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Transcript: Motorala, Medium, and Facebook Paper


This is the transcript to The Dirt episode: “Motorala, Medium, and Facebook Paper

Tim: Every once in a while you tell a story about a Mark I’ve never met.
Hello and welcome to The Dirt. I’m your host Tim Wright and I’m here with
Steve Hickey.

Steve: Hello.

Tim: And Mark Grambau.

Mark: Hi, Tim.

Tim: And we’re talking Google, Facebook media, the et cetera, bullets.
Yeah. Not bullets like gun bullets, bullets like in a list, right? Just to
be clear. Just to clarify.

Steve: Professional web developer there.

Tim: Yeah. So we were reading an article a couple of days ago actually, at
least I found it a couple of days ago, somebody found it.

Steve: It’s been blowing up.

Tim: But Google selling Motorola. And this was super interesting to me
because it was like an experiment and Google maybe wants to do hardware, so
they buy Motorola, and then they say “Aw, I don’t think we want to do
that,” so they got rid of it.

Steve: Pretty expense “I don’t want to do that.”

Tim: Yeah, I mean they’re Google, though. They could buy up the United
States, and shut it down.

Mark: I think general consensus across tech industry is that the
acquisition of Motorola Mobility, and it was specifically Motorola
Mobility, it wasn’t the entire company, in 2011 for $12 billion or so was
in hindsight now, quite a bit of a mistake. So they’re now selling it over
to Lenovo for about $3 billion, $2 billion or $3 billion.
Out of that they’re holding onto the advanced research arm of Motorola that
we spoke about in a previous episode, run by former Darba chief. That’s the
part that’s doing all sorts of really crazy research into things like pills
that you swallow that are powered by stomach enzymes that release a
password through your body in an electrical signal. They’re holding onto
that group, which is pretty interesting, and they’re either holding on to
some patents or having some cross-licensing patent deal.
The amusing thing about all this is that the consensus a few years ago was
that Google wanted to get Motorola, a., to have hardware and have a
hardware company, that was running semi-independent…

Steve: They never really used it, at least the one phone.

Mark: …they kept it semi-independent. They only sort of released the Moto
X towards the end of 2012, 2013.

Tim: That was only like, real official “we built this because we own you”
phone. There were other Motorola…

Mark: Right, yeah. They built others, but that was the first one that was
meant to feel like the Google/Motorola combination. And the thought was
they got it for patents, as all these patent wars had been heating up. The
tough part is that all of these Motorola patents, every time they’ve gone
to court, have fallen on their face and lost.

Tim: Maybe part of why they sold it?

Mark: Yeah. But at the same time though, they’re selling this for $3
billion let’s say, right as they’re buying Nest and potentially getting a
hardware team led by Tony Fadell, so I don’t think the signal is they want
to get out of the hardware game. I think that they had a false start.

Steve: It reminds me of, you hire somebody who has a super awesome resume,
and then you find out that they’re an idiot. That’s what it reminds me of.

Mark: And then you don’t want to hire the thing that you really need.

Tim: I think this goes a little bit further than that. It’s like, you hire
somebody with a super awesome resume and it turns out that they are an
awesome employee but you can’t figure out how to work together. Because
Motorola has built some really nice phones prior to the acquisition, since
the acquisition, just there’s never been that really nice, tight level of
integration. They haven’t marketed things in any effective way. Like the
one where you can swap out the face plates and all the colors and that,
what is that, the Moto X?

Mark: Yeah, and it’s really more than the face plate. It’s that you can
really customize a large part of the phone and it’s… they were making a
gamble that people would want a phone that instead of a face plate, but the
phone itself would have like a wood body. And there’s a market, it’s a

Steve: Do you remember like the old Nokia face plates that you could buy?

Mark: Oh my gosh.

Steve: Shi**y old Nokias, there were thousands of face plates. People loved
that sh**. Nobody likes it any more, I guess. Or they just don’t talk about

Tim: The whole thing, it seems like it’s rife with politics because they
made some deal with Samsung, also.

Steve: I think it’s theorized that this is about Samsung. There are, I
think some things like the patent cross-licensing was clear. But the idea
was basically that if Samsung and Google were each holding the switch for
some mutually assured destruction, basically either Google could decide to
go full vertical integration and alienate all their hardware partners,
which Samsung is selling the majority of Android phones.
Or Samsung could just try to drop Google completely and fork Android and
drop the Google Play store and then in that case they only have some
shi**y, second class apps instead of the whole host of really nice ones.
And there were some other implications there, but it was better for them to
play nice.

Steve: It sounds like they found some sort of reasonable middle ground.

Mark: Yeah.

Steve: In the whole thing, and it ended up with them getting rid of the
majority of Motorola.

Mark: Which is pretty interesting given that just earlier this month at
CES, Samsung was showing off a whole alternate skin, a really, really full-
on, closer to what Amazon did with Kindle, a layer over Android that was
very flip-board-y, very metro-y and it sounds like they are potentially
backing off of that as part of this exchange.

Tim: Metro-y sounds like an offensive term for some reason.

Mark: That’s all in your head, Tim.

Tim: The rumors I think were that that was what spurred them to start
talking to each other, that they actually met at CES, and actually started
hammering out this negotiation, and not destroying each other and
themselves in the process.

Mark: Yeah. But there’s a thought that if Google off-loaded Motorola over
to Lenovo to say “Hey, don’t worry, we’re not going to do hardware,” I
don’t know if that’s a, I don’t know if that really makes sense as much as
I thought about yesterday, in that Lenovo having Motorola’s potentially a
larger threat than Google having Motorola.

Samsung owns a really large chunk of Android and largely on the high end.
Where they’re getting eaten up is on Android on the low end. A lot of brand
X Chinese manufacturers building a ton of phones and Lenovo potentially has
extra reach doing that.

Tim: Do you think they care about the low end at this point, when they’ve
been doing so well on the high end?

Mark: I think Samsung cares about every end. Samsung’s entire marketing
strategy is “I will fill every single possible niche with something for you
to buy.”
Tim: That’s a, it seems shi**y, but I mean then again, they have a ton of

Mark: It’s working for them.

Steve: It’s a numbers game. Yeah. There’s just tons of money being thrown
around. And especially earlier this week we all know that I got all in a
huff about all the money that Medium got thrown at them. It’s a blogging
platform that has no apparent revenue model, and somebody says “Here’s $25
million because you’re associated with Twitter.”

Tim: Good money if you can get it.

Steve: Like, I can’t get any of that.

Mark: I’ve got to say…

Steve: Bad salesman.

Mark: I agree with you. I think it’s crazy. But I think it’s no crazier
than anything and everything else that goes on in the valley every single
freaking day.

Steve: This one was especially. I think this was the first round of
funding, as far as I know.

Mark: $25 million? Pocket change.

Tim: That doesn’t happen. Someone’s like “Oh, here’s $100,000 to keep your
server running and hire somebody, but this was just like “You know what?
Here you go, $25 million.

Mark: I think that the criticism that they have no apparent plan for
revenue is, all that’s merited simply because most of these companies that
are getting funding have no public apparent plan for revenue, but for all
we know they’ve got some great one behind closed doors.

Tim: The companies that are already huge, that are like Twitter, still
doesn’t turn a profit, but they’re enormous. People are really banking on
potential showing up there, but with smaller things, you need to show some
degree of revenue plan or promise.

Steve: They could, you know just to be fair, they could have a revenue plan
and we just don’t know it. They only show it to investors.

Mark: And they may be bigger than what we think.

Tim: This is not obvious. I’m actually curious if they’re paying for the UX
for this whole site, and just the promise of that, this UX will pay off.

Mark: Well, that’s what you’re doing when you’re making an investment,
right? You’re saying not “What is this worth now,” but “What is this worth
in the future?” “Where can this grow?” And they do have a corner on this
market right now, of a blogging platform that is a beautifully designed
platform that lets you feel like you are, you’re Joe Schmoe and you wrote
that, it’s not just on your blog, it’s on this larger site, but it still
feels personal. But it also feels like you’re at some higher platform.
You’re on the level of a larger company. You feel like you’re at the New
York Times.

Tim: Yeah, but to hand out some money though, you still need some vaguely
quantifiable promise of future cash flow.

Steve: Yeah, you don’t invest in something with no promise of return.

Tim: I really want to know what the motivation is here. Because it has to
be something. I refuse to believe that somebody’s throwing around $25
million for no reason whatsoever, but the reason is not apparent.

Mark: Oh yeah. And that’s what I think my argument is. For all the crazy
things, we’re not the one in the negotiating room to see what the revenue
stream plan is. There’s likely one, good or not, but there likely is one.

Steve: They have a great experience, and it performs well, and I love the
way they go from article to article. I mean, it’s not paging, it’s like a
new style of paging. And I think that stuff is super important. I don’t
know if it justifies $25 million, but I’m also not the person showing up
with $25 million.

Mark: I think the kind of visual storytelling that Medium is doing, it
reminds me of, it’s part of this larger context that’s happening towards
visual story telling. And that really is in line with what Facebook
announced this week. Facebook announced a new application for iPhone. They
are launching this on iOS first, called “Facebook Paper,” that at first
glance might look like it’s just an alternate news feed, but I think this
is meant to be sort of a separate product.

This is a very gesture-ly driven, visual storytelling, one story at a time
and I think it’s this and what Medium is doing with the way they’re doing
sort of art-directed, really visual stories as well as companies like, what
is it, Storehouse, I believe it’s called, that are all these tools that are
really changing the way that we tell stories online, is the shift away from
the Web 2.0 boom that was like 2006 through 2011 or so, the “feed” focus of
social media towards a story focus.

Tim: Well, it’s definitely a stand-alone app, but I see it more as an
experiment in how to change Facebook itself.

Mark: Absolutely.

Tim: Think of every time Facebook changes the most minor thing: “Oh, this
stroke is two pixels now instead of one pixel. And then…

Mark: The townspeople appear with their pitchforks.

Steve: And one thing I’ve always liked about Facebook is that they just
don’t give a fu** about that. They just forge ahead and two weeks later,
nobody remembers. This is a massive change, much more massive than anything
they’ve ever done to the news feed since introducing it.

Tim: Well they branch off. It’s a brand new product.

Steve: Yeah, but I think as a brand new product I think they’re containing
a potential massive change to the news media itself in a separate product
so that the villagers don’t get riled up and they can actually experiment
and reiterate and see what performs and then eventually this will be the
news feed, or Facebook itself.

Tim: The most exciting part of this whole thing to me is not even the app.
I don’t even care about the app. It’s how fast that an enormous image
loaded. If you go do, it’s like instant. They have the
best CDN I’ve ever seen.

Steve: Tim is super jealous.

Tim: I am.

Mark: It’s a 500 kilobyte image that loads in a heartbeat.

Tim: Yeah, it’s like it’s just rendering. It’s not even like it’s fetching
the image. It’s insanely fast. And I want to try and get them on the show
and, not Facebook, but the CDN company and just ask them why, and how?

Steve: Just really give me your secrets.

Mark: Yeah, there’s some secrets sauce in there.

Steve: Yeah, I think their secret sauce is a pile of money firing up a
server somewhere.

Mark: That’s like directly outside of your house.

Tim: Yeah.

Steve: It’s just that there’s a furnace. A server that’s powered by a
furnace, and that furnace burns nothing but cash. And it’s just the best
server ever built.

Mark: So Steve, back to your point about Facebook diversifying. This brings
us back to a conversation we were having, gosh, maybe a dozen or so
episodes ago, when we were talking about the snap chat valuation.
Facebook’s plan a few years ago was really about build the Facebook
platform, the network building applications on it. You’re building web
apps, it is the sender of the web, and as they famously sort of
misunderstood the wave and the push to mobile, and they’re getting back on
it now, they’re realizing that on mobile they don’t have the platform.
The platform is perhaps the operating system. They don’t have that. They
tried it with Facebook Home on Android and they may continue to pursue it,
but that something like Snap Chat or We Chat or Line or Instagram can just
pop up out of nowhere and have a kajillion users, and it’s what fueled
their Instagram purchase.
I think that you’ve also seen them release a Facebook messenger dedicated
app. I think they have a Facebook Photos dedicated app, and they are
realizing “Well hey, we can’t replace iOS, but we can build and expand our
experience and we can take over all those icons on that home screen, and
that’s where the platform-based stuff like Facebook email and Facebook chat
does actually have a home.

Steve: Don’t forget about Poke, their standalone competitor to Snapshot.

Tim: I haven’t seen that one. I didn’t even know you could still poke on

Steve: It only ever, they have this standalone poke app that did the exact
same things Snapshot does, but I think he admitted it in an interview this
week that the whole thing was a joke. He’d only had one release. Nobody had
made updates to it afterwards, so it’s just frustrated.

Mark: The last thing that really interests me about this Facebook Paper
release is the, Facebook has been just shoveling up good designers and
developers, just scooping them up from all over the world and acquiring
companies and hiring folks, like crazy over the last few years. And much to
the world’s chagrin, with some of these developers is that the product
would be right on the cusp of great promise and then disappear.
And I’m always excited at least to see something come out the other side
from Facebook that is clearly related and driven by one of those
acquisitions. And one of them will make Mike Matas…

Tim: He’s going to be so pissed.

Mark: He’s going to just call me up and say “Sir, it’s Matas.”

Tim: Or Matas.

Mark: This is really good radio. So Mike Matas is a former designer at
Apple, worked at Nest, worked at Delicious Monster and the company that he
co-founded I think he was working on before to Facebook was a company
called Push-Pop Press that was a publishing app and platform for the iPad.
It was, again big on visual storytelling, it came out in 2010 or 2011, but
fairly early on in the whole thing and then one book that they released,
which was by Al Gore called “Our Choice,” and it was a sort of a follow up
to “An Inconvenient Truth,” a lot of great visuals and everything. And it
was this beautiful thing, and then it disappeared.

Steve: I still remember how angry you were that they got purchased. It was
kind of funny.

Mark: Push-pop Press, the folks so…

Steve: It was a multi-day rant. The company’s getting acquired by Facebook,
and how it was destroying the app ecosystem or something.

Tim: Your mom and pop grocery store, acquired by Facebook.

Mark: Exactly. Russo’s now owned by Facebook.

Steve: They also, Loren Richter was also allegedly up on this a little,
too, which was pretty cool. Letter press, what was it, Tweety?

Mark: Yeah.

Steve: They’ve got some good talent.

Mark: So yeah, it’s nice to see the talent come to fruition in a product
from Facebook that is different from just as they evolve. So,
I’m excited to see where this goes. It comes out next week.

Tim: Yeah. So we have an event coming up at Freshwood Soil. It’s called
“Experience Dev,” it’s on February 27th here at the Watertown office. It’s
a conference for managers and high-level senior folks who manage
development and dev teams, development and design teams, I’ll just edit
that later.

Mark: No you won’t.

Tim: No I won’t. To make the teams work together better. It’s going to be
awesome and you should totally go because tickets are going to be on sale
and they’re crazy cheap. You can get more information at
As usual you can get us on Twitter at TheDirtShow, and I want to especially
thank the folks who joined us for the live broadcast today. Please review
us on iTunes and that’s all we have. Thank you for listening. We’ll try and
do better next time.

Mark: You see the deal where people take an apple and eat it from the
bottom instead of the side and obliterate the core; the core is a myth.

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