
Twice - danielpal
http://blog.aubrey.me/
======
rdl
The genius here was Bill Nguyen turning a failing company and a pittance $11mm
offer from one failing company (Nokia) into an $80-160mm buyout from a real
company (Apple), essentially though hustle alone.

But it's zero-sum genius. I can respect him for being good at playing a
specific game, but it's not a game I want to play myself.

~~~
lmm
I struggle to even respect it. He ripped them off; the world would be better
off without his "hustle".

~~~
mikeryan
He ripped nobody off, he sold a company in the exact way you're supposed to
sell a company or for that matter the exact way you sell anything with a
limited supply. Heck thats how you sell a house.

Step 1. Find interested parties, Step 2. Get Bids. Step 3. Allow other
interested parties to counter.

Thats it there's no scam here. Its not even genius its company selling 101.
Everyone involved had the opportunity to do their due diligence. Instagram did
the exact same thing turning a $500M Twitter offer into a $1B offer from
Facebook.

~~~
thisishugo
In my mind what you call "company selling 101" is just a legal, high level
form of profiteering.

~~~
6ren
It's an auction. Profiteering (price gouging) applies to commodities, which
already have a market price.

Not even really zero-sum, because selling it to the person valuing it the most
(to whom it is most useful) does create value.

But it's not as satisfying as _making_ something that never existed before.

~~~
ucee054
_commodities, which already have a market price_

Balls. Go to a commodity exchange and you know how you find the price? The
last price paid at auction.

Sometimes the negotiation is disguised, using an order book or dealer system.

But sometimes they even explicitly run a call auction.

All Wall Street is is a continuous auction house.

All Supply/Demand is is a continuous auction.

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gatsby
Fascinating story.

Fast Company did a piece on Bill Nguyen about 18 months ago:
(<http://www.fastcompany.com/1784823/bill-nguyen-boy-bubble>) and included an
infographic on his track record:

[http://infographics.fastcompany.com/magazine/160/bill-
nguyen...](http://infographics.fastcompany.com/magazine/160/bill-nguyen-track-
record.html)

For a bunch of companies that have widely been considered failures in terms of
product and number of users, he has had some unbelievable exits and financial
successes.

~~~
rokhayakebe
Keep in mind most acquisitions for product integration kinda fail, well at
least most of the acquisitions I hear off. The company I work for is small
printing co, they made a small acquisition (sub $2M or $3M)a few years back, I
doubt they got more than $500k in revenue from it.

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guptaneil
The point of this post is to talk about Bill's hustling when selling Lala,
which is a very interesting story.

The author should have left the last word out to make a much more powerful
story about Lala rather than changing the focus of the article to Apple's
"genius," especially since there was no genius involved on Apple's part. Just
good luck for Apple, and horrible luck for the Color team.

~~~
jusben1369
I disagree. I thought the last paragraph was great. Life is never a single
event. Round 1 to Lala and their engineers. Round 2 to Apple. There'll be
Round 3's!

~~~
guptaneil
I agree, the last paragraph is great. My issue is with the last word. A better
ending might've been something along the lines of "Paying twice cost less than
paying once," and left out characterizing this fortuitous win as a "genius"
strategy.

~~~
johnchristopher
English isn't my first language and I really have a hard time grasping the
meaning, the subtelty, of the end of the article.

Does the author say: "Apple bought some employes for a high price ($80M).
Later, those employees left Apple for another venture. But when leaving, those
employees also left some kind of shares/bonus or something very valuable they
obtained by being acquired earlier. They were acquired again later (color) for
a much lesser price so in the end they "lost" some money/shares/opportunity".

Have I got that right ?

~~~
OafTobark
The Lala acquisition was worth a total of $160M. $80M up front, and $80M as an
earn out (over time). When they left Apple early to do Color, they lost a huge
chunk of that $80M (earn out money) because they left early before receiving
it (vesting) which in the end was worth a lot more due to increase in stock
value. Apple bought Color (and those same engineers returned to work at Apple)
for a lot less than what they would have paid in the earn out had the
engineers stayed and not leave for Color in the first place.

~~~
johnchristopher
Thanks a lot for taking the time to write it down for me! Much appreciated :)

This makes much better sense to me now.

------
aubreyjohnson
The title of this is a little misleading as I don't really discuss anything
about Apple acquiring Color. I just link to the rumor articles.

~~~
jtoeman
thanks for adding that - i read through it three times trying to find a link
to page 2 or something. :)

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RandallBrown
I miss Lala, at least the final streaming iteration. It had iTunes Match for
FREE years ago. You would upload your library to Lala, they would decide what
they already had and just let you stream that, then anything they didn't have
would get uploaded. It was iTunes in the cloud. Their webapp was phenomenal,
especially by 2009 standards.

I had big expectations for Lala after Apple bought them. I thought they might
actually get a true iTunes in the cloud built.

~~~
ceworthington
+1 to this. I am on Rdio now for $10/mo, and I easily would have paid Lala the
same monthly fee for their service.

I assume they were in bad shape because they had to pay every time someone
streamed a song, and not enough of their users wound up paying them for
streaming access. Too many loss leaders.

~~~
MatthewPhillips
What I liked about LaLa is that you didn't have a monthly fee, and browser-
only purchases were dirt cheap, $0.10 for most songs if I remember correctly.
I don't listen to enough music to make Radio or Spotify worth it for me, but I
could buy a couple of albums to listen in the browser for 2 or 3 dollars every
now and then.

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ValentineC
Looks like the post has disappeared from Aubrey's blog.

Google Cache of his original post:
[http://webcache.googleusercontent.com/search?q=cache:blog.au...](http://webcache.googleusercontent.com/search?q=cache:blog.aubrey.me/twice)

Gizmodo also has his post mirrored: [http://gizmodo.com/5977076/the-amazing-
story-of-how-bill-ngu...](http://gizmodo.com/5977076/the-amazing-story-of-how-
bill-nguyen-sold-two-companies-youve-probably-never-heard-of-to-apple)

------
zaidf
_Google was worried, they moved fast._

This is what I'm unsure about: how much of google's worries was a result of
Lala being a worthwhile company and how much of it was a result of Bill's
propping it up? Let's remove Bill for a minute. Let's say Mr. No-name-CEO
reaches out to his contact at Google and presents the deal for Lala. _My_ gut
would be that Google guy would likely simply pass on the deal because he
doesn't perceive Lala to be much of a competitive threat or a great product,
not to mention the little traction they may have had was a result of Google's
partnership(which I'm assuming they could easily opt out of). What am I
missing? What made google worried, lala inc. or lala inc. with a salesman CEO
with an acquisition offer?

~~~
jaggederest
Mr. Nguyen appears to be a hotshot startup salesman. Much like the proverbial
car salesman, he can pump up something, sell it to a sucker, and pocket the
commission.

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capkutay
He was relieved of day to day activities by the board about a month or more
before the Apple acquisition...was that acquisition really his doing?

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speeder
I do not understood the tale :(

Why it was genius?

~~~
draz
Those employees were given options at Apple ($80M worth) that were probably
lost once they left the company to work at Color. Then Apple ended up getting
them back on the cheap. So instead of $160M, Apple ended up paying $80M + $7M.

~~~
lost_name
Doesn't the notion of this being genius imply that Apple "let them get away"
the first time because they knew they'd be able to acquire their next company
for less? Or am I missing something?

~~~
indy
Its a very sycophantic article that gives Apple far too much credit. No
"genius" strategy was involved it was just fortunate (for Apple) that they
could acquire the remnants of Color for such a low price.

~~~
kami8845
I don't understand.

They bought Lala. The sought-after employees left even after being offered a
$80M golden leash.

They were bought again with Color. What stops these employees from leaving
again, with a much less lucrative golden leash this time around?

~~~
indy
Nothing stops them from leaving again. My previous comment was just taking
issue with the article describing the move as "genius"

~~~
Gigablah
Seems to be a common trend with pro-Apple articles. Earlier I read one that
credited Metro-style design to Retina displays.

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huytoan_pc
Fascinating story but how is Apple genius here? Was it Apple's all along to
acquire Lala, let Lala's engineers go before they exercised their options,
somehow made Color a failure, then bought the all the engineers back on the
cheap? The real genius (or at least real good biz person) in this story is
Bill Nguyen, Apple just did what makes sense for them, it just happens that
two of their acquisitions are Bill's companies.

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alpb
No mention of the Color in the article, I guess but that was a great story.

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lnanek2
This is how the Finance people in NYC interview for a job. Give them a number
and they'll shop it around and start a competition. :)

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brackin
The piece was removed for some reason?

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sidcool
Why is this top link?

~~~
simonw
Because 70 people voted it up.

