Since google acquired android in 2005, the code is no longer open source.

Lawee made the remark at a panel at the 16th annual Stanford Accel Symposium, a conference organized by the university and venture-capital firm Accel Partners.

Lawee said that when Google buys a company, it’s up to the entrepreneurs behind that company to make it a success. Google quietly acquired Android in 2005 for an undisclosed price which has been estimated at $50 million. (Google’s annual report for 2005 says the company spent a total of $130 million on acquisitions that year.)

“I saw this guy in my building for two years, walking his dog, and I was like, I hope this guy does something,” said Lawee of Rubin. Despite Lawee’s initial skepticism, Rubin stayed at Google to champion the development of Android as an open-source operating system. It is now one of the top platforms for high-end smartphones, competing successfully with Apple’s iPhone.

Rubin’s quiet efforts paid off, and Lawee can now hold up Android as an example of a successful deal because of it.

“It’s obvious when the deal doesn’t work out, because the people leave,” said Lawee. “That’s the key metric: Is the technology being used? A lot of it depends on the perseverance of the team coming in.”

Although Google does not charge for the operating system itself, the company profits from mobile ads displayed on Android phones. In a recent earnings call with investors, Google executives said mobile ads are now a $1 billion annual business for Google.

Of course, much of that business comes from AdMob, a mobile-advertising startup whose acquisition Google completed earlier this year. Google paid $750 million for AdMob, though, so the return on investment may not have been as strong as for the relatively small amount it spent on Android.

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Rubin’s startup, Android, was in trouble, he explained. Rubin didn’t like asking for money again, but the situation was dire.

Android, which was creating mobile software for phones, was out of cash, and other investors weren’t biting.

Perlman agreed to wire some funds as soon as possible.

“Maybe a little sooner would be better,” Rubin said nervously. Rubin had already missed payments on Android’s office space, and the landlord was threatening to evict him.

Perlman went to the bank and withdrew $10,000 in $100 bills and handed them to Rubin. The next day, he wired over an undisclosed amount of money to provide the seed funding for Android.

“I did it because I believed in the thing, and I wanted to help Andy,” Perlman told Business Insider.

With the new cash, Rubin got Android back on track. He secured more funding and moved the team into a larger office in Palo Alto, California, a technology hub on the West Coast.

Today, Android powers about 85% of all smartphones globally, while the iPhone accounts for only 11%. It’s making a push into wristwatches, cars, and TVs. It’s not hard to envision a time when Android will be in every single device from stove and thermostats to toothbrushes.

To grab 85% of the smartphone market, Rubin had to beat the two most valuable, and profitable, technology companies of their era: Microsoft and Apple. He had to fight entrenched wireless carriers. He had to get phone makers to buy into its radical vision.

Rubin didn’t do it alone. He got help from investors such as Perlman and big support from Google.

Based on interviews that Business Insider conducted with several sources who were there at the beginning, the following is the story of how Android came to be.

An impossible idea

Over the course of his 29-year career in Silicon Valley, Andy Rubin has become known as a technical genius, a skillful businessman, and a dynamic leader.

Above all, Rubin is an entrepreneur who loves to create things, whether it’s writing code or building robots.

His knack for engineering was evident in Building 44, where Android lives on Google’s campus. There, Rubin spent his spare time programming a gigantic robotic arm to make him coffee each time he sent it a text message. The machine was on the second floor of Building 44, and it was large enough to lift cars, a former Googler says.

Another one of Rubin's projects involved flying a massive remote-controlled helicopter on Google’s lawn.

"It's this huge $5,000 helicopter — he's trying to pilot it and it takes off and flips over upside down," said Sumit Agarwal, a former head of mobile product management at Google. "And it doesn't explode, but you've got this helicopter that's literally ripped itself apart out on the lawn in front of Building 44."

Long before Rubin had the luxury of tinkering with enormous robots at Google, he had to prove he could execute his crazy ideas. One of his wildest was building an open operating system for phones in the early 2000s.

In the early 2000s, carriers controlled everything from the way a phone was marketed to how much it would cost. Carriers called the shots back then, and they were determined to keep it that way. They didn’t want any company — large or small — infringing on their profits, which is why most of the tech industry thought an idea like Rubin’s was impossible, say sources who worked at Google in Android’s early days.

While the carrier system was closed and siloed, Android is open source. The term “open source” means anyone can take the original source code that makes up Android and use it on their gadgets free. Anyone can build on that code or modify it.

Rubin initially tried to design Android for cameras but couldn’t get traction from investors. So he teamed up with Chris White, who previously designed the interface for WebTV, and Nick Sears, a former T-Mobile marketing executive Rubin had worked with when launching the Danger Hiptop, or T-Mobile Sidekick as it was widely known. Rubin explained his idea to create an open-source operating system for phones. Rich Miner, another Android cofounder who leads the East Coast investment team at Google Ventures, joined the group in February 2004.

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