Startups

Apple Alumni Don't Fall Far from the Tree


After selling mobile ad startup Quattro Wireless to Apple (AAPL) in late 2009, Lars Albright took a job helping the iPhone maker work with its community of mobile app developers. He noticed that programmers were having trouble keeping users glued to their apps. Voilà: business opportunity. This spring he left Apple to start Session M. He won't elaborate other than that the startup has raised $6.5 million in venture capital and will help app makers build customer loyalty. Albright is one of a string of Apple managers and engineers who've quit to get a piece of the mobile app boom, a gold rush they helped create. Startups including photo-sharing app Color, tablet magazine Flipboard, and iPad textbook maker Inkling were all founded by Apple departees.

These alumni are using their Apple experience and relationships as a competitive edge. While building an iPad app for fitness trainers called FitView, former Apple engineers Calin Pacurariu and Rainer Brodersen ran into a bug. Unable to quickly fix the problem, Pacurariu sent a note to a former colleague. "Five seconds later, he said, 'Look at this, this, and this,' and sure enough, it was one of those three things," Pacurariu says.

Apple hasn't had a major exodus since the 1990s. Back then, "there was a pretty large list of people who left to go to companies like Adobe (ADBE) [and] Logitech (LOGI), and people who were involved building the first generation of the Web," says Samir Arora, who left Apple in 1992 and went on to found Internet businesses NetObjects and Glam Media.

The stock's performance of late has given plenty of employees the means to do their own thing. And this time the departures may help Apple. "We have left Apple, but we ultimately still work for them because we're giving them 30 percent of everything we do on the App Store," says Mike Matas, who co-founded e-book company Push Pop Press in 2010 after four years at Apple. His company's first title was released on the App Store in April for $5. Apple takes about $1.50 of each sale. "Whether we're inside the company or outside, in a lot of ways the bottom line doesn't change for Apple," says Matas. Apple declined to comment.

Departees may also help their former employer break into new markets. Chuck Goldman ran Apple's technical outreach program to business customers until 2009. His Boston company, Apperian, charges Cisco (CSCO), Progressive (PGR), and others up to $20,000 a month to build and manage iPhone and iPad apps for use by employees. An Apple rep accompanies Goldman on sales presentations to help him make the pitch. "You get more love from Apple when you help them," he says. "It's a quid pro quo relationship."

The bottom line: Apple's last exodus of talent was in the 1990s. This time, people are leaving to make apps—which may help their former employer.

Satariano is a reporter for Bloomberg News in San Francisco.
MacMillan is a reporter for Bloomberg News and Bloomberg Businessweek in San Francisco.

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