Acquired - Season 2, Episode 7: PowerPoint

Episode Date: May 4, 2018

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.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!Links: Robert Gaskins’ definitive history of building PowerPoint: Sweating BulletsAbsolute Powerpoint by Ian Parker Carve Outs:Ben: Mindfulness in Plain English and discussion on Hacker NewsDavid:  The Birds have landed…

Now my video is taking up half the screen and your video is taking up half the screen. Good. How do you even, can you snap it? Oh, there we go. That's kind of cool. Can I make your video small? That's kind of like, what is the use case for this? I'm looking at an enormous version of myself and you're small on the corner now. It's Skype forissists. Welcome to Season 2, Episode 7 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 digging into the historical archives to cover the acquisition of a company you've probably never heard of, but a product that you absolutely have used. Probably hundreds or maybe thousands or maybe you've even gotten your 10,000 hours

in this piece of software. I feel sorry for you if you have. I think I may have. I think I may have. I definitely have. Investment banking. All right, listeners, today we are covering Microsoft's 1987 acquisition of Forethought Incorporated, the makers of PowerPoint. This has the honor, I was going to say dubious honor, but this really is an honor. This was Microsoft's first acquisition and Apple's first investment in another company, first strategic investment. Not only that, they were within like three months of each other. I know. Most people don't even know that PowerPoint wasn't homegrown.

I mean, Word and Excel were homegrown applications, but PowerPoint was an acquisition. Yep, an acquisition. Not just an acquisition, a completely separate business line, as we will get into, which is not to say that that is necessarily how we will categorize it on acquisition category, but Microsoft kept it as a business line separately based in Silicon Valley, actually on Sandhill Road in Silicon Valley was where PowerPoint was developed. It all comes full circle. All right, we will dive in more. But before we do that, listeners, if you like the show, if you've been listening for a while, if you're new and you happen to like this episode, either way, we would love a review on Apple podcasts. It helps us grow

the show and it helps us create more great content. So please take a moment. You can, in fact, you could even pause right now and do it. We don't mind, seriously. If you are new to the show, you can check out our Slack at acquired.fm. 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.

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control. Yep. With ServiceNow, AI agents proactively solve challenges from IT to HR, customer service, software development, you name it. These agents collaborate, they learn from each other, and they continuously improve, handling the busy work across your business so that your teams can actually focus on what truly matters. Ultimately, ServiceNow and Agentic AI is the way to deploy AI across every corner of your enterprise. They boost productivity for employees, enrich customer experiences, and make work better for everyone. Yep. So learn how you can put AI agents to work for your people by clicking the link in the show notes or going to servicenow.com slash AI dash agents. So David, we had much teasing of the plot ahead in the intro.

Do you want to take us in? How did how did forethought get started? How did Microsoft buy it? How was PowerPoint the essential part of Microsoft Office today? Or actually, you know, Office 365, a part of the Microsoft Cloud strategy. How did it all get started? Well, like so many other things, like basically everything in modern computing, the origins of PowerPoint can be traced back to Steve Jobs' historic visit, his raid, some might say, on Xerox PARC headquarters in late 1979 after Xerox had made a small investment in Apple Computer. And Steve got to peek behind the kimono famously and go see the Palo Alto Research Center of Xerox, where they were developing prototypes of their vision of the office computing environment of the future and that was famously park was where the graphical

user interface was developed uh the mouse the idea of networking which of course would lead to the internet and podcasting and us recording on skype and this moment right now the most important thing created out of the internet podcasting all comes back there but no so how does this relate to powerpoint so once steve had seen the future of the graphical universe user interface he brought it back to apple and basically decreed that this was the direction the company was going in but of course apple had been around for many years before then there were other product lines in apple other computers they made that were command line interface um like like dos before windows and those product groups you know didn't just shut down. They kept going. There was the Apple II and the Apple III that were both being continued to be developed.

But David, why join the Navy when you could be a pirate? Exactly. Exactly. You're referring, of course, to the famous Mac group that Steve starts within Apple where he flies the pirate flag in the building. People who were working on the Apple II and the Apple III were talented people. They sort of saw the writing on the wall too, that Apple was going in the direction of the graphical user interface and first the Lisa and then the Mac. But also they

themselves realized that not just was Apple going in this direction, the whole industry was eventually going to go in this direction. And in particular, two folks, the product marketing manager for the Apple III, Taylor Pullman, and the software marketing manager for the Apple II, Rob Campbell, they see this feature and they decide to leave Apple and start a startup to pursue this graphical user interface future because they know it's not on the products they're currently working on. You know, when we first start doing our research, and we start on Wikipedia, or we start reading, you know, the comprehensive history of this company, you always see the name of the founders, but very rarely do they actually go back before

they were the founders of that company. And it seems like without fail, when we start to dig in, and particularly, David, when you start doing your research, like who were these people before? They were ex-Apple, they were ex-General Magic, or they were at Stanford Research. There's a very small number of places they could have come from. And it's amazing where technology and the whole field is today. The world was just not that big. There were not that many institutions or companies. everybody spun out of the same few places. There really weren't. I mean, there were the number was in the thousands of people who worked in the technology industry, or at least the software industry. It just wasn't that many people. And there weren't that many companies back in the day. So Taylor and Rob, they leave

and they see the power of the future of, you know, the Xerox ParkVision, the graphical user interface, interacting with applications that business users are working with directly instead of separate, you know, computer divisions with punch cards and whatnot. But they think that the Mac and Apple, maybe they're a little bitter because Steve kind of kneecapped their products, but they think that the Mac is not the future. They think the future is bringing the graphical user interface to the massive numbers of IBM PC clones that are out there already and shipping in the enterprise. And it turns out that they were right about that. It just wasn't forethought, the company that they founded that would do that.

So they leave Apple. it's the hard part about being a venture investor david you can be right about everything but if you you know pick the wrong horse pick the wrong timing pick the wrong specific nuance you end up with powerpoint uh it's a nice consolation prize usually you don't get the consolation prize so robin taylor the end of 1982, they leave, they start this company, they call it forethought. This is foreshadowing the graphical user interface to come. The vision is they are going to develop an operating system that is going to, like I said, bring a graphical approach, almost a windows like approach, some might say

to IBM clone PCs. So they raise $700,000 right after they leave. There's a lot of people that are really excited about this. Shortly thereafter, they raise another two and a half million dollars from VCs. They attract some great folks, new enterprise associates, NEA invests. Dick Kramlich, who was one of the founders of NEA, a very well-known VC at the time, he invests, he joins the board. Also, as an NEA, uh, very well-known VC at the time, uh, he invests, he joins the board also as an independent board member, they get Bob Metcalf, who was the inventor of ethernet at Xerox park. And by that point in time, he was the chairman of three com. So he's their independent board member, literally like Bob Metcalf of Metcalf's law,

uh, is the independent board member of this company there were like 11 people in technology like this is incredible it's totally incredible so high flying huge vision there's just one problem that a year later microsoft announces windows while this is now the fall of 1983 they've been working on this for a year and while windows wouldn't actually ship for uh windows 1.0 i believe until 1985 yeah it still doesn't seem like a good bet what do you do right what do you do and and and in particular in the case of forethought it's not just that uh the 800 pound gorilla just stepped into the ring with you and is definitely going to crush you even if you could compete apparently development is really not going well. And it's kind of a mess. And the foundation was

the name of the operating system that they were building. It wouldn't even compile, they couldn't demonstrate it, it was just in development hell. So at this point, they've burned through about $2 million of the $3 million, just over $3 million that they had raised, they made no meaningful progress. They have no prospects. The VCs and the board, basically, they issue an ultimatum. They say, you have to, this is now the spring of 1984. We're going to schedule essentially a demo day. You are going to demonstrate this operating system that you are building. We are going to evaluate it. We're going to bring in outside experts, and we're going to see if there's anything here that we can use. Those VCs, man, they really hold your feet to the fire. They do the demo day. There's nothing. But there is some tiny, tiny flicker of good news. And exactly how this happens, even though he wrote a whole book on the topic, I'm still not entirely clear but somehow there's a guy who doesn't even work at the company named robert

gaskins and he's a mid-level manager at bell northern research which is sort of the california division of of bell it's one of the five companies in technology in this yeah one of the five companies in technology he gets connected with the folks at forethought and again he's not he's like a mid-level manager he's not part of the company but he's really excited also about the future of the graphical user interface and he wants to join the company so even though you know the market for the company has just been completely swooped in by by microsoft and the coming windows product the product is in development hell he he wants to join and he has a vision for what he thinks can be a sort of, quote unquote, restart of the company. The term

pivot wasn't wasn't around yet, but that he wants to bring to the company. And this is a good time to say to Bob, thank you so much for being super gracious and emailing with us to help us research this episode for folks who haven't read it. And I would imagine if you are as surprised as I was when I first found out that PowerPoint was an acquisition, you probably haven't read it, but Bob wrote a fantastic book about how this all went down and kind of PowerPoint as a case study and really forethought as a case study

and has gave us some really great quotes that we'll pull out later in the narrative. So if you're interested in what we're talking about here, definitely check out Bob's book. Yeah. We'll, we'll link to all of it. It's a, I love the title. It's called sweating bullets and it's so good. The definitive history of building PowerPoint. And, uh, and Bob is just, um, well, he's a few more words about Bob because he's a pretty interesting guy. He had been a student at berkeley and he was doing an interdisciplinary phd in english linguistics and computer science uh which is quite the combination he ends up dropping out to join bell northern research because he wants to go work in industry and

in computer science this is the mid 70s uh he knows this is going to be the future it's sort of like uh masa and uh when he met with the uh of softbank when he met with the head of mcdonald's and said go work in go work in technology this was actually at berkeley kind of right around the same time and then after powerpoint he'd go on he retired uh he becomes sort of like the world historical expert in um the concertina which is a musical instrument that was developed in england in 1800s. He's really like a Renaissance man. So big thank you to Bob for writing this book and all the blogs that all of this material for this episode comes from him and it's all primary source from him. So thank you.

So Dick Kramlich, who, as I mentioned, of NEA was on the board and he says, you know, I can totally empathize with this being in a VC at a company that, you know, I can totally empathize this with this being in a VC at a company that, you know, is going nowhere, but there's something, and there's someone who wants to do something interesting. He says, yeah, sure. You know, this guy, Bob, like he may not be the most accomplished manager or had the best resume, but like, he's got some sort of vision to do something. And like, rather than just taking the $1 million that's left in the company back, like, let's see what you can do. The board makes the decision to hire Bob in, and they give him 5% of the company. And they basically turn him loose on creating his vision for what an application for the graphical user interface could be. But there's just one one kind

of twist to that, which is that Rob Campbell, who was one of the original founders and was the CEO, he doesn't leave. He remains the CEO of the company, of Forethought. And Rob basically goes and builds a wholly separate company doing software publishing. Because remember, this was back in the day when to actually distribute software, it wasn't just like you developed it and then you like put it on the Internet or in the app store and anyone could buy it. You had to actually, you know, market it, literally ship it. You had literally had to you had to get disks manufactured, put in boxes with paper manuals and shipped to computer stores. And so there was actually a publishing industry, just like there's a publishing industry for authors and books to do all this.

So Rob goes and he starts a publishing division of Forethought. Now, the idea was that the company would build up the muscle in software publishing by publishing other developers' software so that by the time the application that Bob bob gaskins was working on was ready they would be able to publish it themselves without having to have a third party publisher that was the idea so rob goes he he gets a couple developers that he's going to publish their software the first two don't really work out and then he signs up a database program for dos called nutshell that they were going to repurpose and redistribute for the Mac. And they decided to come up with the name for it of FileMaker.

FileMaker. And for any longtime Apple nerds out there, this should be a name that's come across your desk a few times. If you go to FileMaker.com today, it still exists. The website informs you that it file maker an apple subsidiary file maker is now owned by apple one of the very few apple subsidiaries and and a long long time subsidiary and it's kind of incredible they keep it a subsidiary and run it under its own brand like this is like this weird corner of apple that you never hear about when you think about their

you know four products and three sizes that are neatly shrink wrapped and well understood. Four products, three sizes, plus FileMaker. And so the history on FileMaker, I mean, this is kind of incredible that within one roof now, the developers of FileMaker were always a third party company. And Forethought was just publishing the software. But FileMaker would go on to be acquired by Claris, which was the spin out from Apple that was run by Bill Campbell, the coach Bill Campbell, who is one of the most legendary figures in the Valley. Again, it all comes. There weren't even thousands of people. There were probably like 10 people working in technology at this point in time. Bill would then acquire the developer of FileMaker and FileMaker into Apple a few years, actually, I think within a year of when Microsoft acquired PowerPoint and Forethought.

But that is a story for another day. For today, back to the application side of Forethought. So it turns out that Bob was not just had, you know, any vision for the company. He actually had the right vision for the company. So what he saw was that everybody knew that graphical operating systems, graphical user interfaces and operating systems were coming, but this was going to enable essentially a huge wave that would wash across the whole technology industry. And you would be able to, on top of that, build applications that were enabled by now having a graphical computing environment that you couldn't do before and the vision of what application to

build that he comes up with is business presentations up until this point when you made a business presentation you would do it using slides, literally photo slides, like overhead projector, put the slides in. Like the scene in Mad Men with the Kodak carousel, you had an art department, a corporate art department, that would make presentation slides, and then you would put it in your Kodak projector, and that's how you would lead a meeting.

It's nostalgia, David. It's nostalgia. The carousel. It might be the best scene in television like flat out it's so good it's so good but bob so he sees this and he says the carousel is you know going the way of madman this is going to be the future people are going to make these presentations themselves enable the business user who's the uh it feels weird even to describe this to in that there was once another way of doing this like if you are the presenter you are making the presentation you can actually now make it yourself and present it yourself

when you used to have an art department have to do it for you there's this thing called absolute powerpoint by ian parker it's like a super old website floating around or did you find the the thing at all about whitfield diffy no okay so there's a guy named whitfield diffy and i believe he was in the bell northern research center folks who have studied computer science may may know diffy from diffy hellman-Hellman encryption. I'm going to probably get the details wrong, but if I remember right, it was a precursor to the RSA encryption, which is the sort of basis of most secure transactions that happen today. But there's a great, great excerpt from this piece. At Bell Northern, Diffie was researching

the security of telephone systems. In 1981, preparing to give a presentation with 35 millimeter slides he wrote a little program tinkering with some of the graphic software designed by a bnr colleague that allowed you to draw a black frame on a piece of paper and then it goes on to to point out with a few days of effort diffy had pointed the way to powerpoint and it was it's incredibly at bell northern research sort of coming up with this concept of maybe software can help us do this thing that, you know, we have to do manually right now and use a little bit of software to get there. Wow. That's I can't believe I missed that in all the research,

because that is I mean, Gaskins comes from BNR. That's the germ of the idea right there. So the first thing Gaskins does, the board basically, he's not the CEO, but he's basically given CEO like oversight of the core part of the development part of the company, the non-publishing part of the company. He fires everyone except for one person because all the engineers that they have, they're all systems engineers that are all, you know, coding and machine language, trying to build up this, this operating system. He keeps one and then he hires a really great developer that he knew that he had tried to recruit into BNR named Dennis Austin. And then Dennis and Bob go on to the two of them basically in like a previewing the modern, like lean startup team. Like they basically build

PowerPoint together with, with with bob as as the pm and dennis as the engineer dennis at the time was actually working at another nea portfolio company that had just shut down uh dick wasn't on the board one of his partners was on the board and this this tells you about the prospects for forethought and what nea thought of the company the board member at the other company that had just shut down that Dennis was working at tried to stop Dennis from going to forethought because he was like, that is a sinking ship. You don't want to join that. Our firm has no faith in this company. You're throwing your career away. But Gaskins was still able to recruit him. And he writes about this because he was able to do it because there just weren't

that many companies out there that were working on applications for graphical user interface operating systems. So if you believe that was the future, you know, your only bet. And Bob also talks about this is why he joined Forethought himself, despite it being a sinking ship. There just really weren't that many opportunities to do this it was like when the ios you know app store launched and you needed there were only like three places where you could write you know ios apps um which so they're kind of were like yeah there was craig hockenberry at the icon factory you know there was like actually just a few people that there was whoever made uh super monkey ball yes super monkey ball which was that was a port from consoles i think actually ah i didn't know yeah i wonder what it'd be fun to go

back and see like what the first like native companies and apps for ios were you know you know why twitterific came out so early the icon factory uh twitter client no what so craig hockenberry when apple announced their sweet solution uh for developers to be able to build web apps and they're not being an app store craig was one of the people who basically cracked open the iphone and and figured out how to reverse engineer the api surface and know what the apple engineers were doing to build the native apps and he wrote twitterific as a jailbroken app so then he was sort of already because when they released the sdk i mean it was a much more so he had already been essentially building before the sdk comes out they just had to rebuild it on public documented apis

that's awesome yeah yeah yeah uh what would be the equivalent today i mean i guess that's the billion dollar question i mean it depends if you're long crypto or not good question yeah probably also a topic for another episode we definitely have to find some crypto transactions to cover that'd be a fun one all right back to the PowerPoint story. So it takes them about three years to develop PowerPoint within Forethought, beginning with just Bob and Dennis and then eventually growing the team over time.

But because they're doing this in a startup, you would think they're also publishing FileMaker. FileMaker becomes a very successful software on the Mac, but unfortunately they don't have a really great deal with FileMaker. They're actually publishing FileMaker. FileMaker becomes a very successful software on the Mac. But unfortunately, they don't have a really great deal with FileMaker. They're actually losing money on it. And they're losing money on the other software they're publishing too. Not good deals. They keep having to raise money all along. So from NEA and their existing investors, new investors, they're basically constantly pitching. Bob is spending his time either laying off people,

pitching for money or building PowerPoint, probably in that order. Wow. Do you know how much money they raised? I actually don't know the total amount that they raised, but when they do finally sell the company to Microsoft, the total price of the sale is 14 million and the VCs get get $12 million. So only $2 million goes to Common. I don't think that was all $12 million of liquidation preference. There was probably some participation in there too. But you have to imagine they raised at least $6 million, if not more, if they're going to get $12 million. Or quickly catapulting toward,

I wonder what they raised from Apple's strategic investment group. Well, right. So they're raising raising money they're talking with apple all along because apple is starting to launch this strategic investment group but apple's worried that they're not going to be able to actually ship the product so they don't want to invest unless they're actually going to ship this strategic product for mac uh so they keep waiting and waiting and apple actually only finally ends up investing uh just about i think two or three months before microsoft acquires the company yeah it's in uh january of 87 january of 87 they ship the product in february of 87 uh and then the acquisition happens over the summer really really uh believing in them apple until it's absolutely clear that they are literally printing floppy disks and shipping them in one month that's when we will invest in

you sounds like most vcs right yeah i mean at that point it's impressive that they managed to get there without getting the check yeah and i guess they took the check on you know we'll need to ramp production after this first run well it's also like are you really going to turn down apple no which is at that point in time the only platform that you are shipping your software for because developing for windows is a nightmare especially at that day and age so apple invests january 87 february of 1987 they do a big launch event they're finally ready to ship what was initially presenter uh was the the name for the project over the past few years but then they had a trademark issue right before they're about to ship so they changed the name to powerpoint

shocking that you pick a term as generic as presenter and expect that to skate through trademark review but it's again it's like you know back to um back to the early days of ios apps remember like camera plus and like all the you know super basic named apps so they changed the name to powerpoint right before they shipped the product so february 1987 they do a launch event they haven't actually shipped it yet microsoft and bill gates get wind of uh the momentum that's building behind this product and they actually reach out and very explicitly say they want to acquire the company even before the product ships and to be clear what the product is at this point like we say on the product ships it's software that allows you to make black and white printouts on transparencies so that

you can put them on overhead projectors. Yes. Like the PowerPoint you're envisioning is very different than this PowerPoint. Like we talked about 35 millimeter slides. They're not even there yet. They're not even in color yet. Like this is a program that helps you lay out your transparencies for overhead projectors. Yes. But apparently,

up until this point in time, Microsoft and Bill Gates, of course, knew that software applications for graphical user interface operating systems were going to be a huge market. They were working on many of them internally, like Word and Excel. Bill Gates also knew that presentations was going to be a big market. His vision for how Microsoft was going to attack it was they were going to add the option to print an outline to Word. In Word. In Word.

That's so great. So Jeff Rakes is the executive at Microsoft. There's a great excerpt here that Jeff Rakes wrote. He goes, I thought software to do overheads, that's a great idea. I came back to see Bill. I said, Bill, I really think we ought to do this. And Bill said, no, no, no, no, that's just a feature of Microsoft Word. Just put it into Word. And I kept saying, Bill, no, it's not just a feature of Microsoft Word. It's a whole genre

of how people do these presentations. And to his credit, he listened to me and ultimately decided to go forward and buy this company in Silicon Valley called Forethought for the product known as PowerPoint. And here we are today. It's like, it's how freaking businesses communicate internally. Like it's how every, it's how the military communicates. It's how like it is the de facto way for people to get ideas across to other people. You can hate that. You can love that. It can be your tool of choice or you can be your nemesis in an organization. It's not that long ago.

It's the late 80s and the belief was, eh, that's a feature of a word processor. It's a feature of word, yeah. Well, I was gonna save this till the end because I think it's the most fun idea to this whole thing. Forethought is this tragic history of a company they're always perpetually raising money they're doing bridge round after bridge round after bridge round it's impossible to raise money the irony is that because of powerpoint like

powerpoint becomes the vehicle by which more money is raised in the history of humankind over the next 30 years than has ever been raised in the, you know, in mankind's history until that point. And the irony is the company that made it could not raise money. So great. But it also reminds me of, uh, of the Dropbox episode and, you know, Steve Jobs telling Drew Halston that, you know, it's a feature, not a product. $10 billion feature. I guess there was no Jeff Rakes around in Apple in whenever it was 2010 to still tell Steve that, no, this is a product, not a feature.

No, no. Did your research get into the talks that Microsoft was having with another potential company? Only a little bit. Supposedly, there were two other companies that they were evaluating once Jeff Rakes had convinced Bill Gates that this actually needed to be a product within the suite of applications that Microsoft, productivity applications Microsoft would make for Windows. But they evaluated that PowerPoint was the best. So apparently, Dave Weiner had a company called More, capital M-O-R-E.

And Microsoft actually issued a letter of intent to purchase them and ended up walking that back. They basically took it back the same day that they gave Forethought their offer to acquire them. And basically, on April 28th, 1987, this is right after forethought had shipped the the first run of powerpoint a group of microsoft senior execs went and spent a day at forethought to hear about the initial powerpoint sales on on macintosh and what their plans for windows were and that day as soon as they all got back to redmond that next day they they sent the letter withdrawing their earlier

letter of intent to to purchase which is interesting. Interesting. Totally crazy. Well, that makes sense because what I did research was the back and forth on the acquisition from the forethought side. So this was end of February. Microsoft reach out, reaches out to forethought says, we want to get into this market. We want to buy you. We want to do this fast. A couple of weeks later in mid-March, Jeff Rakes and John Shirley, who was then the president of Microsoft, come down to Silicon Valley. Forethought is based in Sunnyvale at this point. And they have dinner. They offer $5.3 million to buy the company in cash. The Forethought board meets and decides they haven't shipped the product yet. This is

still a couple of days before they ship the product and decides you know that's not that much money the vcs have probably put at least that much money into the company they're like we'll roll the dice we'll ship the product they ship the product in mid-march and it's a huge success it sells a million dollars in its first month they they instantly sold out all 10 000 they had printed which is it's just so crazy to be literally sold out sorry you can't get the bits anymore they're sold out get the bits anymore they're sold out only so many bits uh um so then after that that's when microsoft comes back down and meets with them in april And then immediately after that, I guess

they cancel the LOI that they had with more to acquire them. They decide PowerPoint is what they've been looking for. They need to acquire forethought. And then they come back with a much improved offer. Can you imagine like being Dave Weiner in that situation? What a bummer. Oh, total bummer. What could have been uh what would have happened otherwise so interestingly though the offer that they come back with uh this is you know vcs sometimes uh do things to hurt themselves uh they come back with an offer to acquire forethought for 12 million dollars but in microsoft stock the board is happy with the offer but they believe that microsoft stock is overvalued because it was up 6x in the past year and they didn't want to

take microsoft stock they wanted cash now were they public yeah microsoft had gone public the year before sell the stock like what's the big deal of course of course you could sell the stock or you could hold the stock and make billions of dollars but you know there we are vcs cash is king david cash is king cash is king cash is king so the board says no we don't want this billions of dollars of upside in microsoft stock uh and they call themselves venture capitalists there also were a bunch of other weird terms in there like they particularly they wanted the whole company to move up to redmond and join microsoft uh in redmond in seattle uh the team didn't want to do that they wanted to stay in silicon valley so they go back to microsoft they have the boards negotiate uh because they're still vcs on the microsoft board at this point in

time and microsoft comes back with 14 million in cash and the acquisition gets done in early summer. And in particular, the company and forethought as part of the negotiation, they get to stay in Silicon Valley, not just keep developing PowerPoint themselves there, but they get made into a whole official business unit of Microsoft, the graphics business unit of the applications division. And they have a mandate to hire and build and run that whole division out of Silicon Valley. So after the acquisition closes, as we mentioned at the top of the show, they move the company from Sunnyvale up to Sand Hill Road to Tony Sand Hill Road, where all the venture capitalists are right next to right next to Stanford. And

they move into the Quadris complex on Sand Hill Road, take over the whole complex that then is the complex after Microsoft leaves, where Benchmark has their I think their first and longtime office, Shasta is there. Many other many other August Capital is there. And August Capital was the VC investor in Microsoft are all there in that complex. It had been something else before Microsoft, but Microsoft made it into a tech complex. Wow. Wow. And there's a big lesson in here. I mean, this is one of the great quotes from Bob that he sent over. I don't think I'm spoiling anything here in this opening line. I think you guys know the end of the story. But PowerPoint has been so very successful after its acquisition, and mostly as far as I can see, because Microsoft in 1987 lacked any

technology or experience to try to manage us manage its first distant location, and so accidentally avoided smothering its new product while providing what was really vital to us money industry clout strategic tips from bill gates and mike maple senior during confusing times for windows developers uh and was it ever um yeah we we have to say once again thank you thank you bob to for your email to us and uh and writing the book about this uh you listeners you can tell we're we're geeking out over this because it's so cool to have such primary sources for Acquired. So, yeah, that's what happens. I mean, Microsoft really does leave PowerPoint alone.

It's the original Facebook-style acquisition. facebook style acquisition and even though powerpoint would ultimately come to be in 1990 with the launch of windows 3.0 uh the office bundle is introduced and powerpoint comes to be bundled with word and excel and sold together as a set which actually was launched first for the mac in 1989 the three were really together yes my powerpoint became a component of the office suite for mac and then in 1990 for windows ah interesting well that was because windows 3.0 didn't launch until 1990 bob also talked about this is really getting into the weeds of you know both history and technology here but before windows 3.0 like it was impossible to develop for windows like it was nobody outside of microsoft essentially could write applications for it.

It was so buggy. And so the PowerPoint group, again, being independent, refused to ship a version of PowerPoint for Windows until a stable version of Windows came out. So you could get Word and Excel on Windows 2.0, but you couldn't get PowerPoint simply because Bob and the whole group was like no we're not shipping for this piece of crap operating system and the amazing thing is it took a while to get it to get it all integrated so you had word and excel that felt very similar but then you had powerpoint 4 that you know was starting to actually converge but it still looked quite different from the you

know the original um word and excel on windows and it wasn't actually until um powerpoint 95 which used the version number of powerpoint 7.0 um where they actually totally converged and used the same version number and the reason it went from four to seven was to catch up with the excel and word version numbers so there was never a powerpoint 5 or 6 5 and 6 yeah it's it's the uh windows 9 of uh of powerpoint the iphone 10 the iphone 9 the iphone 9 yeah oh boy yeah well that is the story more or less uh of powerpoint and i'll throw out a few numbers just to just to like understand the ramp here a little bit so powerpoint has been phenomenally received since day one so it was overhead

projectors and then it was 35 millimeter slides and it was in color and then they started to actually um find a way to to you know make it i think it was actually it was like a video basically that that was projected out let's see the third version for windows and mac in 1992 introduced video output of virtual slideshows to digital projectors which would over time of course completely replace physical transparencies and slides but the sales numbers are quite staggering so that first 10 000 at 100 bucks a pop sold out right away that was in 87 and 87 And then it comes and only for Mac and only for Mac. It comes out in office in 89. And then for Windows in 1990. By the last six

months of 1992, PowerPoint revenue alone, not office bundled, was running at a rate of over $100 million annually. Incredibly fast growing business. In 1997, there's a couple more great stats here. So fast forward another five years, there's over 20 million copies of PowerPoint in use, and that the total revenues from PowerPoint over its first decade from 87 to 96 was over a billion dollars. I'm going to stop before we get to a cloud world because that's when the accounting gets a little funky inside of Microsoftrosoft but in 2009 there was a a group called mbd which was a microsoft business division i believe which included dynamic crm but that was a smaller group did 18.9 billion in revenue and 12 billion in operating income so you know enormous behemoth it's a it's a frickin Windows sized business for Microsoft

having Office all up. This is the power of if you recognize a massive wave like this, which is like the deployment of a fundamentally new, you know, technology mode of interaction and what that can enable, you can build enormous businesses as an application on top of it. I mean, this is the same story as Uber, right? This is the same story as Instagram. It's just in an office environment and with PCs. It's incredible that there was instant product market fit, even as the product changed so dramatically. The world wanted exactly what PowerPointpoint was the first second and third times and it just it just it occupies uh not only was the the niche enormous the the market for

digital presentations but powerpoint right now owns 95 of that market that is that is unreal which is funny like in tech we think like oh you know lots of people use keynote now and like you know keynote's great like we use keynote at wave but like we're such a small piece of the overall market yeah and you know it's funny while i love keynote and while i've i've dabbled in google slides i end up using powerpoint more often than anything else because i know that if i'm working on a deck and somebody else is going to come in and work on it too, they probably have a history of using and understanding PowerPoint. I don't want to throw them into a new tool set. I mean, it is just,

it is the power of lock-in and network effects and standards. And it's just hard to shake. Yep. If you send it to someone else as a powerpoint file not as a pdf like you know that they're gonna have powerpoint installed on their machines one one quick thing i want to say just on the the idea of this massive wave coming and then building uh conceiving and building an application to ride that wave really really recommend everyone go read bob's book the sweating bullets book it's just it's so good and so fun from a history perspective but he also goes Dave, really, really recommend everyone go read Bob's book, The Sweating Bullets book. It's just, it's so good and so fun from a history perspective. But he also goes into great detail and he kept detailed notes throughout the development

of PowerPoint, you know, about his, how the idea came together, how he did market research for it, how they basically feature prioritized, why they thought that they could beat competition. And it's really a great example of how to think about really a business plan for a new application product in a new technology paradigm. So really great case study. Yeah. Worth reading. Seconded.

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monitor, investigate, and respond to threats with unmatched precision, head on over to huntress.com slash acquired or click the link in the show notes. Our huge thanks to Huntress. Should we move on to category? So I have this as a product. It was its own business unit and it was a self-sustaining, or I don't know about sustaining, but it was a product that they were selling and was selling well. And they had the whole channel to sell it. Ultimately, Microsoft was going to figure out a way to integrate this into every other piece of their business and just make it a product that used the Microsoft sales channel,

the Microsoft distribution, relationships. It only took them a couple of years to really build the, the, the ultimate bundle in Microsoft office out of it. My assessment is product. Yeah. A hundred percent. Like it's a artifact of history that it was officially a business line for a number of years, a cool one, given all the externalities it produced in, in on Sand Hill road and in Silicon Valley,, a hundred percent of product. Also, we didn't talk about this, uh, in the history, but this is a good point for it. We joke on this show about the old quote that like, there's two ways to make money in business, you know, bundling and unbundling the bundling of word Excel and PowerPoint into office was one of the best and most genius business decisions of all time, because when they

did it, each of those products was selling separately for $500. So you would have had to pay $1,500 to buy all three. All three of them had competitors in each of their, you know, word processing presentations and spreadsheets that sold for about the same price but when microsoft bundled all three of them they sold the three of them together for a thousand dollars and there was no user who needed one of those but not the others like if you were an office user you needed all three of them so now you had the choice of you could pay a thousand dollars for all three of them from the you know made by the company that also made your operating system, or you could buy inferior versions separately for $1,500. And they just completely mopped up the whole market. And there's a great Bill Gates quote here that is complete with an ultimatum.

So here's an internal memo by Bill Gates announcing the plan to integrate the applications themselves. And this is in February of 1991 at at the end of PowerPoint 3.0 development, as they're starting to shift toward working on a sort of integrated platform. Another important question is what portion of our application sales over time will be a set of applications versus a single product? Please assume that we stay ahead in integrating our family together in evaluating our future strategies. The product teams will deliver on this. I believe that we should position the office as our most important application. Boom. And I'm not just, I'm not just justifying my career here. Cause I, um, I served when I was at Microsoft, both in my internship and in my first job, I sure I served

on a shared team. So we basically built shared components across the web apps and then later the iPad and Mac apps. But the notion of sharing between the products to promote the business of selling a bundled product group dates back to 1991. Well, that is the sound of many other mid-90s software companies and startups going out of business. And as one of my managers at Microsoft said,

in the 90s, there were 747s flying cash to Redmond. It was just full of cash. Oh, man. It's so funny. It seems like such a different world. It is. That is a totally different world from the world we live in today.

But it was not all that long ago. Like, I remember all that. You worked there, you know? Yeah. And there's still, you know, I haven't worked there in five-ish years now or four years. But, you know, there was still a very strong culture of memory around that and of wounds from the department of justice days and the cultures that are created by these things and the the memory of tapping that incredible product market fit well and and just knowing what that feels like and and feeling like you're invincible they last for two decades

three decades unfortunately they tend to outlast their useful life. Yeah. Culture's a hard thing to shake. Yeah. Well, um, should we do what would have happened otherwise? Yeah. Yeah. So I've got three of them. We've basically covered them,

but Jeff rakes his team before they identified more. And before they identified a PowerPoint, they were working on an internal version of this. And it wasn't, you know, I don't, it certainly wasn't exactly this, but they had a thesis around sort of graphics based presentation computing that they were

going to do no matter what, when Jeff was heading the marketing for the application division, they sort of put pen to paper on what would a presentation product look like. And that's, that's sort of when they started looking around to acquire. So it could have been built internally. Who knows if it would have been as successful. I'm not sure how much nuance there was to nailing the exact right product at this point, because I just don't think there were that many products in the market. So I think had they built it internally, they probably would have still been able to define the market. Yeah, there were no other products in the market. By the time PowerPoint shipped with Windows 3.0 in 1990, they were still it was the first. This is incredible, like the first graphical

presentation software for Windows. What were the other people in the market doing? Yeah, now there'd be three other venture-backed companies, somebody doing it on blockchain, and like 150 knockoff Chinese clones by the time, like, you wake up the next morning and you're like, oh my god. Oh, that's so true. That's so true. My other two, yeah, they could have built it into Word, and they could have bought Dave Weiner's more. It seems like there was no way that Microsoft wasn't going to attack the market at this point.

Who knows, right? But I don't think history would have been any different, really, whether they had acquired PowerPoint or not or taken any of those paths. Like, they would have ended up one way or another with the right product in market. They would have bundled it with Word and Excel or it would have been a part of word or whatever like microsoft was going to own business productivity application software on top of windows like that was going to happen regardless yeah i i think so i mean the biggest difference is it probably wouldn't be called powerpoint i mean maybe there's a world where it wouldn't be a separate application and then maybe slide culture and PowerPoint culture wouldn't have grown up in quite the same way.

The question is, if they built it into Word, is there any way that somebody else would have come out with this format and had it become dominant and large? There just weren't enough companies capable of making and distributing software at that point i think microsoft could have like screwed around for a couple more years and then and then nailed it by either acquisition i mean this is why bob and dennis despite having plenty of career prospects and opportunities other other places went to forethought um was like if you wanted to do this kind of stuff, there just weren't many places to do it. So you're moving to tech themes. Yeah. Yeah. So I mean, we talked about it a little bit, but keep any companies separate to make them more successful. I think that's a huge one here.

Avoid smothering. So provide the resources that are helpful. Don't trample and then figure out when bundling makes sense. You sort of see the same thing with Instagram, um, bundling the, uh, ad units to advertisers between Facebook and Instagram and the, um, network too. Like, I mean, Instagram bootstrapped the social connection network off of Twitter initially, but then when it became part of Facebook and like Facebook started pumping it into the news feed and then both bidirectionally of like Instagram appearing in the news feed and on Instagram, like, oh, your Facebook here, you know, connect with your Facebook friends. You know, that's a huge pour resources on, allow sort of separate cultures at least for a time, but figure out how to bundle to customers. And ultimately, you need to do more integration with the product teams in order to get there.

So you're not sort of shipping your org chart in weird ways. But I think that's important. Are there other good examples of making an acquisition, keeping the team separate, keeping the product separate, and bundling for customers? Amazon and Audible is a decent one. The Audible team is still entirely separate, and yet you can buy your Audible books sort of through the Amazon product page.

I'm having a hard time thinking of really successful instances of this outside of Instagram, PowerPoint. You could argue maybe Lucasfilm by keeping Lucasfilm completely separate creatively, but providing both the resources to make more films and more content, and then the distribution that Lucasfilm didn't have on its own. It's almost like there's different levels of this, like the keep them separate and pour the right resources on and share the right learnings is like table stakes. But it's like this total home run scenario, if you could figure out how to bundle the front end to customers like have you um have you noticed if you're a prime subscriber now you become a twitch prime subscriber and you have one subscription to a to a streamer that comes with that sort of an interesting example although they're cross-pollinating the teams a lot more

than uh well it's a few years in now so it's not so different than this i think we should keep an eye out for that in future episodes though you know the only other theme that i have is one that um that bob mentions in his in his blog posts and and in in the book the quote that he has is a year or two is an eternity in a rapidly exploding market and that's so true like the amount of time that passes in between like throughout this history is is fairly short and amount of time that passes in between, like throughout this history is, is fairly short. And the time that the window is open to create a PowerPoint like product or to create a, you know, Uber like product or an Instagram like product is very, very short. Like these windows don't come along very often when they do, like you need to be delivering the product into market like in that window or if

you're too early like the market's not going to be ready to adopt it really was windows 3.0 shipping getting mass adoption uh and having powerpoint ready and shipping with that like before that forethought probably would have been fine fine and PowerPoint would have been okay if it were just on Mac. But like whoever shipped first with the first mass adopted version of Windows was going to win, you know, and similarly, you know, with the iPhone and Android, like, you know, when you were the first application that just worked, that was a major new, you know, category enabled by the computing paradigm, that was a major new, you know, category enabled by the computing paradigm, that was the time to win. Yeah. And as I'm reflecting on it a little bit in starting companies and trying to make bets on these platform waves, you sort of have to believe

two things. You have to believe that that platform is going to become super dominant and that, you know, it's going to be totally pervasive and change consumer behavior and have incredible um just sort of traction in the market but you also have to believe that you can build a standalone venture scale business by just being on that platform and by being an app on that platform and like for windows 3.0 there was tons of money to be made by or even 3.1. Like, if you're the first to market on that incredibly pervasive expanding platform, you also have to have the faith that Microsoft is going to allow you to monetize on their platform enough so you can be a venture scale business. You know, the Instagram is a kind of a bad example of

that because they weren't monetizing when they sold to Facebook. But it's the question we ask ourselves a lot when we're trying to make a bet on a new emerging platform is, is it going to be huge? And are we going to be able to singularly be here and build a big business? And I think those are the two questions you have to ask about VR. I remember when the Apple TV developer platform came out probably three years ago, I was considering making a bet there. I don't think it sort of changed consumer behavior or became dominant enough, but we were thinking, is this a new, is this a new app store?

Is this a new iOS? And it's, it's hard to know when those two characteristics are, are present. And I think, you know, that's why they call them bets. You gotta, you gotta put your chips down a little well what's what's interesting about this though is like this uh wave and and then mobile and then potentially you know vr or even blockchain in the future are the same in that like it was back in 1982 83 84 when people knew people in the tech world knew that the graphical user interface was the next wave but it wasn't until 1990 when windows 3.0 shipped that that was the right window to be

hitting the market you know so like that's a six to eight year gap there and i feel like vr is kind of like in the same point like everybody who's you know used vr who's been in rec room you know knows that this is the future right but like we're now like maybe we're in like 1986 you know or 87 but there was that article that just came out uh this past weekend that apple is working on a vr and ar headset scheduled to ship in 2020 currently like maybe maybe that's the point. Maybe that's the Windows 3.0 of AR and VR. Like we know it's coming, but the window is not yet ripe to build the, you know, to realize the massive opportunity. You know, as we work on companies at PSL, one of the ways to think about do we know enough about the space yet to start a company? We've seen it come to fruition a few times where one characteristic to prioritize in the early stage

is ability to adapt to change rather than certainty about your plan and making it a good plan. Because there's a few times where we've seen a company that just needed to get into market to both learn about the market and sort of develop that sixth sense about a trend of where they need to be in a year or two that you really wouldn't be without operating in this space. And so it's,

can I only raise a little money? Can I stay super lean and nimble? And can I be first to jump onto new opportunities when they emerge and there's a sea change in the market? With forethought, I think they felt around in the dark for a while to kind of get there and then it wasn't that great of a venture outcome or it was a terrible venture outcome but you know it does speak to like well it would know it was it was like an okay venture outcome i mean remember this was 1987 they more than returning dollars was a lot more than yeah yeah right it was an okay but i think it does speak to the merits of uh if you're already loosely operating there and you have the agility to sort of move around to where the market is going, you're in an amazing place to catch on to one of these rocket ship platforms as they're taking off. Where you want to be is where PowerPoint was, was having enough experience in the market to have the product right.

Yes. And still be able to hang on until the window opened. And then when the window opens, just shoot through it. It's a delicate art. I've got one more before we get to grading on tech themes. Listeners who haven't heard us talk about this, Acquired started because David and I were getting drinks and we would get drinks and catch up maybe every other month or so. And we partially, partially wanted a reason to just hang out and

talk more. But the other part of it was, uh, we were sitting there and I, David, I, I pitched you on two podcasts ideas. One was like, we should cover acquisitions that actually went well. Cause the trope is that none of them ever go well and they implode. The other one was, why don't we do a podcast series where every episode is about the rare company that manages to have a billion dollar plus innovation twice? That's right. I remember that. And we decided not to do that because there just weren't that many. It would be a very short, very short podcast series. Yeah. And I think our thesis was basically like companies have the magic moment just once because they're so rare that they find that product market fit, the monetization, where like just everything works.

And then after that, companies keep finding ways to grow and expand that thing. But they generally fail to find a second complete one of those, and particularly one that works under the same roof and doesn't interfere with the other main business. Microsoft did it. Like, they're one of the few in the world. So let's look at like 2009, 2010, because it's the last time that the business was kind of cleanly broken out where you could see office and you could see windows and they didn't have insane ways of grouping and reporting the financials for these

these divisions but both both of them were doing 18 to 20 billion dollars a year yes they built each other up and yes there's reasons why the department of justice intervened because they were propping each other up and windows was using office to create lock-in and an office was creating a big moat for windows but in a lot of ways you know these were two completely separate multi multi multi-billion dollar businesses office as i was trying to do some of the math they've probably done over 300300 billion of revenue since the beginning of Office. Wow. Just Office, not including Windows.

Not including Windows. Wow. Wow. That's just completely mind-blowing. That is better than the vast majority of companies could ever hope to do alone. And this was just shipping a really incredible bundle. I don't think it would be where it is today without having powerpoint i mean it is so de facto the way that people communicate we'd be missing an entire paradigm of the way that people communicate ideas

and that's a huge piece of what office is all about yeah and i'm glad you brought that up before right before grading because not to load it or because not to load it or anything, not to load it or anything, but, uh, well, okay. Should we go into grading? Yeah, let's do it. Okay. I'm going to go first with what I was going to do before hearing that, um, argument. I was going to give this a B plus, which is funny. We, we say we need to stop giving B+. B pluses are like the standard grade on acquired B plus A minus because like, yeah, it was great. Like super good execution. Like, you know, PowerPoint

was the right thing to do. Buying it versus building it was the right thing to do. But like we talked about a minute ago, this would have happened anyway, I think. But what if it hadn't happened anyway? Like what if, you know, what if if it hadn't happened anyway like what if um you know what if bill gates hadn't listened to jeff rakes and like had shipped a feature in word

and this whole a paradigm wouldn't have been created but like having the three products and being able to bundle them as three was key to winning. Like if it were only two, if it were only Word and Excel, competitors, they wouldn't have been able to reduce the price of the bundle enough that competitors to those products also wouldn't have been able to reduce their prices. And so by like having the three of them and literally knocking the price of a full product

off of the bundle of the three of them, literally knocking the price of a full product off of the bundle of the three of them like no competitor could keep up well no competitor could keep up anyway because no one else on the platform lotus had its time but i mean they were making such ridiculous margins on these things that that and they were selling so many that the fixed costs were completely de minimis i don't think it was like like we lowered our prices so much by having a third app that we could put the other guys out of business because our prices were so low. I think it was like we had every competitive advantage in the world because everyone was using it on our operating system.

And we had all of the sales channels and we invented enterprise software. That's true. But like WordPerfect had an enormous market share in the dos era and brought a lot of that market share into the windows era and it's true it's very true and the feature checkboxes wars where you know it was lotus and word perfect and and office all against each other and it was who could add more buttons on their toolbars yeah yep all right i'm gonna go i'm gonna rest my pen at b plus you're so harsh this is an a this is so clearly an a they turned 14 million dollars into hundreds of billions you were just arguing against me i was arguing your case a minute ago and now you're

arguing my case look i'm gonna play devil's advocate no matter what but i i see why it's a b plus because what when i was thinking through it the question is in our grading should we consider not only the opportunity cost of the capital like so if you consider they turned 14 million into 100 billion over a 25 30 year lifespan whatever it is like holy crap how's that not an a plus the only reason why i would knock it down a little bit is it wasn't actually the insight of buying this particular company and bringing this particular team and product it was it was a incredible insight that this was just a puzzle piece of in the same way that when we did the Siri acquisition, when we did the SoundJam acquisition, it looks actually a lot more like

an Apple acquisition where this was a thing they were going to do anyway. And then this was a building block on which they sort of shaped it into their vision. Now, I don't know if Bob would agree with us. And maybe there was a lot more to PowerPoint and how PowerPoint actually ended up shaping the unique and special thing that was the large-scale successful PowerPoint. But I'm going to go A, not A+, because it wasn't a thing that they wouldn't have been able to do without buying it. There we have it.

All right, some divergence, finally. No, it's good. We need some more divergence if for no other reason than to keep it interesting. There we have it. Should we move on to carve outs? Let's do it. You want to go first?

No, you, by all means. All right. I read a really great Hacker News thread a couple of weeks ago. Well, I feel like it's like 2008 or nine. I read a really great Hacker News thread a couple of weeks ago. Well, I feel like it's like 2008 or nine. I read a really great Hacker News thread. This is a throwback episode. We'll link to both the comment that I'm going to describe and the other comment that recommends the book. But there's two comments in this thread that are amazing. One recommends the book mindfulness in plain English. I'm a complete

and total novice to this, and I would claim no, no wisdom or, or serious practice. But I'm very interested in the topic and looking for more resources of mindfulness and meditation. And it is a book that explains the Vipassana meditation in a way that is completely non-woo-woo. It is very much like how you can wrap your logical mind around this process. And let's say you don't want to hear any of the sentences that leave you staring off into space and go, I have no idea what they just said. And I find that completely meaningless, though it sounds cool. This book doesn't have any of that. And it's got a lot of really great sort of, if you're an engineer or type A or analytical person who listens to this show, and you've thought about meditation,

this is a really, really cool and interesting book. So basically, probably 100% of our audience. Yeah. Yeah. And then the other piece in that thread was somebody who was describing, and this is another analytical engineering type person, describing their experience you're truly sort of silencing your mind and keeping your thoughts focused, really crazy things are going to happen. And you can't have that happen to you when you're outside in the world, when the sort of gain knob is all the way up, or you could basically blow out your speakers. It's too intense. And so why you meditate is to sort of turn down the gain knob or the volume knob so you can experience all this crazy stuff in a really controlled, quiet experience. But then the goal is, as you become more of a master of this, to turn it up over time

and be able to be mindful in real world settings without sort of the danger of, quote unquote, blowing out your speakers. And I thought that was like the coolest way to think about it and the first time that this sort of arena of of thought and practice uh made sense to my my analytical brain what a cool analogy i like it a lot yeah i thought so too so we'll link both of those in the uh in the show notes so you can check it out for yourself because there's a there's a few more paragraphs in there about the, um, the metaphor that I'm not doing justice to. Wow. Well, that's a deep and, um, uh, noble, uh, carve out mine. Well, on the surface, mine is going to be completely the opposite of that, but fits in with the theme of the show with, um, you know,

waves and applications coming to the waves. Ben, have you been riding electric scooters over the past few weeks? I haven't, they're, they're not up in Seattle. I you been riding electric scooters over the past few weeks? I haven't. They're not up in Seattle. I've been riding a lot of the bikes. You got to buy one. So many of the electric scooter sharing companies are now in San Francisco. This is the phenomenon that started about eight months ago in LA, in Santa Monica with Bird, and is sharing just like, you know, bike sharing companies like Ofo and Linebike and the companies in China that do bike sharing, but for electric scooters that are literally like razor scooters with batteries in them and electric motors in

the wheels. And these things are amazing. You can, you know, ride it around the city, get where you're going. You just leave it on the sidewalk. Somebody else in the app finds them with GPS location, goes, picks it up, rides it to wherever they're going, leaves it where, where that is. Okay. So cities are up in arms about this because there's like litter of, you know, electric skateboards or electric, uh, electric scooters all over the sidewalks. But that aside, this is like the most amazing transportation innovation I think that I've seen, you know, since Uber. It's so cool. Like the form factor is perfect. They just nailed it. It's the windows 3.0 of light electric vehicles. And it's great because like, unlike an electric skateboard where like you're on a skateboard, you have to know how to ride a skateboard. And even if you know how to ride a skateboard,

like you still can feel a little out of control on it with a scooter you've got the handlebars so you have a lot more control and at the same time it only takes up the space of a skateboard and is collapsible and is lightweight and portable it's great i've been riding all over the city on these things. And so much so I actually bought my own one. I bought my own. Yes. So on Amazon, Amazon Prime delivered in two days, you can get a nine bot electric scooter, ES1 electric scooter. This thing goes 13 miles an hour, has about a 15. Well, depending on how much you weigh, because that can have a big impact on it. 10 to 15 mile range on a charge. It's great. It's, is this the one you'd recommend? Should we, I would highly recommend it to 99 on Amazon delivered free, you know, prime. And it's great. Like I basically don't use my car

or my bike anymore. Wow. And listeners can't even see all the weight you've gained. Well, maybe I'll have to do some do some you know meditation and mindfulness to think about exercising oh that's cool i yeah in seattle i don't know if it'll work as well as san francisco because what you the one time you don't want to be writing these things is in the rain yeah well they could be huge in the summer it's still pretty cool like even on the hills of san francisco like there's enough torque in these things that like you can with the really steep hills you have to kick a little bit in addition to the motor but you can go up hills like what's the what's the magic here like like we've had sort of e-bikes and scooters and stuff forever.

Like is there something now where mass production is cheap and better for certain parts? Is it lithium ion batteries? Like why now with the scooters? I think it's a couple of things. It's batteries and range at a certain minimum acceptable power and torque that you can deliver. It's the hub electric motors in the wheels. So these things don't have traditional electric motors. They have literally like very tiny motors built into this small seven or eight inch wheels on these things. Um, so that

keeps the size and weight down. And then I think it's also just like figuring out that this is the form factor that once you hit those minimum requirements, like it's so much better than a bicycle because it's so much smaller. So like when you're riding it, you only take up the width of a human being, you know, and you're in the like relative mass of a human being plus like 15 pounds. Whereas when you're on a bike, like a bike is big, it's bulky. You can't fold it up and bring it inside. You know, you got to ride in bike lanes, like all this stuff. Whereas a scooter, it's literally it's just like making the human more efficient. Bionic man. Indeed. It's like a bicycle for a bicycle. All right, on that note. We want to thank our longtime friend of the show,

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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 actually makes your beer taste better, i.e. spend your time and resources only on what's actually going to move the needle for your product and your customers and outsource everything else that doesn't. Every company needs compliance and trust with their vendors and customers. It plays a major role in enabling revenue because customers and partners demand it, but yet it adds zero flavor to your actual product. Vanta takes care of all of it for you. No more spreadsheets, no fragmented tools, no manual reviews to cobble together your security and compliance requirements. It is one single software pane of glass that connects to all of

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And thanks to friend of the show, Christina, Vanta's CEO, all acquired listeners get $1,000 of free credit. Vanta.com slash acquired. All right, listeners, if you are not subscribed and you want to hear more, you can subscribe from your favorite podcast client. If you feel so inclined, we'd love a review on, uh, on Apple podcasts or a comment on breaker or a tweet or a, uh, whatever the kids are doing these days. We appreciate listening and, uh, and hope you enjoyed the show. We'll talk to you soon.