Qualcomm

1. DRDavid Rosenthal0:00

   I walked in, and the first thing I saw was the bottom of the big crane boom arm with the weights, and I was like: "Why are there Olympic weights here?" [laughing]

2. BGBen Gilbert0:08

   [laughing]

3. DRDavid Rosenthal0:08

   And then I was like: "Oh, because we've got a professional boom arm camera. This is amazing."

4. BGBen Gilbert0:14

   All right, let's do it.

5. SPSpeaker0:16

   Who got the truth? Is it you? Is it you? Is it you? Who got the truth now? Is it you? Is it you? Is it you? Sit me down, say it straight. Another story on the way. Who got the truth?

6. BGBen Gilbert0:32

   Welcome to season eleven, episode six of Acquired, the podcast about great technology companies and the stories and playbooks behind them. I'm Ben Gilbert, and I'm the co-founder and managing director of Seattle-based Pioneer Square Labs and our venture fund, PSL Ventures.

7. DRDavid Rosenthal0:47

   And I'm David Rosenthal, and I am an angel investor based in San Francisco.

8. BGBen Gilbert0:51

   And we are your hosts. There's an incredible property of the universe where electromagnetic signals can be broadcast and travel through space at the speed of light to be received at a different point in the universe. Now, a tiny fraction of these frequencies are detectable by humans as visible light. Some other frequencies can be dangerous, like X-rays or gamma rays, but there's a part of the spectrum that is not detectable to humans, and it's not harmful at modest doses, that can be used to transmit invisible messages all around us all the time, without any of us having any idea.

9. DRDavid Rosenthal1:30

   It's like magic.

10. BGBen Gilbert1:31

    Yeah. [chuckles] These frequencies have been used for over a century to broadcast TV and radio shows, presidential messages, and important news updates. In the last fifty years, humans have gotten tremendously clever at purposing some parts of the RF spectrum to be used for cell phones. But the story of how we got from transmitting small messages on a single frequency to having billions of humans concurrently sending megabytes or gigabytes of data every minute, has been an incredible journey of invention and entrepreneurship. The company most responsible for the mind-bending system of how it all works today is Qualcomm. And today, we will dive into their entire history and strategy, unpacking their products, which, to the outside observer, is really best described as a layered series of magic tricks.

11. DRDavid Rosenthal2:21

    And spoiler alert for listeners, this is an incredible story. I had no idea before we dove into the research, like-

12. BGBen Gilbert2:28

    Yeah, me neither.

13. DRDavid Rosenthal2:28

    This one is up there with, like, Nvidia, TSMC. There is so much stuff you can't make up in this story. It's incredible.

14. BGBen Gilbert2:34

    Largest fabless chip company in the world.

15. DRDavid Rosenthal2:37

    Indeed.

16. BGBen Gilbert2:38

    The other thing we should say, listeners, uh, this was super fun to do this episode live, in person, in Lisbon. Our huge thank you to the Solana Foundation for hosting us at Solana Breakpoint. Many longtime listeners will know Austin Federa from the Slack. He was kind enough to invite us, and, uh, and really fun to do it there, especially given Solana's tie to Qualcomm, with Anatoly having worked there for over ten years.

17. DRDavid Rosenthal3:02

    Indeed.

18. BGBen Gilbert3:03

    Well, for our presenting sponsor this episode, we are back with Fundrise. CEO Ben Miller has more to share with us on how they came across the idea for their new growth tech investing arm, the Fundrise Innovation Fund.

19. DRDavid Rosenthal3:15

    I think people have loved, throughout the season, hearing the Fundrise story itself and how you guys raised a hundred and fifty-five million dollars from the retail investing public without actually going public yourself. Can you remind everyone how you did that, A, and then, B, how you're now opening this up to every private company?

20. SPSpeaker3:37

    When we started Fundrise in 2012, like, the mission was to give individual investors direct access to real estate because we saw when money's intermediated, problems happen. Intermediaries don't have the same interests as the owners. And so we scaled that business of democratizing real estate investing, having sort of a direct-to-consumer model. And then when we went to raise, we said: "Well, why don't we walk our own talk? Why, why don't we raise money directly from the individual investors in the same way we do for real estate?" And that was 2017. It was extremely uncertain, like, no one's ever done it before, and we didn't know if it was gonna work. And so we launched it. We think we raised seventeen million dollars in the first, like, twenty-four hours, it was, like, very successful. And we said: "Okay, aha, this is the future. [chuckles] This is the way to do it." And we scaled up, raised a hundred and fifty-five million dollars from thirty-five thousand investors for Fundrise itself, for the tech company, not just for the real estate. So we said: "What's the next thing? We should do it for other tech companies, and we should wrap it in a structure that-- so that all the company has to do is what they normally do with an institutional investor, right? One company on your cap table, but behind it is, like, a mutual fund with millions of investors." And if you're a private company, you should want to have retail investment from the masses as soon as possible, 'cause it's gonna increase your brand awareness, it's gonna smooth your transition to public markets, and it's gonna get you a lot of customers.

21. BGBen Gilbert5:11

    Our thanks to Fundrise. If you want to join the over three hundred and fifty thousand people investing with Fundrise, you can click the link in the show notes, and if you're a founder who wants to get in touch about the Innovation Fund participating in your next round, email notvc, that's notvc@fundrise.com. After this episode, come talk about it with us. There are thirteen thousand other smart, kind people in the Slack, acquired.fm/slack. Without further ado, on to our live show at Solana Breakpoint. And listeners know that this is not investment advice. David and I may have investments in the companies we discuss, and this show is for information and entertainment purposes only.

22. DRDavid Rosenthal5:51

    Well, one small bit of ado before we dive into the story is we owe a big thank you to Dave Mott-... the author of the incredible book, The Qualcomm Equation-

23. BGBen Gilbert6:04

    Yep.

24. DRDavid Rosenthal6:04

    -which is not well known, but is the definitive history of Qualcomm, and ranks right up there with among the best business books that, business histories that we've used as a source on Acquired throughout the whole history of the show. It's awesome. Uh-

25. BGBen Gilbert6:17

    And the book's not even really published under, like, a real publisher. It's published under an industry association. There's no audiobook, there's no Kindle. You have to read the physical book.

26. DRDavid Rosenthal6:25

    Yeah, it's-- you, it's amazing. I literally, the other day, texted Ben a photo that I noticed on the back cover, [chuckles] and Ben, of course, had seen it, too, uh, of one of the blurbs. I'm gonna, I'm gonna read it here now. It says: "Dave Mach helps uncover the single most important business story, single most important business story that has yet to be told, how Qualcomm came to rule the wireless industry. Think of it as a recipe book of, for one of the most innovative and leveraged business models of all time."

27. BGBen Gilbert6:56

    Right.

28. DRDavid Rosenthal6:56

    Whose words does that sound like, Ben?

29. BGBen Gilbert6:58

    That sounds like a deep business model thinker and someone who, uh, who truly appreciates capitalism at its finest.

30. DRDavid Rosenthal7:03

    And is willing to go find the rare gems, the rare diamonds in the rough. That is written and said by none other than Bill Gurley-

Episode duration: 2:27:47