Danger was a company founded in 2000 by Andy Rubin, Matt Hershenson and Joe Britt, former employees of Apple, General Magic, Catapult Entertainment and WebTV among others.

Not many people know abut Danger in Europe, since they were mostly known as the creators of the T-Mobile Sidekick, a very popular early smartphone. The company was bought by Microsoft in 2008 and continued manufacturing devices for T-Mobile and other carriers until 2010. Inside Microsoft, the ex-Danger team was responsible for the development of the Kin, Microsoft’s smartphone fiasco.

In a rare interview with Danger co-founders from early 2004, Andy Rubin explains with all detail Danger’s business model, which is almost exactly the same business model Google’s Android or Amazon’s Kindle have today: sell hardware devices at cost price and make money through associated services. Danger even had an early appstore.

{% blockquote Andy Rubin %}
The three ways we make out money are:
– A small activation fee to bring a new subscriber onto the service.
– A recurring service fee for hosting these applications that are running on the backend.
– A small revenue share on content applications that get downloaded onto the device.
{% endblockquote %}

This is no surprise as Andy Rubin is the co-founder of Android Inc., the company acquired by Google in 2005 which later became the Android operating system.

It’s worth noting that the video was recorded on February 18, 2004. However, Andy had left Danger in 2003 and had already started Android in October 2003. The reasons he left Danger aren’t clear, but he left shortly after being replaced as CEO. His relationship with the board wasn’t optimal at the time, but apparently he still represented the company publicly and got along with his co-founders.

Link to the series of videos in Stanford’s website

The interview is a textbook example on how people go on to build successful companies.

Fresh out of college, the soon-to-be co-founders move to Silicon Valley to work on different innovative companies. They meet while working on the same company or introduced by other colleagues in the industry and quickly become friends.

Soon after that, they find themselves with the desire to move on and work on something new. They start a company with a product in mind. They raise some money from friends and family and start developing the product. They realize nobody wants their product, and they have no money.

Hopeless, they try to pivot while turning down some other business opportunities. They finally find a paying customer, reaching product-market fit and raising more money to scale.

{% blockquote Matt Hershenson %}
Everybody should hope that the company that they start is a reflection of all the mistakes they made at other people’s companies, and you do it right when it’s your own.
{% endblockquote %}

Matt Hershenson and Joe Britt are currently employed at Google. Andy Rubin recently left his position as Android head to lead Google’s new robotics division.