Uri Levine: evaluation

Transcript context

…Okay. There's so much here I want to dig into. One is this example, this story about losing product market fit, it reminds me of, I had Drew Houston on the podcast, the founder of Dropbox, and he described a moment where when Apple launched Apple Photos or iCloud, I think it was iCloud, he's like, "It's as if there's this mushroom cloud exploding far in the distance that you don't hear for a long time and we didn't necessarily see exactly how much this will have impacted our business." And I think that's what happens a lot of cases. You see something happen and you're like, "No, this is no problem, we're going to win anyway." Like Blackberry I think did the same thing with iPhone. We had the same thing with Waze, because when we started Waze was free and it was the only one that was offering turn-by-turn navigation free. And the reason is that we created our own maps. And then one day in 2010, Google announced their free turn-by-turn navigation. Turns out that they were working for the last two years in building maps of the US. And they enabled that on Google Maps, turn-by-turn navigation with audio guidance to turn right, turn left and so forth. And two companies were actually shocked, the entire industry, but two companies were impacted. The first one is actually TomTom. TomTom was the provider of the maps for Google to do navigation. And they basically say, "No, we have our own maps, we are going to terminate the contract." And TomTom said, "Wait a minute, you are paying us $18 million a year and we have five years contract." And Google say, "Yeah, we will keep on paying you that amount of money that we are committed, but we are not going to use your product anymore." And that one was Waze because basically everyone in the industry told us that we are doomed. Our own investors told us that, "Look, if we can sell the company for $20 or $30 million today, do it because you are not going to be successful." Now obviously we turned the corner and turned out to be very successful. And to that level that eventually Google acquired us. And the reason is that the use case was different. Waze was focusing on the daily commuters. So we wanted people to use our application twice a day, when you go to the office and when you come back home. And Google Maps is something that you are being used not that frequent, you are in general I would say if I ask a hundred people how often they use Waze, they will tell me every day. If I ask them how often they use Google Maps, they will tell me, "When I need it." So a different use case and obviously different product that is built for the specificity of the use case. So Waze is way simpler and the map looks almost abstractive, they're not, but looks like abstractive and way less details. And the result is the ability to create something that is simpler and people are using every day. But when Google announced turn-by-turn navigation, all the investors in the world turn their back on us. And that was 2010. We were looking for new funding. I remember that night, because we were just about to go and meet with all partners meeting at Khosla Ventures. And we had multiple meetings beforehand and that was like, okay, this is the final seal. And the evening before we had dinner with the partners that was promoting us at Khosla Ventures and he told us, "Look, I have a lot of relationship in the industry, and I spoke with my friends at Google and they told me that they are at least two years away from building their own maps." And the next morning they simply announced this turn-by-turn navigation. Going to that meeting was a waste of time already. told me that they are at least two years away from building their own maps." And the next morning they simply announced this turn-by-turn navigation. Going to that meeting was a waste of time already. And we had very, very hard time to raise capital because of that. But eventually we were lucky in the sense that once Google announced their turn-by-turn navigation, turns out that the rest of the industry were took by surprise. And Microsoft decided that wait a minute, we don't have our own maps, so let's invest in Waze. So we ended up getting investment from someone that we did not expect.…

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