By Ben Gilbert and David Rosenthal

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Acquired goes behind the scenes of the best (and worst) acquisitions and IPOs of all time. From the Instagram A+'s to the AOL-Time Warner fails, what can we learn from their journeys and apply to our own organizations and careers in business and in tech?

Episode Date
LP Show Preview: Product-Market Fit

Join the Acquired Limited Partner program! (works best on mobile)

We often get asked, “what type of content is on the Limited Partner Bonus Shows?” Well, we figure an episode is worth a thousand words (er, something like that), so we’re releasing one of our LP bonus shows in the main feed.

On this episode, we dive into the most elusive aspect of early-stage investing and company building: finding product-market fit.

We’ll be back next week with our regularly scheduled programming: the Season 3 finale on Tencent!

Dec 10, 2018
Season 3, Episode 9 Netflix (Part 2)

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(works best on mobile)

We complete our two-part Netflix special with the company’s bold transition to streaming, including of course the most (in)famous spin-out in business history. Rising from the ashes of Qwikster, we chronicle Netflix’s rebirth as a media company and long journey back to the top of the FAANG mountaintop!


Carve Outs:


  • Thanks to Silicon Valley Bank for sponsoring all of Acquired Season 3. You can get in touch with Al Guerrero, who you heard at the beginning of this podcast, here:, and read his Medium post here:

Nov 25, 2018
Season 3, Episode 8: Netflix (Part 1)

Join the Acquired Limited Partner program! (works best on mobile)

In a world ravaged by late fees and lack of rewinding, two men from a sleepy California beach town make a stand against tyranny, daringly dethrone an evil empire and… oh who are we kidding, they just copied Amazon’s business plan for books and applied it to movie rentals. But as always there is much more to the story than that! We dive into the fascinating, true, and oft-untold history of Netflix in our first two-part special on Acquired. Part 1 covers Netflix’s original DVD rental business from founding to 2009, and next time on Part 2 we’ll cover the (rocky) transition to streaming from 2010 to present. Buckle up for a wild ride!


Carve Outs:


Nov 12, 2018
Season 3, Episode 7: Venmo (SF live show with Andrew Kortina)

Ben & David are joined by special guest and Venmo cofounder Andrew Kortina for our first-ever SF live show! In front of a packed house we chronicle the journey of how two freshman-year roommates from Penn turned a healthy obsession with Craigslist and a fake podcast into an app that facilitated $17B of payments last quarter alone, producing not one but two landmark acquisitions along the way!

Note: the audio quality is a little rough due to some A/V issues at the live show. We apologize!




Carve Outs:



  • Thanks to Silicon Valley Bank for sponsoring all of Acquired Season 3. You can get in touch with Reetika Grewal, who you heard at the beginning of this podcast, here.

Oct 29, 2018
SF Live Show Announcement: Venmo!

Join Ben and David for Acquired's first-ever SF live show! We'll be covering Venmo's acquisition by Braintree (and then PayPal), with special guest Andrew Kortina, co-founder of Venmo. We can’t wait to see many of you there!


When: Wednesday October 24, 2018 

6:00 PM – 9:00 PM PDT

Where: SVB @ WeWork Golden Gate

25 Taylor Street

San Francisco, CA 9410

Oct 08, 2018
Season 3, Episode 6: Behance (with Scott Belsky)

Ben and David are joined by Adobe’s Chief Product Officer, Behance founder, Benchmark partner, author, and product luminary, Scott Belsky, to tell the story of Adobe Systems’ 2012 acquisition of Behance. We dive into the role it played in of one of the greatest (and least well-known) pivots of all time: Adobe’s transition from packaged software to services, which over the past 6 years has generated an astounding $100B+ in market cap and nearly 10x growth in Adobe’s share price!

Announcement: We're super excited to announce our first SF live show on October 24th, 2018! We have an amazing story and guest lined up who we can’t wait to share with you all. :) Tickets are very limited due to space constraints: please register early at



  • Thanks to Silicon Valley Bank for sponsoring all of Acquired Season 3. You can get in touch with Adam Millsom, who you heard at the beginning of this podcast, here.

Oct 02, 2018
Season 3, Episode 5: Alibaba

We continue our China Tech series with perhaps the most incredible entrepreneurial journey in history: Alibaba and its indefatigable founder, Jack Ma. How did an unknown 30 year-old English teacher from a second tier Chinese city build the world’s 7th largest company by market cap (and the largest in China) in just 20 short years? This is one story you don’t want to miss.


Carve Outs:


  • Thanks to Silicon Valley Bank for sponsoring all of Acquired Season 3. You can get in touch with Eric Zhou, who you heard at the beginning of this podcast, here.

Sep 24, 2018
Season 3, Episode 4: Recode (with Kara Swisher)

In this special episode Ben & David head to Recode’s SF office and sit down in the red chair with the one & only Kara Swisher! Kara tells the story of Recode, from the beginnings of her partnership with Walt Mossberg in the late 90’s at WSJ to the launch of the D Conference and the All Things D blog, to starting Recode and ultimately being acquired by Vox Media in 2015. Kara is someone we’ve long looked up to at Acquired, and it was really special to have her join us on the show. We hope you enjoy the conversation as much as we did!



  • Thanks to Silicon Valley Bank for sponsoring all of Acquired Season 3. You can get in touch with Jeremy Shure, who you heard at the beginning of this podcast, here.

 Credit: Kara Swisher / Recode

Credit: Kara Swisher / Recode

 Credit: Eric Johnson / Recode

Credit: Eric Johnson / Recode

Sep 11, 2018
Season 3, Episode 3: The Sonos IPO

Ben and David are (almost) live on the scene covering the plucky Southern California “camera company”… uh wait, wrong episode… we mean *speaker* company’s IPO! Continuing the long Acquired tradition of analyzing companies at the intersection of music, tech and business, we discuss the past, present and future of Sonos in world where speakers actually now… speak!


Carve Outs:


  • Thanks to Silicon Valley Bank for sponsoring all of Acquired Season 3. You can get in touch with Rob Freelen, who you heard at the beginning of this podcast, here.
Aug 20, 2018
Season 3, Episode 2: The Xiaomi IPO

Acquired kicks off our China tech mini-series by teaming up with the best in the business: Hans and Zara from GGV’s 996 Podcast! Together we cover the largest technology IPO in the world since fellow China tech giant Alibaba in 2014: Xiaomi, where Hans has been an investor and board member from the very beginning. This episode is chock full of history and insight on both Xiaomi and what’s happening in China tech more broadly, and why we all should be paying attention. No matter where you live, this is definitely not one to miss!


  • Thanks to Silicon Valley Bank for sponsoring all of Acquired Season 3. You can get in touch with Steven Pipp, who you heard at the beginning of this podcast, here.
Aug 06, 2018
Season 3, Episode 1: Tesla

Acquired kicks off Season 3 with a gangbuster two-hour extravaganza on America’s most successful automotive startup since The Ford Motor Company: Tesla. We cover everything, from founding to its 2010 IPO to all that’s happened since, including the question on the minds of superhero fans everywhere: who came first, Elon Musk or Tony Stark? (Spoiler: Elon)

Carve Outs:


  • Thanks to Silicon Valley Bank for sponsoring Acquired Season 3. You can get in touch with Jordan Kanis, who you heard at the beginning of this podcast, here.
Jul 17, 2018
Acquired Season 3 Trailer

Get ready for Season 3 with a quick overview for newcomers, our latest mini-series announcement and more!

Jul 09, 2018
Season 2, Episode 10: The Rover-DogVacay Merger (with Rover CEO Aaron Easterly)

Please click here to take the 2018 Acquired Survey. It takes 5-10 minutes, helps us immensely, and you may win a pair of AirPods or equivalent Android-friendly listening accessory (woo!)

Acquired wraps up Season 2 with our first “elusive” private-private merger: and its 2017 combination with rival pet care marketplace DogVacay. We’re joined by Rover CEO Aaron Easterly to dive into the full history of how the crazy idea of “Airbnb for dogs” not only became a billion-dollar company, but also brought our heroes together for the first time and led to the founding of Acquired!



  • Thanks to Perkins Coie, Counsel to Great Companies, for sponsoring Acquired Season 2. You can get in touch with Gina Eiben, who you heard at the beginning of this podcast, here.
Jun 18, 2018
Season 2, Episode 9: GitHub

We’re live on the scene the day following the biggest announcement in the open source software world since well, open source software: Microsoft acquiring GitHub for $7.5B in stock. How did we get here? What does it mean for software developers going forward? And most importantly, why is there a creepy half-cat / half-octopus plastered all over everything? As always, Acquired has the answers. 

Carve Outs:


  • Thanks to Perkins Coie, Counsel to Great Companies, for sponsoring Acquired Season 2. You can get in touch with Lee Schindler, who you heard at the beginning of this podcast, here.
Jun 06, 2018
Season 2, Episode 8: T-Mobile / Sprint

If you thought the telecom business was boring, think again! Acquired brings you an episode packed with more drama than an entire season of Game of Thrones. Starting with a death in the family, we follow a tale of fortunes lost and rebuilt, bitter battles between rivals who once worked for each other, and at the center of it all, a lesson in the power of stable cashflow businesses. This is one call you don’t want to drop!


Carve Outs:


  • Thanks to Perkins Coie, Counsel to Great Companies, for sponsoring Acquired Season 2. You can get in touch with Gina Eiben, who you heard at the beginning of this podcast, here.
May 21, 2018
Season 2, Episode 7: PowerPoint
Acquired returns with a classic, delving into Microsoft’s first acquisition ever: Forethought Inc, the makers of PowerPoint. Hate it or love it, you can’t deny the combined companies’ impact: by the early 90’s PowerPoint had transformed the way businesses, educators and governments communicate, ensuring job security for pointy-haired Dilbert bosses everywhere! Links: * Robert Gaskins’ definitive history of building PowerPoint: Sweating Bullets * The Improbable Origins of PowerPoint by David C. Brock (director of the Center for Software History at the Computer History Museum) Carve Outs: * Ben: Mindfulness in Plain English and discussion on Hacker News * David: The Birds have landed… Sponsor: * Thanks to Perkins Coie, Counsel to Great Companies, for sponsoring Acquired Season 2. You can get in touch with Gina Eiben, who you heard at the beginning of this podcast, here. Full Transcript below: (disclaimer: may contain unintentionally confusing, inaccurate and/or amusing transcription errors)
May 04, 2018
Season 2, Episode 6: Spotify’s Direct Listing

Acquired wraps up a big few weeks of coverage with not an IPO or an M&A or a fundraising round, but what’s still the largest tech exit in recent memory: Spotify’s $30B direct public listing. We dive into what it all means and how we got here: from Napster to iTunes to Facebook (and even some Justin Timberlake thrown in for good measure). Acquired FM is on the scene and spinning all the hits from this new wave music industry titan!

Note: We incorrectly described Spotify CEO Daniel Ek’s ownership stake in Spotify as 25%+; that is actually his voting control. His economic ownership is 9.3%, and cofounder Martin Lorentzon’s is 12.4%. We apologize for the error!


Carve Outs:


  • Thanks to Perkins Coie, Counsel to Great Companies, for sponsoring Acquired Season 2. You can get in touch with Lee Schindler, who you heard at the beginning of this podcast, here.
Apr 06, 2018
Season 2, Episode 5: The Dropbox IPO

Acquired is live on the scene following Dropbox’s public market debut. From playing a central role in the early days of Y Combinator, to having Steve Jobs famously label the company a “feature not a product”, to pivoting from consumers to enterprise to developers and back again, the silicon valley history runs deep with this one. What twists and turns lie ahead for Dropbox as a public company? We speculate!


Carve Outs:


  • Thanks to Perkins Coie, Counsel to Great Companies, for sponsoring Acquired Season 2. You can get in touch with Lee Schindler, who you heard at the beginning of this podcast, here.
Mar 26, 2018
Season 2, Episode 4: SoftBank, Fortress and the Vision Fund

Acquired dives into the topic on the minds and lips of just about every VC and founder these days: SoftBank’s $93B+ Vision Fund, and its seemingly-overnight rewriting of the rules of venture capital and startup fundraising. Where did this new 800lbs gorilla come from, what are its goals, and what does it mean for the future of silicon valley and the global tech ecosystem? The answer, it turns out, starts with an acquisition, and unfolds into a story no one has yet told and few yet understand. Luckily our heroes are on the case!


Carve Outs:

  • Ben: eBoys: The First Inside Account of Venture Capitalists at Work
  • David: Liu Cixin’s Remembrance of Earth’s Past trilogy (starting with The Three-Body Problem)
  • Bonus: shout out to Brian McCullough’s new podcast the Ride Home, in partnership with TechMeme!


  • Thanks to Perkins Coie, Counsel to Great Companies, for sponsoring Acquired Season 2. You can get in touch with Lee Schindler, who you heard at the beginning of this podcast, here.
Mar 23, 2018
Season 2, Episode 3: Nest

Acquired brings it all back home—to the smart home that is—with Google’s 2014 acquisition of Nest for $3.2B. From Nest cofounder Tony Fadell’s first job at General Magic (alongside future Android founder Andy Rubin) to his days as “father of the iPod” under Steve Jobs at Apple, the Silicon Valley history runs deep with this one. But did that make the acquisition a good move for Google in the coming battle with Amazon’s “Lady A” for control over consumers’ homes? We dive in! 


Carve Outs:


  • Thanks to Perkins Coie, Counsel to Great Companies, for sponsoring Acquired Season 2. You can get in touch with Gina Eiben, who you heard at the beginning of this podcast, here.
Feb 20, 2018
Season 2, Episode 2: Raising a Seed Round with Against Gravity CEO Nick Fajt

We launch mini-series on Acquired with a subject near & dear to our heroes’ hearts: startup fundraising! This has been one of our most-requested new topics, and we’re excited to kick things off with makers of the popular Rec Room social VR app, Against Gravity, which raised one of Seattle’s hottest venture rounds in recent history: a $4m seed led by Sequoia Capital in 2016. CEO Nick Fajt joins to tell the story from company inception to building and shipping the initial product, fundraising as a first-time CEO, what they’ve been able to accomplish with the capital and their vision for the future. We had a blast touching on many classic Acquired themes for the first time “in-action” with a young, growing company, and hope you all enjoy the discussion as much as we did. Let us know what you think in the Slack!

Carve Outs:


  • Thanks to Perkins Coie, Counsel to Great Companies, for sponsoring this Acquired Season 2. You can get in touch with Gina Eiben, who you heard at the beginning of this podcast, here.
Feb 07, 2018
Season 2, Episode 1: Zappos (with Alfred Lin)
Former Zappos Chairman & COO (and current Partner at Sequoia Capital) Alfred Lin joins our heroes to kick off Season 2 with a classic: Amazon’s 2009 acquisition of the internet’s quirkiest online retailer for $1.2B in stock. How did three Harvard undergrads go from delivering pizza to their dorm to delivering happiness to the world — and become in the process one of the few companies ever to compete successfully head-to-head against Amazon in commerce? Tune in to find out!  Note: Unfortunately the quality of David and Alfred’s audio tracks in this episode were significantly impacted by a processor issue on David’s computer, which we didn’t discover until after recording. We’ve worked hard to fix in post-production, but it’s still far from perfect. Still, the content from Alfred is so good, we felt we had to put this episode out there even though the audio quality isn’t up to par. We hope you’ll give it a listen regardless, and we’re working on getting a transcript made ASAP as well.  -Ben & David Carve Outs: * Ben: Andrew Mason on Recode Decode  * David: Justin O’Beirne on Google Maps’ Moat * Alfred: Walter Isaacson’s biographies of Albert Einstein and Benjamin Franklin Sponsor: * Thanks to Perkins Coie, Counsel to Great Companies, for sponsoring this podcast. You can get in touch with Jason Day, who you heard at the beginning of this podcast, here. Full Transcript below: (disclaimer: may contain unintentionally confusing, inaccurate and/or amusing transcription errors)
Jan 23, 2018
Announcement: San Francisco Happy Hour

Join us on Tuesday, January 16th at 5:30 in San Francisco for the Acquired Listener Happy Hour! Find out more and RSVP here:

Jan 08, 2018
Episode 51: 2017 Holiday Special

Acquired cozies up to the fire and looks back on the year in tech. How wildly off were we on last year’s predictions? What does the next year have in store? Most importantly, what price will Bitcoin be trading at in December 2018??? Pour yourself a glass of your favorite holiday beverage and kick back with us.

SF Acquired Meetup!

  • Mark your calendars: we’ll be hosting an Acquired Meetup in SF the evening of January 18, 2018. More details coming soon—check Slack or


2017 Carve Outs of the Year:


  • Thanks to Perkins Coie, Counsel to Great Companies, for sponsoring this podcast. You can get in touch with Jason Day, who you heard at the beginning of this podcast, here.
Dec 18, 2017
Episode 50: Apple - Beats

Acquired crosses the half-century mark with an instant classic: Apple’s 2014 purchase of Beats, its largest acquisition ever. If you knew Beats as just another headphone company, think again—the history on this one will keep your heads ringin’.

SF Acquired Meetup!

  • Mark your calendars: we’ll be hosting an Acquired Meetup in SF the evening of January 18, 2018. More details to come soon. 

Carve Outs:


  • Thanks to Perkins Coie, Counsel to Great Companies, for sponsoring this podcast. You can get in touch with Nick Ferrer, who you heard at the beginning of this podcast, here.
Dec 11, 2017
Episode 49: The Stitch Fix IPO

Ben and David dive into the most talked-about tech IPO of 4Q 2017: Stitch Fix. After downsizing the offering and pricing below the range, does this signal a warning that public markets won’t value high-flying silicon valley “disruptors” as high as VCs hope? Or is this a textbook example of a great return for a disciplined management team and well-run company? Most importantly, what happens next? Tune in for our heroes’ take. 

Carve Outs:


  • Thanks to Perkins Coie, Counsel to Great Companies, for sponsoring this podcast. You can get in touch with Jason Day, who you heard at the beginning of this podcast, here.
Dec 04, 2017
Episode 48: Qualcomm - Broadcom

Ben & David cover the proposed largest tech M&A deal of all time, and in the process dive into the evolving dynamics of the industry that started everything in Silicon Valley—silicon. Just when VCs thought innovation was dead in semiconductors, a new wave of startups and large companies are redrawing the lines of competition in an industry dominated for a half-century by the “Wintel” duopoly of Intel and Microsoft.

Topics Covered Include:

The Carve Out:


  • Thanks to Perkins Coie, Counsel to Great Companies, for sponsoring this podcast. You can get in touch with Nick Ferrer, who you heard at the beginning of this podcast, here.
Nov 20, 2017
Episode 47: The Atlassian IPO

Ben & David venture to the land down under (and reunite in-person!) to tell the story of the granddaddy of all bootstrapped tech success stories, collaboration software company Atlassian. How did two plucky college grads from Sydney, Australia go from just trying to escape working for the man to becoming two of the top 10 wealthiest people in the entire country, all without raising a dollar of venture capital? We dive in. 

Topics Covered Include:

  • How Atlassian founders Mike Cannon-Brookes and Scott Farquhar met in college at the University of New South Wales in Sydney, Australia, and their decision to bootstrap a startup as an alternative to finding a “real job” after graduation
  • Atlassian’s “no sales” model, and the resultant efficiency of their sales & marketing spend relative to other SAAS companies 
  • Organic product growth and acquisitions over the years, starting with Jira and later adding Confluence, BitBucket, HipChat / Stride, Jira Service Desk and Trello
  • Rapid revenue growth and the decision to continue as a bootstrapped company, only raising secondary capital prior to going public
  • The IPO in November 2015 and subsequent stock performance (spoiler: it’s been good)

The Carve Out:


  • Thanks to Perkins Coie, Counsel to Great Companies, for sponsoring this podcast. You can get in touch with Jason Day, who you heard at the beginning of this podcast, here.
Nov 07, 2017
Episode 46: Blue Bottle Coffee
Today our heroes cover a deal that might have more impact on life in Silicon Valley than AI, wearables and AR/VR combined… Nestle’s acquisition of Blue Bottle Coffee. Will hipster entrepreneurs and the VCs who love/need them continue to line up around the block for their minimalist coffee experience of choice, now that it’s owned by the Nesquik Bunny? Is this the beginning of Blue Bottle pod machines filling the empty counter space left by Juicero’s demise in VC offices throughout South Park? We investigate.  Topics Covered Include: * The rise of “Third Wave” coffee * Blue Bottle founder James Freeman’s “classical” (music) influences  * Venture capital and the coffee business  * Achieving liquidity when companies and founders’ don’t want to go public, and don’t want to sell their stakes  * Nestle’s position in single-serve coffee market and potential brand impact of Blue Bottle The Carve Out: * Ben: There Never Was a Real Tulip Fever * David: the small joys of the iPhone SE Sponsor: * Thanks to Perkins Coie, Counsel to Great Companies, for sponsoring this podcast. You can get in touch with Jeff Beuche, who you heard at the beginning of this podcast, here. Full Transcript below: (disclaimer: may contain unintentionally confusing, inaccurate and/or amusing transcription errors)
Oct 08, 2017
Episode 45: HTC, Google and the Future of Mobile

Acquired is back and live on the scene! After months of speculation, Google announces today their acquisition (err, "Cooperation Agreement”) of a large portion of HTC’s hardware division. What does this mean for the future of mobile? Can Google transform itself into a vertically integrated device company and compete directly with Apple? Most importantly, when will we see more Beats Android handsets??? (We hope never)

Topics Covered Include:

  • The origins of HTC as a Taiwanese OEM, dating back to the Compaq iPAQ and Palm Treo 650!
  • HTC’s long history with Google, starting as the manufacturer of the first Android phone, the HTC Dream / T-Mobile G1
  • HTC’s ownership of Beats, for a hot minute
  • Google’s own winding history in hardware, with its Motorola acquisition in 2011 and divestiture in 2014
  • Google & HTC’s joint work on the Pixel smartphones in 2016
  • And much analysis and speculation on what this means for Google, Apple, Samsung, vertical vs horizontal business models and more!

The Carve Out:


  • Thanks to Perkins Coie, Counsel to Great Companies, for sponsoring this podcast. You can get in touch with Jeff Beuche, who you heard at the beginning of this podcast, here.
Sep 21, 2017
Episode 44: AOL - Time Warner (with the Internet History Podcast)
On this extra-long episode of Acquired, Brian McCullough from the Internet History Podcast returns to discuss perhaps the most (in)famous merger of all time: AOL - Time Warner. Who doesn’t remember the soothing sounds of 56k modems and the timeless phrase, “You’ve Got Mail”? Join us all as we unpack how one of the biggest ISP’s of the 90’s tried to take over the world… and failed. Topics Covered Include: * AOL’s status in the 90’s / early 00’s * Explaining just what it is that AOL did at the height of their popularity * How AOL pioneered a number of internet paradigms * AOL’s persistent money troubles and bailouts from other companies * Steve Case foreseeing the coming era of broadband, inspiring AOL to pursue working with a cable company * Ebay vs. Time Warner in a down-to-the-wire war for a merger with AOL * Why the money dried up for AOL after their merger with Time Warner * AOL and its value in the post-Time-Warner era * Speculating about what would have happened had AOL and others stayed independent businesses * And much discussion on how to grade this one… The Carve Out: * Ben: Give and Take by Adam Grant  * David: Season of the Witch by David Talbot  * Brian: A Mind at Play: How Claude Shannon Invented the Information Age by Rob Goodman  Sponsor: * Thanks to Perkins Coie, Counsel to Great Companies, for sponsoring this podcast. You can get in touch with Jeff Beuche, who you heard at the beginning of this podcast, here. Full Transcript below: (disclaimer: may contain unintentionally confusing, inaccurate and/or amusing transcription errors)
Sep 18, 2017
Episode 43: The Square IPO
Unicorns and ratchets and lawsuits, oh my! Our heroes dive into the history of Jack Dorsey’s famous “other” company, Square. Was the Square IPO a canary in the coal mine signaling doom & gloom for the so-called unicorn companies of the early 2010’s, or a mispriced and misunderstood diamond in the rough? Acquired weighs in. Topics Covered Include: * Square’s deep origins in the early 90’s in St. Louis, MO with the initial meeting of its co-founders, Jack Dorsey & Jim McKelvey * McKelvey’s side glass blowing business and the “inspiration” for Square that came much later in the late 2000’s * The complicated involvement of Washington University (in St. Louis) professor Robert Morley, who had worked for years developing payment card reading technology * The company’s early meeting with Scott Forstall at Apple, and its “significant” impact on the its name and design * The real disruptive innovation of Square and its business model (hint: not just building a mobile card reader) * Square’s massive payments deal with Starbucks in 2012 and its impact on the company * The evolution of Square’s business from a simple card reader to cloud-based Point of Sale (PoS) system and entire suite of merchant tools & business management services * The drama leading up to Square’s IPO (including at Jack Dorsey’s “other” company, Twitter), dynamics and narratives affecting its pricing, the effect of IPO “ratchets”, and the company’s performance over the ~2 years since The Carve Out: * David: Bob Iger on Nick Bilton’s Inside the Hive podcast * Ben: The World After Capital on GitBooks Sponsor: * Thanks to Perkins Coie, Counsel to Great Companies, for sponsoring this podcast. You can get in touch with Buddy Arnheim, who you heard at the beginning of this podcast, here. Full Transcript below: (disclaimer: may contain unintentionally confusing, inaccurate and/or amusing transcription errors)
Aug 16, 2017
Episode 42: Opsware (with special guest Michel Feaster)
Acquired dives into the legendary acquisition of Ben Horowitz & Marc Andreessen’s “second act” software company Opsware, from a perspective never before heard—HP’s side of the story! Our heroes are joined by Michel Feaster, who led both the acquisition for HP and then the Opsware product as part of the integrated company afterward under Ben Horowitz. Today the tables have turned: Michel is the Co-Founder and CEO of Seattle-based startup Usermind, and Ben Horowitz sits on her board on behalf of A16Z. This episode is not one to miss! Topics covered include: * Opsware’s early history and origins as Loudcloud, the “second act” of internet wunderkind Marc Andreessen and Netscape product manager Ben Horowitz * Ben’s first person telling of the Loudcloud/Opsware history in The Hard Thing about Hard Things, as well as the great Wired "period piece” covering Loudcloud’s launch in August 2000 * The importance of timing, and Loudcloud’s too-early vision of—essentially—AWS before AWS (including eerie parallels between the metaphor Andreessen used to describe Loudcloud during the company’s first press briefing, and Jeff Bezos’s description of AWS at YC nearly a decade later) * Creation of the “Opsware” tool inside of Loudcloud to automate deploying and configuring servers within Loudcloud’s data centers * Loudcloud's meteoric rise, crash following the burst of the internet bubble, and hard pivot as a public company into Opsware—now an enterprise software company selling datacenter tools  * Michel’s role in HP’s evaluation of the company as an acquisition target, and process leading to its $1.6B acquisition in July 2007 * Integration of the company into HP’s culture and sales channel * The creation of Ben & Marc’s “third act”, the VC firm Andreessen Horowitz, and what it’s like for Michel now having Ben as an investor on her board at Usermind  The Carve Out: * Ben: StarStaX star trail photography software * David: Jimmy Iovine on the Bill Simmons Podcast Sponsor: * Thanks to Perkins Coie, Counsel to Great Companies, for sponsoring this episode. You can get in touch with Buddy Arnheim (as heard on this episode) directly here. Full Transcript below: (disclaimer: may contain unintentionally confusing, inaccurate and/or amusing transcription errors)
Aug 05, 2017
Episode 41: with Jetsetter & Room 77 CEO Drew Patterson
Acquired trains its lens on the “second or third best acquisition of all-time”, Priceline’s 2005 purchase of Our heroes are joined by friend-of-the-show and former Jetsetter & Room 77 CEO Drew Patterson to help understand how this little-known startup from The Netherlands grew into the largest travel company in the world, with nearly $8B in annual revenue. Was this deal even better than Instagram??? We debate, hotly.  Topics covered include: * The biggest startup you’ve never heard of (in the US), , and its parent company Priceline (yes, the William Shatner Priceline) * Booking’s founding in Amsterdam in late 1996: by recent college graduate Geert-Jan Bruinsma *’s Definitive Oral History of Online Travel * The travel industry's GDS's (“Global Distribution Systems”) and the development of Sabre  * How Bruinsma raised the initial money for Booking: by emailing anyone he know who had an email address  * OTAs ("Online Travel Agencies”) and how they operate; the "merchant model" versus the “agency model" * The role of search in online travel  * Bill Gurley on Conversion: The Most Important Internet Metric of All * Expedia’s early flirtation with Booking, and decision not to acquire the company * Priceline head of M&A Glenn Fogel’s vision for how powerful the agency model for OTAs could become in Europe * Priceline and Glenn's 2004 acquisition of Active Hotels in the UK, followed by the 2005 acquisition of Booking for $133M and the combination of the two businesses into  * Booking’s incredible growth in the decade since the acquisition, from less than 20M room-nights to over 500M, and $7.8B in revenue in 2016 The Carve Out: * Ben: Scott Forstall talking about the original iPhone at the Computer History Museum * David: The Big Sick * Drew: Bloomberg’s Money Stuff by Matt Levine Sponsor: * Thanks to Silicon Valley Bank for sponsoring this episode. If you'd like to learn more or start a banking relationship, you can get in touch with Shai Goldman here. Full Transcript below: (disclaimer: may contain unintentionally confusing, inaccurate and/or amusing transcription errors
Jul 26, 2017
Episode 40: Activision Blizzard
Ben & David cover the creation of the gaming world’s equivalent of the 70’s rock supergroup: the 2008 merger of Blizzard and Activision. We tell the story from the Blizzard perspective, tracing the history of one of the most innovative companies in the business from humble beginnings at the hands of UCLA undergrads, to surviving multiple acquisition rollups (including at one point being owned by the French national water company), to joining ultimately with Activision to form the largest gaming company in the world, all while inventing multiple game genres that define the industry as we know it today.   Click here to take the 2017 Acquired Survey. It takes 5-10 minutes, and you may win a pair of AirPods (woo!)   Topics covered include: * Blizzard’s founding in 1991 as "Silicon & Synapse” by recent UCLA grads Allen Adham, Frank Pearce, and Mike Morhaime * The team’s first projects making ports for other games, including Battle Chess on the Commodore 64 * Early success on the Super Nintendo with Rock & Roll Racing and The Lost Vikings * Origin of the Real-Time Strategy game genre (“RTS”) and Blizzard’s fist mega-hit, Warcraft  * Blizzard’s crazy corporate ownership changes over the years * Development of further legendary game franchises like Diablo and Starcraft, along with sequels to Warcraft and the rise of the rise of player modding * Emergence of the Multiplayer Online Battle Arena genre (“MOBA”) from the Warcraft III modding community, and its growth into one of the biggest sectors in the games and esports industries today * Blizzard’s role in developing the concept of online gaming, from early hacks to play against friends to World of Warcraft and Massively Multiplayer Online Role-Playing Games (“MMORPG’s”) * The 2008 merger with storied gaming company Activision  * Growth and success since the merger, including the launch of new game franchises Hearthstone, Heroes of the Storm and Overwatch The Carve Out: * Ben: Dick Costolo on Vanity Fair’s Inside the Hive podcast * David: Nellie and Joe's 100% Natural Key Lime Juice (tip: buy in bulk from Walmart/Jet) Sponsor: * Thanks to Silicon Valley Bank for sponsoring this episode. If you'd like to learn more or start a banking relationship, you can get in touch with Shai Goldman here. Full Transcript below: (disclaimer: may contain unintentionally confusing, inaccurate and/or amusing transcription errors)
Jul 13, 2017
Episode 39: Whole Foods Market
Ben and David are once again live on the scene, this time covering the biggest disruption in grocery since… well, sliced bread: Amazon’s $13.7B purchase of Whole Foods Market. We place this deal in context by diving deep into the long, intertwining history of grocery, tech and Amazon, from the infamous dotcom flameout Webvan (domain name now owned by Amazon) to its much more successful progeny Kiva Systems (acquired by Amazon in 2012) to current Silicon Valley unicorn Instacart (founded by former Amazon logistics engineer Apoorva Mehta). One thing is clear: for Amazon and Jeff Bezos, realizing the longterm vision of the Everything Store truly means building the everything store. Topics covered include: * The origins of Whole Foods Market as “Saferway” in the late 70’s Austin, TX hippie scene, founded by CEO John Mackey (“the Steve Jobs of grocery stores”) and his then-girlfriend Renee Lawson Hardy * Whole Foods’ expansion through acquisition throughout the 80’s and 90’s * The company’s recent struggles with competition, leading to sales declines and attracting activist shareholder interest from Jana Partners  * Amazon’s acquisition of the company on June 16, 2017 for $13.7 billion, a 27 percent premium to the stock's previous day closing price * In depth history and analysis of the four keys to understanding this deal: Webvan, Kiva Systems, AmazonFresh and Instacart  Followups: * Walmart/Jet buys Bonobos for $310M The Carve Out: * Ben: Mark Zuckerberg’s 2005 CS50 guest lecture * David: Exponent on Podcasting and Centralization Sponsor: * Thanks to Silicon Valley Bank for sponsoring this episode. If you'd like to learn more or start a banking relationship, you can get in touch with Dan Allred here. Full Transcript below: (disclaimer: may contain unintentionally confusing, inaccurate and/or amusing transcription errors)
Jun 21, 2017
"About Acquired" on the Anchor Podcast of the Day

Ben and David are guests on Anchor's Podcast of the Day, discussing Acquired's origin story, show structure, and how the show gets made. If you're new to the show and looking for a primer, this is a great place to jump in!

Jun 11, 2017
Episode 38: SoundJam (iTunes)
Ben & David revisit the birth of the digital music revolution and Steve Jobs’ “digital hub” strategy, with Apple's 2000 acquisition of the Mac music player SoundJam MP, which would go on to become iTunes. We relive the 90’s with brushed metal interfaces, music visualizers and of course, software sold in (physical) boxes. Topics covered include: * The heady early days of the “digital music revolution”: Napster,  WinAmp, and the Diamond Rio * Former Apple engineer Bill Kincaid’s first exposure to the concept of digital music, via NPR on the way to an auto racing track * Bill’s decision to build SoundJam, recruiting fellow former Apple engineer Jeff Robbin as a cofounder, and later adding Dave Heller to the team * Why you used to need a publisher to sell software… and the celebrity author of the SoundJam user manual: David Pogue! * SoundJam’s release in 1998 and enthusiastic adoption by Mac owners who enjoyed pirating playing digital music  * SoundJam's (and later iTunes’s) most famous UI element: brushed metal * The Apple acquisition of SoundJam in 2000 instead of competitor Panic Software’s Audion, and the wonderful history as told by Panic's founders years later   * Steve Jobs' launch of iTunes at the Macworld keynote in January 2001 * Launch of the iPod later that year in October 2001  * The SoundJam team’s long subsequent tenure at Apple and leadership roles to this day Followups: * Another Echo from Amazon: Echo Show * Facebook streaming 20 MLB games this season * Snap Inc’s first quarter as a public company is in the books The Carve Out: * Ben: The Internet History Podcast on The Napster Story, with Jordan Ritter * David: Israel Thanks to this episode's sponsor, Silicon Valley Bank. You can learn more about SVB, or reach out to Marshall Hawks directly (who's voice you'll recognize on the show) here.  Full Transcript below: (disclaimer: may contain unintentionally confusing, inaccurate and/or amusing transcription errors)
May 31, 2017
Episode 37: BAMTech, Disney and "the Biggest Media Company You've Never Heard Of”
Ben and David continue Acquired’s “tech and sports” mini-series with Disney’s 2016 acquisition of a minority stake (with the right to purchase a majority stake at a later date) in BAMTech, the internet streaming company originally founded as part of Major League Baseball in the early 2000’s. However the importance of this story goes deeper than just sports, with major ramifications for nearly every major technology company from Amazon to YouTube. Even if you’re not not sure if baseball’s played on a diamond or a gridiron, tune in as we swing for the fences in predicting the future of TV!  Topics covered include: * What is BAMTech, and why is it, according to The Verge, "the future of television”? * BAMTech’s origins as part of Major League Baseball's Advanced Media division ("MLBAM)”) * MLBAM’s founding CEO Bob Bowman’s decidedly “non-tech” background, and growth into one of the most important tech leaders of the past 15 years * Initial technology struggles and learnings from early streaming efforts (including a botched audio package of Ichiro Suzuki’s games with the Mariners for fans in Japan) * Landing on a streaming model that works with the launch of in 2002/2003—three years before YouTube is founded!  * Improvement of the service and MLBAM’s streaming expertise over the next ten years through the rise of mobile, and simultaneous growth of MLBAM’s revenues to over $1B annually * MLBAM’s initial deals to expand its streaming services beyond baseball, starting with ESPN in 2010, then WWE, the PGA, HBO and the NHL * The importance of media rights, and MLBAM’s transition from a simple tech/infrastructure provider to a full-fledged media company  * The decision to initiate a spin-off process for BAMTech from MLB in August 2015, and Disney’s $1B investment into the newly created spin-out company in August 2016 * Disney’s subsequent announcement that they’ll be working with BAMTech to create a direct-to-consumer ESPN streaming service * BAMTech’s $300M deal with Riot Games in December 2016 for the media rights to League of Legends eSports content  * Bob Bowman’s announcement in February 2017 that he’ll be stepping back to from a day to day role, and hiring of former Amazon VP of Video Michael Paull as BAMTech’s new CEO Followups & Hot Takes: * Facebook’s struggles with Instant Articles * Microsoft killing Wunderlist (David is VERY sad) * Instagram continues its torrid growth, passes 700M MAU * Amazon’s new Look  * The Cloudera IPO * Confirmation the ride sharing wars are far from over: Didi raises $5.5B in the largest private funding round ever The Carve Out: * Ben: NYT’s 4th Down Bot * David: Wait But Why on Elon Musk’s “Wizard Hat" Full Transcript below: (disclaimer: may contain unintentionally confusing, inaccurate and/or amusing transcription errors)
May 10, 2017
Episode 36: The LA Clippers
In honor of the start of NBA playoffs, Ben & David venture off the beaten path to explore one of Steve Ballmer’s most famous acquisitions, his 2014 purchase of the Los Angeles Clippers NBA franchise. Was this landmark purchase a steal or a turnover for the former Microsoft CEO? We speculate wildly! Topics covered include: * The Clippers’ founding in 1970 as the NBA expansion team the Buffalo Braves * Early ownership changes and the move west to San Diego in 1981 * Acquisition in 1981 by LA lawyer and real estate developer Donald Sterling for $12.5M * Sterling's relocation of the Clippers to LA in 1984 against NBA rules * Struggles over the next 25 years as the "worst franchise in professional sports” according to ESPN  * Turnaround beginning in early 2010s led by Blake Griffin, DeAndre Jordan, and Chris Paul * The bombshell in April 2014, reported by TMZ, of a taped conversation between Sterling and his mistress where Sterling makes hugely offensive and racist comments, directed in particular toward former Lakers point guard Magic Johnson * Fallout from the comments, resulting in a lifetime ban from NBA for Sterling, and a forced sale of the team to former Microsoft CEO,  Steve Ballmer for $2B * Impact of the landmark sale price on NBA and other sports franchise valuations  * Clippers performance post-sale, and  prospects for the future  * The opportunity for technology and business model innovation in the NBA, and professional sports in general Followups: * Instagram Stories passes 200 million users per day (including correction on the definition of DAU) * The Last Jedi trailer! * Clarifying Starbucks’ same store sales performance post-IPO  The Carve Out: * Ben: Bill Gurley on This Week in Startups * David: Pop, Race & the '60s podcast and Just Around Midnight by Jack Hamilton   Full Transcript below: (disclaimer: may contain unintentionally confusing, inaccurate and/or amusing transcription errors)
Apr 24, 2017
Episode 35: Oculus
Ben & David transcend the barriers of “real” reality, and dive into Facebook and Mark Zuckerberg’s geek-eutpoia vision of the future of gaming, social, and maybe even the entire internet: strapping goofy-looking goggles to your face. Is VR for real this time or are we living through another Virtual Boy moment? Tune in to find out! Topics covered include: * Oculus’s origins in 2010 as a twinkle in the eye of the then-17 year old VR wunderkind, Palmer Luckey, who started by prototyping VR headsets in his parents’ garage in Southern California  * Palmer’s time interning at USC's Institute for Creative Technologies , and chronicling of his own VR efforts in the Meant to be Seen 3D  internet forums * Legendary game developer John Carmack’s own interest in virtual reality, his intersection with Palmer on the MTBS3D forums, and how he acquired and popularized one of Palmer's first early prototypes of the Oculus Rift (which was literally held together with duct tape !) by demonstrating it onstage at E3 2012  * How former Scaleform cofounders Brendan Iribe and Michael Antonov teamed up with Palmer after E3 to create the company Oculus VR * The newly-formed Oculus’s wildly successful August 2012 Kickstarter campaign, including video endorsements from both Carmack and Valve founder Gabe Newell * Oculus’s subsequent venture capital fundraisings, and catching the attention of Facebook and Mark Zuckerberg  * Facebook’s acquisition of the company in March 2014 for $2.3B * The Zenimax lawsuit filed against Oculus and Facebook following the acquisition  * Valve (home of the most incredible company handbook of all-time) and Gabe Newell’s subsequent pivot from supporting Oculus to launching their own competing VR efforts with the Vive  * Team changes at Oculus post-acquisition  Followups: * SNAP: still a public company Hot Takes: * Intel’s $15B acquisition of Mobileye (with reference to Ben Thompson’s analysis of the deal and Smiling Curves) The Carve Out: * Ben: Kara Swisher interviews the Pod Save America team at SXSW * David: Adam Gopnik asks Are Liberals on the Wrong Side of History? Full Transcript below: (disclaimer: may contain unintentionally confusing, inaccurate and/or amusing transcription errors)
Apr 11, 2017
Episode 34: Starbucks IPO with Dan Levitan
Ben & David "pour over" the 1992 IPO of the legendary Seattle coffee company with the help of Dan Levitan, who served as lead investment banker on the IPO and who would later co-found the venture capital firm Maveron with Starbucks’ CEO Howard Schultz.  Topics covered include: * The original Starbucks’ founding as a coffee bean roaster, started by three disciples of the legendary coffee roaster Alfred Peet * Howard Schultz’s introduction to Starbucks, his joining the team as director of marketing, and inspiration behind his “third place” coffee shop vision * Howard’s departure from the original Starbucks, founding of Il Giornale, and subsequent of acquisition the Seattle Starbucks stores * Starbucks’ incredible growth following the acquisition and expansion beyond Seattle * The state of raising private capital in the 1980’s/90’s, and the decision to go public (link to the S-1) * Howard’s ambitious goals for the roadshow and investor participation, and subsequent stock performance after the IPO * The narrative and evolution of Starbucks as a technology company, or a consumer company that leverages technology very effectively The Carve Out: * Ben: Dan Primack’s new daily newsletter, Pro Rata * David: The Wizard and the Bruiser podcast  * Dan: The Man in the Glass Full Transcript below: (disclaimer: may contain unintentionally confusing, inaccurate and/or amusing transcription errors)
Apr 03, 2017
Episode 33: Overture (with the Internet History Podcast!)
Ben & David dive deep into the early days of internet search, with the help of the best in the internet history business: Brian McCullough from the Internet History Podcast! We are huge fans of IHP at Acquired, so this was a real treat to collaborate with Brian and the great work he does over there. In this episode we cover the story of how a small incubator in Southern California spawned perhaps the greatest tech business model of all-time, Yahoo!’s fumbling of that golden opportunity, and Google’s recovery of that fumble to cross into the end zone of tech history behind the biggest moat ever constructed on the internet.  Topics covered include: * Overture’s origins as part of the Idealab incubator run by famed early internet entrepreneur Bill Gross * Invention of the paid search business model… initially by returning ADS ONLY in response to search queries * The eventual marrying of Overture’s paid search (ads) with organic search results via syndication on other properties like Yahoo! * Revenue from Overture’s ad partnership saving Yahoo!’s business after the internet bubble burst  * Yahoo!’s eventual acquisition of Overture for $1.4B in 2003  * But… the really interesting story here: Overture’s 'inspiration' of Google’s business model and the creation of "the greatest advertising machine in the history of the world" * The original (pre-Overture) Google business model: selling a box!  * Google’s differentiation vs Overture: focusing on the long tail, ad quality scores, and an advertiser-friendly auction structure * Google’s first major search syndication victory over Overture: AOL * Yahoo!’s failed attempt to buy Google for $3B in 2002, leading it to settle for acquiring Overture instead the following year * “Project Panama” at Yahoo!, and its impact on the tech and internet history * Overture's (and later Yahoo!’s) lawsuit against Google for stealing the paid search business model— "the O.G. version of Snapchat and Instagram” * Paul Graham’s take on "What Happened to Yahoo?” * Perhaps the most important technology to come out of this whole episode: Hadoop * The power of incentive alignment in marketplaces— and creating the widest and deepest moats on the internet The Carve Out: * Ben: The famous University of Washington's “Love Lab” Dr. John Gottman: “The Secret to Love is Just Kindness” * David: Berlin * Brian: The Dark Valley: A Panorama of the 1930s Full Transcript below: (disclaimer: may contain unintentionally confusing, inaccurate and/or amusing transcription errors)
Mar 13, 2017
Episode 32: The Snap Inc. IPO
SNAP! Acquired is live on the scene reporting from the "Super Bowl" of 2017 tech events: Snap Inc's hugely anticipated (and just plain huge) IPO. What does the future hold for this plucky “camera company”? Will Snap's IPO endure as tech's most important picture-frame since the 2012 debut of Facebook, or is it destined to fade as just another snapshot? We debate!  Topics covered include: * Reference to our previous Acquired episode on Snap covering Facebook’s failed attempt to acquire the company in 2013, which goes deep on Snap’s origins and early history * Snap’s busy years since: launching Discover, Lenses, Geofilters, new Chat, Memories, an ads API, acquiring Bitmoji, and, of course, debuting Spectacles * The incredible document that is Snap's S-1 filing (read starting from the “BUSINESS” section on p.93) * Snap Inc’s “unique” voting structure * Evan Spiegel’s “CEO Award” bonus for successfully completing an IPO: an extra 3.0% of the company worth more than $600M * Snap’s IPO pricing, first day of trading “pop”, and momentum carried into day two  * Introducing a new show section (for IPOs): Narratives!  o Snap is a “camera company" o Snap's opportunity is winning television ad dollars o Snap is a cult of the “product genius” o Snap has a growth problem… and its name is Instagram (Stories) o Snap has a cost problem: the (first?) gross margin negative IPO o Wall Street to Evan: “we trust you… for now" * Chris Sacca’s biggest email fail of 2012 * …And of course all the classics from the Acquired canon: waves, moats, flywheels, network effects, starting small and more!  The Carve Out: * Ben: The Bill Simmons Podcast with Ben Thompson * David: The Art of War, also Evan Spiegel’s Carve Out for 2013 :)  Full Transcript below: (disclaimer: may contain unintentionally confusing, inaccurate and/or amusing transcription errors)
Mar 04, 2017
Episode 31: The Uber - Didi Chuxing Merger with Brad Stone, author of The Upstarts & The Everything Store
Brad Stone, Senior Executive Editor of Global Technology at Bloomberg and author of The Upstarts and The Everything Store, joins Ben & David to dive deep into the Uber-Didi saga, a wild story with far-reaching implications that still aren’t fully appreciated by most of the Western tech community. Brad has been the foremost US chronicler of Didi through his reporting at Bloomberg and work on The Upstarts, and shares fascinating insights about its founder & CEO Cheng Wei, how the tech landscape is evolving in China, and lessons & themes that other technology communities around the world can learn from their rapid rise.  Topics covered include: * The global surge in 2012 of entrepreneurs starting ridesharing companies, nowhere moreso than China  * Didi CEO Cheng Wei and investor Wang Gang’s backgrounds at Alibaba, first entrepreneurial effort in Momo, and Momo’s pivot to Didi Dache * The culling of the ridesharing herd in China down to Didi Dache and Kuaidi Dache through brutal competition and involvement of the “big three” Chinese internet companies  * Rise of the Chinese messaging apps and associated mobile payments, and their impact on ridesharing * The 2015 merger between Didi and Kuaidi, brokered in part by Russian VC Yuri Milner * Uber’s decision to enter the Chinese market, and early success with investment and support from Baidu * The first meeting between Uber CEO Travis Kalanick and Cheng Wei in 2015—which does not go well * Subsequent “scorched earth” competition between Didi and Uber throughout 2015-16 * Negotiating an armistice: Uber’s agreement to sell its Chinese operations to Didi in late 2016 * End of the war, or just the beginning? January 2017: Didi invests $100M in Brazilian Uber competitor 99 * Sustainable growth, and building moats versus scorching earth Followups: * Stay tuned for real-time coverage of the Snap IPO coming here on Acquired!  The Carve Out: * Ben: Taming the Mammoth on Wait But Why * David: Conversations with Tyler Podcast by Tyler Cowen, co-author of the Marginal Revolution blog * Brad: Yuval Noah Harari (author of Sapiens)’s new book, Homo Deus: A Brief History of Tomorrow Full Transcript below: (disclaimer: may contain unintentionally confusing, inaccurate and/or amusing transcription errors)
Mar 01, 2017
Episode 30: P.A. Semi + AuthenTec
Ben & David venture into the semiconductor world, analyzing two hallmark Apple acquisitions: P.A. Semi and AuthenTec, both of which would go on to form the basis of core Apple product features in the “A” series of processors and TouchID sensors. Was Cupertino smart to bring these components in-house? Is there more value realized in the whole of Apple’s products than the sum of its parts? We investigate! (Spoiler alert: um, yeah. :) Topics covered include: * P.A. Semi’s original moniker ("Palo Alto Semiconductor”) and its celebrity founder (in the semiconductor world) Dan Dobberpuhl * History of the back and forth tradeoffs between Intel’s powerful x86 chips and low power alternatives like ARM processors  * Dobberpuhl’s technology breakthroughs throughout his career that enabled true low-power + high-performance chips * The initial target markets for P.A. Semi’s chips (surprise: NOT mobile phones) * P.A. Semi’s first foray into a potential deal with Apple, dashed by Cupertino’s surprise switch to Intel processors in 2005 * The rise of mobile finally creating the huge market need for low-power / high-performance, Apple’s acquisition of P.A., and launch of the first Apple-designed chip, the “A4”, with the original iPad in 2010 * Geekbench: the single-core performance of Apple’s latest generation of smartphone processors (A10 Fusion) has basically caught up with Intel’s laptop CPUs * AuthenTec’s beginnings in the late 90’s as a spinoff from the defense contractor Harris Corporation (named by Wired Magazine as the #2 threat to internet privacy in the US), based in Melbourne, Florida * Early versions of the technology that became TouchID, the sensors for which were many times larger than today’s iPhones themselves! * AuthenTec “not very Apple-like” website on (and screenshot) * AuthenTec’s deal that almost was to put their technology and sensors into Samsung’s flagship phones  * Apple’s acquisition of AuthenTec for $356 million in July 2012, and the rapid introduction of TouchID in the iPhone 5S one year later in September 2013 Followups: * Merging of Alaska & Virgin America loyalty programs (woo!) * Walmart announces major reorg following the Jet acquisition * Snap Inc. IPO drama is mounting! (we can’t wait to cover this one) The Carve Out: * Ben: Rands in Repose: The Situation * David: Daily Rituals: How Artists Work   Full Transcript below: (disclaimer: may contain unintentionally confusing, inaccurate and/or amusing transcription errors)
Jan 24, 2017
Episode 29: Special—2016 Review and 2017 Predictions
Ben & David wrap up 2016 with a review of the top tech themes we discussed on the show this year, and look forward to which themes we think will be relevant in the coming year. Can our hosts predict the future? Tune-in in 2018 to find out!  Note: we apologize for the less-than-amazing audio quality on this one. We’re still working on tuning our remote recording setup! Topics covered include: * Our top tech themes of 2016, including the first annual Acquired "Theme of the Year”: Aggregation Theory (surprise, surprise) * Themes we think will be most relevant as we head into 2017 * Extended Carve Outs! The Carve Out(s): * Books: Ben: On Writing Well ; David: The Creative Habit and the Asimov Robot/Empire/Foundation series * Article: Ben: Wait But Why: Religion for the Nonreligious ; David: The New York Times: The Perfect Weapon: How Russian Cyberpower Invaded the U.S. * Podcasts: Both: The Ezra Klein Show * Music: Ben: Justin Bieber ; David: Stevie Nicks * TV/Movies: Ben: Westworld ; David: Rouge One * Apps: Ben: ReachNow ; David: Amazon Music  Full Transcript below: (disclaimer: may contain unintentionally confusing, inaccurate and/or amusing transcription errors)
Jan 11, 2017
Episode 28: The Amazon IPO with original Amazon Board Member Tom Alberg
Ben & David welcome very special guest Tom Alberg, board member and first lead investor in, to cover the IPO of "earth’s most customer-centric company". From longterm thinking to flywheels to riding big waves, this episode is chock full of lessons and stories from the journey of building one of tech’s most iconic franchises. We hope you enjoy listening as much as we did recording it!  Topics covered include: * Tom’s “prolific” bio from the Amazon S-1 * Jeff Bezos’s journey from a Vice President at the New York hedge fund D. E. Shaw to founding Amazon in a Bellevue, WA garage in the summer of 1994 * Jeff’s longterm thinking as evident in the early days of Amazon, and his approach that "failure is ok, but not trying things is not ok”  * Raising the seed money for Amazon before product launch, how Tom met Jeff and decided to invest despite the “high” valuation * Tom's (and Jeff’s) focus on the power of targeting large and growing markets  * Amazon’s actual overnight success after launching the website: according to Tom at the time, "By the second or third week… It was clear there was a trend here.” * How Amazon’s venture round, led by John Doerr of Kleiner Perkins, came together in the spring of 1996  * Amazon’s torrid growth through 1996, Jeff’s mantra of “get big fast” to win the land grab of online book selling, and the board’s decision to prepare for a public offering in the spring of 1997  * How Frank Quattrone and Bill Gurley, then of Deutsche Bank, won the lead position for the Amazon IPO, beating out more storied firms such as Goldman Sachs and Morgan Stanley  * Development of the flywheel concept within Amazon, as an outgrowth of maniacal focus on creating superior customer experience * Amazon's public offering on May 15, 1997 at $18 per share (effectively $1.50 relative to today’s stock price after splits), raising $54M at a market capitalization of $438M — and subsequently trading down during the first few months following the IPO   * Amazon and Jeff’s management of investor perceptions of the company, and ability to sell the longterm vision over short term profits — “you get the investors you ask for”  * The creation of the first annual letter to Amazon shareholders  included in the company’s 1997 annual report (and republished every year since), and then-CFO Joy Covey’s role and contributions to it  * Raising convertible debt just before the peak of the dotcom bubble and subsequent ability to survive the burst, and the impact of the downturn on Amazon culture The Carve Out: * Ben: the band The Album Leaf * David: Cormac McCarthy (author of All the Pretty Horses, No Country for Old Men, etc)’s contribution to W. Brian Arthur’s landmark paper about the economics of the internet, “Increasing Returns and the New World of Business” * Tom: Michael Lewis’s latest book The Undoing Project, chronicling the Nobel Prize winning partnership between Daniel Kahneman & Amos Tversky in developing the field of behavioral economics Full Transcript below: (disclaimer: may contain unintentionally confusing, inaccurate and/or amusing transcription errors)
Dec 31, 2016
Episode 27: Special—A Conversation with Microsoft's Head of Strategic Investments Brian Schultz
Ben & David chat with Brian Schultz, the Managing Director of Strategic Investments & Corporate Development at Microsoft, about Microsoft’s approach to M&A, investing, and partnering with startups — and his journey from acquirer to acquiree and back again!  Topics covered include: * Brian’s history working across “both sides of the aisle” as both a startup founder and corporate development leader at a big company, how perspective from each informs the other, and the importance of learning “customer empathy”  * How Microsoft approaches M&A from an organizational perspective, and the importance of fit with the company’s product roadmap  * How Brian approaches strategic investments at Microsoft, and the evolution over time of the Microsoft (and large technology companies as a whole) perspective on investing in other companies * Balancing the tension between partnering and investing, and what criteria Brian thinks about when evaluating companies  * Microsoft’s investment in Facebook in 2007 (at a then-crazy-seeming $15B valuation), and more recently Foursquare, Mesosphere, CloudFlare and others * The current state of the tech M&A landscape, and the emergence of private equity as tech company acquirers  * Potentially changing corporate and foreign tax structures and how they impact acquirers’ thinking around deals (or not!)  * How Microsoft tracks and evaluates success of acquisitions over time, and lessons learned from successes and failures  * The increasing number of operating companies (technology and otherwise) looking to invest in startups, and how that landscape has evolved over time  Followups: * Snap Inc.’s rumored IPO filing — and bonus discussion of how VC’s and other investors think about “exiting” their investments in companies that have gone public Hot Takes: * Amazon Go! The Carve Out: * Ben: OK Go - The One Moment  * David: UC Berkeley Oral History with Sequoia Capital founder Don Valentine * Brian: Om Malik’s recent piece in the New Yorker:  Full Transcript below: (disclaimer: may contain unintentionally confusing, inaccurate and/or amusing transcription errors)
Dec 16, 2016
Episode 26: Marvel
Ben and David complete the Disney acquisition trilogy, covering the "house that Mickey built"'s 2009 acquisition of Marvel Entertainment. Will our own superheroes save the day for shareholders, or perish at the hands of villainous corporate raiders? Tune in to find out! Topics covered include: * Marvel’s corporate origins as "Timely Publications”, created in 1939 by pulp magazine publisher Martin Goodman in NYC, with the publication of Marvel Comics #1 * Creation of enduring characters such as Captain America, the Fantastic 4, Spider Man, The X-Men, Iron Man, Thor, The Hulk and more * Adoption in 1961 of the "Marvel Comics” brand, and writer-editor Stan Lee’s transition of the company towards focusing on edgier characters and stories targeted at older audiences  * Marvel’s first sale in 1968 to the Perfect Film and Chemical Corporation (later Cadence Industries) * The company’s “turbulent” corporate history through the 1980’s and associated mergers, acquisitions and lawsuits * Marvel’s reinvention as a film-focused media company in the late 1990’s and early 2000’s with the launch of Marvel Studios * Disney’s ultimate acquisition of the company for $4.2 billion in August 2009, during the depth of the great recession  * Marvel's—and in particular Marvel Studios’—performance since the acquisition  Followups: * People like Spectacles!  Hot Takes: * Shoutout to Hightower & VTS merging The Carve Out: * Ben: Westworld * David: Overdrive Full Transcript below: (disclaimer: may contain unintentionally confusing, inaccurate and/or amusing transcription errors)
Dec 05, 2016
Episode 25: The Facebook IPO
Hey Acquired listeners. A note about this show: we recorded this episode the night before the 2016 Election Day in the US. At the time, the biggest change we saw coming was adding a new type of content to Acquired in analyzing IPO’s, which we introduce in this episode. Two days later, we woke up to a very different world than the one we were expecting. Reflecting on what’s happened, and the past few months of our show, we wanted to say two things: First, we want to apologize for our cavalier attitude toward this election cycle, and our glossing over the clearly very real problems and deep divide in America that it represented. In the Skype episode, David pretty glibly compared the AT&T - Time Warner merger to "Make America Great Again", arguing that any reactionary force is “on the wrong side of history” and cannot be relevant in a changing world. That was wrong, the sentiment behind it was wrong, and it was insensitive to the very real pain a lot of people are feeling out there on both sides.  Second, looking back on this particular episode about the Facebook IPO, we think it actually might present a relevant parable for our country right now and--we hope--some important lessons for the technology industry going forward. For all the wonderful aspects of the tech industry that we celebrate on this show, there is no doubt that it also bears a great deal of responsibility for the current divide in America, and especially in its contribution to wealth inequality. Likewise, for all the wonderful aspects to the Facebook IPO story, as told in this episode, there is a very dark side as well: Facebook shareholders, investment banks and institutional investors raked in billions of dollars at the expense of individual retail investors who lost their shirts.  At the same time, Facebook’s perseverance through their “broken IPO", and their determination in overcoming with incredible speed the massive, existential challenge to their business model posed by mobile, is something we think *can be* an inspiration to us all on how to move forward even when that seems hard. We hope you’ll listen to this episode with that in mind and think about how you, we, and the technology industry as a whole can do better in serving everyone in this country and in the world.  Thanks for being on this journey with us. We’re sorry for our shortcomings, and we’re going to keep working hard to do better.  -Ben & David Topics covered include: * Introducing a new content vertical for Acquired: analyzing IPO’s!  * Facebook turning down early acquisition offers, including including the famous $1B overture from Yahoo in 2006 * The Wikipedia entry on the Facebook IPO referencing it as a “cultural touchstone” * Trading of pre-IPO Facebook stock on SecondMarket and SharesPost * The infamous 2011 Facebook - Goldman Sachs deal attempting to circumvent then-active SEC regulations on number of permissible shareholders in a private company, and Goldman’s eventual loss of “lead left” status to Morgan Stanley for the ultimate Facebook IPO * Facebook’s S-1 filing on February 1, 2012 * The company’s "small problem" at the time (read: gaping chest wound) with mobile * Acquiring Instagram for $1B while on file to go public in April 2012 * Facebook’s $16B IPO finally taking place on Friday May 18, 2012, priced at $38 per share giving FB an initial market cap of $104B * NASDAQ’s “technical glitch” (read: egregious f*&# up) preventing the stock from trading when it supposed to and resulting in $500M of investor losses * Facebook’s stock tanking following a flat first day of trading, losing 25% of its value during the first month and over 50% 4 months later, leading some to label it “The Biggest IPO Flop Ever" * Later revelations that Facebook had unprecedentedly lowered revenue guidance during its IPO roadshow due to continuing challenges with mobile, resulting in an information asymmetry between its underwriting investment banks and their institutional investor clients versus the investing public at large  * How, from the ashes of its “broken IPO”, Facebook amazingly rose to fix its mobile problem at lighting speed, going from mobile comprising zero percent of ad revenue to 23% in one quarter, and over 50% one year later * Zuckerberg's belief that the difficult IPO process and "terrible first year” as a public company "made our company a lot stronger”… and silicon valley’s bizarre, antithetical and counter-productive take away to “stay private longer” Followups: * The scoop on Microsoft’s use of foreign cash to buy Skype, thanks to longtime listener and friend Nick Seguin Hot Takes: * Twitter shutting down (or selling?) Vine The Carve Out: * Ben: Amazon employee #1 Shel Kaphan on the great Internet History Podcast * David: Connectography: Mapping the Future of Global Civilization by Parag Khanna Full Transcript below: (disclaimer: may contain unintentionally confusing, inaccurate and/or amusing transcription errors)
Nov 11, 2016
Episode 24: Skype
An acquisition so wild and crazy, they had to do it again. And again. Ben & David cover tech’s perhaps most-traded asset, Skype (which also happens to be a fantastic business). How do we even know which deal to grade? Tune in to find out…  Topics covered include: * Community spotlight: Slack community member Swyx’s financial data research startup Sentieo!  * Skype founders Niklas Zennström and Janus Friis’s meeting in the 1990’s at Swedish telecom company Tele2 * Zennström & Friis’s introduction to talented Estonian developers Jaan Tallinn, Ahti Heinla, and Priit Kasesalu as part of Tele2’s efforts to jump into the dot com “portal mania”  * Skype’s origins in the technology powering Zennström, Friis and the Estonians’ first startup endeavor together: the peer-to-peer file sharing platform Kazaa * The “complicated” legal, technological and ownership situation for Kazaa and Skype  * Skype’s “unique” corporate culture, including a swimming pool in the board room and shots for initiating new employees  * The first Skype acquisition: eBay’s 2005 deal to acquire the company for $2.6B, just two years after launch * Culture clash between eBay and Skype management, and further legal drama regarding Skype technology ownership post-acquisition * The second Skype acquisition: eBay’s 2009 decision to spin the company out to a private investor consortium including Silver Lake and the newly-formed Andreessen Horowitz  * The third (and final?) Skype acquisition: Microsoft’s $8.5B purchase of the company in 2011 * Skype as a “crossover” product with viable market opportunities both in consumer and enterprise * Bill Gurley’s “Keys to the 10X Revenue Club” and the power of Skype’s organic customer acquisition model Followups: * The Google iPhone… err, Pixel!  Hot Takes: * AT&T’s $85B mega-acquisition of Time Warner… making America great again, or rebuilding the T-1000?  * The New York Times acquiring The Wirecutter The Carve Out: * Ben: Sam Altman’s Manifest Destiny * David: SOMA the Musical starring our very own Acquired listener, the brilliant and talented Jake Saper!  Full Transcript below: (disclaimer: may contain unintentionally confusing, inaccurate and/or amusing transcription errors)
Nov 02, 2016
Episode 23: NeXT (Live show at the GeekWire Summit)
Ben & David broadcast live from the 2016 GeekWire Summit covering one of the all-time greats, Apple’s 1996 acquisition of NeXT. This episode has it all: the Steve Jobs hero story, Apple, I.M. Pei, Ross Perot, Aaron Sorkin, Nobel Laureates and… Gil Amelio? Does NeXT rank atop the best acquisitions ever? Our own heroes cast their votes.  Topics covered include: * 1980’s era Apple, entering the age of the “workstation”, with John Sculley as CEO and Steve Jobs leading the newly formed SuperMicro division working on building the “BigMac"  * Jobs’ exile to "Siberia”, and chance meeting with Nobel Laureate Paul Berg that sowed the seeds of NeXT * Jobs’ resignation from Apple on September 13, 1985 to start NeXT, taking with him SuperMicro division employees Joanna Hoffman, Bud Tribble, George Crow, Rich Page, Susan Barnes, Susan Kare, and Dan'l Lewin * Apple’s subsequent lawsuit against Jobs and, Steve’s classic quote in response: "It is hard to think that a $2 billion company with 4,300-plus people couldn't compete with six people in blue jeans." * NeXT’s “anti lean startup” approach, spending $100k on brand identity and moving into I.M. Pei designed offices * Ross Perot’s $20M investment in NeXT * The first NeXT computer (fun unboxing video) product launch, dubbed " The NeXT Introduction” on October 12, 1988 (one of the three scenes in the Aaron Sorkin Steve Jobs movie) * The NeXTSTEP operating system as the first “modern” OS (including Object-oriented programming), and like the Mac equally descended from Xerox PARC * Major technologies developed on NeXT computers, including the first web browser and Doom  * NeXT’s exit from the hardware business and transition to a software-only model with OPENSTEP * Apple’s failed internal projects to develop a modern OS, culminating in the acquisition of NeXT in December 1996 * Steve Jobs’ return to Apple, public lack of faith in the then-current board and management, and maneuvering to return to the CEO role * The transformation of NeXTSTEP/OPENSTEP into OS X, and ultimately iOS, watchOS, tvOS, etc.  The Carve Out: * Ben: Stewart Butterfield (Cofounder/CEO of Slack) on the The Ezra Klein Show * David: DJI and the Rise of the Robomasters Full Transcript below: (disclaimer: may contain unintentionally confusing, inaccurate and/or amusing transcription errors)
Oct 23, 2016
Episode 22: Zillow + Trulia with Zillow Group CFO Kathleen Philips
CFO of Zillow Group Kathleen Philips joins Ben and David to cover the show’s first true “merger” versus “acquisition" (only took 22 episodes!), Zillow’s 2015 combination with Trulia to form Zillow Group.  Note: our audio glitches unfortunately continued on this episode, and quality is rough. We recommend listening on speakers vs headphones if you’re able. We apologize and will be back to normal quality next time! Topics covered include: * Zillow and Trulia’s beginnings during the “Web 2.0” era in the mid-2000’s  * Zillow, Trulia and other online players’ place within the massive US real estate market * The lengthy “dance" between Zillow and Trulia and earlier aborted merger talks between the two * The difficulty of "true mergers” among private companies and why the path is easier for public companies  * Public company shareholders’ influence and role in M&A transactions  * Details of the blazingly fast negotiations (27 days start to finish!) per disclosures in the SEC filings (scroll down to "Background of the Mergers”) * Structuring the deal and incentivizing Trulia and Zillow mangers to stay and continue growing as separate brands * Trulia cofounder Sami Inkinen’s whereabouts during the merger negotiations  * The experience going through a lengthy FTC review of the merger, and defining what the relevant “market” is the FTC should be considering * Introducing our new acquisition category: a “time machine acquisition” ;) (h/t Kathleen) * Zillow Group’s overall approach to acquisitions, folding into its broader HR strategy  * Zillow founder Rich Barton’s startup thesis of searching for "What piece of marketplace information do people crave and don’t have?" Followups: * Snap Inc. Spectacles!  Hot Takes: * Twitter-Disney rumors, according to “people familiar with matter”!  * AppLovin’s journey from bootstrapped startup to $1.4B exit The Carve Out: * Ben: The Marvel Symphonic Universe * David: Shoe Dog by Phil Knight * Kathleen:  Full Transcript below: (disclaimer: may contain unintentionally confusing, inaccurate and/or amusing transcription errors)
Oct 14, 2016
Episode 21: Inside the M&A Press with Bloomberg's Alex Sherman
Ben and David go inside the M&A press with Bloomberg’s technology M&A reporter and host of the Deal of the Week Podcast, Alex Sherman. If you’ve ever wondered how stories about big deals get broken or what “according to people familiar with the matter” really means, tune in for the behind-the-scenes scoop!  Note: A technical glitch with our recording setup created occasional short silences between Alex’s comments and Ben & David’s. It shouldn’t impact listenability, but we apologize for the awkward pauses! Topics covered include: * Bloomberg’s own fascinating “history & facts” and origins following the acquisition of storied Wall Street firm Salomon Brothers  * Bloomberg’s core as a highly profitable technology business (selling terminals to Wall Street firms), with a large media empire built on top of it * The tradable value of breaking M&A news & information to Bloomberg’s terminal customers, and competing on speed * How “sources" work — and industry standard that sources be directly within the companies involved in a deal * The coded language of M&A reporting and gleaning where information is coming from based on a story’s structure and phrasing * The lifecycle of a story—steps from sourcing to writing to release, and reasons (or lack thereof) for why stories run when they do * Internal & external PR resources companies use for M&A  * How Alex prioritizes his time researching and creating stories, and who he’s meeting with to hear about what deals are in the works  * The difference between ‘news' and ‘analysis', and why news dominates the majority of stories versus deeper analysis * Media and social media business models, their evolution in the messenger world, and speculation on Twitter’s future * How entrepreneurs can think about interacting with the press and building relationships with the right reporters for their stage and space * Apple’s ‘unique’ approach to press relations  Followups: * Instagram announces 500k+ active advertisers, up from 200k in February 2016 * Amazon stock price surpasses $800/share Hot Takes: * Ford acquires Chariot  * The Yahoo! data breach and potential impact on their acquisition by Verizon  The Carve Out: * Ben: Phil of Drones’ Burning Man 2016 recap video * David: Algorithms to Live By by Brian Christian & Tom Griffiths  * Alex: Clinton’s Samantha Bee Problem, by Ross Douthat in the NYT Opinion Pages Full Transcript below: (disclaimer: may contain unintentionally confusing, inaccurate and/or amusing transcription errors)
Sep 27, 2016
Episode 20: Android
Ben & David examine Google’s 2005 purchase of Android for a rumored $50M, undeniably one of the best technology acquisitions of all time. But will it top the list of these tough graders? Tune in to find out. Topics covered include: * Welcome new listeners! We quickly review the show format for newbies.  * Community spotlight: Patagonia on a Budget from community member Matt Morgante (@mattm on Slack) * Andy Rubin’s career trajectory and what made him “born to start Android" * The undeniable “cool factor” of the Danger Sidekick in the early/mid-2000’s, including fans such as Larry Page, Sergey Brin  and… Turtle from Entourage  * Android’s original ambition to build an operating system for…  digital cameras * WebTV founder Steve Perlman is pretty much the best friend ever  * Google’s own perspective on Android as their “best deal ever" * The Android team’s reaction to Steve Jobs unveiling the iPhone in January 2007, and redesigning the initial launch hardware * Announcing Android and—equally importantly—the Open Handset Alliance (“OHA”) * The much-talked-about "mobile holy wars", between Android’s “open” platform and Apple’s “closed” platform * The less-talked-about US carrier wars with the iPhone + AT&T in one camp, and everyone else in the Google / OHA camp (including “Droid Does”) * A quirk of history: HTC at one point acquires a majority share in Beats, resulting a short-lived period of Beats-branded Android phones  (still available on Amazon!) * The real battleground for Google in the mobile platform wars: the economics of “default search” (briefly known thanks to the Oracle/Java lawsuit against Google)  * Google’s detour into smartphone hardware with the acquisition (and subsequent divestiture) of Motorola * The “fork-ability” of Android via the Android Open Source Project (versus “Google Android”), and the rise of Xiaomi, Cyanogen, Kindle Fire and other platforms * The ecosystem economics of the Android business for Google * “Defensive” versus “offensive” acquisitions, and protecting Google’s core search business * Could (or would) Google have built an Android-like platform without acquiring Android the company (or having Andy Rubin)? * Framing the technology world’s shift to mobile within (surprise) Ben Thompson’s Aggregation Theory * The current “moving up the stack” of the competitive playing field as the mobile landscape matures * Grading: Android versus Instagram? Followups: * Waze launches Carpool in the Bay Area. Much consternation ensues on the Uber board. Hot Takes: * The iPhone 7 (and AirPods) announcement The Carve Out: * Ben: Business Adventures by John Brooks, Bill Gates’ favorite business book * David: Ezra Edelman's fantastic 5-part ESPN documentary on O.J. Simpson, O.J.: Made in America Full Transcript below: (disclaimer: may contain unintentionally confusing, inaccurate and/or amusing transcription errors)
Sep 16, 2016
Episode 19: Jet
Ben & David break down’s meteoric rise, culminating in Walmart’s blockbuster $3B+ acquisition of the company just two years after its founding. Will we look back on this deal as an ‘Instagram-like’ bargain or a ‘'-sized blunder? And most importantly, can *anyone* compete with Amazon going forward? We speculate wildly. Topics covered include: * Community spotlight: Nowdue, a super fast invoicing platform for teams on Slack. Invoice like it’s the future! This looks very cool.  * Jet’s deep origins in Founder & CEO Marc Lore’s first two companies,  The Pit and Quidsi (aka,  * Lore’s chance run-in with Jeff Bezos at a school picnic in Seattle  in the early 2000’s * Amazon's dramatic acquisition of Quidsi in 2010, including Bezos’ admonition to Amazon corp dev to keep Quidsi from being bought by Walmart under any circumstances (covered well in The Everything Store ) * Lore’s less-than-favorable opinion of Amazon's culture * Lore's vision of Jet as an ‘online Costco’ that can directly with Amazon on price by selling goods to a “huge middle-class of people" at effectively zero margin, and make profit on membership fees * Jet’s huge, pre-launch fundraising rounds, and subsequent massively promoted public launch in July 2015 * Jet’s pivot in October 2015 to drop the membership model (their only profit engine), and subsequent massive growth (but also accompanying massive losses)  * 'Admitting defeat” to Amazon in July 2016? Immediately followed by the blockbuster $3B+ Walmart acquisition announcement * Is e-commerce really a winner-take-all business and will Amazon just take over the world? Featuring liberal citations (again) of Ben Thompson's Aggregation Theory and the importance of customer experience.  * Is there any path for Walmart & Jet to compete effectively with Amazon? Is Marc Lore Walmart’s only hope? * Fantastic interview with Tim Cook discussing (among other things) the massive amount of growth still left in the internet Followups: * Lucasfilm: Star Wars Rouge One trailer drops! Featuring a strong female protagonist!  New section: Hot Takes! (thank you @cteitzel on Slack for the idea) * Verizon/AOL acquires Yahoo! * Lyft reportedly turns down acquisition offer from GM * Microsoft acquires Beam * Randstad acquires  The Carve Out * Ben: Michael Mauboussin’s Talk at Google and Reflections on the Ten Attributes of Great Investors after thirty years of honing his craft * David: Strava, the fantastic social fitness-tracking app Full Transcript below: (disclaimer: may contain unintentionally confusing, inaccurate and/or amusing transcription errors)
Aug 29, 2016
Episode 18: Special—An Acquirer’s View into M&A with Taylor Barada, head of Corp Dev at Adobe
Ben & David are joined by special guest Taylor Barada, VP and Head of Corporate Development & Strategic Partnerships at Adobe, to discuss how large tech acquirers approach buying companies. This episode is full of great insights for startups & entrepreneurs who might find themselves navigating the M&A process, as well as anyone curious about the craft of dealmaking and the strategic approach of large acquirers.  Topics covered include: * How conversations begin between startups and acquirers * The importance of building a relationship with acquirers over time and "investing in lines, not dots” (just like raising VC) * The often under-appreciated role of culture fit between acquirers and acquisition targets * How entrepreneurs should evaluate acquirers throughout the M&A process * Two examples of successful acquisitions Taylor completed at Yahoo in Citizen Sports and IntoNow * The M&A process at large technology acquirers, from initial conversations to LOI, due diligence and the definitive merger agreement * The relative roles of Corp Dev, business/product owners and executive sponsors in the M&A process * Common mistakes startups (and VC’s) often make in the M&A process * Different “categories” of M&A that acquirers think about, and the relative risks & opportunities of “core" acquisitions vs transformative new businesses * What percentage of deals Adobe looks at actually happen, and the importance of being willing to say no * M&A as a tool for strategy, and the different M&A cultures & approaches at different companies * Tech themes Taylor and Adobe think about as part of their M&A strategy * Evaluating the longterm success of deals and the importance of the M&A integration function Followups: * Ben & David’s quick take on Instagram Stories!  The Carve Out: * Ben: Why the Concorde failed by Vox * David: Simone Biles, the greatest gymnast of all time * Taylor: Mindset by Carol Dweck, Shoe Dog by Phil Knight, Originals: How Non-Conformists Move the World by Adam Grant Full Transcript below: (disclaimer: may contain unintentionally confusing, inaccurate and/or amusing transcription errors)
Aug 22, 2016
Episode 17: Waze
Ben and David navigate the mobile platform wars of 2012-13, avoiding speed traps en route to Waze’s destination as a $1B+ acquisition by Google. Topics covered include: * Community Showcase: the Nexcast podcasting platform from listener Brian Sanders, along with their podcast chronicling the team’s journey building the company  * Waze’s origin in cofounder & CTO Ehud Shabtai’s desire to hack his portable GPS navigation unit * Waze CEO Noam Bardin’s retrospective blog post on the Waze journey * Waze’s Palo Alto office and the bizarre Silicon Valley phenomenon of tech companies being located in retail storefronts * Apple’s ill-fated launch of Apple Maps as part of iOS 6 at WWDC 2012, Apple’s subsequent apology letter, and Scott Forstall’s ultimate ouster from the company * The climax of the mobile platform wars… which it turns out Apple and Google both won * Apple, Facebook, and Google all vying to acquire Waze throughout 2013 * Google’s renewed design ethos under Larry Page * Ben and David spontaneously agree (surprise) to create on a new category of acquisition for the show * The increasing strategic value of data and data assets as technology enters the age of machine learning * The coming mega trend of autonomous vehicles, and the role Israeli startups are playing in it (including the globalization of startups & innovation) * The disruptive power of network and data-based business models * Emergence of native as *the* definitive advertising medium on mobile, including ability to close the advertising loop via location-based products and services The Carve Out * Ben: Weezer’s “Summer Elaine and Drunk Dori” on Song Exploder  * David: Simon Sinek’s “Start with Why” TED Talk Followups: * None this week… coverage of Instagram Stories to come next time! Full Transcript below: (disclaimer: may contain unintentionally confusing, inaccurate and/or amusing transcription errors)
Aug 03, 2016
Episode 16: Midroll + Stitcher (acquired by Scripps)
The meta show: Ben and David turn their gaze inward and examine the podcasting industry through E. W. Scripps’ recent acquisitions of the Midroll podcast advertising network and Stitcher podcast client. Featuring discussion of our own product process and metrics at Acquired.  Announcements: * We’re pivoting! (not really) Our new show description: A Podcast About Technology Acquisitions That Actually Went Well * But we are launching a new feature! Since so many of you, our listeners, are also tech and startup folks and/or other builders, we wanted to create a space to feature cool products, companies and side projects you’re working on. Thus we’re adding a "Community Showcase” section to the show. If you’d like to be included just send us a Slack message or email, and we’ll choose one submission to feature on each show. This episode we’re highlighting BESTR, from community member David Resnick (aka @the_rezonator in Slack), which is an online platform to share lists of great things. Check it out and let David know what you think.  Topics covered include: * Top Google search results for “acquired podcast" * Midroll’s origins in the comedy podcast Comedy Bang Bang (now an tv show on IFC) and exit last year to Scripps * The structural challenges inherent to podcasting as a medium and the gap between audience size/engagement and industry revenues * Opportunities for independent podcasters and our own audience and business metrics at Acquired * Stitcher’s long corporate history as a venture backed company, first acquisition by French music company Deezer, and now second acquisition from Deezer by Scripps * Problems with Stitcher as a product and industry reaction to the acquisition including John Gruber's response, Ben Thompson’s article on Stratechery, and Ben & James Allworth's discussion on their excellent podcast Exponent * Handicapping Stitcher+Midroll’s chances for success within Scripps, and opportunities for new startups & innovation in the podcasting space * Pioneer Square Labs’ own past efforts in the podcasting space and their process for evaluating potential new company ideas * Shoutout to Pocket Casts and our listeners down under Followups: * Twitch: bringing tipping onto the platform with the launch of Cheering + Bits (H/t Slack community member jamesk) * Facebook Instant Articles: pour one out for Facebook Paper  (developed by the Push Pop Press team) * LinkedIn: the hotly anticipated SEC filing detailing all the negotiation drama is now live (scroll down to "Background of the Merger” on p.31) The Carve Out * Ben: Mark Titus, AKA @ClubTrillion is joining the Ringer * David: OKR’s and regular goal setting, including great “how to" from Full Transcript below: (disclaimer: may contain unintentionally confusing, inaccurate and/or just-plain-hilarious transcription errors)
Jul 12, 2016
Episode 15: ExactTarget (acquired by Salesforce) with Scott Dorsey
Ben and David return to make their first foray into enterprise software, covering Salesforce’s $2.5B acquisition of ExactTarget in 2013 with the help of special guest and ExactTarget cofounder & CEO, Scott Dorsey.  Technical note: due to an issue we didn’t catch during recording, audio quality is significantly lower than usual for this episode (especially David’s voice). We apologize but hope you’ll give it a chance anyway— Scott offers great wisdom & insights, and the ExactTarget success story is a inspiring one underdog entrepreneurs, especially (but not limited to!) anyone located in the Midwest or elsewhere outside of traditional "Silicon Valley-style” tech hubs. Topics covered include: * The decision to start ExactTarget post-internet bubble and in Indianapolis, with zero software experience between Scott and cofounders Chris Baggott & Peter McCormick * Raising initial money from friends & family, followed by early investment and mentoring from Indianapolis venture pioneer Bob Compton * Building and scaling a great sales organization within a technology company * The importance of focusing early on a clearly defined target market (SMBs in the case of ExactTarget), and then “stair-stepping” up as the product and business scale grow over time * ExactTarget’s unsuccessful first IPO filing during the financial crisis * Building a "capital-efficient” early stage company, and the value of raising growth capital at the right time to step on the accelerator * The value of “secondary” investments allowing founders, employees & early investors to “stay hungry” by achieving some liquidity along the way * When and how to expand internationally and the importance of strategic resellers * ExactTarget’s second successful IPO filing and life as a public company with quarterly financial reporting to Wall Street * How the acquisition process played out with Salesforce and other bidders (including reference to ExactTarget’s incredible SEC filing  detailing the entire negotiation—scroll down to "Background and Reasons for the ExactTarget Board’s Recommendation”, starting at the bottom of page 13) * Approaching the difficult task of integrating a major acquisition involving thousands of people * The fun story of ExactTarget’s winning Microsoft as a large customer—including actual sledgehammers * Scott’s new Indianapolis-based venture studio, High Alpha * Plus as always the "hard hitting" analysis across acquisition category, what would have happened otherwise, tech themes—and final grading The Carve Out * Ben: The Talk Show live at WWDC 2016 with Phil Schiller & Craig Federighi * David: The Score Takes Care of Itself by legendary 49ers coach Bill Walsh, originally recommended by Jack Dorsey [no relation to Scott :) ] at YC Startup School '13 * Scott: 2016 Scipps National Spelling Bee, including one of the finalists’ favorite words: indefatigable Followups: * Instagram’s incredible user numbers announcement: 500M monthly active users / 300M daily active users Full Transcript below: (disclaimer: may contain unintentionally confusing, inaccurate and/or just-plain-hilarious transcription errors)
Jul 05, 2016
Episode 14: LinkedIn
Ben and David cover the 3-day-old acquisition of LinkedIn by Microsoft for $26.2 billion. They cover LinkedIn’s founding story by Reid Hoffman, break down their core businesses, analyze recent stock behavior, and speculate on the future of the company inside Microsoft. The big question - were they worth the price tag? Items Mentioned On The Show: * Adweek: Snapchat Launches a Colossal Expansion of Its Advertising, Ushering in a New Era for the App * The Facebook Effect - David Kirkpatrick * LinkedIn’s Series B pitch deck  * LinkedIn’s S-1 * Microsoft and Apple Double Down - Stratechery * NYT Dealbook on stock based compensation at LinkedIn * Josh Elman - When people get confused about “BS metrics” * Fred Wilson: The Dentist Office Software Story The Carve Out: * Jeff Bezos at Code 2016 * Elon Musk at Code 2016 Full Transcript below: (disclaimer: may contain unintentionally confusing, inaccurate and/or just-plain-hilarious transcription errors)
Jun 16, 2016
Episode 13: Push Pop Press (Facebook Instant Articles) with Todd Bishop
Ben and David are joined by Todd Bishop, technology reporter and co-founder of GeekWire, to discuss Facebook's 2011 acquisition of Push Pop Press. Highlights include: * The founding story of Push Pop Press by Kimon Tsinteris and Mike Matas. * The evolution of Facebook Creative Labs, Facebook Paper, and eventually, Facebook Instant Articles. * Facebook's role in the changing media landscape today. * GeekWire's experiments with Facebook Instant Articles, Google Accelerated Mobile Pages, and live video. The Carve Out * The Startup Podcast Season 3 * The Future of Technology is in Your Ear (Link to product) * The Risk Not Taken Full Transcript below: (disclaimer: may contain unintentionally confusing, inaccurate and/or just-plain-hilarious transcription errors)
Jun 06, 2016
Episode 12: Snapchat (?!)
Ben and David tackle their first failed acquisition: Facebook's 2013 offer to buy Snapchat. They cover the fascinating story of Snapchat's creation and growth, their blossoming business model, how it would be different inside of Facebook, and what the future holds. Items mentioned in the show: The Inside Story Of Snapchat: The World's Hottest App Or A $3 Billion Disappearing Act? Inside Evan Spiegel's very private Snapchat Story Join the Acquired Slack Community at Full Transcript below: (disclaimer: may contain unintentionally confusing, inaccurate and/or just-plain-hilarious transcription errors)
May 23, 2016
Episode 11: PayPal
Ben and David return to technology acquisitions by examining a classic: eBay's 2002 purchase of PayPal.  Items mentioned in the show:  How the 'PayPal Mafia' redefined success in Silicon Valley  - Tech Republic Instagram Will Be a $3 Billion Business This Year: Analyst President Obama and Bill Simmons: The GQ Interview "The Carve Out": Antifragile: Things That Gain from Disorder The Bill Simmons Podcast - Chris Sacca   Full Transcript below: (disclaimer: may contain unintentionally confusing, inaccurate and/or just-plain-hilarious transcription errors)
May 09, 2016
Episode 10: Virgin America

Ben and David deviate entirely from the stated purpose of the show, tackling this non-technology acquisition that is so recent, we have no idea if it went well yet. But, the April 2016 acquisition of Virgin America by Alaska Airlines was so fascinating, we had to do it! 

Items mentioned in the show: 

Louis C.K. - Everything is Amazing and Nobody is Happy

Alaska Acquires Virgin America Investor Deck

“Measuring The Moat” Paper - Michael J. Mauboussin

Business Adventures - Twelve Classic Tales from the World of Wall Street

"The Carve Out":

Michael Mauboussin: "The Success Equation:Untangling Skill and Luck" | Talks at Google


Full Transcript below: (disclaimer: may contain unintentionally confusing, inaccurate and/or just-plain-hilarious transcription errors)

Ben:                 I should see what episode this is going to be.

David:              Ten.

Ben:                 Ten. Easy.

                        Welcome to Episode 10 of Acquired, the podcast where we talk about technology acquisitions that actually went well. I am Ben Gilbert.

David:              I’m David Rosenthal.

Ben:                 And we are your hosts. Today, we come to you with an acquisition that is actually not a technology acquisition, but something that David and I were inclined to talk about anyway because we both sort of have a little romantic fascination with anything involving airplanes, and this is particularly interesting.

                        Today we’re going to be talking about Alaska Airlines acquiring Virgin America right here in our own backyard in Seattle. Before we get into the acquisition history and facts, I wanted to remind you that you can sign up now at to get our episodes delivered via email. We also would really, really, really appreciate it if you could rate us on iTunes. It will help us grow the show and expand what we can do with it from productions to new topics and guests.

                        Now, with that out of the way, David, you want to dive into acquisition history and facts?

David:              Indeed, yeah. This will be a fun one. Listeners, let us know what you think. Don’t worry, we’re not changing the topic of the show, but we thought we’d have some fun and analyze a very different industry than technology.

Ben:                 Yeah, and not to mention the fact that it’s not a tech acquisition. There is technology involved, but the way we’re kind of breaking the mold into this one too is this just happened last month.

David:              Yeah.

Ben:                 Or this month actually.

David:              A couple of weeks ago.

Ben:                 Yeah. So this is something where it’s going to be highly speculative, but I think it’s going to be a fun ride.

David:              All right, with that. So, Virgin America was actually founded in 2004 by Richard Branson and then had to go through a whole series of machinations to end up finally launching their airline service in the US not until 2007. Over those three years, a whole bunch of things happened. So one, it turns out that due to some crazy laws, US domestic airlines cannot have foreign ownership greater than 25 percent of the company.

Ben:                 Crazy.

David:              Crazy. So, Branson and Virgin had to basically sell off 75 percent of the company before they could even have a hope of operating.

Ben:                 It’s wild. I think at that point, when they were first starting, it was Virgin USA even and they rebranded.

David:              It was later that they rebranded to Virgin America. So, Branson sells 75 percent of the company to a couple of hedge funds.

Ben:                 And licenses the Virgin Brand to Virgin America, so that Virgin America doesn’t even own Virgin that’s painted on their own airplanes.

David:              Yup. There was talk at various points in time about ditching Virgin, the name, would that help get regulatory approval earlier, faster. Craziness. Anyway, they finally clear all the regulatory hurdles, they buy some aircraft, and they start operations in San Francisco with SFO as their hub. They launched in 2007. Things go fairly well. They don’t die at least like a lot of startup airlines, and they actually have some major technology-related innovations. So, in 2009, Virgin actually becomes the first airline to offer Gogo in-flight wireless, in-flight Wi-Fi, which is that’s hard to imagine now.

Ben:                 As Louis C.K. says, “It’s magic and it’s the newest thing I know that exists.”

David:              I still hate it now – the random, you know, rare times when you end up on a plane without Wi-Fi.

Ben:                 Sorry.

David:              They also are the first airline, I believe, to install in-flight seat back interactive touch screens for everybody all throughout the whole plane.

Ben:                 Not to mention purple afterglow light.

David:              Not to mention nightclub-inspired lighting. For our listeners who haven’t flown Virgin America, they probably have no idea what we’re talking about.

Ben:                 Yeah, I guess it’s pretty West Coast, and anybody listening in the Bay Area has definitely flown it since they’re hubbed out at SFO.

David:              So, Virgin actually ends up going public having an IPO in November 2014 and then not that long later where about 18 months since then, a bidding war erupts for the company between Alaska which ended up buying them and had rumored to be interested in the company, in Virgin, for a long time and JetBlue. Then Monday morning, April 4, Alaska announces that they have agreed to acquire Virgin for $2.6 billion, which was a 47 percent premium to the Virgin stocks closing price, the previous price at about an 80 percent premium to where the stock was before rumors came out that a bidding war was happening.

Ben:                 Yeah, this is the first red flag for me. I mean, I think that…

David:              Basically, a massive premium.

Ben:                 Yeah, yeah. Anytime you see a spike like that, you start to dig in to why, and I think we’ll talk a little bit more about kind of the way that industry has shifted. But with all the consolidation, the only way that an airline can really compete with the big guys is to be big themselves, and the big guys being United, Delta, American, and Southwest.

David:              Which itself started as a little guy.

Ben:                 Very true. I think that’s like the typical low end disruption case study. That’s a great business and a really interesting story on its own. But, I mean, clearly, Alaska in trying to compete, there’s a limited number of airlines that it could buy. JetBlue clearly identified the same opportunity and the result is this very, very inflated purchase.

David:              Yeah. So when the dust clears and all is said and done, basically the total enterprise value of the deal ends up being about $4 billion, if you include the debt and the aircraft leases that Virgin had.

Ben:                 Which is fascinating because normally when we talk about these acquisitions, we would say a $2.6 billion purchase in cash and stock or maybe an all stock deal, this was an all-cash $2.6 billion purchase plus taking on that $1.4 billion of leases on your planes and debt. What a ridiculous capital-intensive, high fixed cost industry air travel is.

David:              That’s four Instagrams, Ben.

Ben:                 Wild.

David:              Then perhaps the craziest part about this deal is, again, relative to the technology sector, so it was announced a couple of weeks ago on April 4, 2016, not expected to close until early 2017 at the latest. Huge amount of regulatory review that still has to happen here.

Ben:                 We’ve actually precedent I think in the American Airlines – US Air merger where there was regulatory troubles and it almost didn’t go through.

David:              Yeah. The government extracted huge concessions from those two airlines when they merged.

Ben:                 So, we may be doing a follow-up at some point in the future if by 2017 we don’t see a joint airline here.

David:              And our listeners don’t revolt against us, we’re talking about airlines.

Ben:                 It’s true.

David:              Okay.

Ben:                 Well, the other really interesting thing here is in just talking about the deal price, Alaska Airlines does not have $2.6 billion in cash to make this purchase. If I have my numbers right, as of November 2015 according to their earnings, they had $88 million in cash and $1.1 billion in marketable securities. So, I believe what happened here is in the bidding war with JetBlue, Alaska has incredibly clean books. They’re one of the few airlines that actually is investment grade debt.

David:              Very low debt load. Actually, investment grade debt, which for listeners who aren’t in the… come from the investment banking world basically means that the amount of debt that Alaska has is small enough relative to its earnings power that people think it’s very, very unlikely they’ll go bankrupt especially for an airline. No other airline is rated as highly, basically which means that people who don’t think there’s a good chance they’ll go bankrupt.

Ben:                 Yeah. So, is there a chance then, that the way I sort of understand it is JetBlue sort of had to cry uncle because they didn’t have the amount of debt available to them.

David:              Didn’t have the borrowing power to be able to…

Ben:                 Make the purchase.

David:              Yeah, reach this price. But now, this is going to totally transform Alaska, like they’re going to take out another $1.5 billion, perhaps plus with debt.

Ben:                 To make the, well, yeah, I mean to make the purchase and then to take on the debt and leases that…

David:              Virgin was also a fairly low debt load airline as far as airlines go. But still, it’s changing the capital structure of the combined company, pretty significant.

Ben:                 Yeah.

David:              Great. So, we move on to acquisition category.

Ben:                 Yeah, it sounds good to me. Why don’t I start with that?

                        Moving on to the acquisition category, this, to me, doesn’t fit our mold necessarily of people, technology, product, business line or other, and I guess if everything fits in other. In some ways, it’s a business line. They picked up a brand that people have tremendous affinity for and access different customers with…

David:              That’s assuming they keep the brand.

Ben:                 Well, yeah, and that’s something we should talk about. Ultimately, though, what I think they’re acquiring here is capacity. They identified the opportunity that they wanted to be the West Coast airline and right now, they don’t have a meaningful presence in California. They’re hubbed out of Seattle, they have very little in San Francisco, and even less LAX presence. This gives them major, major capacity to be the West Coast airline.

David:              Yeah, basically, if you look at it, if you think about airline route maps that you see on the back of the cards and the back of your seats.

Ben:                 It makes your head spin, but it’s super cool.

David:              It makes your head spin but it’s usually, you know, it’s like the spider web that emanates from a few major cities. The Alaska hub at Seattle and there’s a huge spider web coming out of Seattle to every city in America and in several international destinations and then very few route pairs from other cities. Virgin is the same thing but just from SFO.

Ben:                 So, in your opinion then, well, before we get into that, how would you categorize?

David:              So, yeah, actually we hadn’t discussed this beforehand, but I was going down the same path you are and say in our framework, this would fit closest to a business line, like buying the local San Francisco airline and the local Seattle airline.

                        But I actually think the best categorization is this is industry consolidation, which is in a super mature old school industry like the airline industry, very different from technology, you get these periods of consolidation where players merge with each other because they feel like they need greater scale to compete. And I think that’s what we’re seeing happen here.

Ben:                 Yeah, and this is an interesting time to go into how Alaska makes the case to their investors for this. There’s this great investor deck that they have on their website where they talk about why their investors should feel comfortable with this purchase. And they say that “we’re bullish on the industry.” From 1977 to 2009, the industry lost $52 billion.

David:              The airline industry is notorious for…

Ben:                 Oh, yeah.

David:              I mean, we should talk about there’s a great, great… I almost included this as my carve-out for the week, but I’m going to do something else because I knew we’d talk about it on the episode.

                        There’s a great paper that was written by Michael Mauboussin and his team who’s a great investor. He was head of Legg Mason which is a large mutual fund and at Credit Suisse for a long time. I believe he’s now back at Credit Suisse. He’s written a number of great books. He’s also a professor at Columbia Business School, I believe. He wrote this great paper called Measuring the Moat. It’s all about the concept of the moat, you know, as an investor is sort of the most important thing. Warren Buffet emphasized it in Berkshire Hathaway and Charlie Munger emphasized the moat as sort of the most important thing they look for. And it uses the airline industry as an example of a terrible industry that has destroyed so much economic value and has no moat.

Ben:                 Yeah, and this is… I’m not sure if this… I think this is still true. It was at least true a couple of years ago. If you look at the airline industry since its inception and you look at basically a profit loss statement for an aggregate of every single airline, it’s lost value, like it’s actually not been profitable if you look at every single.

David:              The entire industry, yeah, yeah. And not just lost value but lost a huge amount – a huge amount of capital has been destroyed in this industry.

Ben:                 So, they said that 1977 to 2009, they’ve lost $52 billion as an industry. It is interesting that people continue to invest in it, yet from 2010 to 2015 over the last six years, it generated…

David:              It’s been good times in the airline.

Ben:                 Yes, $45 billion of value.

David:              We’ll get into that.

Ben:                 So some of the things they cite are… or Alaska cites to their investors are “a fundamentally changed industry structure.” That, I think, is largely… I mean, when you look at the consolidation that’s going on they’re basically saying, “Okay, the fragmentation is gone and right now the industry structure is that there’s four relatively perfect substitutes and these big ones that are all, you know, you’re going to get treated sort of like cattle when you’re in coach.”

David:              And you’ve seen in the past few years, I believe the first was United and Continental merged. You’ve seen all the major legacy domestic airlines consolidate and merge, and then US Air and American merged. So you’ve got this consolidating power structure of the industry that actually represents, between the top four airlines, 80 percent of all US domestic airline traffic.

Ben:                 Yes, so it’s interesting. I went and grabbed all their market caps today. Highest right now is Southwest, is a $30 billion company. Delta is higher at $36 billion, Southwest at 30, American at 25, United at 21. Then if you look at… Alaska is $10 billion without Virgin. Virgin is 2.5 and JetBlue at 7. So if you just look at those players, $132 billion effectively market cap for the industry, and when you think about Apple as a $590 billion market cap company, you start to understand like, “Wow!” The whole industry here is, you know, if we’re looking at this any given airline and comparing it against one of these mega technology companies that we usually talk about on the show, the airline companies just don’t create that much value.

David:              Yeah.

Ben:                 Or maybe more accurately, they don’t capture that much value.

David:              Yeah, and it’s super interesting. I’m sure we’ll get into throughout the show the supply chain of the airline industry is fascinating. You’ve got basically a duopoly that are direct suppliers to the airlines in Boeing and Airbus that make the big passenger jets. They have a huge amount of power over the airlines because while there is two of them, you could go from one to the other, it’s not like you can say it’s not like the airlines can be like a Google and be like, “Oh, we’re going to become a full stack company and we’re just going to obsolete you and we’re going to make our own cloud,” or whatever, like, the airlines can’t make their own airplanes.

Ben:                 Yeah. Getting good at servers is different than getting good at airplanes.

David:              Yeah.

Ben:                 Yeah. So getting back to the Alaska, reasons they’re bullish on the industry, the industry structure is consolidated. This is sort of a BS bullet point, I think, but returns focused leadership teams, that’s like tuning your own horn and claiming competency.

                        Constrained airport real estate – this one’s sort of interesting. I guess they’re saying like we reached a saturation point right now where we’re not building more airports, the airports aren’t getting bigger, and over the last since 1960, that’s been the case. Now, it’s all about vying for space at the existing airports that we have, and then the capacity acquisitions starts to make a lot of sense.

David:              Yeah. There are only so many gates.

Ben:                 Right, right. Growth in leisure travel, which is interesting to pick apart and think about why that might be, and then new revenue sources. I think we can all grape about how we are well aware of all the revenue sources that airlines can…

David:              Charging for bags.

Ben:                 Food and entertainment.

David:              I mean, some of these are new services they’ve added. Virgin and Alaska have both been kind of the leading edge here. The in-flight Wi-Fi and entertainment and movies and snacks that are actually edible.

Ben:                 And co-branded with Tom Douglas. It’s always so funny to get on those planes and see how far – for those of you not from Seattle, he’s like the big restaurateur in town – to see how far he’s leveraged that brand. Now that I open the little snack pamphlet in American Airlines, there’s Tom smiling at me on the front of it.

David:              I love it.

Ben:                 So artisanal. So, yeah, from a category perspective, I think absolutely I would chalk it up to capacity.

David:              Yup. The other point I want to explore here a little bit is there’s a really interesting context for this deal that people in Seattle might be aware of, but I doubt anyone not here is, and that’s that Delta actually has been putting a huge amount of pressure on Alaska here in Seattle in their hub. Delta has been growing over the last few years their presence in Seattle a lot. For a long time I think Alaska was probably either concerned or expecting that Delta was going to make an offer to buy them, and they haven’t. Instead, they have just organically grown and taken more and more gates here in Seattle. It’s really interesting.

                        I was talking to somebody who was far more of an airline industry expert than we are and he was making the point that the frame of reference is really different for these two companies, Delta and Alaska. Alaska is a domestic carrier and it’s a West Coast focused carrier. Delta is an international carrier. Delta coming in to Seattle was part about competing with Alaska domestically because Alaska has built a really nice business here. But also, an even bigger part probably for Delta is using Seattle as a gateway for international flights to Asia because gate real estate, as you were saying Ben, is so scarce and the other big cities on the West Coast at SFO and in LAX is so competitive and impossible to get more real estate there. I think Delta really viewed Seattle as their gateway so that they could send people from all over the US on flights to Seattle and then hop over to Japan, to Korea, to China, to what-have-you.

Ben:                 Makes sense.

David:              Whereas for Alaska, that’s not even an accessible market to them right now.

Ben:                 Right, right. In looking at this acquisition category in kind of the way we’ve both defined it, in a $2.6 billion sale that it seems inflated for two reasons. One, kind of the bidding war because it was scarcity of good airlines to buy that would compliment JetBlue or Alaska well. But two, a lot of the value, the intrinsic value that was given to Virgin even before rumors of a sale was brand value. They have tremendous customer affinity, they do things a little bit differently.

David:              People who love Virgin love Virgin.

Ben:                 I always have a better experience.

David:              And people who love Alaska love Alaska, too.

Ben:                 It’s true. Actually, those are two of my favorite airlines to fly. But Virgin is notoriously different and better and feels premium, and that had to be factored in to their market cap. When you think about what they are going to be used for, I mean, Alaska announced that by 2018 they hope to be fully rebranded as Alaska. Hopefully, they can learn some things from Virgin, and they’ve been watching them very carefully. But if they obliterate that brand, what was the point of paying a markup on a markup for capacity?

David:              Yup. It’s a great point. The Alaska brand, again, it was very good especially in the airline industry on its own. I think really was kind of like very professional. They had either the best in the industry or the best on the West Coast on time percentage, lots of great… very, very business commuter-friendly. Virgin was, like we joked earlier, like a nightclub on a plane. It was the favorite airline of all of my classmates when we were in business school. We can leave it at that.

Ben:                 So then one other thing that I want to bring up in that realm is payback period. So Alaska cites that they’ll have $225 million of total net synergies at full integration. So what we can pull from that is that there will be $225 million of cost savings after they’re fully integrated, so let’s call that 2018-ish, and that means that there’s probably other value that they can create on top of that like ability to create more revenue because they have these economies of scale, new things just on top of that. But that means that they have on this, if we look at the $4 billion as the figure, that’s a 17-year payback period on this acquisition just on the synergies.

David:              Now, Virgin had earnings as well that would contribute to that, but two points I want to make, but go ahead.

Ben:                 No, no, go for it. I’ve pretty much made the point there. It seems like it’s going to take a while to…

David:              Yeah. Any way you slice it, it’s going to take a while and I think there are two really head-scratching things about this merger that are really important, that certainly industry experts are questioning, but Alaska hasn’t talked a lot about, one, the primary reason for the sort f economic renaissance of airlines in the last couple of years has been falling fuel prices.

Ben:                 Yeah, which are not only passed on to consumers and everyone’s getting a little…

David:              Right, right. So airlines as a whole, across the whole industry, have gone from call it spending X on fuel which was a huge amount of their operating budget and kept their budgets low to negative to spending X divided by two on fuel. Thus, they are enjoying as an industry much greater profits than they used to.

                        Now the question is, like, is that the new normal or is our oil prices going to go back up at some point. We could do another show on the oil and gas industry. This is a major existential question for that whole industry, but, if you were to take the viewpoint that this is a temporary thing and prices will go back up, which historically they have fluctuated throughout history. Gosh, it seems like you’re buying at the top of the market here where profits are artificially inflated. So, that’s one.

                        Two, synergies as you rightly mentioned, Ben, are often about the combined revenue potential and being able to extract more money from consumers and routes and whatnot, but they’re also really about cost savings.

Ben:                 Yeah. And consolidating the back office.

David:              Consolidating and economies of scale and all that front. But there’s kind of a problem here with this acquisition and that’s that Alaska flies Boeing planes and Virgin flies Airbus planes.

Ben:                 Exclusively Airbus, their entire fleet.

David:              Yeah. Alaska only flies Boeing and Virgin only flies Airbus. You might say as a naïve consumer, as I did before I started looking into this, like no big deal. I mean, they look like… it’s a plane. A plane is a plane, right? I get on it and it looks the same. Well, it turns out that actually they have completely different control systems and pilots who fly Boeing planes can’t fly Airbus planes, and pilots who fly Airbus planes can’t fly Boeing planes.

Ben:                 So it’s not like they’re going to be able to share pilots at all between these fleets.

David:              Not going to be able to share pilots and, of course, all the maintenance and all the parts are completely different.

                        Now, the other major airlines do use a mixed fleet of both.

Ben:                 Except for Southwest.

David:              Except for Southwest, yes.

Ben:                 So Southwest is entirely Boeing 737’s because they realized that a part of their business model was going to be staying as lean as possible and keeping everything totally interchangeable and swappable.

David:              That’s actually been a big part of their story to Wall Street and investors about why they’re a great company. That’s been kind of a pillar of it. Alaska had the same playbook. Now all of a sudden, they’re like a 50-50 shop of Airbus and Boeing.

Ben:                 Yeah. From a heartstrings perspective too, how dare a Seattle company buy a company that’s entirely Airbus planes? That’s just not patriotic.

David:              That’s much sorted in history on Seattle and Boeing and perhaps for another show.

Ben:                 Yeah, yeah.

David:              So yeah, and I think that actually segues into what usually is a short segment for us and I think we’ll probably be short here of what would have happened otherwise. Here, clearly, the otherwise… I mean, Virgin was going to be acquired and the otherwise was JetBlue had acquired them. Now, JetBlue is also an Airbus company, so it would have been a lot easier for them to realize cost synergies.

Ben:                 Yeah. There’s two points I want to make here. One, Virgin is sort of only recently profitable, I think. So they launched in 2007, took them three years to have their first profitable quarter. They’re struggling as pitching themselves as both a low-cost airline and an airline that has a really premium service.

David:              Yup.

Ben:                 I think that they were better at adhering to the premium service than they were to the low cost, but that’s a tough story to sell to consumers. I think they were struggling with how to be both because you can’t both be a Volvo and a Cadillac, and have that story be sustainable and enduring. So I think that Virgin didn’t necessarily need to sell. They were definitely in the right place, right time where they had exactly what…

David:              They got an 80 percent premium to the pre-acquisition share price. That’s pretty good.

Ben:                 Yeah, yeah. Good on them for their M&A positioning, but that seems like a little bit of a precarious position. At prior scrap labs, a lot were thinking about starting these companies, I think I would get a lot of crazy looks if I was like, “Well, we’re going to be a low cost premium company.”

David:              It reminds me of, I’ve been reading… another could have potentially been my carve-out, but won’t be, I’ve been listening on audiobook to a great book called Business Adventures. It’s a classic. I believe it was written in either the ‘70s perhaps. It was recommended to me by a good friend and I’ve been listening to it, and it’s just 10 vignettes of more and more aptly titled Business Misadventures. The first one is about a stock market crash in the ‘60s. But the second one that I’m listening to now is about the Edsel, the car that Ford launched that’s widely considered the worst product launch in history.

                        One of the key lessons from it is that Ford wanted the Edsel to be everything to everyone. They say like “daringly adventurous with a dash of conservative.” It’s like, “What? Are you kidding me?” “It’s an elegant luxury for the aspiring young executive and affordable for the middle market,” and it’s like, “What?” And it failed spectacularly.

Ben:                 Yeah, yeah. I’m not over here preaching that that was going to be Virgin’s path, but that was always sort of a head scratcher maybe about that company.

                        Now, the question that I want to pose to you is: What would have happened to Alaska with all the consolidation in the market going on and kind of moving four major players?

David:              And the pressure from Delta.

Ben:                 The pressure from Delta on the home front. What if they don’t expand?

David:              Yup. I think to give some credit to Alaska, I feel like we’ve been taking potshots of this deal, we’re in a tough position I think. Doing well in the moment but facing this pressure from Delta, this consolidation across the whole industry and they had developed a really, really nice niche here in Seattle as by far the best routes and customer service for people who live in Seattle and flying in and out of Sea-Tac with great business routes. But they had nowhere to go. They were getting pressure from Delta here. It was super hard for them. What are they going to do, expand internationally? Are they going to go to other cities?

                        And that’s what they did with this. They said, “We need to grow. It’s going to be super hard to do organically. We have a great balance sheet and for an airline, a lot of cash. We know we’re relative to the industry pretty well run. Here’s an opportunity to buy Virgin and basically double our size and run the same playbook again.” Or they could have just stayed in a steady state where they are.

Ben:                 Well, it’s funny. You would hope that they double their market size because the acquisition is so expensive, but when you look at the numbers of what Alaska is doing and what Virgin is doing, Alaska has 32 million total passengers a year, Virgin has 7. Alaska has a thousand departures a day, Virgin has 200. There’s 112 destinations served by Alaska, Virgin has 24. Pre-tax profit from Alaska is at $1.3 billion, Virgin $200 million. So, that is an expensive purchase for a much, much smaller operation.

David:              Yeah. And a much smaller operation with no room to grow in San Francisco.

Ben:                 Yeah.

David:              Not just SFO but the other airports in the Bay Area, too – Oakland and San Jose, which they’re really commuter airports, although pro tip for Seattle to Bay area commuters: never fly to SFO. You always got to do Oakland or San Jose because if you do SFO, there’s so much fog and fog delays, and they always delay the Seattle flights because they want the cross-country flights to land on time. Got to do Oakland or San Jose.

Ben:                 Pro tip.

David:              Pro tip. Anyway, but there’s no room to expand with any of these airports.

Ben:                 Yeah. All right, let’s move on to our next section. What tech themes does this illustrate for you?

David:              Yeah, this is a really interesting one. I debated a lot of ideas here and it’s ironic because this is not a technology acquisition. But actually, I’m going to go with niche marketing and again, even though we’ve been taking potshots against this deal, both Virgin and Alaska before the merger really succeeded at this. In a crowded marketplace with lots of big platform players and the big national carriers, they found a niche – Alaska here in Seattle and with business travelers, and Virgin in San Francisco with quality of service and style-minded customers. They served it really, really well. The group, very big businesses out of that. I mean, combined obviously the price for Virgin at $2.6 billion and… I can’t remember, what was Alaska’s market cap before?

Ben:                 Oh, their stock actually went down on announcing acquisition, it’s about $10 billion now.

David:              About $10 billion. These are great businesses and I think that same principle totally applies in technology and people, especially startups, often overlook it. They try and go after the Delta or the United or the Southwest on day one. They try and go after Google on day one. You’re not going to be Google on day one. The way you’re going to be Google down the road is you start with a small audience, a small niche of people who love you passionately and then you grow from there. Then you knock down, in crossing the chasm speak, the next bowling pin and the next bowling pin and the next bowling pin. That’s much easier to do in technology than it is in airlines.

                        But the great thing about it is that you probably not going to become the next Facebook or Google. But if you knock down a couple of bowling pins along the way, you’re still going to become a really great value company and then maybe you got a chance to knock them all down and you will be Snapchat and become the next Facebook, calling it here.

Ben:                 There you go. That’s a good point.

David:              Does that analogy also apply to the brand loyalty aspect of airlines? Which they have huge innovation…

Ben:                 Yeah, invented loyalty.

David:              In the inventing the loyalty and the airline miles and status.

Ben:                 So you’re postulating that in order to capitalize…

David:              Are there other technology companies that have – probably not enough, there should be more – but that have taken that loyalty aspect where the more I use a platform, the deeper I get locked in because the more airline miles I have on it, for lack of a better word.

Ben:                 Yes, totally. I think that everybody that has done well at loyalty in the last 50 years has taken it from airlines. The question is do you need to…

David:              OpenTable definitely did.

Ben:                 Yeah.

David:              Quite successfully.

Ben:                 I guess I’m wondering do you need to…

David:              That will be a great acquisition to cover at some point.

Ben:                 OpenTable?

David:              Yeah.

Ben:                 Yeah. I’ll add it to the list. Yeah, I’m trying to think about is it necessary? Has something changed in the world where it’s necessary to consolidate to keep loyalty? Does something exist now that didn’t exist before where people only ever want to use one airline?

David:              That’s definitely the case in technology. I think about the power of network effects like HipChat, right? Two years ago, a bunch of our portfolio companies used HipChat and some of them used Slack and some of them used HipChat. I talked to people using HipChat and I’ll be like, “You should really check out Slack.” They’d be like, “We use HipChat, it’s good enough.” But then as their friends and other companies got on Slack and then Slack channel started popping up for industry groups and whatnot, then it was like, “Well, we should really think about moving to Slack.” Then this parallel takes over and being on…even if I think Slack has done a lot of great product innovations, but even if it hadn’t, you would be pushed to move towards it even if you’re on HipChat because the rest of the world is on it.

Ben:                 Yeah. It was Slack I think that the network effect was because people were starting inter-company Slacks so you would end up with like, “Oh, I’m in this Slack,” that’s like a social thing or an industry thing. Then it was like, “I’m not going to keep using two separate applications.” So, does that apply here where, “Oh, I’m not going to maintain points in two separate loyalty programs,” because that was always super annoying. There were a few startups that I was trying out that we’re trying to aggregate my loyalty programs for me or at least help me keep track. That was total pain.

                        To segue off of aggregator onto another technology trend, let me think through this and see if this logic follows. So, sites like Kayak and Hipmunk and all these Travelocity and Priceline, travel aggregators pop up.

David:              Yup.

Ben:                 That’s 15-20 years ago. That effectively commoditizes airlines and compresses their margins because people’s loyalty to those airlines is shaken because they have an easy way to find cheaper prices. So therefore, margins are driven down because airlines get more commoditized and when they’remore commoditized and there’s less profits that you’ve had even though they weren’t making a lot of profit before, they need to consolidate to create a cheaper back office, taking economies of scale. Now, if you’re a smaller airline, the inefficiencies from you having a smaller operation could kill you.

                        So if you follow it all the way back to the online travel aggregators, does that create the environment in which you need to have a bidding war for this acquisition so that you could be a more major player in a consolidate market?

David:              Yeah. That’s interesting. It’s different because it hasn’t fully become a digitized industry, but it’s reminiscent of Ben Thompson’s aggregation theory where aggregating a consumer endpoint and experience, he argues, in the digital 21st Century post-internet world, is where all the value is. Then you can aggregate all the difficult content creation behind that… content creation but in this case, airlines like point to point travel, and own that relationship with the customer at the front end. Then you commoditize everything on the backend. That’s completely happened.

                        Interesting, Southwest has refused to participate in the aggregators to let themselves be aggregated and probably has some of the most loyal customers. I mean, their ticker symbol is LUV and they always talk about how much everybody loves each other at Southwest. Yeah, they’ve fought that actively and it probably and they’ve probably had the most success on the branding front.

Ben:                 Yeah, yeah. Why don’t we move on to rendering our conclusions?

David:              I think it’s that time.

Ben:                 Yeah. I think we’ve expressed our opinions laced in a bunch of comments throughout this. For me, I think the value has inflated both by the bidding war and by the fact that they bought something that had brand built into the market cap when they’re not necessarily a leverage and in fact have announced they’re not going to leverage that brand.

                        But, I think they needed to. I don’t think they had a lot of options and I think they both picked the time right when this was an available purchase. They put themselves in a really good position to make that purchase – I’m probably the wrong person to talk about this – but by putting their books in a great position over the last 5 years and being really intentional about being an investment grade or having investment grade credit. I think that JetBlue didn’t prioritize that as much and neither did any of the smaller airlines and in a world where they need to consolidate, they had put themselves in the position where they’re able to do so.

                        So, I’ll give it a B minus.

David:              Yup. It’s hard to separate out just, at least for me, coming from the tech industry this sort of shock looking at the terrible economics of the airline industry as a whole in dynamics versus the actual quality of decision-making in this acquisition. So I think a lot of what you said, I agree with. But I’m going to go lower. I’m going to go C minus because what you said is right, but they paid so much money. They paid so much money! I don’t think it’s public and I don’t know that anybody except the executives involved know what Alaska’s initial bid for Virgin was, but it got bid up so many times and that’s a large price for something that your pilots can’t fly.

Ben:                 Can an airline make a good purchase?

David:              Yeah. Good point, good point.

Ben:                 Yeah.

David:              All right. Should we move on to the carve-out?

Ben:                 Yeah. So this is wild. I was stopping myself from laughing and my jaw dropped and I think it almost ruined David’s train of thought earlier when he started talking about how it wasn’t going to be his carve-out but it was a paper that Michael Mauboussin wrote about this. I picked my carve-out as a Michael Mauboussin talk that he gave at Google.

David:              Oh, this is so good. Everybody should watch this talk, it’s really good.

Ben:                 David, this is so weird. I haven’t watched this in probably two years and it was something that I’ve recommended to friends very often and so I was sitting here before the episode thinking I didn’t see anything particularly interesting this week that I wanted to recommend, but I have an oldie but goodie. It is absolutely wild.

David:              This talk is great and it’s based on a book. I’ve read the book too which is worth reading, too, called Untangling Luck and Skill.

Ben:                 Yup. Untangling Skill and Luck: The Success Equation, and it is so, so fascinating. He gives so many great examples that will make you both follow it logically and nod your head and sort of scared about how much of your own success has been out of your control or how much the world is out of our control. So how much of your own success cannot be attributed to you and how much of your own failure cannot be attributed to you, and trying to figure out what are things that you have perfected.

David:              Attributed to your own skill.

Ben:                 Yes, yes. And what are things that you actually should be focusing on and what are things that you should know that there’s going to be redness in the world.

David:              If you only have an hour, listen to the talk. If you really want to go deep on this, get the book. It’s so good. I will restrain myself, I could go in so many directions. But one real quick vignette I want to throw out is one of my favorite themes from this talk and book is the paradox of skill, which is such a cool thing that in a given activity… the whole premise of the talk and the book is that any activity, the results of which are going to be based somewhat on the skill of the participants in the activity and somewhat online. There’s a spectrum and some things go more towards the luck and some towards the skill. The paradox of skill is that even in things that are highly skill-based, as the level of play gets higher, so imagine the example, Mauboussin uses basketball, as basketball which is very skill-based. As the level of play gets higher and higher and the parody of skill amongst the players gets more and more uniformed, then luck plays an increasing role in the outcome, even though it’s a skill-based game.

Ben:                 Particularly due to globalization because the only people who are even considered for this are the best in the world. So then it’s like, well, among the people that are all the best that look very similar to each other in skill level…

David:              Yeah, the variation in skill gets so minute.

Ben:                 Then luck is magnified.

David:              Then luck is magnified, yeah. And the exact same dynamic holds true in investing in startups and lots of things.

Ben:                 When the world is the pool, you always are the cream of the crop and then it’s all about all the crazy dynamics that play off of there. So, can’t recommend it enough. It’s on YouTube. We’ll link it in the show notes. Definitely check out The Success Equation: Untangling Skill and Luck.

David:              I’ve taken enough time. I’m going to save mine for another time. It wasn’t super interesting anyway. I’m going to doubly recommend this. It’s so good.

Ben:                 All right. Well, there you have it. Thanks for listening today. Again, if you have the time, please, please, please leave us a review on iTunes. Can’t say enough how much it’s important to the success of the show and we love your feedback.

David:              And if you want to receive episodes by email going forward, just sign up on and we’re also now going to start publishing the show by email updates as well, if you prefer that channel.

Ben:                 It’s true. You can give us feedback on the website or See you later, everyone.


Apr 27, 2016
Episode 9: Writely (Google Docs)
Ben and David continue the cloud productivity saga with Google Docs. They examine the suite of acquisitions made by Google with a focus on Writely in 2006. They tackle: * The nuts and bolts of the Upstartle (company behind Writely) acquisition, founded by Sam Schillace, Steve Newman and Claudia Carpenter. * SaaS offerings in cloud productivity today. * Was this a good idea for Google? * Google's future bets. * A new section: The Carve Out! Full Transcript below: (disclaimer: may contain unintentionally confusing, inaccurate and/or just-plain-hilarious transcription errors)
Mar 30, 2016
Episode 8: Acompli, Sunrise, and Wunderlist (w/ Kurt DelBene)

Ben and David have special guest Kurt DelBene on to discuss Microsoft's acquisition of Acompli, Sunrise, and Wunderlist. Kurt is the EVP of Corporate Strategy and Planning at Microsoft, and joins to discuss Microsoft’s cloud-first, mobile-first strategy, and the importance of being cross-platform in the modern era. They cover:

  • How the app of Outlook Mobile on iPhone and Android came to be.
  • How to decide whether to build vs. buy, and how it plays into the strategy for Office.
  • How to preserve a culture and a team, and how Javier Soltero came to run all of Outlook at Microsoft.
  • The origin of Outlook on the PC, originally led by Brian MacDonald as “Ren”.
  • How to balance a business with competing priorities, and a decision-making framework for acquisitions in a large company.
  • How to measure the success of an acquisition, and how sometimes, it’s not by measuring revenue at all.
Mar 01, 2016
Episode 7: YouTube

Ben and David test the widely-held belief that YouTube was one of the most successful tech acquisitions of all time. In today's world of next-generation video platforms, mobile video, streaming, and chord-cutting, was it actually a great purchase by Google?

As discussed in the show, here is Sequoia's original YouTube investment memo - a rarely-shared gold mine for anyone interested in startup investing.

Feb 04, 2016
Episode 6: Lucasfilm

Riding closely on the tails of Star Wars: The Force Awakens, Ben and David cover Disney's 2012 acquisition of Lucasfilm. In the episode, they mention Walt Disney's original flywheel diagram, seen below.

iTunes Link

Jan 20, 2016
Episode 5: Siri

In the last episode of 2015, Ben and David discuss Apple's acquisition of Siri. Notable topics include:

  • The founding of Siri by Dag Kittlau, Adam Cheyer, and Chris Brigham.
  • Scott Forstall on the Apple side, and the end of his time at the company.
  • The other Apple acquisitions around Siri, including Topsy, Novauris Technologies, OttoCat.
  • Cue, Spotsetter, VocalIQ, and Perceptio.
  • The team Apple built around Siri post-acquisition, including Alex Acero from Microsoft Research.
  • Speculation on the future of voice and its role in everyday computing.
Dec 15, 2015
Episode 4: Bungie

Ben and David are joined by Former Microsoft VP and Co-Founder of Xbox, Ed Fries, to discuss the Bungie acquisition and the development of Halo. Highlights include:

  • Ed’s call with Steve Jobs after the acquisition, and sharing the stage with Steve and Bungie Co-Founder Alex Seropian at the Macworld Keynote.
  • Bungie today, and the unlikely path to get there led by Harold Ryan.
  • How to find something that all parties want to get a deal done, the creation Peter Tamte’s spin-out Mac gaming studio, and orchestrating the division of current Bungie projects and assets with Take-Two, led by Ryan Brandt.
  • Saving a project that’s off schedule and missing the mark, and how Jason Jones led the effort to make Halo 2 a hit at launch.
Nov 30, 2015
Episode 3: Twitch

Ben and David discuss Amazon's acquisition of Twitch in 2014. Unlike previous episodes, this recent acquisition still has a lot of open questions, and Amazon hasn't publicly reported growth of Twitch since the purchase. Ben and David talk about Justin Kan's original product with, and the transformation into the Twitch that Emmett Shear is running today.

Nov 16, 2015
Episode 2: Instagram

Ben and David discuss Facebook's acquisition of Instagram in 2012. Was it a success? If so, what are the criteria that made it work? What lessons can be learned for other acquisitions in the future?

Nov 01, 2015
Episode 1: Pixar

Ben and David discuss Disney's acquisition of Pixar in 2006. Was it a success? If so, what are the criteria that made it work? What lessons can be learned for other acquisitions in the future?

iTunes Link

Oct 16, 2015