10 Years of Acquired (with Michael Lewis)

Ben Gilbert 0:00 Happy ten years!

David Rosenthal 0:01 Happy ten-year anniversary, Ben.

Ben Gilbert 0:03 It's crazy it's been ten years.

David Rosenthal 0:04 I know. Here we are. I brought you down here to Silicon Valley to, uh, record our ten-year anniversary holiday special here. I wanted a special place.

Ben Gilbert 0:13 Yeah, what are we doing?

David Rosenthal 0:14 Home of, uh-

Ben Gilbert 0:14 You keep, like, teeing up-

David Rosenthal 0:15 Yeah

Ben Gilbert 0:16 ... "Oh, just come down. Oh, we'll just record it here," and, like, clearly, we're not at your house.

David Rosenthal 0:21 I was actually thinking, uh, we should try and find the Silicon Valley house, the Ehrlich Bachman Aviato. [laughing]

Ben Gilbert 0:27 It's Aviato.

David Rosenthal 0:28 Aviato! Aviato. No, the reason I brought you down here is I booked us a very special place to record. It's actually right over here.

Ben Gilbert 0:39 It's a house. Is this the Google house?

David Rosenthal 0:43 It's the house.

Ben Gilbert 0:44 The- where they had their first office in the garage?

David Rosenthal 0:47 This is Google's first office right here. They gave it to us for the day.

Ben Gilbert 0:50 Like, we can do our holiday special in it?

David Rosenthal 0:52 Come on in. [upbeat music]

Speaker 1:03 Who got the truth? Is it you, is it you, is it you? Who got the truth now? Is it you, is it you, is it you? Sit me down. Say it straight. Another story on the way.

Speaker 1:18 Who got the truth?

Ben Gilbert 1:20 Welcome to the Fall 2025 season finale of Acquired, the podcast about great companies and the stories and playbooks behind them. I'm Ben Gilbert.

David Rosenthal 1:29 I'm David Rosenthal.

Ben Gilbert 1:30 And we are your hosts. Well, listeners, today we're gonna do something very different than our holiday specials of years past. We've received a bunch of requests over the years to do an Acquired episode on Acquired itself, and to unpack why Acquired worked when 99% of podcasts do not. But it's always felt a little bit strange to me, and we've always shied away from analyzing our own company.

David Rosenthal 1:54 Yep. But then this year, we turned 10 years old and thought, "Well, maybe it's time for something," [laughing]

Ben Gilbert 2:00 [laughing]

David Rosenthal 2:01 At least a sort of, uh, pause and reflection, you know, to shout out the Coca-Cola episode-

Ben Gilbert 2:06 Oh!

David Rosenthal 2:06 ... on our journey to this point and why Acquired has worked.

Ben Gilbert 2:10 And so we thought, "Well, if we're gonna do something, we should bring someone in to do it with us," and we'd want someone who is great at dissecting the mechanics behind teams or companies, someone who distills complexity into simplicity, someone who himself knows how to tell a great story.

David Rosenthal 2:27 And there was really only one choice: Michael Lewis, author of Moneyball, Liar's Poker, The Blind Side, The Undoing Project, going infinite on and on and on, and of course, host of his own podcast, Against the Rules. And Ben, you and I have looked up to Michael forever, so this was really special.

Ben Gilbert 2:46 Yes, and then, of course, there's the venue. We thought it'd be a fitting way to cap off the year of our three-part Google series to record in the literal garage where that nearly $4 trillion company got started.

David Rosenthal 2:58 Yes, indeed. Well, listeners, if you wanna know every time an episode drops, vote on future episode topics, and get corrections on past episodes, check out our email list at acquired.fm/email.

Ben Gilbert 3:09 And that email list just got a whole lot better with our first overhaul in five years. So you'll now get episode summaries, our big takeaways, and exclusive photos from our research process. That's acquired.fm/email. Chat about this episode with us and the whole Acquired community in Slack, acquired.fm/slack. And if you want more Acquired, check out our interview show, ACQ2. Our last episode was with Andrew Ross Sorkin, founder of the New York Times DealBook, host of CNBC Squawk Box, and author of 1929. That's ACQ2 in any podcast player. And before we dive in, we wanna briefly thank our presenting partner, JP Morgan Payments.

David Rosenthal 3:50 Yes, just like how we say every company has a story, every company's story is powered by payments, and JP Morgan Payments is a part of so many of their journeys, from seed to IPO and beyond.

Ben Gilbert 4:00 So with that, this show is not investment advice. David and I may have investments in the companies we discuss, and this show is for informational and entertainment purposes only.

David Rosenthal 4:08 With that, onto our conversation with Michael Lewis.

David Rosenthal 4:11 Well, Michael, thank you for joining us.

Michael Lewis 4:13 Total pleasure.

David Rosenthal 4:14 We have a little something, since this is our ten-year anniversary, that we're celebrating, that we need to do before we start.

Michael Lewis 4:21 Okay.

David Rosenthal 4:22 So you went to Princeton. I went to Princeton.

Michael Lewis 4:24 Yep.

David Rosenthal 4:25 My senior thesis would become impactful for Acquired. [laughing] Um, I was a French literature major.

Michael Lewis 4:31 Mm.

David Rosenthal 4:31 I wrote my thesis on the history of Dom Pérignon-

Michael Lewis 4:34 Ha!

David Rosenthal 4:35 ... and the marketing history of Champagne. [laughing]

Ben Gilbert 4:37 Very serious college student, David Rosenthal. [laughing]

David Rosenthal 4:39 Very serious college student.

Michael Lewis 4:40 They, they, let you- [laughing]

David Rosenthal 4:40 A little different than yours.

Michael Lewis 4:41 They let you do that? [laughing]

David Rosenthal 4:42 They, they, uh, somehow-

Michael Lewis 4:44 [laughing]

David Rosenthal 4:44 ... I conned the French department-

Michael Lewis 4:47 Okay

David Rosenthal 4:47 ... into letting me do this.

Michael Lewis 4:48 [laughing]

David Rosenthal 4:48 And, what, probably 12, 13 years later, we made our LVMH episode, and, uh, it was a big moment for Acquired. Moët & Chandon has just released the 2015 vintage-

Michael Lewis 5:02 Vintage

David Rosenthal 5:02 ... of Dom Pérignon. 2015 is the year we started.

Michael Lewis 5:05 So I thought you were gonna say, uh, that the, the, the effect that the Princeton thesis had on, on Acquired. I didn't think it was as specific as that. But I feel like when I'm listening to your episodes, I'm listening to someone who's worked for up to a thesis, that, that, that it is thesis-like immersion in a subject.

David Rosenthal 5:23 Well, I can tell you, our episodes are much better than my actual thesis was. [laughing]

Ben Gilbert 5:27 But, but that is exactly how it feels.

David Rosenthal 5:28 But that, that is the process we go through-

Michael Lewis 5:30 Yeah

David Rosenthal 5:30 ... is like writing a senior thesis.

Ben Gilbert 5:30 And cramming for finals the night before. There's a lot of, like, academic feelings that happen as we get close to recording day.

Michael Lewis 5:37 So, um, it's your show, and I don't wanna take it over, but I, but I wanted, I wanted to start by saying that I didn't discover it until this year. Uh, I disco- in July. Uh, uh, I was at Google Camp, which is kind of a good way to discover Acquired. Uh, and, uh-

David Rosenthal 5:53 We, we should talk about where we are now, too.

Michael Lewis 5:55 And we're- we are sitting in the Google, uh, garage, where-

David Rosenthal 5:59 Yeah.

Ben Gilbert 5:59 Yes.

Michael Lewis 5:59 I mean, I don't know exactly-

David Rosenthal 6:00 This was-

Michael Lewis 6:00 I'm not sure exactly what happened in the Google garage. [laughing]

Ben Gilbert 6:02 So this was the office.

Michael Lewis 6:03 It's a nice, it's a nice idea.

Ben Gilbert 6:04 That like-

Michael Lewis 6:05 Yeah

Ben Gilbert 6:05 ... literally, uh, S- Susan Wojcicki lived here.

Michael Lewis 6:08 Uh-huh.

Ben Gilbert 6:08 She'd, I think, just bought the house.

David Rosenthal 6:08 This was her house. She had just bought the house.

Ben Gilbert 6:10 And was looking to sublet part of it?

David Rosenthal 6:14 Yeah.

Ben Gilbert 6:14 Like, just make s- some extra money on other people using the house.

David Rosenthal 6:17 Uh, and posted a bulletin notice on the Stanford campus-... that there was space available here.

Ben Gilbert 6:22 And so Larry and Sergey's first desks when they got kicked out of-

David Rosenthal 6:26 Stanford

Ben Gilbert 6:27 ... Stanford's offices-

David Rosenthal 6:28 Were

Ben Gilbert 6:28 -were right there.

David Rosenthal 6:29 Right here.

Michael Lewis 6:29 Ah! All right.

Ben Gilbert 6:30 I, I actually think this actual door desk sawhorse is the one that they were using, 'cause Google pulled it out of storage for us.

Michael Lewis 6:38 So I'm at this camp with a lot of kind of well-known people, and a prominent CEO, uh-

Ben Gilbert 6:44 Thank you

Michael Lewis 6:44 ... says to me-

David Rosenthal 6:45 You're welcome

Michael Lewis 6:45 ... "You ought to listen- uh, have you listened to Acquired?" And I didn't know what he was talking about. And I went and listened... I can't remember what I listened to first. I think it might have been the Morris Chang, uh, e- episode, but the- I had about eight different reactions to it, all positive. I- and I thought, "This is am- it's kind of amazing, what you all are doing." So I- then I- I was... From July until now, I've listened to maybe 10 of the episodes, which is a lot of a- lot of hours of listening time.

Ben Gilbert 7:09 That it is.

David Rosenthal 7:09 Yeah.

Michael Lewis 7:10 The first thing that struck me, could not believe you were getting away with a, with a four-hour podcast. A- and, um, and I couldn't believe that even after four hours, I was still kind of looking for even more. That, that you, you created, you created the environment with the podcast that I try to create with a book. You grab the listener, like I try to grab a reader, and get them to the state of mind where they'll let you take them anywhere, uh, and teach them about stuff that they don't even know they wanna learn about. I think we're... If we're gonna- we're doing this as a 10th anniversary sort of celebration.

Ben Gilbert 7:43 Yeah. Please, yeah.

Michael Lewis 7:44 I'm honored, and I feel like, kind of like I'm a little out of my depth here, because I'm just a new listener and I haven't listened to all of it. I'm hardly the world's authority on your, on your podcast, and I didn't prepare at all, except to listen to it. [laughing] Except I did one thing, and that was I went back and listened to your very first episode.

Ben Gilbert 8:01 Oh, God.

David Rosenthal 8:02 Oh, wow. Oh, wow. [laughing]

Michael Lewis 8:04 Just to compare. [laughing] And-

David Rosenthal 8:06 Be kind, please. [laughing]

Michael Lewis 8:06 It is shocking how different it is from y- where, where you started from where you have... You probably haven't ended up, but where you are now. So I'm gonna start by this 10-year journey. I think I can see some things you've learned.

David Rosenthal 8:22 Oh, all right.

Michael Lewis 8:23 But I, I wanna know what you think you've learned.

Michael Lewis 8:25 Give me... Let's do the 10 lessons from the 10-year, the 10-year journey.

Ben Gilbert 8:28 Do you have yours, like, crystallized? 'Cause I don't wanna taint you-

Michael Lewis 8:31 No, no, no, no, no

Ben Gilbert 8:31 ... with what you think first.

Michael Lewis 8:31 No, I do have... It, it's actually one big thing. Uh, and, um, and I'll... And if you, if you say it, I'll acknowledge that you, you know, sunk my battleship, and I have nothing to add. [laughing]

Ben Gilbert 8:42 [laughing]

David Rosenthal 8:42 [laughing]

Michael Lewis 8:42 Uh, but it's, it's- I'm, I'm, I'm curious what you think. There's no way that first thing you did was ever going to become a hit. [laughing]

Ben Gilbert 8:51 [laughing]

David Rosenthal 8:51 Well, it's... I'm, I'm curious if you think... W- I've always believed something that's always been there from the beginning is the magic between me and Ben.

Michael Lewis 8:59 That's interesting to me. You all met at a, like, a Passover Seder?

David Rosenthal 9:03 Yes.

Ben Gilbert 9:03 Yes.

Michael Lewis 9:04 And you're colleague- you end up being colleagues at a VC firm?

David Rosenthal 9:07 Yep.

Ben Gilbert 9:07 Yep.

Michael Lewis 9:07 I'll come back to that. I wanna come- I wanna talk a little bit about you as investors, but we'll come back to that-

David Rosenthal 9:11 [laughing] Oh, boy

Michael Lewis 9:11 ... and how that's different from being a podcaster. But, at what point do you decide that, "Oh, there's a kind of odd chemistry here?"

Ben Gilbert 9:19 We really just wanted to spend more time together. It was the- one of these things where, uh-

Michael Lewis 9:24 You're both straight?

Ben Gilbert 9:25 Yeah.

David Rosenthal 9:25 Yeah, yes. [laughing]

Michael Lewis 9:26 Okay, this is a-

David Rosenthal 9:26 We're both married.

Michael Lewis 9:27 It's not a ro- it's not a romantic relationship.

Ben Gilbert 9:28 No.

David Rosenthal 9:29 Uh, we, we like to say that we each have two spouses.

Ben Gilbert 9:31 Yeah.

David Rosenthal 9:31 We have our actual romantic spouses that we have families with, and then we have each, each other. [laughing]

Ben Gilbert 9:35 But, like, David and I shared a bank account before my wife and I shared a bank account.

Michael Lewis 9:39 So d- are either of your spouses threatened by the relationship?

David Rosenthal 9:43 No. [laughing]

Michael Lewis 9:44 [laughing]

Ben Gilbert 9:44 Uh...

Michael Lewis 9:45 [laughing]

Ben Gilbert 9:45 From a- just from a sheer time perspective-

Michael Lewis 9:47 Yeah, yeah, I mean, a little bit.

David Rosenthal 9:48 My spouse loves it, because she doesn't actually wanna spend that much time with me. [laughing]

Michael Lewis 9:52 [laughing]

David Rosenthal 9:52 She likes that, like- you know, I used to, I used to... All the stuff we do on Acquired, I used to just talk at her, and she wasn't interested. [laughing]

Ben Gilbert 9:58 That is true.

David Rosenthal 9:59 And now-

Ben Gilbert 9:59 My wife loves that it's out there

David Rosenthal 10:00 ... she loves it, because I get to talk to, you know-

Ben Gilbert 10:02 Yeah

David Rosenthal 10:02 ... David about it.

Ben Gilbert 10:02 Although she gets the rough draft. Like, my wife won't listen to episodes, because she's like, "I've, I've already heard four versions of the episode, and unfortunately, I heard, like, four worse versions. And because I endure that and give you feedback-

David Rosenthal 10:13 Right

Ben Gilbert 10:13 ... the listener actually gets-

David Rosenthal 10:14 Yeah

Ben Gilbert 10:14 ... the better version."

Michael Lewis 10:15 Right. So you, so you meet, you meet, and there's a chemistry.

David Rosenthal 10:18 Yeah.

Michael Lewis 10:19 Explain that chemistry. Like, what, what is it that you, when you... What is it that makes you excited to see each other?

Ben Gilbert 10:25 David knew all the Apple rumors in real time, just like I did.

David Rosenthal 10:29 Yep.

Ben Gilbert 10:30 Uh, you had read all the latest Stratechery posts.

David Rosenthal 10:32 We bonded over Ben Thompson originally.

Ben Gilbert 10:34 And I think, y- you can tell me if this is mutual, but I looked up to you 'cause you were doing a thing that was mysterious to me, which was venture capital.

David Rosenthal 10:45 Mm-hmm.

Ben Gilbert 10:45 I was a software engineer, and I got hired to work at a venture firm to do some incubation work, but I didn't know anything about, like, the real job of venture capital. And here's David, someone who's just a few year old- years older than me, like, doing that thing, but kind of in my, like, peer age group.

David Rosenthal 10:59 Mm.

Ben Gilbert 11:00 And I could, I could, like, lean over and be like, "What, what are they talking about?"

David Rosenthal 11:03 Well, it's- I f- uh, I kind of felt like a fraud in a lot of ways, as if I... Like, I, I repressed this deep down. Like, uh, but if I'm honest with myself, I think I felt like a fraud as a VC, because I'd never... But I d- I went, I went to Princeton. I was a French literature major. I worked on Wall Street. I worked briefly at The Wall Street Journal, and then I became a venture capitalist. [laughing] I had no qualification to-

Michael Lewis 11:22 Have you ever coded a- coded or you ever done anything like that?

David Rosenthal 11:24 I mean, I took some CS classes-

Michael Lewis 11:25 All right

David Rosenthal 11:26 ... in college, but, like, I'd never built anything. [laughing] And so I was like-

Ben Gilbert 11:29 You were a tech enthusiast

David Rosenthal 11:30 ... and Ben had built all these things. Like, you built the, the This For That website. Like, you, you built so many products. You had products that, you know, millions of people use, and I was like, "I'm just masquerading here."

Michael Lewis 11:40 So you could see-

David Rosenthal 11:41 I hang out with Ben, and like-

Michael Lewis 11:41 ... that Ben knew stuff-

David Rosenthal 11:43 Yeah, yeah

Michael Lewis 11:43 ... that was exciting for you to, to know about.

David Rosenthal 11:45 Yes.

Michael Lewis 11:46 Did you feel that David knew stuff?

Ben Gilbert 11:48 Absolutely.

Michael Lewis 11:48 What kind of stuff?

Ben Gilbert 11:50 Business.

Michael Lewis 11:52 Really? It wasn't French literature.

Ben Gilbert 11:53 Just generally.

Michael Lewis 11:53 It wasn't-

Ben Gilbert 11:54 No, no, no.

David Rosenthal 11:55 [laughing]

Ben Gilbert 11:55 I, I only found out years into doing Acquired-

David Rosenthal 11:56 Yeah

Ben Gilbert 11:56 ... he was a French lit major.

Michael Lewis 11:58 Yeah. Huh. But that's important, that French l- that, that background.

David Rosenthal 12:01 It ended up becoming huge for him.

Michael Lewis 12:02 This kind of broad curiosity about things other than business and technology, I f- I hear it in your program.

Ben Gilbert 12:09 Mm.

Michael Lewis 12:10 I hear it in your podcast. So what I'm thinking of in my head is Kahneman and Tversky.

David Rosenthal 12:13 Mm.

Michael Lewis 12:14 Uh, that... I wrote a book called The Undoing Project.

Ben Gilbert 12:16 Of course. Yeah, of course. Yeah.

Michael Lewis 12:16 And, and, and you could see-

Ben Gilbert 12:17 It seemed like, uh-

Michael Lewis 12:18 ... if you could see two people... And then then it got me thinking about collaboration, and the- I've had exciting collaborations with people. And the feeling I get is-... this person is making, is bringing out a better version of me, which is why I asked if your spouses were threatened, because the c- because Kahneman and Tversky's spouses were- threatened is too strong a word, but they were very aware that the relationship that was the most important in their lives was with, not with their spouse-

David Rosenthal 12:44 Hmm.

Ben Gilbert 12:44 Hmm.

Michael Lewis 12:44 But with, with the-

David Rosenthal 12:46 I got the sense from The Undoing Project that, um, Kahneman and Tversky's relationship was very intense.

Michael Lewis 12:51 Mm-hmm.

David Rosenthal 12:52 I mean, I don't know that I would describe our relationship as-

Ben Gilbert 12:54 And treacherous, and tumultuous, and-

Michael Lewis 12:55 You know, it was-

Ben Gilbert 12:56 Argumentative.

Michael Lewis 12:56 Yes, it was.

David Rosenthal 12:57 Yes.

Michael Lewis 12:58 Well, yeah.

Ben Gilbert 12:58 And competitive.

Michael Lewis 12:59 Compe- it was not competitive on what... Danny Kahneman felt, um, was, was always at, felt at risk of being dismissed, thought the lesser partner.

David Rosenthal 13:09 Hmm.

Michael Lewis 13:09 Um, there, there was a status difference between the two of them, right going into it.

Ben Gilbert 13:13 Hmm.

Michael Lewis 13:13 Uh, everyone in the world thought Amos was the smartest person they'd ever met.

David Rosenthal 13:16 Hmm.

Michael Lewis 13:17 You two didn't have that, ever have any of that?

David Rosenthal 13:20 Not for me.

Michael Lewis 13:21 But you said you felt like a fraud.

Ben Gilbert 13:22 I think I felt lesser. Like, uh, there were a lot of things when we started doing Acquired, where we were doing this, like, business analysis podcast-

Michael Lewis 13:29 Hmm

Ben Gilbert 13:29 ... but I didn't know finance.

David Rosenthal 13:30 Hmm.

Ben Gilbert 13:31 Like, it was, it was accounting or-

David Rosenthal 13:31 Which is funny, because you've become more, you know, the keeper of the analysis on Acquired.

Ben Gilbert 13:36 Yeah.

David Rosenthal 13:36 And I'm more the keeper of the story. [chuckles]

Ben Gilbert 13:38 It's different, though, than a difference in status. I don't feel that you or I have ever felt we had a difference in status. And f- and the number of, like, fights we've had, or, or real tension we've had, is, like, two, three-

David Rosenthal 13:50 Yeah

Ben Gilbert 13:50 ... ever, in 10 years?

David Rosenthal 13:52 Hmm.

Ben Gilbert 13:52 I mean, it's, it's weirdly-

Michael Lewis 13:53 Let's come back to this

Ben Gilbert 13:54 ... none. Yeah.

Michael Lewis 13:55 Let's, and let's get to the lessons. What have you learned?

Ben Gilbert 13:57 Okay.

David Rosenthal 13:58 We started thinking about what have we learned from the companies we've covered, that we've then applied-

Michael Lewis 14:02 Yep

David Rosenthal 14:03 ... to Acquired?

Michael Lewis 14:03 All right.

Ben Gilbert 14:04 In particular, it's, it- Acquired has clearly worked. W- why? And does that why have something to do with the fact that we study the world's best companies? Like, is there some osmosis that happens from the subject matter bleeding into the property itself?

Michael Lewis 14:21 And?

Ben Gilbert 14:21 So that's our frame.

Michael Lewis 14:22 Okay, let's, let's go with that frame.

Ben Gilbert 14:25 Yes.

David Rosenthal 14:25 [laughs] So the one, the one I was gonna start with is the NFL. The product is scarce. You know, 162 baseball games-

Michael Lewis 14:34 Yeah

David Rosenthal 14:34 ... a year, it's called America's pastime. You, you pass a lot of time with it.

Michael Lewis 14:37 [laughs]

David Rosenthal 14:38 But with the NFL, because the product is scarce, and then they have very smartly cultivated that and engineered it to be more scarce, more of an event-driven sport, that's made all the difference. And like, to me, as I look at what... Like, what we do is insane [laughs] for the podcasting industry. Like, it's completely insane. We release, for the last three years, we've released 12 episodes.

Michael Lewis 15:03 12.

David Rosenthal 15:03 The next year, we're gonna do eight-

Michael Lewis 15:04 Yeah

David Rosenthal 15:04 ... eight episodes for the whole year.

Michael Lewis 15:05 Now, as a hobbyist podcaster, what I get told is you have to be on all the time.

David Rosenthal 15:10 Yep.

Michael Lewis 15:10 And I, I can't do it, and so I'm not gonna do it.

David Rosenthal 15:13 Podcasting is, like, your second or third thing that you do, right?

Michael Lewis 15:16 Correct.

David Rosenthal 15:16 And you make more episodes, I think, per year than we do.

Michael Lewis 15:18 That's correct.

David Rosenthal 15:19 Yeah.

Michael Lewis 15:19 But they're just, you know, the, the, it's... Except for the scripted ones, which I do throw myself into, it really is, I do no preparation, and it is a con- and I don't do, don't do very much of those. The scripted ones I, I do put time into. And, and, but I, it's, it's a different sort of thing than what you're doing. It tends to be a very narrow, little story that I'm telling. You, you didn't start out, though. I think-

David Rosenthal 15:40 We used to make 26 episodes a year, you know, uh-

Ben Gilbert 15:43 And they were 40 minutes long, to an hour 20.

Michael Lewis 15:46 Yeah. And so how do you go from that to realizing... And did you really learn it from the NFL, or did you just do it, and then it was like, "Oh, yeah"?

David Rosenthal 15:51 We were starting to do it, and then we covered the NFL, and we were like, "Aha! This is what we're doing." [laughs]

Ben Gilbert 15:55 Most of these things are actually, I think, are confirmation bias.

Michael Lewis 15:58 Yeah.

David Rosenthal 15:58 Yeah.

Ben Gilbert 15:58 We get some inkling that, like, we should continue to go in this direction. Like, my... In calling out Hermès, it's because I think quality and scarcity have become an important part of Acquired. And in some ways, we, like, learned that from Hermès, but we covered Hermès last year.

David Rosenthal 16:13 Yeah.

Ben Gilbert 16:13 I think we l- found our way to that probably four-ish years ago, maybe five years ago, where we used to feel like we were bad at podcasting because we couldn't make very many-

David Rosenthal 16:24 Mm

Ben Gilbert 16:24 ... and because we didn't have a whole production team, and we didn't have professional ad sales people, and we didn't have...

David Rosenthal 16:31 We weren't full-time for a long time.

Ben Gilbert 16:32 Yeah. And at some point, we kind of looked at each other and we were like, "Maybe if we just admit that we, we are heavily constrained, and then try to just lean into that constraint, i- in the way that Hermès leans into every single Birkin bag must be handmade by one artisan, and we're gonna build a business model around that." And it turns out to be a great business. We sort of thought every episode is gonna be entirely handcrafted by us, all the research, all the recording. We work with this amazing audio engineer, Steven, who does the, the, like, literal waveform editing. But, you know, we go in and in a transcript, highlight 1,000 cuts per episode. Like, it's this made-with-love product, and it turned out we could actually build a big platform and a good business out of something heavily

Ben Gilbert 17:18 constrained.

Michael Lewis 17:19 But that's not where you start.

Ben Gilbert 17:20 No.

David Rosenthal 17:21 No. No, no, not at all, not at all. [laughs]

Michael Lewis 17:23 So how did we start? So let's, just for people who don't know, where you start is, you're two guys who've met each other-

David Rosenthal 17:27 Yep

Michael Lewis 17:28 ... and, and a- got a crush on each, on each other.

David Rosenthal 17:30 Yeah, yeah!

Ben Gilbert 17:30 Yeah.

Michael Lewis 17:30 You're being- you love being with each other, and you, y- you're gonna... You get this idea that, "Oh, it'd be really cool to do a podcast on corporate acquisitions," that worked.

Ben Gilbert 17:39 [laughs] Yeah.

Michael Lewis 17:40 It worked.

David Rosenthal 17:41 Bad idea.

Michael Lewis 17:41 That... Well, it is an idea. I, I would argue-

David Rosenthal 17:44 It was a starting space

Michael Lewis 17:44 ... you could easily have started the opposite, the corporate acquisitions that didn't, and you'd have done much, you'd have had much more material.

Ben Gilbert 17:50 Which is what most press at the time was.

Michael Lewis 17:52 Right.

Ben Gilbert 17:52 It was, "Let's talk about how crappy this acquisition was."

David Rosenthal 17:54 Yeah.

Michael Lewis 17:54 So it's interesting to me that your first step, right from the start, is p- positive.

David Rosenthal 17:59 Yeah, yeah.

Michael Lewis 17:59 It's like what worked. Not what didn't work, it's what worked.

Ben Gilbert 18:03 That's 'cause we were VCs, and I was trying to build companies. I mean, the, the goal was create things that have enough value to get bought, and, or, or go public. And when people buy things, it's because they're working-

David Rosenthal 18:15 They're working, yeah

Ben Gilbert 18:15 ... so let's try to reverse engineer what works.

David Rosenthal 18:16 Yeah, understand why things worked.

Michael Lewis 18:18 Right. So that's a different starting spot from almost all journalism.

David Rosenthal 18:21 Yeah.

Michael Lewis 18:22 In fact, if most journalists started there, they'd be accused of hagiography, of-

David Rosenthal 18:28 Yes

Michael Lewis 18:28 ... that, but you, but you, because of where you, where you're coming from, and because you're thinking of this in very practical terms, like, "How, why did this work?" You do get away with it. It's just, that first episode, you're almost like different people.... But I'm gonna hold back on what I think you've learned. [laughing]

David Rosenthal 18:45 Okay.

Michael Lewis 18:45 'Cause I wanna see if you get to it.

David Rosenthal 18:46 [laughing] Okay.

Michael Lewis 18:46 So you, you've got two- what's the third episode that you have learned some- a lesson from?

Ben Gilbert 18:52 I think Berkshire, we learned so many things from. We did this three-part, uh, saga-

David Rosenthal 18:56 Mm. I didn't even think about that, on Berkshire Hathaway

Ben Gilbert 18:57 ... on Berkshire Hathaway.

David Rosenthal 18:58 Yeah, that's a good one.

Michael Lewis 18:58 God, I have not listened to it, and I am a big investor in Berkshire Hathaway.

David Rosenthal 19:02 Ah.

Ben Gilbert 19:02 Good for you.

David Rosenthal 19:03 Good for you.

Ben Gilbert 19:03 Congratulations.

Michael Lewis 19:04 Well, it has-

David Rosenthal 19:04 Since when?

Michael Lewis 19:05 I bought it right at, in the, in the middle of the financial crisis. Um-

David Rosenthal 19:09 [laughing] Oh, wow.

Michael Lewis 19:10 Because I thought-

David Rosenthal 19:11 Nice

Michael Lewis 19:11 ... I ha- I mean, I had done a take... I mean, it's not- this is a little, putting it a little strongly, but oddly, I had written a takedown of Warren Buffett on the cover of The New Republic magazine called The Temptation of Saint Warren. You can probably dig, dig it off, off of the wayback machine.

David Rosenthal 19:25 What was the thesis?

Michael Lewis 19:25 The thesis was that he may have started out being who he says he is, but that he's become this very different thing in the marketplace.

David Rosenthal 19:34 Mm.

Michael Lewis 19:34 His money's not like other people's money.

David Rosenthal 19:35 That's-

Michael Lewis 19:36 And you don't have a couple of things Warren Buffett has. And his money is valued differently, but secondly, he was willing to do deals that I, at the time, bothered the hell out of me. And what had happened was, I-

David Rosenthal 19:48 Like the Goldman deal, or?

Michael Lewis 19:49 It was a Salomon Brothers deal that bothered the hell out of me.

David Rosenthal 19:51 Oh, yeah.

Michael Lewis 19:51 He kept a, he kept the CEO in place, who I thought should not have been allowed-

David Rosenthal 19:54 Were you there when-

Michael Lewis 19:55 I was there!

David Rosenthal 19:56 Yeah, you, you lived through it.

Michael Lewis 19:57 No, I was through-

David Rosenthal 19:57 This is a huge part of our Berkshire series.

Michael Lewis 19:59 So it made me, it, it turned me, it turned me briefly, only briefly, actually, cynical about Warren Buffett, and then I came out of it and fell in love with him all over again. But I had written this thing, and pissed him off entirely. I mean, like, I... It, it clearly upset him. And then kind of started watching him for longer, and I thought, you know, I just liked him, just liked him. You couldn't help but like him. So I started to soften, and whether- when we get to the financial crisis, I thought, "Well, his money's gonna be so valuable here-

David Rosenthal 20:27 Mm

Michael Lewis 20:27 ... that he, he, uh, what is needed is credit. And I think it might, if he stays alive long enough, it might happen again soon. So I gave-

Ben Gilbert 20:33 So you invested in Berkshire before the-

Michael Lewis 20:36 Goldman deal

Ben Gilbert 20:36 ... legendary deals coming out-

Michael Lewis 20:38 Yes

Ben Gilbert 20:38 ... of the financial crisis?

Michael Lewis 20:39 Yeah. And so I, I bought a chunk of the A shares, and I've just sat on them. And let me tell you, can I tell you a Warren Buffett story?

David Rosenthal 20:44 Yeah.

Michael Lewis 20:45 I mean, this is a little talking a little bit out of school, but, uh, I've never met him. Uh, I know he was really irritated with me, and then I, I actually looked back at that art- it's the only time I've ever looked back at a piece I wrote, and I thought, "I overdid that." I went right back to The New Republic and wrote another 5,000-word thing about Warren Buffett, in which I basically apologized for the first piece. I bought these shares in 2008. When I was working on Going Infinite, I was working on the Sam Bankman-Fried book, and, um, I was talking to a publicist f- completely unrelated to Warren Buffett, and she said, "You know, I also represent Warren." And she said-

David Rosenthal 21:24 Warren.

Michael Lewis 21:24 "And I told Warren that I've been talking to you, and he said he has a question for you." And I said, "What?" She says, "Is he the M- is he the Mi- the Michael Lewis who bought shares back in the [laughing] -"

David Rosenthal 21:33 [laughing] No, no.

Ben Gilbert 21:34 No.

Michael Lewis 21:34 Yeah, I swear to God. I swear to God. So this tells you something about Warren Buffett, more about Warren Buffett than me.

David Rosenthal 21:39 Yeah. [laughing]

Michael Lewis 21:39 And, and he said he bought it, like, what... The book value to s- you know, that thing, that ratio?

David Rosenthal 21:45 Yeah.

Michael Lewis 21:45 He bought it as cheap as it's ever been. And he says, he says, "But he-

David Rosenthal 21:48 [laughing] You made the best trade of your Berkshire stock history.

Michael Lewis 21:50 Wait, no, hold on, hold on. But then he says, then he says-

David Rosenthal 21:52 [laughing]

Michael Lewis 21:53 ... "So he's the Michael Lewis who, who sold some Berkshire Hathaway two years ago and four years ago." And he was like, "Why did he sell?" So he's tracking i- I'm not a huge shareholder.

David Rosenthal 22:05 He's like, yeah, I can't imagine you like- [laughing]

Michael Lewis 22:06 He's tracking... He's-

David Rosenthal 22:07 You're not like Vanguard here. [laughing]

Michael Lewis 22:08 No, no, no. And I said, "Well, actually, I actually just gave them to charity," is what I, is what I'd done. I had given the m- given the money away.

David Rosenthal 22:14 That's unbelievable.

Michael Lewis 22:15 And, and when he hear- and she said that, "He'll be relieved to hear that," kind of thing. It's like... So can you imagine? Can you imagine that Warren Buffett is taking the time to watch who is coming in and out of the A shares, and, and thinking about it? I, I mean, I just thought, he has that- he and Munger had that whole thing about, "Don't put your money in an index fund. Put your money in a, in a big bundle of stocks. Put it in a few stocks and watch those stocks like a hawk."

David Rosenthal 22:39 Yeah.

Ben Gilbert 22:39 Yeah.

David Rosenthal 22:39 Wow!

Michael Lewis 22:39 It's like they, they watch that thing in a way that, like, I, I just... In history, has anybody ever done anything like that?

David Rosenthal 22:45 I mean, all these people are... They're, they're maniacs.

Michael Lewis 22:47 Yeah.

David Rosenthal 22:47 You don't build something like this if you're not a maniac.

Michael Lewis 22:48 You don't. That's exactly right.

David Rosenthal 22:49 Yeah.

Michael Lewis 22:49 So anyway, sorry I just digressed here.

David Rosenthal 22:51 [laughing]

Michael Lewis 22:51 But you did your- what did you learn from your Berkshire Hath- There are three episodes of Berkshire Hathaway.

Ben Gilbert 22:55 Well, as it applies to Acquired, we got really obsessed with the circle of competence, that it's okay to have a giant too hard pile. Uh, there's a bunch of things that, like-

Michael Lewis 23:06 Yeah

Ben Gilbert 23:06 ... I'm not intelligently saying no to.

David Rosenthal 23:08 I forgot about it. We, we used to say this all the time. We'd be like, "Too hard pile, too hard pile."

Ben Gilbert 23:10 Every phone call we'd have would be like, "Eh, too hard pile."

Michael Lewis 23:11 Wait, what is this, what is this expression you use?

David Rosenthal 23:13 So the, uh-

Ben Gilbert 23:14 This is a Charlie-

David Rosenthal 23:15 Warren and Charlie had this thing. There was the, um, the, the, like, the yes pile, the no pile, and then the too hard pile.

Michael Lewis 23:21 The too hard pile.

David Rosenthal 23:22 Yeah.

Michael Lewis 23:22 I see, okay. Yeah.

Ben Gilbert 23:24 And it's okay to just, like, tell-

David Rosenthal 23:25 And too hard means, means no, but-

Michael Lewis 23:27 All of technology was a too hard pile for them.

David Rosenthal 23:28 Yeah, it was just all... Yeah

Ben Gilbert 23:29 Right.

David Rosenthal 23:29 It was like, there might be something in here, but, like, I'm just- just too hard.

Ben Gilbert 23:32 It's basically admitting that, like, our opportunity cost is so high, like, the, the things that we say yes to are so awesome, that it's okay to say too hard to just a giant amount of things.

Michael Lewis 23:43 Yep.

Ben Gilbert 23:43 And that was really freeing-

David Rosenthal 23:46 Yeah

Ben Gilbert 23:46 ... once we started, just, like, I mean, truly, on most of our phone calls.

Michael Lewis 23:48 Oh, so what's an example of something that you... I, I'm surprised you say this.

David Rosenthal 23:52 Uh-

Michael Lewis 23:52 What's too hard for you?

David Rosenthal 23:53 The reason that- uh, one of the reasons, besides just wanting to meet you, 'cause you've been an inspiration to us forever, uh, that I, I wanted to, to meet you a few months ago was Hollywood. Uh, we've had lots of opportunities to work with Hollywood.

Ben Gilbert 24:08 It keeps being too hard.

David Rosenthal 24:09 To this point, they have thus always invariably ended up in the too hard pile.

Michael Lewis 24:13 Are you talking about doing episodes about Hol- Hol- in Hollywood?

David Rosenthal 24:16 No, no, no, no, no.

Michael Lewis 24:16 Or, or to become movie stars?

David Rosenthal 24:18 Other-

Ben Gilbert 24:18 Creating a TV show-

Michael Lewis 24:19 Creating a TV show

Ben Gilbert 24:19 ... creating documentaries-

David Rosenthal 24:20 Yeah, right

Ben Gilbert 24:20 ... adapting into film, the, these stories into films. Uh, they all sound good until we start digging in, and then we're like, the time it would take us to think through all the implications of this, uh, uh, is-

David Rosenthal 24:31 We should just, we should just make another episode.

Ben Gilbert 24:33 We should... The answer-

David Rosenthal 24:34 The answer almost always is, we should just make another episode.

Michael Lewis 24:37 That's a really intelligent way, place to land. 'Cause what they will do is woo you with their enthusiasm.... and then take you down a rabbit hole, where you will spend years of your life and have nothing to show for it.

David Rosenthal 24:50 Well, this is one of the reasons I wanna talk to you. Like, Michael's a very smart guy. You've been very successful-

Michael Lewis 24:53 I've gone down the rabbit holes.

David Rosenthal 24:54 Yeah, but like, but you love writing books.

Michael Lewis 24:55 But I've gone down the rabbit holes knowing that I wasn't- I didn't have a whole lot else better to do at the time.

David Rosenthal 24:58 [chuckles]

Michael Lewis 24:58 It's like between books.

David Rosenthal 25:00 Mm.

Michael Lewis 25:00 The, the- it's a palate cleanser.

David Rosenthal 25:01 Mm.

Michael Lewis 25:02 You don't have be- a between books period. You, you know that-

David Rosenthal 25:05 We need to, yeah.

Michael Lewis 25:05 Yeah, I don't have that. I don't have a... I don't have the machine you have. You've got an assembly line going.

Ben Gilbert 25:10 And it's a compounding asset. I mean, this is the-

Michael Lewis 25:12 Correct, yeah

Ben Gilbert 25:13 ... craziest, craziest thing about podcasting, and, like, a giant amount of why this has worked for us, is-

Michael Lewis 25:17 Yeah

Ben Gilbert 25:18 ... we do a lot of work that looks a lot like the research and the writing of a book. But when we make our book, and we release it to the world, people click subscribe.

David Rosenthal 25:27 And then they-

Ben Gilbert 25:27 And so when we release the next one-

David Rosenthal 25:28 Get the next book

Ben Gilbert 25:29 ... those same people go listen.

Michael Lewis 25:31 Right, right.

Ben Gilbert 25:31 Like, it's almost guaranteed, 'cause-

David Rosenthal 25:33 We're always growing our base.

Ben Gilbert 25:34 Podcasting, being an author, uh, there's loose compounding elements to it, but there's not a, like, literal millions of subscribers.

Michael Lewis 25:40 Not nearly what I thought when, when I got into the business of writing books. I thought there was gonna- I thought about this a little bit.

David Rosenthal 25:46 Mm.

Michael Lewis 25:46 And I th- so you're right. It's-

David Rosenthal 25:47 I mean, you've probably done it better than any of them.

Ben Gilbert 25:48 You're one of the few people who probably does have such a brand.

Michael Lewis 25:51 But I thought, "I'm going to move around America to the various arenas of ambition, Wall Street, Silicon Valley, Washington, movie business, sports, the various things, and I'll naturally attract the audience that is interested in that arena."

Ben Gilbert 26:06 Yep.

Michael Lewis 26:07 "And then I'll drag them along to the others."

Ben Gilbert 26:09 Mm.

Michael Lewis 26:09 And it hasn't really happened that way. It-

David Rosenthal 26:12 Even for you?

Michael Lewis 26:12 Not really. Not really. Uh-

Ben Gilbert 26:14 Mm

Michael Lewis 26:15 ... the books, the books have a kind of market, and it's a big market, big-ish market, but it doesn't... I see no evidence that I'm dragging people along with me. I feel like each, each book feels like a, another startup, and that I've gotta go out-

Ben Gilbert 26:29 Huh

Michael Lewis 26:29 ... and make it happen, almost as if I've not written one. Now, that's-

David Rosenthal 26:33 Moneyball audience is not necessarily-

Michael Lewis 26:34 Correct

David Rosenthal 26:35 ... gonna fit Fifth Risk, right?

Michael Lewis 26:36 Exactly, and then the audiences end up just being different. So it's just the way it is. But that's not true with you.

Ben Gilbert 26:43 That's not true for Acquired.

Michael Lewis 26:44 So you... So every time, if you were to take time off to go do something in Hollywood, you'd be abandoning this glorious network.

Ben Gilbert 26:52 The opportunity cost is so high-

Michael Lewis 26:54 Right

Ben Gilbert 26:54 ... of spending a month not making an Acquired episode, because when we publish an episode of Acquired, the base does come with us.

David Rosenthal 27:01 It, it puts his back on, yeah.

Ben Gilbert 27:01 Maybe not all of it, but, like-

Michael Lewis 27:03 Yes

Ben Gilbert 27:03 ... I, I, you know, we make epic systems about healthcare, and all the people who listen to LVMH are now learning how doctor's office IT works.

Michael Lewis 27:10 Right.

Ben Gilbert 27:11 So podcasts are unique, in that it does have that true subscriber base. But unlike anything else where you click subscribe, there's not an algorithmic platform that disintermediates you. I mean, you think YouTube or, uh, Twitter or any of these, when someone clicks follow or subscribe, they're like... It's like signal in the algorithm-

Michael Lewis 27:29 Loosely

Ben Gilbert 27:29 ... but it's not-

Michael Lewis 27:29 Yeah

Ben Gilbert 27:30 ... guaranteed.

Michael Lewis 27:31 Yeah.

Ben Gilbert 27:31 But, like, you subscribe in Apple Podcasts or Spotify, and those people are actually subscribed, and they're gonna get the next episode.

Michael Lewis 27:37 Right, and they learn to trust you.

Ben Gilbert 27:39 Yeah.

Michael Lewis 27:39 They learn to trust you, that if you're interested, they'll be interested. That what, in fact, what they're buying into is not the subject, but your interest in the subject.

Ben Gilbert 27:45 Yes, and I am terrified of betraying that trust. Like, anytime we make an episode, I think of it as a churn opportunity. If we put this in the feed, if we don't live up to the expectations that our listeners have, we will burn them-

Michael Lewis 27:58 There's, there's a-

Ben Gilbert 27:58 ... and they will leave us forever.

David Rosenthal 27:59 [chuckles] In the W- why does Acquired work, uh, framework, there's, there's a strong element of terror- [chuckles]

Ben Gilbert 28:05 Yes

David Rosenthal 28:05 ... of why it works. Like, we're, we're, we're constantly terrified every time we make an episode.

Ben Gilbert 28:10 E- every minute is a churn opportunity.

Michael Lewis 28:11 Yeah.

David Rosenthal 28:12 So are, are, are we letting, are we letting people down?

Ben Gilbert 28:14 All right, listeners. Now is a great time to thank our presenting partner, JP Morgan Payments. And we wanna tell you about something pretty cool that we just did with them last week, which was a big live show in Las Vegas together.

David Rosenthal 28:27 [chuckles] Acquired residency in Las Vegas, baby. [laughing] No.

Ben Gilbert 28:31 [laughing]

David Rosenthal 28:31 No, no, no, no. But what we did do is we took the stage at the beautiful Venetian Theatre at AWS re:Invent. We did four really just incredible interviews with the CEOs of Netflix, Perplexity, AWS, and J.P. Morgan Payments. And I will say, Ben, it was extra special in retrospect. We were talking with Greg Peters, the co-CEO of Netflix, and asking him how Netflix is reshaping Hollywood just a few hours before they announced the Warner Brothers acquisition. Uh, he has a pretty good poker face, given that we were, you know, in Vegas and all that.

Ben Gilbert 29:02 Yeah, that he does. Also, very funny to interview Matt Garman from AWS at his own event. And I will say, one of the most interesting conversations was with Max Newkirch, the global co-head of J.P. Morgan Payments. We dug into this question that I've always wondered about: How did the leading global bank also come to own this technology business that does $18 billion a year in annual revenue on its own, separate from the rest of J.P. Morgan?

David Rosenthal 29:29 Yeah, it's wild. If J.P. Morgan Payments were a standalone company, it would very likely be in the Fortune 500, but it's also part of J.P. Morgan.

Ben Gilbert 29:37 Max also told us about JPM Coin, developed by Connexus by J.P. Morgan, and how it's helped the bank, and even Jamie, evolve their thinking on how blockchain technology is transforming financial infrastructure.

David Rosenthal 29:49 Overall, it, it was a great week. We hung out at J.P. Morgan's booth on the show floor and got to see their developer portal being demoed live in action to customers, too.

Ben Gilbert 29:56 Yep, so if you want to learn more about these innovations and payments and how J.P. Morgan can help power your business, head on over to jpmorgan.com/acquired.

Michael Lewis 30:06 Are you more terrified than you were two years ago?

Ben Gilbert 30:08 Yes.

Michael Lewis 30:09 So you're-

David Rosenthal 30:09 We're always more terrified.

Michael Lewis 30:10 The terror is growing.

Ben Gilbert 30:10 Yes.

David Rosenthal 30:10 The terror is growing, yes.

Michael Lewis 30:11 At some point, it's not gonna be a good thing.

Ben Gilbert 30:13 [chuckles] Yes.

Michael Lewis 30:14 I mean, it's, it's good to be a little on edge.

Ben Gilbert 30:15 Yes. Yeah, yeah.

Michael Lewis 30:15 But you don't wanna get yourself in a situation where you feel like you have to do the same thing over and over again.

Ben Gilbert 30:20 Yes.

Michael Lewis 30:20 'Cause eventually, it will get old.

Ben Gilbert 30:21 Yes.

Michael Lewis 30:21 We'll come back to-

Ben Gilbert 30:22 Mm.

Michael Lewis 30:22 This is... We're gonna get to the bull and the bear case at the end.

David Rosenthal 30:24 Okay, good, good, good, great, great, great. [chuckles]

Michael Lewis 30:25 Uh, but, but, but, but it's, it's... This is- so back to your, the lesson that you gleaned from Munger and, and Buffett, it's okay to have a Too Hard pile.

Ben Gilbert 30:33 Yeah.

Michael Lewis 30:34 And you said, "And the Too Hard pile is like doing things in Hollywood." But I- when I asked the question, did you ever run across this? Have you run across this? Have you ever had a subject where you thought, "Ah, this is just too hard to do?"

Ben Gilbert 30:44 Yeah.

David Rosenthal 30:44 Oh, yeah.

Michael Lewis 30:45 What would be a example of that?

Ben Gilbert 30:47 ... We got pretty far down the line on doing an episode on the Fed-

David Rosenthal 30:50 Yeah. [laughs] We were talking about it.

Ben Gilbert 30:51 -and walked away from it.

David Rosenthal 30:52 Yeah. Yep.

Michael Lewis 30:53 Uh, so you walked away from it?

Ben Gilbert 30:54 Yeah. We might come back, but it's been like three years.

Michael Lewis 30:57 Well, there'll be a moment to come back to it.

David Rosenthal 30:58 Yeah, yeah. [laughs] Yeah, yeah, I'm glad we didn't do it in the past.

Michael Lewis 31:00 Yeah, no, now it should be better now.

David Rosenthal 31:01 Now, now it's the moment.

Michael Lewis 31:02 But although it's gonna violate your rule about doing newsy things.

David Rosenthal 31:05 We always try and find things... Must be- timelessness is, like, a must, must. Everything we do must be timeless, the company we're covering. [laughs]

Michael Lewis 31:14 Nothing's timeless, so what do you mean by that?

David Rosenthal 31:16 It must be that, like, if you listen to this, an episode that we make five years after we made it, it's 80% as relevant.

Michael Lewis 31:24 Mm-hmm.

David Rosenthal 31:25 Uh, it's still- it- it will still be an important institution in the world-

Michael Lewis 31:28 Right

David Rosenthal 31:29 ... five years from now.

Ben Gilbert 31:29 But like a CNBC article is worth 2% of its original value within a month.

Michael Lewis 31:35 Right.

David Rosenthal 31:36 Yeah.

Ben Gilbert 31:36 And we want to be worth 80% of our original value five years from now-

Michael Lewis 31:39 But are-

Ben Gilbert 31:39 ... on any given piece of content.

Michael Lewis 31:40 So, so does that mean you're picking institutions that you think will survive?

Ben Gilbert 31:45 Yes.

David Rosenthal 31:45 Yes. But, okay, so that's like baseline-

Michael Lewis 31:47 It's odd, because you're in such a volatile-

David Rosenthal 31:48 ... bedrock. Every-

Michael Lewis 31:48 You're, you- so much of your stuff is tech and finance-

David Rosenthal 31:51 [laughs]

Michael Lewis 31:51 -where there's so much churn.

David Rosenthal 31:52 Well, yes, but-

Ben Gilbert 31:53 This didn't used to be true.

Michael Lewis 31:54 This didn't-

Ben Gilbert 31:54 You look at anything pre-2020, 2021-

Michael Lewis 31:56 Right

Ben Gilbert 31:57 ... uh, we, we had not yet discovered-

Michael Lewis 31:58 Okay

Ben Gilbert 31:58 ... this principle.

David Rosenthal 32:00 But our real bangers are timeless and timely. Doing Google this year was timeless and timely.

Michael Lewis 32:05 Right. Having that, however you do it, you're getting to something that I try to get to when I'm picking subjects, but you're doing it in a slightly different way. Um, what I like, what, what gets my- when my socks start to go up and down about a subject, is when I'm really interested in it and nobody else is. [laughs]

David Rosenthal 32:23 [laughs]

Michael Lewis 32:23 Or that, that there isn't... That there aren't people... It's not hot. And I found with, I think it's true of a- basically all my books, couple, maybe a couple exceptions, but a lot of the books, that if I'm at a dinner party and someone asks me what I'm, "What are you working on?" And after about 60 seconds-

David Rosenthal 32:42 They're like-

Michael Lewis 32:42 ... I can see their eyes glaze over.

David Rosenthal 32:44 Yeah.

Michael Lewis 32:44 Like, "Why is he interested in that?" You know, it's just not registering with them in any way.

Ben Gilbert 32:49 Yeah.

Michael Lewis 32:50 And I've learned just to not, not even talk about it, 'cause it kills my interest to watch it kill their interest. But I know why I'm interested and why it's important, and I'm not r- I'm not relying on the world telling me it's important. Uh, that that's a really good sign.

Ben Gilbert 33:06 This is a difference between what you do and what we do. Because I feel like when I think through all your books, they're almost always a story of obscurity, that once it becomes a Michael Lewis book, then it becomes a well-known phenomenon.

David Rosenthal 33:20 The Blind Side. Yeah, yeah.

Ben Gilbert 33:21 Moneyball.

David Rosenthal 33:21 Yeah.

Ben Gilbert 33:21 Like, you were discovering these things-

David Rosenthal 33:22 Yeah

Ben Gilbert 33:22 ... that kind of nobody's talking about. Whereas, when we do something like Trader Joe's, someone says, "What, what are you working on?" And we're like, "Trader Joe's." They're like-

David Rosenthal 33:30 Oh, hell yeah!

Michael Lewis 33:30 I love Trader Joe's. [laughs]

David Rosenthal 33:31 Yeah, yeah, yeah, yeah. Yeah.

Ben Gilbert 33:33 You know?

Michael Lewis 33:33 So that is a difference. Your subjects are not obscure.

Ben Gilbert 33:36 Right.

Michael Lewis 33:36 They're the most famous corporations in the world.

David Rosenthal 33:37 But we do look for-

Ben Gilbert 33:38 Right

David Rosenthal 33:38 ... people love it, but they don't really understand it.

Ben Gilbert 33:41 Yeah.

David Rosenthal 33:41 Like, we do look for like a-

Ben Gilbert 33:43 There's a secret in hiding in plain sight

David Rosenthal 33:44 ... a secret in hiding in plain sight.

Ben Gilbert 33:44 Uh-

David Rosenthal 33:45 Like, people didn't understand Trader Joe's, or people didn't understand Google, we thought, when we-

Michael Lewis 33:48 Right.

Ben Gilbert 33:48 There's three things that make a great Acquired episode. One, there's a compelling hero protagonist that ta- that takes a hero's journey, where we're going from obscurity to ubiquity. How it starts is this thing that nobody cares about, and then it becomes the most important thing in the world.

Michael Lewis 34:02 Right.

Ben Gilbert 34:02 Two is there's a secret hiding in plain sight. Like Costco, I think when the ordinary consumer sees Costco, they're like, "Oh, I love Costco." But when someone who's listened to an Ac- a, the Acquired episode on Costco thinks about Costco, they see, like, all the gears turning of the machine. Like, we... There, there has to be some way that we can expose something. And then our third criteria is it has to be important in the world, and I think that's something we picked up later. I mean, we used to do these-

David Rosenthal 34:26 Yeah

Ben Gilbert 34:26 ... like, little $10 million-

David Rosenthal 34:27 Little things

Ben Gilbert 34:27 ... acquisitions. And now, when we're gonna go spend two months of our life researching and making that, like, the Acquired episode, it, it has to be something worthy of the Acquired stage.

Michael Lewis 34:39 When did that happen? So I, I'm a little unclear, you, you... A- again, getting back to this first episode you did and where you are now, and the difference between them, what sort of compelled you or propelled you into the current form of Acquired? The decision to make it a business and the decision to actually-

Ben Gilbert 34:56 Mm

Michael Lewis 34:56 ... live off of what you were gonna- what you earned from your podcast, so it had to work commercially, so then you w- started to make these adjustments.

Ben Gilbert 35:04 Right.

David Rosenthal 35:04 Yeah.

Michael Lewis 35:04 Is that how it worked?

David Rosenthal 35:05 Uh, yes and no. There's, um... You're on the right track. I like the Berkshire. Uh, I thought you were gonna say partnership as a-

Michael Lewis 35:14 Mm

David Rosenthal 35:14 ... lesson from it. So we did a series on Sequoia Capital, the-

Michael Lewis 35:18 Right

David Rosenthal 35:18 ... venture firm.

Michael Lewis 35:19 Yep.

David Rosenthal 35:19 I went full-time on Acquired in 2020.

Michael Lewis 35:22 Mm-hmm.

David Rosenthal 35:22 Five years in. Ben didn't go full-time until January '24, right?

Ben Gilbert 35:26 Correct.

David Rosenthal 35:27 End of '23, beginning of '24. When I went-

Michael Lewis 35:29 You remained equal partners?

David Rosenthal 35:31 Yes.

Ben Gilbert 35:31 Oh, it, it wasn't a business when we started. It was just like... I mean, we didn't make money-

Michael Lewis 35:35 But those-

Ben Gilbert 35:35 ... till our third year.

Michael Lewis 35:35 But those three years, while you're full-time and you were part-time, it was an equal-

David Rosenthal 35:39 Equal.

Ben Gilbert 35:40 Yes. David was, uh, never once raised the issue, "I'm depending on this for my livelihood, and it's my only thing, so I should own more or get a greater share." That never once came up.

Michael Lewis 35:50 That's great.

David Rosenthal 35:50 It never crossed my mind. Why, like-

Michael Lewis 35:52 See, that, there we go. That's an important point.

David Rosenthal 35:55 Uh-

Michael Lewis 35:55 You're not... You all, you all-

David Rosenthal 35:56 Yeah. I guess I'm glossing over it, 'cause it, like, it wouldn't even... Like, it didn't even cross my mind now.

Michael Lewis 35:59 Right.

David Rosenthal 35:59 Like, it's just, it's always been, Acquired has always been the two of us.

Michael Lewis 36:02 Right. Okay.

David Rosenthal 36:03 Equal. That's-

Michael Lewis 36:03 Okay.

David Rosenthal 36:04 Like, it would be, it would be profane for it to be anything other than that.

Ben Gilbert 36:07 It would actually break it-

David Rosenthal 36:08 Yeah

Ben Gilbert 36:08 ... if we ever, if we ever started trying to figure out, like, little carve-outs or pieces of the pie for-

David Rosenthal 36:12 Yeah

Ben Gilbert 36:12 ... "Well, I did this, therefore, I should get..."

David Rosenthal 36:14 Totally.

Michael Lewis 36:14 It's true collaboration.

David Rosenthal 36:16 Totally.

Michael Lewis 36:16 You don't recognize there's no boundary to where you start and you s-

David Rosenthal 36:19 Okay, this is where I'm going with this story.

Michael Lewis 36:21 Okay.

Ben Gilbert 36:21 It's funny you bring up Sequoia-

David Rosenthal 36:22 So-

Ben Gilbert 36:22 ... 'cause it's actually benchmark-y in that way, that-

David Rosenthal 36:23 Well, it's the quote. It's Leone's quote.

Ben Gilbert 36:25 Okay.

David Rosenthal 36:26 So, uh, end of '22, uh, FTX happens, uh, interest rates go up. You know, all the, uh... podcast advertising market, you know, falls off a cliff. Our revenue dropped 40%. So we went from this wasn't a business, I went full-time, we made it a business, it worked amazingly well-

Michael Lewis 36:47 From '20 to '22, frankly.

David Rosenthal 36:48 From '20 to '21-

Michael Lewis 36:49 Right

David Rosenthal 36:49 ... into '22.

Michael Lewis 36:50 Right.

David Rosenthal 36:51 And then our revenue dropped 40%.

Michael Lewis 36:53 Right.

David Rosenthal 36:53 Overnight. [laughs] ... and that was the moment when we changed everything, and, uh-

Michael Lewis 36:59 Oh!

Ben Gilbert 37:00 Yeah.

Michael Lewis 37:00 So how many episodes-

Ben Gilbert 37:01 You're right

Michael Lewis 37:01 ... are you making in 2021?

David Rosenthal 37:03 A lot.

Michael Lewis 37:03 Oh, I see, okay. And is it- it- but it's not no longer just corporate acquisitions?

Ben Gilbert 37:08 We started broadening with the Tesla episode in, like, 2019, maybe '18.

Michael Lewis 37:12 Yeah, and why did you broaden?

Ben Gilbert 37:13 Uh, it was David's idea, and he said, "I have this thesis that the audience doesn't listen to us because they want to hear if a tech acquisition worked or not. They want to hear the story and strategy of the most important technology companies."

Michael Lewis 37:26 There you go, so you actually-

David Rosenthal 37:26 We would get all this feedback.

Michael Lewis 37:27 You, you, you were- you kind of foul-hooked the listen- the, your, your audience.

David Rosenthal 37:30 Yes.

Michael Lewis 37:31 They, they were listening-

Ben Gilbert 37:32 What's a foul hook?

Michael Lewis 37:33 You- when you go fishing, and the fish, you catch the fish by the belly rather than the mouth. [laughing]

David Rosenthal 37:37 [laughing]

Michael Lewis 37:37 It's, uh, the hook gets, the hook gets in there some we- weird way.

Ben Gilbert 37:41 Yes.

Michael Lewis 37:41 You didn't actually catch the fish in the, in an honest way.

David Rosenthal 37:44 Yes.

Ben Gilbert 37:44 Yeah.

Michael Lewis 37:44 Yeah.

David Rosenthal 37:45 But yet, we would get all these, you know, emails. Every time we'd meet people, and they'd talk about the show and be like, "I love the story. Like, you guys are just gifted storytellers." That's what we'd hear over and over and over again, and, like, eventually, we were like, "Well, we should believe that."

Michael Lewis 37:59 So can I... I'm gonna, at that mo- I'm gonna interject what I noticed. 'Cause it, 'cause we're... That in that first episode, you were so unsure of yourselves, that there is... You were so choked, both of you.

David Rosenthal 38:13 Mm.

Michael Lewis 38:13 And you were- you have a background in theater. You were a kid-

David Rosenthal 38:16 We, we both do.

Michael Lewis 38:17 You're an actor.

David Rosenthal 38:17 Yeah, yeah.

Michael Lewis 38:17 So you did not come across as people who'd been on stage. You, you- it was a, there was a, it was, it was kind of an affectless performance. There was fla- there was a flatness to it. You were, you d- you were afraid to, uh, whether you knew it or not, re- exhibit a lot of emotion. You didn't realize that one of your secret sauces is emotion. It's the way you respond to each other when you're presenting material is teaching the aud- is helping the audience understand how they should feel about it. That you're giving them sometimes very dry facts, like, I don't know, uh, their revenues doubled every year for 100 years straight. [laughing]

Ben Gilbert 38:55 [laughing]

David Rosenthal 38:55 [laughing]

Michael Lewis 38:55 And, and, and the audience may not know that that's something-

David Rosenthal 38:58 Summing up every Acquired episode

Michael Lewis 38:59 ... that, that's an incredible thing.

Ben Gilbert 39:01 Right.

Michael Lewis 39:01 And the way you respond, even sophisticated listeners are helped. "Oh, pay attention now. This was a, this, that's an important thing. I should, I should get excited about that."

David Rosenthal 39:12 We used to share our research, such that we were doing research in the early days.

Ben Gilbert 39:17 Yeah.

David Rosenthal 39:18 I think we only had a single Google Doc that we worked on.

Ben Gilbert 39:20 Yeah, we were just dumping everything into the same shared document.

David Rosenthal 39:22 And we were on the... So by the time we would actually go to record the episode-

Michael Lewis 39:25 There's no surprise

David Rosenthal 39:26 ... it was stale. Yeah, there's no surprise.

Ben Gilbert 39:27 There's no disagreement.

Michael Lewis 39:28 So you can't pretend to be surprised.

David Rosenthal 39:29 We can't pre- yeah.

Michael Lewis 39:30 Or you would be pretending to be surprised.

David Rosenthal 39:31 Yeah, and then-

Ben Gilbert 39:31 Neither of us are good actors.

David Rosenthal 39:32 I don't... When did we- [laughing]

Michael Lewis 39:34 [laughing]

Ben Gilbert 39:34 We, we, we did a little cold intro.

Michael Lewis 39:36 So that's, so this is really important.

Ben Gilbert 39:37 Yeah.

Michael Lewis 39:37 So you added an improvisational component.

David Rosenthal 39:39 Yeah.

Ben Gilbert 39:39 Yes.

Michael Lewis 39:40 There's another way of putting that. You added risk. You're taking risks when you don't know what's gonna happen when you come on.

Ben Gilbert 39:47 100% agree.

David Rosenthal 39:48 Yeah, yeah.

Ben Gilbert 39:48 Every episode now, going into recording day feels like a high-wire act because we haven't fully scripted it out. I'm like, "I think this is gonna come together."

Michael Lewis 39:56 Yeah.

Ben Gilbert 39:56 But, like, we had to add this thing called a production meeting about six months ago. One week before recording, w- we are required to get together and share, a- agree on an episode structure-

David Rosenthal 40:07 Yeah

Ben Gilbert 40:07 ... but not share any details.

David Rosenthal 40:08 A spine.

Ben Gilbert 40:08 Because we got so into this, like, improvisation thing, that some of our episodes would sort of end, and you're like, "That had no flow to it."

David Rosenthal 40:15 [laughing]

Ben Gilbert 40:15 Like, you guys had two completely-

Michael Lewis 40:16 Well, and sometimes it doesn't work

Ben Gilbert 40:17 ... different ideas for the episode-

David Rosenthal 40:18 Yeah

Michael Lewis 40:18 ... You're not taking a risk, if it doesn't work sometimes.

Ben Gilbert 40:20 Yeah.

Michael Lewis 40:20 Right?

Ben Gilbert 40:21 Right.

Michael Lewis 40:21 But it's the difference between... I mean, do you know how your heart sinks when someone gets up at a podium with a script, with a, with a speech-

David Rosenthal 40:28 Yeah, yeah

Michael Lewis 40:28 ... and they're gonna read their speech?

Ben Gilbert 40:29 Ugh!

Michael Lewis 40:30 The audience is waiting for you to get through this thing because they know nothing's going to happen. Like, whatever's on that page-

Ben Gilbert 40:37 [laughing]

Michael Lewis 40:37 ... that's what's gonna happen, and-

David Rosenthal 40:38 Like pre-announcing the score to the Super Bowl.

Michael Lewis 40:39 Yeah, it's exactly right. And that if you get up, and you just start talking, the audience also knows, "Oh, my God, this could be a disaster. This could..." He- they don't know where it's going. Just having just some of that has a huge effect on the way the audience responds to the performance, and so that, that, that's w- that is not in the beginning.

Ben Gilbert 40:59 Yeah.

David Rosenthal 41:00 Do you remember when we started doing that?

Ben Gilbert 41:03 Well, I, I think it was in the first 10 episodes, first five episodes-

David Rosenthal 41:06 Yeah, yeah.

Michael Lewis 41:06 Yeah

Ben Gilbert 41:06 ... we got feedback-

David Rosenthal 41:07 It was-

Ben Gilbert 41:07 ... saying, "You guys need to disagree more."

David Rosenthal 41:09 Yes.

Ben Gilbert 41:09 But I don't think we quite realized that we should reveal surprises for each other until five years ago, four years ago.

Michael Lewis 41:15 Okay.

David Rosenthal 41:15 But at some point, we made it a, uh, you know, an unwritten rule of, like, we have separate documents. We prepare separately.

Ben Gilbert 41:23 We try to do, like, separate research calls.

Michael Lewis 41:24 How, how far... That was, that was five years ago, you say? So the basic-

David Rosenthal 41:28 Yeah.

Michael Lewis 41:28 So we start with the corporate acquisitions in 2015.

David Rosenthal 41:30 Yeah.

Michael Lewis 41:30 And you two, knowing everything that you're gonna say when you get on, basically.

David Rosenthal 41:34 Yeah.

Ben Gilbert 41:34 Yeah.

Michael Lewis 41:34 And it's short-

David Rosenthal 41:35 Yeah

Michael Lewis 41:35 ... and it's 40 minutes.

David Rosenthal 41:36 Yeah.

Michael Lewis 41:38 So first-

Ben Gilbert 41:38 And we're not confident.

Michael Lewis 41:39 And you're not-

Ben Gilbert 41:39 What you're hearing, too, is, like, I'm supposed to be doing financial analysis as someone who's never been taught how to read a financial statement.

Michael Lewis 41:45 Right.

Ben Gilbert 41:45 And so you're also hearing a little bit of, like-

Michael Lewis 41:48 Imposter syndrome

Ben Gilbert 41:48 ... I, I'm trying. I can't get over-enthusiastic 'cause I'm afraid David's gonna catch me and be like, "You don't know what you're talking about."

Michael Lewis 41:54 Okay. So plus there's, so there's an uncertainty about-

Ben Gilbert 41:57 Yes

Michael Lewis 41:57 ... your own abilities. All right, so, so first thing that happens is you move off the corporate acquisitions?

Ben Gilbert 42:04 We went from acquisitions to IPOs-

Michael Lewis 42:06 Right

Ben Gilbert 42:07 ... which was unbelievable timing in 2017-18, when Uber, Pinterest, Slack-

David Rosenthal 42:13 Yeah. They've been the, the-

Ben Gilbert 42:15 There was, like, eight IPOs in a row of tech companies that everyone had been following, and then it, it went really for two years and kind of culminated at the end of 2020 with DoorDash and Airbnb, which we recorded and released one day apart-

David Rosenthal 42:27 Yeah

Ben Gilbert 42:27 ... 'cause we wanted to be there-

David Rosenthal 42:28 We would never do that today [laughing]

Ben Gilbert 42:29 ... on IPO day.

David Rosenthal 42:30 Yeah. Yeah, so but it's-

Michael Lewis 42:31 But once again, you're constraining yourself unnecessarily.

David Rosenthal 42:33 Yeah, exactly.

Michael Lewis 42:34 That, that, eventually, you get to, "We're just gonna do stories," big success stories, basically.

Ben Gilbert 42:39 Yeah. So it was acquisitions, IPOs, uh, then it was broad histories and strategies of tech companies and then broad histories and strategies of companies, period.

David Rosenthal 42:48 All companies, yeah.

Michael Lewis 42:49 And people.

Ben Gilbert 42:50 And people-

Michael Lewis 42:50 And people

Ben Gilbert 42:50 ... with Taylor Swift and Oprah.

David Rosenthal 42:51 Yeah, we frame them as- Yeah, we, we frame them as companies.

Michael Lewis 42:53 In a, in a funny way, you're, you're still constraining yourself. You feel like you need this frame.... and you actually, you're not really living in a frame anymore. [laughing]

Ben Gilbert 43:01 Yeah, but constraints are good.

Michael Lewis 43:02 Yeah.

Ben Gilbert 43:02 Like format, forcing yourself into a format.

Michael Lewis 43:03 Sure, sure, but you should- but at some point, you're gonna wake up and say, "You know, we should be doing more biography. Uh, we should be doing more people." And, uh, if that person is not, you know, i- is not naturally a huge corporation, you may still th- you... I have a feeling there's more, there's, there's more- there's an evolution to come, that you're not just-

David Rosenthal 43:23 There may be.

Michael Lewis 43:23 You haven't, you haven't reached, like, the end point of this. So at what point do you start to feel confident, like, "We know what we're doing?"

David Rosenthal 43:31 Well, when the crash... You know, crash. When, when, uh, the reset happened in 2022, 2023.

Michael Lewis 43:38 So pretty recently.

David Rosenthal 43:39 Yeah.

Ben Gilbert 43:39 Crypto bubble-

David Rosenthal 43:40 Yeah

Ben Gilbert 43:40 ... tech stocks plummet-

Michael Lewis 43:41 Podcast advertising.

Ben Gilbert 43:42 Ad- advertising budgets kind of dry up-

Michael Lewis 43:44 Yeah

Ben Gilbert 43:44 ... end of 2022.

David Rosenthal 43:46 Ben and I looked at each other, and it was like, it, it wasn't even, like, really a conversation. We just knew what we had to do.

Ben Gilbert 43:52 We watched a lot of other people-

David Rosenthal 43:54 Yeah

Ben Gilbert 43:54 ... go for, uh, easy, secure money now.

David Rosenthal 43:58 Try and keep the music playing.

Michael Lewis 43:59 Right.

David Rosenthal 44:00 And we was just- we were just like, "Party's over. We need to get to work. We need to focus on only what is enduring and, like, make great, great, great work and stop doing everything else." Like, up until that point, we, we were- we used to do these things called specials. We would just do, you know, not totally random, but essentially random, kind of-

Ben Gilbert 44:21 Interviews

David Rosenthal 44:22 ... interviews and topics.

Ben Gilbert 44:22 Undifferentiated items.

David Rosenthal 44:23 Undifferentiated topics. And we said, "You know, we need to start making stuff that is only N of 1, only we can do, will only be great, and we need to stop doing everything else."

Ben Gilbert 44:32 And we did it on the commercial side, too. We said-

David Rosenthal 44:35 Yeah

Ben Gilbert 44:35 ... "Let's go cut deals with our favorite partners, even at discounts-

David Rosenthal 44:38 Get rid of most of our sponsors, yeah

Ben Gilbert 44:40 ... and try to just figure out, when we come out the other side of this, that we have, like, the best companies to work with commercially, as well as the most durable stories and brands associated with us because of the editorial side of the house."

David Rosenthal 44:52 Yeah.

Michael Lewis 44:52 The JP Morgans of the world, did they join before you proved that this new way of doing it-

David Rosenthal 44:58 No, we did a year. 2023 was the first year-

Michael Lewis 45:00 I see

David Rosenthal 45:00 ... of this.

Michael Lewis 45:00 And what were the epis- what were those episodes?

David Rosenthal 45:03 That was LVMH, that was the NFL-

Michael Lewis 45:05 Okay

David Rosenthal 45:05 ... uh, that was Porsche.

Michael Lewis 45:07 But it's your deep-

David Rosenthal 45:07 That was-

Michael Lewis 45:08 It's deep dives.

David Rosenthal 45:08 That was the beginning of what we really-

Michael Lewis 45:10 They're durable-

Ben Gilbert 45:10 Yeah

Michael Lewis 45:10 ... long episodes.

David Rosenthal 45:11 Yeah.

Ben Gilbert 45:12 Yeah.

David Rosenthal 45:12 Yeah, and I think that's when we started to build the confidence of, like, "Oh, we can do something that isn't-"

Michael Lewis 45:17 Isn't it interesting that you grabbed this kind of commercial attention only after you went really long?

David Rosenthal 45:23 Yes, and so then JP Morgan came in in the January '24, so we had did a year of kind of building this out.

Ben Gilbert 45:31 You're right. It was only after we had sort of leaned into Acquired as a brand about durability, about compounding over decades and, you know, centuries. And I don't think I appreciated that as a person, uh, in the early days of Acquired, and it certainly wasn't what the show was about.

David Rosenthal 45:49 Yeah.

Michael Lewis 45:49 Anyway, so I, we, I got us a little off track. Your lesson number three was Berkshire Hathaway, and don't be afraid to have a Too Hard pile. [laughing]

David Rosenthal 45:58 Yeah.

Michael Lewis 45:58 Which, pick another-

David Rosenthal 45:59 Oh, okay. Well, so then I-

Michael Lewis 45:59 We're doing, we're doing 10 of these

David Rosenthal 46:00 ... my frame for all of this story was, was Sequoia. So this story is very different than, than Sequoia, but, uh, we interviewed Doug Leone, uh, who was, you know, one of the, the, I guess, two stewards ago of, of Sequoia, and he told us that after the dot-com crash, for the, the Sequoia Fund, that was the, the dot-com bubble fund-

Michael Lewis 46:21 Mm

David Rosenthal 46:22 ... every other venture firm out there, after the bubble popped, were taking Mulligan funds. They went to their LPs and they said, "You know, there's nothing we can do on this one. We're gonna be more disciplined next time." We said, "Absolutely not. We will never lose money for our investors, ever. We will do everything we can possibly do to make this fund in the black." And he, he said the best- I think the best line anyone's ever said on Acquired, he said, "We looked at each other, and you could burn cigarettes on our arms, and we wouldn't flinch." [laughing] And they spent the next, like, five years, they didn't raise another fund.

Michael Lewis 46:55 Mm.

David Rosenthal 46:55 And they just, like, went to work with the portfolio and, like, turned it all-

Ben Gilbert 46:58 I think they stopped taking fees for a while until they were back in.

David Rosenthal 46:59 They stopped taking fees, yeah, and, and, and got it back, and it ended up being a, you know, a positive-returning fund.

Michael Lewis 47:06 This is how you get a reputation.

David Rosenthal 47:07 Exactly, and, and that was-

Michael Lewis 47:09 Easy

David Rosenthal 47:09 ... that moment for us was-

Michael Lewis 47:10 And easy to lose one, too, and so, I mean, it's... So they, they, they were really sensitive to reputation.

David Rosenthal 47:16 Yeah.

Ben Gilbert 47:16 Yeah.

Michael Lewis 47:17 Yeah.

Ben Gilbert 47:17 We'd studied enough businesses-

David Rosenthal 47:18 Yeah

Ben Gilbert 47:18 ... by that point, where we saw what led to durability, and I think we already were awake to the idea that all that matters is the late years of compounding. Like, in any given year, you look at a Mag 7 company, and their profits from the last year are greater than the first 20 years combined-

Michael Lewis 47:39 Right

Ben Gilbert 47:39 ... or whatever. And I think realizing that being around and being respected on the other side of this, you know, economic chasm is, like, the key to everything. We- who cares about making money this year? It's about five, 10, 20 years from now, and we have to, like, have the brand that people want to be a part of then.

Michael Lewis 47:58 Right, but it does- but you don't know that you are a Mag 7-

David Rosenthal 48:03 [laughing]

Michael Lewis 48:04 ... podcast.

David Rosenthal 48:04 It's kind of ridiculous to compare them. [laughing]

Ben Gilbert 48:06 Okay.

Michael Lewis 48:06 No, no, no, but-

David Rosenthal 48:07 Fair enough. Fair enough

Michael Lewis 48:07 ... but when you do, when you make this decision, you don't know that there's gonna be great riches 10 years out, or five years out, or three years out.

Ben Gilbert 48:14 Yeah.

David Rosenthal 48:15 But really, like, I think we were just- we both so believed... It was like the burn cigarettes on our arm.

Michael Lewis 48:19 Right?

David Rosenthal 48:20 Like, I think we just both so believed that that was the right thing to do.

Ben Gilbert 48:23 The return to quality.

Michael Lewis 48:23 Something had happened... Yeah.

David Rosenthal 48:24 Yeah.

Michael Lewis 48:24 So something had happened up at... before that, and you had figured out how to do this. You'd figured out how to study a business in, in a way that was really interesting. The first episode's not that interesting.

David Rosenthal 48:34 Yeah, yeah.

Michael Lewis 48:34 There's just not that much I didn't know, hadn't thought of-

David Rosenthal 48:38 Yeah

Michael Lewis 48:38 ... you know, whatever.

David Rosenthal 48:39 Well, tell us how you-

Michael Lewis 48:40 There's not that much on Pixar-

Ben Gilbert 48:41 And tell a story

Michael Lewis 48:41 ... and it's 30 minutes, or whatever it is. The a- there were... Now, in that first episode, I think there are more ads than there are you all talking, you two speaking.

David Rosenthal 48:48 [laughing] There were.

Michael Lewis 48:49 But, but, but-

Ben Gilbert 48:49 And now we pride ourselves on having the lowest-

Michael Lewis 48:51 Yes, I know, I know, I know, I know

Ben Gilbert 48:53 ... ad percent in the entire industry.

Michael Lewis 48:53 So let's just, let's stop, pause here before we get to number four. How do you study a business? Like, what have you learned about how to study a business that's different from when you started out?... explain to the audience what you do to prepare, to-

David Rosenthal 49:06 Oh, great.

Michael Lewis 49:06 What you do to learn about a business?

Ben Gilbert 49:07 Hmm.

David Rosenthal 49:08 Great. I- [chuckles]

Ben Gilbert 49:11 Go read everything ever about them.

Michael Lewis 49:13 So you, yep-

Ben Gilbert 49:13 Yeah.

Michael Lewis 49:13 You do what I do.

David Rosenthal 49:14 Yeah.

Ben Gilbert 49:15 Yep.

Michael Lewis 49:15 Yeah, go, whatever's out there.

Ben Gilbert 49:16 Right.

Michael Lewis 49:16 Right, so you do AI-

Ben Gilbert 49:18 Who's written-

Michael Lewis 49:18 That's just the AI part of it.

Ben Gilbert 49:19 Who's-

Michael Lewis 49:19 You do-

Ben Gilbert 49:19 Who started with canonical-

Michael Lewis 49:20 Yes

Ben Gilbert 49:21 ... who's done great canonical work in the past?

Michael Lewis 49:23 Right, right.

Ben Gilbert 49:23 And then what ideas do you have from reading the previous canonical work? And, you know, you, you then say, like, "I wonder if I can find this old YouTube video," and then those YouTube videos mention something else, and the, the spiderweb always starts with the preexisting canonical work.

Michael Lewis 49:37 Right, and, and at what point do you pick up the phone and start calling people who maybe have-

David Rosenthal 49:43 Yeah

Michael Lewis 49:43 ... information that isn't on the World Wide Web?

Ben Gilbert 49:45 Zero ever until about 2023, and now that is the most important way-

David Rosenthal 49:49 Oh, yeah

Ben Gilbert 49:49 ... that we research.

Michael Lewis 49:49 So that's, that's another thing.

David Rosenthal 49:50 But probably about 50%, for me, at least, about 50% of the way through the, like, start to get your arms around, then start calling.

Michael Lewis 49:55 Right. You don't call uninformed.

David Rosenthal 49:57 No.

Michael Lewis 49:58 You call-

David Rosenthal 49:58 No, no

Michael Lewis 49:58 ... knowing as much as there is to know, and then you start picking the brains of people who might know more and have not said.

David Rosenthal 50:03 Yeah. There's, like, the obvious people to talk to, like, you know, for Google, we talked to, you know, Sundar or Demis, or like, you know, like, obvious. Then there's, like, the less, slightly less obvious.

Michael Lewis 50:13 Can you, you say- you just say that so casually. Who gets to pick up the phone and talk to the C-

David Rosenthal 50:17 Well, this is part of the compounding effect

Michael Lewis 50:18 ... and talk to the CEO of Google about Google?

Ben Gilbert 50:22 Well-

Michael Lewis 50:22 I mean, nobody. [chuckles]

Ben Gilbert 50:23 We're in a scale economy business.

Michael Lewis 50:25 Nobody.

David Rosenthal 50:25 We're in a compounding business. [chuckles]

Michael Lewis 50:26 Right? So the fact that you... When do you first realize that you can pick up the phone-

David Rosenthal 50:32 Oh, that's a good question

Michael Lewis 50:33 ... and, and call Tim, who are, [chuckles] you know, that you have-

David Rosenthal 50:36 [laughing] Yeah.

Ben Gilbert 50:36 [laughing]

Michael Lewis 50:36 You're on this first-name basis with all these people. When does that start?

David Rosenthal 50:39 Uh, I think it was Mi- our Microsoft series, when we talked to, to Steve, to Ballmer.

Michael Lewis 50:43 Steve, yeah.

Ben Gilbert 50:44 Yeah.

Michael Lewis 50:45 Steve.

David Rosenthal 50:45 [laughing] Steve.

Ben Gilbert 50:46 Past Acquired guest.

Michael Lewis 50:46 Past Acquired guest-

David Rosenthal 50:47 Yeah

Michael Lewis 50:47 ... Steve Ballmer.

David Rosenthal 50:48 [chuckles]

Michael Lewis 50:48 I love, I love na- name-dropping in your world-

David Rosenthal 50:50 [laughing]

Michael Lewis 50:50 ... is so different from name-dropping in, like, Hollywood.

David Rosenthal 50:53 [chuckles] Yeah.

Michael Lewis 50:53 None of your names mean anything in Hollywood.

David Rosenthal 50:54 Oh, yeah, it's true.

Michael Lewis 50:55 But, but they mean everything here. [laughing]

Ben Gilbert 50:57 [chuckles] Well, and the, and the arenas are so funny, 'cause, like, these people aren't, most of them aren't famous, and they're 1,000 to 10,000 times wealthier than-

Michael Lewis 51:05 Of course

Ben Gilbert 51:05 ... these-

David Rosenthal 51:06 Yeah

Ben Gilbert 51:06 ... these-

Michael Lewis 51:06 Yeah

Ben Gilbert 51:06 ... Hollywood stars.

Michael Lewis 51:07 Yes.

Ben Gilbert 51:07 It's just different yardsticks.

David Rosenthal 51:08 Well, what's funny with Microsoft, so we had some acc- 'cause y- Ben used to work at Microsoft, uh, before-

Ben Gilbert 51:13 Which got us zero access.

David Rosenthal 51:15 Well, no, no, no, but you knew some pe-... Like, here's, in my mind, what sort of happened with this, as I'm trying to think about how to answer Michael's question. Um, because we had started in Seattle, and you still live in Seattle, and you had worked at Microsoft, when we started our Microsoft journey, uh, we knew some people.

Michael Lewis 51:30 Right.

Ben Gilbert 51:31 Yeah.

David Rosenthal 51:31 And-

Ben Gilbert 51:31 That's true

David Rosenthal 51:32 ... we were like, "Well, let's see if we can talk to Steve," and so then we, we talked to Steve, and we got his, you know, perspective on things, and i- it completely changed how we-

Ben Gilbert 51:41 Was that a cold email?

David Rosenthal 51:43 I think it might have been.

Michael Lewis 51:44 Is that the first time you do that?

David Rosenthal 51:45 First time we reached that high.

Michael Lewis 51:47 Okay.

Ben Gilbert 51:47 Yeah, and you know what? This is where reputation matters. Steve didn't get back to us for a day, and then we heard back, and he said, "I don't listen to podcasts. I haven't listened to your podcast."

David Rosenthal 51:56 "I talked to some people."

Ben Gilbert 51:57 "But I talked to some people-

David Rosenthal 51:58 Yeah

Ben Gilbert 51:58 ... that I trust, and they say you're great."

David Rosenthal 52:01 Yeah.

Ben Gilbert 52:01 "So let's hop on a call." And we wouldn't have gotten the response back if-

David Rosenthal 52:05 And he gave us probably three hours, four hours in research for-

Michael Lewis 52:09 He did?

Ben Gilbert 52:10 Yeah.

David Rosenthal 52:10 Yeah.

Michael Lewis 52:10 And you learned a lot.

David Rosenthal 52:11 Yeah.

Ben Gilbert 52:12 Yeah.

David Rosenthal 52:12 This, but before we even interviewed him, that was later.

Michael Lewis 52:14 Right.

David Rosenthal 52:14 But, uh, just, just in research.

Michael Lewis 52:16 I see.

David Rosenthal 52:17 And we learned a lot.

Michael Lewis 52:18 And did you, did you all have a moment where you thought, "Oh, my God, let's keep doing that. That worked"?

David Rosenthal 52:21 Yes. Well, yeah, so then we were like, "That worked great." [chuckles]

Ben Gilbert 52:22 'Cause it kind of worked with Jensen, too. So originally, when we had the idea in 2021 to do NVIDIA, we thought we were like an interview show then. We thought the interviews would be better than our core storytelling episodes, 'cause we hadn't discovered that the Ben and David storytelling is our N-of-1 product. It is the thing that we uniquely can do that no one else can do, and we thought getting these big gets would be the key to success. Uh, which is funny, 'cause usually they underperform our standard format. And so in 2021, we emailed NVIDIA through the-

David Rosenthal 52:52 Yeah

Ben Gilbert 52:52 ... warmest connection we could find and said, "Can we interview Jensen?"

David Rosenthal 52:54 We're planning to cover the company. Can we interview Jensen? [chuckles]

Ben Gilbert 52:57 And they said... They gave us a nice-

David Rosenthal 52:58 They were like, "No." [chuckles]

Ben Gilbert 52:58 ... party line back.

David Rosenthal 52:59 [chuckles]

Ben Gilbert 52:59 "Uh, he's very busy." And then in 2022, we did our NVIDIA Part One. We did our standard research process, and I think we did our Part Two.

David Rosenthal 53:07 We did Part Two. Yeah, we went back-to-back.

Ben Gilbert 53:07 And then we got a note from NVIDIA saying, "Jensen has listened and wants to know who your inside sources are-

David Rosenthal 53:13 [chuckles]

Ben Gilbert 53:13 ... because it's the most correct telling of NVIDIA's story ever." And we were like, "Oh, this was all just public information," and if you're good at spidering the internet and just, like, digesting it and thinking about w- why he would've said something at this point in time to this audience in these various random university talks and stuff, you can kind of-

David Rosenthal 53:31 And GTCs

Ben Gilbert 53:31 ... piece together the story. And so that sort of like-

Michael Lewis 53:34 But you're still flying by radar a bit.

David Rosenthal 53:36 Yeah. Oh, we were totally flying by radar-

Michael Lewis 53:38 Right.

David Rosenthal 53:38 Yeah, yeah.

Ben Gilbert 53:38 But that landed us. They were like, uh, that started the relationship, and eventually-

David Rosenthal 53:42 Yeah. Then they're like, "All right, he wants to meet you," and then, and then-

Ben Gilbert 53:44 "Do you want to do an interview and follow up on your episodes?"

Michael Lewis 53:46 But that- but y- you did an in- interview episode with him, but it doesn't do as well as your own NVIDIA episode.

Ben Gilbert 53:52 That one may have been, like, at some particular peak of NVIDIA buzziness, so it was our, probably our then largest episode.

David Rosenthal 53:58 Well, here's what happens with interviews.

Ben Gilbert 54:00 But everything since makes it-

David Rosenthal 54:00 They-

Michael Lewis 54:01 Look

Ben Gilbert 54:01 ... they look small.

David Rosenthal 54:02 They spike faster.

Michael Lewis 54:03 Yeah, and then they go down.

David Rosenthal 54:04 And then they-

Ben Gilbert 54:05 And those listeners don't retain-

David Rosenthal 54:06 Yeah

Ben Gilbert 54:07 ... the way that-

David Rosenthal 54:08 Whereas if you look at our, um, Costco episode, which is now two and a half years old, or, um, LVMH, Hermès, Rolex, like, they just, they just keep going.

Ben Gilbert 54:18 They just keep going.

David Rosenthal 54:19 They just... I mean, I'm sure your books are like this. Like, they just, they just keep going.

Michael Lewis 54:21 Yeah. Every time I bring out a new book, it has the same effect on the old books that a new podcast has on old podcasts.

David Rosenthal 54:28 Mm.

Michael Lewis 54:28 Yeah, it sells all the backlist.

Ben Gilbert 54:29 Mm.

Michael Lewis 54:29 So then, so yes. All right, so, um, I was asking you how you studied a business.

Ben Gilbert 54:34 Yeah. [chuckles]

Michael Lewis 54:34 You told me you-

David Rosenthal 54:35 Oh, yeah, yeah

Michael Lewis 54:35 ... you read everything there is.

David Rosenthal 54:36 Yeah, yeah. Okay, yeah, yeah.

Michael Lewis 54:37 You... So and you must find, when you go and read everything there is, you're very polite, and you're very generous about citing your sources and all that, but you must find-

David Rosenthal 54:48 My wife is an academic. My wife has a PhD, was trained as an academic, and she was like, "You guys gotta cite your sources. Like, what are you doing?" Like... [chuckles]

Michael Lewis 54:54 Ah, well, yeah, but it's also, it- but you, you... Are you ever surprised by the weakness of the source material?

Ben Gilbert 55:03 Yeah.

David Rosenthal 55:03 Yes.

Ben Gilbert 55:04 ... In fact, literally today-

David Rosenthal 55:05 We, we are no longer surprised, but [laughs]

Ben Gilbert 55:07 We got an email from a company that we recently covered saying, "You said a, a factually incorrect story in the episode, and we know the book that you got it from, 'cause it was factually incorrect in that book. We told the author that it was factually incorrect, and it went out anyway."

Michael Lewis 55:20 Right.

Ben Gilbert 55:21 "And now you're repeating the incorrect story." And, you know, we have now an errata section where we-

Michael Lewis 55:26 You're mainly

Ben Gilbert 55:26 ... publish our email list.

Michael Lewis 55:27 And I bet you're mainly correcting other people's errors that you just repeated.

David Rosenthal 55:31 I mean-

Michael Lewis 55:31 Yeah.

David Rosenthal 55:32 I mean, sometimes they're ours.

Ben Gilbert 55:32 Sometimes they're ours.

Michael Lewis 55:33 Yeah.

Ben Gilbert 55:34 Sometimes we make a financial calculation error or something like that, but-

Michael Lewis 55:36 Right. So we read all source material-

David Rosenthal 55:38 Yeah

Michael Lewis 55:38 ... and then, and then we start to make phone calls in 2023, and now the phone calls are more, are, are, have become extremely important, and you're making-

David Rosenthal 55:45 Extremely, yeah

Michael Lewis 55:46 ... 25 of them an episode.

Ben Gilbert 55:47 Google was 40, probably-

Michael Lewis 55:48 40

Ben Gilbert 55:48 ... across the series.

David Rosenthal 55:49 Yes.

Michael Lewis 55:49 And do you find that when you're reaching out on- by phone to all of these people, that, that they always wanna talk to you, or-

Ben Gilbert 55:55 No.

Michael Lewis 55:56 No. Sometimes it-

Ben Gilbert 55:56 It makes, yeah. But usually when you approach it with a spirit of, um-

Michael Lewis 56:00 I'm just trying to understand its own background.

Ben Gilbert 56:02 Yes. We are going to tell a narrative here. Our biggest question to you is, what is most misunderstood, and what incorrect stories are out there where we can set the record straight?

Michael Lewis 56:12 Right.

Ben Gilbert 56:13 And you get lots of great information-

Michael Lewis 56:14 Oh, yeah, [laughs]

Ben Gilbert 56:15 ... after that.

David Rosenthal 56:15 Yeah, yeah.

Michael Lewis 56:15 It's a very good way to go about it.

David Rosenthal 56:17 Yeah.

Michael Lewis 56:17 It's-

Ben Gilbert 56:17 And, and we tell-

Michael Lewis 56:18 I do the, I do the same thing. When I'm researching something, I, I don't know what the story is-

David Rosenthal 56:23 Yeah

Michael Lewis 56:23 ... for the longest time, and I'm holding everything very loosely. And all the... almost all the relationships I have with people I'm interviewing is, "Hey, this is all on background. I just wanna try to understand this."

David Rosenthal 56:32 Yeah.

Michael Lewis 56:32 "Can I hop on a call with you?" And they're usually pretty open to it, and like, "I just wanna be educated," kind of thing. And it's a great way to say like, "What's the stupid thing people say?" Because everybody has an opinion.

Ben Gilbert 56:44 But it's not a trick. Like, this isn't, "Here's one cool trick to get people to talk to you." What... I think you mean it earnestly, and we mean it earnestly of like, "I wanna make something-

Michael Lewis 56:52 That's good!

David Rosenthal 56:53 Yeah

Ben Gilbert 56:53 ... everybody has different-

Michael Lewis 56:54 Right, yeah

Ben Gilbert 56:55 ... beliefs about the truth, but I wanna, I wanna make the story that most correctly approximates the average truth- [laughing] ... that exists from all these different truthy sources.

David Rosenthal 57:05 Yeah. Yeah.

Michael Lewis 57:06 [laughs] Yeah, I don't think of it quite that way, I- but I do think it's like I wanna give back something that's good, and pure, and true, and is like, is like the thing that will, once it's said, there's nothing else to say. It's like, done.

Ben Gilbert 57:17 Yeah.

David Rosenthal 57:18 I got to imagine for your subjects, and I think a big part of us, too, is like, there's the truthy aspect, which, which is very, very important, but there's also the, like, this is gonna be great. Like, this is gonna be really fun. This is gonna be entertaining to read, and people are going to consume it. That's, I think, a huge motivation for our sources.

Michael Lewis 57:35 Have you... So when you're working on one of these episodes, do you, are you aware of how much fun you're having learning, and do you ever- have you ever, ever shut something down just because, "Oh, this isn't that much fun?" The Fed, maybe the Fed.

Ben Gilbert 57:47 That's kind of why we killed the Fed.

David Rosenthal 57:49 Yeah.

Ben Gilbert 57:49 We've, we've definitely killed other episodes that-

Michael Lewis 57:50 If you can find fun in the Fed, man, [laughing] you are-

Ben Gilbert 57:52 Yeah

Michael Lewis 57:53 ... you are doing, you're, you're... You can find fun in anything.

David Rosenthal 57:55 You are doing, yeah.

Michael Lewis 57:56 We can generate-

David Rosenthal 57:57 You're doing good, yeah

Michael Lewis 57:57 ... all that enthusiasm for each other's insights about the Fed.

Ben Gilbert 57:59 We killed-

David Rosenthal 58:00 Yeah

Ben Gilbert 58:00 ... Bell Labs 'cause we couldn't find a through line. There were so many different stories-

Michael Lewis 58:04 Ooh, what a good subject, though

Ben Gilbert 58:04 ... and so many different characters.

David Rosenthal 58:05 I know.

Michael Lewis 58:06 What a good subject.

David Rosenthal 58:06 We, we might come back to it, but-

Michael Lewis 58:07 Bell Labs, I... That would- That's one that I- if I saw it, I'd say, "Yes, I wanna listen to that."

David Rosenthal 58:11 Yeah. Mm. It feels like a Michael Lewis book.

Ben Gilbert 58:13 There- you could kind of do it as the history of the transistor, but then you miss all these other things like radar and, um-

David Rosenthal 58:21 Yeah.

Ben Gilbert 58:21 Yeah.

David Rosenthal 58:21 There's so much stuff that came out of Bell Labs.

Michael Lewis 58:23 Did you do Xerox PARC?

Ben Gilbert 58:24 No.

David Rosenthal 58:25 No, no, but similar.

Ben Gilbert 58:25 That's a good-

David Rosenthal 58:26 Yeah.

Michael Lewis 58:27 It's another one.

Ben Gilbert 58:27 Right.

David Rosenthal 58:27 Yeah.

Michael Lewis 58:28 I guess Google still has this spirit, where they're doing lots of stuff that maybe you can't identify instantly the com-

David Rosenthal 58:35 Quantum computing.

Michael Lewis 58:36 Yeah, the payoff that's right around the corner. This kind of like, "Let's just fiddle around, see what we find" stuff.

David Rosenthal 58:42 I mean, yeah.

Michael Lewis 58:42 The corporate America, I think, just generally does less of that than it used to do a long time ago. Uh, but-

David Rosenthal 58:47 But the big tech companies are-

Michael Lewis 58:48 Am I wrong? You're looking at me like-

Ben Gilbert 58:49 No, I'm trying to think. That's an interesting... So, uh, I'm stealing this idea from our friend Ham- Hamilton Helmer, but he brought up this idea in conversation with us that, um, there is a positive benefit to monopolies because they create the cash flows that fund these sorts of-

Michael Lewis 59:08 Research

Ben Gilbert 59:08 ... boondoggle-

Michael Lewis 59:09 Yeah

Ben Gilbert 59:09 ... basic research. And a lot of the most important-

Michael Lewis 59:14 Yeah

Ben Gilbert 59:14 ... technologies that move society forward-

Michael Lewis 59:16 You need some waste

Ben Gilbert 59:16 ... come out of these-

Michael Lewis 59:18 You need fat.

Ben Gilbert 59:19 Yes.

Michael Lewis 59:19 Yeah, right.

Ben Gilbert 59:19 And like, boy, does Google have that.

Michael Lewis 59:21 Right.

Ben Gilbert 59:22 I mean, you just... Their last quarter was their first $100 billion quarter ever.

Michael Lewis 59:26 Right.

Ben Gilbert 59:26 Astonishing.

Michael Lewis 59:27 I know, I know.

Ben Gilbert 59:27 And that's how they fund, you know, the next Gemini.

David Rosenthal 59:30 Yeah, all this.

Michael Lewis 59:31 Right,

Michael Lewis 59:32 right.

David Rosenthal 59:32 And Waymo, and yeah.

Michael Lewis 59:33 So the... Actually, you just-

David Rosenthal 59:33 Okay

Michael Lewis 59:33 ... bring up your friend, Hamilton Helmer-

Ben Gilbert 59:36 Yes

Michael Lewis 59:36 ... who I'd never heard of until I listened to your podcast, and you do that thing of the 7 Powers.

David Rosenthal 59:40 7 Powers, yeah.

Michael Lewis 59:40 Yeah. Let's just briefly, s- since we're here, how you study a business. That has been a useful analytical framework for you-

Ben Gilbert 59:47 Yeah

Michael Lewis 59:48 ... whatever these 7 Powers are, and I'll never remember any of them. But [chuckles] -

Ben Gilbert 59:51 That's why we say them every episode.

Michael Lewis 59:51 Network effects and all that stuff.

David Rosenthal 59:53 Yeah, yeah.

Michael Lewis 59:53 Uh, what, what is it about Hamilton?

Ben Gilbert 59:56 It, look-

Michael Lewis 59:57 What, what, like, where did you find him, [laughing] and why is he, you making him so famous?

Ben Gilbert 1:00:01 There, there's a lot of good frameworks out there for analyzing business strategy, and this one just clicked. I just read it, and I was like, "That is actually the complete list."

Michael Lewis 1:00:10 When did you read it?

Ben Gilbert 1:00:11 Uh, you found the book.

David Rosenthal 1:00:12 2020? I think it was 2020. Uh, he was- it was very obscure.

Michael Lewis 1:00:16 I looked at that list. I read the list, and it was all gobbly gook to me. [laughing] These, there were these... It, I mean, it didn't... The words did not mean things.

Ben Gilbert 1:00:22 But if you break-

Michael Lewis 1:00:22 You have to know what they mean.

Ben Gilbert 1:00:23 If I asked you in plain English, can you brainstorm all the ways in which a, a industry-leading company gets away with being more profitable than their competitor and gets to keep being more profitable?

Michael Lewis 1:00:37 Right.

Ben Gilbert 1:00:37 That's the list you would come up with.

Michael Lewis 1:00:39 Right.

Ben Gilbert 1:00:39 You might find other words-

Michael Lewis 1:00:39 What creates the moat?

Ben Gilbert 1:00:41 Yes.

David Rosenthal 1:00:41 Yeah.

Michael Lewis 1:00:41 Right.

David Rosenthal 1:00:41 Yeah.

Michael Lewis 1:00:42 Right, but so, so why did you decide you even needed that framework?

David Rosenthal 1:00:47 We... Oh, it goes hand in hand with the durability.

Ben Gilbert 1:00:50 Yeah.

David Rosenthal 1:00:51 If you're trying to study why is a business durable, it, it, the cause is the power.

1:00:56 ... We'd always been searching for a way to land the plane on the episodes. Like, we tell this story-

Michael Lewis 1:01:01 Yep.

David Rosenthal 1:01:01 -and we finish the story, but that-

Ben Gilbert 1:01:03 So what?

David Rosenthal 1:01:03 -felt unsatisfying.

Michael Lewis 1:01:04 Yep.

David Rosenthal 1:01:04 Like, uh, and-

Ben Gilbert 1:01:05 What's the takeaway?

David Rosenthal 1:01:06 Yeah, and so we've had all various permutations of analysis at the end.

Michael Lewis 1:01:10 Buy or sell or hold.

Ben Gilbert 1:01:12 Right.

David Rosenthal 1:01:12 Yeah, yeah.

Ben Gilbert 1:01:12 At least on grading.

David Rosenthal 1:01:12 You know, we did bull and bear-

Michael Lewis 1:01:13 Right

David Rosenthal 1:01:13 ... and grading and blah, blah, blah. Once we shifted to like, "Hey, we're studying these great companies, these durable businesses," power felt like a, a really good part of that, like, so what?

Michael Lewis 1:01:26 Right.

David Rosenthal 1:01:26 Why? [chuckles] For me, a critical, critical part of process, it goes back to writing a senior thesis at Princeton, everything needs to pass through multiple cycles of source material, through my brain, through my fingers, onto a keyboard, and recycle back through-

Michael Lewis 1:01:42 Yep, yep

David Rosenthal 1:01:42 ... about three times.

Michael Lewis 1:01:43 Yep.

David Rosenthal 1:01:44 Uh, and, and so, like, I don't use AI note-taking. I do write physical notes in hard copy books.

Michael Lewis 1:01:50 Yep.

David Rosenthal 1:01:50 Like, if I'm not doing that, uh, I feel like-

Michael Lewis 1:01:54 You haven't thought about it

David Rosenthal 1:01:54 ... it's not gonna work. Yeah, yeah.

Ben Gilbert 1:01:56 His, his annotated books are-

David Rosenthal 1:01:57 And what do you do? [chuckles]

Michael Lewis 1:01:57 Yeah. So I have exactly the same, uh, e- issue, and I discovered I wanted to be a writer writing my senior thesis, and no ambition to do it before then. And then, all of a sudden, I thought, "Oh, my God, I love this," and what I loved was just that, was the, was the constant recycling of the, of the thought. And, and so what I do, in my... The, the process, I don't wanna get too far away from your podcast, but-

David Rosenthal 1:02:18 I, I think people will want to hear.

Michael Lewis 1:02:18 So here I'm sitting with my notepad.

David Rosenthal 1:02:19 Yeah, yeah.

Michael Lewis 1:02:20 So this is a filter. Like, if I'm talking to you, it takes effort to put it down on the page.

David Rosenthal 1:02:24 Yeah.

Michael Lewis 1:02:24 I don't record anything, that I've filtered it-

David Rosenthal 1:02:27 Yeah

Michael Lewis 1:02:27 ... it's interesting enough to me that it belongs on the page. Then I go home, and I write the notes up quickly. Uh, and that's another filter. If what's on the page interests me enough to put it in, uh, uh, in, uh, uh, in a Word document, then I've got... It's filtered again.

David Rosenthal 1:02:41 Yep.

Michael Lewis 1:02:42 Um, and I d- and I keep those notes while I'm working on a book, and the file will be 500 pages long, by the way. It may be longer by the time.

David Rosenthal 1:02:50 Mm.

Michael Lewis 1:02:50 And it's just stuff, and then I start thinking about w- how do you frame this story? What is this story? Um, but it's... That's months usually down the road. Like, and there are times when I get into something, and I am months into it, and I realize, "Oop, there's nothing here." With Sam Bankman-Fried, I was a year into it, and I did not know what I was gonna do with it until it blew up. And then I thought, "Oh, my God! I ha- [laughing] I have the story." [laughing] When it blew up-

David Rosenthal 1:03:18 Do you think you would've, uh-

Ben Gilbert 1:03:19 You had been sitting there for a year watching him.

Michael Lewis 1:03:21 I did other things, too, but-

David Rosenthal 1:03:21 Do you think you would've not published the book if it hadn't-

Michael Lewis 1:03:23 Oh, no, I wouldn't have-

David Rosenthal 1:03:24 Wow! You would've killed the book.

Michael Lewis 1:03:25 Well, I might have found a way to do it. I might have found a way to do it, but I hadn't found a way to do it, and it was always the same conversation with my editor. It was, "I just don't know where this is going. I don't know what the end is. When I don't know what the end is, I don't know what the beginning is," and it's that simple. And it wasn't that, oh, I smelled fraud or anything like that. It was just, it didn't have shape to it. It was just w- it was picaresque experience after picaresque experience. It was like Don Quixote, but the, but the first chapter over and over and over and over. And so there was material there, which is why I kept coming back. It was fun. There were endless scenes. There were-

David Rosenthal 1:04:03 Mm-hmm.

Michael Lewis 1:04:03 You know?

David Rosenthal 1:04:03 Yeah.

Michael Lewis 1:04:03 But it was just like, I don't know-

David Rosenthal 1:04:04 Yeah, but scenes don't make a-

Michael Lewis 1:04:06 No!

David Rosenthal 1:04:06 Scenes don't make a play. Scenes don't-

Michael Lewis 1:04:07 They're necessary.

David Rosenthal 1:04:08 Yeah.

Michael Lewis 1:04:08 They're, they're, they're necessary but insufficient.

David Rosenthal 1:04:10 Yeah.

Michael Lewis 1:04:11 So but the bigger point, I hate to-

Ben Gilbert 1:04:12 Mm.

Michael Lewis 1:04:12 We... I don't wanna be talking about me. We've been talking about you.

David Rosenthal 1:04:15 [laughing]

Michael Lewis 1:04:15 But this pro- you are doing, I sm- I smell this from your, your work. You're doing a s- a something that rhymes what I do- with what I do. You are gathering before you make judgments. You're open to learning things. You're trying to be the world's best student. You want people to want to teach you, and, uh, and then if you... If people want to teach you, they will teach you. And then you can take what you learn, and you can present it in another way, the best way you can present it.

Ben Gilbert 1:04:44 I basically take a note in two scenarios. One is, "Oh, I just figured out how that works, and that is so cool." Like, when I learned how a mechanical watch worked-

David Rosenthal 1:04:55 Yeah, you're the master of the, like-

Michael Lewis 1:04:56 [laughing]

David Rosenthal 1:04:56 ... this is such a cool thing.

Ben Gilbert 1:04:58 It was like I, we- this is-

Michael Lewis 1:04:59 You got excited.

Ben Gilbert 1:05:00 This is in some ways irrelevant to the business success of Rolex, but I, uh, it will, it will make my year to explain-

David Rosenthal 1:05:06 Yeah

Ben Gilbert 1:05:06 ... on air how a mechanical watch works and how a- an escapement i- i- is a thing. And my excitement around that-

David Rosenthal 1:05:15 Those are the greatest moments, yeah.

Ben Gilbert 1:05:16 It is-

David Rosenthal 1:05:16 Or, or, or the Costco ballet or, like, yeah.

Ben Gilbert 1:05:19 Yeah. So there's the, "I just figured out how something worked," and then there's the, "I just made a connection," and I-

David Rosenthal 1:05:25 Yes.

Ben Gilbert 1:05:25 It's-

David Rosenthal 1:05:25 Yep, yep

Ben Gilbert 1:05:25 ... um, like, I'll be on a run. I'll be listening to an audiobook. It'll be the third audiobook that I've listened to about a certain subject.

David Rosenthal 1:05:31 Yep.

Ben Gilbert 1:05:31 And I'll, I'll hear something and think, "Oh, that's why!" And I'll stop, and I'll write my little Apple note, this timestamp in this book, you know, just realized why... I can't think of an example right now. This happened.

David Rosenthal 1:05:44 Yeah.

Ben Gilbert 1:05:45 And then later, I go, and I look it up in the Kindle book, and I figure out, like, how I wanna explain the connection that I just learned on air. But it has to come from the... I have to, like, remember and bottle up my excitement of learning it in that moment to share that enthusiasm with the listener.

Michael Lewis 1:06:00 Yeah. Yep, that's, that's all very familiar to me.

Ben Gilbert 1:06:05 All right, listeners. Now is a great time to tell you about a great friend of the show, WorkOS, and since we recorded this episode in the garage where Google started, we thought this would be a fitting moment to talk about when a startup exits their proverbial garage phase and starts to become a real business.

David Rosenthal 1:06:22 [chuckles] Yeah. Garages were, were a little more popular back in the day with HP or Apple or in the '90s with Google and Amazon, all founded in garages. Today, though, it's more likely an SF apartment or a coffee shop or a hacker house, but, you know, the key question remains: What do you do after you find product market fit and when you start scaling?

Ben Gilbert 1:06:42 One big answer is moving upmarket and finding your first enterprise customers, and the best way to do that is WorkOS. WorkOS makes it easy to add all the things that enterprises require: single sign-on, SCIM-... permissions, audit logs, all with simple drop-in APIs. It lets you scale revenue bigger and faster earlier in the life of your company, or if you already have some of this functionality, to just simplify your code base.

David Rosenthal 1:07:08 As we've been saying all season, this is even more important in the AI era. AI products need deep access to sensitive data to be impactful, so these security features are just the price of admission for enterprises.

Ben Gilbert 1:07:20 You really don't want to be late to this. We talked on our Google series about even with how successful they are today, by initially ignoring the enterprise, Google left the door open to competitors for a while. Google Docs and their original G Suite were so good, I mean, amazing productivity apps on the web, but they lacked enterprise features for years, leaving the door open for Microsoft to catch up and respond with Office 365.

David Rosenthal 1:07:45 Yeah, it's funny, we were talking with WorkOS founder Michael Greenwich about this, and he was making an impassioned pitch to us that Google should have won the entire web-based productivity market, given they were first and, and they had better technology.

Ben Gilbert 1:07:57 Get your enterprise story right early on. OpenAI, Anthropic, Cursor, Perplexity, Sierra, Replit, Vercel, hundreds of other AI startups, too, they all rely on WorkOS as their enterprise-ready auth solution, and you should, too.

David Rosenthal 1:08:11 So if you're ready to get started with just a few lines of code for SAML, SCIM, RBAC, SSO, authorization, authentication, and everything else to please IT admins and their checklists, check out WorkOS. It's the modern software platform to make all this happen. That's workos.com, and just tell them that Ben and David sent you.

Michael Lewis 1:08:29 So give me a fourth example of a-

Ben Gilbert 1:08:31 So-

Michael Lewis 1:08:31 -lesson learned from an episode.

Ben Gilbert 1:08:32 Uh, this we learned... I, I feel like I learned from Ben Thompson, which is-

Michael Lewis 1:08:36 Tell the audience who Ben Thompson is.

Ben Gilbert 1:08:38 B- Ben Thompson is the author of Stratechery, a-

David Rosenthal 1:08:40 Proprietor of Stratechery.

Ben Gilbert 1:08:41 Proprietor, founder of Stratechery. Uh-

David Rosenthal 1:08:43 We did an episode on, on him and, and with him, uh, a few years ago.

Ben Gilbert 1:08:46 But his writing is sort of the thing that we bonded over when we met.

David Rosenthal 1:08:50 Yes.

Ben Gilbert 1:08:50 He's a great strategy technology writer. A, the internet niches are way bigger than you think they are. So if you think you're writing about a niche topic, th- the internet being a global community of four-ish billion people means that any little niche, i- there might be six people in your geography that care about it in your local town, but there, there's millions of people online.

Michael Lewis 1:09:14 Right.

Ben Gilbert 1:09:14 And the internet is your way to reach them. So no matter how niche you are, it's actually way, way bigger. And the corollary to that is, in the media business, in podcasting, you can grow your audience, and thus your revenue, and thus your importance in the world. Uh, all outputs can scale completely independently of your inputs. D- David and I effectively do the same thing that w- we did, not 10 years ago, but two years ago to make an episode, but the audience has grown so much that, like, every output from the business is dramatically different, even though all the inputs are the same. And so we really, like, took to heart the niche of smart people who care about how these businesses work and why the world is arranged in this way is large, and we don't have to scale our operation to reach them. We just have to keep making the highest quality stuff and giving people reason to share it.

Michael Lewis 1:10:07 What is your operation? I mean, we're in here with- [chuckles]

David Rosenthal 1:10:10 [chuckles]

Michael Lewis 1:10:10 ... a, a, a large group of large men. [laughing] And, and a, and, uh-

David Rosenthal 1:10:13 Thanks, guys.

Ben Gilbert 1:10:13 This is a bigger operation than usual.

Michael Lewis 1:10:15 But, but this isn't your normal operation.

David Rosenthal 1:10:16 No, no.

Ben Gilbert 1:10:16 Right.

Michael Lewis 1:10:16 What is your operation?

Ben Gilbert 1:10:18 Uh, I have a basement studio. You know, it's an office that we happen to have-

Michael Lewis 1:10:21 Right

Ben Gilbert 1:10:21 ... some lights and a camera in.

David Rosenthal 1:10:23 I built a studio in my backyard.

Michael Lewis 1:10:24 So that's you two.

Ben Gilbert 1:10:25 A little, little shed.

Michael Lewis 1:10:25 You mentioned that you send your stuff to an editor-

Ben Gilbert 1:10:28 Yes

Michael Lewis 1:10:28 ... without naming the editor.

Ben Gilbert 1:10:29 His name's Steven.

David Rosenthal 1:10:30 Steven. Steven is-

Michael Lewis 1:10:31 Does Steven have a last name?

David Rosenthal 1:10:32 Steven is a critical part about what we do. [chuckles]

Ben Gilbert 1:10:33 Uh, he does. I'm not sure he'd want us to share on air.

Michael Lewis 1:10:35 Okay.

David Rosenthal 1:10:35 Yeah.

Michael Lewis 1:10:35 So Steven, so St-

Ben Gilbert 1:10:36 So he's-

Michael Lewis 1:10:36 So the mysterious Steven.

Ben Gilbert 1:10:37 He's an independent contractor. We're his only client.

Michael Lewis 1:10:39 And he works only for you?

Ben Gilbert 1:10:41 He's-

David Rosenthal 1:10:41 Yes

Ben Gilbert 1:10:41 ... and he's the best. He's the best.

Michael Lewis 1:10:43 So he's clearly good at his job.

Ben Gilbert 1:10:44 He is an integral part.

David Rosenthal 1:10:44 Steven is as maniacal about creating the best audio products-

Ben Gilbert 1:10:53 And video, when we do it.

David Rosenthal 1:10:54 But w- we... Yeah, no, we-

Ben Gilbert 1:10:55 That's it

David Rosenthal 1:10:55 ... no assistants, no-

Michael Lewis 1:10:56 You, no, so-

David Rosenthal 1:10:56 We do, we do everything ourselves.

Michael Lewis 1:10:57 You don't sell, you don't have an ad sales agent?

David Rosenthal 1:10:59 We do, we do all the selling.

Ben Gilbert 1:11:00 We love doing the-

David Rosenthal 1:11:01 We love doing the business

Ben Gilbert 1:11:02 ... ad sales ourselves.

Michael Lewis 1:11:03 You do the... Right.

David Rosenthal 1:11:03 We love, we love doing the business-

Michael Lewis 1:11:05 You got to get a piece

David Rosenthal 1:11:05 ... equally as much as we love making the show.

Ben Gilbert 1:11:06 And I love the alignment. The business and the content are equally important, and they're, they're, like, married.

David Rosenthal 1:11:13 Yeah, it's funny-

Ben Gilbert 1:11:13 They're focused

David Rosenthal 1:11:13 ... preparing for this-

Michael Lewis 1:11:14 Yes

David Rosenthal 1:11:14 ... like, we're always tempted, like, to just talk about the business, 'cause we love the business as much as the show, but we never talk about the business. [chuckles]

Michael Lewis 1:11:19 We do. So I wanna- so let's just stop here for a moment, 'cause I wanna talk about this. First, uh, before we move on from Steven, so Steven is in this rare position of basically being the only person who helps you create this thing.

Ben Gilbert 1:11:27 Yeah.

David Rosenthal 1:11:27 Yeah.

Michael Lewis 1:11:28 How different is the w-

David Rosenthal 1:11:30 We hired a wonderful production crew because we wanted to have great video for-

Michael Lewis 1:11:33 Right

David Rosenthal 1:11:33 ... for today.

Michael Lewis 1:11:34 Right. So how different is what you give, what comes out of-

Ben Gilbert 1:11:40 Ah

Michael Lewis 1:11:40 ... S- Steven-

Ben Gilbert 1:11:41 Oh

Michael Lewis 1:11:41 ... from what you give him?

Ben Gilbert 1:11:42 Eight, nine hours of raw audio with dozens of retakes, sometimes hundreds of retakes.

David Rosenthal 1:11:50 We produce each other as we go.

Michael Lewis 1:11:51 Hundreds of retakes?

David Rosenthal 1:11:52 Yeah.

Ben Gilbert 1:11:52 Yeah, David will say a paragraph, and I'll be like-

Michael Lewis 1:11:55 Wait, wait, I wanna do that in an Acquired tone. Wow, that's amazing! [laughing] Hundreds of, hundreds of retakes? You do hund- that's incredible. I would've guessed, like, if you just asked me, five. Hundreds.

David Rosenthal 1:12:07 You sound, you sound like a millennial. [laughing]

Ben Gilbert 1:12:08 Yeah. [laughing]

Michael Lewis 1:12:10 I just want to be, um, appropriately amazed.

Ben Gilbert 1:12:12 The, the number of lit-

Michael Lewis 1:12:12 Hundreds? You can't do hundreds of retakes

Ben Gilbert 1:12:14 ... literallys that we cut, the number of-

David Rosenthal 1:12:15 We need to cut literally all the time, yeah.

Ben Gilbert 1:12:17 Uh, literally-

Michael Lewis 1:12:18 I see

Ben Gilbert 1:12:18 ... totalies. But the retakes, though, are a different thing. The retakes are, um-

David Rosenthal 1:12:22 We didn't say that clearly enough. We didn't land the point.

Ben Gilbert 1:12:24 I made a point where I wasn't paying enough attention to what David was saying, 'cause I was, like, looking over at my notes.

Michael Lewis 1:12:30 Mm.

Ben Gilbert 1:12:30 And then I make the same point, and he's like, "Oh, I think you missed it. I just said that. Can you just say the last-

Michael Lewis 1:12:36 Oh, I see

Ben Gilbert 1:12:36 ... thing as a acknowledgement of time?"

David Rosenthal 1:12:36 Just give me an "uh-huh," and then we'll move on. [chuckles] Yeah.

Ben Gilbert 1:12:39 Or I explain something in twice the amount of time, and David's, like, getting bored, and he's like, "That was a real monologue. I think we gotta keep the story moving." And I'm like, "I agree. Uh, when I wrote it in my notes, I was really excited about it, but n- now that we're in the moment, I can feel that it's slowing down the energy. So let me take two minutes, let me retype some stuff, and let me figure out if there's a condensed way to say that, so that it can flow seamlessly in the energy of the story."

Michael Lewis 1:13:05 Right.

Ben Gilbert 1:13:06 ... but that is all in the eight, nine hours that we deliver to him.

Michael Lewis 1:13:09 And what, and what, so, and so he's cutting it in half?

Ben Gilbert 1:13:11 Yeah. Yeah.

Michael Lewis 1:13:12 And when he comes, when it, when it comes back to you from him-

David Rosenthal 1:13:15 So he b- he, he turns eight, nine hours of that into an intelligible-

Ben Gilbert 1:13:19 Into, like, five?

David Rosenthal 1:13:20 ... four. Uh.

Ben Gilbert 1:13:21 Ish. I think it's rough cut.

David Rosenthal 1:13:22 I think it's probably appropriate to call it, like, release candidate one-

Michael Lewis 1:13:24 Okay

David Rosenthal 1:13:24 ... to use, like, a software analogy.

Michael Lewis 1:13:25 All right.

Ben Gilbert 1:13:26 And then we make 5 to 800 additional cuts to cut another hour off of it, and th- that stuff we're cutting-

Michael Lewis 1:13:33 Are you doing it on the page, or you're doing it by listen-

Ben Gilbert 1:13:35 On the page.

David Rosenthal 1:13:36 Uh, we use, uh, dis- a tool called Descript, uh, which we, we sort of use it not in its intended way.

Michael Lewis 1:13:42 But you're not listening to it, you're reading.

Ben Gilbert 1:13:43 We are listening to it, and we are watching-

David Rosenthal 1:13:45 And reading it. Yeah, yeah, watching the-

Michael Lewis 1:13:45 And how long does that take?

David Rosenthal 1:13:47 Days.

Ben Gilbert 1:13:47 Three days.

Michael Lewis 1:13:48 Three days to edit?

Ben Gilbert 1:13:49 Yeah. 'Cause we usually edit-

David Rosenthal 1:13:50 We usually do, we usually do two cycles of that.

Michael Lewis 1:13:52 And then do you send it back to him after you've done that?

David Rosenthal 1:13:54 Yeah.

Ben Gilbert 1:13:54 Yeah.

David Rosenthal 1:13:54 And then we do it again.

Michael Lewis 1:13:55 And you do it again.

Ben Gilbert 1:13:56 I listen at 1X, and you have to, like, feel where you get bored, or feel where you're just like, "I don't care." Like, you have to get so sick of the material-

David Rosenthal 1:14:03 Yeah

Ben Gilbert 1:14:03 ... where you're just, like, cutting to the bone.

David Rosenthal 1:14:04 You really... You, you're the hero of this. I can't bring myself to do it. I listen on, on two and a half X, just it's, it's... You, you are the hero for doing that.

Michael Lewis 1:14:11 You don't actually listen at, at, to it at normal speed?

David Rosenthal 1:14:14 Ah, it's so... Like, Ben really jumps on the grenade for this.

Michael Lewis 1:14:19 Almost always. You can cut the beginning of w- almost everything you-

Ben Gilbert 1:14:24 Yep.

Michael Lewis 1:14:24 The, the, there's-

Ben Gilbert 1:14:25 Yeah

Michael Lewis 1:14:25 ... there's always throat clearing.

Ben Gilbert 1:14:25 You make this big windup.

David Rosenthal 1:14:25 Our beginnings always drag.

Michael Lewis 1:14:27 Yeah, windup.

David Rosenthal 1:14:28 Yeah.

Michael Lewis 1:14:28 You don't need it.

David Rosenthal 1:14:28 Yeah.

Michael Lewis 1:14:28 You just go right to it.

David Rosenthal 1:14:29 Yeah.

Ben Gilbert 1:14:29 Yeah, yeah.

Michael Lewis 1:14:30 And, uh, and then once I start to feel it get taut, I just love it. I love it. I love it, I like, I like make... The hardest thing is getting the stuff to out in the first place.

Ben Gilbert 1:14:38 Yeah.

Michael Lewis 1:14:38 And then once it's, once it's out on the page, then you can start, ah, each time it gets better. I find no, I, there's no despair associated with it.

David Rosenthal 1:14:46 Mm.

Ben Gilbert 1:14:46 And there's stuff in the original draft that is a remnant of the point you thought you were gonna make, and by the time you get to the end, you're like, "That's actually not the, the important thing here. I no longer need that whole setup or that, that aside," or-

Michael Lewis 1:14:59 Or it's in there in all kinds of other ways.

Ben Gilbert 1:15:01 Yes.

Michael Lewis 1:15:01 Yeah, but it's important that you had the idea, but it's buried in the, in the story some which way.

David Rosenthal 1:15:07 Yeah.

Ben Gilbert 1:15:07 David will often highlight something and go, @Ben, "Okay to cut? Belaboring."

Michael Lewis 1:15:12 So when... The minute you're there, you know it's gotta be cut.

Ben Gilbert 1:15:15 Yeah.

David Rosenthal 1:15:15 Yeah.

Michael Lewis 1:15:16 Mostly, right?

Ben Gilbert 1:15:16 Oh, yeah.

David Rosenthal 1:15:17 Yeah.

Ben Gilbert 1:15:17 If Michael wants to cut-

David Rosenthal 1:15:17 Our default is always cut. Always cut

Ben Gilbert 1:15:18 ... it's cut.

Michael Lewis 1:15:18 Yeah.

David Rosenthal 1:15:19 Yeah.

Michael Lewis 1:15:19 And so you get five hours down to whatever it is, three and a half, four.

Ben Gilbert 1:15:22 Yeah.

David Rosenthal 1:15:22 We, we, three and a half is the sweet spot.

Michael Lewis 1:15:24 And how do you know when you're done?

Ben Gilbert 1:15:27 We run out of time.

David Rosenthal 1:15:28 Deadline. Yeah.

Michael Lewis 1:15:28 So deadline.

David Rosenthal 1:15:29 Yeah, yeah, deadline.

Michael Lewis 1:15:29 So that's, it isn't like your job-

David Rosenthal 1:15:30 We operate on deadlines

Michael Lewis 1:15:30 ... you're never really done.

Ben Gilbert 1:15:31 I would love one more edit.

David Rosenthal 1:15:33 We'd always-

Ben Gilbert 1:15:33 Always.

David Rosenthal 1:15:33 There's always more. Yeah, the... Yeah, yeah. We have both the gift and the curse of deadline and next episode coming, whereas, like, you, you have a infinite timeline, right?

Michael Lewis 1:15:43 No, no, no, I have a d- I, I mean, I owe a book on June the 1st that will come out September the 29th, that I will start writing on January the 5th. And I will write it in five chunks, and each chunk will be delivered at the end of a, the month, and I won't be able to go back.

David Rosenthal 1:15:57 Mm.

Michael Lewis 1:15:57 So-

Ben Gilbert 1:15:57 Whoa!

David Rosenthal 1:15:57 Okay, wait, wait, wait, wait. What happens if you get to June, and you're like-

Michael Lewis 1:16:00 No, won't happen

David Rosenthal 1:16:00 ... "I'm not, I'm not, uh-

Michael Lewis 1:16:01 Can't. Can't.

David Rosenthal 1:16:02 Okay, so it's a, it's a hard deadline.

Michael Lewis 1:16:03 It's a deadline.

David Rosenthal 1:16:03 It's a drop dead.

Michael Lewis 1:16:04 Yeah. But I, I always find I, once I s- establish that deadline, which is a reasonable deadline, because I've done all... I spent a year doing the work-

David Rosenthal 1:16:11 Yeah

Michael Lewis 1:16:11 ... I have the material. By the way, it's very polite of you to ask me questions about myself. [laughs] Uh, yeah, but-

David Rosenthal 1:16:16 We want to know!

Ben Gilbert 1:16:17 It's, it's like this great-

Michael Lewis 1:16:19 But, but, but, but, no

Ben Gilbert 1:16:19 ... honor to, it-

Michael Lewis 1:16:19 But that, that it's... Somehow, if you take your deadlines seriously, that's the key.

Ben Gilbert 1:16:25 Mm.

Michael Lewis 1:16:25 You take the deadlines deadly seriously-

David Rosenthal 1:16:27 Yeah

Michael Lewis 1:16:28 ... and you just refuse to violate them, um, then you're serious when you establish them, and your, your mind just finishes when it needs to finish. I, I, and I'm always-

David Rosenthal 1:16:39 Yeah

Michael Lewis 1:16:39 ... like, a couple of days ahead of it.

David Rosenthal 1:16:40 Yeah.

Michael Lewis 1:16:41 So I would talk a little bit about the business side, because this is something that b- I, I certainly don't know anything about in, in your lives, but you've turned this into a very lucrative franchise. And you go out, and you, and, and unlike most podcasts, you're not, you're not subcontracting the s- the, the sale of ads to some other co- company, and you're not just promiscuous in who you have as advertisers. So you have two or three, four, whatever it is, major advertisers, you've got these-

David Rosenthal 1:17:06 Four every season

Michael Lewis 1:17:07 ... and, um, and some stability there. When you go, walk me through... Pretend I- Michael Lewis Inc. is your target, that you want me to be a s- like, the anchor tenant-

Ben Gilbert 1:17:21 [laughing]

Michael Lewis 1:17:21 ... i, i, in your building.

David Rosenthal 1:17:22 [laughing]

Michael Lewis 1:17:23 And you're coming in to tell me why I should do this. D- give me, give me a, give me a sense of it, what that sounds like.

Ben Gilbert 1:17:29 Well, so I'll, I'll let David give you the sales pitch. The philosophy of the whole thing comes from we wanna create a durable business on our side and a great listener experience on the listener side. And I always feel, as a listener, so disrespected when there is this content of the podcast that is diamond quality, and then they are running-

David Rosenthal 1:17:49 And then there's a record scratch

Ben Gilbert 1:17:49 ... McDonald's ads-

David Rosenthal 1:17:51 Yeah

Ben Gilbert 1:17:51 ... in the middle.

David Rosenthal 1:17:51 Usually not read by the host, usually with some jingle playing underneath.

Michael Lewis 1:17:56 It bothers the hell out of me, too, and I haven't been able to do anything about it. I, I, I agree. I, it- and I... It, it's, it's the biggest complaint I get about my podcast.

David Rosenthal 1:18:05 Mm.

Michael Lewis 1:18:05 It's like-

Ben Gilbert 1:18:06 Mm

Michael Lewis 1:18:06 ... "I gotta listen to these ads."

Ben Gilbert 1:18:08 The very first ad we ever sold, we said, "What sponsor could we get that would make people perceive Acquired to be a higher quality brand?" So we could, like, have our cake and eat it, too. We'll get revenue, but-

Michael Lewis 1:18:19 I tried this. I had a thought about this on mine, and no one ever took me up on it.

Ben Gilbert 1:18:23 Really?

Michael Lewis 1:18:23 Which is find the things I actually use, and I'll, and I, and it will be fun to talk about them. I wanna, I wanna tell the whole world about Ex Officio underpants. [laughing]

David Rosenthal 1:18:33 [laughing]

Ben Gilbert 1:18:33 [laughing]

Michael Lewis 1:18:34 And, and I can't get Ex, Ex Officio to return my calls. I mean, that kind of thing.

Ben Gilbert 1:18:38 Foolish.

Michael Lewis 1:18:38 I just, they just-

David Rosenthal 1:18:39 Are they asleep at the... Wait, so-

Michael Lewis 1:18:40 I don't-

David Rosenthal 1:18:40 Literally-

Michael Lewis 1:18:41 Why can't-

David Rosenthal 1:18:41 ... you're telling me that Michael Lewis called Ex Officio-

Ben Gilbert 1:18:43 I did. Here for free!

David Rosenthal 1:18:45 ... and they don't return your calls?

Michael Lewis 1:18:45 I did not. I just gave them a l- I gave my podcast a list of things that I really love, just love.

David Rosenthal 1:18:50 Oh.

Michael Lewis 1:18:50 And-

David Rosenthal 1:18:50 But you, but you've gotta call them. That's the, that's the problem.

Michael Lewis 1:18:52 And, and, yeah, well, it pro- that probably is the problem.

David Rosenthal 1:18:54 That is the problem, yeah.

Michael Lewis 1:18:54 Or, or my podcast company does not, does not actually sell the ads. Another company sells the ads.

Ben Gilbert 1:19:00 Right.

David Rosenthal 1:19:00 Mm.

Michael Lewis 1:19:01 And so-

David Rosenthal 1:19:01 Yeah

Michael Lewis 1:19:01 ... it's just, I, I, that, I thought that was the way to make it seamless, is actually, inter- what's integral to my life will be the things that we're talking about.

Ben Gilbert 1:19:08 So that is a structural blocker to creating the best experience.

Michael Lewis 1:19:13 Right.

Ben Gilbert 1:19:14 And-... everything has a trade-off. The trade-off for us is we spend an enormous amount of time engaging with our sponsors. We write a custom read for every single sponsor, every single episode. We try to write it as if we're almost, like, talking about what we think is interesting about the business. We're doing this, like, mini two-minute analysis, and, you know, there's some horse trading there of, "We have to make these points, okay?" But, like, for the most part, and the best sponsor relationships are the ones where they say, like, "Yeah, w- your listeners are going to respond the best when you- "

Michael Lewis 1:19:42 "To what you have to say!"

Ben Gilbert 1:19:43 Yeah.

David Rosenthal 1:19:43 So, so if, if Michael Lewis Inc.-

Ben Gilbert 1:19:45 You have-

David Rosenthal 1:19:45 ... we want you to be a sponsor, I would say, "We're not coming to pitch you," but, like, we're, we're deciding a year in advance-

Ben Gilbert 1:19:52 Now two.

David Rosenthal 1:19:52 When we're, when we're... Now two years in advance, like, what do we want our slate of partners to look like?

Michael Lewis 1:19:58 Right.

David Rosenthal 1:19:59 So we start, Michael Lewis Inc., we think, is gonna be super strategic for us in 2027, 2028. We start planning, like, "Okay, how are we gonna make this happen? How are we gonna make sure that we, we-

Michael Lewis 1:20:10 Right

David Rosenthal 1:20:10 ... we really, you, you, Michael Lewis Inc. is as good as we think it could be?"

Michael Lewis 1:20:14 Right.

David Rosenthal 1:20:14 How are we gonna make sure-

Ben Gilbert 1:20:15 Well, doing this-

David Rosenthal 1:20:15 ... that we're gonna work really well together, that you're gonna see massive ROI from us?

Michael Lewis 1:20:18 At any point, do you sit there worrying that you're compromising the a- you know, the, the shows because of your, the relationship you're about to have with an advertiser?

Ben Gilbert 1:20:27 No. There's been companies that don't feel Switzerland enough that come to us that wanna sponsor, and we just like the idea of not picking a venture capital firm to say, "We think this is the best venture capital firm." It's, like, t- too much of a picking teams thing.

Michael Lewis 1:20:44 What do you... That's a- I've never heard anybody say that, "They don't feel Switzerland enough." Is this a, is this a, is this a cliche in the VC business?

Ben Gilbert 1:20:50 No, I think I just-

Michael Lewis 1:20:51 That's good.

David Rosenthal 1:20:52 No, yeah, yeah.

Michael Lewis 1:20:52 That's a lovely line.

David Rosenthal 1:20:52 Yeah, yeah.

Michael Lewis 1:20:53 So you're looking for Switzerlands?

Ben Gilbert 1:20:54 Yes.

Michael Lewis 1:20:55 And what do you mean by that?

Ben Gilbert 1:20:56 Companies that we think are great, where we don't have to take a side in, like, a big, contentious current thing conversation.

David Rosenthal 1:21:05 Yeah.

Michael Lewis 1:21:05 Would the industry-

David Rosenthal 1:21:06 dinamics are too-

Michael Lewis 1:21:06 Would you take Coca-Cola?

Ben Gilbert 1:21:08 We don't really deal with consumer companies.

David Rosenthal 1:21:09 We don't, we don't... So, okay, number one.

Michael Lewis 1:21:10 Okay, here we go.

David Rosenthal 1:21:11 B2B companies-

Michael Lewis 1:21:13 Right, right, so-

David Rosenthal 1:21:13 ... with high, very high LTV products.

Michael Lewis 1:21:15 So not ex- not, not Ex Officio underwear.

David Rosenthal 1:21:17 Basically, we want companies that are doing a significant number of multimillion-dollar annual deals with customers. Because we wanna feel like we can deliver a couple incremental of those for you-

Michael Lewis 1:21:30 And so, yeah, so you can charge lots of money

David Rosenthal 1:21:30 ... directly attributable to us. Yeah, and then, like, it's just a no-brainer.

Ben Gilbert 1:21:33 Many of our sponsors have been ROI positive on signing one large customer-

David Rosenthal 1:21:38 Yeah

Ben Gilbert 1:21:39 ... who heard about them on Acquired. That is awesome.

David Rosenthal 1:21:41 And often-

Ben Gilbert 1:21:41 Like, that's our-

David Rosenthal 1:21:41 ... it's not even just heard about on Acquired, it's, events are, are a big part of this. Uh, so we do events with almost all of our sponsors.

Michael Lewis 1:21:48 Yep.

David Rosenthal 1:21:48 So there's the funnel of, like, heard about on Acquired, that helps, but then, like, we're doing a event together with them. We're sitting next to-

Michael Lewis 1:21:55 So you-

David Rosenthal 1:21:55 ... their best prospects.

Michael Lewis 1:21:56 So, so I, so I'm, I'm thinking about hiring you. What kind of event will you do for me?

Ben Gilbert 1:22:00 We're happy to join for a customer dinner. We're happy to speak at your big annual customer conference.

David Rosenthal 1:22:06 Annual customer conference. We're happy to, [chuckles] -

Ben Gilbert 1:22:07 We've given this pitch

David Rosenthal 1:22:08 ... we're ha- we're happy to go to a, a sporting event with you, with your top clients. We're happy to-

Michael Lewis 1:22:13 At that sporting event, will you do, like, some-

Ben Gilbert 1:22:15 Fireside chats.

Michael Lewis 1:22:16 Some little-

David Rosenthal 1:22:16 Yeah, fireside chat.

Ben Gilbert 1:22:17 For sure.

David Rosenthal 1:22:17 Yeah, yeah, yeah.

Ben Gilbert 1:22:18 Interview your CEO.

David Rosenthal 1:22:19 Uh, interview a legend from the sport.

Michael Lewis 1:22:21 How many hours of your time am I gonna get?

David Rosenthal 1:22:23 Couple days.

Ben Gilbert 1:22:24 It's-

David Rosenthal 1:22:24 Couple days.

Ben Gilbert 1:22:24 Yeah.

David Rosenthal 1:22:24 We're, we're there full... And wh- while we're there with you, it's like-

Ben Gilbert 1:22:27 We're there with you

David Rosenthal 1:22:27 ... "Hey, what- how can you maximize using us?"

Michael Lewis 1:22:29 You promise to be my friend?

David Rosenthal 1:22:31 Yeah, of course.

Ben Gilbert 1:22:31 Yeah.

Michael Lewis 1:22:31 You'll be my friend, too, in the bargain? [laughs]

David Rosenthal 1:22:33 We're, we're great friends with a whole bunch of-

Michael Lewis 1:22:35 Yeah. [chuckles]

David Rosenthal 1:22:35 Okay, wait, so then it gets even better.

Michael Lewis 1:22:36 Okay.

David Rosenthal 1:22:36 So we, um [chuckles] let me, let me tell you more.

Michael Lewis 1:22:39 Tell me more.

David Rosenthal 1:22:39 Tell me more!

Michael Lewis 1:22:39 I'm, I'm, I'm getting interested.

David Rosenthal 1:22:41 Yeah.

Michael Lewis 1:22:41 I'm on the edge of my seat here.

Ben Gilbert 1:22:42 The reason this whole thing works is the people who listen to Acquired are the most valuable audience in the world. And so i- if you wanna market your-

David Rosenthal 1:22:51 Right

Ben Gilbert 1:22:51 ... B2B software, or financial product, or whatever to them-

David Rosenthal 1:22:54 Founders or executive decision-makers that-

Michael Lewis 1:22:56 Right.

David Rosenthal 1:22:56 But r- really, I'm gonna take a step back. I think the whole business side, and, and a lot of the content, too, but the whole business side of Acquired starts with, we were venture capitalists. We're not media people. So we have just always taken an approach, you're aspiring to be a great partner-

Michael Lewis 1:23:12 Partner

David Rosenthal 1:23:12 ... to them. You know, you're gonna help recruit employees, you're gonna help with whatever, and so we just like... We're like, "Great, that's how we approach our partners."

Michael Lewis 1:23:19 Right. Why do you think... Maybe you've just answered the question. Why do you think no other podcast has approached their business in the way you approach your business?

David Rosenthal 1:23:26 I think we just came at it from, like, this, this totally different space.

Michael Lewis 1:23:29 You think everybody else is coming from a kind of media space, and the media space was kind of bad business?

Ben Gilbert 1:23:33 Okay, here's a take: the media business model of splitting the commercial activity from the editorial-

Michael Lewis 1:23:42 Yep

Ben Gilbert 1:23:42 ... is a societal benefit that we all benefit from, from publications like The New York Times.

Michael Lewis 1:23:48 Yep.

Ben Gilbert 1:23:48 It is really-

David Rosenthal 1:23:48 It was started for journalism

Ben Gilbert 1:23:50 ... It is really good for journalism that, uh-

David Rosenthal 1:23:51 Yeah

Ben Gilbert 1:23:51 ... that exists.

David Rosenthal 1:23:52 What we're doing is not journalism. [chuckles]

Ben Gilbert 1:23:52 The rest of media seems to have adopted it, and everyone doesn't need to.

Michael Lewis 1:23:57 Right.

Ben Gilbert 1:23:59 If we're the hosts of Acquired, it's kind of great if you're going and learning about your sponsor's business, and working with them, and trying to build partnerships with them. It, it was almost like it, um, we had the luxury of getting to rethink what our operational model looks like.

David Rosenthal 1:24:13 So then the thing that brought it full circle a couple years ago is, we added an investment fund. So not our public company sponsors, but almost all of our private company sponsors, we invested them, so it came full circle. [chuckles]

Michael Lewis 1:24:23 But you all, you created an investment fund.

Ben Gilbert 1:24:25 Yeah.

Michael Lewis 1:24:25 You two are venture-

David Rosenthal 1:24:26 Yeah.

Michael Lewis 1:24:26 You are, you, you're the ones who are making the investments.

Ben Gilbert 1:24:28 Yes.

Michael Lewis 1:24:29 Is it any... How are you doing?

Ben Gilbert 1:24:30 It's quite full circle.

David Rosenthal 1:24:31 Yeah.

Ben Gilbert 1:24:31 We're only a year in, but we've, we've invested in, uh, five of our sponsors, and several of them are more valuable than when we've invested.

David Rosenthal 1:24:38 Yeah. Uh, uh, we, w- w- we, we asked ourselves, we're like, "How do we do this?" The focus is the show. If we're, if we're a venture capital firm with a podcast, it doesn't, doesn't work. We need to be a podcast for the venture capital firm. The way we make this work is, we just invest in our sponsors. We put all this work into-

Ben Gilbert 1:24:52 Building these relationships

David Rosenthal 1:24:52 ... finding the best partners for our sponsors in every category that we think are great. Why wouldn't we just invest in them? We don't do any incremental work.

Michael Lewis 1:24:58 Do you invest in all of your sponsors?

Ben Gilbert 1:24:59 No, but a lot of the time, like, we'll just get a call that, "Hey, we're raising an up round. We, we wanna talk about it in the next ad read," and we say, "Oh, that's cool. Can we, can we invest a couple million dollars?" And they're like, "The round's, like, 300 million, so no one on the cap table is gonna care. And we love-

Michael Lewis 1:25:13 Sure. Yeah

Ben Gilbert 1:25:14 ... that you're more aligned with us now, so we'll make room."

Michael Lewis 1:25:16 So you, you're only really accepting as sponsors-... companies that you would like to invest in?

David Rosenthal 1:25:21 That's essentially the frame we, we put on the whole thing.

Ben Gilbert 1:25:23 It's not a perfect overlap, but it's-

Michael Lewis 1:25:25 No, but JP Morgan is not an example.

David Rosenthal 1:25:26 Right, right, right.

Michael Lewis 1:25:27 Right.

David Rosenthal 1:25:27 We, we think it- we like having a couple public companies, JP Morgan, Shopify, ServiceNow.

Michael Lewis 1:25:32 And how deep is this market? How many Acquireds could be created on the back of this business model?

Ben Gilbert 1:25:38 Oh, I think a lot. The question that I- I'm always wondering is, why aren't there more Acquireds out there?

Michael Lewis 1:25:43 I'm asking that question now. [laughing]

Ben Gilbert 1:25:44 The format-

David Rosenthal 1:25:44 Like, why?

Ben Gilbert 1:25:45 Here, here's the ingredients.

David Rosenthal 1:25:46 Yeah.

Ben Gilbert 1:25:47 Two hosts that independently go do research, and through storytelling, like narrative storytelling and analysis, create a conversational audiobook. Could be about businesses, could be about sports teams, could be about, uh-

David Rosenthal 1:26:00 Hollywood, movies

Ben Gilbert 1:26:01 ... political parties.

David Rosenthal 1:26:02 Yeah.

Ben Gilbert 1:26:02 Could be about any, h- how any-

David Rosenthal 1:26:03 Any arena of ambition, as you would say.

Michael Lewis 1:26:05 Right.

Ben Gilbert 1:26:06 There should be an Acquired in all these other verticals. In fact, the business vertical could support 10 more.

Michael Lewis 1:26:11 'Cause there's a lot much more, lot more money in business-

Ben Gilbert 1:26:14 Yes

Michael Lewis 1:26:14 ... in tech and finance.

Ben Gilbert 1:26:15 Yeah, no.

Michael Lewis 1:26:16 That's one. But-

David Rosenthal 1:26:16 I think there's, there's a bit of a cold start. But if you were to propose going and creating an Acquired for, um, sports, uh, you would... The, the sort of, uh, risk I guess we took, we didn't think about it as risk at the time, because it was just a hobby, was you, you, you're looking at years of no or little monetization-

Michael Lewis 1:26:35 Right

David Rosenthal 1:26:35 ... because it's gonna take a long time to build up the audience.

Michael Lewis 1:26:38 Right.

David Rosenthal 1:26:38 Versus, "Oh, I could go join a network. I could join- make a show on The Ringer. I could, you know-

Michael Lewis 1:26:43 Right

David Rosenthal 1:26:43 ... do whatever."

Ben Gilbert 1:26:44 Acquired was path dependent on us having day jobs, for sure.

Michael Lewis 1:26:48 Right. And day jobs in the industry that you're going to cover, right?

David Rosenthal 1:26:52 Yeah.

Michael Lewis 1:26:52 Right.

Ben Gilbert 1:26:53 We built half the relationships and all the know-how and all the shorthand, and, uh, from being in the industry before.

Michael Lewis 1:27:00 So I asked you how many Acquireds could be created. Uh, in, in just your space, what percentage of the advertising revenues do you think you're hoovering up-

David Rosenthal 1:27:10 Mm

Michael Lewis 1:27:10 ... in the way you're hoovering them up?

Ben Gilbert 1:27:12 In, like, b- business podcasts?

Michael Lewis 1:27:14 B2B, the B2B, like the things you pi-

David Rosenthal 1:27:17 Yeah

Michael Lewis 1:27:17 ... the kind of people you will accept as your sponsors, how many times over?

David Rosenthal 1:27:21 Well, there, there are, fortunately for... There, there are a lot more people who want to sponsor Acquired than-

Michael Lewis 1:27:26 That's what I mean

David Rosenthal 1:27:27 ... uh, we need.

Michael Lewis 1:27:27 Like, how many more are there?

David Rosenthal 1:27:29 A lot.

Ben Gilbert 1:27:29 It's probably th- we're probably three or four X oversubscribed-

Michael Lewis 1:27:32 Okay

Ben Gilbert 1:27:32 ... on, on, like, people who really could convert on becoming sponsors if we said, "Sure, we'll take you."

Michael Lewis 1:27:38 How come you don't spawn an extra Acquired or two? How come it-

David Rosenthal 1:27:42 Well, I think that, that, uh, [laughing]

Michael Lewis 1:27:43 Why don't you, why don't you create, why don't you create the next yous?

David Rosenthal 1:27:47 Then we're not Acquired. [laughing]

Ben Gilbert 1:27:48 This, they're, they're-

David Rosenthal 1:27:49 Then we're not us.

Michael Lewis 1:27:49 I see.

Ben Gilbert 1:27:51 Then, like, do less.

David Rosenthal 1:27:51 Then we become CEOs.

Michael Lewis 1:27:52 Right, right.

Ben Gilbert 1:27:53 We do not wanna build a company.

Michael Lewis 1:27:54 Yes, I know, you've decided... No, it's funny, you ci- there's a line that, um, that you don't, you don't have bosses.

David Rosenthal 1:28:01 Yeah.

Michael Lewis 1:28:02 You, you have incentives-

David Rosenthal 1:28:04 Yeah

Michael Lewis 1:28:04 ... but you don't have bosses.

Ben Gilbert 1:28:06 And we're not other people's bosses.

Michael Lewis 1:28:07 That's, that's like my life, too. I have a lot of incentives, I have no bosses. When you're in any kind of creative thing, there is this benefit to not just following the financial incentives, and, and not trying to kind of, like, milk every last penny out of it, and to creating scarcity, not just for the sake of the scarcity, but for the sake of the quality.

Ben Gilbert 1:28:28 Yeah.

Michael Lewis 1:28:29 And only do it if it's great. If you only do it, it's, it's a long-term strategy. I mean, it's not that I think all my books are great. I don't write them, though, unless I think they're gonna be great.

David Rosenthal 1:28:40 Yeah.

Michael Lewis 1:28:40 I just don't.

Ben Gilbert 1:28:41 Well, why would you allocate... Uh, let's say you have a portfolio of however many more years you think you're gonna write, 20, 30. Why would you allocate, you know, I don't know how long-

Michael Lewis 1:28:49 A year

Ben Gilbert 1:28:50 ... a year-

Michael Lewis 1:28:50 A year and a half.

David Rosenthal 1:28:51 Yeah.

Ben Gilbert 1:28:51 Why would you blow a slot-

David Rosenthal 1:28:52 That's huge

Ben Gilbert 1:28:53 ... on-

David Rosenthal 1:28:53 Yeah

Ben Gilbert 1:28:53 ... a bad book?

David Rosenthal 1:28:53 That's a gaping hole, isn't it?

Michael Lewis 1:28:55 Well, well, I'll give you a, a, a reason why, uh, some people might. A publisher offers me a gazillion dollars to write a book about X.

Ben Gilbert 1:29:02 And how much-

Michael Lewis 1:29:02 I know the book's gonna suck, 'cause it's not actually a good idea for a book, and it's not gonna be fun to do because all the fun is in it may be great.

Ben Gilbert 1:29:09 Is there any chance any of those dollars make your life better-

Michael Lewis 1:29:12 No

Ben Gilbert 1:29:12 ... at this point?

Michael Lewis 1:29:13 Zero. So this is the thing people miss. What is Lane Kiffin gonna get out of an extra couple of million dollars going to LSU from Ole Miss?

David Rosenthal 1:29:21 Yeah.

Michael Lewis 1:29:21 The average athlete who's taking a few million dollars more to move his wife and kids from one family to- one city that loves him and that he loves, to some strange place where everybody's gonna be unhappy.

Ben Gilbert 1:29:31 All-

Michael Lewis 1:29:31 People do this all the time.

Ben Gilbert 1:29:32 All dollars do not have equivalent value.

Michael Lewis 1:29:35 No.

Ben Gilbert 1:29:35 The, the marginal dollars have w- way smaller value than the early dollars.

Michael Lewis 1:29:39 Sometimes they end up having kind of negative value, and you become a person who that's what you're about.

David Rosenthal 1:29:44 Yeah.

Michael Lewis 1:29:44 It's like you're saying, "I'm gonna be the person who just follows the financial incentives," rather than, "I'm gonna control the... I'm gonna let these incentives do..." They can be useful. They get you out of bed in the morning for a while, but you, you're gonna have to kind of kind of control them. So I love that you're not milking the market.

David Rosenthal 1:30:00 I think there's two different things here that we're talking about here. One is, uh, milking the market, yes or no.

Michael Lewis 1:30:05 Yeah.

David Rosenthal 1:30:05 Uh, the other one is, do you wanna build an enterprise, or do you wanna stay a boutique? So, like, to, to your question for us, like, why don't we create more Acquireds? Like, we, we, we don't want to manage other shows-

Michael Lewis 1:30:16 Uh

David Rosenthal 1:30:16 ... podcast hosts. Like, we-

Ben Gilbert 1:30:17 People, people often tell us, like, "Oh, you're building this business. You guys are sort of foolish, 'cause there's k- there's all this key man risk. Like, you're building this great business, but if either of you leave, unfortunately-

David Rosenthal 1:30:26 Yeah, what's the enterprise value? [laughing]

Ben Gilbert 1:30:27 ... your business has low enterprise value." And we're like-

David Rosenthal 1:30:29 Okay. [laughing]

Ben Gilbert 1:30:30 ... "But if we sold this business, then we would just go start Acquired." [laughing]

Michael Lewis 1:30:34 Yeah. [laughing]

David Rosenthal 1:30:34 [laughing]

Ben Gilbert 1:30:34 Like, we're, we're already doing the thing that we- [laughing]

David Rosenthal 1:30:38 Yeah, the, the dream is what we're doing. [laughing]

Michael Lewis 1:30:40 All right, so I took us off on a sidetrack. We've only gotten through four.

David Rosenthal 1:30:42 [laughing]

Michael Lewis 1:30:43 I want to hear the fifth-

Ben Gilbert 1:30:43 Uh, we've, we've gotten like five or six or seven.

David Rosenthal 1:30:44 We've got a- we've got a bunch of these.

Michael Lewis 1:30:46 I want to hear the, what's the fifth lesson you've learned-

David Rosenthal 1:30:48 Uh, okay, yeah, go for it

Michael Lewis 1:30:48 ... from the episode?

Ben Gilbert 1:30:48 Uh, founder control was my, a huge one.

Michael Lewis 1:30:51 Is this from Google?

Ben Gilbert 1:30:52 I think we l- we-

Michael Lewis 1:30:53 Meta!

Ben Gilbert 1:30:53 Again, this is one of these things that we, like, learned early, but then got reinforced through episodes.

Michael Lewis 1:30:58 Yeah.

Ben Gilbert 1:30:58 Meta-

David Rosenthal 1:30:59 Meta

Ben Gilbert 1:30:59 ... Rolex, Trader Joe's-

Michael Lewis 1:31:01 Private.

David Rosenthal 1:31:01 IKEA.

Ben Gilbert 1:31:02 Yeah.

David Rosenthal 1:31:03 Yeah.

Ben Gilbert 1:31:03 Uh, like, stay private-

David Rosenthal 1:31:04 Yeah

Ben Gilbert 1:31:04 ... be family owned.

David Rosenthal 1:31:06 You don't even have to take- Meta is a public company, but, but-

Ben Gilbert 1:31:08 Yeah

David Rosenthal 1:31:08 ... founder control. I mean, Google too. Google's founder controlled too.

Ben Gilbert 1:31:12 The important things in the world probably should be big, publicly traded corporations, but, like, there's these amazing, wonderful things you can create by being boutique and, and maintaining control.

Michael Lewis 1:31:21 Well, I think there's an argument to be made that in any industry where there are both private and public companies, the private companies end up being much better run. And, I mean, like, the-... mostly bad things happen when companies go public, and certainly less pleasant. So public or private, your point is founder control.

David Rosenthal 1:31:36 But there's also just, like, a personal choice element. Uh, last year, we, we, we had a, like a-- existential crisis is way too dramatic, but I think something that was on our minds was, like, "Are we being wussies?"

Michael Lewis 1:31:49 What triggered it? What triggered this?

David Rosenthal 1:31:49 We're not doing Hollywood, we're not, uh, adding more shows. We're not building an enterprise.

Michael Lewis 1:31:54 What triggered this, "Are we being wussies?"

Ben Gilbert 1:31:56 We were currently researching Bell Labs, and I think I felt like we were ch-- like chasing this, like, esoteric-ness.

David Rosenthal 1:32:05 So we s- we sought some advice, and we went to one of the best investors ever, who, who we've gotten to know, who's a, a fan of the show, you know, some- somebody everybody would know. And, uh, we, we asked him to dinner, and we just sort of like: "Hey, we, we've got this... You know, we could do all these things. We're, we're not, like, Hollywood," et cetera.

Ben Gilbert 1:32:22 And we sort of expected his comment-

David Rosenthal 1:32:25 To be like-

Ben Gilbert 1:32:25 To be like-

David Rosenthal 1:32:25 ... "Dream bigger," like, you know, "Go for it." Like, you know, "You guys are being wussies." And he sort of sat there, and he thought a minute, and he said, "I have seen so many founders become trapped in prisons of their own making, in their own companies." He's, "You, you-

Ben Gilbert 1:32:41 And they're successful prisons.

David Rosenthal 1:32:42 Yeah, yeah. "You guys have avoided that fate. Don't go down that road." [chuckles]

Michael Lewis 1:32:48 But what is... I, I'm, I'm missing, actually, the connection.

David Rosenthal 1:32:50 Oh, the-

Michael Lewis 1:32:51 Why, if you, why, if you were less wussy-ish, would you have created a pr-

David Rosenthal 1:32:56 Oh, hi- hire people, uh, take on-

Michael Lewis 1:32:58 Oh, start a second show

David Rosenthal 1:32:59 ... more ambitious projects.

Michael Lewis 1:32:59 Oh-

David Rosenthal 1:32:59 Start a second show.

Michael Lewis 1:33:01 Oh, I see. Oh, I see.

David Rosenthal 1:33:01 Go make a Hollywood movie.

Michael Lewis 1:33:01 You meant business wussies.

David Rosenthal 1:33:02 Yeah, business wussies. Yeah.

Michael Lewis 1:33:03 I thought maybe you were... I thought you were saying you were avoiding, like, the consequences of growing.

David Rosenthal 1:33:06 Oh, yeah, that, that's a whole separate wussies.

Michael Lewis 1:33:07 [chuckles]

David Rosenthal 1:33:07 But no, no, we, we asked ourselves-

Ben Gilbert 1:33:09 Yeah

David Rosenthal 1:33:09 ... "Are we being business wussies?"

Michael Lewis 1:33:10 Right, I see.

David Rosenthal 1:33:10 Uh-

Ben Gilbert 1:33:11 But they sort of go hand in hand, like, cheap growth is covering the current thing.

Michael Lewis 1:33:14 Yeah.

Ben Gilbert 1:33:15 It, it will, uh... I've been toying with this idea of-

Michael Lewis 1:33:17 Sugar highs

Ben Gilbert 1:33:17 ... um-

David Rosenthal 1:33:18 Yeah

Ben Gilbert 1:33:18 ... uh, stored potential energy, that, like, great businesses have a stored potential energy that you can't see in the current financials.

Michael Lewis 1:33:26 Mm.

Ben Gilbert 1:33:27 And-

Michael Lewis 1:33:28 Great people have that, too.

Ben Gilbert 1:33:29 Hmm.

Michael Lewis 1:33:30 Great people have that, too. They have these reserves that you just d- that come out when they need them.

Ben Gilbert 1:33:35 And they're not, like, presented in obvious markers.

Michael Lewis 1:33:37 And they aren't, yes, they aren't sparkling there in front of your eyes.

Ben Gilbert 1:33:39 Hmm.

Michael Lewis 1:33:39 But anyway.

Ben Gilbert 1:33:41 And I think we, um, we're trying to, like, store up as much potential energy in Acquired as we can, rather than anytime there's a way to, uh, make it show up on the financial statements, sort of like letting out the pressure and being like, "Yep, second show. Yep, more ads."

Michael Lewis 1:33:58 Right.

Ben Gilbert 1:33:59 "Yep, uh, dynamic ads from an ad network." Yeah, like, just you can say yes to all these things, and you can sugar high the current profits-

Michael Lewis 1:34:05 Right

Ben Gilbert 1:34:06 ... or you can try to, like, figure out how to store up as much potential energy as you can.

Michael Lewis 1:34:10 Right.

Ben Gilbert 1:34:10 And I think once you've kind of hit the point in life where money won't make you any happier, then there's, there's actually not a, a point to letting any of that potential energy out. It just creates goodwill for everyone, most principally, selfishly, yourself-

Michael Lewis 1:34:27 Right

Ben Gilbert 1:34:27 ... to, to keep it bottled.

Michael Lewis 1:34:28 Right. All right, so how do we get on that? We... I don't know how we [chuckles] we got on that-

David Rosenthal 1:34:33 [chuckles] Yeah, well, we-

Michael Lewis 1:34:34 From founder control.

David Rosenthal 1:34:35 Well, uh-

Michael Lewis 1:34:35 That was founder control

David Rosenthal 1:34:35 ... founder matter, founder matter at Google.

Michael Lewis 1:34:37 So that was number five.

David Rosenthal 1:34:37 Yeah, yeah.

Michael Lewis 1:34:37 Number six.

David Rosenthal 1:34:38 Uh, okay, I've got one from, um... This is a non-obvious one.

Ben Gilbert 1:34:44 Also, can I just say, like, sometimes we do some stuff like this.

David Rosenthal 1:34:48 [chuckles]

Ben Gilbert 1:34:48 We are not like saints.

Michael Lewis 1:34:49 Right, right.

Ben Gilbert 1:34:49 We're capitalists.

David Rosenthal 1:34:50 Yeah, yeah, yeah.

Ben Gilbert 1:34:50 Like, we're running a capitalist enterprise here.

David Rosenthal 1:34:52 Sometimes we hire a production crew. [chuckles]

Ben Gilbert 1:34:54 Yeah, sometimes we, uh... Last year, we added a fourth ad slot. We always had three.

Michael Lewis 1:34:59 Yep.

Ben Gilbert 1:34:59 Last year, we looked at ourselves, and we said, "There's four-hour podcast episodes. We're currently at, like, 2%, 3% ad load."

Michael Lewis 1:35:06 Right.

Ben Gilbert 1:35:06 "Everyone else is at-

Michael Lewis 1:35:07 We could go to 5%

Ben Gilbert 1:35:07 ... 15%."

Michael Lewis 1:35:08 Right.

Ben Gilbert 1:35:08 God forbid we go to 4.5% of time, so like-

Michael Lewis 1:35:12 Right

Ben Gilbert 1:35:12 ... we, we indulge-

Michael Lewis 1:35:13 Right

Ben Gilbert 1:35:13 ... occasionally. All right, listeners, this is a great time to thank our friends at Sentry. That's S-E-N-T-R-Y, like someone standing guard.

David Rosenthal 1:35:23 Which is exactly what they do for developers. [chuckles] Sentry helps teams debug everything from errors to latency issues and fix them before users get mad.

Ben Gilbert 1:35:32 And since this episode, we are reflecting on 10 years of Acquired, it's fitting to look at Sentry's journey, which actually looks a lot like our story. They started in 2008 as a tiny open-source project, not even a company, and the goal was to solve one simple problem: alert me when something is broken. It wasn't born out of a big budget or a funding round, no big strategy offsite, just a developer seeing something broken in the world and fixing it.

David Rosenthal 1:35:58 And from there, they just listened to what developers needed: more language support, insight into what happened before an error, who was affected, which release broke, and where the bug lived. Sentry delivered all these and slowly started compounding and making the product better every week for 17-ish years, and that's why more than 150,000 organizations trust them today.

Ben Gilbert 1:36:19 And the range of those companies is incredible: Disney+, Duolingo, friends of the show over at Vercel and Anthropic. There's Cloudflare, GitHub, Atlassian, also a ton of indie developers who are shipping features at 2:00 in the morning. Sentry has just become a key part of how modern software gets built.

David Rosenthal 1:36:37 And the product has grown the way the best companies do, expanding organically into other tools that give developers granular context, like tracing, profiling, and session replays, and now Sentry is taking the next step with AI. Their agent, Seer, can pinpoint root causes with nearly 95% accuracy by using everything that Sentry already knows, including errors, logs, traces, and code. It even suggests fixes, and because Seer has that full context, it can review a pull request and spot bugs before they ever ship. This is not noisy code review. This is, like, real error prediction.

Ben Gilbert 1:37:12 So as Acquired celebrates our own decade of learning and improvement, it is fitting to partner with a company that has been on a learning and improvement journey right along with the rest of the software industry over that same time.

David Rosenthal 1:37:23 Yes, so thanks to Sentry for helping make sure that everyone's favorite apps work the way they should. You can check them out at sentry.io/acquired. That's S-E-N-T-R-Y.io/acquired, and just tell them that Ben and David sent you.... Okay, so sometimes we make episodes that either we think are gonna be great, or we're just really interested in them, and they, like-

Michael Lewis 1:37:46 Mm

David Rosenthal 1:37:46 ... and the numbers-wise, they don't-

Michael Lewis 1:37:48 Perform.

David Rosenthal 1:37:49 They don't, or they, you know, we- the, the great thing about podcasting-

Michael Lewis 1:37:51 We- yeah

David Rosenthal 1:37:52 ... is, like, it's always within, like, a 20, 30% range.

Michael Lewis 1:37:54 Right.

David Rosenthal 1:37:54 So it's not like it's a total flop.

Michael Lewis 1:37:56 But give me an example of the w- of the podcast, the extreme version of the one you all were most excited about that didn't resonate with your audience in the same way.

David Rosenthal 1:38:04 Okay, well, so the, the lesson here is, is gonna be... Yeah, um, Nintendo. We thought Nintendo was gonna be a-

Michael Lewis 1:38:11 Ah

David Rosenthal 1:38:11 ... big, such a great- it's an incredible history, incredible story, incredible company, N of 1 company, durable over 100 years plus, uh, has been through so many iterations. People love it. Uh, you know, 20% underperformed our benchmark, uh, at the time. Um, we're like, "Oh, man."

Ben Gilbert 1:38:31 And then we did a part two to really dig ourselves deeper.

David Rosenthal 1:38:33 Really, like, yeah, just like-

Ben Gilbert 1:38:34 And you know what people don't love is part twos. [laughing]

Michael Lewis 1:38:37 [laughing]

David Rosenthal 1:38:37 Yeah. [laughing]

Ben Gilbert 1:38:37 It's-

David Rosenthal 1:38:37 And they really don't love part twos-

Ben Gilbert 1:38:38 It's, it's-

David Rosenthal 1:38:38 ... when they didn't love part one.

Michael Lewis 1:38:39 Let me tell that joke- let me tell that joke again.

David Rosenthal 1:38:41 [laughing]

Michael Lewis 1:38:41 It's so funny that you, I'll make it even better the second time.

David Rosenthal 1:38:43 Exactly.

Michael Lewis 1:38:44 Yeah.

David Rosenthal 1:38:44 Exactly. Exactly.

Ben Gilbert 1:38:45 It's a, it is a necessary subset. You, you never tune into something called part two without part one.

David Rosenthal 1:38:50 Yeah.

Ben Gilbert 1:38:50 And so the dumbest thing you can do if you're focused on growth is-

Michael Lewis 1:38:54 Is have a part-

Ben Gilbert 1:38:54 ... have an underperforming part one followed by a part two.

David Rosenthal 1:38:57 [laughing] Right. Yeah.

Michael Lewis 1:38:58 Yeah.

David Rosenthal 1:38:58 Yeah, yeah. But we did it.

Michael Lewis 1:39:01 And you liked it.

David Rosenthal 1:39:03 We had a great time.

Ben Gilbert 1:39:03 Nintendo, that's like one of the-

David Rosenthal 1:39:04 It's the most interesting company ever

Ben Gilbert 1:39:06 ... interesting companies ever.

Michael Lewis 1:39:06 Right.

David Rosenthal 1:39:06 It started as a, a Yakuza company.

Michael Lewis 1:39:08 Right.

David Rosenthal 1:39:08 Uh, like, it's-

Michael Lewis 1:39:09 Yeah

David Rosenthal 1:39:09 ... it's crazy.

Michael Lewis 1:39:10 How did it start?

Ben Gilbert 1:39:12 Playing cards.

David Rosenthal 1:39:12 It was playing cards, so-

Michael Lewis 1:39:14 For Yakuza casinos

David Rosenthal 1:39:14 ... gambling was illegal in Japan, uh, after the Meiji Restoration.

Michael Lewis 1:39:17 Okay.

David Rosenthal 1:39:18 And so they made hanafuda cards, which are cards in Japan, and the Yakuza was the main customer.

Ben Gilbert 1:39:23 And then they got into toys, and then they way later found their way into video games.

Michael Lewis 1:39:26 The Japanese mafia was the main co- customer?

David Rosenthal 1:39:27 Yes.

Michael Lewis 1:39:28 That's funny.

David Rosenthal 1:39:29 Yeah, this is an amazing, amazing story, and that they br- they have this, uh, philosophy called lateral thinking with withered technology, which is, uh, if you look at Nintendo systems, you can go way, way, way back, it's not bleeding-edge technology. It's like-

Michael Lewis 1:39:43 How can we repurpose-

David Rosenthal 1:39:44 ... a couple generations back technology

Michael Lewis 1:39:46 ... cheaper.

David Rosenthal 1:39:46 How can we take withered technology and think outside the box with it? So like the Wii is the best example of this. The Game Boy was the original example of this. The Game Boy was basically a calculator, but like-

Michael Lewis 1:39:55 [laughing]

David Rosenthal 1:39:55 ... you know, it didn't have a color screen. It had two buttons, like, you know, but it was this incredible success.

Ben Gilbert 1:40:01 You can see the passion around this episode.

Michael Lewis 1:40:02 I feel like I- I'm about to get you into part three. [laughing]

David Rosenthal 1:40:04 Yeah, yeah, exactly. [laughing] We're gonna do part three.

Michael Lewis 1:40:06 So-

David Rosenthal 1:40:06 Okay, okay, okay, but, but here's the lesson:

Michael Lewis 1:40:08 Yeah.

David Rosenthal 1:40:08 Another episode that was totally like this, Indian Premier League Cricket. Underperformed-

Michael Lewis 1:40:12 Love that show.

David Rosenthal 1:40:13 Incredible story.

Ben Gilbert 1:40:14 Thanks.

David Rosenthal 1:40:15 Incredible story.

Ben Gilbert 1:40:15 You either really loved it or didn't listen at all.

David Rosenthal 1:40:17 Yeah, this is the lesson.

Michael Lewis 1:40:18 It's the first, it's the first of your shows I listened to. That was my-

Ben Gilbert 1:40:21 You started with IPL.

David Rosenthal 1:40:22 Well, okay, you are making the point here.

Ben Gilbert 1:40:24 This is why we did IPL.

David Rosenthal 1:40:25 This is the point.

Ben Gilbert 1:40:25 It's all worth it if we just got Michael.

Michael Lewis 1:40:27 I'm a, I'm a partial owner of the Rajasthan Royals.

David Rosenthal 1:40:29 No way!

Ben Gilbert 1:40:29 You are not! I have a Royals jersey. [laughing]

David Rosenthal 1:40:32 You and, uh, uh, Manoj is the minority, majority owner.

Michael Lewis 1:40:34 Yes, that's right.

Ben Gilbert 1:40:34 He read the book.

Michael Lewis 1:40:34 He's a majority owner. So it's a very tiny slice, but I, but as-

David Rosenthal 1:40:38 Amazing

Michael Lewis 1:40:38 ... I've, I haven't been over. I still can't explain the game, but the league-

David Rosenthal 1:40:41 Wait, how... Okay, wait, wait, wait.

Michael Lewis 1:40:42 But, but when-

David Rosenthal 1:40:42 How did you become a minority owner?

Michael Lewis 1:40:45 Two friends, I'm gonna leave their names out of it, um, but you know who they both were-

David Rosenthal 1:40:50 Okay

Michael Lewis 1:40:50 ... called and said, "There's this guy who's got this cricket team. He wants to make it the Moneyball of..." [laughing]

Ben Gilbert 1:40:57 [laughing]

David Rosenthal 1:40:58 Ah. Oh, they're the Oakland days of the IPL.

Michael Lewis 1:41:00 Yeah, exactly.

David Rosenthal 1:41:01 Oh, I got it. I got it.

Michael Lewis 1:41:01 Yeah.

David Rosenthal 1:41:01 Yeah, yeah, yeah.

Michael Lewis 1:41:02 "And he'd, he'd be open to having you invest." But y- and they were both good filters. Like, if they were interested, it was already smart, and I also thought it was small enough that if it went wrong, it would be an amazing story.

David Rosenthal 1:41:16 Mm. [laughing]

Michael Lewis 1:41:16 And even if it goes right, even if it goes right-

David Rosenthal 1:41:19 Oh, my God. Have you met Lalit Modi?

Michael Lewis 1:41:21 No. [laughing] No, no, I haven't met anybody but Manoj.

David Rosenthal 1:41:25 Oh, boy.

Michael Lewis 1:41:25 And, and, uh, and it's-

David Rosenthal 1:41:25 Oh, boy.

Michael Lewis 1:41:26 And it's-

David Rosenthal 1:41:26 Oh, boy.

Michael Lewis 1:41:26 And it's-

David Rosenthal 1:41:27 Oh, boy.

Michael Lewis 1:41:27 No, I know, there's a whole-

David Rosenthal 1:41:28 Have we got a subject for you? [laughing]

Michael Lewis 1:41:30 But I, I'm not gonna... I don't want to redo your podcast.

David Rosenthal 1:41:32 No.

Michael Lewis 1:41:32 It's just like there may be some way down the... So that was the other thing I was thinking.

David Rosenthal 1:41:35 Mm.

Michael Lewis 1:41:35 Like, it, the, the, a number of... This could work out a number of ways.

David Rosenthal 1:41:38 Mm.

Michael Lewis 1:41:38 So anyway, I, that was the first one I listened to, and you, that un- that was a un- that was an un- it's an unbelievable story.

David Rosenthal 1:41:44 Oh, it's unbelievable.

Michael Lewis 1:41:45 Everybody in the world should listen to this thing.

David Rosenthal 1:41:47 Yeah.

Michael Lewis 1:41:47 And it, it-

David Rosenthal 1:41:48 And it underperformed.

Michael Lewis 1:41:49 And yet it underperformed.

David Rosenthal 1:41:50 Okay, but here, but here's the lesson.

Michael Lewis 1:41:52 It, it-

David Rosenthal 1:41:52 Both Nintendo and IPL, we got- they were the first listening experiences for some incredibly influential people who have changed the direction of Acquired.

Ben Gilbert 1:42:02 Actually, here, let's... I think we can share the whole story.

David Rosenthal 1:42:04 Yeah.

Ben Gilbert 1:42:05 Nintendo was-

David Rosenthal 1:42:06 Specifically listened to by one person on the Meta executive team, who found it, thought it was amazing, sent it to the entire Meta executive team.

Michael Lewis 1:42:12 Right.

David Rosenthal 1:42:13 And then they all listened [laughing]

Michael Lewis 1:42:14 Right.

Ben Gilbert 1:42:14 Built- we built a relationship with them, and then when JPMorgan called us and said-

David Rosenthal 1:42:20 "We've got Chase Center."

Ben Gilbert 1:42:21 Yeah, and they were like, "Well, what would you do?" And we asked this person, like, "Hey, do you think Mark would want to do it?" And-

David Rosenthal 1:42:28 And he said, "I don't know, but I'm gonna ask him right now."

Ben Gilbert 1:42:30 Right.

David Rosenthal 1:42:30 And that's how-

Ben Gilbert 1:42:31 And so without the Nintendo episode-

David Rosenthal 1:42:32 Without the Nintendo episode, Mark Zuckerberg doesn't do a Chase Center.

Ben Gilbert 1:42:34 No 6,000 person...

David Rosenthal 1:42:36 And we have some similar stories with IPL. The point is that, uh, doing episodes, uh, that we, one or both of us, is just, like, insanely passionate about-

Michael Lewis 1:42:47 Where did, where'd you learn this from?

Ben Gilbert 1:42:49 LVMH.

David Rosenthal 1:42:49 From doing these episodes-

Michael Lewis 1:42:50 Oh, I see

David Rosenthal 1:42:50 ... and, like, underperforming, but-

Ben Gilbert 1:42:52 No, we learned it from LVMH.

David Rosenthal 1:42:54 Oh, oh.

Ben Gilbert 1:42:54 I pitched that, like, three times, and you were like, "Okay."

David Rosenthal 1:42:56 No, no, but LVMH was a banger. It performed great.

Ben Gilbert 1:42:58 Which is why we learned the lesson that if one of us feels passionate about something-

Michael Lewis 1:43:01 Go for it.

David Rosenthal 1:43:02 Oh, no, no, but I'm making a different point, which is that-

Michael Lewis 1:43:04 Oh

David Rosenthal 1:43:04 ... if one of us feels passionate about something, even if the episode is a relative dud, it's still worth doing because-

Michael Lewis 1:43:10 That passion, someone else is going to share

David Rosenthal 1:43:11 ... invariably somebody latches onto that passion.

Ben Gilbert 1:43:12 Yes.

Michael Lewis 1:43:12 This is exactly right.

David Rosenthal 1:43:13 And, yeah.

Michael Lewis 1:43:13 If you don't feel anything, no, there's a chance nobody's gonna feel anything.

David Rosenthal 1:43:16 Yeah.

Michael Lewis 1:43:16 But if you feel a lot, someone's gonna feel it.

David Rosenthal 1:43:18 Someone's gonna feel something.

Ben Gilbert 1:43:18 Yes.

Michael Lewis 1:43:19 That's right.

David Rosenthal 1:43:19 Yeah.

Michael Lewis 1:43:20 That's right. So go, so trust that feeling.

David Rosenthal 1:43:22 Yeah.

Ben Gilbert 1:43:23 Yeah. It's about the magnitude of the way a small number of people feel about episodes, often more than the-

Michael Lewis 1:43:30 Yeah

Ben Gilbert 1:43:30 ... the spread.

Michael Lewis 1:43:31 I think that's right.

David Rosenthal 1:43:32 Yeah.

Michael Lewis 1:43:32 Yeah.

David Rosenthal 1:43:33 Now, sometimes we're passionate about something, and it becomes a banger. [laughing] Like, you know, that's, that's the ideal. Rentech, Renaissance Technologies, that was amazing.

Michael Lewis 1:43:41 Oh, w-

David Rosenthal 1:43:41 That was an incredible episode.

Michael Lewis 1:43:42 That's one of the episodes I've listened to. I loved it, too.

David Rosenthal 1:43:44 So great.

Michael Lewis 1:43:45 ... It's one of, like, the two great mysteries on Wall Street, how they do what they do-

Ben Gilbert 1:43:50 Yeah

Michael Lewis 1:43:50 ... and who is Satoshi? [laughing]

Ben Gilbert 1:43:52 Yeah. [laughing]

David Rosenthal 1:43:52 Yeah, I was gonna say, those are the two.

Michael Lewis 1:43:53 Those are the two.

David Rosenthal 1:43:54 Yeah, yeah, yeah.

Ben Gilbert 1:43:54 I kind of like the take that they invented machine learning a decade or two before-

Michael Lewis 1:44:01 Yeah

Ben Gilbert 1:44:01 ... and kept it secret, that resembles LLMs, and that they were able to find signal that existed only in really weak ways in, in a predictable alpha generating.

Michael Lewis 1:44:11 But that nobody else found it, too, so then it all went away because they hid it at the same time as they found it.

Ben Gilbert 1:44:17 Yes.

David Rosenthal 1:44:18 Yeah.

Michael Lewis 1:44:18 That's mind-blowing, if true, that that could still be going on with... I mean, y- you can see why it worked through the '90s.

Ben Gilbert 1:44:28 Yeah.

David Rosenthal 1:44:28 Yeah, yeah.

Michael Lewis 1:44:28 It's really hard with, like, Jane Street, and Citadel, and all these other places looking for every bit of signal in the marketplace.

Ben Gilbert 1:44:34 Mm.

Michael Lewis 1:44:34 It is an amazing story, and that is of the books I didn't write that I wished I'd written.

David Rosenthal 1:44:38 Mm. Wait, did you consider doing that?

Michael Lewis 1:44:40 Oh, I a- so Jim Simon's son had a kid in my oldest child's class in high school, and I tried... I appro- I said, "Look, I can't do it unless you want me to do it. There's no point." And he said, like, "Dad," just like [laughing]

David Rosenthal 1:44:56 [laughing]

Ben Gilbert 1:44:58 [laughing]

Michael Lewis 1:44:58 "No, no, no." I- this whole business of kind of doing it by radar f- completely from the outside, you know you're gonna get so many things wrong.

David Rosenthal 1:45:03 Yeah.

Michael Lewis 1:45:04 And it's like, and embarrass yourself. That you need to be so inside so that you don't- so that the person you're writing about doesn't read it and say, like, "That's just completely wrong."

David Rosenthal 1:45:12 Yeah.

Michael Lewis 1:45:12 And, uh, and that- I could've done that book, but why? You know, that, that, that didn't appeal to me. What appealed to me was he was at the end of his career. I didn't need all the secrets, but I needed some of the secrets. And, uh, and I, and I would need him, and I, mmm, but that's one... That's on my, "Oh, that's too bad that one got away."

David Rosenthal 1:45:34 Yeah, if a butterfly had flapped its wings differently and he collaborated.

Michael Lewis 1:45:38 It would've been a fabulous book.

David Rosenthal 1:45:38 Yeah, yeah.

Michael Lewis 1:45:39 It would've been a fabulous book. Um, all right, number seven.

Ben Gilbert 1:45:43 It's a different twist on the NFL, that- but we definitely learned it from the NFL: create spectacle.

Michael Lewis 1:45:50 All right.

Ben Gilbert 1:45:51 We now think-

David Rosenthal 1:45:51 A live event strategy. [laughing]

Ben Gilbert 1:45:53 Yeah, there's twofold. One, we now s- have stopped thinking about Acquired as a habit for people. Most podcasts, your dream is to create a habit.

Michael Lewis 1:46:01 Yeah.

Ben Gilbert 1:46:01 And ours, we've thrown that out the window and said, "We're-

Michael Lewis 1:46:03 You don't do enough of them.

Ben Gilbert 1:46:04 Right.

Michael Lewis 1:46:04 Right.

Ben Gilbert 1:46:05 So we need to create events. It needs to be the current thing-

Michael Lewis 1:46:08 Right

Ben Gilbert 1:46:08 ... when we release an episode, for whatever your group of friends or, you know, acquaintances is. Like, it has to be the watercool conversation.

David Rosenthal 1:46:14 That has to be Monday Night Football.

Ben Gilbert 1:46:16 And then, once a year-

David Rosenthal 1:46:17 It has to be the Super Bowl

Ben Gilbert 1:46:18 ... we have to have a Super Bowl.

David Rosenthal 1:46:19 Yeah.

Ben Gilbert 1:46:20 And doing the Chase Center show and then the Radio City show, very small amount of people in the audience. I mean-

Michael Lewis 1:46:28 6,000?

Ben Gilbert 1:46:29 6,000.

David Rosenthal 1:46:29 6,000.

Ben Gilbert 1:46:29 So it's... Yeah, great. It's the world's largest indoor theater. It's 6,000 people in this incredible venue in New York City. Relative to the number of people who listen to our episodes-

David Rosenthal 1:46:37 Even if it were 50,000, it would still be-

Ben Gilbert 1:46:38 It's point, uh, 0.4% of the audience?

Michael Lewis 1:46:42 Right.

Ben Gilbert 1:46:42 It's, it's a very small-

Michael Lewis 1:46:43 It's a tiny percentage.

Ben Gilbert 1:46:44 But the amount of heat and light created from the n- the idea that you did that show-

Michael Lewis 1:46:50 Right

Ben Gilbert 1:46:51 ... is more impactful to building the franchise of Acquired than any given episode, maybe even than a whole season of episodes.

Michael Lewis 1:46:59 What's, uh, what's the first spectacle you created?

David Rosenthal 1:47:02 Well, Chase Center was the first-

Ben Gilbert 1:47:04 Spectacle.

Michael Lewis 1:47:04 How long ago was that?

David Rosenthal 1:47:05 We, we had been step- Uh, that was-

Ben Gilbert 1:47:06 18 months.

David Rosenthal 1:47:07 Uh-

Michael Lewis 1:47:07 So you just started doing this.

David Rosenthal 1:47:08 September '24.

Ben Gilbert 1:47:08 Yeah.

David Rosenthal 1:47:09 Yeah.

Ben Gilbert 1:47:09 This is a new thing.

David Rosenthal 1:47:09 We, we had been, um, uh... We did a show in Climate Pledge Arena in Seattle, uh, but it was one section. [chuckles]

Ben Gilbert 1:47:15 But actually, by-

David Rosenthal 1:47:16 But it was, that was the babysit

Ben Gilbert 1:47:16 ... by name, say we did an arena show-

David Rosenthal 1:47:18 Yes

Ben Gilbert 1:47:19 ... even though it was only 1,000 people.

David Rosenthal 1:47:19 The incredibility to-

Ben Gilbert 1:47:20 We talked about it on air as the Acquired Arena show, and that-

David Rosenthal 1:47:24 Yeah

Ben Gilbert 1:47:24 ... had some panache.

David Rosenthal 1:47:25 We were able to say to, to JPMorgan, to Chase Center, to the Warriors, like, "We have done this before."

Michael Lewis 1:47:30 I'm gonna ask rude, couple of rude questions. Your, your Radio City, uh, musical event, was it with Jamie Dimon?

Ben Gilbert 1:47:37 Yeah.

Michael Lewis 1:47:37 6,000 people.

Ben Gilbert 1:47:39 And Meredith Kopit Levien, New York Times CEO, and Barry Diller.

Michael Lewis 1:47:42 Okay, so the three... How many people are there for them, and how many people are there for you?

Ben Gilbert 1:47:46 We did not announce the guests.

David Rosenthal 1:47:48 We did not announce the guests.

Michael Lewis 1:47:48 Oh.

David Rosenthal 1:47:49 So they were-

Michael Lewis 1:47:49 All there-

David Rosenthal 1:47:50 They were all there for Acquired. [chuckles]

Michael Lewis 1:47:50 Oh, they're so-

Ben Gilbert 1:47:51 Mostly 'cause I wanted to give this answer-

David Rosenthal 1:47:53 Yes

Ben Gilbert 1:47:53 ... [laughing] when Michael asked. [laughing]

Michael Lewis 1:47:54 [laughing]

David Rosenthal 1:47:54 We knew Michael, at the end of the year, was gonna ask this question.

Michael Lewis 1:47:57 Okay. So I, uh, so, so-

Ben Gilbert 1:47:59 It's the-

David Rosenthal 1:47:59 It was a surprise

Michael Lewis 1:47:59 ... all I knew was it was gonna be Acquired with a guest. Was it sold out before you announced the guest?

Ben Gilbert 1:48:05 We didn't announce the guest-

David Rosenthal 1:48:06 We never announced the guest

Michael Lewis 1:48:07 So the guest is, is a surprise?

David Rosenthal 1:48:08 It was a surprise. Yeah.

Ben Gilbert 1:48:08 Yeah.

Michael Lewis 1:48:09 Oh.

Ben Gilbert 1:48:10 It hurt in my soul when we did Chase Center. Afterwards, reflecting on it, there was this little thing of like, "Did all those people show up 'cause it said Mark Zuckerberg on the poster?"

Michael Lewis 1:48:18 Yeah. Well, now you know.

David Rosenthal 1:48:19 So now we know.

Michael Lewis 1:48:19 So now you know. So are you gonna- so that's, this is, your form of spectacle is these big public shows.

David Rosenthal 1:48:24 Yeah.

Michael Lewis 1:48:24 Any other forms of spectacle on the horizon?

David Rosenthal 1:48:27 Well, we are doing the actual Super Bowl, so this has come- [chuckles]

Michael Lewis 1:48:29 What are you doing?

David Rosenthal 1:48:29 We, we basically manifested this, [laughing] uh-

Michael Lewis 1:48:31 Are you the halftime show?

David Rosenthal 1:48:33 Uh, I wish.

Ben Gilbert 1:48:33 Yeah, we're collabbing with, uh- [laughing]

David Rosenthal 1:48:34 I wish! Us and Bad Bunny-

Ben Gilbert 1:48:35 Yeah

David Rosenthal 1:48:36 ... we're gonna be on stage. [laughing]

Michael Lewis 1:48:37 I would love the reaction of the NFL fan base-

David Rosenthal 1:48:39 Yeah, yeah, yeah, yeah

Michael Lewis 1:48:39 ... if they were told that it's not gonna be music this year.

David Rosenthal 1:48:41 Ben and David are coming out.

Michael Lewis 1:48:42 It's just gonna be an Acquired episode.

David Rosenthal 1:48:44 Yes. [laughing]

Michael Lewis 1:48:45 Yes, with Peyton and Eli Manning.

David Rosenthal 1:48:47 The NFL-

Ben Gilbert 1:48:47 That would actually-

Michael Lewis 1:48:48 That would not be bad

Ben Gilbert 1:48:48 ... that would be so good.

David Rosenthal 1:48:50 That would, that, that would crush-

Ben Gilbert 1:48:51 Manningcast is, like, the only way I watch Monday Night Football now.

Michael Lewis 1:48:53 Oh, that's great.

Ben Gilbert 1:48:53 Uh, we're doing the Innovation Summit. So the NFL is launching-

David Rosenthal 1:48:55 Launching a Innovation Summit the Friday before the Super Bowl, 'cause the Super Bowl's here in, uh-

Michael Lewis 1:49:00 Right

David Rosenthal 1:49:00 ... in San Francisco this year. So they're launching an Innovation Summit Friday before the Super Bowl with all the, you know, big partners in the NFL, with Roger Goodell. Uh, it'll be in the city, in San Francisco, and we're gonna MC it.

Michael Lewis 1:49:12 Okay. So who- do you know who your guests are gonna be?

Ben Gilbert 1:49:15 We do.

David Rosenthal 1:49:16 We do.

Michael Lewis 1:49:16 But it's a secret.

David Rosenthal 1:49:17 They haven't been announced yet-

Ben Gilbert 1:49:17 We can't talk about it

David Rosenthal 1:49:17 ... but it'll be, it'll be, you know, on par with-

Michael Lewis 1:49:19 And where, which, which venue?

David Rosenthal 1:49:20 So with our past.

Michael Lewis 1:49:20 Where are you doing this?

David Rosenthal 1:49:21 Uh-

Michael Lewis 1:49:22 SFMOMA.

David Rosenthal 1:49:22 Venue... Uh, SFMOMA.

Michael Lewis 1:49:24 Oh!

David Rosenthal 1:49:24 Yeah, yeah.

Michael Lewis 1:49:25 Okay.

David Rosenthal 1:49:25 It's, it's not, uh-

Michael Lewis 1:49:26 Second is big

David Rosenthal 1:49:26 ... it's not gonna be open to the public. It'll be, it'll be streamed.

Michael Lewis 1:49:29 Yep.

David Rosenthal 1:49:29 Um, so it'll be a different style of event than, uh-

Michael Lewis 1:49:31 It'll be VIPs-

David Rosenthal 1:49:32 It's not ticketed

Michael Lewis 1:49:33 ... for the Super, from the Super Bowl

David Rosenthal 1:49:33 ... it's for, uh, it's for the NFL's partners.

Michael Lewis 1:49:35 Right.

David Rosenthal 1:49:36 Um, but, uh, but yeah, it's gonna be, it's gonna be incredible.

Michael Lewis 1:49:40 All right. Let's go to, I think we're on number nine. [chuckles]

David Rosenthal 1:49:43 All right, we're, we- home stretch.

Michael Lewis 1:49:45 Two more.

David Rosenthal 1:49:45 So-... We made Costco, uh, in the back half of 2023. But it was one or two episodes after we made Nike. Nike, I think, ended up being a fine episode, but I tried way too hard, like, w- way too much pressure on myself, I won't speak for you, on, on the Nike episode, and it, it, uh, it came out flat.

Ben Gilbert 1:50:06 We, we read nine books between us-

Michael Lewis 1:50:08 Right.

David Rosenthal 1:50:08 Yeah

Ben Gilbert 1:50:08 ... to prepare.

David Rosenthal 1:50:08 I think it was 11. It was just too much, for all sorts of reasons. And so, like, we were, like, burnt out, we were not happy. We decided to do Costco. I said, like, "I think I just gotta... I gotta take a different approach here. Uh, I gotta play loose on this one." [chuckles] "Like, I can't, you know, play tight," to use the sports analogy. And I said, like, "Let's, let's find the, the one book, like, the right book."

Michael Lewis 1:50:30 Right.

David Rosenthal 1:50:30 It helped that there was only really one book.

Michael Lewis 1:50:32 What is the book?

David Rosenthal 1:50:32 Read, read that book, uh, Sol Price's autobiography.

Michael Lewis 1:50:34 Right.

David Rosenthal 1:50:35 Read that. [laughs]

Michael Lewis 1:50:35 Right.

David Rosenthal 1:50:36 Use that as the main source. Uh, you got m- maybe one of the best primary source interviews-

Ben Gilbert 1:50:42 Oh, yeah

David Rosenthal 1:50:42 ... ever.

Ben Gilbert 1:50:43 The-

David Rosenthal 1:50:43 The CFO of Costco gave you a-

Ben Gilbert 1:50:45 Yeah, just said-

David Rosenthal 1:50:45 ... one-on-one presentation

Ben Gilbert 1:50:46 ... "Come over to the office, and I'll sit you down and give you the entire whiteboard and PowerPoint on how the Costco business model works."

David Rosenthal 1:50:53 Uh-huh.

Ben Gilbert 1:50:53 And we spent the whole afternoon together, and it was-

David Rosenthal 1:50:55 And between those two things-

Ben Gilbert 1:50:56 ... unbelievable

David Rosenthal 1:50:56 ... the book and that time that you s- you spent-

Ben Gilbert 1:50:59 That was the whole episode

David Rosenthal 1:50:59 ... with Richard, that was, that was the... And we didn't need to do more than that.

Michael Lewis 1:51:02 When you went into it, did you know anything?

Ben Gilbert 1:51:04 Yes.

Michael Lewis 1:51:05 What, what-

Ben Gilbert 1:51:05 Yes

Michael Lewis 1:51:05 ... did you know?

David Rosenthal 1:51:06 When we went into starting work on Costco, we knew nothing.

Ben Gilbert 1:51:09 Correct, but I knew a lot going into-

David Rosenthal 1:51:12 Going in with-

Michael Lewis 1:51:12 You knew that

Ben Gilbert 1:51:12 ... meeting with Richard

David Rosenthal 1:51:12 ... meeting with him.

Ben Gilbert 1:51:13 I want- I wanted to be able to hear the things he was saying that were different than common wisdom. When you... There's a lot of think pieces out there about Costco. The Wall Street Journal loves to write about it, investors love to write about the stock-

David Rosenthal 1:51:26 Yeah

Ben Gilbert 1:51:26 ... so you can kind of read that stuff.

David Rosenthal 1:51:27 It's Charlie Munger's favorite company.

Michael Lewis 1:51:29 Right.

David Rosenthal 1:51:29 You know, there's lots of stuff out there.

Ben Gilbert 1:51:30 And I, I wanted to hear... I- this was actually one of the last pieces of research, 'cause I wanted to be really prepped.

Michael Lewis 1:51:36 What did you... I know you were talking about when you're working on an episode, and you're going for a run, and you stop, and it... You make some connection or some insight occurs to you-

Ben Gilbert 1:51:47 Yeah

Michael Lewis 1:51:47 ... and you stop, and you write it down. What- give me a few of the ones about Costco.

Ben Gilbert 1:51:51 Low SKU count drives everything.

Michael Lewis 1:51:54 Oh, all right.

David Rosenthal 1:51:55 That's, that's the, like, the, the starting point-

Michael Lewis 1:51:57 The number of things they have on the-

David Rosenthal 1:51:58 Yeah

Ben Gilbert 1:51:58 ... Yeah.

David Rosenthal 1:51:59 The number of things-

Ben Gilbert 1:51:59 Do you want the Charlie Munger talk? [laughing] This is the- [laughing]

Michael Lewis 1:52:02 The number of things they have on the shelf.

Ben Gilbert 1:52:03 Yeah.

Michael Lewis 1:52:03 So unlike Walmart-

David Rosenthal 1:52:04 Yeah

Michael Lewis 1:52:05 ... they- there's billions of things on the shelf.

David Rosenthal 1:52:05 Walmart has, uh-

Michael Lewis 1:52:06 Hasn't-

David Rosenthal 1:52:07 ... 100 to 200,000 SKUs.

Michael Lewis 1:52:08 You get what you get, you don't pitch a fit. Whatever's there is there.

Ben Gilbert 1:52:10 4,000 things.

Michael Lewis 1:52:11 Yep.

David Rosenthal 1:52:12 Walmart is 100 to 200,000.

Michael Lewis 1:52:13 Yeah.

Ben Gilbert 1:52:14 And here's, like, all the knock-on effects of that. If you only sell 4,000 things, it doesn't take a lot of volume before, very quickly, you are a meaningful seller to every single one of those-

Michael Lewis 1:52:27 Those 4,000 vendors

Ben Gilbert 1:52:27 ... products.

Michael Lewis 1:52:28 Yes.

Ben Gilbert 1:52:28 Those vendors. Suddenly, you become really important to that vendor.

Michael Lewis 1:52:31 Right.

David Rosenthal 1:52:31 Yep.

Ben Gilbert 1:52:32 Your merchandisers, since you only have 4,000-

Michael Lewis 1:52:35 So your incentives start to align.

Ben Gilbert 1:52:37 Yes.

David Rosenthal 1:52:38 Yeah.

Ben Gilbert 1:52:38 The, the merchandisers-

Michael Lewis 1:52:39 This-

Ben Gilbert 1:52:39 ... have a very small portfolio.

David Rosenthal 1:52:40 Yeah.

Ben Gilbert 1:52:40 You're not dealing with 100 vendors.

David Rosenthal 1:52:41 If you're a Walmart buyer, you're dealing with-

Michael Lewis 1:52:43 Right

David Rosenthal 1:52:43 ... hundreds of vendors.

Ben Gilbert 1:52:44 You're dealing with seven.

Michael Lewis 1:52:45 So-

Ben Gilbert 1:52:45 And you would know the absolute crap out of their product line.

Michael Lewis 1:52:48 Right.

Ben Gilbert 1:52:48 If you sell chocolate, you monitor the price in the cocoa commodities markets.

Michael Lewis 1:52:53 Right.

Ben Gilbert 1:52:53 And if it takes someone who's managing a very small portfolio to stay that attuned to each one of the things, small SKU count means that any given thing on the shelf flies off the shelf pretty quick.

Michael Lewis 1:53:06 So there's not... Yeah, so the turnover-

David Rosenthal 1:53:07 Inventory turns

Michael Lewis 1:53:07 ... is faster, so there's more flow.

David Rosenthal 1:53:09 They're getting, they're getting-

Michael Lewis 1:53:09 They get paid-

David Rosenthal 1:53:10 In, in some cases, they're getting multiple turns of cash flow before they pay the first time.

Ben Gilbert 1:53:14 On average, it takes them 27 days to sell through their entire inventory, which means that's, on net 30 terms, three days of grace, where the inventory is actually financed by the vendors and then some.

David Rosenthal 1:53:30 And the thing, on average, it's 27, so some SKUs are selling in two days, that they're turning. They're turning it 10 times a month.

Ben Gilbert 1:53:36 There's no working capital in this business-

Michael Lewis 1:53:37 Right

Ben Gilbert 1:53:37 ... other than building more Costcos.

Michael Lewis 1:53:39 Right. Low SKU count for Costco is like low, uh, low episode volume for you. [laughs]

David Rosenthal 1:53:45 Yeah, [laughing] yeah, right, right, yes. [laughing]

Ben Gilbert 1:53:47 Yes, 100%, we like... Yes.

Michael Lewis 1:53:48 Right?

David Rosenthal 1:53:49 Yeah.

Ben Gilbert 1:53:49 And low number of partners, so we can put, like, all of our energy-

Michael Lewis 1:53:52 These kind of constraints-

Ben Gilbert 1:53:53 ... behind very few

Michael Lewis 1:53:53 ... being, you know, it's not norm- it's not really natural for a business to sell less of things, sell fewer things, when you could sell more things.

Ben Gilbert 1:53:59 And everybody-

Michael Lewis 1:53:59 But actually do- doing that, and when you walk into Co- it is the odd experience, when you walk into Costco, is the absence of choice.

David Rosenthal 1:54:05 Yeah.

Michael Lewis 1:54:05 And in fact, consumers kind of like not having too much choice.

Ben Gilbert 1:54:10 This is the Trader Joe's insight.

Michael Lewis 1:54:10 There's all this, there's all this research showing that if you, if you sell 30 different kinds of jams in the supermarket, y- you will sell less jam than if you sell three kinds of jam.

David Rosenthal 1:54:18 Yeah.

Michael Lewis 1:54:18 'Cause the pe- the people will just be paralyzed by the choice.

Ben Gilbert 1:54:21 Yes.

Michael Lewis 1:54:22 And you smell- you feel, in Costco, someone has made all these decisions for me.

David Rosenthal 1:54:25 Yeah.

Michael Lewis 1:54:26 And they're good decisions.

Ben Gilbert 1:54:27 Yes.

Michael Lewis 1:54:28 It-

Ben Gilbert 1:54:28 It's curated.

Michael Lewis 1:54:29 Yeah.

Ben Gilbert 1:54:30 You can't just run this strategy willy-nilly. If you're only gonna sell very few things, you're only gonna make very few episodes, it puts a lot of onus on making exceptional choices on the things that you do choose to carry.

Michael Lewis 1:54:40 Right.

Ben Gilbert 1:54:40 So it's like a very high-leveraged strategy.

Michael Lewis 1:54:44 But then, you didn't know anything about any of this when yous go into the episode?

David Rosenthal 1:54:47 No, we were just, uh... The only reason we did the episode was it was Charlie Munger's favorite company.

Michael Lewis 1:54:51 All right, give me another, give me another lesson. How are we doing on time?

David Rosenthal 1:54:55 Is this, is this the last?

Ben Gilbert 1:54:56 This is Acquired, Michael. [laughing]

Michael Lewis 1:54:57 Okay, I know. [laughing] I know, I know!

David Rosenthal 1:54:59 You said you didn't have any plans tonight.

Michael Lewis 1:55:01 [laughing]

Ben Gilbert 1:55:03 We were sitting down with, uh, Morris Chang, and he was talking about TSMC.

Michael Lewis 1:55:06 Yep.

Ben Gilbert 1:55:06 And he told us that one of the ways that they erred was trying to exit the integrated circuit market, or diversify from that market, and go into-

David Rosenthal 1:55:16 They went into-

Ben Gilbert 1:55:16 ... solar-

David Rosenthal 1:55:17 ... uh, memory. Yeah, what are the other-

Ben Gilbert 1:55:19 Memories, and there was-

David Rosenthal 1:55:20 Yeah

Ben Gilbert 1:55:20 ... one other thing, too, and none of those were as good of a business. And the, the key insight was, "You're already in the best business. I- integrated circuits are the future and will be for a long time, and you're already the best at them, so stop trying to do other things and just do that really well." Uh, probably to a fault and with a bias, we believe that about Acquired. E- every time we look at anything else-

Michael Lewis 1:55:43 We're do- already doing the thing we should be doing.

Ben Gilbert 1:55:45 We're already doing, yes.

Michael Lewis 1:55:45 Don't go do something that we're less good at-

David Rosenthal 1:55:47 Yeah

Michael Lewis 1:55:47 ... or-

David Rosenthal 1:55:47 Yeah

Michael Lewis 1:55:47 ... gonna be less fun or...

Ben Gilbert 1:55:49 Right.

David Rosenthal 1:55:49 We should always just make another episode.

Michael Lewis 1:55:50 However, you have decided to become venture capitalists [laughing] again.

Ben Gilbert 1:55:54 [laughing]

Michael Lewis 1:55:54 So the que- so here's a q-

David Rosenthal 1:55:55 Yeah

Michael Lewis 1:55:55 ... here's a que- I'm curious, what's the difference between what you do and-... and what I, a normal Silicon Valley venture capitalist does before they put money in a company? Do you think you know more than they do?

David Rosenthal 1:56:04 Oh, well, I think there's a, I think there's a b- there's a, there's just a, uh, um, I think there's a top-level misconception about what the venture capital industry is.

Michael Lewis 1:56:11 All right.

David Rosenthal 1:56:12 Uh, uh, I think a lot of people think it is a analytical industry. You're learning all about the company, you're doing diligence. It's not that you're not. You are doing that, but that's the commodity. It's an access business.

Michael Lewis 1:56:25 Yep.

Ben Gilbert 1:56:26 Especially at the growth stage.

David Rosenthal 1:56:27 Yeah.

Ben Gilbert 1:56:27 Early stage, there's more picking involved.

David Rosenthal 1:56:30 But that picking is, like, a super art. [chuckles] It's not a, a... Early-stage picking is not a, you know, understanding a company-

Michael Lewis 1:56:39 Right

David Rosenthal 1:56:39 ... early. It's, it's a, it's a whole different thing.

Ben Gilbert 1:56:41 So the entire bet that we've made in this chapter of our venture capital careers is a bet that getting into the best companies is just an access thing. The, you know, growth stage, private companies, y- you can tell what the good ones are.

David Rosenthal 1:56:55 Yeah.

Ben Gilbert 1:56:55 Most people can't get in. If you can, you should.

David Rosenthal 1:56:58 All right, you know, I mean, with the way- w- we do the work in choosing our sponsors, and then we do like, "Okay, great, that box checked." Our sponsors are not, um, non-obvious companies-

Michael Lewis 1:57:08 Right

David Rosenthal 1:57:08 ... that all growth stage investors don't want to get into.

Michael Lewis 1:57:11 But the kind of work that you do to do a, an, a podcast episode about a company, does it bear any, uh, resemblance to the kind of work a VC does, uh-

Ben Gilbert 1:57:21 Oh

Michael Lewis 1:57:21 ... about a company before they invest in it?

Ben Gilbert 1:57:24 Uh, I don't think so. I wrote a lot of investment memos in my early stage career. They're all about how big could this thing be if it goes right, but you're almost always investing, at least I was, at the napkin stage, and so you're, you're m- mostly making stuff up. You're, you're, like, dreaming what this market could look like when it materializes, but, like, you don't know.

Michael Lewis 1:57:46 Right.

Ben Gilbert 1:57:46 You're, you're really just making a founder bet, and then you're trying to support it with all this, like, structural information that is a very, um, imprecise.

Michael Lewis 1:57:55 Right.

Ben Gilbert 1:57:55 You're acting like you know the third or fourth decimal place, when in reality, you barely know the first one.

Michael Lewis 1:57:59 You answered my... My question was, is, are these two things similar? And you're saying basically, not so much.

David Rosenthal 1:58:03 No, no, they're not.

Michael Lewis 1:58:04 So that means that being a venture capitalist in no way really prepared you to create these podcast episodes, 'cause they're very different things.

David Rosenthal 1:58:12 Well, I think it, I, I think it-

Ben Gilbert 1:58:13 Hmm

David Rosenthal 1:58:13 ... prepared us to create the business that we created-

Michael Lewis 1:58:15 Okay

David Rosenthal 1:58:15 ... for sure.

Michael Lewis 1:58:16 But what have you learned? I'll put the q- question another way. [laughing] What have you learned about telling a story-

David Rosenthal 1:58:22 Yeah

Michael Lewis 1:58:22 ... uh, that you-

David Rosenthal 1:58:22 No, no, I think, like, uh-

Michael Lewis 1:58:23 ... that you didn't know w- how to do when you started?

David Rosenthal 1:58:24 reading your books and, you know, uh, being a liberal arts, you know, major at Princeton, for me.

Ben Gilbert 1:58:29 Studying the businesses that we studied for Acquired helps me make Acquired far more than any investment memo I ever wrote. In fact, I remember in one of my last few years of being a venture capitalist, one of my partners, uh, asked me how I, like, learned so much so quickly about different industry dynamics, and I was like: "It's, it's not 'cause I'm talking to all these early-stage companies, none of which know what the future looks like. It's studying these mature businesses and understanding what markets can look like at maturity." Acquired helped me be an investor much better than the other way around.

Michael Lewis 1:59:04 Gotcha. What can you do now as storytellers that you couldn't do 10 years ago?

David Rosenthal 1:59:09 I think we think about narrative structure and acts, uh, and, and what, w- well, what a story is.

Michael Lewis 1:59:15 Right.

David Rosenthal 1:59:16 When we're reading books sometimes, a lot of books, especially corporate history books, are, "This happened, and then this happened, and then this happened-

Michael Lewis 1:59:23 Right

David Rosenthal 1:59:23 ... and then this happened."

Michael Lewis 1:59:24 Yep.

David Rosenthal 1:59:25 That's fine for, you know, cataloguing history. [chuckles]

Michael Lewis 1:59:27 Right. It's not a story.

David Rosenthal 1:59:28 That is not a story. [chuckles]

Michael Lewis 1:59:30 Yeah.

David Rosenthal 1:59:30 And at a certain point we realized, like-

Michael Lewis 1:59:32 No, this is-

David Rosenthal 1:59:32 ... you can't do, "and this happened."

Michael Lewis 1:59:33 Right. It's the why of it. It's the-

David Rosenthal 1:59:36 Yeah, it's the story flow.

Michael Lewis 1:59:36 The, the queen died, and then the king died, is not a story.

David Rosenthal 1:59:39 [chuckles]

Michael Lewis 1:59:39 The queen died, and then the king died of heartbreak, is.

David Rosenthal 1:59:42 Yeah.

Michael Lewis 1:59:42 If someone just told you... if you told me 10 years ago that two guys, without any previous really literary, podcasting, any kind of experience, were gonna create this four-hour conversation about an individual company, and people are gonna be mesmerized by it, people are gonna listen to the whole thing and, and want even more, I'd have said, "That doesn't sound, like, very promising."

David Rosenthal 2:00:06 Yeah, definitely not.

Michael Lewis 2:00:07 Like, I would not, I wouldn't put money into that.

David Rosenthal 2:00:07 Yeah, you would-

Ben Gilbert 2:00:08 Yeah

David Rosenthal 2:00:08 ... as if you were an early-stage VC-

Michael Lewis 2:00:09 So it's like, it's like, why it works is a really good question, 'cause it's not obvious. It's counter to much of what's going on in the culture, like attention spans supposedly getting shorter, blah, blah, blah. But you, uh, like, it does work. It clearly works. It works as a business, but also works as just a creative thing. Um, and the why of it is, like... and you must think about this all the time, the why of it.

Ben Gilbert 2:00:32 Yeah. There's a bunch of different answers to this. One giant tailwind for us is, a year after we started the podcast, AirPods came out.

David Rosenthal 2:00:39 Yeah, yeah.

Michael Lewis 2:00:39 Yeah.

Ben Gilbert 2:00:39 And it became-

David Rosenthal 2:00:40 This is super non-obvious

Ben Gilbert 2:00:40 ... societally acceptable to just listen to stuff while you're moving about the world.

Michael Lewis 2:00:45 While you're talking to your mother.

Ben Gilbert 2:00:47 So... Yes.

David Rosenthal 2:00:47 Yeah.

Michael Lewis 2:00:47 Yeah.

David Rosenthal 2:00:47 Yeah.

Ben Gilbert 2:00:47 So there, there, um-

Michael Lewis 2:00:49 Right

Ben Gilbert 2:00:50 ... our brains all got two input channels. Like, we used to only focus on one thing at a time. Everyone now focuses on two things at a time. You can't do the same thing, like, you can't read and listen at the same time, but you can drive and listen, you can run and listen, you can do the dishes and listen. And so we have w- this massive tailwind of people have, like, a large number of minutes throughout the day where they're doing stuff that they can also listen.

Michael Lewis 2:01:14 Right.

David Rosenthal 2:01:15 Yeah.

Ben Gilbert 2:01:15 Which that's true for all podcasts, but like-

David Rosenthal 2:01:19 Yeah. There are a couple of things that are true for all podcasts. One, one, one is AirPods. Uh, it's basically all the platform stuff that happened over the last 10 years, and we started at the right time to invest.

Michael Lewis 2:01:27 Right.

Ben Gilbert 2:01:27 Yeah.

David Rosenthal 2:01:27 So AirPods, um, Spotify-

Michael Lewis 2:01:30 Yep

David Rosenthal 2:01:30 ... Spotify didn't enter podcasts until 2018-

Michael Lewis 2:01:32 Right

David Rosenthal 2:01:32 ... and now is, I think, over half of the market.

Michael Lewis 2:01:35 Right.

David Rosenthal 2:01:35 Uh, brought hundreds of millions of people into podcasting.

Ben Gilbert 2:01:38 Apple Podcasts not becoming YouTube was actually great for us.

David Rosenthal 2:01:41 Right.

Ben Gilbert 2:01:42 That it's a place to, to... When you get a listener, you really get a listener, and it's like this durable, incredibly valuable place to accumulate listeners. Spotify is, too, but, um-

David Rosenthal 2:01:51 Uh, YouTube in its own way, too.