Acquired Episode 17: Waze

[0] We have a model where I think money from venture investors, we give it to engineers.

[1] That's how the business model works.

[2] Except for that, now that we're part of Google.

[3] Now that we're part of Google, everything's changed.

[4] Who got the truth?

[5] Is it you?

[6] Is it you?

[7] Is it you?

[8] Is it you?

[9] Is it you?

[10] Is it you?

[11] Is it you?

[12] Welcome to episode 17 of Acquired, the podcast where we talk about technology acquisitions.

[13] I'm Ben Gilbert.

[14] I'm David Rosenthal.

[15] and we are your hosts.

[16] Today, we're going to be talking about Google's acquisition of ways.

[17] But first, we talked about in our last episode, we are going to be doing a community showcase.

[18] And this week, it's one of our listeners, Brian Sanders.

[19] He and his team are building something called Nextcast.

[20] Nextcast is a next generation podcasting client that has a lot of interactivity baked into it.

[21] So they look at the existing kind of flat, one -way medium of podcasting as it is today.

[22] And Brian and his team are looking at ways to make it kind of more of a two -way street.

[23] So you can have a relationship with a podcaster and click links and watch videos and things like that.

[24] The app's not totally built yet, but their customer development process and kind of their pitching for funding and things like that is being covered in a podcast called Building Nextcast.

[25] So check them out at Building Nextcast .com if you're We launched Community Spotlight, and we did an episode about podcasts, and it's like they were listening to the episode.

[26] This is perfect.

[27] Yeah, it's awesome.

[28] So if anybody out there is building a social navigation app, please ping us.

[29] Yeah.

[30] If you would like to be on our next listener showcase and you're working on something that you want to tell people about, shoot us an email at Acquiredfm at gmail .com or tweet at us at AcquiredFm.

[31] or hit us up in the Slack group, as always.

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

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

[34] 85 % of the Fortune 500 runs on them, and they have quickly joined the Microsofts at the NVIDias as one of the most important enterprise technology vendors in the world.

[35] And, just like them, Service Now has AI Bake in everywhere in their platform.

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

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

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

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

[40] So whether you're looking for AI to supercharge developers in IT, empower and streamline customer service, or enable HR to deliver better employee experiences, service now is the platform that can make it possible.

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

[42] For example, smarter self -service for changing 401k contributions directly through AI -powered chat, or developers building apps faster with AI -powered code generation or service agents that can use AI to notify you of a product that needs replacement before people even chat with you.

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

[44] It's pretty incredible that ServiceNow built AI directly into their platform.

[45] So all the integration work to prepare for it that otherwise would have taken you years is already done.

[46] So if you want to learn more about the ServiceNow platform and how it can turbocharge the time to deploy AI for your business, go over to servicenow .com slash acquired.

[47] And when you get in touch, just tell them Ben and David sent you.

[48] Thanks, ServiceNow.

[49] All right, Ben, should we get into it?

[50] Let's do it.

[51] Let's do it.

[52] Waze.

[53] I would presume most of our listener base is familiar with ways, but for those who aren't, it is a social navigation app, much like Google Maps or MapQuest going way back or Apple Maps.

[54] We'll get into that in a minute.

[55] but you drive with friends.

[56] Yeah, and so Waze's, you know, magical insight is that there's a whole bunch of data being collected on the road by other drivers all the time that can indicate things passively, like, oh, there's a traffic, there's high traffic there because people are going really slow.

[57] Now, Google's been doing that for a long time.

[58] They introduced that in 2009 based on data being fed back from Android.

[59] But what Waze does is it both plugs you in with a social network based.

[60] on Facebook or importing your contacts, and you can, while you're driving, report things like red light cameras, like police officers, like traffic accidents, and you kind of get a real -time map when you're driving of the incidents on the road.

[61] And this is really cool because before Waze, there was kind of like all of navigation and mapping was this like top -down thing where like, you know, Tom Tom or Garmin, like they had their, data set that was like canonical and then you know even google was collecting it from android phones but before that you know they were just buying it from from these other companies um but the key insight in ways was like hey people are driving around with this stuff like they should be sending data back about what's really going on in real time so yeah cool history about how this started so ways um is uh actually an israeli company uh and this is our first acquisition that we're covering out of Israel.

[62] Um, it was started in 2006 by five co -founders.

[63] Ahud, uh, I don't know if I'm saying this right.

[64] Uh, Houd Shabtai, uh, was the main founder in CTO.

[65] And he was joined by Amir and Gili, uh, Shinar, uh, Uri Levine, uh, and Ari Gilan.

[66] And Ahud had been given an old GPS system, well, new at the time, but now old to Arvi.

[67] GPS system by a friend, you know, those things that, like, my dad still has one of these, that you like the portable things, like a garment type thing.

[68] Yeah, like in once a year or something, you can download all the new map tiles.

[69] Yeah, and you like, you know, plug it into your cigarette lighter in your car and, like, you know, suction cup it to your, to your windshield.

[70] So he'd been given one of these in 2006 and he thought it was super cool and he decided to write some software for it that would allow people to share information about where speed cameras.

[71] were located in on the streets in Israel and it started to take off but the company that made the GPS device that he had didn't like it and so they sent him a seasoned desist letter and I believe I believe we read that they said you know they'd be willing to you know like integrate the software but like he had to stop doing it and so rather than just giving them the software he said well screw you I'm going to take your mapping data out of this and I'm just going to create my own mapping data and I'm going to crowdsource it and have build this through the user base socially.

[72] So he started a project called FreeMap Israel.

[73] And the aim was just that to replace this sort of like top down map data set that this company had put in their GPS unit with a crowdsourced, you know, living and social data set.

[74] And it started to take off.

[75] Huh.

[76] A couple years later in 2008, things are going well and they changed the name of the project and the company to Waze.

[77] And they changed the terms of the map from of the map data from being open and being usable by anyone to being owned by Ways.

[78] So Ways now owns and can commercialize all of the mapping data that its user generating.

[79] And so that was in 2008.

[80] And then in March of 2008, they raised their Series A, the first capital they raise.

[81] They raised $12 million, led by Blue Run Ventures, which is a U .S. venture firm and Magma Venture Partners and Vertex Venture Capital, I believe, who are Israeli venture firms.

[82] And it's interesting.

[83] Later, you know, this comes to play after the acquisition.

[84] Noam Barden, who became joined later in 2009 as the CEO of the company, he writes a blog post and he said, one of Ways' mistakes was the valuation of its Series A, which significantly diluted the founders.

[85] Perhaps had we held control of the company as the founders of Facebook, Google, Oracle, or Microsoft had, Waze might still be an independent company today.

[86] This was after the acquisition, he wrote in a blog post on LinkedIn.

[87] Oh, wow.

[88] Yeah.

[89] So the company continues to grow after they raise the Series A, mostly in Israel, and then they start to add other countries as well.

[90] And in December of 2010, by that point, they've reached 2 million users, and things are growing pretty well.

[91] They have over 250 million kilometers logged.

[92] in the app which is which is huge again compared to um data that other mapping companies are using uh which is not live real data this is you know a huge amount of mileage that's that's you know on real city streets and routes that are getting uploaded to ways yeah so at that point they raise a 25 million dollar series B from the same investors uh plus qualcomm and that was at a 95 million dollar valuation.

[93] This was all reported in a Wall Street Journal article after the acquisition.

[94] And at that point, they opened up their first office in the U .S. in Palo Alto, which is really cool.

[95] I remember when I started at business school at Stanford and seeing the Ways office just like on the street in Palo Alto, like, oh man, there's Ways.

[96] Like, that's super cool.

[97] It was a little storefront.

[98] I had that same feeling.

[99] I remember when I moved out to California for a summer for an internship.

[100] walking up and down Castro Street and Mountain View and just seeing like all the different startups.

[101] The one that actually sticks out in my mind was Mibo.

[102] I remember it was like that web -based chat software that I'd used a lot.

[103] And it's like really strange when you see a logo in real life that you're used to seeing digitally, like a physical representation on a building.

[104] And you're like, whoa, it's right there.

[105] Yeah, this is one of those like really strange things that when you live in Silicon Valley, you like get used to really quickly and don't think about.

[106] but when you first, like, move there or you visit is totally mind -jarring.

[107] Like, you see these storefronts, and they're actually like storefronts in Palo Alto and Mountain View.

[108] And sometimes even in San Francisco, that'll be next to retail shops and they're like, you know, ways.

[109] Yeah.

[110] So they raised the series B. They had about two million users.

[111] That's December of 2010.

[112] Fast forward, not quite a year to October of 2011.

[113] And here the intrigue starts to begin.

[114] October 2011, they raised their series C, so less than a year later, they raised $30 million at about a $200 million valuation from Kleiner Perkins and Horizons Ventures, and they announced that they have 7 million users at that point.

[115] So October 2011, at the end of 2011, beginning of 2012, they announced they have 10 million users.

[116] So in just a couple months, they had 3 million users.

[117] Halfway through 2012 in July, they, they announced that they have 20 million users.

[118] So they've now doubled from 10 to 20 in six months.

[119] And then later on by the end of 2012, they get to 34 million users.

[120] But a really important thing happens in the life of this company.

[121] And like I said, where the intrigue begins in the summer of 2012 at WWDC.

[122] It's amazing like how much, you know, Apple and WWDC ends up playing a role in, you know our podcast here um is this is this the forestall oh yeah oh yeah scott forestall's last hurrah last stand um it's like custer's last stand i was actually at uh wait see what it is well so yeah i'm burying the lead here um apple announces iOS 6 at wc 2012 and in it one of the marquee features is they're launching apple maps so they're ripping google maps out of uh the iphone so they're ripping google maps out of uh the iPhone So until then, all previous versions of iOS had had the native built -in map software was Google Maps.

[123] That was built by Apple, but with Google's data and Google's map tiles.

[124] And I think it was something like the contract expired, and it was such that Apple didn't want to renew the contract with Google because they were starting to, kind of part ways and get into a little bit of a war between the two companies.

[125] And Apple had to ship maps early because they couldn't use Google's data anymore and they didn't want to re -up and they knew that re -uping would like come with a really nasty price tag for them and, you know, a lock -in to send Google a bunch of data that they didn't want to.

[126] And I think Google is also requiring that people sign in with their Google accounts, which Apple didn't want to do for privacy concerns, even all the way back then.

[127] So Apple kind of like, you know, know, obviously rushed maps to market because it was really the only choice.

[128] You know, I think there's even more context setting that needs to happen here, which is that like it's, as we were doing the research for this episode, like, it struck me like just how fast the technology world moves.

[129] Like this was only four years ago, but it feels like a lifetime ago.

[130] And I didn't, I'd completely forgotten all this stuff.

[131] So this is in this, like at this time, the mobile platform wars, you know, quote unquote, were, like, in full swing, like, Apple and Google are going at each other's throats.

[132] And, like, everybody in the tech industry is, like, who's going to win mobile?

[133] Is it going to be iOS?

[134] Is it going to be Android?

[135] And, you know, the tithe swinging one way or the other.

[136] And people think that this is going to be a winner take -all market at this point in time.

[137] Yeah.

[138] And the other thing that happened is Tim Cook had recently taken over as CEO of Apple.

[139] Steve Jobs had passed away.

[140] and um the uh apple was was really you know in a tim and and apple they were figuring out like what was going to be the path path forward it was it was becoming clear that there was no way that they were ever going to uh overtake or catch up to or overtake android on actual uh user numbers um but like the world hadn't come to the conclusion yet which now we just accept as a given is that like nobody won the platform war, like iOS and Android exist, coexist peacefully.

[141] Yeah, there's this, you know, everybody builds for both mostly, and Apple kind of has the more valuable customers, and Android has most of the customers, and that's just the way the world works now.

[142] And there are all sorts of tools now to make it easier to build for both, but that was not the world back then.

[143] And so this is the stage, you know, ways it had been operating for four years at this point.

[144] And it'd been growing the user base nicely and riding the wave of mobile.

[145] But all of a sudden, they are like at the center of this huge conflict between these two behemoths.

[146] Yeah.

[147] So at WWDC, Apple announces Apple maps.

[148] And this has been years in the making.

[149] But as Ben, as you were saying, they had to rush the product to market when they actually shipped iOS 6 in the fall.

[150] And it becomes super clear.

[151] Like there was a ton of hype for this product.

[152] This was like the tent pole feature of iOS 6.

[153] It becomes clear within a week that like it is hugely broken.

[154] And there are all these reports of like people getting sent to the wrong addresses causing all sorts of problems and accidents.

[155] And like it is a disaster for Apple when this happens.

[156] Yeah.

[157] And the story, you know, that Apple is trying to tell is like it's, it's two -sided.

[158] One is that, you know, we really messed this up and we apologize.

[159] And that's kind of Tim Cook comes out with that public letter.

[160] Writes a letter posted on Apple .com apologizing.

[161] This has never happened before in the history of Apple.

[162] Like people are saying, this would never happen under Steve.

[163] Right, right.

[164] But on the other side, you know, Apple's hedging.

[165] And they're saying, well, you know, it takes a lot of time for the data to come in for it to get better.

[166] Apple Maps is only going to improve, which is true.

[167] Which is true.

[168] It's gotten dramatically better.

[169] And that's the exact same story they had with Siri.

[170] And going back to the Steve Jobs comment, it's funny, Steve, this feels like actually a tremendously Steve Jobs move because, like, Steve is famous for, you know, saying he's going to go thermonuclear on Android.

[171] And like when he gets into a TIF, like, they get into a TIF.

[172] And like, even if it is, it has some fallout, like we saw here, I think that that's a very Steve move.

[173] And that's actually, Scott Forrestall was largely responsible for this.

[174] And he was a, you know, Steve.

[175] Steve Jobs' protégé.

[176] And so closing the loop on the Apple intrigue here, this ultimately ends up in Scott Forrestle getting fired.

[177] Scott refused to write the letter.

[178] Tim said, I'm going to do it personally.

[179] He refused to sign it.

[180] Only Tim Cook signed it, even though Scott had publicly introduced the MAPS product.

[181] Like, it was clear as his product.

[182] And before Steve died and Tim became CEO, like the public talked about like, hey, is Scott Forrestle, the next CEO?

[183] of Apple.

[184] Like this guy is not, he's not just like some Apple exec.

[185] He was like Steve Jobs's protege.

[186] Yeah.

[187] And it's amazing that in this letter that Tim Cook writes, he lists some alternatives for people that are dissatisfied with Apple Maps and says it's going to get better.

[188] But actually, alternative products.

[189] Lists ways as one of the products that people should go and try out instead of Apple Maps.

[190] In the, in the letter, which is, again, this is like uncharted territory for Apple at this point.

[191] Again, because with the backdrop of they are locked in this feature war with Android.

[192] And another one of the reasons why that people speculate about why Apple and Google couldn't come to terms to keep Google Maps within the native iPhone software is that Google had recently shipped turn -by -turn navigation in Google Maps for Android, but not it wasn't available on Apple and people were speculating that Google was withholding that ability which is hugely compelling um you got to remember again this is like more context like the like Tom Tom and Garman and all these guys had navigation apps in the app store at the time and they cost like a hundred bucks I think they were patented like Apple for whatever reason I remember maybe I was wrong about this but I remember the reason being the reason being that Google Maps for the iPhone didn't have turn by turn is because those companies owned the patent to that.

[193] Could have been.

[194] Maybe Apple was concerned about that.

[195] But it was bizarre.

[196] Like the official Maps app on iOS, like you only just got a list of directions.

[197] Like you couldn't, it wouldn't talk to you and say like turn right in 600 feet or whatever.

[198] Like you had to like scroll through the list as you were driving or walking or whatever.

[199] Yeah.

[200] It was terrible now like, you know, looking back on it.

[201] But if you wanted turn by turn directions, A, you got crappy products with crappy data from companies like TomTom and whatnot.

[202] But you had to pay 50, 100 bucks for that just for the app.

[203] Like, could you imagine paying 100 bucks for an app now?

[204] Right.

[205] Right, right.

[206] So the stage is set.

[207] I mean, it's - The stage is set.

[208] So in the middle of all this, Ways is free.

[209] And Waze provides pretty good mapping data and application.

[210] So this was, it was kind of October 2012 by the time the day.

[211] dust settles.

[212] Apple's fired Scott Forrestle.

[213] Um, and, uh, then rumors start swirling that Apple is looking at acquiring ways.

[214] Which was actually never true that, uh, I believe it was, who denied it?

[215] Apple, um, well, Apple denies everything.

[216] So, yeah.

[217] Anyway, Apple denied publicly.

[218] Apple, Apple, Apple denied publicly, but you got to imagine that, you know, in the wake of this, that they're looking around and saying, oh, my gosh, what are we going to do?

[219] Like, we just have this egg on our face.

[220] And here's this free app that, like, is pretty good in the store and has a really interesting data model.

[221] Like, maybe we should buy it.

[222] And the rumors were that they were talking about about a $500 million acquisition with Ways.

[223] How far that went?

[224] We don't know.

[225] But it doesn't come together.

[226] At the same time, in December of 2012, So a couple months later, Google launches a standalone Maps app, the Google Maps app on iOS, which many of us, myself included, now use and love, does include turn -by -turn directions, but is just a regular app in the app store.

[227] And it was great.

[228] It was like this incredible, actually I know there was a five -person team that did the native code, and they're actually in the Kirkland office here in Seattle.

[229] Oh, cool.

[230] Yeah.

[231] I didn't know that.

[232] Yeah, I think the back end was all down in the valley.

[233] but the actual iOS app, the Objective C, was written up here.

[234] Wow, that's all.

[235] And when it comes out, like, it gets huge praise.

[236] And it was, like, better than the Android app.

[237] And there's all these, yeah, that was a big blowup.

[238] There's all these articles written about Google's new design paradigm because it was uniquely iOS, but still familiar for people that, that love the Google interface, and they found this amazing way to combine the two design languages.

[239] And there were pieces written.

[240] There was a fast company piece that was written about how Google's new, Google had this design studio in New York and they would go and work with all these individual business units.

[241] And it was like, I mean, I thought that it was really well made and I think the rest of the world did too.

[242] It was so well received.

[243] And I think actually that moment looking back on it now is the beginning, the heralding of the end of the mobile platform wars.

[244] Like now, I think we can look back on that and say that was the moment when the world, at least Apple and Google both decided like, hey, we can peacefully coexist here.

[245] Yeah.

[246] Yeah.

[247] And Google knew that they had a good product on their hands.

[248] And if they released it, and I believe you still have to, when they released it, you had to sign in with your Google account.

[249] So that was a path to getting a whole bunch of data that they wanted.

[250] And then Google realized they were getting all this data and all this monetization opportunity on iOS.

[251] And it actually was super valuable for them.

[252] So that was at the end of 2012, 2012, going into beginning of 2013.

[253] Another piece of context here is that Facebook is now emerging as the big, giant counterbalancing Google in the, you know, again, in the post, you know, as the world is determining that, you know, Apple and Google can peacefully coexist.

[254] Like, Google's main enemy shifts from being Apple to being Facebook.

[255] Yeah, and it's funny that it was Apple.

[256] is this weird detour, Google's core competency is being the best search engine, and that turns out to be a tremendous ad platform.

[257] So, you know, 90 -some percent of their revenue to this day still comes from search ads or search -end display ads, and they shifted direction.

[258] It almost seems like Android was a little bit of a distraction to go to war.

[259] Like they needed, they needed Android for a variety of reasons, but it made them focus on Apple as the enemy.

[260] since Apple, you know, was also producing this, like, rival OS that came with great hardware.

[261] But really, Apple wasn't after Google's core business of search queries that led to a tremendous ad market place.

[262] And nor was Google ever after Apple's core business of hardware sales.

[263] Like, Google doesn't make money on hardware sales for Android.

[264] No, but they really went to bat on trying to displace the iPhone.

[265] Yeah.

[266] And it's weird, like, you know, historically, Google and Apple had always had.

[267] had this great symbiotic relationship.

[268] Google does the services, Apple does the hardware, native software.

[269] And, you know, Eric Schmidt was on Apple's board until Steve Jobs kicked him off after they launched Android.

[270] And really, but, you know, then at the end of 2012, when Google launches Google Maps on iOS, it's like the detente is reached.

[271] And since then, it's like, I wouldn't say it's back to the good old days, but like Google and Apple both realize, like, hey, we're not.

[272] not each other's enemy here.

[273] Yeah, yeah.

[274] Apple makes hardware and software that are excellent, sells the hardware.

[275] They have services that differentiate them, but ultimately you can plug in Google's superior services on any of those devices.

[276] And have a great experience, and it's symbiotic.

[277] Yeah, but you can see why Google felt so strongly that they needed to control the input pipeline.

[278] It's the same reason that they make Chrome.

[279] It's the same reason they're distributing Chrome books.

[280] Anybody who's the front door to the user has the power to redirect that like Apple shipping all these services associated with Bing in Siri and I maybe even the default search engine on iOS.

[281] It's still Google but that's always back and forth.

[282] Yeah.

[283] You can totally see why Google's like, okay, we need to make sure that we don't like lose, you know, billions of people.

[284] The front door to the internet, which is where we make our advertising money, which is foreshadowing.

[285] Yeah, yeah.

[286] So Facebook goes public, you know, the right around the same time as WWDC in 2012, the beginning of this map's drama.

[287] The real threat emerges to Google, and that's Facebook's IPO.

[288] Yeah, Google's, you know, castle is where are people going to spend their ad dollars digitally.

[289] And that's linked to where people spend their time and where people's front door to the internet is.

[290] And it's like, oh, man, that's Facebook increasingly.

[291] Yeah, Apple's not going to eat Google's launch.

[292] They have no incentive to try and get that advertising pie.

[293] But, like, Facebook sure.

[294] is, that's their core business.

[295] That's the real threat.

[296] Yep.

[297] So we've just gone through this wild ride.

[298] Apple was rumored to be circling around ways, thinking about a half a billion dollar -ish acquisition to fix their mapping issue, falls through.

[299] But then a couple months later, in the spring of 2013, rumors start circulating that Facebook is not only interested in which, ways, but is going to buy ways and going to buy ways for about a billion dollars.

[300] This was in the press for weeks.

[301] It was almost reminded me of the Twitch deal, you know, about about a year later in that like, everybody just thought this was like a done deal that Facebook had bought ways.

[302] Yeah.

[303] And in my research, trying to look and see, you know, how Google justified this acquisition and, you know, how Waze was doing as an independent business beforehand.

[304] So many of these articles of that are all loosely titled, why is Ways worth a billion dollars, were written before the acquisition.

[305] Yeah.

[306] Nobody even knew Google was in the mix at this point.

[307] This was about Facebook.

[308] Yeah.

[309] Yeah.

[310] So the Facebook deal falls through.

[311] And we don't know, you know, unfortunately, Waze was not a public company, so we can't go through all the SEC filings and do our usual magic.

[312] And to date, there haven't been any lawsuits for us to go through discovery.

[313] So We may never know exactly what happened with Facebook, but in some of the comments that the Ways team is made after the acquisition, one of the key sticking points apparently was that Facebook wanted to move the whole company to Menlo Park to California.

[314] And the team really wanted to stay in Israel.

[315] So a couple weeks keep going by and the world assumes Facebook has bought ways, but it hasn't been announced yet.

[316] And then kind of out of the blue.

[317] June 2013, it's announced that Google is buying ways for right around a billion dollars, somewhere between a billion one and a billion three.

[318] Most of it was cash, but there were other stock and other considerations, and that the team is staying in Israel.

[319] Some of the wazers who were in Palo Alto are joining Google in California, but the core team is staying in Israel.

[320] Yeah, and this, you know, they had a pretty immature, location -based advertising products right around this time.

[321] Do you know when they actually started having a business model other than wasted?

[322] Yeah.

[323] I thought you were referring to.

[324] Google had a pretty immature location -based advertising product at this point in time, which also might be an accurate statement.

[325] This was, I believe, when did Marissa Mayer leave Google to take over Yahoo? Topical as Verizon just bought Yahoo this week.

[326] But Marissa had been in charge of.

[327] of local and location -based advertising products at Google before leaving for Yahoo. So I don't remember.

[328] I think she had left for Yahoo at this point.

[329] But anyway.

[330] What I was sort of getting at there is this billion dollar evaluation has very, very little to do with.

[331] Wherever Ways was in their monetization path.

[332] And they were doing things like they had sponsored gas stations and they had some, you know, like Safeway and other location -based advertising on the map.

[333] but I mean, this was a, well, we'll get into acquisition category.

[334] Let's just get into acquisition category right now.

[335] I mean, this was not a business line acquisition.

[336] I know.

[337] I will come down hard on that.

[338] No. What's your categorization been?

[339] I want you to go first because I'm going to do something unorthodox.

[340] Oh, I'm going to do something unorthodox.

[341] That's why I turn the ball over.

[342] Okay, I'll go first.

[343] All right.

[344] Well, I'm doing it.

[345] So, traditionally on this show, we categorize either by people, technology, product, business line, or other.

[346] And I don't believe this falls into any of them because this is a data acquisition.

[347] I agree.

[348] And David, it's funny, you were just bringing this up right before we talked about the show.

[349] I want to introduce for Acquired going forward another category of asset.

[350] Yep.

[351] This is clearly an asset buy.

[352] Is that what was that?

[353] That's exactly what I was going to say.

[354] It's like right here.

[355] All right.

[356] So apparently we are too.

[357] Are we sharing notes or something?

[358] are you cheating on the test pan?

[359] We actually started like five or six episodes ago.

[360] David and I realized that it wasn't very fun when we like talked beforehand and then were of one mind when we got into the show.

[361] And then we would refer to things like we were talking before the show, which is less fun for you guys.

[362] So we were like, okay, we're going to stop talking before the show, except for like a few things here and there to make sure we have all of our bases covered.

[363] And sure enough, here we both are again.

[364] Yeah.

[365] And it's like, this is so clearly what it is because, you know, if you run through all the, all of our previous categories for acquisition, like this was not a people acquisition.

[366] Like the ways founders were clearly very talented, but that's not, you know, Google had plenty of people who were great at.

[367] A billion dollars is not a. an acquisition.

[368] Yeah, well, I mean, yeah, no, it's not.

[369] This was not a technology acquisition.

[370] The technology, as we were just saying, that was actually in the Google Maps asset was arguably as good or better than Ways at the time.

[371] Yeah, they didn't have active reporting, but they had the passive reporting of traffic and had been doing it forever.

[372] And I actually had in my notes from real early research, why doesn't Google just do this themselves?

[373] Because this is exactly the kind of thing they're good at.

[374] Yep.

[375] It wasn't a product acquisition.

[376] Like, Ways still exist.

[377] and lots of people use it and love it, but, like, they didn't replace Google Maps with this.

[378] No, and it's, in fact, not even part of, like, the Google suite.

[379] Google finally now is bundling it as one of the OEM options when you get to choose all the Google services when you're making an Android phone, but it's still not a Google -branded product.

[380] No, Google Maps is still clearly the flagship, location -based product.

[381] It definitely wasn't a business line.

[382] No, it doesn't make money.

[383] But it definitely was an other slash asset buy.

[384] and the asset was, you know, I think a couple of things in this case, which is really interesting.

[385] Like, I think this, we talked about this a little bit with LinkedIn, but like, A, this was a data asset.

[386] Like, Waze generates so much very, very valuable data for, that would be valuable to lots of people, but especially to Google in terms of improving their MAPS product, their core MAPS product, in terms of their driverless car initiatives and everything they're doing with transportation, you know, having real time data and not just passive data being strong.

[387] stream back from the phone like they're doing with Google Maps, but things like, you know, where traffic stops are, like user reported accidents, you know, controversially, but has always been part of ways, you know, reporting where police officers are in speed traps and red light cameras and things like that.

[388] But also like super clearly, as we've just been talking about with this whole drama leading into the acquisition, this had huge defensive value.

[389] for Google.

[390] Like, they did not want Facebook to have this.

[391] Yeah, and even more than the actual asset of the data is they bought this data gathering machine.

[392] And I think that's why we haven't seen them mess with it at all is because it had a great growth trajectory, particularly after the Apple Maps debacle, it was growing at like 100 ,000 new users a day.

[393] Yeah.

[394] It was insane.

[395] And, you know, that obviously is short -lived, but they recognize that this thing is going to continue to feed us really great data.

[396] and data about the real world mapping data is something that is in need of being constantly updated and people, like, Waze has invented these great mechanics that people often complain about because they say they're distracting while they're driving, but they've really created mechanics that people reliably feed really up -to -date information in high fidelity both passively and actively.

[397] Yeah.

[398] And, you know, the super high value asset is nailing the creation of that machine and the user experience that compels people to continue to do that over and over again.

[399] Yep.

[400] Well, I don't know if I want to say I'm glad we're in agreement, but I think we should add this to our categories going forward because this is so usually in other, it's like, oh, it's a one -off, but like this is very clearly a category that we just haven't come across before.

[401] Yeah, I agree.

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[420] Cool.

[421] So what would have happened otherwise?

[422] I feel like, you know, in a lot of ways, it's through what we were discussing in the history with the drama and all the different big tech companies circling around ways, you know, this company was going to get acquired by somebody.

[423] So I think that's what would have happened otherwise.

[424] Yeah.

[425] It's also interesting to think, though, I mean, you know, this was 2013.

[426] Again, not that long ago reminding me again how fast the technology world moves.

[427] I feel like Ferris Bueller here, you know, if you don't stop and look around once in a while, you might miss it.

[428] Nobody was thinking about driverless cars then.

[429] And today, like, people think driverless cars are going to be the second coming and the uh you know every tech company and their mother is is going after it and what's interesting is that israel is actually really uh companies in israel and talent in israel are really well positioned in this there's a company called mobile i um which is a large public company now that makes a lot of the sensors that go into cars that are used for autonomous and semi -autonomous applications um is that the military influence that well everything in israel is military influenced but um so this is a yes but um you know it's interesting to think like would a is independent israeli based transportation and um driving focused company software company combined with the hardware talent there um be a real player in the race for autonomous cars today i don't know i mean clearly you know big asset to google right now yeah the hard part would be production i mean that's that's something that traditionally American manufacturing has been very good at making, but, you know, Japanese are probably forthcoming Chinese cars.

[430] Well, it's interesting, too.

[431] I mean, it's just like that market is so, still has so far to go to play out.

[432] Like, do you actually have to make the whole car yourself?

[433] Could you make kits to put into cars that lots of people are trying to do?

[434] You know, can you just be a pure software platform?

[435] Yeah, I think if I'm the car companies right now, and realizing that there's going to be this driverless future, I think you have to make the bet that people aren't going to want to buy your cars in mass, but people might want to subscribe to your fleet.

[436] And it would be like a Mercedes -based Uber, like a self -driving Mercedes -based Uber.

[437] And the question is, like, you know, would people rather subscribe to an individual auto manufacturer's fleet or the things you can do for lock -in there?

[438] Or would people rather subscribe to a more generic fleet, Google or Uber?

[439] You know, in terms of, you know, thinking about, themes we've talked about on this show a lot in terms of Ben Thompson's aggregation theory and owning the customer and the user experience, his ways, is Google Maps?

[440] Is that the user experience for driving now?

[441] And then the cars are the back end?

[442] I don't know.

[443] Maybe we should also spend a minute.

[444] I think it would be, because this is just pure speculation, as well this next topic.

[445] But what if Facebook had bought these guys?

[446] Like, what does the world look like now?

[447] Facebook has basically no play in transportation right now.

[448] Did you see, this isn't quite transportation, but Facebook's doing some like crazy cool drone stuff.

[449] Oh yeah, super cool.

[450] So Facebook's, you know, Facebook's core competency is delivering ads to people and they've basically run out of people with internet.

[451] So to expand past their existing massively saturated user base, they're trying to get internet to more people.

[452] So there's a team, I think it's a London -based engineering team that created I believe it was a company they acquired.

[453] Yeah, but they created this like gigantic drone that can is super lightweight and as like can beam internet down and can fly for like a month at a time.

[454] And so it's like it's interesting like while they're not in the transportation space, they are in sort of a large scale manufacturing space for completely different reasons.

[455] Yeah, super cool.

[456] This thing is awesome.

[457] Like it is a giant drone that can stay in the air for.

[458] for, you know, months at a time and beam internet down and probably do satellite imagery applications as well.

[459] Super cool.

[460] Yeah, it is interesting.

[461] Like, why, you could see Facebook buying this just to more effectively deliver local ads.

[462] I mean, this feels like Facebook at this point is looking for, basically Facebook is buying digital social billboard space.

[463] And that's what Instagram is, that I don't know.

[464] know if that's what WhatsApp is.

[465] That eventually is what Oculus is, right?

[466] They create these experiences, and Facebook extends their core competency of, you know, being an advertising company into that, I think, it's wildly speculative.

[467] But basically, like, you know, Waze fits into that category of digital social billboard space where stuff comes up that is relevant to you or people want to show to you or your friends recommend.

[468] I think it makes sense in that context and it just doesn't get used for the autonomous car stuff at all?

[469] It is interesting, like, to this point until about two minutes ago, we started, we've been talking about ways in the context of the world when it was acquired.

[470] And it is interesting now to start thinking about it in the context of the world several years from now that's much more focused on requiring a super high fidelity data asset for autonomous vehicles.

[471] Yep, yep.

[472] which is like, you know, clearly Google, they'd already announced that they were working on self -driving cars as part of Google X at that point when they acquired ways.

[473] But very few other people were thinking about this at that point in time.

[474] You know, how much did that play into this acquisition or not at the time?

[475] You know, hard to say, but it's clearly like for them as a defensive move versus everybody else that's trying to get into it.

[476] Now, I mean, like, Facebook might have bought it, but what if Tesla had bought, you know?

[477] Right, right, right.

[478] Or what if Apple had bought ways as they were trying to?

[479] And Apple is now, as, you know, widely reported working on self -driving cars.

[480] Yeah, did you just see they put Bob Mansfield in front of that?

[481] I saw that.

[482] I saw that.

[483] In charge of it.

[484] Bob Mansfield is like their, I think he's a senior VP of hardware and then, like, didn't agree with management or something when Scott Forrestall was still there and then moved to, like, head of special projects and seemed like he was like, half retiring, but now he's like really back in full force with Project Titan, or the Apple, I think that's a codename for the Apple self -driving car thing.

[485] Interesting.

[486] All right.

[487] Should we move on to tech themes?

[488] Yeah, not that we haven't been in there for the last couple minutes.

[489] Well, I've got, so I've got two here actually, and one I'll just do quickly, which is, you know, we've mostly covered in this past section, but, you know, is sort of the value of a data asset.

[490] and and um but specifically the the bent i wanted to talk about it is like it's when you have the potential for um a very valuable data asset you can use that as like a way to upend the business model in um in the industry that you're playing in and just give something away for free so in this case like turn by turn navigation apps you know cost 50 to $100 you know but ways can just give it away for free because they're going to get their value out of of getting the data.

[491] Right, and they don't have to pay to acquire it.

[492] And they don't have to, yeah, right.

[493] And they don't have to pay.

[494] And I think we've seen this in various ways in other acquisitions, both that we've covered on the show and ones that we haven't yet.

[495] Like I'm thinking about Instagram, right?

[496] Like Instagram was a social network, right?

[497] But there was also this app called Hipstimatic that was out before Instagram.

[498] That was basically just the same thing, but it cost three bucks.

[499] And it gave you a cool photo filter for your photo.

[500] photos and Instagram came out and made it free.

[501] And like lots of people, I'm sure, tried Instagram because they're like, oh, cool.

[502] I wanted to use Hipsomatic, but I didn't want to pay three bucks.

[503] You know, and, you know, same with LinkedIn.

[504] Like, if you wanted access to people's resumes, you had to, you know, pay recruiters and, like, go through databases and whatnot on LinkedIn was like, resumes are free, you know?

[505] Skype did the same thing with phone calls.

[506] WhatsApp did the same thing with text messages.

[507] So I think it's a...

[508] That's a really interesting way of looking at that that I really thought of before.

[509] It's like all of these companies found a way to make something free that was previously expensive and then could up in that business model.

[510] And I think a lot of the initial users that came onto these platforms were probably just like Cheapos who were like, oh yeah, I want, I was thinking about using Hifstomatic, but I really don't want to pay three bucks, you know?

[511] Yeah, which is like everyone, right?

[512] Right.

[513] Like as much I do that.

[514] You do that.

[515] Exactly.

[516] Like we're all Cheapos in various ways.

[517] and um but that's the thing about like how you can get these winner take all markets and what you need to tip the market in your favor is you need to like i love the the jeff bezos quote at the code conference which was um this year which was one of our carveouts a while a while back you know he said he has this thing he says um i think it was either carer or walt was asking him about uh prime and he's like i want it i want it i want it amazon prime to get to the point where it would be irresponsible not to be a prime member because you're getting so much value out of it and like that's what that's what this is here is like it would be irresponsible to pay for hipstamatic because you get more value out of Instagram and it's free.

[518] Right.

[519] Which especially with network effects, of course you get more value out of it.

[520] Everyone's using it because it's free.

[521] Exactly.

[522] Network effects.

[523] They're a beautiful thing.

[524] Yeah.

[525] All right.

[526] I'm going to do my two now.

[527] That was just one of yours, right?

[528] you've another one coming?

[529] Yeah, but it's fast.

[530] All right, cool.

[531] I'm going to do both my next related.

[532] One is bringing measurable online advertising into the real world.

[533] Google and Facebook both have ad units around this now of trying to attribute when you see ads online and when you go to physical retail stores and understanding where those places are tracking you either via GPS or sensors when you're in the store, trying to bridge transactions in the store and really get some good measurement around the holistic view of you in the real world and you online and, you know, Waze totally does this.

[534] You see a digital ad, you tap on it.

[535] you navigate to go there and like there's people don't even think twice about the privacy because like the main purpose of ways is knowing where you are so you hand that data right over you say i want to go to this place you navigate there they might have paid for that ad and then or it might be a place that you're kind of organically trying to go to and then ways knows that you for sure went there which makes it a pretty valuable ad unit and kind of ahead of their time i think people were talking about doing this for a long time but the idea of putting it into an app where you very explicitly have said, please track me is pretty interesting.

[536] Did I actually go there?

[537] Yep.

[538] Yeah.

[539] And then this kind of falls out of my second piece, which is, or my second tech theme, which is banner ads totally failed on mobile.

[540] Like display ads were a thing on websites, and people tried to put banner ads on mobile, but there's such a little screen real estate that even the display ad people on mobile have mostly fallen back to just putting a big freaking desktop square in the middle of articles.

[541] Remember when this would be a fun episode to do at some point, but when Google bought AdMob and Apple bought, was it, Quatro Wireless, everybody thought, like, mobile display was going to be such a thing.

[542] Yeah, I mean, there's, like, there's that slide every single year in Mary Meeker's deck that says that the mobile ad opportunity is still huge because the amount of minutes spent on mobile versus on desktop way outpaces, the actual ad spent on mobile versus desktop.

[543] And that's because, like, this is this is my my tech theme we're just now seeing the emergence of effective native advertising on mobile and as it turns out it's not a banner ad it's not a square it's not an interscial it's none of those things it's not instagram yeah yeah and it's Pokemon right like it's it's figuring out what the very specific tailored experience someone is in when they're they're immersed in this you know single full screen application and like in the Pokemon case it's my god they're obsessed with finding that we are so obsessed with finding the pokey stop or the gym and like businesses can pay for the right to direct like people to go places in the real world and and that's going to be in my opinion the way that mobile advertising succeeds is that it's native it's very specific to the platform and it took us freaking 10 years of mobile to figure out what the right way to advertise to people on that platform it's such a classic case of like uh you know the mobile display ads being like the head fake that you know it was a faster horse right like it just wasn't you know it was the totally wrong way to think about it and we see this over and over again in technology that like um and we especially see it like being in in you know the startup world like so many times people recognize an opportunity coming in a wave but their mode of thinking is stuck in the old world right and like you know it's the faster horse thing.

[544] Like, you know, it's like, you know, you need to build the car, you know, and like, Pokemon Go is the car, Snapchat is the car, Instagram is the car, ad mob was the horse, you know?

[545] Yeah.

[546] It's a $750 million horse, but, hey, you know, good for, good for that.

[547] And Omar, I believe the CEO is at Sequoia now.

[548] So, yeah, he's doing great.

[549] Everybody, worked out for everybody.

[550] I'm going to do my second one real quick.

[551] We've also talked about this before, but I think this is a really, I put this in here because there was a great quote in that same blog post I referenced earlier that we'll put in the show notes from Noam Bardan, who was the CEO of Ways and still is from 2009 onward.

[552] And the theme is that like entrepreneurship is a global thing now.

[553] And like Silicon Valley is this incredibly special place and has its own network effect and is where the vast majority of startups are going to come.

[554] come, but, like, innovation is not a physical location -based thing anymore.

[555] And no one puts this great in his blog post.

[556] He writes about how Waze was an Israeli company, and the importance of that.

[557] He says, growing up in Israel in the 80s and 90s, I lived in a radically different world than my American cousins.

[558] We had one channel of black and white TV.

[559] Music and movies arrived 10 years later.

[560] There was no fast food or American brands, and we lived very differently.

[561] And then he talks about how cable television started flattening the consumer experience when that came out in the 90s and early 2000s.

[562] But then he says then the internet accelerated this change as people globally used Windows PCs and explorers to surf websites.

[563] Social and platforms have pounded at it again.

[564] And today, most of the users have the same Facebook account or Gmail interface and use it very similarly.

[565] The final flattening of innovation in the world came from mobile.

[566] anywhere you go in Israel today you will see iPhones and Android phones the same as in San Francisco running the same consumer apps and delivering equal joy on a family vacation with Ways Management it was amazing watching our kids both Israeli and American naturally communicate and share apps without the need to speak the same language like this is like a sea change that's happening in innovation and we're seeing it with stuff like the apps like musically now that are getting big like it's based in Shenzhen but like it's a big social network in America Yeah.

[567] I mean, there's still something to be said for density of networks, like just the people you encounter and the people you work around and the speed of which information gets exchanged there.

[568] Absolutely.

[569] But I think the nuance here, though, is like something like Musically, something like Waze, like it's in both places.

[570] Like, Musically is in Shenzhen and it's in Silicon Valley.

[571] Waze was in Palo Alto and in Israel.

[572] Yeah.

[573] Yeah, definitely the dual office thing.

[574] I would say like, you still.

[575] still sort of need to have your finger on the pulse in the hub.

[576] Yep, absolutely.

[577] Well, we talked about this with Scott, right?

[578] Like, the importance in the exact target episode, it was so important to Scott and to Indianapolis that they get the direct flight to San Francisco.

[579] Yeah.

[580] That's a great point.

[581] Okay.

[582] Great in it.

[583] Let's grade it.

[584] So it's interesting.

[585] There's probably, there's like two criteria to think through here.

[586] We're three years out from this acquisition, so we have a little bit of perspective.

[587] We can see what they've done with it so far.

[588] But then you also have to take into account the speculative view looking forward, which is a lot around autonomous vehicles.

[589] And, you know, I think they've done a pretty, like, it's really hard to figure out what the size of the ad business within Ways is.

[590] I predict it is nowhere near close to paying back the purchase.

[591] Like this as a product.

[592] I would be shocked.

[593] Yeah, this as a product is not going.

[594] going to pay for itself.

[595] But the data asset has stayed really strong.

[596] Like people still use ways all the time.

[597] Many like Uber drivers are using it and preferring it to Google Maps.

[598] It's in developing countries, it's used way more often because the crowdsource data is way more accurate.

[599] So as those countries really start to come online, I mean, their default experiences ways, it would be not great for Google if that was out of their hands.

[600] And I think that, that that combined with Google's autonomous vehicle future and the great data that it develops, that it creates for itself, for its use in its own app, and that feeds into Google Maps.

[601] I'm going to go A -minus only because the A's that we've given out are just wildly successful on a ridiculously fast scale.

[602] Yeah, I mean, to me it's almost like, in some ways this is a cut, like I am going to give it a grade, but how I really feel is, and I know this is a cop -out in some ways, but Waze quote unquote It's too early to tell Like even though this happened three years ago And it's too early to tell because Just like three years ago And this whole Waze story I feel like Was really the closing chapter Of the mobile platform wars quote unquote You know what's happened since then We're now at the emerging of the era Of like machine learning is the really important thing in technology like we went from you know Google's being very open and saying this you know about themselves but we went from a world uh call it 10 years ago where companies were you know internet first companies we weren't software companies we were internet companies to you know from 10 to five years ago the world shifted to mobile first companies companies aren't you know aren't just internet like they're mobile and they're not just building desktop websites but now like we're shifting to a machine learning based you know companies are ML first like Google is very explicit we are an ML first company now and you see that across all of our products with Google brain with maps with TensorFlow and um the first I think like huge native ML application that industry that's going to happen is going to be probably autonomous vehicles so already is well yeah it already is I mean Tesla is doing it.

[603] Like, it was like, you know, this was the Trojan horse.

[604] So how important ways and the ways data becomes in that to Google?

[605] Like I said, I think the value is still in the future.

[606] But that said, like for the defensive reasons we talked about and for the value that they've realized even so far along that, yeah, I mean, I think it's an A minus because, like you said, the bar is, our bar is very high for the A. yeah it's like it's it's it's an a minus with low confidence that it's going to stay there right like it either is going to be an a or it's going to not be an a minus yeah right um yeah uh it's interestingly compare that to cruise which gm bought for a billion dollars like right around the same amount of money um you know arguably uh there's a lot more value in um ways uh thus far that Google has realized, then, you know, Cruise is still very much pre -product.

[607] So we'll see.

[608] That's a part of why I say, though, is that, like, it's just, it's too early to tell.

[609] Okay.

[610] Let's bring this one on home.

[611] So follow -ups, we got nothing for you this week, but maybe next time.

[612] Maybe we'll talk about autonomous vehicles.

[613] Carve out.

[614] What's you got, Ben?

[615] All right.

[616] So I've got a podcast for us this week.

[617] I've been, I listened to one episode of this because I got, I got totally roped in actually a while ago to a podcast called Song Exploder by their first episode, which, which featured the Postal Service.

[618] And what, what the host does, Rishi K. Sheraway, he sits down with an artist, a musical artist, does an interview and also gets them to provide the actual track, all the different tracks that make up, that song and he'll listen to each layer and play each layer individually and have a conversation with that artist about where did this individual sound come from and where did this instrument come from and who provided this and who did you collaborate with and a lot of times they even come with early recordings and demos and songs that inspired that song and he does a really great job of kind of isolating these individual pieces so you go oh whoa I can totally see that and one of my favorite bands is Odeza.

[619] I saw them this weekend in Seattle, Capitol Hill Block Party.

[620] Their episode is super, super cool.

[621] They talk about, you know, when they went over to Bainbridge Island to compose this song and that's super cool.

[622] But the best episode, in my opinion, and it's sort of dangerous to start with this one because it sets the bar high is an interview with Weezer where the systematic approach to songwriting by this dude is, absolutely amazing and he has like spreadsheets full of um lyrics that come out of his journaling that he highlights that he then puts in there and tags by the number of syllables and the onbeat and the offbeat and then combining all these different ones after he writes a riff it is like i'm not doing it justice you got to listen to this it's the weezer episode of song Exploder it's so good dude that's awesome i've i've heard about this podcast but and been meaning to check it out um but i really need to know that sounds really cool it's like they're doing to uh songs what we do to m &A deals they are and the production is so so high quality it's like a total treat to listen to each one and it's gotten me into bands i didn't like before and it's gotten me into songs where now when i hear some of these songs after i hear it get exploded for 20 minutes before it's like it that song that comes on that's like one of my favorite songs if it was if it was an episode that's awesome um so my carve out for the week is an oldie but goody that was sent to me recently by a really good friend and I'm so glad he sent it to me because I'd watch, it's a TED talk and it's Simon Sinex start with Y TED talk.

[623] It's one of the top 10 TED talks and it's interestingly it's a TEDx talk done at TEDx Puget Sound here in I believe it was in Seattle in 2009.

[624] And it's just such a cool concept.

[625] And it's called Start With Why, and then he ended up writing a book about this.

[626] But in the sort of more raw version of the TED Talk, he talks about it as the golden circle.

[627] And it's, you know, there are three levels of communication about a company or a product or a person or a firm.

[628] There's the what you do, there's the how you do it, and there's the why you do it.

[629] and 99 % of companies or firms or products or people say, hi, I'm David.

[630] I'm a venture capitalist at Madrona Venture Group in Seattle, Washington.

[631] And we do seed in series A deals, invest in seed in series A stage technology companies, largely in the Pacific Northwest and would love to talk to great companies, right?

[632] So it's like people start with what, and then they do how.

[633] and then maybe they do a little bit of why.

[634] But if you actually want to inspire people and reach people and do something that has a much higher chance of success, you need to reverse the order and start with why.

[635] Say, I'm David Rosenthal.

[636] I believe that all great companies in the Pacific Northwest deserve a chance to have experience with their venture capital firm that's every bit as high quality as the best companies in Silicon Valley get.

[637] yeah that was a lot more do you want my money right like you know then that like it just comes across like you're you just by reversing about like talk about why you're doing you're doing something and what you believe in uh it's going to be so much more powerful than starting with the what um and uh interestingly apple is the is the company that uh that he uses as the canonical example here uh we think differently at apple uh we uh design uh beautiful we have beautiful intelligently designed products and those products happen to be phones and computers and cars and cars yeah not we make computers and phones we design them beautifully and we believe in thinking differently yeah that wouldn't fit on the poster it would not our sponsor for this episode is a brand new one for us stat sig so many of you reached out to them after hearing their CEO Vijay on ACQ2 that we are partnering with them as a sponsor have acquired.

[638] Yeah, for those of you who haven't listened, Vijay's story is amazing.

[639] Before founding Statsig, Vijay 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.

[640] 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.

[641] So now StatsSig is the modern version of that promise and available to all companies building great products.

[642] Statscig is a feature management and experimentation platform that helps product teams ship faster, automate A -B testing, and see the impact every feature is having on the core business metrics.

[643] The tool gives visualizations backed by a powerful stats engine unlocking real -time product observability.

[644] So what does that actually mean?

[645] It lets you tie a new feature that you just shipped to a core metric.

[646] in your business and then instantly know if it made a difference or not in how your customers use your product.

[647] It's super cool.

[648] 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.

[649] Customers include Notion, Brex, OpenAI, FlipCart, Figma, Microsoft, and Cruise Automation.

[650] There are like so many more that we could name.

[651] I mean, I'm looking at the list, Plex and Vercel, friends of the show at Roeck's.

[652] Rec Room, Vanta.

[653] They literally have hundreds of customers now.

[654] Also, Statsig is a great platform for rolling out and testing AI product features.

[655] 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 Statsing.

[656] Yep.

[657] 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.

[658] They can now ingest data from data warehouses.

[659] 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.

[660] You don't even have to migrate from any current solution you might have.

[661] We're pumped to be working with them.

[662] You can click the link in the show notes or go on over to stat sig .com to get started.

[663] And when you do, just tell them that you heard about them from Ben and David here on Acquired.

[664] All right.

[665] If you aren't subscribed on iTunes and you want to hear more, you can subscribe from your favorite podcast.

[666] podcast client.

[667] And if you feel so inclined, we would love a review on iTunes or tell your friends, share us on Twitter.

[668] And we'll see you next time.

[669] We'll see you next time.