Acquired - Episode 45: HTC, Google and the Future of Mobile

Episode Date: September 21, 2017

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) Sponsors:ServiceNow: https://bit.ly/acqsnaiagentsHuntress: https://bit.ly/acqhuntressVanta: https://bit.ly/acquiredvantaMore Acquired!:Get email updates with hints on next episode and follow-ups from recent episodesJoin the SlackSubscribe to ACQ2Merch Store!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 G1HTC’s ownership of Beats, for a hot minuteGoogle’s own winding history in hardware, with its Motorola acquisition in 2011 and divestiture in 2014Google & HTC’s joint work on the Pixel smartphones in 2016And much analysis and speculation on what this means for Google, Apple, Samsung, vertical vs horizontal business models and more!  The Carve Out: Ben: Odesza’s new album A Moment ApartDavid:  Bruce Springsteen on Fresh Air

Well, this is nuts. It's like leaking out as we speak. Yeah, coming at you live. Welcome back to episode 45 of Acquired, the podcast about technology acquisitions and IPOs. I'm Ben Gilbert. I'm David Rosenthal. And we are your hosts. Today we are live covering the leaks as they come out. Well, Google is apparently about to acquire HTC, or at least a part of HTC.

And David and I are hitting refresh on our browsers while recording this on the evening of uh of wednesday september 20th around 8 p.m pacific time um and uh even since we decided a few hours ago to shift course and uh and dive into this episode instead of um one that we will do next week that is less time sensitive um we uh there's been new information yeah. We're coming at you live here on Acquired. So we decided that the way we want to structurally do this is we'll sort of state our assumptions about what we know because Dave and I were talking about it

and we're pretty sure that we know the majority of the information that will be announced tomorrow. And so we'll sort of state what we know and then if we need to pop in and revise at'll sort of state what we know and then um you know if we need to to pop in and revise uh at the beginning of the episode or something which you will have already heard if you're listening to this um then then we will so everything uh everything that you'll hear is based off of some some assumptions that we'll introduce yeah there's like there's some serious time travel going on in this episode because you guys will be listening to this in the future obviously we're here in the evening pacific time on september 20th it's already

morning in asia uh and so the official news is is starting to come out uh over in taiwan um and and of course the leaks were coming out yesterday in tai, which is still today here in Pacific time. Yeah. And the most obvious one that's not a leak, that's a public announcement is that HTC will not be trading tomorrow because of a large announcement that is likely to significantly impact the shareholders. Okay, listeners, now is a great time to tell you about longtime friend of the show, ServiceNow. Yes, as you know, ServiceNow is the AI platform for business transformation, and they have some new news to share. ServiceNow is introducing AI agents. So only the ServiceNow platform puts AI agents to work across every corner of your business. Yep. And as you know from listening to us all year, ServiceNow is pretty remarkable about embracing the latest AI developments and

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before diving into these acquisition history and facts of HTC, let's throw out for the audience what we know and what we believe now. Right. So tomorrow, September 21st, it's looking like it will be announced that Google is going to acquire a large portion of the engineering team at HTC. So they are not acquiring the whole company is the best information we have thus far.

But they're paying just over a billion dollars to acquire about half of the employees, and specifically, the group of hardware employees. And I believe that's also along with the manufacturing kind of plants and supply chain assets that worked on the Google Pixel phones that they released last fall that HTC made for them. So that is current state of play. They're acquiring about half of the people in the company, but HTC as a company itself and all of its brands and its own operations are still remaining independent fascinating and other products right so the the you know the vibe yeah not just yeah not just the vibe other products but htc's own non-google um smartphone efforts so very confusing uh they are going to continue to be a smartphone handset manufacturer on their own.

But sort of the A-team that was working directly with Google on the Pixel phones and other devices is now coming over to be directly part of Google. Yeah. And we say the A-team, you know, there can be furious debate about HTC and who's prioritizing what and who they put on which projects. But one thing that you cannot deny is it was very, very widely publicized and covered that the Google Pixel was the best Android phone ever made and set the new standard. And it's that team that worked on an amazing product. And obviously, Google did lots and lots of the design there. But we are getting ahead of ourselves.

So David, tell us a little about HTC. Yeah, let's dive into history and facts and rewind the clock. And HTC is not, you know, it's a household name in the U.S., but only recently. However, it's been involved in many products over the years that our listeners will probably recognize. So the company was founded in 1997 in Taiwan. It's a Taiwanese company. And they began life and for most of their initial life were just an an oem so an original equipment manufacturer they were essentially contract manufacturer for other

tech companies they didn't have their own brand and then over time they built their own brand but obviously just like the google pixel and other devices they continued to build products for other brands. And when they first started in 1997, they right out of the gate worked on laptop computers, but then pretty quickly transitioned to cell phones. And this was before, you know, smartphones as we know them today. But back then, smartphones and smart mobile devices were PDAs, personal digital assistants. So HTC actually, this was a blast from the past, was the manufacturer, and I believe also involved in elements of the design for the hp and compact ipac windows uh you know personal assistant and you remember that one and then also uh a pretty popular device the palm trio 650 which i think if i'm remembering right was one of the first palm you know slash handspring trio devices that was also a cell phone huh huh yeah that's

crazy you know i in thinking about this you know i always think about um there are the the few manufacturers that actually made their own stuff and palm always occupied that space in my head um you know as did nokia and um you know i apparently palm didn't make all their own stuff and i don't know i'm not actually sure if uh did they manufacture other products do you know yeah i don't know and palm itself that'll be an episode a fun episode someday uh it was you know a darling kind of startup uh tech company in in the valley in the 90s and then ended up getting acquired by 3com right is that right palm which it's yeah it wasn't palm part of 3com at one point um well eventually they ended up going to hp um and getting bought by hp after the palm pre

um which was that was a shame like web os was a absolute pioneering product and the palm pre was was a uh controversial yet well-designed device and i think um you know to absolutely languish at hp but yeah that's totally that's for another day let's let's definitely do an episode another day okay okay i just looked it up quickly yeah palm was acquired by u.s robotics corp in 1995 and then u.s robotics was acquired by 3com so it was part of did it like spin out yeah so then the founders left uh 3com because they were you know unhappy and uh and started handspring and that's why handspring and palm, it was always that confusion. I remember. Yeah. Anyway, back to the topic at hand.

So HTC is in the middle of all of this. I mean, they are like the OG players in the smartphone game here. And even going back to the founding of the modern smartphone game, obviously they weren't involved with Apple and the iPhone, although they did own Beats at one point in time, which we'll get into. We also covered this in our Android episode, episode 20, which is very relevant here. This should really be like the coda to that episode um but htc was one of the founding members of the open handset alliance which if you might recall from that episode was google's initial smartphone efforts uh that turned into android and so htc when what became android uh the artist that would become android finally launched in 2008, the very

first and only for a long time, quote unquote, Google phone was the HTC Dream, which in the US was the T-Mobile G1. And that was made by HTC. And that was the very first and again only android phone for quite a long time yeah man i remember playing with prototype hardware of that um in like 2007 ish and uh i think that's right and that was that maybe it was just very early hardware but that was like it was hard to believe that that was the future. I mean, I know everyone was all excited about it. And it's in a lot of ways the same way now that people are showing off like an extremely crummy experience in IoT

and being like, IoT is the future. And you're just like, eh, okay. Yeah, I mean, this thing, you know, I don't think I've ever actually used one in person. I've certainly seen them. But this thing, we'll try and link to it. Remember to link to it in the show notes. So it had like a trackball on it, right?

It had a trackball and then it also had a slide up physical keyboard. This was like, you know, the sort of unholy marriage of like a Blackberry an iphone and like one of those super old school 80s trackball you know mouse mice for a computer well yeah i mean this was like when um when android was still basically kind of a open source um copy or perhaps inspired by blackberry before they spent um the better part of a decade doing you know becoming that that of ios and it was you know at that point in time like it seemed like that that blackberry physical keyboard um you know have a little uh cursor on screen it seemed like that was the form factor right like that if you're gonna that's what a smartphone looks like if you're

gonna go make a smartphone yep yep and of course there was danger and the uh the sidekick at the time too that was also inspiring all this and uh i think back on the android episode we gave a shout out to that uh that entourage episode where turtle gets a gets a sidekick and all this is like so dated now absolutely always fun um so htc again like right in the middle of all this the very first uh google phone very first android phone um and then they they really stay at the cutting edge for for quite a while in the early sort of modern smartphone period um they built and launched one of if not the first 4g phone that was available in the u.s i think um it was on sprint and uh i'm forgetting right now what it was called but it was uh it was like they marketed the hell out of this thing i think it had probably like an you know like hour and a half long battery life but it was the first uh the first uh mobile phone

and and network uh in the u.s that um that you could really like use it and it felt like broadband i mean before that there was 3g of course, but it was sort of not that much faster than the old dial-up days. So they really were pioneers of a lot of firsts. They were. And still, you could argue that the Vive is really Valve's innovation, and in a lot of ways it is. And a lot of the control rests with Valve. I mean, you talk about that in technical terms. Well, just like Android was, you know, Google and, well,

and Android and Andy Rubin's innovation. Yeah, yeah, but the fact remains, like, absolutely a pioneering device, and HTC, you know, largely responsible. Yep, yep. So that was kind of the high point. And I think that was right around, trying to remember like 2010 ish, I think when, when that phone came out, um, and in 2010, 2011, like HTC was really on the rise and people thought, you know, that they were going to be a really credible competitor to Samsung, uh and uh a dominant device maker

in the in the smartphone era unfortunately um since 2011 at its high point uh that has not happened over the last five to six years and the stock is down 90 since then then. So HTC now, well, as of yesterday, before they halted trading, had a market cap of just under $2 billion in US dollars, which is down significantly from where they were at that peak. I think they were around somewhere between $20 and $30 billion at their peak. Yeah. And I'll embarrass myself a little bit here. I was texting David earlier, and I looked up their market cap just on Google Finance, and I was like, whoa, David, I mean, this is going to be really splashy.

It's a huge deal. $58 billion market cap. And then like a few hours later, as you're doing your research, you texted me back. You were like, uh, that market cap is in Taiwanese dollars. And it's only, it's only about 1.9 billion in US dollars. And like thinking about, you know, what, what HTC was. And in my head, they still occupied a large brand. You're like, oh yeah, HTc is a 60 billion dollar company for sure

no unfortunately for them and aol was 150 billion dollar company yeah and again you know we like i i mentioned this earlier uh a minute ago and and we talked about it back on the uh on the android episode but um just like you can't make this stuff up so in 2011 right at its peak htc acquired i believe a 51 percent stake in beats so this was back when beats was was just the headphones was dr dre and jimmy ivine and um and and they were gonna buy this brand and this great audio technology integrated into their design and manufacturing uh and supply chain expertise and basically what happened was for about a year to 18 months every htc product uh across their whole line which wasn't just smartphones but but mostly smartphones had beats branding plastered all over it so you can still go on amazon and and get htc beats android phones i mean they're htc by apple totally so um you know uh what did steve jobs think at the time

well i mean if if this co-branding stuff like apple is not immune from this if you remember the the first um the original ipod had a motorola come out it was hp oh i'm sorry so they had the moto rocker also but there was an ipod that came out that was an ipod hp edition yeah and it had like an hp brand on the back above the apple brand it was the weirdest thing oh man apple you know for all that they really we're going to talk much more about apple in this episode but uh as we have always on this show um for all that they really are so often at the top of their game sometimes they just do things that you look back on them and you're like what were you thinking um so so htc in 2013 divested their stake in beats sold it back

to the company i believe i want to say carlisle came in and and did a big uh private equity infusion into beats and they bought back the stake and then of course it was uh just about a year year and a half later i think that that apple acquired the company um so that was that's our that's our sidebar uh hC, of course, also, as we've talked about in 2016, in partnership with Valve, created the Vive, which still, I think, is probably arguably the best virtual reality experience out there. Better than Oculus still, I believe. I think so. We can certainly, fanboys will argue that. You can argue in the comments or in the Slack.

But again, really, it's really interesting the approach that HTC has taken to innovation. They've sort of been at the forefront of every tech wave that's come over the last 15 years, 15 to 20 years, really really but they don't do it themselves they always do it in partnership with with other companies um yeah and they can't seem to strategically position themselves to hold on to the most valuable asset as it grows i mean that that yeah over and over and over failing as a company to do that. Yeah. So speaking of, let's bring Google into the story here. And we'll pick back up again, right around 2011, when HTC is sort of at its height. And Google at that point, Samsung was really, Google sort of had a problem that Samsung had taken Android.

They were by far the most successful, powerful OEM out there. And they did that basically by taking Android as an operating system. But then in every other aspect from hardware design and all the skins and modifications that they made to the Android operating system and software, they just copied the iPhone. And so Samsung phones were if either you didn't, you were on a carrier that didn't have the iPhone, which was still a thing at that time. Or for whatever reason, you weren't part of the Apple ecosystem, but you wanted something that felt like an iPhone, you went with Samsung. And Google, of course, was threatened by this for many reasons. They decided to acquire Motorola.

Now, this was for two reasons. The primary reason and what they said at the time and in retrospect probably continue to justify was for patent reasons. There was a lot of litigation happening in the smartphone world and in particular in the smartphone operating system world at this point. And Android, of course, was open source, so they needed patent protection. Motorola had a large patent portfolio, but they did actually acquire all of their smartphone manufacturing business as well, and they spent a lot of money for it. Um, they operated Motorola for, um, about two and a half years and, and they released, you know, a number of, uh, devices, smartphones, kind of at all ranges from low end to high end, uh, weren't particularly successful. Um, and then they sold it to, it to the Chinese company Lenovo in 2014 for about $3 billion. So they paid $12.5 billion for it. They kept the patents. They also sold

another piece of Motorola's business, which makes the cable boxes for your house. So for Comcast or Time Warner or whatever, they sold that off for i believe about two and a half billion right after they did the transaction so let's say they paid 10 billion uh net for motorola uh and then two and a half years later they sell it for three billion under three billion so so not a good not an auspicious beginning to google's efforts in the smartphone no business no so i mean if you're a shareholder right now like you need a little bit of an explanation like i mean i mean today like if you at first glance just here and i know the details are a little bit different than this but like google's buying htc or google's buying the arm that manufactures the phones of htc or even you know whatever it is like uh okay

like we've tried this once so how is it going to be different this time yep well and and we'll see how it's different we ben and i will speculate on how it's different but there's one thing that is the same history repeating itself and that's that there was an executive within uh google motorola uh named rick osterlay Osterlo. Uh, and he ended up, uh, by the end of, of Google's, uh, ownership, uh, stewardship, if you will, of Motorola, uh, becoming the head of that unit. And then when they sold it to Lenovo, he continued running that unit under Lenovo last year in 2016, he left and came back to Google. And so he is now running Google's quote unquote hardware business, uh, reporting to Sundar. And, um, and so he, that division is responsible for, uh, everything that they launched last year, the Google home,

the Google pixel, which we've referenced and we'll talk more about um the daydream their their vr headset adapter for smartphones uh all of that so it's it's really they are uh in many ways with the same people executing the playbook all over again yeah but uh you know we'll get to this but times are different now you know indeed they are and i want to pause real quick so times are well a few things times are different now the mechanics of this deal are completely different um and on top of it um you know it's probably worth talking about the patent portfolio uh motorola had and um you know there's there's a lot of speculation and you can read plenty of think

pieces about this um about the real value of that acquisition being the ip and google retained a lot of that ip i believe when they sold um sold motorola off and so then it's you know highly protective for android so that there's more to this than meets the eye. And, you know, it's just worth calling out how big of a player or how big of a deal IP was as part of that Motorola transaction. It absolutely was. But what's super interesting is like, again, that was the story. And then when they sold Motorola, that was that was the real emphasis that they said on the story. Hey, this was really, you know, an IP thing. And we dabbled in hardware.

We decided it didn't make sense. We were, you know, I'm sure in tech themes, we will get into the, you know, vertical versus horizontal approach to, to a company, uh, didn't make sense, uh, as a horizontal provider of Android to also be a vertical provider and compete with our partners um but now they're doing the same thing all over again yeah yeah yeah and it's worth pausing here for a second so uh listeners um i think this came out right before we started recording uh google has confirmed the news um google signs agreement with htc continuing our big bet on hardware and uh written by none other than Rick Osterloh,

who David just mentioned. And the key sentence in this blog post is, let's see here, with this agreement, a team of HTC talent will join Google as a part of the hardware organization. These fellow Googlers are amazing folks we've already been working with closely

on the Pixel smartphone line, and we're excited to see what we can do together as one team. The deal also includes a non-exclusive license for HTC intellectual property, and they're calling this an agreement. So it's not, you know, no one's saying acquisition, no one's saying purchases. It's an agreement. And, of course, it's for $1.1 billion of cash that goes over to HTC. But okay, so we have definitive news that it's basically exactly as all the speculation was about that, specifically that hardware engineering team. And the other interesting thing here is

they have a non-exclusive license to HTC's IP. So does that mean like all of HTC's patents are, you know, available for Google right now? And obviously HTC can do other things with them and license them as well. But that's kind of interesting too. I mean, that definitely bolsters the value of the deal. Yeah, and it's interesting. I mean, like we were talking about earlier, how much of the innovation that was happening in these products, you know, even going back to the G1 and the HTC Dream, the first Android phone, like how much of that IP was HTC's?

How much was Google's? Impossible to know right now, but I'll be curious if this comes out in the filings when they happen. Yeah. Yeah, me too. but i'll be curious if this comes out in the filings when they when they happen yeah yeah me too and i think um it i can't you know i'll say this now probably talk about later google uh you can definitely sense the um we've been burned once and now we're going to be very methodical about this approach here like it's a smaller price tag, 1.1 billion. It's just the hardware engineering team.

You know, it's, it's, yeah, yeah. And I mean, if you look at it, it's really only exactly what they needed. And they spent, you know, years first engaging with this team, doing a try before you buy. I mean, this is a highly calculated, highly risk mitigated transaction by Google. Yep. And yet at the same time, well, we'll get here in tech themes,

but they're still, again, deciding to be both a horizontal and a vertical player in this space. David, just plug yours in. La, la, la, la, la. Yeah, right, right, right. All all right let's go to okay acquisition category yeah yeah well uh go ahead it's quite literally a people like a talent acquisition i mean it's a team it's a it's let's not call it an acquisition ben it's a it's it's an agreement it's an agreement it's an agreement yeah um an agreement to make 2 000

of htc's 4 000 people google employees yes um i'm actually quite curious how the mechanics of this work like i hope there's kind of filings about this and david you might actually have good insight but uh like do those people all go into a sub entity temporarily along with the license to the ip and then google buys that sub entity for 1.1 billion or can they actually just yeah i don't know give a bunch of cash and then say all right you you know these employees all work for us now yeah well i mean i got to assume that most if not all of that cash is going to htc because htc had had huge losses as we've talked about yeah for the last few years and um you know their market cap before today was was less twice that $1.1 billion figure. So that amount of cash in the bank was desperately needed by the HTC folks.

Yeah, totally. And this is actually a great segue. So instead of what would have happened otherwise, this time we're going to do what will happen now that hasn't happened before or what will happen in the future that isn't happening now because of this transaction. And we'll talk a lot about the Google side, but it's an interesting thing. On the HTC side, they've had mounting losses. This gives them $1.1 billion of a capital infusion to do something with their business they're still making handsets they're they're the hardware partner for manufacturing the vive like if you're

htc and you're trying to sort of like steer the ship and trim down and i mean i guess maybe you look at it like well whatever revenues we were making from google isn't going to be the long-term strategy. So let's just jettison this team, get all the cash flows from that up front now and do something else with it. But what is that something else? Yeah. And what is that? I mean, that is the, the, uh, $64,000 question here, right? Like we're a lot more, a lot more money than that given their history of as we've talked about thus far on this episode how they operate the type of innovation they do i mean they really are like they are a at their best when they're a contract shop um and again that's what they were doing with with google and the pixel. And that worked well, right?

Like Google ended up buying that whole team. You know, they did that for a long time. And then they tried to build a brand on their own. On top of that, they had some success, but it wasn't sustainable. And part of that, I think, was probably because they were still riding on Google's platform. I think it's very hard as an Android manufacturer to build a real brand. Even Samsung is very vulnerable, as we've seen in the last couple of years. But so now what are they going to do, right? Like, are they, do they go back to square one and say, you know, there really is an

opportunity, be it in smartphones or other emerging devices and categories to be a great contract manufacturer? Do they use the resources to go back and do that and build up that team again? Do they create their own real IP? I don't know. It'd be very interesting to see what happens. So maybe this is one place where I'm a little out of my element but if you're a contract manufacturer how much different is that than being foxconn or is that the same thing as being foxconn like could ht htc pivot purely into a b2b company shed their brand and and just start um you know making doing manufacturing to spec and like the when you think about it like is that effectively what the team was doing that was doing the the pixel manufacturing or is there actual like you know engineers there on the htc side doing design. I don't know. I'm not totally clear on how much different

the HTC contract sort of manufacturing was than what Foxconn does for Apple. Yeah, I don't know the delineation either. But certainly Foxconn, you know, has built a very, very large business on just that strategy of we are a B2b company yeah and what i was going to suggest is like maybe maybe go for it well i was going to say you know too in other uh adjacent industries in particular the semiconductor industry like this is also a very sound strategy

you know if you're tsmc which is taiwan semiconductor company um it's interesting that these businesses of course tend to be um particularly thrive in taiwan and in hong kong where where foxconn is uh because of the proximity to china and the ability to do business there um you know you can you can build a great business and being a foundry for semiconductors where you don't do the design. There are lots of fabulous semiconductor companies that are either independent companies doing their design or, you know, folks like Apple, which again, we'll get into later in this show. It can be a very sound strategy. Yeah. And I was going to work myself into a corner a little and

say, well, maybe what HTC should do is start shedding their consumer brands and really just be this contract manufacturing shop. But if they do that, then companies like Google will come along and just buy them so they don't have to contract them. But clearly, that's a model that works. Apple hasn't tried to buy Foxconn or bring any of that in-house. The fabless semiconductor companies, I mean, granted, maybe if they took a huge hunk of capital, then it would actually make sense to fab them themselves. But sort of being a horizontal manufacturer seems to work, and HTC could sort of move into that. Yeah. And I wonder if, I think the key is we just don't know enough, uh, right now and haven't been able to do the research in the few hours

since this announcement happened or since the rumors swirled, um, to know for, for HTC, like where, where did they play in that value chain? Like it was, it was the, this is the question you asked, like how much were they the con just the manufacturer, how much were they play in that value chain like it was it was the this is the question you asked like how much were they the just the manufacturer how much were they involved in the design how did that change over time and um and it's interesting that like sort of counterintuitively i think in the world we're in right now in tech uh when you're competing against uh app you know apple in in really every category but also you know companies like like samsung and increasingly google themselves um design uh is really not valued it's it's sort of you know back to ben thompson's smiling curve you know either you're

at one end of the spectrum where you're just the contract manufacturer, you are the semiconductor foundry, or you are really controlling the user experience like Apple does and like Google is clearly trying to do now with Android and with this acquisition. But if you're in the middle there, that's a bad place to be. Yeah, I completely agree. Well, switching over to the google side um what does this allow google to do that they're not currently doing it's so there's a there's a couple let's presume they were just gonna um go forward with the pixel line no matter why and really start doubling down on that and in tech, we can talk about why. So this presumably makes it so the teams can work more efficiently together,

being under one roof, so you don't have sort of that weird contractor arm's length thing that has to happen. Not to mention sort of if you're an engineer over there who's collaborating with Google, you sort of have two bosses. You're the business interests of HTC and then shipping the best product you can with Google, you sort of have two bosses, you're the business interests of HTC, and then shipping the best product you can with Google. So that gets eliminated a little bit. For Google, you know, there they can, there's those inefficiencies where they can move faster.

But what is it by them? I mean, I'm sure I'm sure they had some kind of agreement where they had access to HTC's IP before, and they were going to keep working with this team anyway, and they were basically just going to defer the payments to some kind of contract that paid HTC over time. What else do you think this buys Google? Well, I think one thing, if I'm trying to imagine myself in Google executive shoes and in Rick Hostler's shoes, you know, I think it's a little easy from the outside looking in to dismiss supply chain as like, oh, yeah, Foxconn will take care of that or whatever. But like, I think this buys them a meaningful amount of supply chain expertise and assets. I mean, I think about Apple and how much

they have invested, you know, both monetarily, you know, billions and billions and billions of dollars, but also human capital wise and expertise and know-how in their supply chains. And part of that is internally at Apple and their people, but part of it also is their relationships with Foxconn and other manufacturers. Um, I mean, right. Like this is Tim Cook, right? Like Tim Cook is the CEO of Apple and this was his job. Like this is so important at Apple and has been for the last, you know, decade plus that that's why Tim Cook is the CEO, you know, not Johnny Ive. Um, and that's the DNA that, that Google really had zero of, you know, they maybe thought they were getting it with Motorola, but, but Motorola was headquartered

in Chicago. You know, uh, you can't make, you can't make, uh, uh, iPhones or, or pixel phones, uh, in Chicago for, for a lot of reasons. Yeah, great point. But you can in Taiwan and you can in China. Great, great point. I remember even when, you know, a few years before Tim transitioned into CEO, people sort of realizing that one of Apple's major competitive advantages is, and this is before they were making their own silicon too, they had bought up a year or two of the entire world's supply of many of the components in iPhones because they knew they could justify the demand for it, and so no one else could get that generation of whatever the thing was,

even processors to some extent, for many months after Apple shipped something. That's a huge competitive advantage um yeah i mean i'm thinking about was it uh right after the apple event last week where they announced the iphone 10 not x the iphone 10 wait will there ever be an iphone 9 i mean that is the question right like? Like, I don't understand. Like, let me take a quick aside here. So I think Apple blew it. Like, to me, it's like you should have this iPhone X or whatever. It's an iPhone 10.

But like, have it be this thing that's like not part of your numerical line. That's like a sidestep to a new thing. So when you want to start building your generations, like how when Adobe decided that they were going to go from like Photoshop 7 to Photoshop CS cs and now you're in like this creative suite world like they had the opportunity to sidestep and start a new thing now and like they didn't um but they have did right because it's like an x not a 10 so okay so all that's weird because with ipad they they to my mind like they did what made sense with the ipad they went just got ditched the numbers and we're like there's ipad there's ipad pro you know why isn't there just like iphone

iphone pro and if it's gonna be a 10 and it's gonna continue just do a 10 like it's really so confusing and here's the funniest thing is so you're i was listening to everyone should go listen to derry fireball if you're like an apple nerd or i'm sorry uh the talk show um with yeah okay so this is what i was gonna reference so we'll bring it back to topic in a minute but go ahead so uh john bumps into phil schiller at uh at you know after the event because they get these press briefings and stuff and phil the first thing um phil phil looks at him and he just says hi john we spent a lot of time on the name sorry about that sorry about the 10 thing which is crazy the sorry about the 10 thing was crazy because like gruber wrote this piece like two hours before

phil schiller stepped on stage to announce it so like he knew he had read gruber's piece or been alerted to it and and gruber called that it was going to be an iphone x and of course it was an iphone 10 um which you know he he ate some crow on but like like i don't understand why though i i believe i believe you that everyone spent a bunch of time on this i just like i'd kill to know the rationale because it doesn't make sense to me it does not make sense like why would you release an eight and a ten at the same point anyway we've gotten way off topic but gruber also of course had craig federighi on a special episode of the talk show and I remember if I'm if I'm remembering this right Craig was saying you know John was asking him about face ID

and like everything that went into creating that and I remember Craig saying in response like oh you know it was it was of course the engineering team and the hardware team software team working together but it was more than that it's more than that apple was the security team working with them and i remember him saying it was also the ops team and our supply chain was a big part of that like you can't make the iphone and you can't have all the stuff that apple can do with the iphone by integrating everything um that leads to features like like face id um you that ops and supply chain is a critical part of that yeah totally true and man after after seeing that episode um i'm sorry after seeing that um um that apple keynote like to to

think that's such a great lens to think about doing this episode because the amount of things that were launched that only work as well as they do because of the integration of like not only hardware software in the way that we used to think of it like cool you like assemble all your own components into a pc and you own the and you build the hardware i'm sorry and you build the hardware, I'm sorry, and you build the operating system, the notion that they control to the finest grain all of the power management and core switching in the CPU and how that works with the secure enclave to do the security stuff and how they can do the swipe up

from the bottom of the iPhone while the face ID thing is still reading your face and then get the signal at the last second to unlock like all the timing and all the user experience stuff. It's really starting to become so much more than just being the component integrator and the software maker. It's really like the component that you have to create the components in order to get the some of these um really incredible sort of micro optimizations that in aggregate create a

whole new class of product that's possible today yep and that is you know supply chain is critical to that and and you know before um before this uh partnership, partnership that, that, uh, uh, agreement that Google just reached with HTC, um, they were really hugely behind. I mean, they're still hugely behind, uh, on that, on that dimension. Um, but I think it, it, you're absolutely right. And I think as, um, as the, uh, smartphone slash whatever the smartphone evolves into, it you know ar glasses or wearables and watches i think it'll be probably all of these things as that technology platform matures the table stakes for that level of supply chain and ops integration to be able to do these things just gets higher and higher and higher um you know and i think like

the apple keynote again is the perfect lens to see that through where of course there was face id and and all the things happening there between the sensors and software and security working together and then of course ops to have all of that sourced and available in you know billions or hundreds of millions of units um but uh but also in um in in the processor again through you know throwing back to our pa semi uh and an authentic episode um that was not one of our more popular episodes but i think is a really critical one to also understanding this like the a11 chip you know you know, bionic, quote unquote. It's crazy. I mean, Apple's, I don't know what's going on with the people who name stuff at Apple

right now. Like keep it simple. It's like you can randomly throw bionic on something. They threw bionic on something else too. There was like some part of, I forget if there was something else later in the keynote that was also arbitrarily bionic. I think it had to do with Face ID. I remember it was part of the iPhone 10 announcement.

I'm like, what is bionic and what is not? What is bionic? Seriously, seriously. But like that chip is a beast, right? Like it is like benchmarking at the same level or higher as chips that are in MacBook Pros. Not like old MacBook Pros, like MacBook Pros that you go and you spend $2,000 in an Apple store today for. And that's in a phone on your pocket that is not connected to power that's running on a battery. That is what when you make these types of investments and that's controlling the whole stack from the chip design, you know, through the PA semi acquisition, you know, all the way down through the supply chain and the software coupled with that, like that enables you to do this kind of stuff.

And so I got to imagine like your Google and your Sundar and looking at this and you're like okay we've got the software like google is our core competency is software that's what we do like android has gotten great and services and great services yep yep we're your software and services but like hardware supply chain ops like we have none of that um and and i think as as the world moves more towards all of these things that really really are about making the devices themselves to disappear into the background um if you don't have that that expertise like you're you're just you're gonna lose yeah the best way i can summarize this is uh of course as with many other episodes where we're talking about someone of apple's competitors

we drift into talking about apple and then just like laughing about how far ahead they are but it really is like uh like apple's playing a very different game um than everybody else and so you know in in making their own silicon and having done this for years now um and controlling the operations and supply chain in this way that no one else is doing because because nobody else is um yeah well i think that's what's really interesting about it though they people say apple makes their own silicon that's not true they design their own that's right tsmc and then they can and they control all of the supply chain but tsmc and and samsung and and others know, they're the ones who actually fab the silicon.

It's a great point. That's a really great point. And so then at what point did you have to go deeper and integrate that? I mean, is that the next step? Is there some optimization that happens between design and manufacturing where it's beneficial to actually start owning the manufacturing? Yeah, well, it's interesting. I don't know. I mean, they haven't you know

with foxconn they haven't with tsmc and samsung when on the foundries i wonder if it's just like you know those uh services are are pure commodities they're very very capital intensive commodities apple certainly could make those investments if they wanted to um but uh but there's not a lot of differentiation within them yeah yeah that's a great point okay so okay well it would be you know we'd be kidding ourselves to say we're not already in tech themes um but it is interesting to think about like you know the the features that are now expected in phones um and ARKit is a really great example of new stuff that's going to be available on iOS 11 that takes advantage of ARKit, especially on all the new Apple hardware that's kind of purpose-built for ARKit. All of these new phone experiences require a new level of design and integration with the hardware that that really wasn't necessary before and so the way that i am viewing this acquisition is like acquisition agreement

is google is still a horizontal company and they need to you know they make money 80 plus percent of their money from or maybe they make money 80 plus percent of their money from or maybe it's even 90 plus percent of their money from uh ads and specifically from search ads and so you know that going back to our android episode the reason that create they create android is to um reduce the amount of licensing fees that they need to pay ios or need to pay apple to make uh google the default search in ios like that's as when it really comes down to it you know i think what did we determine that number was like a billion dollars a year that it saves them dollars a year yeah a billion dollars a year well a billion dollars a year that they're paying to apple

uh even that's right that's right well but it's interesting and when they started android that was the strategy but you know you replace apple with microsoft they thought microsoft was going to dominate mobile operating systems like they did on desktop they didn't want to be beholden it turned out they were right strategically but they just had the wrong competitor yeah interesting yeah so yeah so for for listeners who didn't listen to the Android episode, um, you know, the, the core play with Android is, uh, uh, own the front door to the, the user. So control the browser that they're on, control the operating system that they're on so that they don't have to pay, uh, pay basically affiliate fees for every search that's conducted and every ad that's clicked on Google to the, um the browser um creator and so when you start putting that lens on then you then you start to have to think like okay so google needs to sort of be switzerland because they need to be ubiquitous and have everybody use them but if

this android strategy is to you know make sure that that for some significant number of people they're they're controlling the whole experience like android has to be credibly on par with ios and if the table stakes have now risen to the level where you need to do like ridiculous hardware integration and potentially even like manufacture your own stuff to enable the types of features that people expect from their phone experiences now or will expect in a few years when some of the stuff um you know face id uh ar kit um a lot of the performance and and um um power management stuff like when that becomes completely commodity like google's going to be hosed on this whole android strategy if if they um you know they don't have that and so this thing that

they've been doing forever of like hey guys like we're not gonna you can all samsung you can make money on android phones by making them and we'll just produce the operating system like that could be falling apart because that's no longer competitive with apple in this in this new world could be falling apart and could be falling apart quickly and it's interesting also to think about you know go back to our our episode on the snap ipo and the narratives around snap um and it's i think it's still too early to to make a call on on them as a company but but what we decided was their fate is going to lie with do they, you know, can they essentially paddle over to this wave that is what we're talking about? Call it AR, call it wearable, you know, whatever it is, but it's essentially devices receding into the background and technology just being part of your ambient life. You know, what is Snap investing in? What are they doing? Like spectacles um you know what are what is snap investing in what are they

doing like spectacles you know what room is there for google and android in that world not a lot basically in a spectacles world whether it's spectacles that win or don't win or whatever there is no room for google anymore both either at a at a hardware level or a platform level or at an advertising level yeah uh anyway i look at that differently like for google's core business is making money off of people who are looking for information um and i don't i just don't think snapchat i mean snapchat is more um i i don't i don't think it's apples and apples to apples enough i mean i i agree with you where um it's clear that snapchat is making an investment and trying to become a little bit more of a hardware company and now google's following in suit um

oh yeah i i i didn't necessarily mean that as like snapchat itself is gonna dethrone google but like think about this right like take the iphone event last week or the apple event last week you've got uh the iphone 10 um which clearly uh whether it's this year or next year or two years like they are laying the groundwork for an AR slash ambient future that the iPhone is part of, or, or a hub of, um, you've got, uh, you've got the Apple watch series three, which I'm super excited about, by the way. Um, which is like, there is no, you know, uh, there, there, there is no phone. There is no, you know, um, uh, device really. It's a thing that sits on your wrist and like all the computing is just around you.

You know, then you've got you've got Snap and where you've got spectacles, not to mention the Snapchat experience. Then you've got Facebook and you've got everything they're doing with Oculus and then and the core Facebook platform itself. Like you can start to see a world where like all of those devices and services all work together really nicely um and like where's google in that world yeah i see where you're going there this actually this dovetails nicely with uh i don't know if i've talked about this on the show before but but I think Google is in many ways their own

existential threat. And I think, so follow my logic on this for a minute. So Google, their core competency as a business is making money off of showing you a list of things and then charging somebody to be in that list and their core competency from an engineering perspective is you know recently machine learning but you know dating back to their beginning sort of distributed computing distributed storage um all these things that are sort of stepping stones to the to becoming like the best company at machine learning and they're that that leads in many ways to them being the best company in this voice world where the google home and google assistant is a really really you know

pioneering fantastic voice service relative to all these others and so google's engineering um the things that make them good in engineering um are are pushing them toward a future where they don't really show you a list of things anymore because voices is when it's an output is not a really good way to ever like list off stuff it's a good way to like just do one thing so you you tell it to do a thing and it does a thing and like imagine if you're no longer searching getting a bunch of blue links and getting one blue link that's paid for and it does a thing and like imagine if you're no longer searching getting a bunch of blue links and getting one blue link that's paid for and it's more like you you just yell something at it and then it gives you the answer and like where where do they start charging for things in that world

like do they start blending um paid and organic results where sometimes you're getting a sponsored one or do they start shifting their business model where they're realizing that, well, actually, we're about to be best in class at this new form of hardware and new form of experience that people want. Maybe we just double down on that and actually own the full user experience

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Our huge thanks to Huntress. right? Like, I think Google's in a challenging spot, because they're sort of being forced to compete on this playing field that we've been describing for the last, you know, 40 minutes here. But 4045 minutes, but they are fundamentally a horizontal company. And the playing field we just described is a vertical vertically integrated playing field um i guess i guess what i'm saying is i think the horizontal company may be at risk um and that business may not be something they can keep riding for the next decade and um they made i mean that it's hard to say this yet because they're so dominant, but like you could imagine a world in a few years where like search revenues start declining, um, because they're getting the, the, the, the best user experience that wins in search is providing you one answer. And like, they need to do something dramatic.

And this really sets them up to, to try and shift to a vertical company yep yep but again they're really far behind i mean they have to do it like this is uh for all the money and resources google has and and all of the um threats that we've been talking about and again we're we're probably being dramatic uh given where we stand here in september 2017 um but you know like if there's one constant in the tech world it's that it changes and it changes fast i mean even as we've been talking through this episode and the timelines thinking back on some of these devices like it was not that long ago you know like 2011 though six years ago htc was on top of the world and like coming out with the first true broadband you know smartphone that feels like ancient history now so anyway yeah i mean it's i guess i guess the interesting thing is like uh how fast will we

get to a post-search world and is there anybody who can beat google to that punch yep and if so then they gotta verticalize quickly and try and beat whoever that is um i i don't know i mean the counter argument to that is search is an incredibly hard problem they have so many years of doing it they have so much data um they've built all these incredibly you know really well-oiled systems that um give them a you know many many many year head start against anybody but search is also yeah that's true but i think it's also getting it's they're getting attacked on all sides right it's getting chipped away bit by bit vertical by vertical as well we you know in there our booking episode right like booking.com trying to remember what was the figure that we talked about that they spend is it three three and a

half billion a year in adwords um like an insane amount right but then airbnb spends like i'm sure they spend a little bit of money in adwords but like a tenth of that at most you know at most because they've actually established that they are the place to go because when you're looking for a place to stay you go to airbnb.com you don't go to google.com right um or you go to airbnb's you know experience whether that's airbnb.com or their app or whatever or you know you're looking for uh transportation you don't go to google and search for you know a uh a car rental in in whatever city you know you're looking for uh transportation you don't go to google and search for you know a uh a car rental in in whatever city you're visiting you just go there and you open your uber app yep and then it's happening will and will more zillows get started right

where like that was google's business to lose they should have just had a amazing search for homes thing and they could have integrated it nicely with like google maps or google earth and then the ads next to that could have been for real estate agents but they didn't and then the whole rise of zillow so like what other companies will get started well and at the same time like where you know where's google's biggest bread and butter it's like you know it's it's buying stuff right and like you know you're you're you search on google for something and there's something you want to buy and you buy that right but now there's amazon when there's been amazon for a long time but like there's there's those i don't know what any of the

figures are but i've seen crazy graphs where it's like the shift of um people starting their search on amazon instead of starting their search on google for products that's very real yeah i think it's super real the question is and this gets back to the culture question is can you actually change the dna of a company and shift it to a vertical products focus company um and and they need to be good at so many things because like just being good like apple needs to get better at services right because what you actually need to be good at now and in this if we're postulating that Google needs to be sort of good in a vertical sense,

it's good at all the things, right? It's like all the way down to silicon and hardware, manufacturing and design and software and services, like all the things that they're good at now also. Yep. Well, I'll tell you i mean this is uh uh just purely based on um surface level reading into what's going on here um but i think if i if i saw this and i felt that these threats were real what i wouldn't do is go in one fell swoop swoop by 2000 engineers who i sort of know

but don't really know and didn't hire and aren't part of my culture and go graft them onto my company right like i would go find a tim cook and give him 10 years to build this capability we don't have time for that we don't have time the world's on fire or it's about it is it is right but uh like culture it's a thing yeah yeah okay this is kind of an interesting before we go into grading even though you're hinting at it uh has any company ever successfully done this and is that is there like a high profile example of someone that shifted from from being horizontal to being vertical in a big way like a bet the company way i mean you get like that your best transitions and your best save the company things ever tend to be like knowing that one market is drying up

and entering another market like when you have uh leaving memory and going into cpus or you have apple betting with the big with the iphone but does anyone well actually disney's sort of doing it or disney's about to sort of be doing it right like they with this announcement of a disney only streaming service and starting to pull their content off Netflix. Like they're saying, we need to be the best content creators and we need to be the best user experience for viewing it. It's going to be hard. Yeah. Maybe IBM. So IBM made and sold devices and products and then they shifted to purely services.

But is that really vertical and horizontal in the same way i'm not sure people usually go the other way right like they get it's like i to me ibm made like a you know they they were a vertical company that made and sold these mainframes and they made and sold pcs and now they're like horizontally selling consulting services to anybody that you know cares to hear about watson well like i mean as you know right like we all know but you you you lived it right like microsoft tried to go from horizontal to vertical and then it was like oh you know fortunately kind of in in time realized that was a terrible idea and went back hardcore to horizontal which was totally the right move yeah yeah that's interesting listeners if you've got ideas um acquire.fm we'd love to talk to you in the slack because i think that's an interesting topic and i think it actually could be a whole new podcast that someone should start is like companies that manage to make that shift and like individual case studies on on how that happened yep

well man i all this discussion and i haven't normally i like form a little bit of a thesis on what to grade and i'm uh i don't have one so if you want to start i'll probably well i mean i'm gonna i i was i was i was hinting at this earlier. When we started recording this episode, I didn't have a great in mind going into it. But through the discussion, I don't think this is going to work out well for Google. Again, we're being dramatic on this episode, but this is their second bite at the apple and so what they chose to do was to buy 2 000 engineers does the nest count in taiwan can we call this their third bite at the apple well yeah maybe literally bite at the apple here i mean that's what's going on but uh yeah i don't think this is gonna work right like buying 2 000 engineers from htc

uh halfway around the world that aren't part of your culture even though you've been working together with them on the pixel for a year you know whatever but um that's better than nothing but having that go up against like the apple you know what they've built uh in everything we've been talking about on this show for the last well really the whole life of the company the last 40 years um i don't think that's gonna work well wait let me let me play devil's advocate real quick here so uh the pixel product is going quite well i mean i don't know any units sold but it's a great product that's getting lots of love uh do you think yeah okay how many pixels have

you seen in the wild uh yeah i don't i don't actually know and figures seem hazy it's in the low single digit millions i believe um of number that they sold but my question is do you think uh it could get any worse like do you think by these this team in-house, like, it could get worse? Well, I mean – Presumably, if they just kept doing the same thing, each of these products would get better. More people would start to buy this phone over time. And it has to do at least that by bringing them in-house, right? Yeah. Well, but at the end of the day, it's a culture problem, right?

Like, this is – you've talked about it on the show before like this when you were at microsoft right like and microsoft was trying to be a go to being a vertical company and you're like but we should just ship office for ipad because that's what we do you know um the like that's that's the problem that google is going to face here. Uh, they're bringing in these 2000 people who are, um, is it 2000? Yeah. 2000 people, um, who are, you know, hardware and supply chain and device people. And they're coming into a Google culture where the crown jewel of, you know, Google's mobile

strategy is Android and android is predicated on being horizontal and so like eventually there's gonna be you know a fight of like are we gonna prioritize our new you know hardware and vertically integrated team and then like what are the people running android who probably have a lot more juice within the company going to say about that? Um, you should say your grade so I can then disagree. Okay. I'm going with a D. Oh, wow.

All right. Well, I don't know what I'm going with yet, but I'm going to start talking and see where I land. Um, the, uh, the counterpoint I want to make to that is I think they're deciding. I think if you're an Android OEM right now, you better figure out what your strategy is because I don't think it's putting Android on your phones anymore. To me, I don't think they are conflicted internally anymore. I think they've decided.

So they're willing to go to war with Samsung. That's what I'm looking at here i mean i think their bet is we're going to start creating experiences that like you just have to be in-house to you got to be bundled to be able to make like i think they've they that they're seeing what apple is doing and saying, yep, we're bought in on that. Well, okay, interesting. I mean, maybe they can do that because Samsung doesn't really have any leverage. They can't go anywhere else. What are they going to do, make their own operating system?

They can't do that. They tried that and it didn't work. Yep, yep, it didn't work. So, okay, yeah, Google could play hardball with Samsung and say, like, you're just coming along or you're dead. Can Google make enough phones? Like, that's another interesting question. It's like, how many people buy Samsung phones? Does Samsung make their own phones?

Are they their own manufacturer? I believe so. I believe so. Yeah, so, like... Or even if they're not they have enough a deep enough relationship with the fox cons of the world that like i mean that that's the thing right like pixels a great phone but i've never seen one in public and i've seen millions and millions of iphones and galaxies i think two years from now we'll revisit this and go, wow, Google's ecosystem of OEM partners dried up fast. Yeah. That's a heck of a transition.

But who's going to make the phones then? I mean, well, there's going to be all this capacity, right? Like if Google starts to shift this way, like there's a lot of people that need to make a lot of phones that are suddenly going to be available. Yeah. a lot of people that need to make a lot of phones that are suddenly going to be available yep um you know and i mean maybe maybe uh samsung does and um google just commoditizes samsung even further or maybe maybe apple just like really continues to dominate in this world like they have capacity like um their supply chain is the best in the world yeah well so here's kind of a funny thing is this is the same price that of instagram right so it's it's funny to like make this little apples to apples comparison of like

which would you have rather bought um yeah but and one other lens that i want to look through it as is um if you are htc there's two other lenses one is um i think it's about 500k per head um so that's kind of an interesting stat to look at lots of talent acquisitions are a million dollars an engineer and obviously these aren't aren't all engineers but um that's kind of an interesting if it's 2 000 people then it's 500k per head and it comes with this access to the patent portfolio so so that's that's an it's interesting it's not that expensive um the other thing is we have no idea what deal what the deal looked like between um htc and google going forward but you have to assume that if you're htc um or you know what the terms of their their contracting agreement was to to make the phones um but you have to assume that if your HTC or you know what the terms of their their contracting agreement

was to make the phones but you have to assume if your HTC then basically you're doing some kind of sum of future cash flows here and saying like well you know over the next four years you're going to make this much revenue from this thing so yeah we're fine with it being worth 1.1 billion and impossible for us to know what the the cash flows would have looked like but um you know something tells me this actually isn't that expensive for google um i know 1.1 billion to google is nothing oh and i mean from the perspective of like what the alternative was in terms of paying htc out time. I think HTC has so little leverage and needs cash that they're very willing to do a deal here, and I don't think they looked can do this integration well, got a pretty good deal on hiring 2,000 people that are strategically, perfectly trained to do the thing that Google needs to do. And I really do think Google needs to do this.

And Android needs to become much more like the iPhone. So Android and Pixel phones kind of need to become one. And, you know, if that's the plan and if Google's going to actually execute that, I think this is a great move. And, you know, hard to grade because I think there's lots and lots of variants on where it could go but the question is somewhere between a C and a B yeah I don't think we're saying anything that different I'm just super skeptical that this is going to work but do you think they're actually going to go the direction of dehorizontalizing Android to all the OEMs

yeah I don't know i mean they kind of have to right like you can't compete with what apple's doing if you in the current android ecosystem yeah unless you believe that doesn't none of the things that they're doing to optimize matter but i think that's the death by a thousand cuts if you yeah but i think also like google has clearly shown that they do believe that like ar and ambient computing is the future and if you believe that then that doesn't work in the android ecosystem as is yeah and i mean the fact that google's doubling down with google home and they're doing daydream and they're releasing their own phones.

Like they're becoming a hardware company and this is going to dramatically help them. Yeah. So I'm going, it's going to be somewhere between a B and a C, but I'm trending closer to a B. I'm at this point. Wow.

All right. Disagreement. Yeah. Uh, cool. Carbouts. Yeah. Um, right disagreement yeah uh cool carve outs yeah um i'm a huge odeza fan uh if you're um if you're into sort of like ambient trap like powerful sit in a concert and bob your head um it's it's it's awesome awesome band really great to listen to while you're working, while you're running. And they're actually from Bainbridge Island, which is pretty cool, from Seattle area.

Oh, cool. I didn't know that. They are. They are. And they just came out with a new album, and it is awesome. And I think there's this great pitchfork quote from the review that I want to read real quick that describes the album very well and you can choose this may or may not appeal to you but um they nail it by saying it derives its power from its supersized subtlety exaggerated gestures a kind of weaponized softness and the album is called a moment apart so if that sounds like your jam

go check it out it's uh it's great listen wow weaponized self softness i know that in itself is like an album name yeah wow that's great um well you inspire me i'm gonna call an audible do not what i wanted to but um music uh this is by me i uh uh listened to uh recently this was actually i think this was re uh replaced in the feed on fresh air fresh air uh with terry gross on npr on their podcast um was they just re-released an interview that she did about a year ago with Bruce Springsteen. And it's great. Done in his studio, in his home studio in New Jersey. Just talking about, you know, he'd written an autobiography that had come out.

And he's now doing a one-man show on Broadway. And that'll be premiering soon. Which I think is why they re-released this this interview um and it's just really cool he talks about he talks about his his persona of of bruce springsteen and um that like i i always just assume that like bruce springsteen is bruce springsteen but like the real bruce springsteen is not that much like you know the the bruce springsteen that you see on stage uh and um and he talks about like where that persona came from and um you know how it's shaped his life so really really great interview he's a very very smart guy and smart guy and has lived an amazing life.

So highly recommend. Wow, very cool. We want to thank our longtime friend of the show, Vanta, the leading trust management platform. Vanta, of course, automates your security reviews and compliance efforts. So frameworks like SOC 2, ISO 27001, GDPR, and HIPAA compliance and monitoring, Vanta takes care of these otherwise incredibly time and resource draining efforts for your organization and makes them fast and simple. Yeah, Vanta is the perfect example of the quote that we talk about all the time here on Acquired. Jeff Bezos, his idea that a company should only focus on what

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