Book Notes - How the Internet Happened (Brian McCullough)
This book really flowed like a story, and I had a hard time putting it down. Here are some of my key takeaways
North Star
- One of netscape’s plan was to achieve ubiquity with its browser (become a platform). Ubiquity opens up a lot of options, either revenue from the products you are ubiquitous on or from products that benefit as a result.
- Steve Jobs and his team knew that the iPod would be a hit because they personally craved it.
Operations and Strategy
- Most successful startups delayed raising capital as much as possible, maintaining significant equity. They were also careful in keeping their spend under control.
- Multiple companies witnessed that in the internet era, consumers wanted unlimited selection and instant gratification.
- Users tend to stick with familiar services (as long as they continue to work), creating a significant first-mover advantage.
- When Google discovered the value of search advertising (2000-2002), it became obsessed with keeping it a secret because it feared tipping off Microsoft.
- Yahoo’s initial launch of ads faced angry emails from users. But the protests subsided in a few weeks, and since the service was as useful as always, users stayed loyal.
- As startups scale, experienced VCs often mandate bringing in seasoned engineering leadership (including CEOs). Google’s recruitment of Eric Schmidt, with his experience managing Microsoft as an adversary at Sun and Novell, was a strategic move.
Adaptation and innovation
- Jobs asked a team to work on DRM not because he liked copy protection (he didn’t, he felt it needlessly complicated the user experience). It’s because he knew that was the only way to get music executives to the negotiating table. Still, it was pretty hard to convince the record companies, and the main reasons Jobs could convince them were:
- As the owner of Pixar movie studio, he had credibility
- The music industry was desperate; their revenues were declining and they were effectively blocking people from consuming digital music after people had gotten a taste of it with Napster
- The music industry was willing to experiment with Apple because at that time Apple was insignificant and if things went south, it wouldn’t be a huge impact.
- Even with the iPod mini being the bestselling model, Apple continued to innovate, replacing it with the thinner and flash drive-equipped iPod nano.
- The dot-com bubble burst devastated even promising companies like Pyra Labs. Their blogging platform went from 2k blogs to 100k, then 700k a year later. Still, their funding dried up, the founder had to lay everyone off, and he was the last remaining employee, keeping the site up on his own computer, on his own dime from his home.
Interesting tidbits
- Google’s founders were initially firmly against advertising, so teams inside had never experimented with ads.
- Brin and Page didn’t want to take Google public but had to because of post-dot-com bubble financial regulations. In their original letter to shareholders, they mentioned that they wanted Google to develop services that improve the lives of as many people as possible and to do things that matter.
- Jobs was quite stubborn, even in cases where it was beneficial for the company, e.g., he held Mac in high regard and used iPods to sell Macs and as a result didn’t bring iTunes to Windows. Apple execs had to show him studies which proved Mac sales would be unaffected by releasing a Windows version of iTunes, only then did he give in.
- Jobs was also opposed to having an App Store on the iPhone. He told the New York Times that iPhones are more like iPods than like computers. You don’t want to have like three apps on them and then not be able to make a call anymore.