One painful meeting with Steve Jobs(twitter.com)
twitter.com
One painful meeting with Steve Jobs
https://twitter.com/apartovi/status/1447251334814523392
140 comments
Actually, OP says here his intent was to deceive - and Jobs picked up on it. https://twitter.com/apartovi/status/1447324896904638467?t=ou...
I took from this that the OP assumed Jobs wouldn't be too price-sensitive. And that he would be happy to pay a small premium to get the feature into iTunes faster. And that a little - err - negotiating fudge in the opening meeting might fly under the radar.
Jobs would have had an estimate of what it would take to copy the feature - way less than $50m, just not quite as quickly.
It surely wouldn't have made a lot of difference (to Apple) if Jobs had laughed off the bluster, and negotiated back down to pretty much any number they liked, maybe even less than $50m.
But the asshole vibe from Jobs comes from the fact that he clearly didn't value the feature that much. It was more valuable to wait for his own team to build it slower, and send the CEO away with a flea in their ear pour encourager les autres. So I'm sure that story got heard by plenty of other potential Apple acquisitions, and saved Apple a lot of money down the line.
Jobs would have had an estimate of what it would take to copy the feature - way less than $50m, just not quite as quickly.
It surely wouldn't have made a lot of difference (to Apple) if Jobs had laughed off the bluster, and negotiated back down to pretty much any number they liked, maybe even less than $50m.
But the asshole vibe from Jobs comes from the fact that he clearly didn't value the feature that much. It was more valuable to wait for his own team to build it slower, and send the CEO away with a flea in their ear pour encourager les autres. So I'm sure that story got heard by plenty of other potential Apple acquisitions, and saved Apple a lot of money down the line.
I actually think what happened is that Jobs was on his way out of the room, having heard enough and happy to let his subordinates work out any possible deal, and took umbrage that a "small fry" would detain him with trying to fix a ballpark figure on the spot.
Moral evaluation of his action I leave as an exercise for the reader.
Moral evaluation of his action I leave as an exercise for the reader.
>But the asshole vibe from Jobs comes from the fact that he clearly didn't value the feature that much.
Why is not valuing the feature that much an asshole move?
I'm sure you'll figure out a way somehow. It's amazing how far people will bend themselves out of shape over Steve Jobs.
Why is not valuing the feature that much an asshole move?
I'm sure you'll figure out a way somehow. It's amazing how far people will bend themselves out of shape over Steve Jobs.
No strong feelings on Jobs, but quite a few people here commenting it was sharp practice, and I understand why.
Of course it's reasonable for anyone in business to say "you're trying to bullshit me, so I'm not doing business with you". The OP agrees, end of story.
But - Jobs might have batted away OP's amateur bravado with grace, and still bought his company for any price he wanted (probably even less than it would have cost Apple to build!). Or he could have passed them over to a subordinate be let down.
Instead Jobs personally wanted to be known for cruel honesty, and for ordering a clone of a startup that he'd changed his mind about buying. I genuinely don't know whether he succeeded because or in spite of that kind of conduct.
Of course it's reasonable for anyone in business to say "you're trying to bullshit me, so I'm not doing business with you". The OP agrees, end of story.
But - Jobs might have batted away OP's amateur bravado with grace, and still bought his company for any price he wanted (probably even less than it would have cost Apple to build!). Or he could have passed them over to a subordinate be let down.
Instead Jobs personally wanted to be known for cruel honesty, and for ordering a clone of a startup that he'd changed his mind about buying. I genuinely don't know whether he succeeded because or in spite of that kind of conduct.
Building the feature probably took a few engineers a couple of months. That's a lot cheaper than 50 million dollars.
Why would he do business with someone who had just lost his trust? You wouldn’t want to acqui-hire that team.
I think the commenter means that Jobs behaved how he did because he didn't intend to do business with them on their terms.
It still doesn't make the tantrum, humiliation, or insults OK. The CEO didn't do anything 90% of us don't do during salary negotiations. Imagine if anytime you said you know the market price is X for your skills without having another offer in your hand or adding lots of disclaimers like "I think maybe I might be able to find an offer that is kinda like ...", you would be shouted at, belittled, insulted.
Yes, and if Steve Jobs whim had blown the other way and allowed the price framing, this guy would be hailed by the same crowd as a negotiation genius -- even though both scenarios were actually just high-stakes coinflips.
People are so soft. OP was a bad negotiator and he's acknowledging it. That's what this comes down to. Jobs didn't want to waste his own time by extending the meeting further and did OP a favor by being transparent at all.
Would you rather Jobs had NOT been transparent, and obscured his his thoughts behind niceties? Or perhaps he should have given a 30 minute negotiation coaching session to OP for free? He could do either of these, and others might, but this is business first and not necessary.
Would you rather Jobs had NOT been transparent, and obscured his his thoughts behind niceties? Or perhaps he should have given a 30 minute negotiation coaching session to OP for free? He could do either of these, and others might, but this is business first and not necessary.
OP was a bad negotiator and he's acknowledging it.
To me this seems like the "reality distortion field".
There's just no amount of "good negotiation" that is going to get Apple up from $50m to $150m here. Apple was willing to pay an acquihire amount of money and Ali wanted an acquisition that respected the last couple years of work they put in. The two sides were pretty far apart. So they didn't make a deal. That's all there is to it.
Steve Jobs somehow pulled a trick, though, convincing Ali that the reason everything went sour is that Ali was a bad negotiator. Just because he's Steve Jobs doesn't mean he knows the "correct" valuation of your startup! He's just trying to bully Ali into revealing whether there are other offers on the table.
The principles of negotiation here are simple... Ali had to find another company willing to pay a lot more than $50m. There's no way that a lot of talking to Apple is going to change how they view a small acquihire target.
I mean, saying "I know X" when in reality you aren't 100% confident... that's completely a Steve Jobs move! How many times did he say a product was absolutely amazing, when actually it's kind of just a middling quality Apple product?
To me this seems like the "reality distortion field".
There's just no amount of "good negotiation" that is going to get Apple up from $50m to $150m here. Apple was willing to pay an acquihire amount of money and Ali wanted an acquisition that respected the last couple years of work they put in. The two sides were pretty far apart. So they didn't make a deal. That's all there is to it.
Steve Jobs somehow pulled a trick, though, convincing Ali that the reason everything went sour is that Ali was a bad negotiator. Just because he's Steve Jobs doesn't mean he knows the "correct" valuation of your startup! He's just trying to bully Ali into revealing whether there are other offers on the table.
The principles of negotiation here are simple... Ali had to find another company willing to pay a lot more than $50m. There's no way that a lot of talking to Apple is going to change how they view a small acquihire target.
I mean, saying "I know X" when in reality you aren't 100% confident... that's completely a Steve Jobs move! How many times did he say a product was absolutely amazing, when actually it's kind of just a middling quality Apple product?
>To me this seems like the "reality distortion field"....There's just no amount of "good negotiation" that is going to get Apple up from $50m to $150m here. Apple was willing to pay an acquihire amount of money and Ali wanted an acquisition that respected the last couple years of work they put in. The two sides were pretty far apart. So they didn't make a deal. That's all there is to it.
OP says he would have taken less than $150m ("we tried in vain to negotiate some lower number"). Whether that lower number would be under Apple's highest number, is unknown. So your point is well taken that "bad negotiator" is a bit subjective and assumes that a deal could have been struck.
OP says he would have taken less than $150m ("we tried in vain to negotiate some lower number"). Whether that lower number would be under Apple's highest number, is unknown. So your point is well taken that "bad negotiator" is a bit subjective and assumes that a deal could have been struck.
So, looking into it a bit more, iLike ended up selling for $20m to Myspace roughly a year after this story happened. It sucks for Steve Jobs to say you're full of BS, but really, if there's a mistake here, the mistake is simply not taking the $50m. Ali probably could have called up corp dev the next day and said, ha ha wasn't it funny that Steve called me a bullshitter in that meeting, anyways I accept your offer.
Was it a mistake? In retrospect it would have made Ali more money, but I don't know, maybe iLike still had some chance of succeeding on its own at that point. Maybe it was just a calculated risk that didn't pan out.
Maybe the perfectly charismatic negotiator could have squeezed an extra 10% out of Apple but that just isn't that important compared to the decision of "should we sell the company for approximately 50m, or not?"
Was it a mistake? In retrospect it would have made Ali more money, but I don't know, maybe iLike still had some chance of succeeding on its own at that point. Maybe it was just a calculated risk that didn't pan out.
Maybe the perfectly charismatic negotiator could have squeezed an extra 10% out of Apple but that just isn't that important compared to the decision of "should we sell the company for approximately 50m, or not?"
I think jobs did him a favor. Didn't teach him anything worth the pain he felt, but didn't leave him with lingering questions where he really fucked up like a soft "no" would.
OP clearly would have been willing to negotiate a better price and even Craig was trying to hold the deal together. This fell through because Steve was offended at being bluffed, not for any objective evaluation of business merit.
What I consider soft is lashing out over the smallest emotional slight, which Steve was famous for. I wish we would all stop pretending that the platonic ideal of a leader is having the emotional maturity of a toddler.
What I consider soft is lashing out over the smallest emotional slight, which Steve was famous for. I wish we would all stop pretending that the platonic ideal of a leader is having the emotional maturity of a toddler.
> What I consider soft is lashing out over the smallest emotional slight, which Steve was famous for. I wish we would all stop pretending that the platonic ideal of a leader is having the emotional maturity of a toddler.
Exactly. The lesson of this encounter wasn't anything more than: Steve Jobs had power and was willing to use it at the drop of a hat to puff up his ego over a tiny thing. Maybe there was something strategic behind that or maybe he just had anger issues and enough power that he didn't have to do anything about them.
Exactly. The lesson of this encounter wasn't anything more than: Steve Jobs had power and was willing to use it at the drop of a hat to puff up his ego over a tiny thing. Maybe there was something strategic behind that or maybe he just had anger issues and enough power that he didn't have to do anything about them.
You seem to be suggesting the problem is that Jobs allowed himself to get offended. Isn't it rather that there was a lack of trust between parties? In failing to recognize that "mark to model" does not work in the real world, and that you are worth whatever someone will pay for you, OP "lied" to Steve, who was "marking to market," by contrast. Whether or not OP intended to deceive, this was a misstep in the relationship.
What? It was a 3-4 sentence exchange and Steve simply piledrived through the guy in his typical bully way. ("We'll make sure the investort accept it.") The startup wanted a higher price and the guy said it so with emphasis, this triggered Steve, and that's the end of the story, the blahblah about offers and trust doesn't really matter, as at that point it was about emotion. (They just met there was no established trust anyway.) The guy folded like a house of cards - as would probably anyone who happens to be doing their first negotiation to sell their company, especially doing it with the oh so powerful Mr Jobs.
And this huge analysis about deceptive intent makes no sense. Of course the startup wanted a price as high as they can get.
And this huge analysis about deceptive intent makes no sense. Of course the startup wanted a price as high as they can get.
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Totally agree that we should "stop pretending that the platonic ideal of a leader is having the emotional maturity of a toddler. ", and my respect for Jobs is very mixed in this regard
Yet this story increased my esteem for Jobs.
Jobs knew going in that Apple could build the feature set themselves, and invited the company on the chance that they could do it faster with an aqui-hire. He'd prepared and knew his numbers also, although he didn't need or intend to discuss them.
Now, everything goes swimmingly, and then this guy asks about numbers and expresses concern that his investors won't accept that. Fair enough, legit, and Steve instantly responds "Don't worry, we'll make sure they accept it." That should be WAY MORE than enough of a statement from someone like Jobs - he and his team obviously have huge experience at this, and the guy should have dropped it, and taken back that information, now more prepared. He should also have read the room and noticed that the tenor had changed and that's as far as it should be pushed.
Now, he goes ahead and doubles down basically demanding more money. It is now just about the money. Had he stopped at "I think we're worth more", it probably would have just ended at Steve saying "I don't think so", and leaving it to Eddy, maybe they'd make a deal, maybe not.
But then he instantly doubled down again, saying "I Know it is" - basically saying he had a competing term sheet at that value — when he had nothing. If he'd actually had a $150MM term sheet, Steve might have said, "ok, we'll consider it", or "you should take that deal".
But when Steve saw that there was nothing to back up the statement, what earthly reason could he have to want to even talk with the guy anymore? His time is too valuable to talk to liars, and he instantly lost any interest in acqui-hiring them.
It's impressive how Jobs instantly saw the BS and adjusted his attitude to the new reality.
Perhaps it'd be a tad better had Jobs not flashed anger at his wasted time and interacting with liars, but instead expressed sadness at the opportunity lost - could be a bit softer, but why? The situation is the same - SJ will not want you in the company even at a $1 aqui-hire.
It's critical to understand the level of game being played, and play it well. This guy played like he was in some college seminar instead of the top pro level, and he got burned. Good he's taking it so realistically.
Yet this story increased my esteem for Jobs.
Jobs knew going in that Apple could build the feature set themselves, and invited the company on the chance that they could do it faster with an aqui-hire. He'd prepared and knew his numbers also, although he didn't need or intend to discuss them.
Now, everything goes swimmingly, and then this guy asks about numbers and expresses concern that his investors won't accept that. Fair enough, legit, and Steve instantly responds "Don't worry, we'll make sure they accept it." That should be WAY MORE than enough of a statement from someone like Jobs - he and his team obviously have huge experience at this, and the guy should have dropped it, and taken back that information, now more prepared. He should also have read the room and noticed that the tenor had changed and that's as far as it should be pushed.
Now, he goes ahead and doubles down basically demanding more money. It is now just about the money. Had he stopped at "I think we're worth more", it probably would have just ended at Steve saying "I don't think so", and leaving it to Eddy, maybe they'd make a deal, maybe not.
But then he instantly doubled down again, saying "I Know it is" - basically saying he had a competing term sheet at that value — when he had nothing. If he'd actually had a $150MM term sheet, Steve might have said, "ok, we'll consider it", or "you should take that deal".
But when Steve saw that there was nothing to back up the statement, what earthly reason could he have to want to even talk with the guy anymore? His time is too valuable to talk to liars, and he instantly lost any interest in acqui-hiring them.
It's impressive how Jobs instantly saw the BS and adjusted his attitude to the new reality.
Perhaps it'd be a tad better had Jobs not flashed anger at his wasted time and interacting with liars, but instead expressed sadness at the opportunity lost - could be a bit softer, but why? The situation is the same - SJ will not want you in the company even at a $1 aqui-hire.
It's critical to understand the level of game being played, and play it well. This guy played like he was in some college seminar instead of the top pro level, and he got burned. Good he's taking it so realistically.
Jobs also gets credit for being incredibly intuitive.
Very few negotiators can reverse their positions in nanoseconds and realize the better deal is no deal at all.
Very few negotiators can reverse their positions in nanoseconds and realize the better deal is no deal at all.
Jobs's notorious "Fuck Michael Dell" comment, to his employees, captures what you're saying, for me. A person is free to think what he or she likes of the man, but unlike most CEO's, he wan't mealy-mouthed.
The 'I know' vs 'I think' is a red herring.
Steve floated $1/user. In isolation, that's a fine initial consideration.
The OP's reaction - "that means we didn't create any initial value" - is 100% accurate response.
What you do with that epiphany is what's important.
In the end, iTunes Genius Sidebar didn't last long either.
Steve floated $1/user. In isolation, that's a fine initial consideration.
The OP's reaction - "that means we didn't create any initial value" - is 100% accurate response.
What you do with that epiphany is what's important.
In the end, iTunes Genius Sidebar didn't last long either.
> in a subjective way ("I know" vs "I think")
These are both pretty subjective. But Jobs only got to attack one of them. "I think" would have been even easier to attack.
The CEO in question seems to have disengaged for subjective reasons related to points surrounding his ability to perceive himself from positions of weakness. As you said, he wasn't being deceptive, more like authentic and open. This Jobs didn't care for, in the sense of offering it room in the negotiation.
Jobs rightly perceived that you can negotiate powerfully with those in positions of emotional vulnerability if you develop subjective criticisms and refine them into more objective language via generalizations. But he had his own blind spots as well; it's more like he was lucky that op didn't take a different approach...but op was in a difficult place to begin with, this being Apple's platform.
These are both pretty subjective. But Jobs only got to attack one of them. "I think" would have been even easier to attack.
The CEO in question seems to have disengaged for subjective reasons related to points surrounding his ability to perceive himself from positions of weakness. As you said, he wasn't being deceptive, more like authentic and open. This Jobs didn't care for, in the sense of offering it room in the negotiation.
Jobs rightly perceived that you can negotiate powerfully with those in positions of emotional vulnerability if you develop subjective criticisms and refine them into more objective language via generalizations. But he had his own blind spots as well; it's more like he was lucky that op didn't take a different approach...but op was in a difficult place to begin with, this being Apple's platform.
> that op didn't take a different approach
What whould have been a better approach?
What whould have been a better approach?
There are thousands of different approaches that could be developed based on who Jobs was.
But a better approach, that really depends on a lot of things. More than just words to say in the meeting context.
Anyway...
Jobs cared a lot about people as capital; he also cared about impact, creativity, and especially insight. He admired the big picture, but a huge problem for him was that he couldn't easily live in it. I think this was extremely frustrating and kept him floating in the limbo-like DMZ between daily details and the big picture.
So here's an approach I would have liked to try:
"OK, so you just heard about the software and how we think it's pretty neat. But you don't want the software. We know you're not that dull. It's really a story about our people, the developers who know Apple customers, and who have helped us build up a cult following. And we have new concepts underway that are even better. If you knew what we had planned, in the big picture, you'd sh*t your pants."
Then I'd talk about how universal the ideas are. Then because I'm a time traveler and op's situation is annoying, and I want to get in a little jab for op, maybe I'd add,
"But these days our problem is trust. Can we really trust the platform we're building on? Look at these platforms. People are stuck between two of them, at home and at work. We want to look forward and imagine what future trusted platforms look like, too. Maybe you want us to experience something like that trust in dealing with Apple, but then again maybe you're just like all the rest..."
But a better approach, that really depends on a lot of things. More than just words to say in the meeting context.
Anyway...
Jobs cared a lot about people as capital; he also cared about impact, creativity, and especially insight. He admired the big picture, but a huge problem for him was that he couldn't easily live in it. I think this was extremely frustrating and kept him floating in the limbo-like DMZ between daily details and the big picture.
So here's an approach I would have liked to try:
"OK, so you just heard about the software and how we think it's pretty neat. But you don't want the software. We know you're not that dull. It's really a story about our people, the developers who know Apple customers, and who have helped us build up a cult following. And we have new concepts underway that are even better. If you knew what we had planned, in the big picture, you'd sh*t your pants."
Then I'd talk about how universal the ideas are. Then because I'm a time traveler and op's situation is annoying, and I want to get in a little jab for op, maybe I'd add,
"But these days our problem is trust. Can we really trust the platform we're building on? Look at these platforms. People are stuck between two of them, at home and at work. We want to look forward and imagine what future trusted platforms look like, too. Maybe you want us to experience something like that trust in dealing with Apple, but then again maybe you're just like all the rest..."
>simply for using the almost intrinsically abstract English language in a subjective way ("I know" vs "I think")
If you use "intrinsically abstract English language in a subjective way" in multi-million dollar deals or in medicinal practice, and you stand to benefit from it, then you could very well be a liar, or if sincere extremely dangerous to others...
If you use "intrinsically abstract English language in a subjective way" in multi-million dollar deals or in medicinal practice, and you stand to benefit from it, then you could very well be a liar, or if sincere extremely dangerous to others...
At some positions of responsibility you are required to make quick assessments of people that will govern how you interact with them in the future. There is no time to sit and think if this other person is a good father/mother/friend etc. That comes later when you seriously decide to invest in a relationship. I don’t see how forming strong first impressions for people you’ll hardly ever see again is a bad strategy.
To the one in the receiving end, you can choose to get intimidated by a larger than life personality like Steve Jobs, and focus on what he said to you and get crushed by any admonition or, conversely, lose your head by any praise.
This is not any good. Rather, look at the situation for what it is. It’s a mini-game. Good or bad outcomes should only inform future actions, and not be allowed to take over your thought process for unnecessarily long periods.
To the one in the receiving end, you can choose to get intimidated by a larger than life personality like Steve Jobs, and focus on what he said to you and get crushed by any admonition or, conversely, lose your head by any praise.
This is not any good. Rather, look at the situation for what it is. It’s a mini-game. Good or bad outcomes should only inform future actions, and not be allowed to take over your thought process for unnecessarily long periods.
Even if it was, it was a "bluff". I would have imagined someone like Steve Jobs has bluffed numerous times over his career too.
I think you are missing the point, knowing is not about conviction but facts. OP put emphasis in it, he not just think he knew. If you say you know something it is expected that you have reasonable arguments and evidence to back them up. It is fine if you are wrong but if you do it without anything to show then you are just bullshitting.
But if Steve wanted to say "you're full of #%^#" and instead said "I admire your conviction", he'd be the liar.
Both can be said in many ways that are not without integrity.
Are you arguing that Steve Jobs should have been less transparent to save the feelings of another CEO?
This is one of those razor's edge situation where if you lose, you learn big, which I'm sure he did. Unfortunately, the world is not kind on losers.
In a tech world it is necessary to remember that ideas worth nothing. Well, a good idea may worth $100, a brilliant one $1000 top. Even if you can patent your idea, there is a cost to enforce your patent.
So, "stealing the idea" is an oxymoron, like "led zeppelin".
So, "stealing the idea" is an oxymoron, like "led zeppelin".
I will never understand why people allow themselves to be humiliated, stressed and abused in the name of "being educated" by so called technological geniuses, who are narcissistically used to being worshiped by everyone around them just because they are (ephemerally) famous and have a ton of money. IMHO, neither iPhones in particular, nor smartphones in general have really altered the course of the world in any meaningful way. A couple of generations of youngsters will, indeed, spend half of their lives with their faces glued to mobile screens, but then some new technological trend will arrive replacing the old one or perhaps dumping technology altogether will become the new riot. Sooner or later no one will even remember who Steve Jobs was (while names like William Shakespeare or Ernest Hemingway will deservedly live forever, BTW).
I can understand the underlying sentiment you're trying to get across but I just have to challenge the assertion that "IMHO, neither iPhones in particular, nor smartphones in general have really altered the course of the world in any meaningful way" because the world has already been altered greatly by having the capabilities of smartphones be so widely available.
In fact, there have been several significant events in recent history that were started because someone used a smartphone to do something. Unless one of the bystanders watching what happened to George Floyd was carrying a camcorder that day, the public would probably have never known about it.
I imagine Steve Jobs will probably be relevant in our cultural memories for the next few generations. But his relevance will probably fade, just as people today have heard the name 'Howard Hughes' but are only barely aware of his importance and impact.
In fact, there have been several significant events in recent history that were started because someone used a smartphone to do something. Unless one of the bystanders watching what happened to George Floyd was carrying a camcorder that day, the public would probably have never known about it.
I imagine Steve Jobs will probably be relevant in our cultural memories for the next few generations. But his relevance will probably fade, just as people today have heard the name 'Howard Hughes' but are only barely aware of his importance and impact.
Phone cameras were popular before iPhones.
For your last para - I seriously doubt it. I often see youngsters being awed by Musk and sometimes even Gates due to his foundation work/PR/whatever. Jobs? Nope. Yeah, most of them know him and maybe are aware of him but that's about it. And rightly so.
The guy knowingly, intentionally tried to deceive Steve. That was the explicit intent, and Steve picked up on it and didn't like it. How is that Steve abusing someone? That's some pretty impressive reality distortion you've got going on there.
To be clear it took a lot of stones for this guy to tell his story and clarify what his intent was. Deep respect.
To be clear it took a lot of stones for this guy to tell his story and clarify what his intent was. Deep respect.
So the guy panicked and bluffed during business negotiations that he wasn't really trained for - so what? Could happen to anyone under pressure and facing disappointment of an unexpectedly low offer. Jobs, supposedly an experienced business professional, could have just coldly smiled, Warren Buffet -style, and could have sent the rookie on his way with a 2/3 offer just to make a point and educate him. Instead, Jobs started calling the poor guy a liar in front of his co-founders, stormed out of the meeting and, in the end, screwed every single person in the entire startup by shamelessly copying their product. To me, it seems like behavior of a Yet Another (Proverbial) Silicon Valley Narcissistic A-hole (YAPSVNA).
Let's suppose the story was reversed. It was Steve Jobs who tried to deceive someone, and the negotiator on the other side detected it and called bullshit on it. Would you be arguing that Steve should have been given the benefit of the doubt and it wasn't a big deal?
Yeah, who would praise somebody so undeveloped emotionally? What a small, small man.
Then you read about how he treated his family and his employees - he was just a tiny thing of a human being. It's sad - like a self-contained parable about how to not live your life.
Then you read about how he treated his family and his employees - he was just a tiny thing of a human being. It's sad - like a self-contained parable about how to not live your life.
it was a 100M bluff in front of the CEO of one of the most important companies on earth
if you don’t pay for inexperience there I don’t know where you will
if you don’t pay for inexperience there I don’t know where you will
The more people that aggressively call out con-artists and bullshitters, the better.
He learned a lesson that day and there was subsequently less shittery in the world from then on than there would have been.
Win win for decent humans.
He learned a lesson that day and there was subsequently less shittery in the world from then on than there would have been.
Win win for decent humans.
Nobody tried to deceive anyone, Steve threw a temper tantrum when someone wouldn't give him their lifelong work for free, so he responded by playing "good cop bad cop" during their negotiations and making the CEO feel bad enough to admit liability. Frame it however you want, but that kind of mental gymnastics doesn't work on a forum of jaded tech enthusiasts who watched Woz get berated for building a better product.
This had already been posted several times on this thread, before you posted this comment, but apparently it needs posting again:
https://twitter.com/apartovi/status/1447324896904638467?t=ou...
https://twitter.com/apartovi/status/1447324896904638467?t=ou...
> and making the CEO feel bad enough to admit liability.
Youngsters? Look around in the Western world. People of all ages and walks of life have their faces glued to screens, and it has been socially acceptable for a decade at this point.
Conflating writers with CEOs doesn't make a lot of sense. One creates art, another creates value.
Conflating writers with CEOs doesn't make a lot of sense. One creates art, another creates value.
>Steve focused his gaze on me and asked, “how much is your revenue?” And also, “what was your last financing valuation?”
>I replied that our last round had been two years earlier, pre-launch, at a $50M valuation.
>Steve said, “we’d probably acquire you for $50 million.” My heart sank. I couldn’t imagine telling our team that their years of work had created no new value.
The biggest mistake was conflating valuation on paper with liquid value. The team’s years of work had turned an entirely theoretical $50M into $50M in cash. The value created was $50M minus however much the funders actually gave the company. As an extreme example, suppose I offer to buy a one billionth share of a startup for $1 today, thereby giving the startup a $1B valuation on paper. It would be insane to call it a failure if that startup actually managed to sell itself for $1B or even $500M two years down the road.
>I replied that our last round had been two years earlier, pre-launch, at a $50M valuation.
>Steve said, “we’d probably acquire you for $50 million.” My heart sank. I couldn’t imagine telling our team that their years of work had created no new value.
The biggest mistake was conflating valuation on paper with liquid value. The team’s years of work had turned an entirely theoretical $50M into $50M in cash. The value created was $50M minus however much the funders actually gave the company. As an extreme example, suppose I offer to buy a one billionth share of a startup for $1 today, thereby giving the startup a $1B valuation on paper. It would be insane to call it a failure if that startup actually managed to sell itself for $1B or even $500M two years down the road.
But then your dollar, two years down the road, is worth... $1 or even $0.50. Smells like failure to me, except to those who paid less than $0.50 for their shares. Would you invest with them again?
As much as we celebrate success on HN, it's always worth remembering that it's a lot easier to lose in business. You can have year after year after year of wins, but one big loss will sink your company.
Most investors get into a company expecting a high probability of losing their money. They invest on the basis that they'll get it right and make a significant profit every few deals, not that they'll win every time. Coming to a deal to sell to Apple (in the face of losing everything by having Apple and FB eat your lunch) at the same valuation as 2 years prior is absolutely not a failure event. It's a huge win. Practically every investor would invest again.
Most investors get into a company expecting a high probability of losing their money. They invest on the basis that they'll get it right and make a significant profit every few deals, not that they'll win every time. Coming to a deal to sell to Apple (in the face of losing everything by having Apple and FB eat your lunch) at the same valuation as 2 years prior is absolutely not a failure event. It's a huge win. Practically every investor would invest again.
Yup, and a loss is called a loss, not a gain.
When you invest, you are dealing in probabilities and potentialities. When you exit, you are dealing with actualities. When you actually lose money, it is one of your failures, not one of your successes.
I think what actually happened was the deal fell through and Apple ate their lunch anyway, right? What do you call that?
When you invest, you are dealing in probabilities and potentialities. When you exit, you are dealing with actualities. When you actually lose money, it is one of your failures, not one of your successes.
I think what actually happened was the deal fell through and Apple ate their lunch anyway, right? What do you call that?
From the company’s perspective, either case is a success story: you walk away with $999,999,999 or $499,999,999.50.
From the investor’s perspective, while certainly not a resounding success, not necessarily an abject failure either. Perhaps in those two years the nature of the market the company competes in becomes clear and the investor realizes that they had grossly overvalued the company. Perhaps the company is actually worth $10. Then, by some miracle, someone offers to buy the company at something close to its initial overvaluation. Breaking even or even losing 50% of your investment is preferable to losing 100% of it.
In this particular case, given that both Apple and Facebook were both able to implement this company’s entire product in a matter of weeks, I’d say the investor’s initial valuation was inflated, and they should have been happy to break even.
From the investor’s perspective, while certainly not a resounding success, not necessarily an abject failure either. Perhaps in those two years the nature of the market the company competes in becomes clear and the investor realizes that they had grossly overvalued the company. Perhaps the company is actually worth $10. Then, by some miracle, someone offers to buy the company at something close to its initial overvaluation. Breaking even or even losing 50% of your investment is preferable to losing 100% of it.
In this particular case, given that both Apple and Facebook were both able to implement this company’s entire product in a matter of weeks, I’d say the investor’s initial valuation was inflated, and they should have been happy to break even.
No, from the company's perspective, it is not a success. The company's purpose is to generate a return for their shareholders. In this context, that means an exit over their last valuation. Not over zero, not just good for the founders, not just what they were really worth after all, sucks to have belived the pitch deck, too bad if you invested in the last round.
The investor's initial valuation was inflated because the company failed to develop anything that would be worth an exit appropriate to that valuation.
The investor's initial valuation was inflated because the company failed to develop anything that would be worth an exit appropriate to that valuation.
By your definition, over-valued companies would be destined for failure, through no fault of company executives but poor judgement on the investor's part.
A corollary is that the company's founders would be way more "successful" raising money from investors who value their company least.
PS: In case you are running a startup, consider selling me 10% of your shares for $1, so that you'll look successful a couple years later as long it hasn't gone bust yet.
A corollary is that the company's founders would be way more "successful" raising money from investors who value their company least.
PS: In case you are running a startup, consider selling me 10% of your shares for $1, so that you'll look successful a couple years later as long it hasn't gone bust yet.
Yes. If you take on a large valuation, you take on the responsibility of generating a return on it. Go figure.
You are making a funny but you are not exactly wrong: yes, you should be looking for investment deals where you are likely to get a return on your investment.
You are making a funny but you are not exactly wrong: yes, you should be looking for investment deals where you are likely to get a return on your investment.
>The company's purpose is to generate a return for their shareholders
Absolutely correct, but who are the shareholders? If the investor owns less than half of the company, then the majority of the shareholders comprise the founder and employees, who would come out way ahead selling their company at initial valuation. As you said, the goal of a company is to maximize all shareholders’ returns, not just the investor’s return.
> The investor's initial valuation was inflated because the company failed to develop anything that would be worth an exit appropriate to that valuation.
Why is the investor faultless here? Valuation could just as easily have been inflated because the investor failed to do proper due diligence in accurately estimating how much the company is truly worth.
Absolutely correct, but who are the shareholders? If the investor owns less than half of the company, then the majority of the shareholders comprise the founder and employees, who would come out way ahead selling their company at initial valuation. As you said, the goal of a company is to maximize all shareholders’ returns, not just the investor’s return.
> The investor's initial valuation was inflated because the company failed to develop anything that would be worth an exit appropriate to that valuation.
Why is the investor faultless here? Valuation could just as easily have been inflated because the investor failed to do proper due diligence in accurately estimating how much the company is truly worth.
OK, you're a minority shareholder in a company and the founder screws you on the exit. This does happen. It can be perfectly legal. There's an illuminating and apropos anecdote about Steve Jobs and Pixar in Charles Ferguson's High Stakes, No Prisoners that I haven't seen printed elsewhere that might even be true.
Do you ever invest in one of his ventures again?
The idea that the investor is at fault if he gets hoodwinked is logic of the con man though: the mark is equally at fault!!!
Do you ever invest in one of his ventures again?
The idea that the investor is at fault if he gets hoodwinked is logic of the con man though: the mark is equally at fault!!!
This is the discussion I’m curious about. Is there some theory around valuing something? Are we declaring that a company will be worth X Net capital in Y years? Actually, I believe investors try to maintain a P/E of around 15 (or 20-30 these days?). So, the question “how much is your revenue?” makes sense, which we don’t know if it was answered by iLike.
Another question is, what will the employees pursue once they know that their acquisition strategy will not work? I’m sure the employees are skilled, so I would hope they have an alternative: 1. pivot, 2. Show off their achievements when applying to other companies
Another question is, what will the employees pursue once they know that their acquisition strategy will not work? I’m sure the employees are skilled, so I would hope they have an alternative: 1. pivot, 2. Show off their achievements when applying to other companies
This guy had an inside deal with Facebook for his platform app, yet he claims that Facebook somehow screwed him over and ... wait ... did he really state in writing that he thinks his company came up with the Like button? Oh my God, where do we even go with this. It’s amazing what people will say to look good to others — if Facebook wasn’t considered evil (finally!) I’m sure he’d be telling us of how he was so lucky to have an “insider view” on the company, as so many used to humble-brag years ago.
FriendFeed didn’t really go anywhere but they did in fact pioneer the use of “like” as an interest graph builder within the context of a social network. If you’re at YC, I am sure Paul can tell you the real story on this (which I don’t know myself, but I’m sure it’s good). In terms of the basic concept of the like action, however — there was a failed dotcom (like.com I think?) that really started the whole idea in the web world. Well, that and all of the fake profiles people were creating on Friendster and MySpace for the things they liked, which everyone involved in the industry was noticing as an “emergent behavior.”
This guy’s claim is almost as comical as all of the people who claim they came up with the Facebook Platform, yet can’t come up with a compelling platform strategy to save their lives, or the lives of any of their employers.
I guess Steve was right (and I’m sure he walked into that meeting with some background intel).
FriendFeed didn’t really go anywhere but they did in fact pioneer the use of “like” as an interest graph builder within the context of a social network. If you’re at YC, I am sure Paul can tell you the real story on this (which I don’t know myself, but I’m sure it’s good). In terms of the basic concept of the like action, however — there was a failed dotcom (like.com I think?) that really started the whole idea in the web world. Well, that and all of the fake profiles people were creating on Friendster and MySpace for the things they liked, which everyone involved in the industry was noticing as an “emergent behavior.”
This guy’s claim is almost as comical as all of the people who claim they came up with the Facebook Platform, yet can’t come up with a compelling platform strategy to save their lives, or the lives of any of their employers.
I guess Steve was right (and I’m sure he walked into that meeting with some background intel).
(deleted, I was wrong)
He does in fact make this claim directly in the tweet thread:
...Facebook copied our signature feature: the “iLike button.” (They were kind enough to call in advance to inform us.)
...Facebook copied our signature feature: the “iLike button.” (They were kind enough to call in advance to inform us.)
On a smaller scale I knew people like Jobs. They constantly lied about things but at the same time really resented when others lied. One guy who constantly cheated on his wife was totally outraged when she did the same once. And because they were experienced liars themselves they were good at assessing others.
That's how the story reads to me.
That's how the story reads to me.
Yup, and it's a manipulation tactic to make you show your belly - which this guy still does, years later.
To make it somehow easier to read:
https://threadreaderapp.com/thread/1447251334814523392.html
https://threadreaderapp.com/thread/1447251334814523392.html
Thanks. First thing I do when I see a HN post being a twitter thread, check comments for link to this (since I never remember the name of threadreaderapp).
After all, that's at least 24 tweets. But this horse has been so badly beaten to pulp...
After all, that's at least 24 tweets. But this horse has been so badly beaten to pulp...
How is this a better experience? Threadreader puts ads in the middle of the tweet stream – on Twitter you can just read the thread, by scrolling. What is the point?
Twitter doesn’t load on iOS if you have even basic content blockers enabled. I’m guessing they are artificially crippling the site to make you disable ad blocking.
Once you disable Adblock, you realize that clicking on almost anything will show a modal asking you to create an account (feels like playing minesweeper to find the links that will work). That modal - once opened - is unclosable until you make the account or start over. It’s incredibly frustrating to repeatedly enter this unclosable UI.
You think it’s all over once you’ve disabled Adblock and created an account? Nope! Now you are harassed at every opportunity to “download the app”
Once you disable Adblock, you realize that clicking on almost anything will show a modal asking you to create an account (feels like playing minesweeper to find the links that will work). That modal - once opened - is unclosable until you make the account or start over. It’s incredibly frustrating to repeatedly enter this unclosable UI.
You think it’s all over once you’ve disabled Adblock and created an account? Nope! Now you are harassed at every opportunity to “download the app”
Seems to me the wrong lesson was taken -- they were prepared for a presentation not a negotiations. They unwisely jumped the gun into a negotiation at the end of a negotiation. They got their ass handed to them for being unprepared. What they said was not out of line, just unprepared.
Pretty sure the "you're a liar" is just a convenient way to blow it off without going into details.
The buy was probably already questionable even for $50m, a number Steve probably already knew even before they entered the room. The exchange showed that the founders were going to be stubborn about the price.
So in the end this isn't "trust is everything in business, and Steve was offended" but simply "don't jump into negotiations with your pants down".
The buy was probably already questionable even for $50m, a number Steve probably already knew even before they entered the room. The exchange showed that the founders were going to be stubborn about the price.
So in the end this isn't "trust is everything in business, and Steve was offended" but simply "don't jump into negotiations with your pants down".
I think this is reasonable.
What I think is slightly unreasonable and probably a sub text a few people is that anyone, the CEO of this company or not, thought that their value added to customers was worth $150 million to Apple. It was music suggestion and a like button.
Clearly nothing the Apple couldn’t and didn’t just copy.
$150 million for that? Perhaps another explanation is that Steve Jobs heard that number, realize the after enough of these meetings and acquisitions that dollars had lost their meaning, but this wasn’t worth it.
What I think is slightly unreasonable and probably a sub text a few people is that anyone, the CEO of this company or not, thought that their value added to customers was worth $150 million to Apple. It was music suggestion and a like button.
Clearly nothing the Apple couldn’t and didn’t just copy.
$150 million for that? Perhaps another explanation is that Steve Jobs heard that number, realize the after enough of these meetings and acquisitions that dollars had lost their meaning, but this wasn’t worth it.
> I replied, “I don’t think our investors would accept this.” (We’d been hoping to raise new money at a $150M valuation, and had floated this to potential new investors. There’d been some interest, though no serious takers.)
> And then, my terrible mistake, a moment that I’ve regretted ever since: “Actually, I know we’re worth three times as much.” /14
I don't see how it's reasonable at all to pounce on this as a lie if you mean it in the sense of having a strong belief and say this when asked to clarify.
> And then, my terrible mistake, a moment that I’ve regretted ever since: “Actually, I know we’re worth three times as much.” /14
I don't see how it's reasonable at all to pounce on this as a lie if you mean it in the sense of having a strong belief and say this when asked to clarify.
> I don't see how it's reasonable at all to pounce on this as a lie if you mean it in the sense of having a strong belief and say this when asked to clarify.
Did you read the entire Twitter thread ?
Higher up in the thread the guy said that Steve asked him
> “how much is your revenue?” And also, “what was your last financing valuation?”
To which the guy gave him the answers.
For the guy to then go back and arrogantly say “Actually, I know we’re worth three times as much.”
I would call that a lie, wouldn't you ?
He only just gave Steve the hard numbers a few minutes before, and now he's claiming he "knows" they are worth more ?
I'm afraid I'm on Steve's side on this one, i.e. "Don't waste my time and I won't waste yours".
Business negotiations should always take place around hard facts and figures. If you start to try to introduce fluffy subjective nonsense that you cannot back up with facts into the discussion, like this guy did, you'll most likely be shown to the nearest door.
Did you read the entire Twitter thread ?
Higher up in the thread the guy said that Steve asked him
> “how much is your revenue?” And also, “what was your last financing valuation?”
To which the guy gave him the answers.
For the guy to then go back and arrogantly say “Actually, I know we’re worth three times as much.”
I would call that a lie, wouldn't you ?
He only just gave Steve the hard numbers a few minutes before, and now he's claiming he "knows" they are worth more ?
I'm afraid I'm on Steve's side on this one, i.e. "Don't waste my time and I won't waste yours".
Business negotiations should always take place around hard facts and figures. If you start to try to introduce fluffy subjective nonsense that you cannot back up with facts into the discussion, like this guy did, you'll most likely be shown to the nearest door.
There is also an interesting omission in this exchange. Steve asks for revenue and last valuation, but gets back number of users and last valuation. It appears the author dodged a direct and critical question in this exchange. Steve almost certainly caught this, but still gave a clear and direct answer. Additionally, Steve said Eddy Cue would be responsible for working out the details, but the author chose to press Steve to stay and talk money. It doesn't seem crazy that Steve was annoyed with the author by the time the "I know" statement was made.
> If you start to try to introduce fluffy subjective nonsense that you cannot back up with facts into the discussion
I get that, but labelling someone a liar is much stronger than this.
I get that, but labelling someone a liar is much stronger than this.
I guess we could talk till the cows come home about interpretations of English language and things that get said in the heat of the moment.
Ultimately in this story I think the crux lies in the guy's failure to take the "work out the details with Eddy" hint. That was the real point of no return, everything else after that was just a case of when, not if, the things would fall apart.
Eddy (or the Eddy like character in other scenarios) is the guy who has more time for you than the CEO and is likely more willing to give you more rope to hang yourself in terms of exploring things like valuation boundaries.
By seeking to go above the Eddy in the room and negotiate "right there" with the CEO in the room you are only opening yourself up to being eaten for breakfast. The CEO has a million things on their mind and likely doesn't have the time or mental capacity for the details. By openly seeking to go above the Eddy in the room, you are openly both stepping on Eddy's toes and potentially sending a message to the CEO that you don't trust the Eddy. Thinking you can close an M&A deal then and there with the CEO just like you would sell a widget is a bit arrogant and naïve.
Ultimately in this story I think the crux lies in the guy's failure to take the "work out the details with Eddy" hint. That was the real point of no return, everything else after that was just a case of when, not if, the things would fall apart.
Eddy (or the Eddy like character in other scenarios) is the guy who has more time for you than the CEO and is likely more willing to give you more rope to hang yourself in terms of exploring things like valuation boundaries.
By seeking to go above the Eddy in the room and negotiate "right there" with the CEO in the room you are only opening yourself up to being eaten for breakfast. The CEO has a million things on their mind and likely doesn't have the time or mental capacity for the details. By openly seeking to go above the Eddy in the room, you are openly both stepping on Eddy's toes and potentially sending a message to the CEO that you don't trust the Eddy. Thinking you can close an M&A deal then and there with the CEO just like you would sell a widget is a bit arrogant and naïve.
Exactly, it could have happened anywhere but this is Jobs in 2008. If he's bought you already, leaving the details to Eddy, and you basically announce that Eddy won't cut it you're asking for a reality check right there. Then it's this if in a hole, stop digging.
In a follow up tweet, he admitted that he was pretending to have an offer for 150M in that exchange, so yea, he was lying.
It's narrated looking back years, so probably the conversation had been slightly different. I agree that pouncing like that on "know" vs. "believe" seems over the top. But he probably used some different way to express himself. Maybe he even told Jobs that they had a better offer but was obviously bullshitting.
With that much shame involved, some ego-protection would be expected.
With that much shame involved, some ego-protection would be expected.
[deleted]
[deleted]
Not enough has been said about the line “I don’t think our investors would accept this.”
50 million. He just asked Steve jobs to hand over some large fraction of 100 million to his investors.
Steve was a product guy. This guy just showed he cared more about his rent-seekers-on-capital than the real creators.
That’s a fundamental disconnect.
50 million. He just asked Steve jobs to hand over some large fraction of 100 million to his investors.
Steve was a product guy. This guy just showed he cared more about his rent-seekers-on-capital than the real creators.
That’s a fundamental disconnect.
Reminds me of this story by Andy Miller who sold his company to Apple, and almost lost the chance during the meeting.
https://youtu.be/k7f-51oy0OA
Starts at 26m50s
https://youtu.be/k7f-51oy0OA
Starts at 26m50s
Off-topic, but if you do https://youtu.be/k7f-51oy0OA?t=26m50s instead of typing the time separately, it'll load the video straight at the right time.
Edit: Loved watching it by the way, thank you for the link!
Edit: Loved watching it by the way, thank you for the link!
Steve may have changed the world, and Andy would have made a lot of money... but life is too short - I promised myself to never work for an asshole ever again and so I cringed watching these two in the video glorify Steve's asshole behavior.
If Steve leaned over to me and changed price during negotiation, or told me to fire everyone who didn't want to move from Boston to Cupertino (if that wasn't part of the original deal), I would have walked.
But that laugh, saying a project would have taken 6 months but only given 4 weeks... stop glorifying martyrdom people!
If Steve leaned over to me and changed price during negotiation, or told me to fire everyone who didn't want to move from Boston to Cupertino (if that wasn't part of the original deal), I would have walked.
But that laugh, saying a project would have taken 6 months but only given 4 weeks... stop glorifying martyrdom people!
The problem with people in general is we don't know how to deal with sociopaths. Unfortunately we seem to glorify them here on HN.
As a computer person who loves them, Steve made them worse not better. We live in a world where most computers are now locked down, spyware laden, ad serving, micro transaction sucking, subscription rent seeking, pieces of garbage. When I look at iPhones and iPads I get sad for the children.
As a computer person who loves them, Steve made them worse not better. We live in a world where most computers are now locked down, spyware laden, ad serving, micro transaction sucking, subscription rent seeking, pieces of garbage. When I look at iPhones and iPads I get sad for the children.
> We live in a world where most computers are now locked down, spyware laden, ad serving, micro transaction sucking, subscription rent seeking, pieces of garbage. When I look at iPhones and iPads I get sad for the children.
Interesting in that some of those items Apple pushes for, and some of those items Apple pushes very hard against.
Interesting in that some of those items Apple pushes for, and some of those items Apple pushes very hard against.
Yeah, this was an easy blunder to make, especially if you're inexperienced. Jobs's reaction is the least important part of the story.
It is, as someone else said, about leverage. And board-room dynamics. Jobs probably did not care if it was 50Mi, 150Mi or 1Bi. He cared it was a fair price, sure. But he was there to seal the deal, not to worry about peanuts or negotiate that. He probably didn't even care about the actual numbers if it was under 1Bi.
And after all it's what, 50Mi for a sidebar? They just rebuilt it. It's a feature not a product. Take the money.
It is, as someone else said, about leverage. And board-room dynamics. Jobs probably did not care if it was 50Mi, 150Mi or 1Bi. He cared it was a fair price, sure. But he was there to seal the deal, not to worry about peanuts or negotiate that. He probably didn't even care about the actual numbers if it was under 1Bi.
And after all it's what, 50Mi for a sidebar? They just rebuilt it. It's a feature not a product. Take the money.
The guy was bullshitting and got caught. Period.
But the kind of mental gymnastics people in the comments section do to defend Steve is impressive.
I'll have you know I'm not that rude in meetings like Steve was :P
But the kind of mental gymnastics people in the comments section do to defend Steve is impressive.
I'll have you know I'm not that rude in meetings like Steve was :P
I don’t know much about acquisitions, so what is the incentive of the acquisition from the buyer’s side? Apple and Facebook seemed to create clones of the functionality pretty easily, so the main purchase benefit seems risk over implementation timeline. What am I missing?
The acquisition can bring along customers and partnerships that would be difficult to create from scratch, especially when facing an entrenched competitor.
So jobs never lied to advance his company? Or is the message more like to not lie at the wrong moment?
The better you are at strategic deception, the easier it is to smell out others who are deceiving. Is it a lie? Is it an exaggeration? Is it a forward-looking prediction? Is it just a fabrication? Does it matter? When you're in the room with someone who is clearly a master of wielding the Reality Distortion Field, don't think you can go in as a rank amateur and beat him as his own game.
It would have been better to just say "make us an offer" without making any claims at all, and then leave it up to the negotiation.
On the other side, lying to investors these days about revenue, customers, or financials can get you screwed if things go south. Even if it's just in a pitch deck.
It would have been better to just say "make us an offer" without making any claims at all, and then leave it up to the negotiation.
On the other side, lying to investors these days about revenue, customers, or financials can get you screwed if things go south. Even if it's just in a pitch deck.
Reading this comment made me extremely sad, thinking about all the young geniuses who will be pitching their product to $NEXT_CORP but getting rejected because they didn't copy enough pages out of the Steve Jobs playbook. I weep for the future.
Pitching your company to be acquired by the next corp is in itself a form of sadness. While exits are great when they have great outcomes, 9 times out of 10 (maybe more), these acquisitions end up providing less benefit for the founders that sell their company than they might expect. The sheer number of fire sales, acquihires, ripoff acquisitions, and more shows that acquisition by BIGCORP shouldn't be blindly seen as a success. In fact, when I see an acquisiton announcement from a company I really liked working with I can't help but feel sad for what I know will be a likely outcome: the death of the product I like so much.
Focus on building things people want and building a sustainable company that can grow and continue to provide benefit. Not the tech startup equivalent of house flipping where you build something that's not meant to last in hopes of flipping for a return. When you raise venture capital, especially, these stakes are poor.
Build to last. Build to compete. Build to make your customers thrilled. Never build to flip.
Focus on building things people want and building a sustainable company that can grow and continue to provide benefit. Not the tech startup equivalent of house flipping where you build something that's not meant to last in hopes of flipping for a return. When you raise venture capital, especially, these stakes are poor.
Build to last. Build to compete. Build to make your customers thrilled. Never build to flip.
It’s like being a good poker player. Listen to Kenny Rogers
In poker, you'd call a bluff. You wouldn't get mad at the other player and call him a liar.
It is perhaps why he is acutely aware of the danger.
I guess the point is "just don't get caught, at least until the lie does not matter. be wary of the stakes when you lie"
To me it seems like there was way more leverage from Apple’s side, so the “negotiation” was really a nicety, which was subsequently reverted.
The company was eventually sold at a loss rather than breaking even, so the true market value was ultimately less than what Jobs was offering when the claim was it was worth 3x more.
The company was eventually sold at a loss rather than breaking even, so the true market value was ultimately less than what Jobs was offering when the claim was it was worth 3x more.
Don't lie to the wrong people I guess. Or don't get caught.
A board member once gave me advice ahead of my first major acquisition meeting with the CEO of a mega corp.
“You’re meeting the CEO. No matter what you talk about - Never, ever, ever discuss price with the CEO. You both have people who will do that for you.”
“You’re meeting the CEO. No matter what you talk about - Never, ever, ever discuss price with the CEO. You both have people who will do that for you.”
Yeah I've never been anywhere near M&A but that was my takeaway too. Steve blessed the acquisition, that's all you need from him. Seems like this guy would have been much better off keeping his mouth shut and letting the negotiations play out slowly. Truly a story of a social faux pas with huge consequences.
> I replied that our last round had been two years earlier, pre-launch, at a $50M valuation. Since then, we’d amassed 50M+ active users.
> Steve said, “we’d probably acquire you for $50 million.” My heart sank. I couldn’t imagine telling our team that their years of work had created no new value.
It was probably the valuation that was incorrect, or is invalidated by recent market changes. It could have been worth that much then, the value of the then-static product/users decreased, value was created since, but it's still only worth the same now.
> “Did you say you ‘know’ you’re worth more? You have another offer?” Steve Jobs's gaze pierced holes through me. “Bullsh*. You’re lying to me. You’re full of sh*. We’re done here.”
Steve had keen senses and didn't appreciate being lied to. Basically if you don't have another offer, how could you 'know' that?
> Steve said, “we’d probably acquire you for $50 million.” My heart sank. I couldn’t imagine telling our team that their years of work had created no new value.
It was probably the valuation that was incorrect, or is invalidated by recent market changes. It could have been worth that much then, the value of the then-static product/users decreased, value was created since, but it's still only worth the same now.
> “Did you say you ‘know’ you’re worth more? You have another offer?” Steve Jobs's gaze pierced holes through me. “Bullsh*. You’re lying to me. You’re full of sh*. We’re done here.”
Steve had keen senses and didn't appreciate being lied to. Basically if you don't have another offer, how could you 'know' that?
It sounds like this guy just assumed that the initial valuation had to be correct, which is of course a childish way to look at the value of something. The value of anything, whether that's a multi-million dollar company or a Snickers bar, is decided by the market at the time it's placed in the market. If Apple is offering you $50M and everyone else is offering you less (or nothing), guess what, you're worth $50M. Maybe that's because you didn't sell yourself very well, but regardless your value is what other people are willing to pay.
I agree. I can also see how it would be so easy to fall into this logical trap. Having your past value anchored in your mind at 50M for so long while you continue to show value and users added then adding up to 50M would be hard to reason about and emotionally accept on the spot. Still saying "Steve, I think [...] Actually, I know we’re worth three times as much." was clearly outside the lines, speaking to someone with much more experience valuing companies being acquired.
I've seen that "piercing look" as he calls it--in business, trust is everything. Of course everyone is posturing and throwing their weight around to get the best deal, but as soon as you even hint of telling an outright lie it would be the death of you.
Outcomes like this happen when you don't have a strong BATNA. Maybe I'm being naive, but I'd rather spend my time securing a solid BATNA instead of learning how to become a skillful negotiator.
After all, I'm never going to be nearly as good at negotiating as these corporate M&A honchos. But, if I have multiple interested parties or a solid fallback plan to a non-outcome, negotiating is pretty straightforward: "We'll just let the market decide on price."
I remember years ago hoping Apple would acquire iLike. I was one of their earlier users that was at first just using the iTunes sidebar plug-in with a few friends and if I recall correctly this was shortly before Facebook announced they were becoming a platform, possibly before my first Facebook account where iLike was at least for a very short time one of the more popular widgets you could stick on your profile.
Well all this time later, it’s fairly interesting to see how that Apple acquisition I wanted to see didn’t come to be. Ah well.
What did we get instead. I think iLike went to MySpace, and Apple announced Ping?
Well all this time later, it’s fairly interesting to see how that Apple acquisition I wanted to see didn’t come to be. Ah well.
What did we get instead. I think iLike went to MySpace, and Apple announced Ping?
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It looks like anchoring - since he mentioned a $50M valuation, this number stuck in Steve's mind. In this way, negotiating upwards (by a factor of 3) is an uphill battle.
O.T. but every time I see "baited breath" I imagine the Sardine Bait and Tackle" shop in "Cloudy with a Chance of Meatballs" putting a lure in the speakers mouth. What's worse, "bated breath" doesn't mean what the speaker really intends - https://www.thefreedictionary.com/bated.
Interesting thread. I can't help but think this deal would have fallen apart sooner or later anyway. At one point somebody from Apple would have asked the questions Steve Jobs asked, the same offer would have been made and the response would have been the same (we are worth more, etc).
Somewhat OT, but funny to see Ali P. on HN this AM. I went to high school with Ali and his twin brother. They were salutatorian and valedictorian (don't remember in which order). I think they (or one of the two) went on to do very well co-founding a company with the late Tony Hsieh.
I think the team unwillingness to discuss pricing with Eddy was a dick move to Eddy.
The lesson is about greed. Risk always accompanies greedy moves and you have to calculate that risk before taking action. Without solid facts to back him up, going in so hot against Steve Jobs and Apple was too risky.
The lesson is about leverage.
$50M isn't greed when that amount was already invested into the venture. You accept that offer you're repaying your investors and walking away with nothing.
Apple was leveraging their position to lowball a smaller company. Ultimately the smaller company upset the bigger one, and even the "charity" was withdrawn, and the bigger company used their vast wealth/resources to crush the smaller.
$50M isn't greed when that amount was already invested into the venture. You accept that offer you're repaying your investors and walking away with nothing.
Apple was leveraging their position to lowball a smaller company. Ultimately the smaller company upset the bigger one, and even the "charity" was withdrawn, and the bigger company used their vast wealth/resources to crush the smaller.
I think the mistake was to try negotiating the price with Steve, who was known for hardball negotiation tactics, and for lowball offers. Once Steve's position was out there, it was difficult for other Apple execs to negotiate a more reasonable price, especially considering, as you say, what little leverage the smaller company had. And the smaller company had no real incentive to take the lowball offer at the time.
I don't know much about funding or selling a company, but it seems to me that the smart move was to shut up about the buying price, shut up and nod even if Steve Jobs gives a low-ball price, and let the negotiations take place later on.
It sounds like it was all about pride for Jobs, small guy was cocky enough to speak up to him so he had to punish him by dropping the deal so he knows his place.
It sounds like it was all about pride for Jobs, small guy was cocky enough to speak up to him so he had to punish him by dropping the deal so he knows his place.
> . You accept that offer you're repaying your investors and walking away with nothing.
I thought the previous round was $50MM. So those investors would get back their original cash, and all the other employees/investors would essentially cash out at that value.
I thought the previous round was $50MM. So those investors would get back their original cash, and all the other employees/investors would essentially cash out at that value.
Leverage is the risk. Asking for 3 times what's initially offerred is greed. Greed isn't bad, per se, it just entails a risk.
The suspect the problem with the point you're trying to make is that you're using the term "greed." Greed has implied immorality to it.
It wasn't "greedy" to ask for over $50M, because $50M was what was already invested into the company. When another company wants to acquire you, it is normal and expected for you to make profit on that acquisition. 3x current valuation isn't, to me, "greedy." Quite reasonable in fact.
It wasn't "greedy" to ask for over $50M, because $50M was what was already invested into the company. When another company wants to acquire you, it is normal and expected for you to make profit on that acquisition. 3x current valuation isn't, to me, "greedy." Quite reasonable in fact.
You'ree right. I don't attach morality to 'greed' -- it's just wanting 'more' than what you've been given.
I was expecting this to be about his "elevator meetings", where he would ask people in the elevator with him what it was they did and decide whether to fire them or not.
Yes, well the same Steve Jobs who denied being the father of his daughter, who dumped the burden of supporting his daughter on ordinary working taxpayers while he counted his first hundred million, this was the guy who called someone who was convinced his company was worth more a liar for saying he knew it. And even got the guy to feel bad about his sin. Amazing. It was all part of his extraordinary toolbox of manipulative tools, the "reality distortion field" that his admirers spoke of.
I got to see him behind closed doors in meetings when he was at NeXT. If you want to see Steve Jobs in a private meeting, watch the scene in the movie Glengarry Glen Ross where Alec Baldwin tells the salesmen that they are losers because the Baldwin character drives a more expensive car. Steve literally did that in one meeting, answering a question about why he didn't do such-and-such with a "I drive a Porsche and you drive a General Motors car" as his argument for why his superior wisdom must not be questioned by losers.
I got to see him behind closed doors in meetings when he was at NeXT. If you want to see Steve Jobs in a private meeting, watch the scene in the movie Glengarry Glen Ross where Alec Baldwin tells the salesmen that they are losers because the Baldwin character drives a more expensive car. Steve literally did that in one meeting, answering a question about why he didn't do such-and-such with a "I drive a Porsche and you drive a General Motors car" as his argument for why his superior wisdom must not be questioned by losers.
The Rolling Stone obituary is, in my view, the best piece on Steve Jobs [1].
> Jobs may be remembered as the man who brought the human touch to our digital devices. But perhaps his greatest – and hardest-won – accomplishment was bringing the human touch to Steve Jobs.
How do we evaluate someone who exercised wanton cruelty and dismissal of others' lives, but who worked on earning the capacity to change? What does it mean that he got the chance to evolve and make good as a rich man, where so many others would not?
At the end of the day, sometimes we have to just let the story be the story and give up on our anxiety to compress it into simpler, more digestible themes.
[1]: https://www.rollingstone.com/culture/culture-news/the-steve-...
> Jobs may be remembered as the man who brought the human touch to our digital devices. But perhaps his greatest – and hardest-won – accomplishment was bringing the human touch to Steve Jobs.
How do we evaluate someone who exercised wanton cruelty and dismissal of others' lives, but who worked on earning the capacity to change? What does it mean that he got the chance to evolve and make good as a rich man, where so many others would not?
At the end of the day, sometimes we have to just let the story be the story and give up on our anxiety to compress it into simpler, more digestible themes.
[1]: https://www.rollingstone.com/culture/culture-news/the-steve-...
> called someone who was convinced his company was worth more a liar for saying he knew it.
No, that wasn’t the lie. From the horse’s mouth:
“I was intentionally pretending we had another offer, and he detected it.”
https://twitter.com/apartovi/status/1447324896904638467
No, that wasn’t the lie. From the horse’s mouth:
“I was intentionally pretending we had another offer, and he detected it.”
https://twitter.com/apartovi/status/1447324896904638467
You're making a good point while still, I think, missing mine. You, the author, I probably all tell ourselves and others things that we "know" that we mostly hope for. "I know I'm going to lose ten pounds before Christmas." Do you really "know"? Do you have a time machine? And maybe one friend expressed support, so, "...and other people agree with me!" Well, you're implying more than one person, probably without feeling bad about it unless someone challenges you. "How many people? What are their names?" Oops. Now, we're in trouble.
My point is the irony of feeling bad and learning a lesson about being completely honest when caught by a master famed for "reality distortion". Reality distortion is almost literally truth stretching. No doubt the master of doing it was a master at detecting it, but that didn't mean he was deeply committed to the truth himself. He was deeply committed to and famously skilled at manipulating but not being manipulated, which is not at all the same thing.
My point is the irony of feeling bad and learning a lesson about being completely honest when caught by a master famed for "reality distortion". Reality distortion is almost literally truth stretching. No doubt the master of doing it was a master at detecting it, but that didn't mean he was deeply committed to the truth himself. He was deeply committed to and famously skilled at manipulating but not being manipulated, which is not at all the same thing.
This story and Jobs' reaction is not about the fluid meaning of the word "know." Jobs immediately caught on to the fact that Ali was lying to him about having a 150M offer, which he explicit admits:
https://twitter.com/apartovi/status/1447324896904638467
It is not about "someone who was convinced his company was worth more" being called a liar for saying he "knew" it.
https://twitter.com/apartovi/status/1447324896904638467
It is not about "someone who was convinced his company was worth more" being called a liar for saying he "knew" it.
I wish he would have said this in his original chain. Big detail to leave out.
> I drive a Porsche and you drive a General Motors car
i hate adding to the steve jobs circle jerk, but i think this is actually kind of smart if we can momentarily suspend our disgust for his character.
the fact is that steve and everyone he's in the room with are there because they worship money. that's the social contract with every job. he has the most, and if you want some of his, you have to be quiet and listen even if he's being unbearable.
i hate adding to the steve jobs circle jerk, but i think this is actually kind of smart if we can momentarily suspend our disgust for his character.
the fact is that steve and everyone he's in the room with are there because they worship money. that's the social contract with every job. he has the most, and if you want some of his, you have to be quiet and listen even if he's being unbearable.
> but i think this is actually kind of smart
> the fact is that steve and everyone he's in the room
> with are there because they worship money. that's the
> social contract with every job
I'm lucky in that I no longer work because if I don't my family won't eat, but that was once why I worked, and it's why most folks hold jobs.
Even the folks in that room probably cared about their career/power/influence/personal mythology more than they did about their bank account balance -- and yes, those two things are related but distinct.
sure my comment was mainly in the context of people like steve jobs and OP who are chasing multi-million dollar deals
but yeah maybe "worship" is the wrong word when i extend it to every job. the fact is whatever our motivations, we still show up to work every single day, and we do it for money.
but yeah maybe "worship" is the wrong word when i extend it to every job. the fact is whatever our motivations, we still show up to work every single day, and we do it for money.
Christ what an asshole.
When are we going to stop posting twitter threads to this board?
I understand large companies dealing with large amounts of money need to be ruthless, but I've always hated this kind of attitude (in general, not just Jobs)
edit: to be clear I'm not saying OP didn't pull the figures out of his arse, just that it quite clearly wasn't an attempt to be deceptive based on the language he used around it