This Week in Startups - Beeper's fight to break Apple's stronghold on messaging with Eric Migicovsky | E1892

Starting point is 00:00:00 It's very hard for a startup to say I'm going to choose not to sell or make my app on an iPhone because I don't agree with them. It's almost like we're as app makers or creators, we have to build for where the people are. And when more than 50% of the population is on a particular platform, it's hard to give that up. But at the same time, like if we don't speak up, if we don't share our experience and if we don't explain that, you know, creating new products is harder because of the fact that one company controls this ecosystem. it won't change. This week in startups is brought to you by KuroTech. Are you one of those companies

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Starting point is 00:01:17 And ketone IQ is a clean energy boost without sugar or caffeine. Get 30% off your first subscription order of ketone IQ at HVMN.com slash twist. All right, everybody, welcome back to this week in startups. As you know, Apple is the most valuable company in the world, by their market cap, at least, over $3 trillion. And it controls access to the world's most valuable consumers

Starting point is 00:01:45 via their smartphones and the app store. Going to war with them, if you're a startup especially, it's pretty crazy. But the regulatory landscape, as you know, has shifted over the last couple of years. Getting a little hawkish on big tech and people are starting to monitor these big companies for when they do things that are anti-competitive, uncool.

Starting point is 00:02:06 And recently, both startups and larger companies have started to fight back against Apple and they're doing it in public. A bunch of examples of this, you may have seen the smartwatch company, M.SMO. They just had a huge illegal win against Apple, which was forced to disable its blood oxygen functionality in the Series 9 watches

Starting point is 00:02:23 due to this patent dispute. This watch right here. You can't buy it anymore. And Epic's CEO, Tim Sweeney, took on both Apple and Google over their app store fees. Spotify issued a formal complaint in the EU against Apple's App Store rules

Starting point is 00:02:37 a couple years ago. And that complaint turned into a full-on EU investigation. And according to Bloomberg, the EU is expected to ban any abusive app store rules against Apple's music streaming rivals. So we've had this reoccurring theme. Even 37 signals, friends of the pod here, Jason Freed and David Handmeyer Hansen, DHH.

Starting point is 00:02:56 They've been publicly calling out Apple's App Store practices for years as they struggle to get their apps approved. But another example, which I find the most fascinating, if I'm being honest, is Beeper. This is a tiny startup that lets Android users do something really cool, which is have blue text bubbles when they're in iMessage, which you know can break all of your IMessage groups when somebody from Android comes in. and Apple didn't like that. So they shut down Beeper's app about three days after it launched in December. We asked the CEO to come on the show and talk about it.

Starting point is 00:03:30 He was nice enough to say yes. So welcome back to the program, Eric Mijikovsky. Did I get your last thing, correct? You got it. Thank goodness. Now, last time you were on was, I guess we talked about Pebble, your previous startup, yeah? Yeah, back in the day.

Starting point is 00:03:45 Back in the day. So you've been running this company, Beeper, Maybe you can just explain to everybody what your mission is with Beeper, what you're trying to accomplish, what the app is supposed to do for consumers, and then we'll get into the back and forth dispute with Apple. So what you mentioned earlier is kind of a subset of our overall mission. We're building a universal chat app, one app that lets you chat with anyone on any chat network. The idea came to me, actually, you know, while I was at Pebble, I, you know, would look down at my phone and see a folder full of chat apps that all kind of did the exact same thing, except with a slightly different subset of my contact list on each app. I'm a Canadian. I live in the States. I've lived in Europe.

Starting point is 00:04:31 I spent a lot of time in Asia during the pebble days. And I just kind of collected friends on basically every single chat app out there. And I was looking down at my phone and seeing all these different apps. And I just figured there's got to be a better way. And we kind of kind of had this technology. If you remember, like 12, 15 years ago, there were a bunch of universal chat apps like adi-m or game or Trillion Mibo. So we had that. We had it. It was in our hands and then it slipped through our fingers during the transition to mobile. That's when... And for people who don't remember, that was like Yahoo Messenger, AOL, instant messenger. There were all these desktop IM apps. ICQ. I CQ, right? Which was bought by AOL. And I think AOL got

Starting point is 00:05:19 dragged kicking and screaming and Yahoo, everybody, but eventually they all decided, hey, interruptability would be a good thing for everybody. That's when ex-MPP kind of came around and Google Talk supported it. Facebook Messenger supported it. IChat actually supported XMPP back in the day. And that kind of beautiful period didn't translate into mobile. That's when the big tech companies threw the guards up, through the, through the walls up, and created these siloed, chat apps kind of linking the chat client to the chat network. So for example, only the WhatsApp app can access WhatsApp messages. Only the iMessage app can send and receive iMessages.

Starting point is 00:06:01 So we started working on this in 2019. We built it on top of an open chat protocol, an open source chat protocol called Matrix. And over the last three plus years, we've been building Beeper. We support 15 different chat networks. including WhatsApp, IMessage, Telegram, Instagram, like you name it, we've got it.

Starting point is 00:06:26 And we have a desktop app, an Android app, and an iOS app. And so it's a very simple value proposition for users. One app to unite them all. You authenticate all of your different apps in Beeper, and now I don't have to tab between iMessage, signal, telegram, WhatsApp. I mean, it is, it's arduous and painful and annoy. to have to do this. And if people are power users,

Starting point is 00:06:52 why shouldn't they have the ability to do this? What would be the argument against this that anybody could make credibly? I think of this, I think of that friction that you're describing as a tax that we pay on top of all communication by virtue of having so many different channels which we can use to communicate.

Starting point is 00:07:12 There's this overhead. There's this extra process that we're always running in our brain to match up a given person, with the network, the last network that we used to chat with them on. So that overhead, while it definitely doesn't feel like it's arduous, but it's not like the end of the world, we obviously get through it. But that, you know, three to five percent extra effort that we have to do to basically do

Starting point is 00:07:35 all forms of communication is just this extra friction. And our goal with Beeper is to eliminate that friction and make it easy for you to chat and communicate with anyone regardless of which network they're on. And there are now some standards. There have been standards for a while, but so people understand this, you know, when you do email, there's an email standard. And you don't have to, if you're an Outlook user, I'm a superhuman user, or you use Gmail, whatever you use for your email, you shouldn't have to create a new email address to talk to another person in another email network that, would be insane and deranged. And that's what they're asking us to do with these messaging apps.

Starting point is 00:08:23 And so the one that people are most frustrated with is iMessage. IMessage lock-in, I believe, is a major part of why people keep their iPhones. Every time I come off my iPhone and I test, and I've done it maybe three or four times since the iPhone came out. Yeah. You know, I probably own maybe a half dozen Android phones. And the thing that always gets me in trouble with my friend groups in the group chats is, oh, IMessage. They explain to the audience what Apple is doing when they green message versus blue message you in a group thread and why they do that in your mind. So if you have an iPhone, there's actually only one application that you're allowed to use for texting.

Starting point is 00:09:06 It's called messages and it allows you to send SMS text messages, which are the green bubbles and iMessages, which are blue bubbles. SMS is a telephony protocol that's used by the carriers. It is an open standard, but Apple has a rule, which says that only they can build an SMS app for Android. There's no other alternative SMS apps available on the app store. You can only use theirs. They've bundled a service called iMessage inside this application, and they've used SMS as a means of bootstrapping their own.

Starting point is 00:09:46 chat protocol, chat network. So they did this, I think it was starting in 2011. And over time, people became, especially in the U.S., conditioned to use SMS. SMS was the backstop for all kind of communication. I think all the Europeans who are listening to this will think like, oh, what are those crazy Americans doing with SMS? Like, we have WhatsApp, we have telegram, you could switch to that. But for some historical reason here in the States, SMS became the de facto standard for kind of text communication for chat. By building iMessage on top of SMS, Apple has made it very easy for people to transition over to using iMessage as their

Starting point is 00:10:27 group chat protocol or their DM protocol between two people. That has made it hard for people to leave iPhone for other platforms. When you put your SIM card into an Android phone, like you decide to switch from iPhone to Android. There's no way to import your chat history over on your Android phone, and all of the conversations that you've been having with people over the IMessage protocol are not available on an Android. There's no, Apple doesn't make an iMessage app for Android. You ask another question, which is like, what are the implications of not having, say, an Android app for iMessage? So you as an iPhone user, by default, when you use the messages app, if you're chatting with someone who has an Android, your phone will send an unencrypted green bubble SMS message.

Starting point is 00:11:23 It's missing a lot of features that you might have become used to with iMessage. When you chat with someone who has an Android phone, you're sending out an unencrypted message. usually the photos and video are much lower resolution. You don't get features like being able to unsend a message or edit a message. You can't see when they're typing or whether they've read your message or not. And when you add them to a group chat, if that group chat was a blue bubble IMS group chat, it downgrades the moment that you introduce or add the first Android person to that group chat. Right. And that's where you get ostracized.

Starting point is 00:12:02 and that's where this like actually results in people saying you got to use an iPhone. And the peer pressure starts. Okay, you've seen Sunday night demo a ton of AI tools and we've learned that these tools are going to help you do so much more with less. That means more revenue and less overhead. Here's the hard part for a lot of companies. How do you actually integrate your AI into your daily work flow? Well, you got to check out CuraTech.

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Starting point is 00:13:40 So Beeper has two apps. We have one main app that we call Beeper Cloud that supports 15 different chat networks in one app, and that's the one that has a desktop app, an iOS app, and Android app. And it's still up and running. You know, we have over 100,000 people that are using Beeper Cloud. But at the beginning of December, we decided to launch a new app called Beeper Mini. Beeper Mini was an Android app dedicated to being a great iMessage client for Android. We did two things that had never been done before.

Starting point is 00:14:12 We reverse engineered the iMessage protocol down to the over-the-wire kind of protocol and implemented that in the Android app, which meant that we had full end-to-end encryption between the beeper mini app and the iMessage servers. The second thing that we did that no one had done before was we figured out a way of associating your Android phone number with iMessage, so that if an iPhone friend typed in your phone number or tapped on your name in the contact list,

Starting point is 00:14:41 your number would actually come up as a blue bubble. We launched the app on December 5th, and within three days, had over 100,000 users. It was a paid app, so, you know, $2 a month, pretty significant revenue. Yeah, millions of dollars in revenue show up immediately so you know, hey, for 25 bucks a year,

Starting point is 00:15:04 no problem with a couple hundred thousand people, a couple million dollars in revenue, immediately you've unlocked product market fit. People want to have this product. And why shouldn't they have it? And then what happens after that? So a lot of people ask, like, what were we expecting what would happen?

Starting point is 00:15:21 and here's what I expected. I believe that Beeper Mini actually increases the quality of experience for iPhone users. So you have an iPhone, you send a message to an Android user. Before Beeper Mini, it was unencrypted, it was a green bubble, it was a pretty crappy experience. Beeper Mini comes onto the scene that Android friend of yours can now download the app, upgrade your existing chat to a blue bubble, now it's encrypted, you could add them to group chats. no problems anymore. That was the state of the world that we thought would be

Starting point is 00:15:57 kind of great for both iPhone users as well as Android users. Again, you kind of touched on this a little bit earlier. Like, who would argue with that? Only somebody who was trying to protect their monopoly. Yeah, but even so, I feel like Apple stands for privacy and security. Like, that's what they put on their ads. and our app actually increased the level of security and privacy between iPhone and Android chats. The logic says it should exist, right?

Starting point is 00:16:27 And there's no way of getting around that logic. And Apple's got a long history of claiming that they would support open standards and then not ultimately supporting them. I think you're referencing the FaceTime announcement. So 2010, that was back in the Steve Jobs era, right? Maybe you could explain to the audience. He stood up on stage and he said that FaceTime was going to be an open stand. standard. And while we're 13 years later, and it's not. Yeah. You know, this is the tragedy, I think, of Apple post Steve Jobs is that they really

Starting point is 00:17:02 could be bringing a lot more people into their ecosystem, net net, I believe, if they made an iMessage app for Android, Windows, desktops, etc. And they did that for iTunes. If you remember, when iTunes came out, you could have an iPod on a Windows machine as but one example of they are capable of doing this, and they have done it in places where they feel they don't have a choice, right? If they felt they didn't have a choice because they're up against Spotify or wherever it is, they did it. With iMessage, they don't have an app for Android users or Windows users or, you know, people who are not iPhone users, which is bizarre. They should have that, yeah. So Apple took action to block Beeper mini users from being able to send and receive iMessages.

Starting point is 00:17:46 and they even came out with a public statement a couple days after explaining or trying to use the argument that they, it was something around protecting users, security and privacy by blocking, you know, third party services from sending eye messages, which to me felt like double speak, like 1984 double speak, where they were actually making the experience worse for iPhone customers by blocking people many. And people don't know this, but they are the majority of smartphone users. here in the United States now. They've got essentially, they're part of a duopoly. And yeah, this is, I think, the perfect place for the government to get involved and maybe say, you know what? You should give users a bit more choice.

Starting point is 00:18:31 And Apple has backed down at times. They originally wouldn't let anybody use a third-party media player like VLC and open-source one on phones and on their iPads. They wouldn't allow people to use other browsers than Safari. And they currently won't let you use things like that. Beeper or they won't let you use other third-party app stores and they put up all these roadblocks. But I think the developer community now is standing up to them.

Starting point is 00:18:53 So maybe you could speak to why you chose, I don't want to say to pick this fight, but to not back down, why you chose to do this and kind of hold your ground? And where is this, you know, stale made at with Apple? And are you going to keep being able to produce this and this cat and mouse kind of back and forth to make the technology work while they're trying to stop it? So our vision for the future is, it kind of stems from my love of science fiction. So I love reading sci-fi and I've actually just rereading the three-body problem series. Oh, yeah, that's a great series.

Starting point is 00:19:32 Excellent, you know, epic space adventure. And it said in the future, you know, you know what doesn't happen in the future? People never have to discuss which protocol they're using for communication. They just use the technology to communicate it. And so when I look at kind of the state of the world here in 2024, it doesn't feel like so many elements of today feel futuristic. Like the AI kind of the LLM revolution feels like we are getting a taste of what's to come. But when you look at communication and the absolute like mess that's on our hands

Starting point is 00:20:10 in terms of the number of networks and the number of apps and how every, Every month there seems to be more fragmentation. It doesn't feel like the future. And so our number one goal, our mission, is to help people migrate to an open source chat protocol that doesn't force you to kind of align yourself with one of these big tech companies. And that's one of the reasons why, you know, with Beeper,

Starting point is 00:20:37 we didn't build yet another closed source chat protocol. We decided to adopt an open source chat protocol. So over time, we really do think that people will be able to move to something more like email for chat and maintain these connections, these legacy connections to existing chat networks while we go through this kind of messy stage of having to migrate to an open standard. Because in the future, I really do think that if we do our jobs at Beeper, we'll be able to live in a world where it looks a lot more like email. You'll have multiple clients, you'll have multiple vendors, and you'll be able to carry and take your friendship and your kind of chat list, your connections to other platforms, regardless of which place you started at. Starting a business used to be a pain. You needed a lawyer. There were hidden fees.

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Starting point is 00:22:13 That's Northwest registered agent.com slash twist today. Listen, regulators are noticing this fight. You have investors for your company, I take it, your venture back, or did you fund it yourself? This is not your venture back. So I guess, you know, we're on this week in startups. How do you manage this with your investors and say, hey, we want to fight this fight against Apple? This is a big deal to take on. they could file a lawsuit against you.

Starting point is 00:22:41 They haven't taken legal action against you, which I think is, I think strategic on their part. They don't want to be seen as attacking a startup, but they have been blocking you. But then, you know, I read the Justice Department met with you.

Starting point is 00:22:53 I know you can't comment on that. But the Federal Trade Commission has now commented on this, the antitrust committee in the Senate. Yeah. The Senate, Amy Klobuchar, I know, is involved in that and Mike Lee. And so that's bipartisan.

Starting point is 00:23:07 they are pushing the Justice Department to take action here. They wrote a letter. And Apple is, you know, maybe seems a little vulnerable at this point to more regulation. So maybe you could speak to where you think this is all going to head. Do you think there is an outcome here where Apple is forced to provide interoperability or to use some standards? So in some ways, I feel like this all started a little bit with Cambridge Analytica in 2016. You know, we were riding high on mobile apps and there, you know,

Starting point is 00:23:41 there were so many big tech companies that could basically do no wrong. You know, we believed that they had our best interests in mind, that they were continuing to build new products that would like, you know, dazzle us each year. And the combined data that we had stored in these systems were only being used to create a better experience for us. I think Cambridge Analytica was one of the first moments where, we realized that that wasn't totally true. The data that we had, you know,

Starting point is 00:24:12 uploaded and produced and created for all these big tech companies could also be used for really, you know, negative things that we did not intend. And that started, that kind of kicked off some efforts in government as well as kind of in the popular culture to think that, you know, maybe we need to start thinking about our own rights and, you know, freedoms. with our data.

Starting point is 00:24:37 And we're still kind of on the forefront of that wave. It hasn't crested. It hasn't broke yet. But there's little symbol signs that this is actually starting to take a toehold. So in Europe, the European Commission recently passed a kind of GDPR-esque piece of legislation called the Digital Markets Act

Starting point is 00:24:59 that defines your rights and freedoms on the internet, including a provision that mandates that the largest tech companies open interoperable interfaces for their networks. This was groundbreaking. It was the first time that really anyone had come out and said, we need open interfaces for these siloed chat networks. The law got passed just over a year ago, and it's actually coming into force in Europe on April 1st of this year.

Starting point is 00:25:32 So expect to see some big changes. Just today or yesterday, I saw that Facebook was allowing European customers to unlink their their meta accounts. So their messenger, WhatsApp, and Instagram accounts, which previously were kind of involved together in one kind of rat's nest. They've now been forced to let people press a button and untangle these accounts. I think that, you know, the U.S. hasn't passed any legislation to kind of affirm this right that we have to manage. our own data. But we have been, you know, trying to make the case that this is

Starting point is 00:26:10 something that not only is good for us as users of this technology, but also it sets a level playing field for startups to be able to build new technology, new products, new interfaces on top of, you know, your own personal data, like your contact list and your message history. Yeah, and for people who aren't following it,

Starting point is 00:26:28 the Justice Department, according to New York Times and other folks, is in the late stages. of, and I'm quoting from the New York Times here, of an investigation to Apple and could file sweeping antitrust case, taking any amount of the company's strategies to protect the dominance of the iPhone

Starting point is 00:26:44 as soon as the first half of this year, said three people of knowledge of the matter. And I think iMessage is, you know, here. It's one of those components. Yeah, specifically investigators have examined how the Apple Watch works better with the iPhone than other brands, as well as how Apple locks competitors out of its iMessage service.

Starting point is 00:27:01 They have also scrutinize Apple's payment system for the iPhone, which blocks other financial firms from offering similar services, the people said, yeah. Just last week, you mentioned, you know, at the top there, that Apple took a feature out of the Apple Watch just because they lost a lawsuit rather than paying, you know, a royalty fee or something. And I think there's just so many of these little pieces of the puzzle

Starting point is 00:27:25 that are falling into place that at some point, you know, there's going to be a straw that breaks the camel's back. Technology can change. Nothing is constant in this world. And if you look at the history of kind of computing over the last 30, 40 years, you know, there are waves and there are waves that crash. And I really do hope that, you know, as an Apple user myself, I'm sitting in front of my MacBook, you know, a happy MacBook customer. I really do hope that they, you know, see the light on this issue and allow their own users to be able to have more power over how their, you know, technology works. Yeah.

Starting point is 00:28:01 And so what is it like when the regulators come to you and want you to be involved in all this? It's got to be a bit of a distraction, yeah? It's pretty different. So I went through kind of my first startup, which was Pebble, you mentioned. Yeah. Just over 10 years ago, we, it was a crazy ride, right? We. Pable was amazing.

Starting point is 00:28:21 It was a Kickstarter project, if I remember correctly. Yeah, we launched our first watch on Kickstarter. It went viral and we ended up selling, you know, over two million units over the span of three years. years. And I posted a kind of 10-year retrospective blog post a couple years ago about what that experience was like. And especially towards the end, as we lost sight of kind of the long-term, like I wrote a much longer blog post about this. And so if you're interested, please check it out. Well, no, tell us. What did you learn? Yeah. To summarize it, like, you know, I was thinking about like towards the end before we sold the company to Fitbit, like, what?

Starting point is 00:29:01 What could we have improved? What could we have changed? And the primary thing that kind of caused us to lose control of our destiny is we over, we overmanufactured. We had one year where we miscalculated and we built more inventory than we could sell. So that was the kind of primary cause that caused us to, to kind of enter that kind of, I kind of likened it to trying to pull the airplane up as we were heading down. We were trying our best to pull it up and to pull out of that.

Starting point is 00:29:31 that tailspin. But that's only the, that was only the, like, factor that caused us to get into that. There was a, there was an underlying kind of broader problem, which was that I didn't present a strong vision for the future of where I wanted to take the company and the technology. Like, we had a really strong vision coming out of our first Kickstarter campaign. We, you know, introduced this new piece of technology that hadn't existed. But that lasted for, you know, two or three years that, that initial vision kind of powered us

Starting point is 00:30:00 through, but I didn't present that next generation, that, you know, where is this going in the long term? And I stand by that. I think that that was, you know, one of the biggest problems that I had at Pebble. I didn't kind of positively speak about what the future could be. But now with, you know, with hindsight, there definitely were elements that made it harder for us to compete. And I'm very careful because I think that, you know, at the end of the day, we were in control of most of our own destiny. But the fact is, is we were building a product. 50% of our users were iPhone users.

Starting point is 00:30:38 And as we thought of every new feature that we wanted to add to Pebble, we had to consider what it would be like to integrate that feature into an iPhone platform. Like we were building an app that was distributed through the app store. We were competing with a watch, the Apple Watch, that was deeply, integrated into the operating system through API endpoints that we couldn't access ourselves. Like we didn't have the ability to send and receive text messages, for example, on iPhones. And that turns out to be the killer app of watches after maybe, you know, being able to track your steps does feel like when I see most people use their watch is to look at a message without

Starting point is 00:31:22 taking their phone out. Yeah. And so, again, like I think with you asked, like, what does it like to kind of have into interactions with these regulators during the pebble days, it didn't even cross my mind. And I, looking back, there probably could have been some opportunities where we could have said, similar to what Tile is doing now, saying that, look, hey, this is, this is like 50, more than 50% of the phones in the States are iPhones. The company that makes them Apple not only makes iPhones, but they also make the store

Starting point is 00:31:54 that, you know, the software is distributed on. They make a lot of the services that are bundled into the, phone and they yeah, they have this kind of stranglehold on how other people build products that work with their with their phone.

Starting point is 00:32:12 I was a major I was a major tile users for a long time and then just because air tags are integrated like you're saying, I had kind of no choice but to go with air tags because they're built into the operating system and nobody's using, or I shouldn't say

Starting point is 00:32:27 nobody's using the tile network with the tile network has been deprecated because now you have everybody using iPhones and then tiles, I think, get penalized as like a tracker in a way air tags don't, yeah? Yeah. And actually, I remember a quote from another YC partner. And he said that most startups don't live long enough to be able to have an impact in Washington to be able to actually take action that could, you know, benefit them or positively impact the startup ecosystem.

Starting point is 00:32:59 because a startup can live, breathe, and die in the span of months. In Washington, things take much, much longer. I know some people that have been working on their particular fight for decades now. Yeah. And that means that there's this like impedance mismatch between companies in Silicon Valley and startups in general and the regulators and the lawmakers that are trying to, you know, honestly do something that improves the world. I've had much a much larger chance this go-round with Beeper to be able to learn about how the DC kind of ecosystem works.

Starting point is 00:33:37 And I think what I've realized is that startups can play a role, but it's not going to produce results in the same time frame that your next sprint or your next product release is on. Your runway, let's be candid, like your runway might be 18 months if you're a startup, if you're lucky, sometimes 24, 30, you know, if you're really lucky, you've got a ton of runway. But these things take five or ten years to settle if you're lucky.

Starting point is 00:34:03 And so you're right. There's two different timelines going on here. And these companies can bully you into submission, yeah. The place where startups can have the most impact is making decisions about what products they build and the platform and ecosystem that they work with. And it's hard to look at the app store, the iOS app store and the market that comes with it and say, you know, I don't agree with their kind of decisions or I don't agree with Apple the way that Apple does business with developers. And I'm going to, you know, it's very hard for

Starting point is 00:34:33 a startup to say I'm going to choose not to sell or make my app on an iPhone because I don't agree with them. It's almost like we're as, you know, app makers or, you know, creators, we have to build for where the people are. And when more than 50% of the population is on a particular platform, it's hard to give that up. But at the same time, like, if we don't speak up, if we don't share our experience and if we don't explain that, you know, creating new products is harder because of the fact that one company controls this ecosystem, it won't change. When you're in the startup business, you should always be looking for a performance edge. There are simple ways to do this, like getting better sleep, we all know that, but let me tell you

Starting point is 00:35:12 about a little hack that elite athletes and U.S. military members use. It's called ketone IQ. A bunch of the quantified self, people like Andrew Huberman, have been told. talking about the benefits of ketones recently, and ketone IQ is a ketone shot that was developed through a contract with DARPA to make American soldiers sharper. You can think of ketones as nature's brain fuel. They have a bunch of proven health benefits like improved focus and weight loss, and ketone IQ is a clean energy boost with no sugar and no caffeine. I have been on it for a couple of months now, and my energy level has gone up, up, up, and my focus as well. I love taking these shots. I take it in the morning before I work out. I take it in the morning before I work out. I take

Starting point is 00:35:52 it when I'm skiing, and man, it makes you feel like a superhero. So here's the call to action. Get 30% off your first subscription to ketone IQ at HVMN.com slash twist. That's HVMN.com slash twist for 30% off. Or you can easily find ketone dash IQ at your local sprouts market. Comes in the little bottles and you just take this little shot, boom, you're off to the races. Do the companies try to pay you off in your experience? Did they try to like buy your silence, the Apples of the world, the Googles of the world, when they, you know, kind of feel you're in this, or do you hear stories about that, or they're just like silent and they just let you die? Look at what happened last week, right?

Starting point is 00:36:31 Apple lost a lawsuit or lost a ruling in the Epic v. Apple kind of saga, and they were forced to allow developers to link out of their apps to their website in order to process payment. And they could have abided by the letter of the agreement that the deal. that the judge forced them to. Instead, they did the polar opposite. They said that if you want to link off to your other platform to the web to process payment, sure, you could do that by all means, but we're going to throw up a disgusting pop-up that warns people of, you know,

Starting point is 00:37:06 losing their firstborn child to the website that they're about to click through. And that website's forced to track their users and send Apple a bill for 27% of whatever payment they make within seven days on the web platform. The 27% is their fee for the running the app store. And so this is where the FTC and like regulation, even if you're libertarian or you believe in free markets, when somebody has a monopoly or they're part of a duopoly in this case, which, by the way,

Starting point is 00:37:38 a duopoly is essentially just two monopolies. It's not like it's a competitive landscape. They're just conspiring. When one player pays $18 billion to the other player, like Google does to Apple. Like there's no conflict there. Yeah. Yeah.

Starting point is 00:37:53 There's a lot of commingling happen. Absolutely. But I think your question was like, you know, do they, does Apple, you know, or these other players, do they try to take individual action? I don't think so. I think like the like that action with the 27% pop up like they don't give a shit. Like they'll do what they want to do. And that those kind of actions are.

Starting point is 00:38:18 the outcome of that. And I think the cherry on top is that that happened during the same week that Apple created or launched their new computing platform, their first new computing platform in over a decade. And they're trying to position this as a platform that developers are supposed to go out and either translate their iPhone mobile apps to or create new experiences, create new things that didn't exist. and they did it on the exact same week that they published that, you know, new pop-up.

Starting point is 00:38:54 And you notice some developers are maybe, well, and developers are like, you know what? I think Netflix, Spotify, a number of folks like, yeah, you know what? We're in no Russia to develop and help you with your next platform. Sorry, we're just not going to participate, which I thought was pretty telling. I don't know if they'll eventually have to crack

Starting point is 00:39:12 when it hits critical mass, if it ever does. I don't know. You think that's, you think this AR glasses are going to as a technologist ever going to click with people? So the problem is I'm an incorrigible hardware person at heart. Yeah. I can't. I have to.

Starting point is 00:39:26 I just love, I love hardware. I love technology. I love. For sure. I haven't ordered one. I haven't convinced myself to do that. Oh,

Starting point is 00:39:32 but I do believe that, you know, we should be experimenting and trying new, you know, platforms. I, but do you think spatial computing? Do you people want to wear something on their faces like this?

Starting point is 00:39:41 Or I, is it a form factor issue or is it like, I'm trying to want the technology? I had the original Oculus. I had every generation. I've tried, I've tried literally everything. And of course,

Starting point is 00:39:52 at some point I'm going to try it, and I probably will be blown away and love that experience. I haven't found something that clicks into, say, you know, that's been a habit. Like the last, I think, really mind-bogglingly cool new piece of technology was the AirPods. Like,

Starting point is 00:40:09 it was a, it was a moment, like, I haven't left the house, you know, really without AirPods in the last seven years. They're super compelling. I think I just had the

Starting point is 00:40:20 I just had the founder of the rabbit which you know took over CS I don't know if you you must have seen it right so you're a hardware guy actually a YC founder yeah he's a former YC founder yeah he's really cool and he was speculating us like what he wanted to do next he was kind of riffing and you know we just started vibing on the pod

Starting point is 00:40:39 and I was like you know what do you think of AirPods he's like yeah you know I think I could put the rabbit in AirPods and I was like whoa okay, now that's mind-blowing. Imagine the case of AirPods, if he made Rabbit AirPods or, you know, in buds. And he was like, I can make it right now, by the way. And I was like, well, why don't you make it?

Starting point is 00:41:00 Well, I have to make it like over-the-ear headphones. And I was like, wow, can you imagine if you had over-the-year headphones? And inside of it was like a Raspberry Pi or whatever circuit board and an LTE connection. And so when you said, hey, play this music or order me an Uber or get my DoorDash or Uber Eats, it just did it. And you didn't have to have anything with you. That would be like a pretty dope device that we would all pay for. And I'm like, that must exist in the world.

Starting point is 00:41:24 It doesn't really exist. Now, somewhere in Cheongen or Akihabara in Japan, maybe somebody's built it. But man, that could be a mind-blowing vision if you think about it. And I don't know. We actually, we had that vision at Pebble back in the day. During the waning years in 2016, we created a product called the Pebble Core, which was a headless, a screenless Android phone that was roughly the same size as the AirPods case.

Starting point is 00:41:52 And it was designed to be a kind of wireless tether for your pebble. So we couldn't fit an LTE modem into the pebble at the time, but we could fit it into this kind of like basically the exact same size as an AirPods case. So that was like your, that little core was a little thing you're putting your pocket. That is your LTE connection basically. Yeah. Yeah. And so I'm a firm believer.

Starting point is 00:42:14 that technology is cyclical. You know, we can, you know, have an idea, like, just like Beeper, you know, we had universal messaging at one point, and it kind of fell out of fashion or technologically wasn't available, but good ideas come back. And they do.

Starting point is 00:42:31 I think that will happen on, on wearables and... So people, for now, they can just use Pabble, consolidate all of their messages, with the exception of I message, and stay tuned, because...

Starting point is 00:42:44 You know, this is David and Goliath. But it's happened before that the Goliaths have gotten hit with the rock in just the right place. And then they have to back down and they got to open stuff up. And so, you know, on behalf of the startup community, we appreciate you fighting this fight. And I think everybody should speak up now. Everybody in the community, developers and startups, when big tech is acting anti-competitively, just stand up to them and just say, like, this is BS. and you know if you're if they try to crush your company then be vocal about hey they're trying to crush my company and let's just amplify those discussions there's no reason if you buy a piece of hardware

Starting point is 00:43:21 like an iPhone that you shouldn't have the right to pick your browser pick your goddamn media player and if you want to use a different app store or if you want to buy books you know ebooks from amazon instead of apple books like you paid i mean this last phone was like 1400 It's bonkers. I bought this phone, Eric. The controller was like, did you buy another laptop? And I was like,

Starting point is 00:43:45 no. We just got an $1,800 charge from Apple. And I was like, $1,800. And I was like, oh, that's my iPhone 15. It was $1,800 with tax and everything. I mean, listen, I bought the one with the highest memory and the highest storage. But that was bonkers when you think about it.

Starting point is 00:44:01 If we're paying all this amount and then they want us to put $4,000 goggles on her head, man, come on, give us a break. your Apple. It's just how much do you need to win? That's the thing I don't understand. You know, you squeeze so tightly, the galaxy is going to slip through your fingers here. And I think Apple, if you're going to, if you want developers to participate with you, then be reasonable with them. You know, I don't think Apple's being particularly reasonable here. I think it's like a giant mistake for them to do this. We'll continue to success, Eric, and keep fighting the good fight. How do you make money with your startup now? Pretty simple. So we sell, so we have a,

Starting point is 00:44:37 Beeper worked with 14 other chat networks. Pretty simple model. We sell a subscription. We think that that creates a very clean relationship between the vendor and the customer. What's interesting is that every other chat network, except for Telegram actually, has a very kind of nebulous business model,

Starting point is 00:44:57 like in the case of I message, they sell phones by locking you into the platform, WhatsApp. No one's really sure how they make money. Like there's, you know. Maybe the enterprise stuff. Yeah, the business to business stuff is what I heard. Yeah, I think at the end of the day, like, we want to make it very clear that your data is your own. There's intent encryption and you're in full control.

Starting point is 00:45:21 And that's why we've just decided to make it simple and we charge a subscription for using Beeper. Eric, thanks for coming on the program. Good luck with everything. Can people help you in any way in this fight? Maybe just tweet some support. Tweet and start using Beeper. We start using Beeper. That's actually the best thing you go.

Starting point is 00:45:36 just go, and I'm actually downloading in the background right here. All right, Eric, thanks for taking the time. Thanks for coming back on the pod. It's been eight years. You're back. And I'm going to download people and give you some product notes after I get it set up on my desktop. All right, brother.

Starting point is 00:45:48 I'll see you soon. And we'll see you all next time on this week's startups. Bye bye. Hey, everybody. I talk to a lot of founders here on this week in startups and as an investor. And they tell me the same thing over and over again. They want two things from me. More FaceTime and money.

Starting point is 00:46:02 They want me to invest in their companies. And they want to spend time together. We've been working here on a new meetup program. We call it Founder Fridays. And Founder Fridays are an event by founders for founders. This is an event that is hosted in cities by people like you. If you're listening to This Week in startups, you're a founder. So what are you going to do at Founder Fridays?

Starting point is 00:46:23 You're going to get together with other founders in your community. It could be four or five of you. It could be maybe up to 30 of you in a location. Pick a cafe, pick a co-working space. I like to go to a great Mexican joint or maybe a dimson. some restaurant, you know, you can do shared food, have a couple of cocktails maybe. You do it on a Friday, you get together and you host it. Now, why is it important for founders to get together? Shouldn't you be at home just focusing? Shouldn't you be in the office just focusing on your

Starting point is 00:46:49 startup? Well, if you get together with other founders, true founders who are in the arena building like you are, you're going to get a lot of value from that because you can trade notes with that other founder about what's working at your startup and what's not working. The truth is, if you're facing a problem, there are hundreds of founders out there who have probably solved it already. And instead of you banging your head against the wall, when you sit there and you talk to three or four founders, you're having some dim sum, you're splitting a cassidia, some prajitas. Somebody says, oh, you know what, I had that same human resources problem. Oh, I had that same technical problem. Oh, I had that same marketing problem.

Starting point is 00:47:22 And they might tell you about a tool or a service that'll solve that problem for you. This happens over and over and over again when I do Founder Fridays with our portfolio companies. we're going to give you that same experience. But here's what I need you to do. I need you to host this in your city. So you're going to go to this week in startups.com slash meetups. That's it. And you'll see a landing page where you can sign up and you can say, I want to host in my city. Now, your city may already be hosting so you can just join that person. And what if you go to this event and you learn some go-to market strategy that 10x is your growth? That might unlock funding. Or you might be talking to somebody and they say, hey, I'm a marketplace too. I'm not a competitive

Starting point is 00:48:00 marketplace. Your marketplace is for used cars. My marketplace is for hairstylists, whatever your jam is, whatever you're working on. But they give you some technique that you didn't know about to increase your supply side or get more demand in your marketplace and you 10x your business. I see this happen all the time. And founders are like mutants, right? And I'm like Professor X here. I'm trying to put on Cerebro and find all the founder mutants in the world and then have you get together and do your own little meetup. And here's what you're not going to have to deal with. You're not going to have to deal with a bunch of service providers trying to sell you software or services. And you're not going to have to sit through a bunch of passive speakers. You can listen to This Week in Startups and get the

Starting point is 00:48:38 greatest speakers in the world on your own time. And you're not going to have to pay for a ticket to a conference or get on a plane or fly somewhere. No, this is about having an intimate experience with five, ten, maybe two dozen other founders in your city. Please go to this weekendstartups.com slash meetups if you are a founder. This is four founders by founders only. If you are not a founder, this event is not for you. You can start your own meetup for lawyers, accountants, recruiters. This is four founders by founders. We vet everybody to make sure you're a founder. And if you host it, it's a non-commercial event. Our first founder Friday will start on February 2nd. So please mark your calendars. And we're going to do these on a rolling basis. You can join an existing meetup if it's

Starting point is 00:49:23 already occurring in your city, or you and one or two other founders can start your own. We're using a wonderful piece of software that we've invested in called River. You can sign up for a River account just by going to This Weekend Startups.com slash meetups. We've already got host and attendees lined up in San Francisco, New York City, Toronto, Los Angeles, Las Vegas, London, and even in India. So this is your chance to connect. And if you didn't hear your city named, you can start your city. Go to This Weekend Startups.com slash meetups. Thank you.

This Week in Startups - Beeper's fight to break Apple's stronghold on messaging with Eric Migicovsky | E1892

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