We dive into the history behind Meituan, the juggernaut Chinese "super-app" which dominates China's services economy, offering consumers everything from food delivery, restaurant reviews, travel booking, bike-sharing, movie ticketing, and countless other entertainment and lifestyle services all at the touch of a button. Already China's 3rd largest tech company by market cap (behind just Tencent and Alibaba), Meituan did $15 billion in net revenue in FY2019 and continues to grow rapidly. What makes it so special, and how were they able to become the market leader in such a competitive space? This story is packed with lessons that apply equally beyond China tech to high-growth company building and investing everywhere.  If you love Acquired and want more, join our LP Community for access to over 50 LP-only episodes, monthly Zoom calls, and live access for big events like emergency pods and book club discussions with authors. We can't wait to see you there.&nbsp;Join here at:&nbsp;  Sponsors:  Thanks to Tiny for being our presenting sponsor for all of Acquired Season 8. Tiny is building the "Berkshire Hathaway of the internet" — if you own a wonderful internet business that you want to sell, or know someone who does, you should get in touch with them. Unlike traditional buyers, they commit to quick, simple diligence, a 30-day or less process, and will leave your business to do its thing for the long term. You can learn more about Tiny here:&nbsp; Thank you as well to Vouch and to Capchase. You can learn more about them at:        The Meituan Playbook: (also available on our website at &nbsp;) 1. Adding product offerings (post initial product-market fit) isn't losing focus. It's smart business.  A huge part of Meituan's success and longterm defensibility versus its literally thousands of past competitors is its ability to cross-sell customers across many different product lines. Meituan can afford to spend much more on acquiring and retaining a new user who'll end up purchasing food delivery, groceries, hotels, travel and more through the platform vs. standalone competitors in each vertical. Most western companies woefully misunderstand this dynamic. (Amazon being a notable exception) Meituan enjoys an average of 26 transactions per user per year (vs e.g. Airbnb users which book an average of 0.5 transactions/year). With each additional offering, Meituan increases the number of revenue streams it can amortize its CAC over, while also offering superior experiences to customers. Key to making this strategy work is having the discipline to follow the same playbook as any startup: launch new initiatives quickly, test and improve based on real customer feedback, don't let perfect be the enemy of shipped, and kill what's not working and move on. Meituan and Amazon's new initiatives often lack polish — but they either quickly bring in $billions of revenue, or they die and the company goes on to the next one. Again with few exceptions, western tech companies completely misunderstand how to execute this playbook effectively.  2. When you spot a market that's both large and growing fast — ride that wave!!  Chinese e-commerce was a 20% saturation industry in 2017 and still growing nicely. However real world services was only 5% online, and poised to grow even faster. Staying nimble to capitalize on this online to offline (or "O2O") trend allowed Meituan to accelerate while Alibaba was caught flat-footed. Today Meituan (along with its fellow Tencent portfolio company Pinduoduo) represents probably the biggest threat Alibaba has faced in its entire history.  3. Many still don't realize what a powerful moat (trusted) reviews provide in online platforms.  Once it merged with Dianping, review data became Meituan's biggest competitive advantage vs other food delivery (and other product line) competitors. A deep database of reviews creates an incredible barrier to entry: any competitor can standup a set of listings, but without trusted...

Meituan

Unicorns and ratchets and lawsuits, oh my! Our heroes dive into the history of Jack Dorsey’s famous “other” company, Square. Was the Square IPO a canary in the coal mine signaling doom &amp; gloom for the so-called unicorn companies of the early 2010’s, or a mispriced and misunderstood diamond in the rough? Acquired weighs in. &nbsp; Topics Covered Include:  Square’s deep origins in the early 90’s in St. Louis, MO with the initial meeting of its co-founders, Jack Dorsey &amp; Jim McKelvey McKelvey’s side glass blowing business and the “inspiration” for Square that came much later in the late 2000’s The complicated involvement of Washington University (in St. Louis) professor Robert Morley, who had worked for years developing payment card reading technology The company’s early meeting with Scott Forstall at Apple, and its “significant” impact on the its name and design The real disruptive innovation of Square and its business model (hint: not just building a mobile card reader) Square’s massive payments deal with Starbucks in 2012 and its impact on the company The evolution of Square’s business from a simple card reader to cloud-based Point of Sale (PoS) system and entire suite of merchant tools &amp; business management services The drama leading up to Square’s IPO (including at Jack Dorsey’s “other” company, Twitter), dynamics and narratives affecting its pricing, the effect of IPO “ratchets”, and the company’s performance over the ~2 years since  &nbsp; The Carve Out:  David: Bob Iger on Nick Bilton’s  Inside the Hive podcast Ben:  The World After Capital on GitBooks  &nbsp; Sponsor:  Thanks to Perkins Coie, Counsel to Great Companies, for sponsoring this podcast. You can get in touch with Buddy Arnheim, who you heard at the beginning of this podcast,  here.

Episode 43: The Square IPO

Hey Acquired listeners. A note about this show: we recorded this episode the night before the 2016 Election Day in the US. At the time, the biggest change we saw coming was adding a new type of content to Acquired in analyzing IPO’s, which we introduce in this episode. Two days later, we woke up to a very different world than the one we were expecting. Reflecting on what’s happened, and the past few months of our show, we wanted to say two things: First, we want to apologize for our cavalier attitude toward this election cycle, and our glossing over the clearly very real problems and deep divide in America that it represented. In the Skype episode, David pretty&nbsp;glibly compared the AT&amp;T - Time Warner merger to "Make America Great Again", arguing that any reactionary force is “on the wrong side of history” and cannot be relevant in a changing world. That was wrong, the&nbsp;sentiment behind it&nbsp;was wrong, and it was insensitive to the very real pain a lot of people are feeling out there on both sides. Second, looking back on this particular&nbsp;episode about the Facebook IPO, we think it actually might&nbsp;present a relevant parable for our country right now and--we hope--some important lessons for the technology industry going forward. For all the wonderful aspects of the tech industry&nbsp;that we celebrate on this show, there is no doubt that it also&nbsp;bears&nbsp;a great deal of responsibility for the current divide in America, and especially in its contribution to wealth inequality. Likewise, for all the wonderful aspects to the Facebook IPO story, as&nbsp;told in this episode, there is a very dark side as well: Facebook shareholders, investment banks and institutional investors raked in billions of dollars at the expense of individual retail investors who lost their shirts. At the same time, Facebook’s perseverance through their&nbsp;“broken IPO",&nbsp;and their determination in overcoming with incredible speed&nbsp;the&nbsp;massive, existential challenge to their business model posed by mobile, is something&nbsp;we think&nbsp;*can be* an inspiration to us all on how to move forward even&nbsp;when that seems hard. We hope you’ll listen to this episode with that in mind and think about how you, we, and the technology industry as a whole can do better in serving everyone in this country and in the world. Thanks for being on this journey with us. We’re sorry for our shortcomings, and we’re going to keep working hard to do better.&nbsp; -Ben &amp; David &nbsp; Topics covered include:  Introducing a new content vertical for Acquired: analyzing IPO’s!&nbsp; Facebook turning down early acquisition offers, including&nbsp;including the  famous&nbsp;$1B overture&nbsp;from Yahoo in 2006  The&nbsp;Wikipedia entry on the Facebook&nbsp;IPO&nbsp;referencing it as a&nbsp;“cultural touchstone” Trading of pre-IPO Facebook stock on&nbsp;SecondMarket and&nbsp;SharesPost  The infamous 2011 Facebook -&nbsp;Goldman Sachs deal attempting to circumvent then-active SEC regulations on number of permissible shareholders in a private company, and Goldman’s eventual loss of “lead left” status to Morgan Stanley for the ultimate Facebook IPO  Facebook’s S-1 filing on&nbsp;February 1, 2012 The company’s "small problem" at the time&nbsp;(read: gaping chest wound) with mobile Acquiring&nbsp;Instagram for $1B while on file to go public in April 2012 Facebook’s $16B&nbsp;IPO finally taking place on&nbsp;Friday&nbsp;May 18, 2012,&nbsp;priced at $38 per share giving FB&nbsp;an initial&nbsp;market cap of $104B NASDAQ’s “technical glitch” (read: egregious&nbsp;f*&amp;# up)  preventing the stock from trading when it supposed to and resulting in $500M of investor losses Facebook’s stock tanking following a flat first day of trading, losing 25% of its value during the first month and over 50% 4 months later, leading some to label it&nbsp;“The Biggest IPO Flop Ever" Later revelations that Facebook had...

Episode 25: The Facebook IPO

Ben &amp; David welcome very special guest Tom Alberg, board member and first lead&nbsp;investor in Amazon.com, to cover the IPO of "earth’s most customer-centric company". From longterm thinking to&nbsp;flywheels to riding big waves, this episode is chock full of lessons and stories&nbsp;from the journey of building one of tech’s most iconic franchises.&nbsp;We hope you enjoy listening&nbsp;as much as we did recording it!&nbsp; &nbsp;  Topics covered include:    Tom’s “prolific” bio from the Amazon S-1 Jeff Bezos’s journey from a&nbsp;Vice&nbsp;President at&nbsp;the New York&nbsp;hedge fund D. E. Shaw to founding Amazon in a Bellevue, WA garage in the summer of&nbsp;1994 Jeff’s&nbsp;longterm thinking as evident in the early days of&nbsp;Amazon, and his approach that "failure is ok, but not trying things is not ok”&nbsp; Raising the seed money for Amazon before product launch, how Tom met Jeff and decided to invest&nbsp;despite the&nbsp;“high” valuation Tom's (and Jeff’s) focus on the power of&nbsp;targeting large and growing markets&nbsp; Amazon’s actual overnight success after launching the website: according to Tom at the time,&nbsp;"By the second or third week… It was clear there was a trend here.” How Amazon’s&nbsp;venture round, led by John Doerr of Kleiner Perkins, came together in the spring of 1996&nbsp; Amazon’s torrid growth through 1996, Jeff’s mantra of&nbsp;“get big fast” to win the land grab of online book selling, and the board’s decision to prepare for a public offering in the spring of 1997&nbsp; How Frank Quattrone and Bill Gurley, then of&nbsp;Deutsche Bank,&nbsp;won the lead position for the Amazon IPO, beating out more storied firms such as Goldman Sachs and Morgan Stanley&nbsp; Development of the flywheel&nbsp;concept&nbsp;within Amazon, as an outgrowth of maniacal focus on creating&nbsp;superior&nbsp;customer experience Amazon's public offering&nbsp;on&nbsp;May 15, 1997 at $18 per&nbsp;share (effectively $1.50 relative to today’s stock price after splits), raising $54M at a market capitalization&nbsp;of $438M&nbsp;— and subsequently trading down during the first few months following the IPO&nbsp;&nbsp; Amazon and Jeff’s management of investor perceptions of the&nbsp;company, and ability to sell the longterm vision over&nbsp;short term profits&nbsp;—&nbsp;“you get the&nbsp;investors you ask for”&nbsp; The&nbsp;creation of the&nbsp;first annual letter to Amazon shareholders&nbsp;included in the company’s&nbsp;1997 annual report (and republished every year since), and then-CFO&nbsp;Joy Covey’s role and contributions to it&nbsp; Raising convertible debt just before the peak of the&nbsp;dotcom bubble and subsequent&nbsp;ability to survive the burst, and the impact of the downturn on Amazon culture   &nbsp;   The Carve Out:    Ben: the band&nbsp;The&nbsp;Album Leaf David: Cormac McCarthy (author of&nbsp;All the Pretty Horses, No Country for Old Men, etc)’s&nbsp;contribution to W.&nbsp;Brian Arthur’s landmark paper about the economics of the internet, “Increasing Returns and the New World of Business” Tom: Michael Lewis’s latest book&nbsp;The Undoing Project, chronicling the Nobel Prize winning&nbsp;partnership between&nbsp;Daniel Kahneman &amp; Amos Tversky in developing the field of behavioral economics

Episode 28: The Amazon IPO with original Amazon Board Member Tom Alberg

Acquired brings it all back home—to the smart home that is—with Google’s 2014 acquisition of Nest for $3.2B. From Nest cofounder Tony Fadell’s first job at General Magic (alongside future Android founder Andy Rubin) to his days as “father of the iPod” under Steve Jobs at Apple, the Silicon Valley history runs deep with this one. But did that make the acquisition a good move for Google in the coming battle with Amazon’s “Lady A” for control over consumers’ homes? We dive in!&nbsp; Links:  Tony Fadell in the Academy of Achievement Steve Jobs deleting Tony Fadell from his Favorites  Carve Outs:  Ben: Do by Friday podcast David: A Kingdom from Dust By Mark Arax in The California Sunday Magazine  Sponsor:  Thanks to Perkins Coie, Counsel to Great Companies, for sponsoring Acquired Season 2. You can get in touch with Gina Eiben, who you heard at the beginning of this podcast, here.

Season 2, Episode 3: Nest

Acquired is live on the scene following Dropbox’s public market debut. From playing a central role in the early days of Y Combinator, to having Steve Jobs famously label the company a “feature not a product”, to pivoting from consumers to enterprise to developers and back again, the silicon valley history runs deep with this one. What twists and turns lie ahead for Dropbox as a public company? We speculate! &nbsp; Links:   Dropbox’s Y Combinator application Original Dropbox demo video  &nbsp; Carve Outs:  Ben:  Raytracing comes to DirectX David: Lazy Game Reviews  &nbsp; Sponsor:  Thanks to Perkins Coie, Counsel to Great Companies, for sponsoring Acquired Season 2. You can get in touch with Lee Schindler, who you heard at the beginning of this podcast,  here.

Season 2, Episode 5: The Dropbox IPO

If you thought the telecom business was boring, think again! Acquired brings you an episode packed with more drama than an entire season of Game of Thrones. Starting with a death in the family, we follow a tale of fortunes lost and rebuilt, bitter battles between rivals who once worked for each other, and at the center of it all, a lesson in the power of stable cashflow businesses. This is one call you don’t want to drop! &nbsp; Links:   Seattle Times’ infographic on Bellevue’s wireless company history John Legere at CES 2013  &nbsp; Carve Outs:  Ben: Andrew Chen on the Intercom podcast David: The 996 Podcast from Zara &amp; Hans at GGV Capital  &nbsp; Sponsor:  Thanks to Perkins Coie, Counsel to Great Companies, for sponsoring Acquired Season 2. You can get in touch with Gina Eiben, who you heard at the beginning of this podcast, here.

Season 2, Episode 8: T-Mobile / Sprint

We’re live on the scene the day following the biggest announcement in the open source software world since well, open source software: Microsoft acquiring GitHub for $7.5B in stock. How did we get here? What does it mean for software developers going forward? And most importantly, why is there a creepy half-cat / half-octopus plastered all over everything? As always, Acquired has the answers.&nbsp; Carve Outs:  Ben: The Idea Maze by Chris Dixon David: Invisible Asymptotes by Eugene Wei&nbsp;  Sponsor:  Thanks to Perkins Coie, Counsel to Great Companies, for sponsoring Acquired Season 2. You can get in touch with Lee Schindler, who you heard at the beginning of this podcast,  here.

Season 2, Episode 9: GitHub

Please click here to take the 2018 Acquired Survey. It takes 5-10 minutes, helps us immensely, and you may win a pair of AirPods or equivalent Android-friendly listening accessory (woo!) &nbsp; Acquired wraps up Season 2 with our first “elusive” private-private merger: Rover.com and its 2017 combination with rival pet care marketplace DogVacay. We’re joined by Rover CEO Aaron Easterly to dive into the full history of how the crazy idea of “Airbnb for dogs” not only became a billion-dollar company, but also brought our heroes together for the first time and led to the founding of Acquired! &nbsp; Links:   The original Rover pitch from Startup Weekend  &nbsp; Sponsor:  Thanks to Perkins Coie, Counsel to Great Companies, for sponsoring Acquired Season 2. You can get in touch with Gina Eiben, who you heard at the beginning of this podcast, here.

Season 2, Episode 10: The Rover-DogVacay Merger (with Rover CEO Aaron Easterly)

Season 3 Trailer

Acquired kicks off Season 3 with a gangbuster two-hour extravaganza on America’s most successful automotive startup since The Ford Motor Company: Tesla. We cover everything, from founding to its 2010 IPO to all that’s happened since, including the question on the minds of superhero fans everywhere: who came first, Elon Musk or Tony Stark? (Spoiler: Elon) &nbsp; Carve Outs:  Ben: The Dissect podcast David: Harry Potter and the Sacred Text podcast  &nbsp; Sponsor:  Thanks to Silicon Valley Bank for sponsoring Acquired Season 3. You can get in touch with Jordan Kanis, who you heard at the beginning of this podcast, here.