FiftyThree, Maker of Popular Paper and Paste Apps, Gets Acquired


Back in 2012, a Seattle-based startup named FiftyThree launched a drawing app designed completely for iPad, with a reputation that sounded prefer it was designed particularly for an Apple crowd: Paper. Despite its simplicity and likewise due to it, Apple topped it the iPad App of the Year. Tech writers described it as “the next great iPad app”, “a superbly designed sketching app,” and “a fresh canvas ready and waiting for your ideas, inspiration, and art.” FiftyThree later expanded to incorporate an iPhone app, an non-compulsory subscription known as Paper Pro, and Paste, a collaboration app.

FiftyThree additionally managed to do what few app startups have finished: make and promote {hardware}. Its $60, soft-nibbed, walnut stylus, known as Pencil, presaged Apple’s eventual entry into the world of stylii.

Today FiftyThree introduced its apps and crew have been acquired by WeSwitch, a cloud-based file switch firm with headquarters in Amsterdam and Los Angeles. Terms of the deal weren’t disclosed, however WeSwitch stated it had acquired the corporate’s total patent portfolio and all property for its apps. FiftyThree’s government crew and product groups will keep on board for now. As for the way forward for FiftyThree’s suite of apps, together with Paper, which has 25 million customers, the corporate says the apps will dwell on with “increased investment and support.”

WIRED spoke to FiftyThree cofounder and CEO Georg Petschnigg about why he offered FiftyThree, the largest modifications he’s noticed within the app financial system over the previous a number of years, and why he and his crew ignored the phrases of Steve Jobs and made a stylus anyway. The interview has been condensed for size.

WIRED: Talk about why you offered FiftyThree. How lengthy have you ever been in acquisition talks for?

Georg Petschnigg: We’d been in one another’s orbits for a very long time, as a result of Troy Carter and Suzy Ryoo are shared traders and advisors. But then the conversations began in earnest just a few months after we launched Paste, our crew collaboration product [in November 2017].

I went on a really, very lengthy stroll with Gordon [Willoughby], their CEO, in New York. We walked from first the East Side to West Side, after which the West Side all the best way over DUMBO. We crossed Manhattan a number of occasions. Then just a few days later, I met with cofounding shareholder Damian [Bradfield] in London. And it was very clear that this was meant to occur.

They have this distinctive enterprise mannequin the place they’re capable of provide a free, ad-supported model and a subscription model, and what’s distinctive about their free model is that they do that by respecting individuals’s privateness and their information. And on the identical time we have been increasing our Paste app on the desktop, and that’s the place WeSwitch has a really robust enterprise and a way more lively consumer base.

WIRED: Had you been speaking to another corporations about acquisition?

GP: Over the final seven years? Oh, jeez. (Laughs.) There have been numerous talks in numerous kinds and totally different phases. But the factor that has all the time given us essentially the most pleasure is determining learn how to put expertise in service for creativity, and it turns on the market are lots of people who say they supply these companies, and lots of people who actually imagine in it and do it daily. We felt that was the case right here.

WIRED: Let’s return to the start if you first began FiftyThree. What was your objective then, and the way did that replicate what apps and the App Store have been like at that time limit time?

GP: When you take a look at the founding crew at FiftyThree, we got here from two very totally different components of Microsoft. One hand was engaged on productiveness instruments—Word, Powerpoint, Excel—primarily making individuals extra environment friendly, squeezing extra efficiency out of the mind. And the opposite hand you had of us from Xbox and loads of leisure merchandise, guaranteeing that folks went again to their leisure time. And someway, you’re form of losing individuals’s time on one hand, and then again you’re making them a greater, sooner cog within the machine. Something concerning the human expertise was misplaced between these two.

‘it wasn’t till Cambridge Analytica that I might say customers actually began turning into extra conscious of what’s occurring if you use free software program.’

Georg Petschnigg, FiftyThree

And then when iPad launched, it wasn’t clear what iPad was going to be for. Maybe it was going to be the next-generation journal, with publishers creating new journal codecs. Maybe it was going to be the following large video service. People actually didn’t know. When we checked out it, we clearly noticed the iPad for creativity. That result in the Paper app, the place you may take the concepts in your head and rapidly translate them by way of your fingertips into ink strokes. It actually modified individuals’s notion of the iPad, however for us, it additionally put FiftyThree on the map.

The subsequent step for us then, which actually began in 2012, was to assume by means of the stylus as a software. That ended up resulting in the event of Pencil.

WIRED: What strikes me is that it sounds such as you’re saying that transition to {hardware} was a fairly pure factor. But on the identical time {hardware} is basically laborious, particularly within the startup world if you happen to don’t have the provision chain or product administration experience. So what was it that made you say, let’s make {hardware}?

GP: Yes, {hardware} is difficult however if you take a look at our founding {hardware} crew…I imply John Ikeda was a part of the event crew that created the unique Xbox 360 controller; our head of engineering led engineering at Sonos; our product supervisor who was operating this system ran the provision chain for Sonos as properly. So in a approach, sure, {hardware} is difficult and I completely wouldn’t do this if you happen to didn’t have a fantastic community and crew. But in our case, many individuals at FiftyThree had reached ranges of their careers the place they have been comfy with it. So it wasn’t, ‘Can we build the product?’ however as a substitute, ‘Are we building the right product?’

WIRED: How many Pencils did you promote? Was it worthwhile for FiftyThree?

GP: Oh yeah. This was additionally the very uncommon half: It was a worthwhile {hardware} program. I don’t assume we ever disclosed what number of we offered.

WIRED: So what’s attention-grabbing is that your app Paper was, from the start, thought-about to be an Apple darling. And then Apple got here out with one thing known as…Pencil. What was that second like for you and your crew?

GP: That was…We…(lengthy pause)…Look, once we have been out beginning FiftyThree in 2011, I can’t inform you the quantity of people that advised us that proverbial Steve Jobs story about styluses. People would simply inform me time and again, ‘A stylus is bad; don’t do it.’

What our crew actually believed is that we needed to develop new expertise that allowed us to maneuver creativity ahead on gadgets. Today, if you take a look at the stylus panorama, it’s clear what a deep affect Pencil—particularly the design of Pencil—had. Stylii as we speak are buttonless, they’ve a tremendous tip to put in writing, they’ve a aspect to shade, they emphasize expressiveness and creation. The design language of that was created by means of Pencil. [Writer’s note: FiftyThree discontinued its hardware business at the end of 2016.]

WIRED: Your software program additionally advanced together with the App Store. At first your app was free; that was perhaps a part of the idea then, throughout App 1.0, that issues could be free. And you then began providing one thing extra superior as a subscription, which looks as if it was hitting this curve of app makers attempting to monetize what they have been doing and never in spammy, gross methods. So discuss slightly bit about that evolution of software program.

GP: When we first launched Paper with in-app purchases, that was phenomenal. As somebody coming from the world of shrink-wrapped software program gross sales, very massive software program gross sales, the concept that you may promote an in-app buy or productiveness software and solely promote as a lot software program as individuals wanted was massively interesting. That labored very properly initially. The solely problem is that you simply rapidly understand that the primary model of your software program is the most affordable to develop. Software, particularly that’s utilized by hundreds of thousands of individuals, the assist and ongoing upkeep is far more costly than the preliminary improvement.

What muddled the image over time, although, is definitely the introduction of free software program that’s financed by the sale of information. And it wasn’t till Cambridge Analytica that I might say customers actually began turning into extra conscious of what’s occurring if you use free software program. Like, one thing is really being offered. You are being focused. And that’s occurring as a result of persons are promoting interpretations or analyses on high of your information. And it’s not simply Facebook. But that did result in considerably of a warped value perspective on how a lot software program must value.

So when Apple began that shift to software program subscriptions, it was a very necessary and really large shift. But the patron understanding of, ‘How many subscriptions should I have?’, or ‘Why should I buy a subscription?’ and ‘How does that work?’ I believe that can take just a few extra years for it to actually take maintain.

WIRED: Would you say that subscriptions have been profitable for you?

GP: Yes, they’ve been.

WIRED: So one of many issues I’m listening to you say is Paper is a worthwhile program, Pencil was worthwhile for you…is FiftyThree worthwhile at this time limit?

GP: Well, FiftyThree as an organization now not exists, however, WeSwitch is a worthwhile firm. FiftyThree was not worthwhile on the time of the acquisition.1

WIRED: Why promote?

GP: In our case it’s as a result of we needed to be half of a bigger providing, and from a model and tradition perspective, and a enterprise perspective, it was a fantastic match.

WIRED: What would you say has been the largest change you’ve seen within the app financial system over the previous seven years?

GP: There have been so many issues. One factor is, iPad Pro and the introduction of Apple Pencil has remodeled that computing expertise.

There’s additionally that channel fatigue and other people not wanting to put in new apps, and I believe persons are having a way more mature and wholesome relationship, or not less than, the beginnings of a way more wholesome relationship with expertise the place we’re all realizing how a lot it may distract you. I don’t assume it’s stunning that essentially the most profitable functions proper now are meditation functions.

Also, our relationship with information is altering. The enterprise economics round subscription fashions are nonetheless forming.

Another factor that’s modified is that folks have grow to be such nice photographers. To me that’s type of unimaginable. Where we’re as we speak, wanting on the visible fluency individuals have, and the way they’ve gotten there by means of expertise, that’s been an unimaginable shift. So yeah, seven years of working by means of and across the App Store, it’s been fairly the journey.

WIRED: So the very first thing you talked about simply now’s iPad Pro and the introduction of Pencil. I’m simply so curious as to how your crew reacted to that. Did Apple name and say, ‘Hey, we’re making a Pencil!’ I imply actually, what’s the story behind that?

GP: What I can inform you proper now’s that it had a fabric impact on our enterprise. But not a materially optimistic impact, let’s put it that approach.

1Correction: An earlier model of this text quoted Petschnigg as saying, “We transferred as a profitable company.” The appropriate assertion is, “WeTransfer is a profitable company.”


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