad.

[667] The second fun personal story there is the team that built that app was actually Kirkland based.

[668] It was Google Kirkland.

[669] It was a small team.

[670] I remember there was four core people on the team and I went to a presentation by them on how we built Google Maps for iOS like three months after they launched it.

[671] They basically said, like, look, that the whole API surface was already written for Android.

[672] Like, we just needed to be really good iOS engineers and connect to the right services.

[673] Like, not that it wasn't that hard, but, like, it actually was architected really nicely for us to just sort of make an iPhone app that, you know, we just had to be Objective C experts.

[674] It really shows the power of all the work that Google had done to this point that just in a few months there, they could make something really nice.

[675] Two things to pull forward from Playbook and maybe we can mention them again then, but to talk about them in the moment, one, I think all of this episode just highlights, people talk about Google being an engineering -driven organization and having incredible engineering resources and talent.

[676] And like, this is it.

[677] I mean, better than anyone else on the planet.

[678] Nobody else could do this.

[679] Everything that they did with Maps over the now 15 years that it's been around, the incredibly architected backend and API surface, such that within three months, a team that is an incredibly talented team can build one of the best iOS applications in the world at that time and use this API backend and not need to worry about it and then ship it to the app store and now Google Maps is one of the most downloaded and installed iOS apps of all time.

[680] Pretty incredible.

[681] Yeah.

[682] I also remember one big thing that made it so good was when it was still the Apple version, Apple's app was connecting to an older.

[683] back end that used the static tiles and had to re -download new tiles for whatever your sort of zoom level was.

[684] Whereas when Google regain control over the front end, by being able to ship their own app, they could connect to their V2 .0 or whatever it was, APIs that actually had the vector maps.

[685] So suddenly all the scrolling was much smoother and zooming.

[686] And actually, this is when they introduced that gesture.

[687] And for anybody who hasn't used this, if you don't use this and you're learning this for me for the first time, this is going to blow your mind to make your life better, instead of pinching on Google Maps, you can actually double tap and then move your thumb up or down to change your scroll level.

[688] So you can use Zoom one -handed by just holding your phone instead of holding it with one hand and pinching with the other hand.

[689] Oh, that's awesome.

[690] I did know that, but I'd forgotten that.

[691] Oh, that's huge.

[692] Life -changing here on Acquired.

[693] So we're going to end history and facts here.

[694] Definitely go check out our Waze episode, our Android episode.

[695] to hear more of the history around this and Waze especially kind of picks things up from here because Google, a couple months after this, Waze gets a huge traffic boost and download boosts from Tim Cook's letter where Ways is one of the applications he recommends in rumors start swirling that Apple's going to now buy Ways to fix their mapping problem.

[696] Then the rumors start swirling that Facebook is going to buy ways because they want to be a internet portal to and have a mapping solution for some reason.

[697] Ends up Google buys Ways for $1 .3 billion in June of 2013, and then progress marches until today.

[698] One last little coda before we leave the history and move on to acquisition category, I think this was one of our carve -outs on the Zappos episode with Alfred Lynn.

[699] Justin O 'Burn did three wonderful, wonderful long -form blog posts in the last couple years comparing the development of Apple and Google Maps over the last few years.

[700] we'll link to them in the show notes.

[701] If you're really into all the technical aspects and detailed minutia of mapping and business models around this, go read Justin's post.

[702] They're really, really great.

[703] I've got a couple of fun catch -ups from this story to today.

[704] The first is, what did the Rasmusins do at Google after moving on from maps?

[705] I know the answer to this.

[706] Well, the real question is, do you know what Lars went and did after this?

[707] But of course, what they go and do is Google Wave.

[708] Google Wave.

[709] I remember when that was launched.

[710] I was so hype on that.

[711] I watched Lars's live stream of like here is the platform that's going to change the freaking world.

[712] It was super cool.

[713] I mean, the crazy thing, like one of the main meta themes on Acquired that we keep talking about is like the tech world is a small place.

[714] Old ideas are new again.

[715] Everything comes around.

[716] They were right.

[717] Like they were completely right on the need for this.

[718] And the need for the product that met that need was Slack.

[719] It was not Google Wave.

[720] Sort of.

[721] It was like Slack plus Notion because it was also, it was like a document surface in addition to being chat.

[722] That's true.

[723] That's true.

[724] And so it would be interesting to think about like, was it just that the timing was wrong?

[725] Was it that they got the product wrong of trying to be Slack plus Notion all in one product?

[726] We'll never know necessarily, but yeah, Google Wave.

[727] So then do you know what Lars went and did after Google Wave?

[728] I know the company that he started that he's running now that.

[729] Before that.

[730] Ooh, I do not.

[731] He went to Facebook.

[732] I don't know if he conceived of in launch, but he was a key executive on Facebook for work, which is Facebook's attempt to compete with, to compete with Slack and be in this market.

[733] Which we have heard from listeners.

[734] I think we may have denigrated Facebook for work in the past, and we've heard from some listeners that they really like it and that has rolled out at scale inside their organization.

[735] So That's definitely a quietly large and successful product.

[736] Yeah, within Facebook.

[737] So, yeah, super fun.

[738] Lars is a new company is called weave .io.

[739] Weave, not to be confused with Wave.

[740] And it is a, like, musical BPM syncing service that their first thing is a running app that I'm excited to try out.

[741] Yeah, yeah.

[742] Well, you've been doing a lot of running lately.

[743] It's true.

[744] And then one last update, the fourth co -founder of Where to Null Gordon is the only one of the four who is still working at Google.

[745] So their fourth co -founder retired a few years ago.

[746] The Rasmussen's obviously are gone, but Noel Gordon is still a Googler.

[747] Wow.

[748] Incredible.

[749] 15 years later.

[750] Yep.

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[771] Well, should we move on to Acquisition Category?

[772] Yep, let's do it.

[773] I think it's a technology acquisition with where to.

[774] Walking through this, listeners, this is where we select whether the acquisition was primarily done or the main value that was acquired was people, technology, product, a business line, an asset, which is what we decided that Waze was, since it was sort of the data that Ways contained and the data that would be generated an ongoing.

[775] basis in the future or other, which gives us the ability to come up with new stuff every episode if we want to.

[776] But I think this is pretty squarely a technology acquisition that they transitioned into launching their own product.

[777] Yeah, that makes sense.

[778] I mean, you could make an argument for product, but it wasn't like it was Google Maps.

[779] They launched it state as Google Maps.

[780] Like, it really, like, a lot of the work and building was, was done within Google.

[781] And it was the technology that they acquired that led to this.

[782] All right.

[783] Well, would have happened otherwise.

[784] Oh, man. That's a really good question.

[785] Could Google have done this internally without buying Where2 and would it have been successful if they did without the Rasmussen's and the rest of the Where2 team?

[786] I mean, Hanky and Keyhole and Zip Dash.

[787] Maybe, I mean, maybe they would have gotten there internally eventually, but there was so many other things going on at Google at this point in time.

[788] the IPO, obviously, Gmail, everything that was happening then, all the YouTube, which of course they acquired docs, they certainly wouldn't have moved as fast.

[789] And then you think about Voodool and acquiring that and stream maps.

[790] Of course, what we didn't talk about then is Sebastian Throon goes on just like all of these alumni to do so many amazing things, founded Udacity, started Google X within Google, and then of course, Waymo and that whole division and Google's autonomous card division comes out of that.

[791] We're really throwing rocks on this episode.

[792] But I don't think Yahoo would have come up with all of this.

[793] There wasn't a logical other acquirer for them.

[794] I mean, Facebook was too early and apparently made some decision that they didn't care about owning maps at some point.

[795] I think they use Bing Maps as their solution now.

[796] I remember that.

[797] You know, Apple was almost a decade away from doing anything here.

[798] If they were going to sell the company to someone, it was probably going to be either Google or a legacy player.

[799] And then I guess the other, what would have happened otherwise is what if they had raised the Sequoia money?

[800] And what if the timing had been different by, you know, just enough so that they actually could close the deal?

[801] This is actually a good question.

[802] Did where to need Google in order to be a successful mapping product?

[803] Or could where to have been its own thing?

[804] Because if this were playing out today, where to would have raised a hundred, soft bank would have invested hundreds of millions of dollars in this company.

[805] I mean, Mapbox, like, literally SoftBank invested 300 million in MapBox.

[806] Yeah.

[807] So we have to go back to what was happening at the time.

[808] I don't think this could have been an independent company.

[809] I actually agree with Sequoia's.

[810] Did they need Google for distribution?

[811] Maybe, maybe not.

[812] But I agree with Sequoia's decision to ultimately pass because maybe they could have gotten distribution on their own, you know, certainly Flickr did.

[813] Certainly YouTube did, although both of those companies, you know, sold and sold way too early.

[814] but they could have been built as standalone companies.

[815] I think the problem here was the reliance on on Navtech and Teleatlas data.

[816] Like if you're an independent startup, are you going to be able to negotiate with them get rates, especially since users are not going to pay for the product?

[817] Like it has to be a free product because MapQuest and Yahoo Maps is free.

[818] So you're not going to have a business model.

[819] You're going to have to license all of this super expensive data.

[820] and the business model, the ingenious business model that Google ends up developing of the API here, that you can't really monetize until you free yourself from that data.

[821] And you can't free yourself from that data.

[822] Well, there's multiple businesses.

[823] Yes, certainly local advertising is the primary business model.

[824] But you're going to be hamstrung by that.

[825] And I think that would just be at the time have been really hard to do as an independent company because there was no way, even if you went public, you couldn't raise the amount of money that companies can raise now.

[826] And so they just wouldn't have had the access to capital to do this.

[827] Google has run this in the red for at least 10 years, maybe more.

[828] There's no way that they would have had the leeway to do that as a private company in that era.

[829] I mean, and when I say in the red, like way in the red.

[830] Like you think about the operational costs of driving all these vans around or paying someone else for that data, which wouldn't have been as good as the data that data asset that Google has built up.

[831] Yeah.

[832] And back to satellite for a minute.

[833] In 2014, Google acquires Skybox imaging, which is a satellite company.

[834] So Google is now owning, operating, and launching satellites into space to do all this.

[835] Could a mid -2000 startup have done this all independently?

[836] Hard to imagine.

[837] Thank you, you're right.

[838] All right, should we move into Playbook?

[839] Yep, let's do it.

[840] So it's been a while since we did a classic acquired episode of sort of analyzing a big company that bought a small company and then grading if that was a good use of capital or not from A to F. So I went back and cloned an old script and, you know, my old one said tech themes, which, of course, we now call the playbook now because I think when we used to do this section, we were just sort of obsessed with abstractly what tech themes are there here.

[841] And we've definitely become more interested in what are the learnings from the actions that that Google took and where to took here that we can sort of extrapolate to use in future investments, companies we start, companies we work at.

[842] And so here I have Playbook, formerly known as TechThames.

[843] Love it.

[844] The biggest thing that I'm taking away here is that Yens saw the future that there could be a geo -visualized search results page.

[845] And this is an important distinction from turn -by -turn directions with a map.

[846] It's, it's, if you have a rich canvas map and it's a full experience and in the future, screens will get better and speeds will get better and everything, you know, all the technology will get better, a map is actually a great platform interface for other things, particularly search.

[847] And I think it's important to think about that when considering startup or product ideas really sitting in the nuance of, this is not a direct competitor to MapQuest.

[848] This has the potential to be something very different because we're going to build it in such a way where it can be so much more than what MapQuest is.

[849] Yeah, there's two thoughts on that.

[850] One, just the power of the interface, it's not just search.

[851] It's not just Google Maps.

[852] It's Uber.

[853] It's DoorDash.

[854] It's Zillow.

[855] Like none of these businesses would exist without Google Maps and without this user interface paradigm.

[856] time.

[857] The other thing that reminds me of is I'm trying to remember who said this to me. I think it might have been Kurt Del Benny back a way early days acquired guest, former venture partner at Marjona when we were all there and now had a strategy at Microsoft.

[858] We're looking at a company and I remember him saying to me, like, it's very rare that you find an idea of product or a company you're an idea, you know, think about it in terms of an idea, that the more you think about it, the bigger it gets.

[859] And this is one of those ideas.

[860] Like, they're extremely, extremely rare.

[861] And they often come, you know, in camouflage.

[862] But when you find them, that's the time to go big.

[863] And at this moment in time, as we were saying, there was no way to go big as an independent company.

[864] The only way to really do this was part of, part of Google.

[865] Maybe Microsoft could have bought them or something.

[866] But really Google was the natural fit here.

[867] At this time, exactly.

[868] At this time, yeah.

[869] Today, if you find yourself with an idea like this, well, the first trick, and this is actually a big part of our jobs as venture capitalists, is like everybody, you know, might think they have an idea like this.

[870] But are you really, really intellectually honest with yourself?

[871] And can people around you evaluate whether this truly is an idea of this category, of which 99 .9 % of ideas are not.

[872] But if you do have that, today you can build it as an independent company.

[873] And today you can become an enormous, enormous platform in and of yourself.

[874] And I think this really is, you know, everything comes back to SoftBank.

[875] But for all the funny hijinks around SoftBank and we will cover many of them in their coming WeWork IPO episode, you know, I think this is the thesis that like with ideas like this, you can now fund them and build large independent companies and not have to be YouTube and sell to.

[876] Google for a billion dollars.

[877] It's a good point.

[878] I think, I don't remember if we talked about it on the show or not, but I feel like you and I had a conversation four or five years ago.

[879] And I remember having this conversation a lot and saying, you know, machine learning is becoming equivalent with software.

[880] In the way that in the early 2000s, you said were software, in the late 2000s you said we're an internet company.

[881] In the early 2010s, you say we're a machine learning company.

[882] Like, it's table stakes to build a technology product, especially a large scale one, is to use machine learning in some way.

[883] And I remember having this fear, and definitely we both talked about this, that startup innovation was capped because the big companies had all the data.

[884] And the best products were going to be built by Google and Facebook, not because they had the most money, but also that, but because they had the most data.

[885] exactly your point for all the hijinks and criticism of softbank it enables this this way to flank that and says okay yeah but what if you had half a billion dollars yeah or what if you know your door dash like what if you have like three or four billion dollars like how about that can you compete it does actually in a world where data modes have become incredibly important it does actually allow for startups to continue to have the ability to compete with these big companies.

[886] Yeah.

[887] Yeah.

[888] Well, so this is at the risk of being too waxing poetic here, which you could definitely accuse us on Acquired all the time.

[889] But to Zoom way out here, I think it's really cool.

[890] Like we started this show in 2015.

[891] So we've been doing it for four years now.

[892] And I think we've like witnessed in this show.

[893] has been chronicled all the changes that have happened of exactly what we're talking about.

[894] And it's like when we started, we were focused on acquisitions and acquisitions that actually went well and then acquisitions.

[895] And that was, you know, still at that time, people thought, you know, people were thinking about, yeah, you can build big independent companies.

[896] Of course, Facebook did and whatnot.

[897] But like, as VCs and as founders, you were still like, you know, yeah, I could build something.

[898] I could get that half a billion, billion dollar acquisition.

[899] And the whole venture landscape was optimized around that.

[900] You know, most funds, most quote -unquote early -stage funds were in the 200 to, you know, maybe at the outsized, $500 million fund size.

[901] And so a billion acquisition of a portfolio company, that really was meaningful.

[902] But today, that's really completely changed.

[903] And so you see on the show, and to really dig into that, like, let's say you own 10 % at exit.

[904] That means you have a $100 million return on that company.

[905] If your fund size is is 200 million.

[906] Like, ideally, it shouldn't be your biggest exit.

[907] You should have an exit that's, you know, two to three X that size to really make the portfolio math start to pencil.

[908] But, you know, it's a big dent.

[909] And you could have, you know, a good fund.

[910] It's been a long time since we've covered an acquisition on this show.

[911] Most of what we do are IPOs or just stories of great companies, right?

[912] Because now the opportunity is to build a great company.

[913] And there's so much more capital available, not just from SoftBank, but from like Sequoia, for instance, which we'll talk about more on this season, just raise the $12 billion global growth fund, so many funds, new entrants, all sorts of things.

[914] And the goal is really find these types of ideas and build them into really large independent standalone companies.

[915] Yep.

[916] Yep, yep.

[917] There's a few other topics I want to touch before we sort of go to grading.

[918] So one is something we didn't talk about, but I think was actually a really big piece of value creation for, Google Maps, which was Google Map Maker.

[919] And Lars talks about this in a talk that he gives six, seven years ago, it's an old YouTube video with like 3 ,000 views.

[920] But basically, in order to build out maps, especially before they had all the cars driving around with cameras really operationalized, they got a lot of their early data from relying on the passion of locals, who I think were called Google guides or Google Local Guides, who wanted to improve digital maps for their area because they saw this dream of oh my god like my area no matter where i am in the world should totally have a really rich robust digital map for it and and they figured out this great system of appointing local guides and earning points and community leaders emerged to really build the maps for their area and it's totally the power of of uc of user generated content business models where if you can organize people to do something that benefits them.

[921] I mean, people were excited to use the maps, but also have a little bit of street crad around being a local guide.

[922] And your vision is big enough.

[923] And your vision is, I want to make the world better in this way.

[924] Everyone should be able to digitally view a map of their area because of all the benefits that come with that.

[925] You can get a crazy amount of stuff for your business for free and in a sustainable and updatable way.

[926] And for a long time.

[927] And Google Mapmaker is not a tool anymore, but they still have variants of this with people in local communities updating information for them.

[928] You can claim your business and update all the info on it.

[929] Yep.

[930] Another point that I wanted to make was Lars, in that same talk, talks about how difficult it was for them to recruit to where to.

[931] It was the four of them.

[932] They wanted to hire all of their engineering friends.

[933] They couldn't because everybody thought that they couldn't make money from maps.

[934] And I think it was even difficult to recruit once they got into Google, because the canonical wisdom was there's not a business there.

[935] And as we'll get into here in grading, there was, it was just 15 years later.

[936] Yeah.

[937] Well, so lucky that Brett Taylor was already working on this.

[938] Totally.

[939] Was the natural person to move over and help make this happen.

[940] And have to imagine adding a truly excellent PM to the team of engineers like that had a lot to do with how fast they shipped and how fast they iterated.

[941] Do we want to do value creation, value capture, before diving into grading.

[942] Well, we could probably devote a whole episode to this here, you know, between the wars between the platforms and the moat that Google has built because of all of this and how hard it is to compete.

[943] You know, we alluded to Mapbox, which is like great, and for sure has potential, but like, man, that's a large hill to climb to compete with Google Maps here.

[944] And especially the Ways acquisition and like, I don't know, in the current antitrust environment, like, would that have been allowed to happen?

[945] Probably not.

[946] Or at least it certainly I think would have been scrutinized a lot more than it was.

[947] I mean, I guess this is a long -winded way of saying, I think Google Maps is a perfect example to me of the kind of thing that Ben Thompson has been talking about for a couple years now of like antitrust needs to evolve in the current environment because Google Maps has created so much consumer surplus.

[948] It's free to use as a consumer.

[949] It's incredible benefits to like so many people's lives and so many other businesses.

[950] and yet because of that, it has this moat where it's effectively a monopoly, and it has been allowed to continue to purchase other startup competitors to it.

[951] And what does that mean for the future of innovation in the space?

[952] But no doubt in my mind, massively, massively value -creating for the world that this product exists and that this acquisition happened.

[953] Zero doubt.

[954] The interesting thing is, like, it has created so much value for the world.

[955] Like, does that enable Google now to capture so much value going forward that it becomes a problem?

[956] Which is a great way to segue into grading.

[957] You know, a lot of times the way to sort of think about value creation, value capture is a fair trade is to be able to capture 10 % of the value that you create for your customers.

[958] You know, at the very start of Maps, Google was capturing 0%.

[959] And the question is, how much are they capturing now from all this value that they're creating in the world?

[960] So going into grading, this is where I want to make my case.

[961] The criteria that we use for grading, for anybody who's joined the show in the last, I don't know, season and a half or something for grading acquisitions is how good of an idea was it for the big company to buy the small company?

[962] Like, an F is they lit the money on fire, that it would have been better off in their bank account doing absolutely nothing or perhaps even buying a company that did less worse, you know, less terrible.

[963] to a burning platform.

[964] A all -time Warner or Nokia or a variety of companies.

[965] An A -plus is Instagram is our shining example.

[966] Booking .com is a great one, too, of the price line group buying that, you know, where you spend money and it becomes an enormous, enormous part of your business.

[967] Instagram, actually some great data that came out today, thanks to some reporting by the information.

[968] Facebook bought Instagram for a billion dollars, and Instagram revenues were expected to surpass $10 billion in 2018 after hitting $1 billion just two years before.

[969] So, I mean, you think about like, yeah, the enterprise value of Instagram is, I don't know, one to $400 billion.

[970] What is that?

[971] That's over 300 % annual growth over the last two years, starting from a billion dollar base.

[972] Oh, my goodness.

[973] Yeah, so that's what an A plus looks like.

[974] So let's think about this.

[975] So let's start in the abstract.

[976] Google's mission is to organize the world's information and make it easily searchable.

[977] What Maps does really is it organized the world's information geographically.

[978] So it's this sort of like really, really nice extension of their mission.

[979] And another thing to keep in mind for context here is to remember that Google, despite being in cloud computing, productivity, mobile operating systems, making phones, making laptops, making home assistants, and all these other bets, 84 % of the revenue for Google still comes from advertising revenue.

[980] Like, 4 % is Google Cloud, which they just started breaking out, and 12 % is this others.

[981] So when you think about Google as a business, it is ads, and most of the ads is search ads, not this, no. Does that include YouTube ads too, I think?

[982] Yes, the YouTube ads are included YouTube ads and Maps ads.

[983] are included in that 84 % of revenue.

[984] It's considered, I guess, advertising.

[985] What they don't break out is what is search advertising.

[986] I don't think they have over in different points in time sort of alluded to it, but it's not in their regular financials to break out sort of like YouTube advertising versus search advertising.

[987] So advertising is still the cash cow.

[988] Maps, one decent allegory is Maps is a lot like Facebook acquiring Instagram.

[989] Granted, Maps didn't come with its own user base, but, you know, in the sense that it lets their existing advertisers have access to more inventory and new and creative ways to reach users where they are.

[990] You know, YouTube is similar.

[991] YouTube actually is estimated to be worth $160 billion, according to a Morgan Stanley estimate.

[992] So, David, it is time for us to go and revisit YouTube.

[993] We analyze that business and said, as best we can tell, it's still a break -even business.

[994] You know, it's still is extremely expensive to run.

[995] We just did the episode too early.

[996] Yeah.

[997] Well, the funny thing is we did the episode sort of like value investors.

[998] Like, you know, what are, what are the gross margins on this business and, you know, will it ever actually generate a profit?

[999] And we should have been doing it like tech investors or like public market investors who are willing to buy these IPOs who are saying, wow, look how much revenue they're doing.

[1000] That's 160 billion dollar market cap company right there within Google.

[1001] It's being a little facetious, but, you know, it really speaks to the difference between trying to value a business based on what you think it's either you in economics or gross margins are today and what you believe that scale will be able to let that business accomplish in the future.

[1002] So here I'm making this case that Maps is kind of like YouTube, which is kind of like Facebook buying Instagram, which is take your existing advertisers, give them a new way to reach existing customers in a new inventory format that's valuable.

[1003] So, you know, what are the equity researchers sort of think that Google Maps is doing as a business?

[1004] Barrett Equity Research has estimated that in 2016, Maps could do $1 .5 billion in revenue.

[1005] And then in 2017, they estimated that as soon as 2020, Maps could do $5 billion in revenue.

[1006] And you really start to see, you know, this business emerging where people are using Google Maps.

[1007] as a place to go for search.

[1008] And it's a different kind of search.

[1009] It's not what lawnmower should I buy.

[1010] I mean, that's all happening over on Amazon.

[1011] But they're really using it for, I need to find something around me. And they're very open suggestions.

[1012] I mean, last year, Google launched, or I think two years ago, they launched promoted pins on Google Maps.

[1013] They just issued a change in the last six months that sort of made those larger and more prominent.

[1014] But they're really starting to think about using the Google Maps surface, much like the search results surface.

[1015] And I think that they're...

[1016] Total aside here, a feature request for any Google Maps folks who are listening right now.

[1017] So I still use Foursquare for restaurant, bar, cafe, discovery.

[1018] I think you're weird in that, man. Well, okay, but here's why.

[1019] So for Google Maps folks who are listening, I hate the five -star rating system of both Yelp and Google Maps.

[1020] I think it's completely useless and doesn't give me any actual information.

[1021] 4Square has a 10 .0 rating system.

[1022] And so when I run a search on 4Square, they have two features.

[1023] One, that you can use your finger to draw a geo fence of where you want to search.

[1024] I still don't think you can do that on Google Maps.

[1025] Like, for me, like, I'm looking for a restaurant in a very specific area that is not a rectangle that I can get to with MapZo.

[1026] Two, the ability to differentiate between quality at that 10 .0 granular level is super important to me because everything's a four star.

[1027] And that just means, like, I want to know.

[1028] And what I can tell Foursquare is, show me ranked on a 10 .0 scale within this very specific geo -fenced area that I've drawn what the best cafes are.

[1029] And then I can, like, that is much more useful information to me than the current way you can search for such things on Google Maps.

[1030] It's a great feature request.

[1031] And actually, I looked up last night to see what's Yelp due in revenue.

[1032] Last year, they did about a billion dollars.

[1033] I mean, that could also be Google's revenue.

[1034] Like, I could see a world where Google Maps continues to get better and better.

[1035] they encourage people to do more and more local searches there.

[1036] They control the operating system so they could get a little bit more heavy -handed for how most people are at least 50 % of America and most of the world begin to look for things in the real world.

[1037] It seems very plausible to me that there's $5, $10 billion of advertising revenue that Google could see come from the mapping product.

[1038] And if you're looking at it that way, I mean, it could well be as big as an advertising platform as Instagram is.

[1039] Yeah, yeah.

[1040] Then you have the API licensing.

[1041] And I haven't dug into the finances there, but it's tough.

[1042] What you can do, the new pricing is $7 per thousand requests.

[1043] So it's a $7 effectively CPM.

[1044] So any app that wants to, so DoorDash is paying $7 per thousand times.

[1045] Someone looks at a map.

[1046] And there are five million customers with API keys for Google Maps.

[1047] And so tough to, tough to quite understand how much of the Google Maps business is attributable to the API versus versus search ads, but the potential is there.

[1048] Yep, for sure, for sure.

[1049] So when I look at this versus Waze, you know, let's say that this acquisition, just to put a number in the air, is where to was maybe $10, $20 million.

[1050] Waze was a billion.

[1051] You look at the revenue potential from maps and probably what they're doing now being single digit billions, maybe in the next couple of years getting to $5 billion.

[1052] It's a much better revenue business.

[1053] They're generally a lot more revenue from Google Maps than they are from Ways and they paid a heck of a lot less for it.

[1054] Now, of course, the amount of the billions of dollars they've poured into building the asset over time, you know, that's actually, I think, the right way to sort of analyze this.

[1055] but, you know, just from the acquisition itself, paid way less to buy the company and seeing significantly more upside than ways.

[1056] In this case, it's truly warranted to say the financial aspect is only one part of grading here and probably not even the most important because it's everything we've been talking about.

[1057] This is fundamental infrastructure for so much of the internet and beyond the internet going forward as you think about autonomous vehicles, if and when they should ever become mainstream, that this asset is so, so valuable.

[1058] And they bought it for, you know, so we know it was $37 million for Zip Dash and Keyhole at, say, another 20.

[1059] It's almost silly to do that.

[1060] It's silly, right.

[1061] They've probably spent, but you're right.

[1062] They've spent billions.

[1063] How many billions of dollars?

[1064] Yeah, really creating it.

[1065] But it was, as we talked about, if they hadn't bought these companies, I don't think it would have bubbled up.

[1066] internally, certainly not as fast to be working on these things.

[1067] And the moat that they have, you know, again back one of Justin O' Burns' piece is called Google Maps moat.

[1068] The moat is so wide at this point.

[1069] They have years and years of advantages over any other competitor, and that gap keeps getting wider.

[1070] Anyway, it's funny you mentioned soft driving cars, because I think if we had done this episode, a couple years ago, I would have been more inclined to grade on how helpful has it been to self -driving cars, but in spinning Waymo out and that market developing slower than we all sort of, I don't know, open -wanted thought.

[1071] Yeah.

[1072] And it feeling like Google's not necessarily a clear winner there, it's, I feel like less of the value that Google Maps is going to provide is coming from self -driving cars in the next, I don't know, five years or something.

[1073] That may be true.

[1074] But what's interesting, though, is like, to me it comes back to the API.

[1075] Forget self -driving cars.

[1076] What about Uber?

[1077] What about Zillow?

[1078] How many more businesses are going to be built on the Google Maps API.

[1079] I don't think we're done yet.

[1080] No, I think you're totally right.

[1081] This is an A for me. Yeah.

[1082] Yeah.

[1083] Well, I think that, yeah, for me, too, the question is, is it an A plus?

[1084] I mean, with Instagram, it's like they've, on every dimension, strategic, asset base, and financial returns, it's a knock it out of the park.

[1085] The reason why I think this is an A and not an A plus, and you just compare it to Instagram is, Instagram is a pure tech business.

[1086] Like they've built an incredibly asset light thing that's pretty, I'm going to say easy to maintain, even though there's tons of people working on it.

[1087] But basically, like super high fixed costs, almost no variable costs, except for like cost of revenue to go and acquire the advertisers that are putting the ads on it.

[1088] But crazy high gross margin business, when you look at this, the maintenance costs of keeping the maps up to date, to adding the expected functionality, to doing all this stuff in the physical world, it's meaningfully higher.

[1089] All right.

[1090] I'm with you.

[1091] So are only A pluses remain, Instagram and next?

[1092] I think booking.

[1093] Oh, was booking an A plus or an A?

[1094] If it wasn't, we were wrong.

[1095] Okay.

[1096] Either actual grading or revised grading, the A plus Pantheon is next Instagram and booking.

[1097] Maps doesn't quite make it, but it's very close.

[1098] doesn't quite make it.

[1099] And we'll see over the next few years, too.

[1100] I think it could, I think it could emerge.

[1101] The two big takeaways are one, it's fundamental structure to the internet as we know it today, that they're going to monetize through charging for that API.

[1102] And two, it's an ever increasingly common, basically new search page.

[1103] And Google makes all their money on the search page.

[1104] Yep.

[1105] There we go.

[1106] Very compelling argument.

[1107] We want to do a bit of follow -up?

[1108] Yeah.

[1109] So I messed something up on the Shopify episode that I, I wanted to talk about.

[1110] That was our last episode, not including the quick take that we did on DoorDash.

[1111] And that was Shopify actually powered $41 billion of sales last year, not $14 billion, as discussed toward the end of the episode.

[1112] That $14 billion number that we talked about was the fourth quarter number.

[1113] So I guess we way discredited the incredible amount of commerce that Shopify powers.

[1114] So while this changes the analysis of the value captured that we did at the end of the episode, where Shopify actually only captures 2 .5 % of the merchant sales as their own revenue, not the 7%, which admittedly is very different.

[1115] I don't think it changes the overall sentiment that we had on the company as discussed in the episode.

[1116] Any thoughts on that, David?

[1117] The only thing I'd add, especially given this episode and we're talking about the platform that Google Maps has built and the ability for empower of companies to be built on that platform.

[1118] I'm starting to think Shopify actually is a similar opportunity that you could think about, like, I think you might be able to build really big companies that use Shopify and Shopify's customers as a platform, and in particular, Shopify fulfillment that was just launched, which is not them doing their own fulfillment.

[1119] It is a wide open door for new logistics and fulfillment providers to come in and serve all of Shopify's customers, with a very easy distribution channel and customer acquisition.

[1120] So I'm even more bullish on Shopify's potential as a platform.

[1121] Yep, very much agree.

[1122] And interestingly, that's predicated on there being a huge total addressable market out there.

[1123] Because if you think about this, so Shopify, I mean, it's not a marketplace business.

[1124] So it's not a take rate.

[1125] But if you think about it this way, they capture 2 .5 % of the value that they create as their own revenue.

[1126] If you think about Uber, Uber captures close to 30 % of the value that they create as revenue for themselves in the form of a take rate.

[1127] That's marketplace a sign where the platform itself is doing a lot of the work.

[1128] If you look at Airbnb Marketplace Assist, do you know what the take rate there is, David?

[1129] It's like the 15 % or at least historically on average.

[1130] So less of the value is sort of being provided by the platform than Uber.

[1131] because Uber actually assigns you someone, when you bring supply to demand, you're entitled to take much more of the economics than if you just provide a platform and then say to someone, go find all your own customers.

[1132] And I think that that was sort of an interesting takeaway for me in analyzing the percentage of total value they're capturing.

[1133] Yeah.

[1134] Well, it comes back to the end of the Shopify episode, which we talked about of, it's not a network effect business, although they're network effect aspects to it.

[1135] It's a platform.

[1136] And it's Bill Gates' definition of a platform is you are capturing far, far less of the value than you are creating.

[1137] And what's cool about platforms like Google Maps is they provide a wide open opportunity for businesses to be built on top of them, and especially marketplace businesses.

[1138] So if you're building a marketplace business on Shopify or anything resembling a marketplace business, please come talk to me. Carbouts?

[1139] carve outs.

[1140] I'm going to do a mashup of one of your recent carveouts, which is the expanse.

[1141] I started reading, not yet watching the TV show.

[1142] I want to read the books.

[1143] I started reading the books of the expanse series.

[1144] They are so good.

[1145] So, so good.

[1146] I finished the first one.

[1147] I'm in the second one.

[1148] I think there are maybe nine in total.

[1149] So it's going to keep me occupied for a while, but really, really great stories.

[1150] I heard the books are great.

[1151] I did the latest thing and watched the TV show.

[1152] It's good.

[1153] I'll watch the TV show, Benjamin.

[1154] Books or TV show, take your pick.

[1155] Great, great sci -fi stories.

[1156] Yeah.

[1157] David, as you alluded to early in the episode, I've been doing a lot of running recently.

[1158] I ran my first marathon on Sunday this past weekend.

[1159] And that means that I've listened to a lot of podcasts in my training.

[1160] I always thought I'll never listen to podcasts when I run.

[1161] Like, I need something.

[1162] I need music.

[1163] I need that to be sort of like fast and motivating.

[1164] And I can't like not focus on the running.

[1165] It turns out like when you're doing lots and lots of miles, having a distraction is actually pretty nice.

[1166] And being able to not focus on the steps is quite nice.

[1167] So one of the episodes that I listened to during the marathon was an episode of The Moment with Brian Koppelman, who you may remember me raving about is one of the co -creators of Billions on a previous carve -out.

[1168] So he has this podcast.

[1169] The podcast itself is very cool because he talks to people from sort of all walks of life, but really dives into creativity, creative process.

[1170] It's like lightweight cycle analysis, but it's a lot of making the unique work that someone does often in a very archaic way, understandable and digestible to a broad audience.

[1171] And that's very similar to what he did in billions.

[1172] It's very similar to what he did in Rounders.

[1173] And he interviews in this episode, Mark Andreessen.

[1174] And it's really fun to, for listeners to this show, for myself, for David, we listen to people talk about tech and venture capital and building big companies within our own circles a lot and we get to hear it discussed at a very micro exactly exactly we all know what the terminology means everything there's lots of expectations that we all sort of have there's lots of things that you can look over to another person and know that they have the same fundamental basic assumptions that you do Brian's show is not like that and so it's very cool here during Mark Andresen explain venture capital to not, you know, people who probably have never come in contact with it.

[1175] It's just a really cool and different perspective on it, I think.

[1176] Super cool.

[1177] I have to listen to that.

[1178] Yeah.

[1179] Our sponsor for this episode is a brand new one for us.

[1180] Statsig.

[1181] So many of you reached out to them after hearing their CEO, Vijay, on ACQ2, that we are partnering with them as a sponsor of Acquired.

[1182] Yeah.

[1183] For those of you who haven't listened, Vijay's story is amazing.

[1184] Before founding Statsig, VJ spent 10 years at Facebook where he led the development of their mobile app ad product, which, as you all know, went on to become a huge part of their business.

[1185] He also had a front row seat to all of the incredible product engineering tools that let Facebook continuously experiment and roll out product features to billions of users around the world.

[1186] Yep.

[1187] So now Statsig is the modern version of that promise and available to all companies building great products.

[1188] STATSIG is a feature management and experimentation platform that helps product teams ship faster, automate AB testing, and see the impact every feature is having on the core business metrics.

[1189] The tool gives visualizations backed by a powerful stats engine, unlocking real -time product observability.

[1190] So what does that actually mean?

[1191] It lets you tie a new feature that you just shipped to a core metric in your business and then instantly know if it made a difference or not in how your customers use your product.

[1192] It's super cool.

[1193] Statsig lets you make actual data -driven decisions about product changes, test them with different user groups around the world, and get statistically accurate reporting on the impact.

[1194] Customers include Notion, Brex, OpenAI, FlipCart, Figma, Microsoft, and Cruise Automation.

[1195] There are like so many more that we could name.

[1196] I mean, I'm looking at the list, Plex and Versel, friends of the show at Rec Room, Vanta.

[1197] They like literally have hundreds of customers now.

[1198] Also, Statsig is a great platform for rolling out and testing AI product features.

[1199] So for anyone who's used Notion's awesome, generative AI features and watched how fast that product has evolved, all of that was managed with Statsig.

[1200] Yep.

[1201] If you're experimenting with new AI features for your product and you want to know if it's really making a difference for your KPI's Statsig is awesome for that.

[1202] They can now ingest data from data warehouses.

[1203] So it works with your company's data, wherever it's stored, so you can quickly get started no matter how your feature flagging is set up today.

[1204] You don't even have to migrate from any current solution you might have.

[1205] We're pumped to be working with them.

[1206] You can click the link in the show notes or go on over to stat sig .com to get started.

[1207] And when you do, just tell them that you heard about them from Ben and David here on Acquired.

[1208] All right, that brings us home.

[1209] Listeners, if you aren't subscribed and you like what you hear, you should click the subscribe button in the podcast, of your choice.

[1210] And if you want to become a limited partner, subscribing gets you access to our bonus show, where, as I mentioned earlier, we dive deeper into the nitty, gritty of actually building companies rather than, you know, what we're doing on this show, which is reflecting on sort of where they ended up.

[1211] So if you are in the process of building company in any way, shape, or form, we'd love to have you join us and listen.

[1212] You can click the link in the show notes or go to glow .fm slash acquired, and all new listeners get a free seven -day trial.

[1213] So with we will see you next time.

[1214] See you next time.