Business Breakdowns: The rise and fall of “Blackberry” with Lon Harris | E1773

0:00And this is another important point. what got you here won't get you there is one of these credos uh it's one of these heuristics one of these best practices here in the valley and so if what got you here was you know a bunch of folks who come up with great ideas and who have great culture will work for small amounts of money they're new to the business they got fresh ideas but then you start having millions of people and servers and contracts you need people who've done this before and this is one of the hardest things and mike goes through this where he's like hey this guy's my best friend right multiple times when he wants to take him to new york he always but he's my best friend and this is one of the hardest things in business i see it over and over again where three great friends build a company and then all of a sudden one of them was charged a product one of them was charged of sales one of them was uh the ceo and then all of a sudden the person who's doing sales they don't hit their numbers they've never done sales before and then you got to bring in somebody who's a VP of sales who's done it before, who's had 50 people working for him.

1:03This person's never had anybody working for him. They got 12 people working for him. And those people hate him because they don't know how to run the department. And this is that moment where the company moves from trying to figure out product market fit, and then becomes an at scale company. The people who run an at scale company, Lon, are very different people than the people who create products. This Week in Startups is brought to you by Vanta. Compliance and security shouldn't be a deal breaker for startups to win new business. Vanta makes it easy for companies to get a SOC 2 report fast. Twist listeners can get$1 ,000 off for a limited time at vanta.com slash twist.

1:43Embroker's Startup Insurance Program helps startups secure the most important types of insurance at a lower cost and with less hassle. Save up to 20 % off of traditional insurance today at Embroker.com slash twist. While you're there, get an extra 10 % off using offer code twist. And House of Macadamias is the next big health trend. Get a free box of Namibian sea-salted macadamia nuts at HouseofMacadamias.com slash twist. Plus, get an extra 20 % off your order by using code TWIST20. All right, everybody. Welcome back to This Week in Star Wars. Got a real treat for you today. My guy, Lon Harris, is back with us.

2:25And Lon and I loved this segment where we would talk about the lessons and the TV shows like the WeWork documentary. Yeah, We Crashed. We watched that one with Jared Leto. Jared Leto, so good. and then uh oh his wife rivka right that was great anne hathaway and hathaway and then we also did uh i think we had a dropout we did the dropout with amanda seyfried as uh as elizabeth holmes of course wait when are those emmy awards coming out anyway she won it's over you won oh you won okay great yeah amanda seyfried won the emmy for for her amazing dazzling turn as elizabeth i think won a few other emmys as well to drop it okay um so we thought there's so many great business movies out there past and present that lon and i would do a business breakdown show so this is a new show we're going to do for you that this week in startups audience hopefully these will be timeless but we're going to do the business breakdowns based upon a tv show a movie or a book in this case this is a book that was turned into a movie so lon tell everybody about today's film right well we picked the uh the sundance 2023 selection blackberry it's a canadian film about a Canadian company based on the book Losing the Signal, the untold story behind the extraordinary rise and spectacular fall of BlackBerry.

3:47That's by Jackie McNish and Sean Silcoff. So this was co-written and directed by a guy named Matt Johnson, who also co-stars in it as Doug Fragan, one of the co-founders of Research in Motion, the company that developed BlackBerrys. We've had a glut this year of behind-the-scenes business movies. It's become kind of a whole film genre air. We had the story behind the Air Jordans Tetris on Apple TV+. The story behind how did Tetris, the video game, get from behind the Iron Curtain Soviet Union over Flamin' Hot is on Hulu right now. The Flamin' Hot Cheeto story. Jerry Seinfeld in a few months on Netflix has the Pop-Tart story coming out.

4:30How the development and invention of Pop-Tart. So it's becoming a viable Hollywood genre, like the stories behind your favorite products and brands. And I like this one, the BlackBerry film, just called BlackBerry. I like this one more than most of the others we've seen, because I really feel like they dug into the personalities and the characters. It feels like more of a human story. story it's not it is about the product but it is also about the guys who created the blackberry who ran the company and how their dynamic changed how the business worked and and what happened so this is super important i think for everybody to take from here what's going to happen on this episode is lon's going to talk about the filmmaking and the story and uh then throw it and toss it to me when we have a business lesson there now i i watched the film just last night in fact and i wrote down all the business lessons so things that you would normally hear me talk about here on this week in startups as hey here's a here's a business lesson for you this movie is so good and is so well crafted i really enjoyed it and i watched it with my wife and she loved it as well yeah it's great so it's it's a great it's really good it's a great film but it's a really it's i think it's an even better story with there are so many great business lessons in here so let's stop the preamble and start the program.

5:51Right. So really, we got three main characters that we're following throughout the movie. We got Jay Baruchel, you know him from Freaks and Geeks. He's in a bunch of Judd Apatow stuff. He plays Mike Lazaridis, the co-founder of Research in Motion, and really sort of the brains in a high-level way, the engineering mind behind the Blackberry, the guy who sort of really conceived of this product. And then Matt Johnson, who, as I mentioned, co-wrote and directed the film. He also co-stars as Doug Fragan, who is Mike's co-founder at Research in Motion, another very smart technical guy, but also really the culture, the guy who was running the team there, was motivating the team, and was really safeguarding the early culture of what Research in Motion was and what they were all about.

6:39And then third, we have Glenn Howerton. He plays Jim Balsillie. He took over, came into Research in Motion after hearing the pitch for BlackBerry. And he was the business mind. He was the guy, the dealmaker, the money guy who sort of saw the big vision of how to pitch this, realized that Mike and Doug were behind the scenes, technical wizards, but didn't know how to be in the room, be in front of the money people and make the sale. And so that's sort of how he comes in and takes over the company. It's a great cast. It's a great cast. People are really enjoying seeing a different side of Glenn Harrington, of course.

7:15Dennis from It's Always Sunny. Ah, I don't watch that show, but yeah. Oh, he's really funny on It's Always Sunny in Philadelphia, but it's a very, very different Dennis Reynolds, a very different kind of character. And I think that this is for a lot of people, myself included, this is really the first time seeing him in a more dramatic role. And he nails it. He's fantastic. And this little trio have some great dynamics. if you were to compare their dynamics to other popular dynamics uh in the history of business glenn is a hard charging you know bit of an a-hole um not a bit i mean as the movie goes on he gets more and more yeah i mean he somewhere between a confidence man uh but also a harvard mba apparently or he went to harvard i don't know if he got his mba from there but jim uh balsilly ballsilly i think it's ballsilly but as a joke throughout the movie people keep mispronouncing it ball silly which he does not silly yes yeah so i'm gonna go with ballsilly um just such a great character matt is kind of the lovable goofy heartfelt guy who's the soul of the company he likes to host movie night he's your culture guy right he's pure culture guy makes everybody feel great and then jay is kind of playing a sort of a genius larry page type maybe a little bit awkward not exactly on the spectrum but not exactly off the spectrum but maybe more of a a zuckerberg type let's say or a bill gates type i think it's that he's got the ideas he's got all of this insight but he's not he's not the best at communicating it to a lay person audience he's good with technical people but regular people he there's a communication breakdown which you sometimes do see i think with yes engineering geniuses it is sometimes hard for them to condense what they know into something a regular non-computer scientist can understand and i think this is our first lesson that we'll go to here which is what makes uh for great companies is typically multiple co-founders so having two or three co-founders in a company that complement each other now listen each of these people is flawed in some ways but they do complement each other because mike can focus in as the co-founder you know i'm building the product and he's a product genius and give him 24 hours he's gonna come back with something great doug will keep the troops happy and host movie night keep the culture going while mike is heads down and then jim you send to war he will threaten to sue people he will jump on a plane he'll chase somebody down he does not care he's a rabid dog and and that's really complimentary so we look for that actually when we invest in companies two or three co-founders who can compliment each other whether it's larry page and sergey bren you know or bill gates steve bomber and uh the third founder who passed away paul allen you know you usually have two or three folks and hopefully they compliment each other okay and i think one thing the movie gets gets uh gets around to by the end too is is understanding those roles.

10:18It's not just having a good balance with your co-founders, but understanding this is the job I do, this is the job they do, and sort of understanding, because I think we get over the course of the film, Mike starts to look at Jim and realize Jim's having all this success, Jim, people are seeing him as the leader, and he starts emulating, and not necessarily all of the best qualities, and I think starts to sort of ape some of the negative qualities he sees in Jim as well, and I think that there is an understanding of like you know no mike needed to understand his role was the yes the smart guy who's going to be like we can't do it that way we have to do it this way it won't work to do that we have to do it like this and not to sort of take his eye off the ball that way yeah and doug stays consistent he uh he probably has the most grounding uh the other two are the flawed characters right so in some ways you have jim and mike in some sort of dance and doug is you know kind of the most level-headed hey like right let's build a great product guy he's he's our audience surrogate too he's the guy like he we see we kind of view the rise and fall through his more he's the narrator kind of perspective yeah i mean he's not technically the narrator but i feel like he's the relatable character that we're watching these two other eccentrics from his pov i feel now you know i remember this company because i grew up in it i remember blackberries arriving on the scene so do you yeah all of us who lived through this era remember the ride the sudden because it did feel very quickly even compared to a lot of other hot products it felt like all of a sudden you'd never heard of a blackberry and then everybody had a blackberry yeah and this is when uh the concept uh on a business a basis comes in of market pull this product didn't just have product market fit in the beginning of the film they start to figure out product market fit but then it became such a status item it was so effective at doing what it did the product was so transcendent and had no competitors and was so technologically unique in how they were able to send data that it really had market pull and they knew they had it because they literally couldn't they sold so many of these they were breaking the networks and this is something i had forgotten yeah there were many times in the 90s when the blackberry network would go down and go down i'd forgotten about that i had forgotten about that and so you just think you know it literally is like when twitter first started the fail whale one of the signs that you're doing great in business is you have so much market pull on that your service cannot handle it your cars are sold out there was a period of time when tesla's was a two-year wait um and so ramping up and scaling is very hard if you get market pull your organization lawn goes from trying to find product market fit to trying to fill consumer demand so yeah your your company the entire mindset of the company is trying to figure out product market fit and solve problems.

13:12And then all of a sudden, boom, like lightning. When you get product market fit, the consumer demand becomes so overwhelming, it can literally just break the company. And this company almost broke from it just like Twitter almost did. If you're a SaaS or services company that stores customer data in the cloud, then you need to be sock to compliant, you know that from a third party, and you need that third party to close big deals. And if you want to get compliant easier and faster, you need to use Vanta. V-A-N-T-A. Vanta makes it so easy for you to get and renew your SOC 2. On average, Vanta customers are SOC 2 compliant in just two to four weeks.

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14:22Vanta is going to give you$1 ,000 off. That's 10 hundies. Get$1 ,000 off at vanta.com slash twist. That's vanta.com slash twist for$1 ,000 off your sock too. Okay, let's continue because there's multiple they kind of structured this into a couple of you know key moments in the history of the company so it's probably a good way for us to analyze it yeah so i i noticed that this is kind of it's the same thing sorkin did with his uh jobs screenplay that the steve jobs uh profile that he did where you sort of rather than the full scope of everything that happened which could be sort of overwhelming yes such a long period of time so much to cover he sort of we sort of zero in on a few key moments in the sort of development of the story.

15:02So yeah, we opened in 1996, where Mike and Doug, they've created Research in Motion, they have all these modems that they've made, they've got this deal with US Robotics, which agreed to buy some of their modems. But now they're having trouble collecting on their invoice and deliver it. They're just being held that US Robotics doesn't want to pay them for the modems. That's put them in a real cash hole. But they also have this idea that Mike sort of developed for this thing they're calling a pocket link, which is Mike has sort of come to this realization that there are these internet signals that you could potentially that are just out there already, you wouldn't have to send them yourself, you could sort of tap into this pre existing internet network and use it to send emails.

15:45And so he has this idea for a device that would be in your pocket, but you could use it to check emails. It doesn't sound super impressive in 2023. But in 1996, emails in your in your pocket was remarkable. so he goes and he's pitching it around to various companies one of the companies he pitches it to jim balsillie is an executive there he hears the pitch he realizes right away this is an interesting product there's something there but he doesn't like the name pocket link and these two guys who have come in these two dorks who don't know how to present themselves who don't know how to present their ideas in a professional way they're not going to get there at the same time because of his personality and his anti-social tendencies, Jim has sort of, he's on the outs with his prior employer.

16:32Yeah. So he sort of puts a few things together, seizes this moment, lies to the guys at Research in Motion and sort of tells them he's doing this entrepreneurially on his own merit. Doesn't tell them he's been fired from his other job. No. So he goes to them and says, here's what I'm going to do. I'm going to buy a chunk of your company. You're going to make me the CEO. and i'm gonna put this i'm gonna put this on the right track and this is a great moment for me to jump in because he actually acts as their angel investor he offers 20k for 50 they have a little negotiation he winds up buying a third of the company for 150k which would be a 450k valuation 450 000 valuation which at the time would not be of unheard of you know low one or two million would probably be more appropriate but this is a company that was really damaged but makes a cardinal sin he does no due diligence and if he had done due diligence he would know they were 1.6 million dollars in debt yeah so now he puts the 150k in they're in debt and he has to mortgage his house and so this is another major business lesson which is the burning the boats um which is uh something they always talk about in silicon valley sometimes you just got to burn the boats as part of the strategy which is we're not going back to the homeland we got to the new world we burned the boats and now we're going to fight our way through this new world and and that's the burning the boats moment or as my friend ruloff at sequoia would say the crucible moment he's got to make this work because he has literally nothing he's been fired he put all his money into this and he just put his mortgage into it and man does that create a ton of pressure which then spurs them to action if they had been overfunded like we see in today's era lon right there would be no need for them to you know get that make it or break it deal in new york from uh whatever the company was that becomes verizon bel atlantic oh yeah bel atlantic then becomes verizon they wouldn't need to hustle so you have the pressure starts to build no pressure no diamonds that is mike's we see that mike as a as an engineer as a science guy and as a stem guy his whole perspective is i need time i need months of testing this isn't i i need to do this i need to check this i need to check that and you know that that's what they would have done without jim there lighting a fire under them tomorrow tomorrow the meeting is tomorrow they would have taken months to put this item together and that's where uh at some point jim says listen to mike perfect is the enemy of good where he says you know what perfect you know what perfect is the enemy of good you're in a race to get this thing to market and we are a year behind i need a prototype i'll do it perfectly or i don't do it mike are you familiar with the saying perfect is the enemy of good which is you know something reed hoffman gets credited with this and many people have said it before reed but he said if you're not embarrassed by your mvp you know you didn't you waited too long to ship kind of situation you gotta really get your product out there and that's what they did they made in 24 hours and maybe that's true maybe it's not who knows if it was true but he makes them do that overnight prototype and you really that is the magic or a big part of the magic and folklore of the technology industry as i grew up in it now today the idea that people would work overnight and sleep under their table because of all the money in this industry and funding available and resources available and you haven't seen that much these days even that's really in ai companies they're not sleeping at their desks anymore you know i i think there's so much money in entitlement right now that the crazy pirate attitudes in silicon valley is limited to a very small handful of companies if you if the company was going out of business like in this similar situation in today's world the average silicon valley company if somebody like jim came in and said hey we got to do this overnight you would have had five people resign on the spot i'm not working overnight they would just walk out the door whereas in that era people would be like well what else am i going to do i'm just an engineer and that is you know a point i was gonna bring up a little later but i'll bring up now the engineers in this are treated horribly the technical people are considered like plebs they're just like necessary evils they're just you know a means to an end as opposed to the stars of their own show and i think it's like really interesting to watch that for me because i forgot that era i was an it guy and i got treated terribly people were just like oh it guy you know just like i was like uh the photocopy repairman yeah and i mean you could really see it i think both glenn howerton and michael ironside who plays the guy who gets brought in to be the sort of the coo the sort of hard hard ass coo who sort of whips them all into shape they walk around with so much confidence the the business guys the deal guys were so clearly in charge they're they're the alphas in that office they're walking around With all the confidence.

21:27And all the other guys are the cubicle jockeys. They're the developers. The coders are the low-level. Code monkeys. They're the geeks, yeah. And we even see there's a moment in the movie, we'll talk about it a little bit, where they bring in these sort of elite developers from Apple and Google and all these sort of legendary companies later on. And you can really see the shift that the balance of power kind of moves during the course of the film. Listen, I work with super early stage companies at launch, like literally year zero. They haven't even incorporated yet. And then we hit the Series A, people have thousands of dollars in MRR, and maybe they've only raised a couple of hundred thousand before that Series A, and they don't have their insurance set up.

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They love it. try and broker today with the code twist and you'll get 10 off their startup package in broker.com slash twist that's e-m-b-r-o-k-e-r.com slash twist and use the code twist for 10 off okay let's get back to this amazing episode i love what happens next because they the next morning ball silly right and mike fly to new york to meet with bell atlantic they have this big meeting with bell atlantic soon to be for isa where they kind of they not only have it's the pitch it's like they not only have to sort of present them with their idea but then really sell them on why is this a game changer yeah and this to me was a magical moment mike forgets the prototype in the car which who knows if that was true or not but that is you know stuff like that happens they you know had flown over you know they worked overnight flown there in the morning he forgets the you know which is he's probably tired anyway he reclaims the device and they open it up and he gives it to the bell atlantic ceo who by the way is an incredible actor saul rubinick a great character actor very very memorable theatrical i mean was he also in um was he also in secession has like a lawyer an environmental lawyer maybe maybe i don't remember seeing him around as like one of the guys you've seen him in so many things i mean he's that guy right one of those tons of stuff but i'll i don't know if he's he is a really interesting character because he's probably 20 years their elder it seems so he he and he has a lot of customers so he's got a lot of wisdom i mean there's a couple of great moments in this pitch scene and i think this pitch scene is really uh one of my favorite parts and at one moment when he holds the prototype of the blackberry he says well it's definitely the world's largest pager to which mike lazaritas says no it's actually the world's smallest email terminal and what we call this in psychology and in business and in negotiations is framing how do you present the idea is super important and everybody kind of nods and it's just such a great moment and that basically wins them the pitch that very moment and you know those moments are rare but they're important it's i think because it's it's such a it is a mental shift and you do it a lot of people watching this are probably too young to remember a time when the the idea of a of a pager was that there was where you couldn't really interact with these devices mobile devices were like alerts it was one thing it was like you're getting a phone call and then you got to go find a phone and actually make the phone call and i think that's what they're getting at john woodman is the name of the character saw ruben i don't know if it's based on a real guy but he's still stuck in that mentality of well this device in my pocket it's just it's gonna like let me know if i have an email or if it's gonna it's going to like hook up to something that he's still not thinking about no no you can do your full you can complete this task on this device and that that is like the the changeover moment oh you know what that guy was in billions he was happy yeah solar rubidex in billions unforgiven to very memorably but he also has an interesting moment where they show him the jogger on the side of the um blackberry which was like a little wheel right you could jog it up and down and he you know it's like little design elements come into play there which i love because product does matter right yeah that's the dawn of the status device era i mean that that was the first one where it wasn't just about what it can do functionality it was about form it was about looking cool it was about showing off it was about you have the hot new tech in your hands that i want to get which of course we'll talk about paving the way for what was coming well and it was uh it's like it's like a jogger or something i've got the name of it it'll come to me um but it also was the beginning click wheel yeah it's kind of like that it also was the the birth of the gadget era so the sony walkman was like a gadget but it was one of one in the world but then slowly people started to make other devices gadgets that you could put on your side you know on your uh utility belt as it were and blackberries would live on your belt right and there was another popular item called the palm pilot which is a personal digital assistant you have a phone in it in the original version we'll get to that in a minute yeah there was another paradigm shift we make the jump to 2003 yeah so there were so many moments in this film where you saw the paradigm shift and paradigm shifts are so interesting to me because people have to live through them and now i've lived through them i lived through the pc era to the mobile era from the client server architecture to cloud computing, PCs to mobile, dial up to broadband, the consumer net web 2.0, social media now, AI, there's so many paradigm shifts that occur.

27:43And it's very hard as a technologist investor or somebody covering it, to sometimes make the jump. And sometimes people stay behind in the paradigm. There's a great paradigm moment, it's very subtle. But when he explains to them that they can have more than 10 blackberries on their network at bell atlantic because instead of the blackberries polling to see if there's uh and pulling data down constantly it just sends a note to the blackberry that it's got a new message and push technology right and that was another one where people's brains are kind of broken there's always that opportunity and we see that now with chat gpt and language models not perfect but before we got on air here we were brainstorming names for this segment uh and it was you know interesting it was an interesting tool but at some point chat chpd will nail it and it will name the segment so he nails the pitch and they need a name and that's when blackberry is actually born right in that moment i did look that up that is not true the the story of the origin of the blackberry name in the movie is that mike when he's he's eating like a danish or something in the car and he spills and he gets a little blackberry stain on his shirt and And then Jim sees it.

28:53That's where they get the idea from. That is not true. They thought when they designed it that the buttons on the Blackberry looked like seeds. And so they came up with, let's give it a fruit name. And then they just made a list of fruits. Love it. Went on the whiteboard and then were like, Blackberry, that's the one. I looked this up because I thought that was such an interesting detail in the movie. And it's so interesting in the movie. If you were looking at your iPhone during the movie, you got pulled away. They didn't say a word. It was a nonverbal cue. He just gets the stain on his shirt.

29:21and then in the meeting on the stage zoom in on the stain so if you're one of those people who's multitasking in a movie which i do sometimes this is how you miss things so please put your phone away in the movie theater okay let's jump to 20 2003 they sort of nailed the pitch for i or what's would soon be verizon is on board bell atlantic they make the deal and we cut to 2003 by this point research emotion had gone public in 1997 market cap when we rejoin them about one to two billion. And the big the big action of this middle chunk is that Palm CEO Carl Yankowski, played by the brilliant Kerry Elwes, he takes a meeting with Jim and Mike and he tells them, basically, if they don't agree to sell BlackBerry to him, he's going to just buy up their stock and take over their company regardless.

30:08And so he sort of they don't have a choice. He wants to he wants Palm to own BlackBerry and he's going to set out to do it. So Jim's plan to keep their company is we've got to massively up our value. Like the valuation's got to go through the roof. The stock price's got to go up, valuation's got to go up. So then it's too expensive for Carl Yankowski to just buy up all the shares and take over their company. So his big plan is start pumping up all of these sales numbers, but the engineers are telling him we can't for exactly the reason that you mentioned. If too many Blackberries are on the network at one time, it's going to stop working.

30:44We're going to crash the entire network. There's no way to do it. We can't figure it out. So this is the real sort of conflict of this middle section. Jim ends up going to the salespeople and telling them to go ahead and start selling more BlackBerry anyway. Just like, as you mentioned, he'd rather apologize later than ask for permission. And this is also when the sales guys come up with the winning idea, which is you're really selling it by getting these in the hands of well-to-do people, good-looking people, wealthy people, well-heeled people. Gadget has a status symbol. Right. Your technology is a status symbol.

31:22Right. Put them in places where a lot of other people who have a lot of money are going to see them and they're going to be like, what is that thing that they're using? I need one too. And that's when it really takes off because they make BlackBerry a status thing that everybody wants to be seen having. And so this is really important in terms of marketing. Are you marketing to everybody or are you marketing to a beachhead market? So when we talk about startups, you usually have some beachhead market. You have some ideal customer profile. and the ideal customer profile here was a rich guy who had was at a tennis club or smoking a cigar who had a six-figure salary and a an expense account so they could afford to buy one of these and pay for it and these blackberries would of course um because you're using them out and about um you know they're portable by design uh there's a in-person over-the-shoulder type virality to them so they told good-looking members of their sales team just go and you know show it to people or just be laughing looking at it right and go to a cigar bar go to a country club go to a high-end bar and look at your blackberry and laugh and you're engaging with it and you're checking your emails and make other people want good boiler room vibe at that moment do you notice that it's like they come in with like stacks of business cards from people they met the night before at you know drinking scotch and smoking cigars or at the tennis club and they just slam them down on the salespeople's desk and say go close this and it and it reminded me of you know you'd be at a at a party or you'd be at a bar and somebody would pull out an ipad like in the early days when the ipad was first out people would crowd her out what do you do do you guys get games on there what is it like it really they capture how that really does happen very organically when you bring these kinds of gadgets in it's another lesson for people you know technology used to you know not be uh essentially uh part of your life uh in the real world you use technology at your office maybe on the margins at home you know got a video game console or you know whatever a pc you know in your den but you know it was it lived on two different desks you know like a little nook in your house your house perhaps you know by the kitchen you had a shared computer and then you had a computer on your desk at work yeah it wasn't like this having gadgets with you in between and it was it was actually seen as nerdy like a person who was obsessed with gadgets or technology who always was playing around with stuff was like door you were steve urkel like if you go back and watch family matters that's the steve urkel joke is he's obsessed with technology and gadgetry because he's a dork and it wasn't seen as cool so the real world virality happens i saw this happen with uber and other people have seen it happen with postmates doordash real world virality is you see something in the real world like somebody ordering an uber and over the shoulder they show you the uber app or you see the mustache on the front of a lift right and so the real world virality happens of course that leads to too many people buying these things and that means he crashes a server right okay this is another big moment because mike realizes like i think jim comes to me at one point it's like you told me you had the best why are the servers now you told me you had the best engineers in the world he said no i told you i have the best engineers in canada you said they were the best engineers in the world i said they're the best engineers in canada and then jim's like all right so he is of action this is one of the things i love about jim so as a as a founder if you're watching this like the great part is that he takes action and yeah does he bend some rules yes does he break some laws yeah but then when you if it bends that's one thing but if it breaks not good it bends that's funny yes if it breaks not funny then not funny not funny so this is a moment of him bending right he's he's overloading the servers that's bending but continue on lon with the story here because he quickly starts to break stuff.

35:24Yeah, he's recruiting all this top engineering talent. And what he's finding is that it's very hard to get people to leave companies like Google and Microsoft. They've got contracts, they've got very lucrative options or whatever. And so what he starts doing is he's backdating these stock options. He's like, I'm going to give you stock, but we're going to backdate it like if you had it before BlackBerry became a huge company and you'll be granted into all of this extra sort of all of these extra back channel earnings, millions and millions of dollars to these guys to recruit them that he didn't have on hand i mean i think that's the big thing is he knew he needed to spend millions of dollars to bring these guys in he knew he needed them on his team he didn't have that kind of cash on hand so he's he's manipulating these stock deals to give them these bigger rewards to come work this by the way became a bit of common practice apple got caught up in this a bunch of people got caught up in this in the 2000 turn of the millennial turn of the century kind of time period because uh what happened at that time period was you would say to somebody listen you know we have this document and uh instead of having your options start on 2003 if we put it at 2001 the stock price was a dollar now it's 13 right so that doesn't cost me anything so who who's actually paying for that cost is what you're left to wonder why doesn't everybody do that why doesn't everybody give those well we find out later why right and And we'll explain it in more detail as we go.

36:50In the short term, it works. And he wins over Rich Summer from Mad Men, plays one of the Google engineers to come over. Sung Won Cho, who's an old school YouTuber, plays another one of the engineers who comes in. It was nice to see him. Anyway, so they come on board and they do start to figure out this problem, how to condense the data so they can get a lot more people using their BlackBerrys all at one time without expanding Verizon's network any further. You know, they can't control that. They don't have a power of that. As well, Jim brings in Charles Purdy to come in as CEO. Oh, we already mentioned Michael Ironside as this sort of gruff, hard ass.

37:28And that really is this moment where the culture behind the scenes at Research in Motion shifts. It was this very community driven, developer driven culture that sort of Doug was sort of sitting on top of a lot of fun, a lot of movie nights. We see them hanging out, watching Raiders of the Lost Ark together, even during a high pressure moment for the business. And this is when when Charles Purdy comes in, he's like, that's over. No more movies. We're not goofing around. This is a business. You're here to work. Yeah. And lays down the law and sort of that way. And they wind up solving the problem in terms of connectivity.

38:05The stock jumps 400%. So they have successfully fended off Palms, sort of takeover threat. But the culture of the business is fundamentally changed probably forever. And that sort of wraps up the 2003 segment. And this is another important point. What got you here won't get you there is one of these credos. it's one of these heuristics one of these best practices here in the valley and so if what got you here was you know a bunch of folks who come up with great ideas and who have great culture will work for small amounts of money they're new to the business they got fresh ideas but then you start having millions of people and servers and contracts you need people who've done this before and this is one of the hardest things and mike goes through this where he's like hey this guy's my best friend right multiple times when he wants to take him to new york he always but he's my best friend and this is one of the hardest things in business i see it over and over again where three great friends build a company and then all of a sudden one of them was charged a product one of them was charged of sales one of them was uh the ceo and then all of a sudden the person who's doing sales they don't hit their numbers they've never done sales before and then you got to bring in somebody who's a vp of sales who's done it before who's had 50 people working for him this person's never had anybody working for them.

39:24They got 12 people working for them. And those people hate them because they don't know how to run the department. And this is that moment where the company moves from trying to figure out product market fit, and then becomes an at scale company. The people who run an at scale company lawn are very different people than the people who create products, and who get a product to market and even create a category, like this company did to create a category, got to be a bit of a pirate and you're, very experimental. To be part of the scale team, you have to have a very narrow focus. At the start of a company, you got 10 people, and each one's doing five jobs.

40:03And then when the company gets to scale, you have 50 people doing one job, like literally 50 people in a department working on this one aspect of the phone, you know, the keyboard. And literally, everything gets atomized down to the point at which it would be very boring for some of those people to be there. And that's this moment. And for me, that was one of the, it's always one of the sad moments in a company but it's bittersweet because it's a sign that you're growing that you're outgrowing people just like sometimes personal growth in a relationship sometimes people outgrow each other right and they get divorced or they don't they don't stay friends yeah and i think that that is like that changeover is is in some ways what i think the heart of the movie is really about more than a lot of the the sort of ups and downs of the business is about you know people change and things change and how time and and success and failure sort of shift relationships around, I think.

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42:03Plus, you'll get 20 % off your order with code TWIST20. That's a$35 value plus 20 % off with the code TWIST20. Now, I got a question for you here. Is this movie so good that it's going to get remade with the next level of stars? No, I don't. I think what it is going to do, I think, is we're going to start seeing Glenn Howerton, especially in these pop up in more of these kinds of roles. I was saying this made me feel like he'd be a perfect Lex Luthor. We're recasting the world of Superman right now with the bald head. He's funny, but he's angry. he's he's he's smart but he's a loose cannon like it feels kind of a lex luthery sort of so i think that i think this movie is going to get these guys a lot of attention and i think it's gonna it's it's still it's still only vod on streaming so i think once this once this ends up on a hulu or on a netflix or on a uh i don't i i don't know where it's going yet but um i think a lot of people are going to disco all right well now we get to the big moment that you've all been waiting for 2007 so finally worth the the 2007 the sort of the final chunk of the movie uh so blackberry now by this point 50 percent close to 50 percent of the global phone market they're the dominant player in the category jim is starting to get distracted he's we didn't mention earlier he's a he's an obsessive hockey fan and at this point when we rejoin him in 2007 he's become very fixated on this idea of bringing a hockey team to toronto and i'm right right toronto bringing a hockey team to canada he wants to take him from pittsburgh yes he wants to take the pittsburgh penguins and move them to hamilton canada that's his that's his big plan uh so as that's happening he's become very distracted he's kind of taken his eye off of blackberry as that's happening steve jobs memorably has a keynote at which he announces the iphone and immediately everybody except for the people inside blackberry seem to sense this is a real important moment of significance the the team at blackberry seems a little distracted they don't necessarily see it as an immediate threat yes although some people there's a great scene um and it's a throwaway scene where two of the engineers you know camera sort of cuts over to them during one of these they're watching i mean the show research emotion they're watching the the apple keynote so they're watching the steve jobs keynote in in in real time but he says hey you know they got they got an app store coming and it's gonna like developers are gonna be any developer can put an app in the app store yeah third party developers third party developers this is another paradigm shift and you know if you look at the iphone it had multiple paradigm shifting attributes to it there was of course the fact that it didn't have a keyboard now it was that the revolution the touchscreen no touchscreens had existed before i would argue that the bigger piece to it um in a success was the third-party developer platform that's just my belief now of course some people might argue you know the keyboard versus not having a keyboard but i actually think it was from my memory yeah the when iphone was new and everybody wanted one it was the big colorful screen slash touch screen that no more would you have this little tiny black and white kind of screen full color looked like a computer screen in your pocket that was that was the that was maybe the biggest one yeah and then the other one was third party app store games videos you know what not videos yeah like like people you'd be able to pull up other stuff beyond just the internet yeah browser on your browser was amazing too because blackberry browser just didn't get the job done you know like looking at stuff in a blackberry browser was like it was a last-ditch effort you know yeah to me it was that it was really that screen it was yeah we're going from it was like the the you know a game boy style to the full like you know ps vita or whatever so you know maybe it's two parad i mean that might explain in some ways the amount of uh market pull this thing had was that it had two paradigm shifts happening at the same time because i mean i think when you when you you make a very compelling case that it was the screen and it's got me now thinking maybe maybe lon's right here it was the screen but then when you started seeing those apps showing up it was like getting a new phone up and seeing it.

46:39It was just like, oh my God, it really is a computer. That's the difference. Blackberry feels like an email terminal in your pocket, but the iPhone felt like a full computer. Yeah. Yeah. So people keep bringing it like, I think the movie does a really good job of over the course of a few scenes, more and more people start bringing it up to Mike, you know, hey, have you seen this jobs thing? Have you seen what Apple's doing? What do you think of the iPhone? And it gets out there in the world very quickly. Everybody's kind of looking for what BlackBerry is going to do. And I think this is where we get that they kind of didn't get what the nature of the challenge facing them was and how to respond.

47:18Mike gets very fixated on how do we sort of find a middle ground between competing with the iPhone, but keeping the BlackBerry BlackBerry-ish. It's got to click still. It's got to feel authentically like the BlackBerry I already created. And I think the movie implies that there was a little bit of ego there there was a little bit of pride he has a he has a point where he's it's like i invented this whole category i came up with this product and he did he did but he did yeah he's holding on to it even after like well but here's the next revolution tragedy and you know i've seen this moment i've seen this moment up close and personal with founders as well which is you sometimes identify yourself with the product and the company uh more than you realize you are the creator of the product in the company, and that you'll have other creations down the road.

48:07If they had if he had had more grounding, and less ego about this, or just more self awareness, you can say, listen, they want up to it's a better product, our products different. We've got some number of years where people are still going to buy Blackberries because they're addicted to them. But we really need to start thinking, where is the puck going? And do we need to make a competitor to the iPhone? What's the opportunity here? And eventually, they did do a Blackberry with android on it they did do a blackberry with a keyboard at the bottom and a huge screen at the top they tried a lot of different ideas here um and um none of them stuck but it really is when i said before about paradigm shifting paradigms shift but sometimes people do not and that was the moment where he couldn't leave the current paradigm he was too identified you know with his personality and he couldn't make the jump whether it's jumping from gas powered cars to electric power cars from search to now chat gpt from desktop to mobile from you know installing software to you know renting it per month and then his standards start to change and he never wanted to build stuff in china and then there's a pallet of phones from shenzhen where i've actually been so it's interesting for me to see the word shenzhen on the side right the whole movie he's really resisted to ideas of farming out manufacturing to China because in his personal experience, one of the things that motivated him early in the movie, when products are manufactured on the cheap in China, they don't hold up as well.

49:34Their quality is lower. There's always, he's irritated by like when they're static on the audio device or when little things stick. And so he's a perfectionist. He wants everything to be great. He refuses. And then at the end of the movie, that's when he caves and he's like, okay, to get these Blackberry storms out at Kha, you know, on budget in time we'll farm it out to china and then you're at the end of the movie he it makes him crazy he's he's going through the box and fixing them individually himself it's kind of like you know what to remind me of is the conversation uh you and i are students of film for those of you haven't seen the conversation with gene hackman there's like somebody loses their mind kind of moment with technology somehow being at the crux of it right yeah it's it's it's is pointless and we back up and you see all the boxes he'll never be able to fix all of the phones himself yeah so even as all that's going on we also cut to the sec is now investigating these stock deals basically mike and doug both point the finger at jim like we weren't doing the money he was making all of these offers and doing these deals so in the movie blackberry gets raided by the sec jim was forced to resign as chairman and uh the company they ended up settling the case with the FCC.

50:48The FCC and the FBI cracked down on many companies during this era for backdating their options. People got speeding tickets. And they got big, people got big speeding tickets for these. They were not insignificant. Yeah. And ultimately, Jim, he was focusing more on this NHL deal, took his eye off the prize with BlackBerry. And then in a final tragic turnabout, he also doesn't, the NHL deal falls through, so he ends up getting nothing. He took his focus off with BlackBerry and that company crashes and he doesn't get his Hamilton Ontario hot. Which is, you know, focus matters in startups. And when he starts getting obsessed with the NHL, that's when you knew that that was more important to him than, you know, running the company.

51:30And this is one of the things with great success is something I've, you know, listen, I haven't had great success, but I've had some success. A lot of times you get some success and it's very easy to get distracted. You know, Adam Newman with his private jet, I've seen founders get obsessed with their front desk and the reception area there were two founders i knew who are fighting over the design of the reception area where their offices are going to be anything that's not the team the product or the customer i get worried when founders are obsessing over it right team product customer outside of those three things i mean sure there are some things that could be important like an office space could be important i guess but it's not the most important and man he he when he blows a gasket and he basically one of the things i realized is there was some dramatic foreshadowing at one point mike says to jim when they're on the way to that first meeting to show uh bell atlantic the phone the blackberry prototype he says let's make a deal that will never lie to each other and they kind of they kind of let that one float for it you notice that they let it float for a minute and they kind of go zoom in on jim if i remember correctly and it's like okay i guess like you know kind of lukewarm agrees to it knowing full well that he is a manipulator and liar at least according to this telling the story who knows what's actually true i just want to make sure people understand this everything we've said right now is based on the movie we have some information that's true or not people obviously they didn't have like a transcript here to go to and i think there's plenty of places online to where people will debate what's real what's not like a social network type of thing there was a book that That book presumably was very carefully researched, but now we're kind of riffing on the ideas in the book and it's taken on an element of fictionalization for sure.