Even outside of the whole wider decades-long "Jobs: Sinner or Saint" discussion, it's interesting to see from this one incident just what kind of things don't even register as questionable in certain "dog eat dog" business circles. Both the OP and the replies not only pay little attention to the fact Jobs called OP a liar in a very aggressive way simply for using the almost intrinsically abstract English language in a subjective way ("I know" vs "I think"), they seem to almost think Jobs should be thanked for giving OP a character building experience. He could even have been blunt without sugar coating it: "I admire your conviction, but you won't ["I don't think you will"? lol] be able to make those targets and so we can't go ahead. Best of luck." To then go on to steal the idea anyway? That's just Grade A Hole.<p>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)<p>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
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).
>Steve focused his gaze on me and asked, “how much is your revenue?” And also, “what was your last financing valuation?”<p>>I replied that our last round had been two years earlier, pre-launch, at a $50M valuation.<p>>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.<p>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.
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 <i>really</i> 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.<p>FriendFeed didn’t really go anywhere but they <i>did</i> 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.”<p>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.<p>I guess Steve was right (and I’m sure he walked into that meeting with some background intel).
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.<p>That's how the story reads to me.
To make it somehow easier to read:<p><a href="https://threadreaderapp.com/thread/1447251334814523392.html" rel="nofollow">https://threadreaderapp.com/thread/1447251334814523392.html</a>
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.<p>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.<p>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 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.)<p>> And then, my terrible mistake, a moment that I’ve regretted ever since: “Actually, I <i>know</i> we’re worth three times as much.” /14<p>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.
Reminds me of this story by Andy Miller who sold his company to Apple, and almost lost the chance during the meeting.<p><a href="https://youtu.be/k7f-51oy0OA" rel="nofollow">https://youtu.be/k7f-51oy0OA</a><p>Starts at 26m50s
Yeah, this was an easy blunder to make, especially if you're inexperienced. Jobs's reaction is the least important part of the story.<p>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.<p>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.<p>But the kind of mental gymnastics people in the comments section do to defend Steve is impressive.<p>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?
A board member once gave me advice ahead of my first major acquisition meeting with the CEO of a mega corp.<p>“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.”
> 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.<p>> 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.<p>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.<p>> “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.”<p>Steve had keen senses and didn't appreciate being lied to. Basically if you don't have another offer, how could you 'know' that?
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.<p>Well all this time later, it’s fairly interesting to see how that Apple acquisition I wanted to see <i>didn’t</i> come to be. Ah well.<p>What did we get instead. I think iLike went to MySpace, and Apple announced Ping?
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 - <a href="https://www.thefreedictionary.com/bated" rel="nofollow">https://www.thefreedictionary.com/bated</a>.
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.
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.
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.<p>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.