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Ben Gilbert
Venture Partner
Ben is the co-host and co-founder of the Acquired podcast. Acquired tells the stories and strategies of great companies in long-form, three-hour episodes. The show has over a million listeners and has been ranked the #1 Technology show on Apple Podcasts and Spotify.Previously, Ben was a co-founder and a managing director at Pioneer Square Labs, a Seattle-based venture fund and startup studio, where he currently serves as a venture partner. Ben began his career as an entrepreneur and independent iPhone developer, with the productivity app "SeizeTheDay" being used by over a million people. He also has a background in product management from Microsoft where he shipped the first version of Office for iPad and ran The Garage, the company’s grassroots innovation program.Ben was named the 2017 Young Entrepreneur of the Year by GeekWire and 40 Under 40 by Puget Sound Business Journal. He is an Eagle Scout and holds a BS in Computer Science and Engineering from The Ohio State University.
Highlights
Well that's a crazy sight.
https://acquired.fm/sf
Our Acquired Microsoft Volume II episode is finally here. When we began our research, I expected this to be "the boring one". Everyone seems to believe the 2000s at Microsoft were post-glory days and before Satya turned everything around. But as David and I dug in, it seemed like every single pre-conception I had was wrong. There's a story behind every story:
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The stock price was flat. ...but revenue and profits 3x'd from 2000-2014.
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They had a horrible experience with the DOJ. ...but they didn't really lose the case, and avoided being broken up into two companies. (!)
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They blew it in consumer (music, mobile, search). ...but they created an entire enterprise business from scratch that was bigger than they could have imagined.
The list goes on. So what are the big takeaways of why Microsoft succeeded? And why is it so widely misunderstood?
1/ 💰 For Microsoft, Money is not the scarce resource. They've generated more profits than they could reinvest nearly every year of their existence. The real constraint is company's focus + the amount of talented employees they can aim at a problem.
2/ ☁️ PCs were an unbelievable tailwind. The PC market doubled every year 1975-1986. Rapid early growth is one thing, but it just... kept going. For decades. The PC TAM turned out to be massive, and by 2003, still only 62% of homes had a PC. There was still running room left that late! It's hard to mess up as a business when you are the dominant player in a wave as massive as that.
And the same thing is happening in the cloud. Microsoft seems to have found this phenomena again 2008-2024. Cloud/server is now Microsoft's largest and fastest-growing business.
3/ 🌎 You can't compete with your distributor. And Netscape learned this the hard way 1995-2000. As made famous by the DOJ case, Microsoft launched Internet Explorer, fighting Netscape viciously for browser market share. Netscape found themselves in a tough position where nearly all of their future potential users... were Windows users. Once Microsoft realized the threat that the web posed to their business, they made it a priority to ensure nobody (especially Netscape) could leverage the web to usurp their powerful position as the platform to develop PC applications.
4/ 🧪 Amazingly, Azure was not started inside of Microsoft's Server and Tools Business. Ray Ozzie incubated the cloud initiative in 2006 elsewhere, in its own dedicated team. The team working on Windows Server had an entirely different business model, set of KPIs, and incentives. It was only after the unit economics and product-market-fit were proven did the incubated Azure get moved into the core product group.
I set out to write this list and had 18 playbook themes. But 4 will have to do for LinkedIn! You can listen to the whole 5-hour episode here:
