This Week in Startups - Business Breakdowns: The rise and fall of “Blackberry” with Lon Harris | E1773

Episode Date: July 7, 2023

This Week in Startups is presented by: Vanta. Compliance and security shouldn't be a deal-breaker for startups to win new business. Vanta makes it easy for companies to get a SOC 2 report fast. TWiST listeners can get $1,000 off for a limited time at vanta.com/twist Embroker. The Embroker Startup Insurance Program helps startups secure the most important types of insurance at a lower cost and with less hassle. Save up to 20% off of traditional insurance today at Embroker.com/twist. While you’re there, get an extra 10% off using offer code TWIST. House of Macadamias is the next big health trend! Get 20% off your first purchase and a free box of Namibian Sea Salted Macadamia Nuts at houseofmacadamias.com/twist by using code twist20! * Today’s show: Lon joins Jason to extract the business lessons from the film Blackberry (2:19). The two discuss the company’s rise and fall, the benefits of having multiple co-founders (9:11), the psychology of framing (23:05), knowing when to "fake it 'til you make it" (56:19) and much more! * Time stamps: (0:00) Cold open! “What got us here won’t get us there.” (2:19) Jason and Lon intro Business Breakdowns - a new series! (5:51) Blackberry cast breakdown (9:11) Lessons: Importance of having multiple, complementary co-founders and market pull (13:25) Vanta - Get $1000 off your SOC 2 at https://vanta.com/twist (14:32) Lessons: “Burn the boats,” importance of diligence, product velocity (21:51) Embroker - Use code TWIST to get an extra 10% off insurance at https://Embroker.com/twist (23:05) Lesson: Framing the product or pitch (26:11) Lesson: Importance of riding and recognizing paradigm shifts (31:04) Lessons: Marketing as a status symbol, real-world virality, being of action, “bend don’t break” (36:50) Lesson: What got you here won’t get you there (40:53) House of Macadamias - Get 20% off and a free box of Namibian Sea Salted Macadamia Nuts at https://houseofmacadamias.com/twist by using code TWIST20 (42:12) Lessons: Blackberry’s downfall, importance of focus, product association (53:13) Lesson: Knowing when to cash in your chips (56:19) Lesson: Know when to “fake it ‘til you make it” (59:51) Business Breakdown Awards, presented by Jason and Lon * Read LAUNCH Fund 4 Deal Memo: https://www.launch.co/four Apply for Funding: https://www.launch.co/apply Buy ANGEL: https://www.angelthebook.com Great recent interviews: Steve Huffman, Brian Chesky, Aaron Levie, Sophia Amoruso, Reid Hoffman, Frank Slootman, Billy McFarland, PrayingForExits, Jenny Lefcourt Check out Jason’s suite of newsletters: https://substack.com/@calacanis * Follow Jason: Twitter: https://twitter.com/jason Instagram: https://www.instagram.com/jason LinkedIn: https://www.linkedin.com/in/jasoncalacanis * Follow TWiST: Substack: https://twistartups.substack.com Twitter: https://twitter.com/TWiStartups YouTube: https://www.youtube.com/thisweekin * Subscribe to the Founder University Podcast: https://www.founder.university/podcast

And this is another important point. What got you here, won't get you there, is one of these credos, it's one of these heuristics, one of these best practices here in the Valley. And so if what got you here was, you know, a bunch of folks who come up with great ideas and who have great culture will work for small amounts of money, they're new to the business, they got fresh ideas. But then you start having millions of people and servers and contracts. you need people who've done this before.

And this is one of the hardest things. And Mike goes through this where he's like, hey, this guy's my best friend, right? Multiple times when he wants to take him to New York. But he's my best friend. And this is one of the hardest things in business. I see it over and over again where three great friends build a company. And then all of a sudden, one of them was charge a product.

One of them was charge of sales. One of them was the CEO. And then all of a sudden, the person who's doing sales, they don't hit their numbers. They've never done sales before. and then you got to bring in somebody who's a VP of sales who's done it before, who's had 50 people working for them. This person's never had anybody working for them.

They got 12 people working for them, and those people hate them because they don't know how to run the department. And this is that moment where the company moves from trying to figure out product, market fit, and then becomes an at-scale company. The people who run an at-scale company lawn are very different people than the people who create products. This Weekend Startups is brought to you by Vanta. Compliance and security shouldn't be a deal breaker for startups to win new business. Vanta makes it easy for companies to get a SOC2 report fast. Twist listeners can get $1,000 off for a limited time at vanta.com slash twist. Embroker's startup insurance program helps startup secure the most important types of insurance at a lower cost and with less hassle.

Save up to 20% off of traditional insurance today at imbroker.com slash twist. While you're there, get an extra 10% off using offer code twist. And House of Macadamias is the next big health trend. Get a free box of Namibian sea salted macadamia nuts at House of Macadamacadamias.com slash twist. Plus, get an extra 20% off your order by using Code Twist 20. All right, everybody, welcome back to this week. And startups got a real treat for you today. My guy, Lon Harris, is back with us.

And, um, Lon and I loved this segment where we would talk about the lessons and the TV shows like The We Work documentary. Yeah, we crashed. We watched that one with Jordan, uh, Jared Letto. Jared Leto, so good. And then, uh, oh, his wife, Rivka, right? That was great.

Anne Hathaway and Hathaway. And then we also did, uh, I didn't get a dropout. We did the dropout with Amanda Seafried as, uh, as Elizabeth Holmes, of course. Wait, when are those Emmy Awards coming out? Anyway. She won. It's over. You won.

Oh, you won. Okay, great. Amanda Seafried won the Emmy for her amazing dazzling turn as Elizabeth. I think it won a few other Emmys as well to drop it. Okay. So we thought there's so many great business movies out there, past and present, that Lon and I would do a business breakdown show. So this is a new show we're going to do for you, the This Week in Startups audience.

Hopefully these will be timeless. But we're going to do the business breakdowns based upon a TV show, a movie, or a book. In this case, this is a book that was turned into a movie. So, Lon, tell everybody about today's film. Right. Well, we picked the Sundance, 2023 selection Blackberry. It's a Canadian film about a Canadian company based on the book,

The Signal, the untold story behind the extraordinary rise and spectacular fall of Blackberry. That's by Jackie McNish and Sean Silcoff. So this was co-written and directed by a guy named Matt Johnson, who also, co-stars in it as Doug Fragan, one of the, one of the co-founders of Research in Motion, the company that developed Blackberries. We've had a glut this year of like behind-the-scenes business movies. It's become kind of a whole film genre air. We had the story behind these sort of the Air Jordan's Tetris on Apple TV Plus.

The story behind how did Tetris the video game get from behind the Iron Curtain Soviet Union over Flaming Hot is on Hulu right now. the Flaming Hot Cheetah story. Jerry Seinfeld in a few months on Netflix has the Pop-Tart story coming out. Wow. How the development and invention of Pop-Tarts. So it's becoming a viable Hollywood genre, like the stories behind your favorite

products and brands. And I like this one, the BlackBerry film, just called BlackBerry. I like this one more than most of the others we've seen because I really feel like they dug into the personalities and the characters. It feels like more of a huge. story. It's not, it is about the product, but it is also about the guys who created the Blackberry, who ran the company, and how their dynamic changed how the business worked and what happened. So this is super important, I think, for everybody to take from here. What's going to happen

on this episode is Lon's going to talk about the filmmaking and the story and then throw it and toss it to me when we have a business lesson there. Now, I watched the film just last night, in fact, And I wrote down all the business lessons. So things that you would normally hear me talk about here on this week in startups as, hey, here's a business lesson for you. This movie is so good and is so well crafted. I really enjoyed it. And I watched it with my wife and she loved it as well. Yeah, it's great.

So it's a great. It's a great film. But it's a really, I think it's an even better story with, there are so many great business lessons in here. So let's stop the preamble and start the program. Right. So really, we got three main characters that we're following throughout the movie. We got Jay Barichel. You know him from Freaks and Geeks.

He's in a bunch of Juddapetow stuff. He plays Mike Lazaridis, the co-founder of Research in Motion, and really sort of the brains in a high-level way, the engineering mind behind the Blackberry, the guy who sort of really conceived of this product. And then Matt Johnson, who, as I mentioned, co-wrote and directed the film. He also co-stars as Doug Fragan, who is Mike's co-founder. at Research in Motion, another very smart, technical guy, but also really the culture, the guy who was running the team there, was motivating the team, and was really safeguarding the early

culture of what Research in Motion was and what they were all about. And then third, we have Glenn Howardton. He plays Jim Balsely. He took over, came into Research in Motion after hearing the pitch for Blackberry, and he was the business mind. He was the guy, the deal-maker. the money guy who sort of saw the big vision of how to pitch this, realized that Mike and Doug were behind the scenes, technical wizards, but didn't know how to be in the room, be in front of the money people and make the sale.

And so that's sort of how he comes in and takes over the company. It's a great cast. It's a great cast. People are really enjoying seeing a different side of Glenn Harrington, of course, Dennis from It's Always Sunny. Ah, I don't watch that show, but yeah. Oh, he's really funny on it's always sunny in Philadelphia, but it's a very, very different. Dennis Reynolds, it's a very different kind of character.

And I think that this is for a lot of people, myself included, this is really the first time seeing him in a more dramatic role. And he nails it. He's fantastic. And this little trio have some great dynamics. If you were to compare their dynamics to other popular dynamics in the history of business, Glenn is a hard charging, you know, bit of an a hole. not a bit. I mean, as the movie goes on, he gets more and more... Yeah, I mean, he...

Somewhere between a confidence man, but also a Harvard MBA, apparently. Or he went to Harvard. I don't know if he got his MBA from there. But Jim, uh, bow silly? Ballsilly? I think it's Ballsilly, but as a joke throughout the movie, people keep mispronouncing it, ball silly, which he does not like. Ball silly, yes, yeah.

So, I'm going to go with Ballsillie. Just such a great character. Matt is kind of the lovable, goofy, heartfelt guy who's the soul of the company. He likes to host movie night. He's your culture guy, right? He's just a pure culture guy. It makes everybody feel great. And then Jay is kind of playing a sort of a genius Larry Page type, maybe a little bit

awkward, not exactly on the spectrum, but not exactly off the spectrum, but maybe more of a Zuckerberg type, let's say, or a Bill Gates type. I think it's that he's got the ideas, he's got all of this insight, but he's not, he's not the best at communicating it to a lay person audience. He's good with technical people, but regular people, there's a communication breakdown, which you sometimes do see, I think, with engineering geniuses. It is sometimes hard for them to condense what they know into something a regular non-computer scientist can understand. And I think this is our first lesson that we'll go to here, which is what makes for great companies is typically multiple co-founders. So having two or three

co-founders in a company that complement each other. Now, listen, each of these people is flawed in some ways, but they do complement each other because Mike can focus in, as the co-founder, you know, on building the product and he's a product genius and give him 24 hours, she's going to come back with something great. Doug will keep the troops happy and host movie night, keep the culture going while Mike is heads down, and then Jim, you send to war. He will threaten to sue people. He will jump on a plane. He'll chase somebody down.

He does not care. He's a rabid dog. And that's really complimentary. So we look for that, actually, when we invest in companies, two or three co-founders who can complement each other, whether it's Larry Page and Sergey Brin, you know, or Bill Gates, Steve Bomber, and the third founder who passed away Paul Allen. You know, you usually have two or three folks, and hopefully they, you know, compliment each other. Okay. And I think one thing the movie gets, gets around to by the end, too, is

understanding those roles. It's not just having a good bounce with your co-futters, but understanding this is the job I do. This is the job they do. And sort of understanding, because I think we get over the course of the film, Mike starts to look at Jim and realize Jim's having all this success. Jim, people are seeing him as the leader. And he starts emulating and not all, not necessarily all of the best qualities. And like, I think starts to sort of apes. some of the negative qualities he sees in Jim as well. And I think that there is an understanding of like, you know, no, Mike needed to understand his role was the smart guy who's going to be like,

we can't do it that way, we have to do it this way, it won't work to do that. We have to do it like this and not to sort of take his eye off the ball that way. Yeah. And Doug stays consistent. He probably has the most grounding. The other two are the flawed characters, right? So in some ways, you have Jim and Mike in some sort of dance. And Doug is, you know, kind of the most level-headed, hey, like, let's build a great product guy.

He's our audience surrogate, too. He's the guy like, we see, we kind of view the rise and fall through his more stable kind of perspective. Yeah. I mean, he's not technically the narrator, but I feel like he's the relatable character that we're watching these two other eccentrics from his POV, I feel. Now, you know, I remember this company because I grew up in IT. I remember BlackBerry's arriving on the scene, so do you. Yeah, all of us who lived through this era remember the rise.

The sudden, because it did feel very quickly, even compared to a lot of other hot products, it felt like all of a sudden you'd never heard of a Blackberry and then everybody had a Blackberry. Yeah, and this is when the concept on a business basis comes in of market pull. This product didn't just have product market fit. In the beginning of the film, they start to figure out product market fit, but then it became something. a status item, it was so effective at doing what it did. The product was so transcendent and had no competitors and was so technologically unique in how they were able to send data that it really had market pull. And they knew they had it because they literally couldn't, they sold so many of these. They were breaking the networks. And this is something I had forgotten. Yeah. There were many

times in the 90s when the Blackberry network would go down in New York. I'd forgotten about that too. I had forgotten about that. And so you just think, you know, it literally is like when Twitter first started the fail well. One of the signs that you're doing great in business is you have so much market pull on that your service cannot handle it. Your cars are sold out. There was a period of time when Tesla's was a two-year weight. And so ramping up and scaling is very hard. If you get market pull, your organization lawn goes from trying to find product market fit to trying to fill consumer demand. See, your company, the entire mindset of the company is trying to figure out product market

fit and solve problems. And then all of a sudden, boom, like lightning. When you get product market fit, the consumer demand becomes so overwhelming. It can literally just break the company. And this company almost broke from it, just like Twitter almost did. If you're a SaaS or services company that stores customer data in the cloud, then you need to be, uh, SOC2 compliant. You knew that.

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Here's the best part. Vanta's going to give you $1,000 off. That's 10 hundies. Get $1,000 off at vanta.com slash twist. That's Vanta. com slash twist for $1,000 off. You're sock, too. Okay, let's continue because there's multiple, they kind of structured this into a couple of, you know, key moments in the history of the company.

So it's probably a good way for us to analyze it. Yeah. So I noticed this is kind of, it's the same thing Sorkin did with his, uh, jobs screenplay, that the Steve Jobs profile that he did. Where you sort of rather than the full scope of everything that happened, which could be sort of overwhelming. Yes. Such a long period of time, so much to cover. He sort of, we sort of zero in on a few key moments. in the sort of development of the story.

So, yeah, we opened in 1996 where Mike and Doug, they've created research in motion. They have all these modems that they've made. They've got this deal with U.S. robotics, which agreed to buy some of their modems. But now they're having trouble collecting on their invoice and deliver it. They're just being held out. US robotics doesn't want to pay them for the modems. That's put them in a real cash hole. But they also have this idea that Mike sort of developed for this thing.

They're calling a pocket link, which is Mike, has sort of come to this realization that there are these internet signals that you could potentially that are just out there already, you wouldn't have to send them yourself. You could sort of tap into this pre-existing internet network and use it to send emails. And so he has this idea for a device that would be in your pocket, but you could use it to check emails. It doesn't sound super impressive in 2023, but in 1996 emails in your pocket was remarkable. So he goes and he's pitching it around to various companies. One of the companies he pitches it to, Jim Ballsalee is an executive there. He hears the pitch. He realizes right away, this is an interesting product. There's something

there, but he doesn't like to name PocketLink. And these two guys who have come in, these two dorks who don't know how to present themselves, who don't know how to present their ideas in a professional way, they're not going to get there. At this same time, because of his personality and his anti-social tendencies, Jim has sort of, he's on the outs with his prior employer. So he sort of puts a few things together, seizes this moment,

wise to the guys at research in motion and sort of tells them he's doing this entrepreneurially on his own merit, doesn't tell them he's been fired from his other job. No. So he goes to them and says,

here's what I'm going to do. I'm going to buy a chunk of your company. You're going to make me the CEO. And I'm going to put this, I'm going to put this on the right track. And this is a great moment. for me to jump in because he actually acts as their angel investor. He offers 20K for 50%.

They have a little negotiation. He winds up buying a third of the company for 150K, which would be a $450,000 valuation, $450,000 valuation, which at the time would not be of unheard of. You know, low $1 or $2 million would probably be more appropriate, but this is a company that was really damaged. But makes a cardinal sin.

He does no due diligence. And if he had done due diligence, he would know they were $1.6 million. million dollars in debt. Yeah. So now he puts the 150k in. They're in debt. And he has to mortgage his house.

And so this is another major business lesson, which is the burning the boats, which is something they always talk about in Silicon Valley. Sometimes you just got to burn the boats as part of the strategy, which is we're not going back to the homeland. We got to the new world. We burned the boats. And now we're going to fight our way through this new world. And that's the burning the boats moment.

moment, or as my friend Ruloff at Sequoia would say, the crucible moment, he's got to make this work because he has literally nothing. He's been fired. He put all his money into this, and he just put his mortgage into it. And man, does that create a ton of pressure, which then spurs them to action? If they had been overfunded, like we see in today's era, Lon, there would be no need for them to, you know, get that make it or break a deal in New York from whatever the company was that becomes Verizon. Bell Atlantic. Oh, yeah, Bell Atlantic.

Then becomes Verizon. They wouldn't need to hustle. So you have the pressure starts to build. No pressure, no diamonds. That is Mike's, we see that Mike as an engineer, as a science guy and as a STEM guy, his whole perspective is, I need time. I need months of testing. This isn't, I need to do this.

I need to check this. I need to check that. And you know that that's what they would have done without Jim there lighting a fire under them tomorrow, tomorrow, the meeting is tomorrow. So they would have taken months to put this item together. And that's where at some point, Jim says, listen, to Mike, perfect is the enemy of good? Where he says, you know what perfect is, the enemy of good? We're in a race to get this thing to market, and we are a year behind.

I need a prototype. I'll do it perfectly or I don't do it. Mike, are you familiar with the saying perfect is the enemy of good? Which is, you know, something Reid Hoffman gets credited with this. And many people have said it before Reid, but we see. said if you're not embarrassed by your MVP, you know, you waited too long to ship kind of situation. You got to really get your product out there. And that's what they did. They made in 24 hours. And maybe that's true. Maybe it's not. Who knows if it was true. But he makes them do that

overnight prototype. And you really, that is the magic or a big part of the magic and folk law of the technology industry as I grew up in it. Now, today, the idea that people would work overnight and sleep under their table because of all the money in this industry and funding available and resources available. You haven't seen that much these days. Really? Even in AI companies, they're not sleeping at their desks anymore? You know, I think there's so much money in entitlement right now that the crazy pirate attitudes in Silicon Valley is limited to a very small handful of companies. If the company was going out of business, like in this similar situation in today's world, the average

Silicon Valley company if somebody like Jim came in and said, hey, we got to do this overnight, you would have had five people resign on the spot. I'm not working overnight. They would just walked out the door. Whereas in that era, people would be like, well, what else am I going to do? I'm just an engineer. And that is, you know, a point I was going to bring up a little later, but I'll bring up now. The engineers in this are treated horribly. The technical people are considered like plebes. They're just like necessary evils. They're just, you know, a means to an end, as opposed to the stars of their own show. And I think it's really interesting to watch that for me.

Because I forgot that era. I was an IT guy and I got treated terribly. People were just like, oh, IT guy, you know, I was like the photocopy repairman. Yeah. I mean, you could really see it. I think both Glenn Harrington and Michael Ironside, who plays the guy who gets brought in to be the sort of the CLO,

the sort of hard, hard-ass CLO, sort of whips them all into shape. They walk around with so much confidence. The business guys, the deal guys, were so clearly in charge. They're the alphas in that office. They're walking around with all the confidence. And all the other guys are the cubicle jockeys. They're the developers, the coders are the low-level.

Code monkeys. They're the geeks. Yeah. And we even see there's a moment in the movie. We'll talk about it a little bit where they bring in these sort of elite developers from Apple and Google and all these sort of legendary companies later on. And you can really see the ship that the balance of power kind of moves during the course of the film. Listen, I work with super early stage companies at launch, like literally year zero.

They haven't even incorporated yet. And then we hit the Series A. People have thousands of dollars in MRR. And maybe they've only raised a couple of hundred thousand before that Series A. And they don't have their insurance set up. And in fact, we recently had a great startup that didn't have DNO. And we had to really stop everything because they were having board meetings. They were making massive decisions.

There were legal issues. And they didn't have the basic D&O insurance that protects. directors and officers. So we send them right to Embroker. Embroker is business insurance built specifically for startups. A single application will help your startup get four quotes for four lines of coverage in 15 minutes. Think about that. Four quotes, four lines, 15 minutes. And they're going to connect you with one of their expert brokers for unmatched service that goes beyond your policy. We use it at launch. It's easy, peasy, lemon squeasy. It's easy, breezy. What more do I need to tell you? I use it. I love it. A lot of our startups use it.

They love it. Try a broker today with the code twist. And you'll get 10% off their startup package in broker.com slash twist. That's eM-B-R-O-K-E-R.com slash twist. And use the code twist for 10% off. Okay. Let's get back to this amazing episode. I love what happens next because the next morning,

Ball Silly. Right. And Mike fly to New York to meet with Bell Atlantic. Yeah, they have this big meeting with Bell Atlantic, soon to be, Verizon, where they kind of, they not only have to. It's the P. pitch. It's like they not only have to sort of present them with their idea, but then really sell them on why is this a game changer. Yeah. And this to me was a magical moment. Mike

forgets the prototype in the car, which who knows if that was true or not, but that is, you know, stuff like that happens. They, you know, had flown over, you know, they worked overnight, flown there in the morning. He forgets the, you know, which is, he's probably tired. Anyway, he reclaims the device and they open it up and he gives it to the Bell Atlantic CEO, who, by the way, He's an incredible actor. Saul Rubenek, a great character actor, a very, very memorable theatrical. I mean, was he also in,

was he also in secession? Has like a lawyer, an environmental lawyer? Yeah, maybe, maybe. I seem to remember seeing him around as like one of the guys in Logan Roy's. You've seen him in so many things. He pops up in, one of those products. He pops a bit of stuff, but I don't know if he says.

He is a really interesting character because he's probably 20 years their elder, it seems. and he has a lot of customers, so he's got a lot of wisdom. There's a couple of great moments in this pitch scene, and I think this pitch scene is really one of my favorite parts. And at one moment,

when he holds the prototype of the BlackBerry, he says, well, it's definitely the world's largest pager, to which Mike Lazaridis says, no, it's actually the world's smallest email terminal. And what we call this in psychology and in business and in business, and in negotiations is framing.

How do you present the idea is super important? And everybody kind of nods. And it's just such a great moment. And that basically wins them the pitch, that very moment. And those moments are rare, but they're important. It's, I think, because it's such a, it is a mental shift. And you do, a lot of people watching this are probably too young to remember a time when the idea of a pager was that there was, you couldn't really interact with these devices.

mobile devices were like alerts. It was one thing. It was like, you're getting a phone call. And then you've got to go find a phone and actually make the phone call. And I think that's what they're getting at. John Woodman is the name of the character Saul Rubenx. I don't know if it's based on a real guy. But he's still stuck in that mentality of, well, this device in my pocket,

it's just, it's going to like let me know if I have an email or if it's going to, it's going to like hook up to something that he's still not thinking about. No, no, you can do your full, you can complete this task on this device. And that is like the changeover moment, I think. Oh, you know what? That guy was in billions. He was half-thaleridex in billions. Unforgiven, too, very memorably.

But he also has an interesting moment where they show him the jogger on the side of the Blackberry, which was like a little wheel. Right. You could jog it up and down. And he, you know, it's like little design elements come into play there, which I love, because product does matter, right? Yeah. That's the dawn of the status device era.

I mean, that was the first one where it wasn't just about what it can do functionality. It was about form. It was about looking cool. It was about showing off. It was about you have the hot new tech in your hands that I want to get. Which, of course, we'll talk about paved the way for what was coming. Well, and it was, it's like a jogger or something. I forgot the name of it.

It'll come to me. But it also was the beginning. Click wheel. Click wheel, yeah. It's kind of like that. It also was the birth of the gadget era. So the Sony Walkman was like a gadget, but it was one of one in the world. But then slowly people started to make other devices, gadgets that you could put on your side, you know, on your utility belt, as it were.

And BlackBerrys would live on your belt, right? And there was another popular item called the Palm Pilot, which is a personal digital assistant. I need to have a phone in it in the original version. We'll get to that in a minute. Yeah. It was another paradigm shift. That's what we make the jump to 2003. Yeah.

So there were so many moments in this film where you saw the power. paradigm shift. And paradigm shifts are so interesting to me because people have to live through them. And now I've lived through them. I live through the PC era to the mobile era, from the client server era architecture to cloud computing, PCs to mobile, dial up to broadband, the consumer internet web 2.0, social media now, AI. There's so many paradigm shifts that occur. And it's very hard as a technologist, investor, or somebody covering it to sometimes make the jump. And sometimes people stay behind in the paradigm. There was a great paradigm moment. It was very subtle. But when he explains to them that they can have more than 10 Blackberries

on their network at Bell Atlantic, because instead of the Blackberries polling to see if there's and pulling data down constantly, it just sends a note to the Blackberry that it's got a new message and push technology, right? And that was a note. one where people's brains are kind of broken. There's always that opportunity, and we see that now with chat GPT and language models. Not perfect, but before we got on air here, we were brainstorming names for this segment. And it was, you know, interesting. It was an interesting tool, but at some point, chat GPT will nail it and we'll name the segment. So he nails the pitch and they need a name, and that's when Blackberry is actually born, right, in that moment. I did look that up. That is not

true. The story of the origin of the blackberry name in the movie is that Mike, when he's eating like a Danish or something in the car, and he spills it, he gets a little blackberry stain on his shirt, and then Jim sees it, that's where they get the idea from it. That is not true. They thought when they designed it that the buttons on the blackberry looked like seeds, and so they came up with, let's give it a fruit name. And then they just made a list of fruits. Love it. Went on the whiteboard and then we're like, Blackberry, that's the one. I looked this up because I thought that was such an interesting. detail in the movie.

And it's so interesting in the movie, if you were looking at your iPhone during the movie, you got pulled away, they didn't say a word. It was a nonverbal cue. He just gets the stain on his shirt. Yeah, you zoom in on the stain. They zoom in on the stain. So if you're one of those people who's multitasking in a movie, which I do sometimes, this is how you miss things.

So please put your phone away in the movie theater. Okay, let's jump to 2003. They sort of nailed the pitch. Verizon is on board. Bell Atlantic. they make the deal and we cut to 2003. By this point, research in motion had gone public in 1997. Market cap, when we rejoined them about one to two billion.

And the big action of this middle chunk is that Palm CEO Carl Yankowski, played by the brilliant Carrie Ellis, he takes a meeting with Jim and Mike and he tells that basically, if they don't agree to sell Blackberry to him, he's going to just buy up their stock and take over their company regardless. list. And so he sort of, they don't have a choice. He wants to, he wants Palm to own Blackberry and he's going to set out to do it. So Jim's plan to keep their company is we've got to massively up our value. Like the valuation's got to go through the room. The stock price has got to go up. So then it's too expensive for Carl Yankowski to just buy up all the shares and take over their company.

So his big plan is start pumping up all of these sales numbers, but the engineers are telling him we can for exactly the reason that you mentioned. If too many blackberries are on the network at one time, it's going to stop working. We're going to crash the entire network. There's no way to do it. We can't figure it out. So this is the real sort of conflict of this middle section. Jim ends up going to the salespeople and telling them to go ahead and start selling more Blackberries. Anyway, just like as you mentioned, he'd rather apologize later than ask for permission. And this is also when the sales guys come up with the winning idea, which is you're really selling it by getting these in the hands of well-to-do people, good-looking people, wealthy people, well-heeled people. Gadget as a status symbol.

Right. Your technology is a status symbol. Right. Put them in places where a lot of other people who have a lot of money are going to see them and they're going to be like, what is that thing that they're using? I need one too. And that's when it really takes up because they make BlackBerry a status. thing that everybody wants to be seen having. And so this is really important in terms of marketing. Are you marketing to everybody or are you marketing to a beachhead market? So when we talk about

startups, you usually have some beachhead market. You have some ideal customer profile. And the ideal customer profile here was a rich guy who was at a tennis club or smoking a cigar, who had a six-figure salary and an expense account so they could afford to buy one of these and pay for it. And these blackberries would, of course, because you're using them out and about, you know, they're portable by design, there's a in-person over-the-shoulder type virality to them. So they told good-looking members of their sales team, just go and, you know, show it to people or just be laughing, looking at it. Right. Go to a cigar bar, go to a country club, go to a high-end bar, and look at your

blackberry and laugh and you're engaging with it and you're checking your e-esgare. and make other people want one. Good boiler room vibe at that moment. Do you notice that? It's like they come in with like stacks of business cards from people they met the night before at a, you know, drinking scotch and smoking cigars or at the tennis club. And they just slam them down on the salespeople's desk and say, go close this. And it reminded me of, you know, you'd be at a party or you'd be at a bar and somebody

would pull out an iPad, like in the early days when the iPad was first out, people would crowd her out. What do you do? Do you guys get games on there? What is it? Like, it really, they capture how that really does happen very organically when you bring these kinds of gadgets in the public. It's another lesson for people.

You know, technology used to, you know, not be, uh, essentially, uh, part of your life, uh, in the real world. You use technology at your office, maybe on the margins at home. You either got a video game console or, you know, whatever, uh, a PC, you know, in your den. But, you know, it was, it lived on two different desks, you know, like a little nook in your house. your house perhaps, you know, by the kitchen, you had a shared computer, and then you had a computer on your desk at work. Yeah.

It wasn't like this having gadgets with you in between. It was actually seen as nerdy. Like a person who was obsessed with gadgets or technology who always was playing around with stuff was like, you were Steve Urkel. Like if you go back and watch Family Matters, that's the Steve Urkel joke is he's obsessed with technology and gadgetry because he's a dork. And it wasn't seen as cool. So the real world virality happens.

I saw this happen with Uber and other people have seen it happen with Postmates DoorDash. Real world virality is you see something in the real world like somebody ordering an Uber and over the shoulder they show you the Uber app or you see the mustache on the front of a lift, right? And so this real world virality happens. Of course, that leads to too many people buying these things and that means he crashes a server. Right. Okay. This is another big moment because Mike realizes. I think Jim comes to him at one point.

It's like, you told me you had the best, why are the servers now? You told me you had the best engineers in the world. He said, no, I told you have the best engineers in Canada. You said they were the best engineers in the world. I said they're the best engineers in Canada. And then Jim's like, all right, so he is of action. This is one of the things I love about Jim.

So as a founder, if you're watching this, like the great part is that he takes action. And yeah, does he bend some rules? Yes. Does he look? You break some laws, yeah. But then when you, if it bends, that's one thing. But if it breaks, not good.

If it bends, that's funny. Yes. If it breaks, it's not funny. That's not funny. Not funny. So this is a moment of him bending, right? He's overloading the servers. That's bending.

But continue on, Lon with the story here because he quickly starts to break stuff. Yeah. So he's recruiting all this top engineering talent. And what he's finding is that it's very hard to get people to leave companies like Google and Microsoft, they've got contracts, they've got very lucrative options or whatever. And so what he starts doing is he's backdating these stock options. He's like, I'm going to give you stock, but we're going to backdate it. Like if you had it before Blackberry became a huge company and you'll be granted into all of this extra sort of all of these extra

back channel earnings, millions and millions of dollars to these guys to recruit them that he didn't have on hand. I mean, I think that's the big thing is he knew he needed to spend millions of dollars to bring these guys in. He knew he needed them on his team. He didn't. didn't have that kind of cash on hand. So he's, he's manipulating these stock deals to give them these bigger rewards to come work for him. And this, by the way, became a bit of common practice. Apple got caught up in this.

A bunch of people got caught up in this in the 2000 turn of the millennial, turn of the century kind of time period because what happened at that time period was you would say to somebody, listen, you know, we have this document. and instead of having your options start on 2003, if we put it at 2001, the stock price was a dollar, now it's 13. So that doesn't cost me anything. So who's actually paying for that cost is what you're left to wonder. Why doesn't everybody do that?

Why doesn't everybody give those? Well, we find out later why. Right. And we'll explain any more detail as we go. In the short term, it works. And he wins over Rich Summer from Madman, plays one of the Google engineers that come over, Juan Cho, who's an old school YouTuber, plays another one of the engineers who comes in. It was nice to see him.

Anyway, so they come on board and they do start to figure out this problem, how to condense the data so they can get a lot more people using their Blackberries all at one time without expanding Verizon's network any further than, you know, that. They can't, they can't control that. They don't have a power of that. As well, Jim brings in Charles Purdy to come in his CEO. Oh, we already mentioned Michael Ironside as this sort of gruff. hard-ass, and that really is this moment where the culture behind the scenes that research and motion

shifts. It was this very community-driven, developer-driven culture that sort of Doug was sort of sitting on top of a lot of fun, a lot of movie nights. We see them hanging out watching Raiders of the Lost Dark together, even during a high-pressure moment for the business. And this is when when Charles Purdy comes in, he's like, that's over, no more movies. We're not goofing around. This is a business. You're here to work. and lays down the law and sort of that way. And they wind up solving the problem in terms of connectivity. The stock jumps 400%.

So they have successfully fended off palms, sort of takeover threat. But the culture of the business is fundamentally changed probably forever. And that sort of wraps up the 2003 segment. And this is another important point. What got you here, won't get you there. is one of these credos, it's one of these heuristics, one of these best practices here in the valley. And so if what got you here was, you know, a bunch of folks who come up with great ideas and who have great culture will work for small amounts of money, they're new to the

business, they got fresh ideas. But then you start having millions of people and servers and contracts. You need people who've done this before. And this is one of the hardest things. And Mike goes through this where he's like, hey, this guy's my best. friend, right? Multiple times, when he wants to take him to New York. But he's my best friend. And this is one of the hardest things in business. I see it over and over again where three

great friends build a company. And then all of a sudden, one of them was charged a product. One of them was charge of sales. One of them was the CEO. And then all of a sudden, the person who's doing sales, they don't hit their numbers. They've never done sales before. And then you've got to bring in somebody who's a VP of sales who's

done it before, who's had 50 people working from them. This person has never had anybody working from. And they got 12 people working for them. and those people hate them because they don't know how to run the department. And this is that moment where the company moves from trying to figure out product, market fit, and then becomes an at-scale company. The people who run an at-scale company lawn are very different people than the people who create products and who get a product to market and even create a category like this

company did. To create a category, you've got to be a bit of a pirate and you're very experimental. to be part of the scale team, you have to have a very narrow focus. At the start of a company, you got 10 people, and each one's doing five jobs. And then when the company gets to scale,

you have 50 people doing one job. Like literally 50 people in a department working on this one aspect of the phone, you know, the keyboard. And literally everything gets atomized down to the point of which it would be very boring for some of those people to be there. And that's this moment.

And for me, that was one of the, it's always one of the sad moments in a company, but it's bittersweet because it's a sign that you're growing, that you're outgrowing people. Just like sometimes personal growth in a relationship, sometimes people outgrow each other, right? And they get divorced or they don't stay friends. Yeah. And I think that that is like that changeover is in some ways what I think the heart of the movie is really about. More than a lot of the sort of ups and downs of the business is about, you know, people change

and things change in how time and success and failure sort of shift relationships around, I think. Let me tell you about House of Macadamias. This brand's got a special place in my heart. The founders, Brandon and Carmen, they are avid listeners to this podcast this week in startups. And they actually started their company after listening to this pod and reading my book Angel. It's incredible. It warms my heart. And in fact, their first angel investment was a huge winner.

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discounts, but they always give a special offer just for our Twist listeners. Get a free box of Namibian, C-Salt and Macadamacadamacan nuts at House of Macadamacadamus.com slash twist. Plus, she'll get 20% off your order with code Twist 20. That's a $35 value plus 20% off with the code twist 20. No, I got a question for you here. Is this movie so good that it's going to get remade with the next level of stars? No, I don't. I don't. I think one, I think one, I think What it is going to do, I think, is we're going to start seeing Glenn Howardton, especially in these pop up in more of these kinds of roles. I was saying, this made me feel like he'd be a perfect Lex Luthor. We're recasting the world of Superman right now with the bald head.

He's funny, but he's angry. He's smart, but he's a loose cannon. Like, it feels kind of a Lex Luthori sort of. So I think that, I think this movie is going to get these guys a lot of attention. And I think it's going to, it's still, it's still only VOD on streaming. So I think once this, once this ends up on a Hulu or on a Netflix or on a, I don't, I, I don't know where it's going yet. But I think a lot of people are going to discop. All right.

Well, now we get to the big moment that you've all been waiting for, 2007. Right. So finally worth the 2007, the sort of the final chunk of the movie. So Blackberry now, by this point, 50%, close to 50% of the global phone market. They're the dominant player in the capital. category. Jim is starting to get distracted. He's, we didn't mention earlier, he's a, he's an obsessive hockey fan. And at this point, when we rejoin him in 2007, he's become very fixated on this idea of bringing a hockey team to Toronto. And it's, I'm right, Toronto, bringing a hockey

team to Canada. He wants to take him from Pittsburgh. Yes, he wants to take the Pittsburgh penguins and move them to Hamilton, Canada. That's his, that's his big plan. So as that's happening, he's become very distracted. He's kind of taken his eye off of Blackberry. As that's happening, Steve Jobs memorably has a keynote at which he announces the iPhone. And immediately everybody, except for the people inside Blackberry, seem to sense this is a real important moment of significance. The team at Blackberry seems a little distracted. They don't necessarily see it as an immediate threat.

Yes. Although some people, there's a great scene, and it's a throwaway scene where two of the engineers, you know, camera sort of cuts over to them during one of these categories. I mean, they show Research Emotion, they're watching the Apple keynote. So they're watching the Steve Jobs keynote in real time. But he says, hey, you know, they got an app store coming and it's going to like developers are going to be any developer can put an app in the app store. Yeah, third party developers. Third party developers. This is another paradigm shift.

And, you know, if you look at the iPhone, it had multiple paradigm shifting attributes to it. There was, of course, the fact that it didn't have a keyboard. Now, was that the revolution, the touchscreen? No, touchscreens had existed before. I would argue that the bigger piece to it in its success was the third-party developer platform. That's just my belief. Now, of course, some people might argue, you know, the keyboard versus not having a keyboard, but I actually think it was.

From my memory. Yeah. When iPhone was new and everybody wanted one, it was the big colorful screen slash touchscreen that no more would you have this little tiny black and white kind of screen, full color looked like a computer screen in your pocket. That was maybe the biggest one. Yeah.

And then the other one was third party app store, games, videos, you know, what, not videos. Yeah, like, people, you'd be able to pull up other stuff beyond just the internet browser on your eye. The browser was amazing too, because BlackBerry browser just didn't get the job done. You know, like,

looking at stuff in a Blackberry browser was like, it was a last ditch effort, you know? Yeah, to me, it was that it was really that screen. It was, we're going from, it was like the, you know, a Game Boy style to the full, like, you know, PSVita or whatever. So, you know, maybe it's two-powered,

I mean, that might explain in some ways the amount of market pull this thing had was that it had two paradigm shifts happening at the same time. Because when you make a very compelling case that it was the screen, and it's got me now thinking, maybe Lon's right here, it was the screen.

But then when you started seeing those apps showing up, it was like getting a new phone. And it was just like, oh my God, it really is a computer. That's the difference. Blackberry feels like, an email terminal in your pocket, but the iPhone felt like a full computer. Yeah.

Yeah. So people keep bringing, like, I think the movie does a really good job of over the course of a few scenes, more and more people start bringing it up to Mike. You know, hey, have you seen this jobs thing? Have you seen what Apple's doing? What do you think of the iPhone? And it gets out there in the world very quickly. Everybody's kind of looking for what Blackberry is going to do.

And I think this is where we get that they kind of didn't get. what the nature of the challenge facing them was and how to respond. Mike gets very fixated on how do we sort of find a middle ground between competing with the iPhone, but keeping the Blackberry, Blackberry-ish. It's got to click still. It's got to feel authentically like the Blackberry I already created. And I think the movie applies that there was a little bit of ego there. There was a little bit of pride.

He has a point where he says, like, I invented this whole category. I came up with this product. And he did. he did but he's holding on to it even after like well but here's the next revolution and you know i've seen this moment i've seen this moment up close and personal with founders as well which is you sometimes identify yourself with the product and the company more than you realize you are the creator of the product and the company and that you'll have other creations down the road if they had if he had had more grounding and less ego about this

or just more self-awareness, you can say, listen, they want up to, it's a better product, our product's different. We've got some number of years where people are still going to buy Blackberries because they're addicted to them, but we really need to start thinking, where is the puck going?

And do we need to make a competitor to the iPhone? What's the opportunity here? And eventually they did do a Blackberry with Android on it. They did do a Blackberry with a keyboard at the bottom and a huge screen at the top. They tried a lot of different ideas here. And none of them stuck. but it really is that when I said before about paradigm shifting, paradigms shift, but sometimes people

do not. And that was the moment where he couldn't leave the current paradigm. He was too identified with his personality and he couldn't make the jump, whether it's jumping from gas powered cars to electric power cars, from search to now chat GPT, from desktop to mobile, from installing software to renting it per month. And then his standards, start to change and he never wanted to build stuff in China. And then there's a pallet of phones from Shenzhen where I've actually been. So it was interesting for me to see the word Shenzhen on the side. Right.

The whole movie, he's really resisted to ideas of farming out manufacturing to China because in his personal experience, one of the things that motivated him early in the movie, when products are manufactured on the cheap in China, they don't hold up as well. Their quality is lower. There's always, he's irritated by like when they're static on the audio device or when little thing stick. And so he's a perfectionist. He wants everything to be great.

He refuses. And then at the end of the movie, that's when he caves. And he's like, okay, to get these Blackberry storms out at Ka, you know, on budget in time, we'll farm it out to China. And then you're at the end of the movie. It makes him crazy. He's going through the box and fixing them individually himself. It's kind of like, you know, to remind me of as the conversation.

You and I are students of film. For those of you haven't seen the conversation with Gene Hackman. There's like somebody loses their mind kind of moment with technology somehow being at the crux of it. Right. Yeah. It's this pointless. And we back up and you see all the boxes he'll never be able to fix all of the phones

himself. And so even as all that's going on, we also cut to the SEC is now investigating these stock deals. Basically, Mike and Doug both point the finger at Jim. Like, we weren't doing the money. He was making all of these offers and doing these deals. So in the movie, Blackberry gets raided by the SEC. Jim was forced to resign as chairman and the company. There was a settlement.

They ended up settling the case with the SEC. The FCC and the FBI cracked down on many companies during this era for backdating their options. People got speeding tickets. And they got big, people got big speeding tickets for these. We're not insignificant. Yeah. And ultimately, Jim, he was focusing more on this NHL deal,

took his eye off the prize with Blackberry. And then in a final tragic turnabout, he also doesn't. the NHL deal falls through, so he ends up getting nothing. He took his focus off of Blackberry and that company crashes, and he doesn't get his Hamilton, Ontario Huck. Which is, you know, focus matters in startups. And when he starts getting obsessed with the NHL, that's when you knew that that was more important to him, then, you know, running the company.

And this is one of the things with great success. It's something I've, you know, listen, I haven't a great success, but I've had some success. A lot of times you get some success, and it's very, easy to get distracted. You know, Adam Newman with his private jet, I've seen founders get obsessed with their front desk and the reception area. There were two founders I knew who were fighting over the design of the reception area, where their offices are going to be. Anything that's not the team, the product, or the customer, I get worried when founders are obsessing over it, right? Team, product, customer. Outside of those three things, I mean, sure, there are some things that could be important,

Like, yeah, an office space could be important, I guess, but it's not the most important. And, man, he, he, when he blows a gasket and he basically, one of the things I realize is there was some dramatic foreshadowing. At one point, Mike says to Jim, when they're on the way to that first meeting to show, uh, Bell Atlantic, the phone, the Blackberry prototype, he says, let's make a deal that we'll never lie to each other. Mm-hmm. And they kind of, they kind of let that one float for it. You notice that they let it float for a minute? and they kind of go zoom in on Jim, if I remember correctly. And it's like, okay, I guess.

Like, you know, kind of lukewarm agrees to it, knowing full well that he is a manipulator and liar, at least according to this telling him a story, who knows what's actually true. I just want to make sure people understand this. Everything we've said right now is based on the movie. We have some information that's true or not. Obviously, they didn't have like a transcript here to go to. And I think there's plenty of places online to where people will debate what's real and what's not. like a social network type of thing. There was a book. That book, presumably, was very carefully researched.

But now we're kind of riffing on the ideas in the book, and it's taken on an element of fictionalization, for sure. Yes, yes. That takes us to the end. We get some updates on what happened to everyone during the end credits. Verizon sued research in motion for $500 million to cover their losses. Almost all the Blackberry storms, that final product they came up with to sort of be their iPhone killer. Most of them were returned or replaced due to manufacturing.

errors. Lazaridis resigns in 2012. Balsali avoids jail time and Doug Frigin sold his stock near the peak of its value in 2007 and according to the film at least is now one of the richest people in tech or in America or is a very wealthy man. I wonder, I mean, I got to think he owned, even with the dilution and everything, if he was a co-founder, you know, maybe he owned a third or 25 percent, got watered down to five or 10 percent, but if he did sell nearish the peak, it would be billions of dollars. Yeah. And I've never met him, and I don't know his net worth,

but I'm sure it's not insignificant. Yeah. So, you know, it's unfortunately. Forbes hasn't. Let's see what Forbes says. Well, it's, you know, it says over a billion, one point seven. It said $1.7 billion in November.

Yeah. An estimate from a Canadian business publication. But, you know, it's hard to know. Yeah, Forbes just says one billion. That's their guess. So yeah, I mean, I guess $1 billion ain't what it was back in the day but it's pretty darn good.

It's more than a lot of I have. Yeah, a lot of I have. That is very important. That moment is important one. Who gets rich with stocks going up and down like this? Lon, there's one camp that says you've got to ride your winners.

So, hey, a stock is going up. You don't want to sell it. But then there's also a point at which a stock is irrationally valued and you probably want to sell some of it, right? A very important moment in time. How do I deal with that? When we have an investment that goes 50 or 100x

and we have a chance to sell some of our shares, we sell 10 or 20 percent. And then if it doubles again, and maybe we'll sell 10 or 20 percent again and then we'll hold, let's call it 60, 70, 80, 90 percent for when the IPO happens, right? And so with Uber, I sold some shares back to the company and to Masi Yosh'san before it went public

and I still own a whole bunch. and just yesterday and today, Lon, you'll be happy to know that Uber is now back at its IPO price that I've been holding it out all this time. But I'm still holding it because, hey, look, it is now becoming a profitable company, right? It's a new crucible moment. Uber's not going anywhere right now. People still need to Uber places, I guess. Well, I mean, and when you look at the Uber, there was so many distracting moments there are so many different. things that were distracting them.

And now, you know, the companies kind of settled down. They got rid of all these excessive businesses. They had a lot of international ones that weren't working. And they have just focused on the things that are working and really focused on three things. Their trucking business, their food business, and obviously ride sharing. So many important lessons here. No pressure, no diamonds. Yeah.

I love that one. But I love the closing credits where they say Doug did that. There is a thing that we didn't talk about here. There were multiple times on where they were. faking it until they make it. Oh, sure. And this is, I think, an important lesson. You see other companies fake it, and they don't make it.

And that would be Theranos, right? It was like, fake it, fake it, fake it, we're never going to make it. And then let's fake it until you make it. They did fake it till they made it. And this was like a perfect example of like prototypes and duct tape and we can deliver the product, even though they couldn't. I do think that there is, the movie does kind of show you like how this is, this is not like Theranos, that Theranos you really had the sort of the vision and the dream and then all the technical people

Elizabeth Holmes would talk to, all the microbiologists, all the engineers would be like, I don't know how this works, it's just too small. There's no way to manipulate this many chemicals and processes in this little box. Research in motion, it does not seem like they're trying to do anything that is completely impossible. They're trying to solve difficult problem. And I think the fake it till you make it part is, this is a problem we could solve in six months. Well, I need you to pretend to solve it in a week.

And I think that is faking it until you make it. But it's categorically different than step one, I'm going to have this box to does blood test. Well, how does it work? I don't know. We'll figure it out. You know, like I think there was more, there was less faking it with research emotions.

Yeah, this reminded me also, just as we wrap up here on the story, abrasive people, people who are difficult, are sometimes the ones who actually really have outlier success and succeed. And Don Valentine, who is the founder of Sequoia Capital, at one point he pulled some young partner aside and he said, listen, let me explain something to you with these four quadrants. And he drew a four quadrant chart. And at one side, it said, easy to get along with,

hard to get along with. And the other axis has said normal and the other end said brilliant. And he said, sometimes we make money with brilliant people who are easy to get along with. Most often we make money with brilliant people who are hard to get along with. We really make people with normal people who are easy to get along with. And so when you think about it, this movie had brilliant people, some who are easy to get along with, Mike and then Jim, very hard to get along with, right? But also brilliant in his own. They kind of made him into a bit of a villain here.

I don't know that he was as bad of a villain as they make him out to be, if I'm being honest. Well, I think it's, yeah, the perspective of the movie is definitely, I mean, the writer-director cast himself as dumb. So I think that you can see where sort of the movies POV comes in. And the movies being made by, you know, artists, creative people, not business people. Business people don't make movies. They're too busy starting companies. So I think that if you are coming in from that mindset, there are natural heroes and villains in this story. And Jim is the villain.

I think you're right that if an investor or a bunch of CEOs and founders wrote a movie, Jim might very conceivably be the hero of their story. And I think we've seen other versions of this where that character is the hero, the founder. I mean, the founder. But there's all sorts of business movies where it's about the entrepreneur, the startup person, the deal maker is the genius visionary. They're the hero. And I think this is a little bit of a different take.

This is from the perspective of the other guys in the office. Let's do our quick awards. So our first award, the would hire award for a character you would hire immediately. So you're telling me there's a chance. Who's in contention here? Some of the nominees we have here, Jim Balsely, Charles Purdy, that would be the CEO, tough CEO of the engineers from Microsoft and Google, who helped Mike figure out the networking complications. or a sleeper pick, the receptionist, Jim's very first hire, who stays with the company for seven years.

Okay. Or you can go road. Well, from where I am in my career, I like a C-O type. Very rare to have a hard-charging C-O, no bullshit, who is just content with staying in their lane and making the company operate really efficiently and keeping everybody on task.

It is one of the hardest archetypes to find. People think they want to be a C-O-O, but they don't have that rigid and, what would you call him, like a sergeant, you know, that kind of fixer sergeant kind of approach. A hard-ass, yeah. A hard-ass, yeah, yeah. Who do you got?

Who do you got? I mean, I think it's hard to not pick Paul Stannos and Richie Chung there, the Microsoft Google engineers who come and figure out. They're the guys who figure out the hardest problem. You know, I think that you don't have a company that can grow without those guys coming in at a crucial moment. All right. So our next award, the Wood Fire Award for the character you would fire immediately.

You fire. Our nominees are the engineers who are constantly goofing off at movie night. You've got Doug himself, who's kind of he's got an attitude. He's sort of resisted to any and all change. we've also got Jim Jim Balsely he's doing a fraud he's very he could be a difficult guy and very distracted towards the end of the movie

and we've also highlighted the skinny nervous sales guy who seems incredibly ineffective when he chews out yeah it's interesting this is an interesting one I might go with Doug the co-founder and I'll without knowing him or his role and the accuracy of the film

I will say a sometimes those folks can be a blocker. So later on, I might have encouraged that person to take a role on the board or in the lab with new products, right? You kind of find a little sandbox for that person to have their skills to keep them in the company without having them hold the company back, right? There's no reason for someone like Doug who seemed to be like really creative and really zero to one and good in a small group to put them in a big machine. they kind of get lost and they're kind of odd and then people kind of treat them as this oddity inside the company. So for his own

optimization, I would have created a laboratory and said, hey, you go work on new stuff, right? Just like they had, and Sergey Brin's not the perfect analogy here, but in Google, Sergey Brin created the X area where they did autonomous driving and the loon, the balloon thing that was going to serve internet

before lower Earth orbit orbit satellite started working. And Sergey's got that kind of crazy mind where you can dream up amazing products. And so I think when you have somebody who's that good, it's kind of a waste to keep them working on one product in the seventh, eighth, ninth, into the second decade into the second decade of the product. Like, why not have them give the world a new product?

Yeah, I mean, I think, I think the, an interesting thing that they depict about Doug, because even though the, you know, the movie obviously likes him, he's a likable character, he's being played by the writer-director, I think it is very aware of he's got that tendency to immediately resist change, even if it's potentially positive change. And I think I can be that guy in work situation sometimes. And I think, you know, I sort of recognize that as a flaw of my own personality. And I think those people can be, that could be troubling because sometimes you're trying to work quickly.

You're trying to motivate everybody. You've got to, you've got to, you know, make this adjustment quickly. You've got to pivot. And you do tend to have those people around. It can be a little toxic who are always the ones who are like, well, I don't know if this is going to work. Well, I don't think the timing is right. The worst version of that's called an Eeyore.

Like from Whitty the Poop, you're not an Eeyer. You're just creative and you should be in creative situations. It's something I'm aware of. And so I tried not to do it as much as my natural inclination would be. I'm always inclined to be like, is that a good idea? I hold back a lot because I know that I do that. All right, this is a weird one. The Scarface push it to the limit award for best money-making montage.

We'll play the sound cue, I'm sure. There's a beat in the movie Scarface where he's really, he's gotten rid of his main competition. He's taken over the Miami business himself. He's starting to really see a lot of money. He's got market pull. And you just got this bride de Palma does this amazing. Very 80s, Montagetka, counting the money. Tony Montata smoking cigars.

He's on the phone with his Colombian contacts. They're laughing. It's got to be a sports car driving somewhere. Yeah, him and Michelle Pfeiffer dancing at the night club. I think is cut in there. I wonder if there's some people doing. you know, illicit drugs in that montage somewhere.

People do it blow in that much. So, yeah, so I mean, that's the moment. Every, every capitalism movie has that moment of, it's,

everything's firing on all cylinders. They found their market fit and, and they're making a lot of money. Yeah. You also think of the cartel movies always have that. Like in Blow,

there's that great montage where Johnny Deft's filling up the closet with suitcases and bags full of money. And you watch it. I love a good montage. I love a good montage. keeps the story moving. You can get a lot done in a montage.

But yeah, this one where they have the needle drop and someday by the strokes. It's a day. By the strokes. Yeah. And you cut to a lot of real TV mode. It's like Oprah giving everybody in the audience a Blackberry. How it really became this cultural thing overnight. It was a, they did drop like Doom.

They did show like Command and Conquer. I think they were playing the classic video game. Oh, sure. Yeah. They had a lot of great moments about what life in the 90s. and into the 2000s were like so they did a the opening credits too are really good what I forget

I forget what song there but is a cannonball or so it is cannonball I think the breeders some good song yeah but it opens with it's sort of the period right before Blackberry like the 80s and early 90s like where these guys' heads would have been at like

here's what technology was in the previous generation that was feeding them and their creativity and I thought that was a clever way to open to it. modern day head nods too. I don't know if you saw them, but there was one where they had the ephemeral film of, I forgot

his name, but Peter Scientist talking about, hey, you wouldn't even need to be in cities anymore. The concept of a city will go away. Oh, is it Carl Sagan? I don't know who that opening scene is. We got to check that. But anyway, I think that's a notable one. I don't think that was made up, but it could have been staged for this

and they could have just made it look old. I think almost everything in that opening montage is like, you know, it was like Star track and like all of the like 60s, 70s, 80s, 90s ideas about tech sort of all very quickly. We're saying, you know, like circuit boards and, you know, like soldering, all the, all the halt and catch fire sort of 80s and 90s. These guys would have been raised on. Yeah. I like the, uh, Oprah, you know, kind of giving them away and people freaking out.

Those kind of cultural markers of like, well, that, if you were had a huge breakout product in that cultural moment, that's how you would know. Oprah wants to give it away. That's how you know it's the hottest thing. All right, here's a funny one, the Travis Award for Biggest Force of Nature. Name for Travis Kavonic, of course. We are going to dominate every city that we go into. So we've got Jim Ballsalee, Palm CEO, Carl Yankowski, played by, of course, Carrie Owes. Then Sleeper Pick, Steve Jobs, who does that.

There's no actor playing Steve Jobs in this movie. We only see that archival footage of his keynote. But he definitely steps in and changes the entire course of. of the film by introducing the iPhone. I got to go Steve Jobs in this. I know Jim is the easy choice to make because he's so ballsy, uh, Balsy, uh, Bucilli. But I, I got to go with Steve Jobs. He was relentless with that phone.

And I mean, just getting singular and then the next network, the Nets network. Yeah. And the pace at which they came out with new ones and their commitment to it. I think like sometimes the first person up the hill takes the arrows is another business lesson. And if you look at Yahoo, they ran up the hill. They took the arrows. And Google came after them.

Then you had Friendster and MySpace and Facebook came after them, right? For Tesla, you had the, what was that EV-1? I forgot which company it was, but they destroyed all the cars. Yeah, and Tesla came after them. So sometimes there's like people who try these things, but it's too early. And that was another very important part of this film is timing. Timing is so critically important. Timing can make the company the entrepreneur or it can break the entrepreneur.

Yeah, the other fascinating thing about Job. I mean, I think jobs is the obvious pick here. here too. And I think what's, it's also that the birth of like the keynote being the, a spectacle. The idea, the movie really shows us everybody's watching that Apple keynote in real time. And this is a landscape Blackberry sort of helped to create is making gadgets such a big thing that people were interested enough to watch a business person doing a keynote. But of course, you think about today, you know, Comic-Con, the game awards, we're kind of. constantly watching keynotes. It's, it's an entertainment vehicle just like anything else now.

And I, that really drove that home that. That's a Steve Jobs creation. He was, I'm going to come out and make this keynote itself a part of the product launch. I'm going to, you know, this is, this is the introduction of the marketing when I come out on stage and tell you what it's going to be. Yeah. All right. Listen, this has been a great episode. Let us know what you think. We're going to do it again. I think the next one, you had a couple of ideas for the next one. What's your best idea for the next one? Oh, man, there's so many of these movies that we can do. I mean, I do think air had a lot of interesting, it's not tech. No, it doesn't have to be for business lessons. I do think Air, Air had a lot of interesting sort of insights. Yeah, about Nike. Yeah. Well, that one,

yeah, it's about, that's about, it's about Nike and really the really very specific sort of internal Nike debate about basketball shoes, the basketball division, how to market to basketball fans, and how that sort of all led to the development of the first Air Jordan product launch. So it's a Ben Affleck movie that came out. I like putting on the list, the founder.

Yes, with a 2016. Michael Keaton. And the book's great as well about Ray Kroc. My big question to you would be, should we do the big, the granddaddy of, I think a lot of these, certainly in the tech world, the social network.

You know, I haven't seen it since it came out in theaters. I think it's a great one to put on the doc for sure to look back on what were the lessons there. And I think David Fincher kind of codified this genre as Sorkin and Fincher to me sort of invented the modern business movie as we're thinking about them. Well, I mean, then we have to think about what was pre-social network. So pre-TSN. Well, sure.

You mentioned boiler room Tucker. certainly. I think, you know, you could talk about like the sort of Wall Street kind of that Wall Street's not bad. Yeah, lessons there. You could also do good, you could you could stretch it a little bit and go business lessons from Scarface. You business lessons from the Godfather. If you want to talk about those are sort of business movies. I mean, there's also, it would be probably fun to go back and revisit Pirates of Silicon Valley. That's an HBO movie about Bill Gates and Steve Jobs. Yes. I, you know what? I don't think I've ever seen it. I think I only saw parts of it. Oh, really? Wow. No.

Wiley, Steve Jobs, and Anthony Michael Hall is Bill Gates. It's like late 90s, early aughts. But yeah, it's about, you know, the founding of Apple and Microsoft. And there's sort of those two big personalities that that would be fun to revisit. Yeah, you have to think some of these will work for an hour discussion or a 45-minute discussion. We might want to pair some together because you got Glenn Gary, Glenn Ross. Sure. It's got a lot of lessons in there, obviously, about sales.

Well, Glenn Gary and Boileroom would go very well together. That's what I was just thinking. those like about guys who clearly have watched Glenn Gary and sort of model themselves on it. I also feel like, oh, I was just thinking of one. Where is it? We're sure to happenness maybe? Yes. I think that one, yes.

I was going to say, Moneyball, I think would be another good one. Moneyball's great. Which is a movie, I think, that for non-business people comes up a lot in terms of business lessons that you can extract from a movie. Moneyball, I think was a really clever sort of way to take that nonfiction book. and sort of make it into a narrative. Fascinating. Yeah.

Yeah. So, yeah, lots of stuff we can do. So interesting. I just said chat TBT. Give me 10 more that are similar, but don't have to be about business, but have business lessons in it. Did you ever see margin call that J.C. Shandor movie?

Oh, yeah, of course. Yeah, that would be a good one, too. About, like, the first 24 hours behind the scenes at Lehman Brothers, like, right as the financial crisis hits. And, like, Zachary Kinto plays the sort of analyst behind the scenes at Lehman Brothers, who first notices what's about to happen is like raising the alarm at the company. Really well done.

Jeremy Iron is so good. Jeremy Iron's best 10 minutes in movie history in that movie. Yeah, he just has that killer monologue at the end, but it's just devastating. It's perfect. Yeah, when he starts justifying what they're selling, that was pretty next level. We are selling,

to willing buyers and fair market value. It's like, we'll never sell again. He's like, there's never going to be in again. This is the end of the road. This is it. That scene is a. Amazing. I'm like to watch it on YouTube right now. I mean, it is get you up.

I mean, I feel like crypto people are so inspired by that movie without ever having seen it. It's kind of like their film of just like, just sell the shares. When the market opens, sell with all your heart to whoever will buy them. And they're like, to our customers? You want to sell this shit? To our customers? He's like, they're willing buyers, yes. Big short, yeah, of course.

Sure, big short, yeah. I mean, Devil Wears Prada. I wonder if there's lessons in there. More like a job. I mean, definitely there's that one big Merrill Street monologue scene that we could talk about for sure from Devil Wars Prada, where she's like, and Hathaway doesn't realize, she doesn't think she makes fashion choices,

but every choice you make about every piece of clothing you buy was influenced by all of these different things. It's like a little quick lesson about how the fashion industry works. All right. everybody. We will see you all next time on this week. Startups. Thanks, Lon. My pleasure.