10 Years of Acquired (with Michael Lewis)

Why has Acquired — seemingly against all odds — “worked”? It's a puzzling question: episodes are four hours long, they come out infrequently, and they usually don’t have guests or video. Hardly the standard-issue playbook for podcasting success! And yet well over a million smart, curious and exceedingly busy humans share their (your!) valuable time with us every month. Why? This is the exact paradox that has been rolling around in the head of Michael Lewis (yes, that Michael Lewis) since he found the show earlier this year. So we asked Michael to be our guest "interlocutor" and share what he thinks is going on here, while we share ten lessons we've stolen (graciously) from companies we've studied and brought into Acquired itself. He takes us through the entire Acquired journey: how we started, why we've never hired anyone or raised money, how we pick episodes, what our business model actually is, why we focus on quality and enjoyment over maximizing enterprise value, and ultimately why we’re all — you, him, us — kindred spirits together. Oh, and just for fun, we recorded this episode where another special journey began — the garage where Google was founded. Thank you for an incredible decade together… here's to the next one! Sponsors: - J.P. Morgan Payments: https://bit.ly/acquiredJPMP10yearyt - You can watch our full show with them at AWS re:Invent here! https://youtu.be/2ExjNvGYDiU?si=34mmBQTfCQTdIabJ - WorkOS: https://bit.ly/workos25 - Sentry: https://bit.ly/acquiredsentry - Shopify: https://bit.ly/ShopifyACQ25 Thank-yous: - First, to Google for loaning us the garage. The sawhorse table desk, PC and CRT monitor on display in the background were all Google originals courtesy of the Google Founders Collection at the Computer History Museum. So cool! - Second, to our friends at Shep Films for helping us seriously up our game on production quality this episode! https://www.shepfilms.com Our Favorite Michael Lewis Books: - Home Game: https://www.amazon.com/Home-Game-Accidental-Guide-Fatherhood/dp/0393338096 - Moneyball: https://www.amazon.com/Moneyball-Art-Winning-Unfair-Game/dp/0393324818 - Liar’s Poker: https://www.amazon.com/Liars-Poker-Norton-Paperback-Michael/dp/039333869X - The Blind Side: https://www.amazon.com/Blind-Side-Evolution-Game/dp/0393330478 - The Undoing Project: https://www.amazon.com/Undoing-Project-Friendship-Changed-Minds/dp/0393254593 Carve Outs: Books: - The Name of the Wind by Patrick Rothfuss: https://www.amazon.com/Name-Wind-Kingkiller-Chronicle/dp/0756404746 - Science, the Endless Frontier by Vannevar Bush: https://nsf-gov-resources.nsf.gov/2023-04/EndlessFrontier75th_w.pdf - Last Man Standing: The Ascent of Jamie Dimon and JPMorgan Chase by Duff McDonald: https://www.amazon.com/Last-Man-Standing-Ascent-JPMorgan/dp/1416599541 - The Art of Spending Money by Morgan Housel: https://www.amazon.com/Art-Spending-Money-Simple-Choices/dp/B0F5585V8M/ - Emperors of Chocolate by Joel Glenn Brenner: https://www.amazon.com/Emperors-Chocolate-Inside-Secret-Hershey/dp/0679421904 - Morris Chang's Autobiography: https://karinabao.substack.com/p/morris-changs-memoir-chapter-1-english Podcasts: - Against the Rules: https://atrpodcast.com/ - Revisionist History: https://www.pushkin.fm/podcasts/revisionist-history - Graham Duncan on Invest Like the Best: https://joincolossus.com/episode/graham-duncan-talent-whisperer/ - Glue Guys: https://open.spotify.com/show/18n6FcVMR5J0hSeboeETPc?si=e33a5c76cca14289 Video: - Jay Kelly: https://www.imdb.com/title/tt30446847/ - The Rehearsal: https://www.hbo.com/the-rehearsal Video Games: - Sea of Stars: https://seaofstarsgame.co/ - Kirby and the Forgotten Land: https://www.nintendo.com/us/store/products/kirby-and-the-forgotten-land-switch/ Products: - ARTEZA Rollerball Pen 0.7mm Fine: https://www.amazon.com/Arteza-Rollerball-Journaling-Writing-Sketching/dp/B0819SWQQV/?th=1 - Rotring 800 Mechanical Pencil: https://www.amazon.com/Retractable-Mechanical-Engineering-Architecture-Professionals/dp/B00AZWNS84/ - Uniqlo Socks!: https://www.uniqlo.com/us/en/products/E482605-000/00?colorDisplayCode=15&sizeDisplayCode=027 - On Running Shoes: https://www.on-running.com/en-us/ - Rimowa Luggage: https://www.rimowa.com/us/en/home Parenting: - Guided Access on iPad: https://support.apple.com/en-us/111795 - SlumberPod: https://slumberpod.com/ - Bluey Experience in NYC: https://camp.com/bluey-x-camp-nyc 0:00 Recording in Google's Garage 1:18 Intro 4:11 Michael Lewis Shares His First Impressions of Acquired 8:25 Learning Scarcity from the NFL and Hermés 17:18 From Acquisitions to Broader Stories: Acquired's Journey 29:49 Embracing the 'Too Hard Pile' from Munger and Buffett 59:32 Applying Hamilton Helmer's 7 Powers to Acquired 1:15:57 The Unique Business Model 1:30:40 Why Underperforming Episodes Still Matter 1:43:20 Transforming into an Event-Driven Experiences 1:49:40 The Power of Founder Control 2:18:54 Carve-outs: favorite books, movies, TV shows, and video games

Ben GilberthostDavid RosenthalhostMichael Lewisguest

Dec 15, 20252h 47mWatch on YouTube ↗

EVERY SPOKEN WORD

150 min read · 30,002 words

0:00 – 1:18
Recording in Google's Garage
1. BGBen Gilbert
  Happy ten years!
2. DRDavid Rosenthal
  Happy ten-year anniversary, Ben.
3. BGBen Gilbert
  It's crazy it's been ten years.
4. DRDavid Rosenthal
  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.
5. BGBen Gilbert
  Yeah, what are we doing?
6. DRDavid Rosenthal
  Home of, uh-
7. BGBen Gilbert
  You keep, like, teeing up-
8. DRDavid Rosenthal
  Yeah
9. BGBen Gilbert
  ... "Oh, just come down. Oh, we'll just record it here," and, like, clearly, we're not at your house.
10. DRDavid Rosenthal
  I was actually thinking, uh, we should try and find the Silicon Valley house, the Ehrlich Bachman Aviato. [laughing]
11. BGBen Gilbert
  It's Aviato.
12. DRDavid Rosenthal
  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.
13. BGBen Gilbert
  It's a house. Is this the Google house?
14. DRDavid Rosenthal
  It's the house.
15. BGBen Gilbert
  The- where they had their first office in the garage?
16. DRDavid Rosenthal
  This is Google's first office right here. They gave it to us for the day.
17. BGBen Gilbert
  Like, we can do our holiday special in it?
18. DRDavid Rosenthal
  Come on in. [upbeat music]
19. SPSpeaker
  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.
1:18 – 4:11
Intro
1. SPSpeaker
  Who got the truth?
2. BGBen Gilbert
  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.
3. DRDavid Rosenthal
  I'm David Rosenthal.
4. BGBen Gilbert
  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.
5. DRDavid Rosenthal
  Yep. But then this year, we turned 10 years old and thought, "Well, maybe it's time for something," [laughing]
6. BGBen Gilbert
  [laughing]
7. DRDavid Rosenthal
  At least a sort of, uh, pause and reflection, you know, to shout out the Coca-Cola episode-
8. BGBen Gilbert
  Oh!
9. DRDavid Rosenthal
  ... on our journey to this point and why Acquired has worked.
10. BGBen Gilbert
  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.
11. DRDavid Rosenthal
  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.
12. BGBen Gilbert
  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.
13. DRDavid Rosenthal
  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.
14. BGBen Gilbert
  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.
15. DRDavid Rosenthal
  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.
16. BGBen Gilbert
  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.
17. DRDavid Rosenthal
  With that, onto our conversation with Michael Lewis.
4:11 – 8:25
Michael Lewis Shares His First Impressions of Acquired
1. DRDavid Rosenthal
  Well, Michael, thank you for joining us.
2. MLMichael Lewis
  Total pleasure.
3. DRDavid Rosenthal
  We have a little something, since this is our ten-year anniversary, that we're celebrating, that we need to do before we start.
4. MLMichael Lewis
  Okay.
5. DRDavid Rosenthal
  So you went to Princeton. I went to Princeton.
6. MLMichael Lewis
  Yep.
7. DRDavid Rosenthal
  My senior thesis would become impactful for Acquired. [laughing] Um, I was a French literature major.
8. MLMichael Lewis
  Mm.
9. DRDavid Rosenthal
  I wrote my thesis on the history of Dom Pérignon-
10. MLMichael Lewis
  Ha!
11. DRDavid Rosenthal
  ... and the marketing history of Champagne. [laughing]
12. BGBen Gilbert
  Very serious college student, David Rosenthal. [laughing]
13. DRDavid Rosenthal
  Very serious college student.
14. MLMichael Lewis
  They, they, let you- [laughing]
15. DRDavid Rosenthal
  A little different than yours.
16. MLMichael Lewis
  They let you do that? [laughing]
17. DRDavid Rosenthal
  They, they, uh, somehow-
18. MLMichael Lewis
  [laughing]
19. DRDavid Rosenthal
  ... I conned the French department-
20. MLMichael Lewis
  Okay
21. DRDavid Rosenthal
  ... into letting me do this.
22. MLMichael Lewis
  [laughing]
23. DRDavid Rosenthal
  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-
24. MLMichael Lewis
  Vintage
25. DRDavid Rosenthal
  ... of Dom Pérignon. 2015 is the year we started.
26. MLMichael Lewis
  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.
27. DRDavid Rosenthal
  Well, I can tell you, our episodes are much better than my actual thesis was. [laughing]
28. BGBen Gilbert
  But, but that is exactly how it feels.
29. DRDavid Rosenthal
  But that, that is the process we go through-
30. MLMichael Lewis
  Yeah
8:25 – 17:18
Learning Scarcity from the NFL and Hermés
1. MLMichael Lewis
  Give me... Let's do the 10 lessons from the 10-year, the 10-year journey.
2. BGBen Gilbert
  Do you have yours, like, crystallized? 'Cause I don't wanna taint you-
3. MLMichael Lewis
  No, no, no, no, no
4. BGBen Gilbert
  ... with what you think first.
5. MLMichael Lewis
  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]
6. BGBen Gilbert
  [laughing]
7. DRDavid Rosenthal
  [laughing]
8. MLMichael Lewis
  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]
9. BGBen Gilbert
  [laughing]
10. DRDavid Rosenthal
  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.
11. MLMichael Lewis
  That's interesting to me. You all met at a, like, a Passover Seder?
12. DRDavid Rosenthal
  Yes.
13. BGBen Gilbert
  Yes.
14. MLMichael Lewis
  And you're colleague- you end up being colleagues at a VC firm?
15. DRDavid Rosenthal
  Yep.
16. BGBen Gilbert
  Yep.
17. MLMichael Lewis
  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-
18. DRDavid Rosenthal
  [laughing] Oh, boy
19. MLMichael Lewis
  ... 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?"
20. BGBen Gilbert
  We really just wanted to spend more time together. It was the- one of these things where, uh-
21. MLMichael Lewis
  You're both straight?
22. BGBen Gilbert
  Yeah.
23. DRDavid Rosenthal
  Yeah, yes. [laughing]
24. MLMichael Lewis
  Okay, this is a-
25. DRDavid Rosenthal
  We're both married.
26. MLMichael Lewis
  It's not a ro- it's not a romantic relationship.
27. BGBen Gilbert
  No.
28. DRDavid Rosenthal
  Uh, we, we like to say that we each have two spouses.
29. BGBen Gilbert
  Yeah.
30. DRDavid Rosenthal
  We have our actual romantic spouses that we have families with, and then we have each, each other. [laughing]
17:18 – 29:49
From Acquisitions to Broader Stories: Acquired's Journey
1. BGBen Gilbert
  constrained.
2. MLMichael Lewis
  But that's not where you start.
3. BGBen Gilbert
  No.
4. DRDavid Rosenthal
  No. No, no, not at all, not at all. [laughs]
5. MLMichael Lewis
  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-
6. DRDavid Rosenthal
  Yep
7. MLMichael Lewis
  ... and, and a- got a crush on each, on each other.
8. DRDavid Rosenthal
  Yeah, yeah!
9. BGBen Gilbert
  Yeah.
10. MLMichael Lewis
  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.
11. BGBen Gilbert
  [laughs] Yeah.
12. MLMichael Lewis
  It worked.
13. DRDavid Rosenthal
  Bad idea.
14. MLMichael Lewis
  That... Well, it is an idea. I, I would argue-
15. DRDavid Rosenthal
  It was a starting space
16. MLMichael Lewis
  ... 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.
17. BGBen Gilbert
  Which is what most press at the time was.
18. MLMichael Lewis
  Right.
19. BGBen Gilbert
  It was, "Let's talk about how crappy this acquisition was."
20. DRDavid Rosenthal
  Yeah.
21. MLMichael Lewis
  So it's interesting to me that your first step, right from the start, is p- positive.
22. DRDavid Rosenthal
  Yeah, yeah.
23. MLMichael Lewis
  It's like what worked. Not what didn't work, it's what worked.
24. BGBen Gilbert
  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-
25. DRDavid Rosenthal
  They're working, yeah
26. BGBen Gilbert
  ... so let's try to reverse engineer what works.
27. DRDavid Rosenthal
  Yeah, understand why things worked.
28. MLMichael Lewis
  Right. So that's a different starting spot from almost all journalism.
29. DRDavid Rosenthal
  Yeah.
30. MLMichael Lewis
  In fact, if most journalists started there, they'd be accused of hagiography, of-
29:49 – 59:32
Embracing the 'Too Hard Pile' from Munger and Buffett
1. DRDavid Rosenthal
  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.
2. BGBen Gilbert
  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.
3. MLMichael Lewis
  Are you more terrified than you were two years ago?
4. BGBen Gilbert
  Yes.
5. MLMichael Lewis
  So you're-
6. DRDavid Rosenthal
  We're always more terrified.
7. MLMichael Lewis
  The terror is growing.
8. BGBen Gilbert
  Yes.
9. DRDavid Rosenthal
  The terror is growing, yes.
10. MLMichael Lewis
  At some point, it's not gonna be a good thing.
11. BGBen Gilbert
  [chuckles] Yes.
12. MLMichael Lewis
  I mean, it's, it's good to be a little on edge.
13. BGBen Gilbert
  Yes. Yeah, yeah.
14. MLMichael Lewis
  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.
15. BGBen Gilbert
  Yes.
16. MLMichael Lewis
  'Cause eventually, it will get old.
17. BGBen Gilbert
  Yes.
18. MLMichael Lewis
  We'll come back to-
19. BGBen Gilbert
  Mm.
20. MLMichael Lewis
  This is... We're gonna get to the bull and the bear case at the end.
21. DRDavid Rosenthal
  Okay, good, good, good, great, great, great. [chuckles]
22. MLMichael Lewis
  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.
23. BGBen Gilbert
  Yeah.
24. MLMichael Lewis
  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?"
25. BGBen Gilbert
  Yeah.
26. DRDavid Rosenthal
  Oh, yeah.
27. MLMichael Lewis
  What would be a example of that?
28. BGBen Gilbert
  ... We got pretty far down the line on doing an episode on the Fed-
29. DRDavid Rosenthal
  Yeah. [laughs] We were talking about it.
30. BGBen Gilbert
  -and walked away from it.
59:32 – 1:15:57
Applying Hamilton Helmer's 7 Powers to Acquired
1. MLMichael Lewis
  right.
2. DRDavid Rosenthal
  And Waymo, and yeah.
3. MLMichael Lewis
  So the... Actually, you just-
4. DRDavid Rosenthal
  Okay
5. MLMichael Lewis
  ... bring up your friend, Hamilton Helmer-
6. BGBen Gilbert
  Yes
7. MLMichael Lewis
  ... who I'd never heard of until I listened to your podcast, and you do that thing of the 7 Powers.
8. DRDavid Rosenthal
  7 Powers, yeah.
9. MLMichael Lewis
  Yeah. Let's just briefly, s- since we're here, how you study a business. That has been a useful analytical framework for you-
10. BGBen Gilbert
  Yeah
11. MLMichael Lewis
  ... whatever these 7 Powers are, and I'll never remember any of them. But [chuckles] -
12. BGBen Gilbert
  That's why we say them every episode.
13. MLMichael Lewis
  Network effects and all that stuff.
14. DRDavid Rosenthal
  Yeah, yeah.
15. MLMichael Lewis
  Uh, what, what is it about Hamilton?
16. BGBen Gilbert
  It, look-
17. MLMichael Lewis
  What, what, like, where did you find him, [laughing] and why is he, you making him so famous?
18. BGBen Gilbert
  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."
19. MLMichael Lewis
  When did you read it?
20. BGBen Gilbert
  Uh, you found the book.
21. DRDavid Rosenthal
  2020? I think it was 2020. Uh, he was- it was very obscure.
22. MLMichael Lewis
  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.
23. BGBen Gilbert
  But if you break-
24. MLMichael Lewis
  You have to know what they mean.
25. BGBen Gilbert
  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?
26. MLMichael Lewis
  Right.
27. BGBen Gilbert
  That's the list you would come up with.
28. MLMichael Lewis
  Right.
29. BGBen Gilbert
  You might find other words-
30. MLMichael Lewis
  What creates the moat?
1:15:57 – 1:30:40
The Unique Business Model
1. DRDavid Rosenthal
  Mm.
2. MLMichael Lewis
  So-
3. BGBen Gilbert
  Whoa!
4. DRDavid Rosenthal
  Okay, wait, wait, wait, wait. What happens if you get to June, and you're like-
5. MLMichael Lewis
  No, won't happen
6. DRDavid Rosenthal
  ... "I'm not, I'm not, uh-
7. MLMichael Lewis
  Can't. Can't.
8. DRDavid Rosenthal
  Okay, so it's a, it's a hard deadline.
9. MLMichael Lewis
  It's a deadline.
10. DRDavid Rosenthal
  It's a drop dead.
11. MLMichael Lewis
  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-
12. DRDavid Rosenthal
  Yeah
13. MLMichael Lewis
  ... I have the material. By the way, it's very polite of you to ask me questions about myself. [laughs] Uh, yeah, but-
14. DRDavid Rosenthal
  We want to know!
15. BGBen Gilbert
  It's, it's like this great-
16. MLMichael Lewis
  But, but, but, but, no
17. BGBen Gilbert
  ... honor to, it-
18. MLMichael Lewis
  But that, that it's... Somehow, if you take your deadlines seriously, that's the key.
19. BGBen Gilbert
  Mm.
20. MLMichael Lewis
  You take the deadlines deadly seriously-
21. DRDavid Rosenthal
  Yeah
22. MLMichael Lewis
  ... 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-
23. DRDavid Rosenthal
  Yeah
24. MLMichael Lewis
  ... like, a couple of days ahead of it.
25. DRDavid Rosenthal
  Yeah.
26. MLMichael Lewis
  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-
27. DRDavid Rosenthal
  Four every season
28. MLMichael Lewis
  ... 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-
29. BGBen Gilbert
  [laughing]
30. MLMichael Lewis
  ... i, i, in your building.
1:30:40 – 1:43:20
Why Underperforming Episodes Still Matter
1. MLMichael Lewis
  All right, so I took us off on a sidetrack. We've only gotten through four.
2. DRDavid Rosenthal
  [laughing]
3. MLMichael Lewis
  I want to hear the fifth-
4. BGBen Gilbert
  Uh, we've, we've gotten like five or six or seven.
5. DRDavid Rosenthal
  We've got a- we've got a bunch of these.
6. MLMichael Lewis
  I want to hear the, what's the fifth lesson you've learned-
7. DRDavid Rosenthal
  Uh, okay, yeah, go for it
8. MLMichael Lewis
  ... from the episode?
9. BGBen Gilbert
  Uh, founder control was my, a huge one.
10. MLMichael Lewis
  Is this from Google?
11. BGBen Gilbert
  I think we l- we-
12. MLMichael Lewis
  Meta!
13. BGBen Gilbert
  Again, this is one of these things that we, like, learned early, but then got reinforced through episodes.
14. MLMichael Lewis
  Yeah.
15. BGBen Gilbert
  Meta-
16. DRDavid Rosenthal
  Meta
17. BGBen Gilbert
  ... Rolex, Trader Joe's-
18. MLMichael Lewis
  Private.
19. DRDavid Rosenthal
  IKEA.
20. BGBen Gilbert
  Yeah.
21. DRDavid Rosenthal
  Yeah.
22. BGBen Gilbert
  Uh, like, stay private-
23. DRDavid Rosenthal
  Yeah
24. BGBen Gilbert
  ... be family owned.
25. DRDavid Rosenthal
  You don't even have to take- Meta is a public company, but, but-
26. BGBen Gilbert
  Yeah
27. DRDavid Rosenthal
  ... founder control. I mean, Google too. Google's founder controlled too.
28. BGBen Gilbert
  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.
29. MLMichael Lewis
  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.
30. DRDavid Rosenthal
  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?"
1:43:20 – 1:49:40
Transforming into an Event-Driven Experiences
1. MLMichael Lewis
  That's right. So go, so trust that feeling.
2. DRDavid Rosenthal
  Yeah.
3. BGBen Gilbert
  Yeah. It's about the magnitude of the way a small number of people feel about episodes, often more than the-
4. MLMichael Lewis
  Yeah
5. BGBen Gilbert
  ... the spread.
6. MLMichael Lewis
  I think that's right.
7. DRDavid Rosenthal
  Yeah.
8. MLMichael Lewis
  Yeah.
9. DRDavid Rosenthal
  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.
10. MLMichael Lewis
  Oh, w-
11. DRDavid Rosenthal
  That was an incredible episode.
12. MLMichael Lewis
  That's one of the episodes I've listened to. I loved it, too.
13. DRDavid Rosenthal
  So great.
14. MLMichael Lewis
  ... It's one of, like, the two great mysteries on Wall Street, how they do what they do-
15. BGBen Gilbert
  Yeah
16. MLMichael Lewis
  ... and who is Satoshi? [laughing]
17. BGBen Gilbert
  Yeah. [laughing]
18. DRDavid Rosenthal
  Yeah, I was gonna say, those are the two.
19. MLMichael Lewis
  Those are the two.
20. DRDavid Rosenthal
  Yeah, yeah, yeah.
21. BGBen Gilbert
  I kind of like the take that they invented machine learning a decade or two before-
22. MLMichael Lewis
  Yeah
23. BGBen Gilbert
  ... 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.
24. MLMichael Lewis
  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.
25. BGBen Gilbert
  Yes.
26. DRDavid Rosenthal
  Yeah.
27. MLMichael Lewis
  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.
28. BGBen Gilbert
  Yeah.
29. DRDavid Rosenthal
  Yeah, yeah.
30. MLMichael Lewis
  It's really hard with, like, Jane Street, and Citadel, and all these other places looking for every bit of signal in the marketplace.
1:49:40 – 2:18:54
The Power of Founder Control
1. MLMichael Lewis
  All right. Let's go to, I think we're on number nine. [chuckles]
2. DRDavid Rosenthal
  All right, we're, we- home stretch.
3. MLMichael Lewis
  Two more.
4. DRDavid Rosenthal
  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.
5. BGBen Gilbert
  We, we read nine books between us-
6. MLMichael Lewis
  Right.
7. DRDavid Rosenthal
  Yeah
8. BGBen Gilbert
  ... to prepare.
9. DRDavid Rosenthal
  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."
10. MLMichael Lewis
  Right.
11. DRDavid Rosenthal
  It helped that there was only really one book.
12. MLMichael Lewis
  What is the book?
13. DRDavid Rosenthal
  Read, read that book, uh, Sol Price's autobiography.
14. MLMichael Lewis
  Right.
15. DRDavid Rosenthal
  Read that. [laughs]
16. MLMichael Lewis
  Right.
17. DRDavid Rosenthal
  Use that as the main source. Uh, you got m- maybe one of the best primary source interviews-
18. BGBen Gilbert
  Oh, yeah
19. DRDavid Rosenthal
  ... ever.
20. BGBen Gilbert
  The-
21. DRDavid Rosenthal
  The CFO of Costco gave you a-
22. BGBen Gilbert
  Yeah, just said-
23. DRDavid Rosenthal
  ... one-on-one presentation
24. BGBen Gilbert
  ... "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."
25. DRDavid Rosenthal
  Uh-huh.
26. BGBen Gilbert
  And we spent the whole afternoon together, and it was-
27. DRDavid Rosenthal
  And between those two things-
28. BGBen Gilbert
  ... unbelievable
29. DRDavid Rosenthal
  ... the book and that time that you s- you spent-
30. BGBen Gilbert
  That was the whole episode

Episode duration: 2:47:36

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