I thought when the iPhone came out that like, oh, it's like a mobile phone. I've had a mobile phone since the early 90s. Well, it wasn't a mobile phone. It was a mobile computer. And even more than that, it was the most important computer, or it would become the most important computer for most people around the world, which meant that if you like to make software and wanted to sell it to people, you had to go through that computer.

Now suddenly, before you could even launch, you'd have to ask Apple for permission. That always sat wrong with me. But it wasn't until we launched Hey! in 2001 that I saw the full extent of the rot. When we got ready to launch, after spending two years building this product, millions of dollars in investment to it, we obviously needed mobile apps.

So we had built a great native client for both iOS and for Android, and we were so excited. Hey, world, we've been working on this new thing. I'd love for you to check it out. And of course, as with anything, when you launch a new product, there are some bugs.

So we quickly found a few in the iOS client and submitted a new build to Apple. Hey, here's our bug fixes. Can you please update? And that's when all the help broke loose. They said, oh, wait a minute. We see that you're not using our in-app payment system, which means that we don't get 30% of your business.

You will have to rectify that or you can't be in the App Store. Apple was willing to destroy Hey if we did not agree to give them 30% of all the signups that came through the iOS app. And it wasn't just about the 30%. When you sell an app in the App Store, you're not selling an app to a customer.

You're selling an app to inventory at Apple. And then Apple sells an app to that customer. So if you want to give discounts or refunds, if you want to easily support multi-platform, if someone signs up for Hey on their iPhone and they want to switch to Android, it's complete hell.

For a million reasons, I did not want to hand my business over to Apple. So we decided to do something that seemingly Apple had never heard before. We said, no, this is not fair. This is not reasonable. Please approve. And of course they didn't. And it escalated. And after a couple of days, we realized, you know what?

We're going to be dead if they go through with this. Unless we make such a racket, such noise that they will regret it. So I started kicking and screaming and going public. And that turned into a prolonged two-week battle with Apple that essentially ended in the best possible outcome we could have gotten.

We wouldn't hand 30% over to Apple. They wouldn't kick us out of the App Store, but we had to build some bullshit dummy accounts such that the app did something when you downloaded it. That was a rule that Phil Schiller seemingly made up on the fly when pressed for the fifth time by the media about why we couldn't be in the App Store when a million other companion apps could.

But we just happened to be able to create so much pain and noise for Apple that it was easier for them to just let us be than to keep on fighting. Thank you for watching this clip. Please subscribe to the Lex Friedman YouTube channel and consider watching the full episode of the podcast.