🍏 How does Apple buy startups?

PLUS: Are there too many digital health startups? May 5, 2021 [The Hustle] [The Hustle]( Kids might want to close their ears for this one: The New York Department of Education says there will be no more “snow days” this year. Why? To make up for lost days, classes will be conducted via Zoom on days that snow makes in-person school inaccessible. The big idea [Apple logo]( Here is Apple’s M&A strategy Apple is known for its ironclad secrecy, particularly around new iPhone launches. The same guiding principle informs the company’s mergers and acquisitions (M&A) practices. As detailed by [CNBC](, the company is known for small and discreet deals. Apple closed 100+ deals over the past 6 years... … a pace of one about every 3 or 4 weeks. While it did spend $3B on Beats by Dre in 2014 (its largest acquisition ever), Apple hasn’t made big headlines in a while. This is in contrast to its Big Tech frenemy Microsoft, which just dropped $19.7B on AI firm [Nuance](, its priciest deal since buying LinkedIn for $26B+ in 2016. One reason we don’t hear about the deals: Apple has strict NDAs and advises acquired employees to not update their LinkedIn profiles. What Apple looks for in a deal The iPhone maker focuses on filling gaps in its tech stack: It acquired tech for fingerprint ID (AuthenTec), iPhone Shortcuts (Workflow), Apple News+ (Texture), voice assistance (Siri), and Apple Music (Beats). When Apple wants expertise in a sector, it will buy up multiple firms. Take [semiconductors](: It bought P.A. Semi in 2008 ($278m), Intrinsity in 2010 ($121m), and Passif Semiconductor in 2013 (undisclosed). Once a firm is targeted, Apple requests a demo If there’s interest, the tech giant sends in the deal team (no outside bank is used). Since the deals are primarily to acquire talent (AKA acquihires) -- and not brand or customers -- Apple makes an offer based on the number of technical employees (~$3m per engineer). It largely ignores revenue or previous fundraising valuations. These individuals are then offered “golden handcuffs,” which are plush deals that vest over 3-4 years… hopefully enough money to make up for the fact they can’t update their LinkedIn profiles. [Share on Facebook]( [Share on Twitter]( [Send as email to a friend](mailto:?subject=The%20Hustle%20wrote%20something%20I%20think%20you%27ll%20like...%0A&body=Here+is+Apple%E2%80%99s+M%26A+strategy%0Ahttps%3A%2F%2Fthehustle.co%2F05052021-Apple-MA-strategy%3Futm_campaign%3DApple%2BM%2526A%2BStrategy%26utm_content%3D05052021-Apple-MA-strategy%26utm_medium%3Demail%26utm_source%3Ddaily%0A%0AYou%20can%20subscribe%20with%20my%20link%20here%20to%20get%20the%20latest%20in%20tech%20and%20business%20daily:%0A [View on our website]( SNIPPETS NEW! Introducing our new and improved [Snippets](. You can now get extra snippets on your favorite topics. Follow the button below to get started. Lifting up Lyft: Ride-hailing firm Lyft is recovering from the pandemic. Sales hit [$609m]( in the first quarter of the year, which -- while down 36% YoY -- was up 7% from Q4 2020. Tiger on the prowl: Investment giant Tiger Global is looking to raise a [$10B]( growth equity fund. This is mere weeks after raising one of the largest VC funds ever ($6.7B). We wrote more on the firm [here](. Want more Snippets in your Daily newsletter? Click the button👇 to choose your favorite topics and see your list grow in tomorrow’s email. [Personalize Your Snippets]( Health Tech [pill bottle with cash]( Health startups are flush with cash, but still need to prove their merit You’ve def seen them: digital health startups… they’re everywhere. Per [The Wall Street Journal](, $7B of VC money hit the sector in Q1 2021, the highest figure in at least 10 years. The main customers for these health services are corporate-benefits departments… … and they are revolting against the flood of choices Benefits execs are pushing startups for a few changes: - Expand offerings: There are a number of individual apps that specialize in one niche (e.g., heart health, sleep tracking, mental health). Corporates want combined offerings, so they don’t have to subscribe to a million options. - Pricing: Corporates want to pay by use, instead of purchasing monthly subscriptions that often go unused. - Most importantly: They want companies to prove that the product actually delivers better care and lowers costs. Health companies are taking note Telemedicine provider Teladoc moved into diabetes monitoring with a $13.9B acquisition of startup Livongo. That’s one of many deals for Teladoc, while its main competitors -- like MDLive, Doctor on Demand, and PlushCare Inc. -- are active on the M&A front, per WSJ. And in a very meta development, here’s another hot investment area: apps that help you manage other health apps (AKA care-navigation apps). At the current funding pace, you’ll soon see these apps everywhere too. [Share on Facebook]( [Share on Twitter]( [Send as email to a friend](mailto:?subject=The%20Hustle%20wrote%20something%20I%20think%20you%27ll%20like...%0A&body=Health+startups+are+flush+with+cash%2C+but+still+need+to+prove+their+merit+%0Ahttps%3A%2F%2Fthehustle.co%2F05052021-Health-startups%3Futm_campaign%3DApple%2BM%2526A%2BStrategy%26utm_content%3D05052021-Health-startups%26utm_medium%3Demail%26utm_source%3Ddaily%0A%0AYou%20can%20subscribe%20with%20my%20link%20here%20to%20get%20the%20latest%20in%20tech%20and%20business%20daily:%0A [View on our website]( Supply-chain blues [manufacturing]( Just-in-time auto manufacturing is having a rough time In 1913, Ford [launched]( the assembly line to great success on one basic premise: Never stop churnin ’em out. Unfortunately, the past year has highlighted the line’s fatal flaw: If even a single screw is out of stock, everything has to be turned off. First, a brief history lesson With just-in-time manufacturing, supplies show up just as needed to save on space and costs. Just-in-time manufacturing [developed]( over decades: - 1920s: Ford mined its own iron which it then used to build cars, but the company later shifted toward outsourcing suppliers - 1950s: Toyota executive Taiichi Ohno went to an American supermarket, saw how items were restocked as needed, and tried to replicate the process for cars - Present day: Companies from all sorts of industries -- auto firms, Apple, McDonald’s, and Target -- use just-in-time to save on costs It’s a great system for when things go as planned. Problem is, nothing seems to be going as planned In the last few months, the auto world has taken one helluva beating: - The Texas snow debacle closed a refinery that produces 85% of US resins, used to make seat cushions. Toyota paused several plants as a result - A March fire at Japanese chip manufacturer Renesas -- which supplies [⅔]( of the industry -- sliced production capacities Ford, for example, could see a 50% production hit and miss out on $2.5B in profits. Companies are working to improve by stockpiling inventory, building vertically integrated supply chains, and, in the case of Tesla, signing exclusive deals for access to raw materials. If anything, this whole ordeal has been a stark reminder for the auto biz not to put all their eggs in one basket. [Share on Facebook]( [Share on Twitter]( [Send as email to a friend](mailto:?subject=The%20Hustle%20wrote%20something%20I%20think%20you%27ll%20like...%0A&body=Just-in-time+auto+manufacturing+is+having+a+rough+time%0Ahttps%3A%2F%2Fthehustle.co%2F05052021-Just-in-time-auto-manufacturing%3Futm_campaign%3DApple%2BM%2526A%2BStrategy%26utm_content%3D05052021-Just-in-time-auto-manufacturing%26utm_medium%3Demail%26utm_source%3Ddaily%0A%0AYou%20can%20subscribe%20with%20my%20link%20here%20to%20get%20the%20latest%20in%20tech%20and%20business%20daily:%0A [View on our website]( Podcast How a retired cop makes nearly $1m giving ‘crime walk’ tours in NYC That’s right -- 8k+ people have bought the tour for ~$100 each! In episode #177, we talk about: - How you can pull off a similar tour in your own city - Why the chicken rental business is a “blue-collar side hustle” that you should start - How to become the “Barstool of Tech” (we think this is a multimillion-dollar opportunity) [🎧 Listen here →]( TRENDS Would you rather… - A million connections on LinkedIn - $10 million - A like from @elonmusk Our friend, Packy McCormick [recently tweeted]( this question and while we love the conundrum, we’ve opted for a fourth option: a top 20 business podcast. If you haven’t heard yet, [My First Million]( achieved that goal last week, thanks to Sam’s antics. That’s why we broke down exactly how he did it in [Trends]( this week, among his other antics... including his chain of hotdog stands selling “weiners as big as a baby’s arm” and his early pen names. That’s not all. We also covered: - A subreddit that’s growing like a weed, that may be hiding the next viral ingredient (think Hibiscus Very Berry) - A gifting app that raised $4m and sent 10k gifts within 2 months of launch - The “Netflix For Gadgets” that grew their ARR by 2.2x last year and saw a 2,000% increase in traffic to their B2B store - And much more…. To access the full report and our full archive of 100+ sends, [try trends for $1](. [Get ahead of the pack →]( Memes of the day Here are 3 hilarious Apple memes, all around one viral [Tim Cook]( photo: SHARE THE HUSTLE [Hustle Cons Greatest Hits ebook]( Over the years, we’ve learned… secrets. The business secrets, tips, and tricks that have helped founders go from zero to millions -- and even billions -- of dollars. Want to see ‘em? Just refer 3 more friends to The Hustle and we’ll send you our curated set of interviews with founders from brands like Zola, AWAY, Vungle, Bonobos, and more. 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