August 2019 - How Google Works by Eric Schmidt and Jonathan Rosenberg

While at times it reads as a piece of Google propaganda, this book offers insight into the management techniques that Larry, Sergey and Eric employed to grow the Company to massive scale. Its hard to read this book and expect that all of these practices were actually implemented – it reads like a “How to build a utopia work culture” - but some of the principles are interesting, and more importantly it gives us insight into what Google values in their products and operations.

Tech Themes

Smart Creatives. Perhaps the most important emphasis in the book is placed on the recruiting and hiring of what Eric Schmidt and Jonathan Rosenberg have termed: Smart Creatives – “people who combine technical & business knowledge, creativity and always-learning attitude.” While these seem like the desired platitudes of every silicon valley employee, it gives a window into what Google finds important in its employees. For example, unlike Amazon, which has both business product managers and technical product managers, Google prefers its PMs to be both business focused and highly technical. Smart Creatives are mentioned hundreds of times in the book and continually underpin the success of new product launches. The book almost harps on it too much, to the point where it feels like Eric Schmidt was trying to convince all Googlers that they were truly unique.
Meetings, Q&A, Data and Information Management. Google is one of the many Silicon Valley companies that hosts company wide all-hands Q&A sessions on Friday where anyone can ask a question of Google’s leadership. Information transparency is critically important to Google, and they try to allow data to be accessible throughout the organization at all times. This trickles into other aspects of Google’s management philosophy including meetings and information management. At Google, meetings have a single owner, and while laptops largely remain closed, it’s the owner’s job to present the relevant data and derive the correct insights for the team. To that end, Google makes its information transparently available for all to access – this process is designed to avoid information asymmetry at management levels. One key issue faced by poor management teams is only receiving the best information at the top – this is countered by Amazon through incredibly blunt and aggressive communication; Google, on the other hand, maintains its intense focus on data and results to direct product strategy, so much so that it even studies its own teams productivity using internal data. Google’s laser focus on data makes sense given its main advertising products harvest the world’s internet user data for their benefit, so understanding how to leverage data is always a priority at Google.
80/20 Time. As part of Google’s product innovation strategy, employees can spend 20% of their work time on creative projects separate from their current role. While the idea sounds like an awesome to keep employees interested and motivated, in practice, its much more structured. Ideas have to be approved by managers and they are only allowed if they can directly impact Google’s business. Some great innovations were spawned out of this policy including Gmail and Google Maps but Google employees have joked that it should be called “120%” time rather than 80%.

Business Themes

Google’s Cloud Strategy. “You should spend 80% of your time on 80% of your revenue.” This quote speaks volumes when it comes to Google’s business strategy. Google clearly is the leader in Search and search advertising. Not only is it the default search engine preferred by most users, it also owns the browser market that directs searches to Google, and the most used operating system. It has certainly created a dominant position in the market and even done illegal things to maintain that advantage. Google also maintains and mines your data, and as Stratechery has pointed out, they are not hiding it anywhere. But what happens when the next wave of computing comes, and you are so focused on your core business that you end up light years behind competition from Amazon (Web Services) and Microsoft (Azure)? That’s where Google finds itself today, and recent outages and issues haven’t helped. So what is Google’s “Cloud Strategy?” The answer is lower priced, open source alternatives. Google famously developed and open sourced, Kubernetes, the container orchestration platform, which has become an increasingly important technology as developers opt for light weight alternatives to traditional virtual machines. They have followed this open sourcing with a, “We are going to open source everything” mentality that is also being employed, a bit more defensively at Microsoft. Google seeks to be an open source layer, either through Kubernetes (which runs in Azure and AWS) or through other open source platforms (Anthos) and just touch some of your company’s low churn cloud spend. Their issue is scale and support. With their knowledge of data centers and parallel computing, cloud capabilities seemed like an obvious place where Google could win, but they fumbled on building a great product because they were so focused on protecting their core business. They are in a catch up position and new CEO of Google Cloud, Thomas Kurian (formerly at Oracle), isn’t afraid to make acquisitions to build out missing product capabilities, which is why it bought Looker earlier this year. It makes sense why a company as focused as Google is on data, would want a cloud focused data analysis tool. Now they are betting on M&A and a highly open-sourced multi-public cloud future as the only way they can win.
“Objective” Key Results. As mentioned previously, the way Google combats potential information asymmetries by empowering individuals throughout the organization with data. This extends to famous venture capitalist (who invested in both Google and Amazon) John Doerr’s favorite data to examine – OKRs – Objective key results. Each Googler has a specific set of OKRs that they are responsible for maintaining on a quarterly basis. Every person’s OKRs are readily available for anyone to see throughout the Company i.e. full transparency. OKRs are public, measurable, and ambitious. This keeps engineers focused and accountable, as long as the OKRs are set correctly and actually measure outcomes. These fit so perfectly with Google’s focus on mining and monitoring data at all times: their products and their employees need to be data driven at all times.

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June 2019 - Zero to One by Peter Thiel

Peter Thiel’s contrarian startup classic, Zero to One, is a great book for understanding and building startups.

Tech Themes

Zero to One. As Thiel explains in the opening pages, Zero to One is the concept of creating companies that bring new technology into the world: “The single word for vertical, 0 to 1 progress is technology.” This is in contrast to startups that simply copy existing ideas or other products and tackle problems 1 to n. In Thiel’s view, the great equalizer that allows you to create such an idea is proprietary technology. This can come in many forms: Google’s search algorithms, Amazon’s massive book catalog, Apple’s improved design of the iPad or PayPal’s faster integrated Ebay payments. But generally, to capture significant value from a market; the winning technology has to be 10x better than competition. To this end, Thiel says, “Don’t disrupt.... If your company can be summed up by its opposition to already existing firms, it can’t be completely new and it’s probably not going to become a monopoly.” The true way to become a massively successful company is to build something completely new that is 10x better than the way its currently being done. This 10x better product has to be conceived over the long term, with the idea that the final incremental feature added to the product gives it that 10x lift and takes it to monopoly status.
Beliefs and Contrarianism. Thiel begins the book with a thought-provoking question: “What important truth do very few people agree with you on?” To Thiel, however you answer this question indicates your courage to challenge conventional wisdom and thus your potential ability to take a novel technology from 0 to 1. Extending this idea, Thiel defines the word startup as, “the largest group of people you can convince of a plan to build a different future.” This sort of Silicon Valley contrarianism is exactly the mindset of Internet bubble entrepreneurs. Thiel continues on this thinking, with another question: “Can you control your future?” and to that question he answers with an emphatic, “Yes.” People are taught to believe that “right place, right time” or “luck” is the greatest contributor to individual success. And as discussed in Good to Great, while many CEOs and prominent executives make this claim, they often don’t believe it and use it much more as a marketing mechanism. Thiel firmly believes in the idea of self-determination, and why shouldn’t he? He’s a white male, Rhodes Scholar and Stanford Law School graduate who has now made billions of dollars. In his mind, you either believe something novel and create that future or you waste your time tackling the problems that exist today. This also conveniently mirrors Thiel’s investing focus and he even calls this out in a chapter detailing venture returns. Venture takes informed speculative bets on which technology will ultimately win out in a market – the best bets are the ones that differ so greatly from the established norm because the likelihood of landing in the monopoly position (though still small) is much greater than a Company that is recreating existing products.
Looking for Secrets and Building Startups. The answers to the Thiel question posed above are secrets: knowable but undiscovered truths that exist in the world today. He then poses: “Why has so much of our society come to believe that there are no hard secrets left?” He provides a four part answer:

Incrementalism – the idea that you only have to hit a minimum threshold for pre-determined success and that over-achieving is frequently met with the same reward as basic achievement
Risk Aversion – People are more scared than ever about being wrong about a secret they believe
Complacency – people are fine collecting rents on things that were already established before they were involved
Flatness – the idea that as globalization continues, the world is viewed as one hyper competitive market for all products

Sticking on his contrarian path, Thiel emphasizes: “The best place to look for secrets is where no else is looking…What are people not allowed to talk about? What is forbidden or taboo?” This question is especially interesting in the context of the latest round of startups going public. A lot of people have argued that the newest wave of startups are tackling problems that are of lower value to society, like food delivery – focused on pleasing an increasingly on-demand, dopamine driven world. Why is that? Have we reached a local maximum in technology for a given period? While you may not completely believe Ray Kurzweil’s Law of Accelerating Returns, the pace of technological evolution has probably not hit a maximum. It could be argued that we have enjoyed a great run with mobile as a dominant computing platform (PCs before that, Mainframes before that, etc.) and that the next wave of startups tackling “important" problems could spring out of such a development.

Business Themes

Monopoly profits. Thiel plainly states the overarching goal of business that is normally obfuscated by cult-like Silicon Valley startups: monopoly profits. This touches on a point that has been bouncing its way through the news media (Elizabeth Warren, Stratechery, Spotify/Apple) in recent months with Elizabeth Warren calling for a breakup of Apple, Facebook and Amazon, Spotify claiming the App Store is a monopoly, and others discussing whether these companies are even monopolies. He claims monopolies deserve their bad press and regulation, “only in a world where nothing changes.” Monopolies in a static environment act like rent collectors: “If you corner the market for something, you can jack up the price; others will have no choice but to buy from you.” This is true of many heavy regulated industries today like Utilities. It’s often the case consumers only have one or two providers to choose from at max, so governments regulate the amount utilities can increase prices each year. Thiel then explains what he calls creative monopolists, companies that “give customers more choice by adding entirely new categories of abundance to the world. Creative monopolies aren’t just good for the rest of society: they’re powerful engines for making it better.” Thiel cites a few interesting examples of “monopoly” disruption: Apple iOS outcompeting Microsoft operating systems, IBM hardware being overtaken by Microsoft software, and AT&T’s monopoly prior to being broken up. It should be noted that two of these examples actually did require government regulation – Microsoft was sued in 2001 and AT&T was forced to break up its monopoly. What’s even more interesting, is the prospect of the T-Mobile/Sprint merger being blocked because while the consolidation of the telecom industry could mean increased prices, both T-Mobile and Sprint have struggled to compete with guess who, AT&T and Verizon (who started as a merger with former AT&T company, Bell Atlantic). Whether monopolies are good or bad for society, whether its possible to call tech companies with several different business lines monopolies remains to be seen – but one things for sure – being a monopoly, tech monopoly, or creative monopoly is a great thing for your business.
Prioritizing Near Term Growth at the Risk of Long Term Success. Thiel begins his chapter on Last Mover Advantage with an interesting discussion on how investors view LinkedIn’s valuation (since acquired by Microsoft but at the time was publicly traded). At the time, LinkedIn had $1B in revenue and $21M in net income, but was trading at a value of $24B (i.e. 24x LTM Revenue and 1100x+ Net Income). Why was this valued so highly? Thiel provides an interesting answer: “The overwhelming importance of future profits is counterintuitive even in Silicon Valley. For a company to be valuable it must grow and endure, but many entrepreneurs focus on short-term growth. They have an excuse: growth is easy to measure, but durability isn’t.” Thiel then continues with two great examples of short-term focus: “Rapid short-term growth at Zynga and Groupon distracted managers and investors from long-term challenges.” Zynga became famous with Farmville, but struggled to find the next big hit and Groupon posted incredibly fast growth, but couldn’t get sustained repeat customers. This focus on short-term growth is incredibly interesting given the swarm of unicorns going public this year. Both Lyft and Uber grew incredibly quickly, but as the public markets have showed, the ride-sharing business model may not be durable with each company losing billions a year. Thiel continues: “If you focus on near term growth above all else, you miss the most important question you should be asking: will this business still be around a decade from now?” To become a durable tech monopoly, Thiel cites the following important characteristics: proprietary technology, network effects, economies of scale, and branding. It’s interesting to look at these characteristics in the context of a somewhat monopoly disruptor, Zoom Video Communications. CEO Eric Yuan, who was head of engineering at Cisco’s competing WebEx product, built the Company’s proprietary tech stack with all the prior knowledge of WebEx’s issues in mind. Zoom’s software is based on a freemium model, when one user wants to video chat with another, they simply send the invite regardless of whether they have the service already – this isn’t exactly a google-esque network effect but it does increase distribution and usage. Zoom’s technology is efficiently scalable as shown by the fact that its profitable despite incredibly fast growth. Lastly, Zoom’s marketing and branding are excellent and are repeatedly lauded within the press. The question is, are these characteristics really monopoly defining? Or are they simply just good business characteristics? We will have to wait and see how Zoom fairs over the next 10 years to find out.
Asymmetric Risk & VC Returns. Thiel started venture capital firm, Founders Fund in 2005 with Ken Howery (who helped start PayPal with Thiel). Thiel notes an interesting phenomena about VC returns that several entrepreneurs don’t truly understand: “Facebook the best investment in our 2005 fund, returned more than all the others combined. Palantir, the second best investment is set to return more than the sum of every investment aside from Facebook…The biggest secret in venture capital is that the best investment in a successful fund equals or outperforms the entire rest of the fund combined.” Venture capital investing, especially at the earliest stages like Seed and Series A (where Founder’s Fund invests) is a game of maximizing the chance of one or two big successes. In the past five to ten years, there has been a significant increase in venture capital investing, and with that a focus among many firms to be founder friendly. As discussed before, these founder friendly cultures have led to super-voting shares (like Snap, FB and others) and unprecedented VC rounds. Even with these changes, there is still a friction at most VC-backed companies: the supposedly value added VC board member doesn’t believe that Company XYZ will be the next Facebook or Palantir, and because of that chooses to spend as little time with them as possible. This has fueled the somewhat anti-VC movement that several entrepreneurs have adopted because as with Elon Musk at PayPal and Zip2, being abandoned by your earliest investors can be devastating.

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May 2019 - The Everything Store: Jeff Bezos and the Age of Amazon by Brad Stone

This book is a great deep dive on the history of Amazon and how it became the global powerhouse that it is today.

Tech Themes

The Birth of AWS. We’ve looked at the software transition from on premise, license maintenance software to SaaS hosted in the cloud, but let’s dive deep into how the cloud came to be. The first ideas of AWS go back to 2002 when Bezos met with O’Reilly Media, a book publisher who in order to compete with Amazon, had created a way to scrape the latest book rankings off Amazon’s website. O’Reilly suggested creating a set of tools to let developers access Amazon’s rankings, and in 2003 Amazon launched Amazon Web Services (AWS) to create commerce API’s for third parties. Around this time, Amazon had centralized its IT computing resources in a separate building with hardware professionals operating and maintaining the infrastructure for the entire company. While parts of the infrastructure had improved, Amazon was struggling internally to provision and scale its computing resources. In 2004, Chris Pinkham, head of the infrastructure division, relocated to South Africa to open up Amazon’s first office in Cape Town. His first order of business was to figure out the best way to provision resources internally to allow developers to work on all types of applications on Amazon’s servers. Chris elected to use Xen, a computer that sits on top of infrastructure and acts as a controller to allow multiple projects access the same hardware. This led to the development of Elastic Compute Cloud (EC2). During this time, another group within Amazon was working on solving the problem of storing the millions of gigabytes of data Amazon had created. This team was led by Alan Atlas, who could not escape Bezos’ laser focus: “It would always start out fun and happy, with Jeff’s laugh rebounding against the walls. Then something would happen and the meeting would go south and you would fear for your life. I literally thought I’d get fired after everyone one of those meetings.” In March 2006, Amazon launched the Simple Storage Service (S3), and then a few months later launched EC2. Solving internal problems can lead to incredibly successful companies; Slack, for example, originally started as a game development company but couldn’t get the product off the ground and eventually pivoted into the messaging giant that it is today: “Tiny Speck, the company behind Glitch, will continue. We have developed some unique messaging technology with applications outside of the gaming world and a smaller core team will be working to develop new products.”
A9. In the early 2000s, Google arrived on the scene and began to sit in between Amazon and potential sales. Around this time, Amazon’s core business was struggling and a New York Times article even called for Bezos to resign. Google was siphoning off Amazon’s engineers and Bezos knew he had to take big strategic bets in order to ward off Google’s advances. To do that, he hired Udi Manber, a former Yahoo executive with a PhD in computer science who had written the authoritative textbook on Algorithms. In 2003, Udi set up shop in Palo Alto in a new Amazon subsidiary called A9 (shorthand for Algorithms). The new subsidiary’s sole goal was to create a web search engine that could rival Google’s. While A9.com never completely took off, the new development center did improve Amazon’s website search and created Clickriver, the beginning of Amazon’s advertising business, which minted $10B in revenue last year. Udi eventually became VP of Engineering for all of Google’s search products and then its Youtube Division. A9 still exists to tackle Amazon’s biggest supply chain math problems.
Innovation, Lab126 and the Kindle. In 2004, Bezos called Steve Kessel into his office and moved him from his current role as head of Amazon’s successful online books business, to run Amazon Digital, a small and not yet successful part of Amazon. This would become a repeating pattern in Kessel’s career who now finds himself head of all of Amazon’s physical locations, including its Whole Foods subsidiary. Bezos gave Kessel an incredibly abstract goal, “Your job is to kill your own business. I want you to proceed as if your goal is to put everyone selling physical books out of a job.” Bezos wanted Kessel to create a digital reading device. Kessel spent the next few months meeting with executives at Apple and Palm (make of then famous Palm Pilots) to understand the current challenges in creating such a device. Kessel eventually settled into an empty room at A9 and launched Lab126 (1 stands for a, 26 for z – an ode to Bezos’s goal to sell every book A-Z), a new subsidiary of Amazon. After a long development process and several supply chain issues, the Company launched the Kindle in 2007.
Business Themes
Something to prove: Jeff Bezos’s Childhood. What do Jeff Bezos, Steve Jobs, Elon Musk and Larry Ellison (founder of Oracle) all have in common? They all had somewhat troubled upbringings. Jobs and Ellison were famously put up for adoption at young ages. Musk’s parents divorced and Elon endured several years of an embattled relationship with his father. Jeff Bezos was born Jeffrey Preston Jorgenson, on January 12, 1964. Ted Jorgenson, Bezos’s biological father, married his mother, Jackie Gise after Gise became pregnant at age sixteen. The couple had a troubled relationship and Ted was immature and an inattentive father. The couple divorced in 1965. Jacklyn eventually met Miguel Bezos, a Cuban immigrant college student, while she was working the late shift at the Bank of New Mexico’s accounting department. Miguel and Jacklyn were married in 1968 and Jeffrey Jorgenson became Jeffrey Bezos. Several books have theorized the maniacal drive of these entrepreneurs relates back to ultimately prove self-worth after being rejected by loved ones at a young age.
Anti-Competitive Amazon & the Story of Quidsi. Amazon has an internal group dubbed Competitive Intelligence, that’s sole job is to research the products and services of competitors and present results to Jeff Bezos so he can strategically address any places where they may be losing to the competition. In the late 2000s, Competitive Intelligence began tracking a company known as Quidsi, famous for its site Diapers.com, which provided discount baby products that could be purchased on a recurring subscription basis. Quidsi had grown quickly because it had customized its distribution system for baby products. In 2009, competitive intelligence reached out to Quidsi founder, Marc Lore (founder of Jet.com and currently the head of Walmart e-commerce) saying it was looking to invest in the category. After rebuffing the offer, Quidsi soon noticed that Amazon was pricing its baby products 30% cheaper in every category; the company even tried dropping prices lower only to see Amazon pages reset to even lower prices. After a few months, Quidsi knew they couldn’t remain in a price battle for long and launched a sale of the company. Walmart agreed in principle to acquire the business for $900M but upon further diligence reduced its bid, which prompted Lore to call Amazon. Lore and his executive team went to meet with Amazon, and during the meeting, Amazon launched Amazon Mom, which gave 30% discounts on all baby products and allowed participants to purchase products on a recurring basis. At one point, Amazon’s prices dipped so low it was on track to lose $100M in three months in the diapers category alone. Amazon submitted a $540M bid for Quidsi and subsequently entered into an exclusivity period with the Company. As the end to exclusivity grew nearer, Walmart submitted a new bid at $600M, but the Amazon team threatened full on price war if Quidsi went with Walmart, so on November 8, 2010, Quidsi was acquired by Amazon for $540M. One month after the acquisition, Amazon stopped the Amazon Mom program and raised all of its prices back to normal levels. The Federal Trade Commission reviewed the deal for four months (longer than usual), but ultimately allowed the acquisition because it did not create a monopoly in the sale of baby products. Quidsi was ultimately shut down by Amazon in 2017, because it was unable to operate it profitably.
The demanding Jeff Bezos and six page memos. At Amazon, nobody uses powerpoint presentations. Instead, employees write out six page narratives in prose. Bezos believes this helps create clear and concise thinking that gets lost in flashy powerpoint slides. Whenever someone wants to launch new initiative or project, they have to submit a six page memo framed as if a customer might be hearing it for the first time. Each meeting begins with the group reading the document and the discussion begins from there. At times, especially around the release of AWS, these documents grew increasingly complex in length and size given the products being described did not already exist. Bezos often responds intensely to these memos, with bad responses including: “Are you just lazy or incompetent?” and “If I hear that idea again, I’m gonna have to kill myself” and “This document was clearly written by the B team. Can someone get me the A team document? I don’t want to waste my time with the B team document.” Its no wonder Amazon is such a terrible place to work.

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December 2018 - Steve Jobs by Walter Issacson

This is a long biography about an incredible person. The book is surprisingly personal and has tons of little stories that show Jobs’ true personality.

Tech Themes

The reality distortion field. Steve Jobs was famous for his reality distortion field: the ability to convince himself and others of pretty much anything through a mix of intense passion and hyperbole. The term was coined by Bud Tribble, an early member of Apple’s design team, who had daily experience working with Jobs at Apple and NeXT. Jobs’s would speak charismatically about achieving incredibly lofty goals and slowly bend employees to his way of thinking through somewhat manipulative means. He would frequently dismiss ideas as “complete shit” only to come back a few weeks later claiming to have come up with the idea. As Andy Hertzfeld (an original member of the Apple development team) put it: “I thought Bud was surely exaggerating, until I observed Steve in action over the next few weeks. The reality distortion field was a confounding melange of a charismatic rhetorical style, an indomitable will, and an eagerness to bend any fact to fit the purpose at hand. If one line of argument failed to persuade, he would deftly switch to another.” While this approach led to several incredible engineering feats, it also created a difficult environment for Apple employees. Jobs would frequently claim ideas as his own and give little credit to the engineers that actually created something. This extended to his personal life as well, where he wouldn’t shower because he claimed his diet of largely fruits and vegetables did not produce any smell (he was very wrong). Unfortunately this also extended to his cancer diagnosis, which he was convinced he could beat with a new diet despite several prominent doctor warnings to the contrary.
Owning the user experience. Steve was obsessed about user experience. At a time when the world was dominated by hard to use, clunky computers, Jobs helped Apple be the first to focus solely on how the user interacted with the computer. After his infamous visit to Xerox’s Palo Alto Research Center (Xerox PARC), in which he saw early designs for an easy to use mouse, Jobs adopted the technology for an upcoming Apple release. Apple and Jobs introduced several important design innovations including: windows for each operating program, drop-down menus, desktop metaphor (files and the trash can), drag and drop manipulation, and direct editing of a document. Jobs also wanted to maintain a tight connection between the hardware and software of all Apple devices. If Apple could abstract away all the back-end complexities and present an incredibly easy to use interface, its devices could be widely adopted by all consumers. This ran in the face of the general computing industry, which allowed significant user configurability.
Design simplicity. Steve Jobs was relentlessly passionate about the design of Apple products. As an extension of the user experience, Jobs wanted products that looked simple and felt magical: "To design something really well, you have to get it.” Jobs worked incredibly closely with Johnny Ive, Jobs’s “spiritual partner at Apple,” on the beautiful simplicity of every Apple product. One example of Jobs’s incredible focus on design is the iPhone. Not only does Jobs appear on the patent for the iPhone’s box, Ive and Jobs obsessed over each part of the phone, focusing on the ten commandments of design espoused by influential artist Dieter Rams. Jobs was so focused on sleek design, that even the internal, unseen logic boards of the Apple II needed to be redesigned because they weren’t straight enough. He also was thoughtful about building design at Pixar, building an open atrium that fostered random interaction as people traveled through it every day.

Business Themes

Bill Gates hovering over Jobs at MacWorld Boston 1997.

Vertical integration. It was Tim Cook who pulled Steve Jobs to dinner one night in Japan that led to the mass proliferaiton of Apple devices across the world. Cook had recognized that chipmakers were capable of making the device that Jobs had obsessed over for years, the iPod. Apple is a rare example of a Company that has focused on complete vertical integration. Apple wants to make both the hardware and the software behind its devices. Apple is now so large that it essentially controls all of its suppliers. Most companies leverage third party hardware (Dell, Toshiba, Motorola, Samsung, etc), put someone else’s software on it (Windows and Android), add third party services (Google, carrier services, etc.) and then sell it through someone else’s store (carrier retail stores, Best Buy, etc.) - Apple does it all.
Strategic investors. Many people do not know this, but Microsoft and Xerox were both strategic investors in Apple. Xerox’s investment led to that infamous visit to Xerox PARC, that led to inclusion of several proprietary technologies in Apple devices. When Jobs returned to Apple after the NeXT acquisition, he realized Apple’s dire cash circumstances. Jobs decided to call his sometimes enemy, sometimes friend, Bill Gates. Apple was in the process of suing Microsoft for copying its operating system, but Jobs desperately needed the cash. He negotiated a deal whereby Microsoft would invest $150M in Apple and Apple would drop its lawsuit against the Microsoft. “Bill, thank you. The world’s a better place.” The deal was announced at MacWorld Boston in 1997, where Gates appeared on a massive screen, hovering over Jobs in what would become an iconic scene.
Competing teams. Jobs would frequently set two different teams at Apple against each other in a fierce competition to produce a device or feature. The most famous example of this civil war experimentation was the design of the iPhone. According to Tony Fadell, Jobs had four different groups all working on an Apple phone: the large iPod for Video team (touchscreen), the iPod Phone team (spinning wheel), the touchscreen Macbook Pro, and the Motorola Rokr (the first phone integrated with iTunes). The whole development process was top secret within the Company, and dubbed: Project Purple. The Macbook Pro touchscreen would eventually become the iPad, and the large iPod for Video became the iPhone. These competing teams led to incredible developmental feats albeit at the sacrifice of shared knowledge within Apple.