AAcquired
← All episodes
Trip Hawkins27 May 2019

The Electronic Arts IPO (with Trip Hawkins)

3Frameworks
14Insights

Listen

Frameworks in this episode

Insights & moments

The myth-busts, hot takes, explainers, and tools worth keeping.

Myth Buster· 1

Myth Buster34:30

How Steve Jobs's Licensing Mistake Let Microsoft Clone the Mac

Trip reveals that Jobs's own carelessness in licensing Word, Excel, and later PowerPoint to Microsoft without platform restrictions let Windows effectively copy the Mac interface, decimating Apple's market share.

  • Jobs wanted Microsoft apps on the Mac and didn't restrict the license from allowing other platforms.
  • Bill Gates used that same unrestricted license to build Windows on other manufacturers' PCs.
  • Trip frames it as Jobs both destroying and later saving Apple.

“he wanted Microsoft apps for the Mac, and he was really careless about the IP license that they needed to do Windows because he didn't…”

Trip Hawkins · 34:30

“it's kind of funny because Steve saved Apple, but he destroyed it first.”

Trip Hawkins · 36:00
#Apple#Microsoft#licensing#Steve Jobs

Hot Take· 1

Hot Take1:37:00

Trip's Hot Take on Closed Platforms Choking Creativity

Trip contrasts Nintendo's tightly controlled, high-royalty licensing model with more open approaches, praising Epic's fight against app store gatekeepers as an extension of his own lifelong stance against controlling platforms.

  • Nintendo's closed model with security chips and high fees made third-party publishing largely unprofitable.
  • Trip says he's been consistently passionate about creative freedom for developers across his career.
  • He explicitly praises Epic Games' current fight against Google Play and app store gatekeeping.

“anybody that wants to come along and choke that to death and control it and prevent certain things from being viable, yeah. Not a fan.”

Trip Hawkins · 1:37:30
#platform control#Nintendo#Epic Games#app stores

Explainer· 2

Explainer16:30

Why EA's 'Overnight Success' Took Two Decades

Trip explains that EA didn't have real value until two years after its IPO, framing company building as a 20-year process, and draws a parallel to Google Stadia's lack of a first-party game catalog.

  • A decade of planning preceded EA's founding, and another decade of operating preceded major value creation.
  • Trip applies the same patience lens to Google Stadia's missing first-party content problem.
  • He argues few companies or people are willing to play a genuine multi-decade long game.

“if you look at that time frame, creating that value was a 20-year process.”

Trip Hawkins · 16:30

“there was a about a decade before Electronic Arts was founded, where I'm planning the whole thing, and then it took another decade of actually…”

Trip Hawkins · 17:00
#long-term thinking#patience#Google Stadia#company building
Explainer30:00

The Real Three Founders: Jobs, Wozniak, and Mike Markkula

Trip explains that Apple really had three roughly-equal co-founders, with Mike Markkula providing 'adult supervision,' hiring Mike Scott as CEO, and mentoring an unpolished young Steve Jobs.

  • Markkula, Jobs, and Wozniak each held roughly a third of the company early on.
  • Markkula brought in Scotty as CEO while remaining chairman and occasional interim CEO for two decades.
  • Markkula personally coached Jobs on basic social norms, describing him as uncivilized a year before Trip arrived.

“there was Mike. There were really three equal musketeer co-founders of the real corporation.”

Trip Hawkins · 30:00

“you have no idea how much better he is now than a year ago.”

Trip Hawkins · 31:30
#Apple history#Mike Markkula#Steve Jobs#founders

Story· 8

Story06:00

From Stratomatic to Probability: Trip's Childhood Discovery of Games

Trip describes growing up loving both sports and tabletop dice games like All-Star Baseball and Stratomatic, and how at age 10 he essentially reverse-engineered Bayesian probability theory by studying the game's dice odds.

  • TV sports (football, baseball) first revealed strategy to him as a kid.
  • Cardboard dice games like All-Star Baseball and Stratomatic let him simulate that strategy at home.
  • At around age 10 he worked out probability theory on his own by analyzing player cards and dice rolls.

“I could tell that something really interesting was going on from a strategy standpoint.”

Trip Hawkins · 06:00

“heck, I was about, I don't know, 10 when I basically on my own figured out Bayesian probability theory from studying the dice.”

Trip Hawkins · 07:00
#origin story#childhood#games#probability
Story10:30

All-Nighters in Harvard's Computer Lab While Playing Football

Trip recounts attending Harvard at the same time as Bill Gates, balancing club football with late-night sessions on the shared timeshare computer systems.

  • Trip may have shared computer labs with Bill Gates without ever meeting him.
  • Serious students used the machines at night to avoid competing with daytime coursework users.
  • Trip played club (not varsity) football to leave time for computing, and his team went undefeated and unscored on.

“there were basically nerds that you could smell from ten feet away. There were guys sleeping under tables.”

Trip Hawkins · 11:00
#Harvard#Bill Gates#college#computing history
Story12:30

Trip's First Startup: A Self-Funded Tabletop Game That Failed

In high school, Trip borrowed $5,000 from his father to build and market a full tabletop game, got great customer feedback, but lost every penny because he didn't know how to run a business.

  • He sourced silk-screened boards, dice, and printed parts to manufacture the game himself.
  • Customers loved the product but there was no money for marketing or distribution.
  • He describes the emotional lesson of failure alongside the excitement of wanting to try again.

“I had no idea how to run a company. I didn't have enough money to do any marketing, so it obviously didn't get very far,…”

Trip Hawkins · 13:30
#failure#first startup#entrepreneurship
Story19:30

How an Unsolicited Market Study Landed Trip a Job at Apple

Trip describes talking his way into free market research projects with Fairchild and a research firm, culminating in a furious phone call from Steve Jobs about a flyer that led directly to a job offer at Apple.

  • Trip offered free market research to get access and course credit rather than a paycheck.
  • He copied the approach of a report he found on personal computers, an entirely new topic at the time.
  • Steve Jobs called Trip's home angrily about a flyer claiming Radio Shack was the market share leader, which led to Trip getting a job offer at Apple.

“what why the hell are you calling Radio Shack uh the market share leader? This is incredible.”

Trip Hawkins · 28:00

“Free is a fabulous word, it's the most powerful word in the history of marketing, and it opens a lot of doors.”

Trip Hawkins · 21:00
#Apple#Steve Jobs#career origin#market research
Story1:04:30

Birth of EA Sports: Signing Dr. J and Larry Bird

Trip describes recruiting his childhood hero Julius Erving and then Larry Bird for the first celebrity-endorsed video game, One-on-One, effectively founding what would become EA Sports.

  • Trip pitched Dr. J on the educational and legacy value of the new medium for his kids.
  • Dr. J was paid $25,000 plus a 2.5% royalty; Larry Bird got the same deal.
  • The design was intentionally simple enough that even non-gamers could play it, including retailers on sales calls.

“he was paid twenty five thousand dollars and got a two point five percent royalty.”

Trip Hawkins · 1:12:00
#EA Sports#Julius Erving#Larry Bird#celebrity licensing
Story1:15:30

The Two-Day Train Ride That Shaped Madden Football

Trip recounts choosing John Madden as the top football endorser and taking a two-day cross-country train ride with him (because Madden didn't fly) to hash out the entire game design, including Madden's insistence on 11-on-11 play.

  • Madden was chosen for his unmatched football credibility across coaching, playing, and broadcasting.
  • The train ride became a marathon football strategy session that shaped the game's design.
  • Madden flatly rejected a simplified 7-on-7 'skeleton' design, insisting on the real 11-on-11 game.

“the train uh went west, and for two days all we did day and night was talk football.”

Trip Hawkins · 1:17:00

“he just says, Well, that's not football. I mean, look, that's all he had to say is that okay, next question.”

Trip Hawkins · 1:20:30
#John Madden#Madden NFL#product design#celebrity partnership
Story1:32:00

The Clean Room: Reverse-Engineering the Sega Genesis

Trip describes the year-long, legally careful 'clean room' effort by engineers Jim Mitchell, Steve Hayes, and David Maynard to reverse-engineer the Sega Genesis so EA could publish games without a license, including the personal toll it took.

  • Engineers worked in an isolated clean room, building tools from scratch to decode the console without infringing copyright.
  • The team confirmed Sega had no security chip like Nintendo's, clearing a legal path to publish unlicensed.
  • Trip credits Jim Mitchell, who later died young from alcoholism, as one of the greatest heroes in EA's history.

“you go into that room and the room is essentially sealed, and then you have to create tools from scratch and figure out a way…”

Trip Hawkins · 1:32:00

“these guys are the greatest heroes in the history of electronic arts.”

Trip Hawkins · 1:34:00
#Sega Genesis#reverse engineering#clean room#IP law
Story1:45:30

How Madden Football Secretly Became Joe Montana Football

When Sega's own Joe Montana football game fell behind schedule, Sega asked Trip to hand over Madden as a replacement; instead he negotiated to deliver a stripped-down version as Montana Football while keeping the full Madden game for EA.

  • Sega's outsourced Joe Montana game was going to miss Christmas.
  • Trip refused to give up Madden but agreed to build a simplified version in six weeks for $2 million.
  • Both games shipped for Christmas and became two of the five best-selling titles that season, with no one realizing Montana was a stripped-down Madden.

“We literally cranked out this different game in six weeks by taking Madden and basically dumbing it down.”

Trip Hawkins · 1:47:00

“nobody knew that under the hood that Montana was Madden.”

Trip Hawkins · 1:49:00
#Madden#Sega#Joe Montana#product strategy

Q&A· 1

Q&A46:30

Don Valentine's Test: 'What Do I Need You For?'

Before wiring funding, Sequoia's Don Valentine told Trip over lunch that he expected Trip to push back on him in the boardroom, not simply follow instructions.

  • Valentine wanted a founder with independent conviction, not a yes-man.
  • He explicitly told Trip the investment would be pointless if Trip just did whatever Valentine said.
  • Trip specifically sought out Valentine as an investor because he wanted someone tough enough to challenge him.

“if I'm telling you what to do, and you always do what I say, then what the hell do I need with you?”

Trip Hawkins · 47:00
#venture capital#Don Valentine#board relationships

Takeaway· 1

Takeaway1:54:00

3DO's Lesson: The Danger of Being Too Early

Reflecting on his hardware venture 3DO, Trip admits his run of success at EA made him overconfident, comparing himself to race car drivers who push past the edge of control, and names being 'too early' as his most repeated career mistake.

  • 3DO was born inside EA as a skunkworks before spinning out, and went public arguably too soon.
  • Trip compares his overconfidence to F1 drivers Niki Lauda and Ayrton Senna pushing past the edge of control.
  • He names being too early as the most classic and recurring mistake of his career.

“probably the uh most classic mistake I've made the most in my career is being too early.”

Trip Hawkins · 1:55:30
#3DO#failure#timing#hubris