EVERY SPOKEN WORD
140 min read · 27,806 words- 0:00 – 3:49
Holiday banter, show intro tweak, and what’s on today’s agenda
- BGBen Gilbert
I am loving that you also busted out the holiday sweater. Feels very appropriate.
- DRDavid Rosenthal
Yes, I purchased this holiday sweater at the Seattle Nordstrom for our 2019 live show at the University of Washington.
- BGBen Gilbert
It was, like, two months before the pandemic hit.
- DRDavid Rosenthal
That's right, and I think I wore it last year, too.
- BGBen Gilbert
I feel like you did. Yeah, we were right behind me. I wish we were doing it again this year, but, uh, seems prudent to, uh, not have a father of a toddler hop on an airplane and then sit in a confined space with me for five hours right now. [laughing]
- DRDavid Rosenthal
[laughing] A lot of germs in my life right now.
- BGBen Gilbert
Thank you for your precautions.
- 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. Who got the truth?
- BGBen Gilbert
Welcome to season thirteen, episode five, the season finale and holiday special of Acquired, the podcast about great companies and the stories and playbooks behind them. I'm Ben Gilbert.
- DRDavid Rosenthal
I'm David Rosenthal.
- BGBen Gilbert
And we are your hosts. Do you see what I did there, David?
- DRDavid Rosenthal
I did. I did. No technology.
- BGBen Gilbert
No technology. Yes, I motion to, uh, you know, the whole board of directors here, that we drop technology from our intro, since I crunched the numbers, and four of the fourteen episodes we did this year were technology companies.
- DRDavid Rosenthal
Ah. All right, well, it's a good thing that there are no other board members of Acquired besides you and me-
- BGBen Gilbert
[laughing]
- DRDavid Rosenthal
-because I am in full agreement.
- BGBen Gilbert
Unanimous.
- DRDavid Rosenthal
And otherwise, we would have had a deadlocked vote there, one to one.
- BGBen Gilbert
That's true, and, uh, I don't think our charter really actually ever accounts for what to do in that circumstance. [chuckles] So yes, listeners, if you count Lockheed Martin, it's five. If you count Visa, it's six. But the minority of the episodes that we did in 2023 were tech companies, which is a very fascinating evolution to me, based on where Acquired started analyzing technology acquisitions that actually went well. But, of course, we will keep doing deep episodes on tech companies, since we are nerds, and that's where we've spent, you know, our whole careers so far. So if you liked the programming and assembly language on air from Nvidia, or I guess, assembly language pseudocode, or our Qualcomm episode, where we tried to describe how the CDMA protocol works, we're still here for you. We're just gonna do a lot of LVMH, NFL, uh-
- DRDavid Rosenthal
Costco
- BGBen Gilbert
... Visa, Costco.
- DRDavid Rosenthal
Nike.
- BGBen Gilbert
Nike, and, uh, you know, mixed in there. So what are we doing here today? Well, David and I are gonna bring you good tidings, good cheer, hopefully, and, uh, keep you company.
- DRDavid Rosenthal
Yes, happy holidays. Cheers!
- BGBen Gilbert
Cheers.
- DRDavid Rosenthal
I've got my, uh, cinnamon, uh, infused hot chocolate here. It's delicious.
- BGBen Gilbert
Ooh, you're feeling very festive. Yes, we are here to, uh, keep you company on your long drives, or flights, or workouts, or house cleaning, or whatever over the holidays. On our agenda today is a recap of Acquired this year, both the state of the franchise from the board of directors themselves. We will also be giving you some new tidbits on our favorite episodes, behind each one of them, why we picked them, how they came to be, what listeners helped us select, that sort of thing. We're gonna talk about how we see Acquired fitting into the broader media landscape, how our views about the show and the stuff that we cover have changed over time, what's in store for Acquired in 2024, new carve-outs, and answering listener questions from the Slack. And then at the end of the episode, we're gonna share a little bit about David and my investing lives and how those will be changing in 2024, as, uh, David, you and I are gonna get to do much more of our investing together.
- DRDavid Rosenthal
I know. It's gonna come full circle. We started both at Madrona investing together, and, uh... Well, we'll just have to talk about this later in the episode.
- 3:49 – 7:44
Two major life updates: Ben becomes a parent and goes full-time on Acquired
- BGBen Gilbert
We will. But first, listeners, I mentioned in one quick line on the Charlie interview, and, uh, have not said anything on any social media or anything like that since, but, uh, I am a parent.
- DRDavid Rosenthal
Woo! [clapping]
- BGBen Gilbert
I'm joining David on the parenting journey with approximately a one-month-old here at the Gilbert household.
- DRDavid Rosenthal
Ben, Jenny and I are so, so, so happy for you guys. Parenting, uh, as you know now, is the most joyous, difficult, wonderful, biggest thing you will ever do in your life, and there is no way to understand or describe it until you become one. So welcome to the club.
- BGBen Gilbert
Thank you. I think that's right. I think any words that I would say about what it's been like so far are words that other people tried to use to describe it to me, and I found them largely meaningless. I mean, I could say the same things that everyone else always says, and there have been some amazing things written. I think I read the Paul Graham article on kids. I read the Fourth Trimester, Wait But Why piece. I've read-
- DRDavid Rosenthal
You read the Michael Lewis book, right?
- BGBen Gilbert
The Michael Lewis book.
- DRDavid Rosenthal
Yeah, that was good.
- BGBen Gilbert
But, like, I don't know, the words kind of bounce off you. You're like: Well, why would that be fun? Why would that be rewarding? Why would waking up at 3:00 AM to change a diaper and soothe a, you know, screaming... Like, why is that? But it's, uh... Actually, Morgan Housel put it to me in a really lovely way, where he just said, "What greater gift could you have than helping another human, another member in your family, who's new to the world, in their most intense time of need?" And, you know, that intense time of need comes a dozen or two dozen times a day. But-
- DRDavid Rosenthal
[laughing]
- BGBen Gilbert
... the sort of privilege of being able to soothe someone when they're experiencing that sort of intense emotion. You know, they may not be fully formed, but babies are people, too, so.
- DRDavid Rosenthal
Absolutely. Yeah. Well, so great. That is big, big change number one since we last reconvened here. Big change number two is, Geekwire reported about this already, but you are joining me full-time next year on Acquired. I'm so, so excited.
- BGBen Gilbert
It's about freaking time, huh, David? [laughing]
- DRDavid Rosenthal
[laughing] I wasn't gonna say it, but... [laughing]
- BGBen Gilbert
Yeah, I can't wait. You and I are so just fired up to double down on Acquired, and it feels very fun to be going all in on it together.... And on the one hand, it feels like it's been a long time coming. On the other hand, Acquired has been such a slow burn over the last eight plus years, that there was not, like, an obvious moment to do it. So it was one of these moments where you sort of look back and you're like: "Whoa, how am I not spending all of my waking time and energy on this, when, uh," you know, it is something that is just, you know, it's our life's work, as our friend Patrick O'Shaughnessy likes to say about the types of entrepreneurs he's looking for. Like, this is definitively our life's work, and it wasn't when we started, and somewhere along the way, gradually, it just became that.
- DRDavid Rosenthal
Yeah, totally.
- BGBen Gilbert
And the way it's gonna work, I'm transitioning to a venture partner at PSL, at Pioneer Square Labs here in Seattle, so still get to keep my board seats, which I think keeps me sharp for the show, and stay a friend of the family there. So, I'm excited to sort of change my role at PSL, but of course, all of my real time and energy going forward is Acquired.
- DRDavid Rosenthal
I'm so happy, not only for, as a, you know, fifty percent shareholder in Acquired, but, uh, [laughing]
- BGBen Gilbert
[laughing]
- DRDavid Rosenthal
... even more so, like, you're my best friend, and this means we're gonna spend even more time together and, uh, just outside of the show, outside of anything that that means for us, our business, you know, the episodes, all of which are gonna get so much better. It just, it brings me joy. I'm so happy.
- BGBen Gilbert
Thanks, man. So we should say before we get too far in, this is not investment advice, this whole show. Dave and I may have investments in the companies we discuss, and the show is for informational and entertainment purposes only. Somebody here has to follow the rules and keep us, uh... I've got a nice script that's well built out in front of me. I also must apologize to listeners. I am coming in hot from podcaster paternity leave here, and if anything [chuckles] I say is completely incoherent, I am on pretty minimal sleep, so thank you for bearing with me.
- DRDavid Rosenthal
All the parents out there will understand and appreciate you being here, as do I.
- BGBen Gilbert
Yeah.
- 7:44 – 14:24
2023 year-end recap: half a million listeners, analytics obsession, and what growth means
- DRDavid Rosenthal
Well, let's start the twenty twenty-three Acquired year-end review recap. Dude, [chuckles] this has been freaking wild. I mean, you were talking about, like, Acquired has been a slow burn. You know, we have doubled every year, and we've always been this example of exponential growth that, like, it starts small, and, you know, first year, we doubled from two to four listeners, you know, like, but no, it wasn't exactly that.
- BGBen Gilbert
No, I worked it backwards one time. I think it was, like, five hundred to a thousand or something. Actually, I should crunch that number, but there is a number you can figure out in year one, since you know what our current numbers are.
- DRDavid Rosenthal
Yep.
- BGBen Gilbert
But small base. It was, like, small base, kind of small base, still pretty small base, you know.
- DRDavid Rosenthal
There were many years where nobody would have imagined that this would be either of our full-time gigs.
- BGBen Gilbert
No.
- DRDavid Rosenthal
And I actually, when I looked it up last year on our holiday special, I was both pretty excited and proud to announce, and also terrified, that we had hit a quarter million listeners to the pod. Felt like, "Holy crap! That's a big number. This is, like, real, what we do." And I was terrified because I was like: "We talk all the time. Ben talks all the time about how we double every year. Like, how on earth are we gonna do that?" [chuckles]
- BGBen Gilbert
Right. You were like: "You should stop saying that, 'cause it's eventually gonna not be true." [chuckles]
- DRDavid Rosenthal
Yeah, 'cause it's about to end. [chuckles]
- BGBen Gilbert
Which is true. Eventually, it will not be true.
- DRDavid Rosenthal
Of course. I mean, unless literally we start expanding galactically or something like that.
- BGBen Gilbert
Yeah, and the question is: how big is the addressable market for people who want to, in an audio-only medium, consume, you know, four-hour, essentially, books, conversational audiobooks, about business histories, often in kind of an esoteric way? And granted, you and I have gotten much better at becoming storytellers over time, but each one of those sort of concentric circles niches it down, and I think you and I just thought that that addressable market was, you know, a hundred thousand people or something at first, but now we know it's at least half a million.
- DRDavid Rosenthal
Yes. So the big news, we hit half a million listeners this year, which is pretty wild. Hopefully, we can put up the chart, the Ben Gilbert Acquired chart that you make obsessively every month, showing our episode growth over time.
- BGBen Gilbert
Which, at some point, I do wanna stop making, 'cause I said last year on the show, like, at the holiday special, "I don't think growth is inherently virtuous for us, for the goals of our business here." And yet, I am the person who's sort of obsessively trying to compile the numbers and figure out, is it gonna double again organically, since we don't advertise or anything? And so do I wanna be known for the Ben Gilbert chart? I don't really think so, 'cause it's actually antithetical to how I think about what we do. But I do make the chart. I do put a lot of thought into it, and what episodes will do what, and trying to predict the numbers. I think a lot of people describe it as virtuous to, "Oh, I don't pay attention to the analytics." I think to each his own. I pay a lot of attention to the analytics. I think that helps you become better at making a product that people like. I don't understand why you wouldn't immerse yourself in every single number you possibly could all the time. Like, it may lead you to a different outcome, but that outcome, as long as you're measuring correctly, seems to be make something that people want more. So yes, I obsessively look at the numbers. I look at the completion rates. I think that's super important.
- DRDavid Rosenthal
Well, and, uh, related sidebar to that, thank you to all of you [chuckles] -
- BGBen Gilbert
Yes
- DRDavid Rosenthal
... half a million of you now, for spending all this time with us this year. There's a lot to discuss. So, you know, for me, I've kinda gone back and forth. You started saying, I think about two years ago: "Growth is not a goal. I don't know that growth is good for Acquired." And I sorta nodded my head, but I wasn't totally sure. This year, I think, has really helped crystallize my thoughts on this, as we've grown so much. I do completely agree with you. Growth in and of itself should not be a priority, and in fact, can be very detrimental to what I think we both wanna do here, if we optimize just for growth. What I think we've done this year goes back to the very start of this episode, and you changing the intro. We went from a podcast about great technology companies and the stories and playbooks behind them-... to a podcast about great companies [chuckles] and the stories and playbooks behind them. And yes, we have continued to grow in the tech world and sort of our core niche, and I think that audience and audience potential is way bigger than we ever realized. But we've also added everybody else in the world now who is interested in business and runs a brand and thinks about brand management, or runs a retailer, or runs a large hardware business like Home Depot or something like that, you know? And also all around the world, too. I mean, some of our biggest episodes this year were, A, not American companies, B, even if they were American companies, they were truly global brands and global companies. A lot of what we do, if we just wanted to optimize for growth, we would do differently. [chuckles] We would not make four-hour episodes-
- BGBen Gilbert
Well-
- DRDavid Rosenthal
We would release more frequently, et cetera, et cetera.
- BGBen Gilbert
It's interesting, growing from a podcast about great technology companies to a podcast about great companies is certainly a growth strategy, or a by-product of doing that is growth, because the addressable market is larger. But I think it would fail if that wasn't just you and I following what our natural interests were. People ask us all the time, "How do you pick episodes?" And the answer is, you and I talk for hours a day. We wander around our house and our neighborhoods, putting on AirPods and calling each other and talking about, you know, what's currently in our email inbox, what we're researching, what we need to do to ship an episode, prep for guests, that sort of thing. And one of the conversations that always is happening is, "What are you interested in right now? How have your views shifted over X period of time? What is fascinating to you now?" And I think the growth is sort of a by-product of our obsessions shifting, and becoming these durable businesses, and trying to understand what makes a company worthy of being a century-long company, regardless of where it came from, or how it was funded, or what technologies were used in creating it.
- DRDavid Rosenthal
I think that's been what's so cool for me, and my big lessons and takeaways from everything we've done this year, is that those stories and studying the LVMHs, the Costcos, the Nikes of the world, if anything, that's, like, even more important than studying the great technology companies for building a great technology company.
- BGBen Gilbert
Yes.
- 14:24 – 16:33
When Acquired “gets in the water”: cultural impact of episodes (LVMH, Costco, Nike, Porsche)
- DRDavid Rosenthal
We found this just incredible response, especially to the LVMH episode, of, like, "Wow, here are these lessons that are not well talked about and known in our world."
- BGBen Gilbert
Right. It is kind of strange becoming canon. I never thought Acquired would get to the point where when we do an episode on something, it has the possibility to become an undertone of themes that people are discussing. And certainly, years one through six or seven, that was never the case, but with LVMH, with Costco, maybe with Porsche, certainly with Nike, I think there was an element of we released the episode, and suddenly, we noticed the discussion, especially amongst the tech sphere, about that topic, massively picked up. Where people would go on CNBC and make a point that we made, and [chuckles] I'd call you, David, and go like, "Ah, I wonder how that comparison got made?"
- DRDavid Rosenthal
This is great. Maybe they didn't even listen to the episode, but what was cool is that enough people now have been consuming this, and talking about it, and getting value out of it, that-
- BGBen Gilbert
It gets in the water.
- DRDavid Rosenthal
It gets in the water. Yeah, it's wild. My favorite was a friend of mine, who's a VC at LightSpeed, texted me about two weeks after the Costco episode came out and said, "Dude, I have gotten three pitches this week from startups, where at some point in the deck, they talk about how their business model is similar to Costco." [laughing]
- BGBen Gilbert
[laughing] Yes, I don't want to over toot our own horn on this, but that has been a huge change this year that we have never seen in previous years, is once we do an episode, it sort of gets in the water.
- DRDavid Rosenthal
Yeah. All right, so let's talk about the episodes. So we started the year actually with the NFL, which I think a lot about that episode still-
- BGBen Gilbert
Absolutely
- DRDavid Rosenthal
... to this day. And we did the Visa episode that we finished the year with, was like the NFL coda, part two. Then we did LVMH, which I feel like we have even more to talk about. Nintendo, Lockheed, Porsche, Nike, Costco, Nvidia part three, and then Visa. And then our interviews this year, and we should talk about our kind of change in strategy from what used to be specials last year to Acquired interviews this year: Daniel Ek, Dara Khosrowshahi
- 16:33 – 27:19
Favorite vs best episodes: Costco/Visa purity, LVMH worldview shift, and Nike pressure lessons
- DRDavid Rosenthal
from Uber, Jensen from Nvidia, and then Charlie. But let's stick with the season first. Of that, what was your favorite that we did this year? Like, Ben Gilbert's personal favorite episode.
- BGBen Gilbert
I think the most interesting businesses, or businesses that sort of tickle me, are Costco and Visa, because there's a purity to them. Costco's is the purity of the way that the puzzle pieces fit together in a way that is just artful. It's almost like a discovery of laws of physics, the way that Sol Price, and Jim Sinegal, and the rest of the crew have sort of built that business over the years. It's just beautiful. It's like watching a ballet. I think that we likened it to that in the episode. Visa, on the other hand, is, like, the best operating leverage business. I mean, they have over fifty percent net income margins. They seem like they're locked in forever, you know, for better or for worse, as we described on the episode. But if you w- wouldn't ask someone, like, "What is the best at-scale business model?" It's probably Visa, to do this sort of, uh, least work for the most free cash flow. You look at Costco, not that much free cash flow, crap ton of work. It's almost like the complete opposite over in Visa land.
- DRDavid Rosenthal
Total opposites.
- BGBen Gilbert
But you asked me what my favorite episode was, and my favorite episode was LVMH.... because it was so not on my radar at all, and not something that I valued at all, and I scorned luxury before doing the research, and I didn't understand any of the history. And now I feel like a whole new world has been opened to me of understanding brand and value.
- DRDavid Rosenthal
And now you have a whole closet in your house filled with Louis bags. [laughing]
- BGBen Gilbert
[laughing] I do not. I do not. I only own one thing from one luxury brand in all my possessions, and actually, that item is not made by LVMH.
- DRDavid Rosenthal
Dude, you're just gonna leave it at that?
- BGBen Gilbert
Well, I, I wanna reveal it on a twenty twenty-four episode we are planning.
- DRDavid Rosenthal
Ooh, okay. All right. [laughing] You heard it here first. There will be at least one luxury episode in twenty twenty-four. Is that what you're telling me?
- BGBen Gilbert
Yes, absolutely. And I should say, I own probably a lot of things that are LVMH, but none that I would consider luxury. I don't mean like a Louis Vuitton suitcase. I mean, like, I have some Woodinville whiskey in the closet, that LVMH somehow, over the last few years, came to own Woodinville whiskey. I think there's a lot of those sorts of things that... where I've bought a lot of things at duty-free shoppers or-
- DRDavid Rosenthal
Yeah.
- BGBen Gilbert
Yeah.
- DRDavid Rosenthal
You're talking about an item that is truly a luxury item, which is on a whole different rubric.
- BGBen Gilbert
It has a sense of place.
- DRDavid Rosenthal
It has a sense of place. It is not a premium item. You could look at it through a certain lens and say, "This is utterly ridiculous."
- BGBen Gilbert
Correct.
- DRDavid Rosenthal
And, like, how on earth is this, you know, piece of raw material worth that?
- BGBen Gilbert
Right. I only own one of those things.
- DRDavid Rosenthal
Yes. Okay.
- BGBen Gilbert
I'm curious, would you describe anything that you own that way, other than things that are obviously that way, other than some, like, Louis Vuitton suitcase that you have or some... I don't know what you have, but you've got some Rolexes.
- DRDavid Rosenthal
Yeah, I have some watches, but honestly, those are mostly from my dad. My dad is really into watches, and a few of those sort of have trickled to me over the years. I was thinking about it in preparing for this. I do not, and maybe part of that is having a two-year-old. [laughing]
- BGBen Gilbert
Right. [laughing]
- DRDavid Rosenthal
Um, which, uh, is not good for the health of the objects in your home. But, uh, I was thinking about that, and I was like: You know, I, I would like to change that and have something that is meaningful on a different level beyond just what it physically is.
- BGBen Gilbert
Yep. I guess any jewelry would count as that.
- DRDavid Rosenthal
Oh, yeah.
- BGBen Gilbert
And these things may not be branded the way that we're talking about luxury branding, but, like, a diamond engagement ring is inherently not premium, but luxury.
- DRDavid Rosenthal
Yep, and I certainly I would count my wedding ring amongst that.
- BGBen Gilbert
Or a real-world NFT for the crypto folks out there.
- DRDavid Rosenthal
[chuckles] Oh, boy. All right, let's keep it moving here.
- BGBen Gilbert
Which, by the way, I think is actually the best way to think about diamonds. I spent some time recently looking into lab-grown versus mined diamonds, and there's sort of an interesting... I know we're on a diatribe here, but you asked me about my favorite episode, and LVMH came up, and here we are. So there is a fixed supply of diamonds in the world, and there is a rate at which humans can mine them. So regardless of the intrinsic q- qualities of diamonds, it is a thing that can only come out at a certain volume, and largely, they go through the GIA to be identified with a serial number, and it actually gets laser-etched microscopically onto the diamond. So these things are, like, you know, verified that they came out of the ground, and you know the year they were mined, and you know where they were mined, and all that stuff.
- 27:19 – 31:17
Luxury lessons applied to Acquired: scarcity, boutique “factory,” and not scaling output
- BGBen Gilbert
It is funny how doing the episodes and studying these people and these businesses teaches us things that we internalize in our own business. I would not have been able to describe Acquired as a luxury brand or a luxury product prior to LVMH. And luxury's probably still not right. It's probably... I don't know if it's ultra-premium or if it's just, like, a prestige brand.
- DRDavid Rosenthal
I want to talk about this later in the episode, but my quick take is, we are not a luxury product, but we share a lot of traits.
- BGBen Gilbert
Yeah. Scarcity is kind of the biggest one, and that's a thing where I was unable to understand what to do with our scarcity before studying LVMH. But then afterwards, I sort of came to the realization of, "Oh, we should embrace the fact that we only have the throughput to be able to do one episode a month." And rather than trying to figure out how to scale that, there is a very fair path to owning it and staying a boutique little shop that's you and I, and Steven, our wonderful editor, who works with us on a contract basis, and this is the team. This is what we do, and we can only make so much, and if we make more, the quality drops, or we have to scale in some way that feels unnatural to us, and that's okay. Rather than every other person in the podcast ecosystem that we had spoken with up until that point was, "Well, you have to figure out, how do you layer that second show, or how do you introduce more hosts, or how do you get research assistants, so you don't have to do that?" And the boutiqueness is one of our greatest strengths, and it was something I think I was trying to run away from for a while. And now, people ask, "What's gonna be different for Acquired when you go full-time? You're doing way more episodes." No, absolutely not. We're gonna make the same number or fewer of even better episodes.
- DRDavid Rosenthal
We gotta be careful, or we're gonna turn into Dan Carlin here and do one episode a year.
- BGBen Gilbert
Hardcore History, yeah. I know.
- DRDavid Rosenthal
So The Luxury Strategy, which was part of our preparation for LVMH, was reading this incredible book, The Luxury Strategy, which contains the twenty-four anti-laws of marketing, and I just want to call out anti-law of marketing number eighteen.
- BGBen Gilbert
You just have this on your desk?
- DRDavid Rosenthal
Well, I put it on my desk ahead of recording this episode, but, actually, I've had it on my desk for large portions of this year.
- BGBen Gilbert
[laughing]
- DRDavid Rosenthal
Anti-law of marketing number eighteen: Do not relocate your factories.
- BGBen Gilbert
Yeah.
- DRDavid Rosenthal
This is our version of that.
- BGBen Gilbert
Right.
- DRDavid Rosenthal
We're never gonna relocate our factories. [chuckles]
- BGBen Gilbert
And we happen to be in a particular business that scales extremely elegantly. With a word-of-mouth go-to-market and a product that is infinitely replicatable and a revenue stream that scales nearly in lockstep with the size of the distribution, and I say "nearly" is important. We should talk about nearly later. But we do have a business model that lets you-... grow the business indefinitely without compromising at all. And like, if you are an LVMH, you do have to go build another factory in order to go serve more customers. There's not sort of that infinite scaling that can happen by the virtue of the internet and media on the internet.
- DRDavid Rosenthal
Yep. So to put a bow on the very easy question of, what was your favorite episode?
- BGBen Gilbert
Yeah, uh, so far you have spent a lot of time not answering me.
- DRDavid Rosenthal
Uh, no, I did. It was Nike. Nike was my favorite, but I think, um, the other part of the coin question of what was our best episode, I think Visa was our best-
- BGBen Gilbert
Whoa!
- DRDavid Rosenthal
-episode.
- BGBen Gilbert
Nice.
- DRDavid Rosenthal
There were others that are more impactful. I think LVMH, that episode alone, I think, completely changed Acquired.
- BGBen Gilbert
As did Costco.
- DRDavid Rosenthal
As did Costco, but Visa, I think, was the perfect blend of, like, an NFL Sunday gone extremely right. We prepared the right amount, and we played loose. We had fun, we laughed, we remembered that we were good at this. I think you can see it in the finished product.
- BGBen Gilbert
Yeah. It's the ones where we didn't put too much pressure on ourselves that I think came out the best.
- DRDavid Rosenthal
Yep, which for me, were LVMH, Costco, and Visa.
- 31:17 – 34:56
Sponsor break: Statsig growth stats and why they remain a selective sponsor
- BGBen Gilbert
Yep. All right, well, David, before we move out of talking about our season episodes this year to the interviews that we did, this is the perfect time to talk about one of our favorite companies, Statsig.
- DRDavid Rosenthal
Yes, and man, it has been a big year for Statsig, too. When we had Vijay on ACQ2 earlier this year, they were already a pretty impressive kind of Series B stage startup with a killer team and early product market fit and all that. But what's happened since, and the scale that they're operating at now, is pretty wild.
- BGBen Gilbert
This is where we get lucky in being very choosy with our sponsors. Sometimes these things happen to them while we're mid-flight.
- DRDavid Rosenthal
Yes. So I asked them for some fun stats that we can share publicly with everyone to kind of give folks a sense of scale of what happened in 2023 for Statsig. So the first one, in the past month, Statsig shipped actual live product experiments to over one point two billion end users around the world. Now, that stat is not deduplicated across apps, so there's some overlap in terms of actual people, but, I mean, even if you cut that in half to approximate actual flesh-and-blood human people out there, that's almost ten percent of the [chuckles] world's population.
- BGBen Gilbert
Crazy.
- DRDavid Rosenthal
Okay, so that's one. Two, Statsig now processes about a hundred and thirty billion, that's with a B, events per day from its customers. That is one point seven million events every second. [chuckles] So the infrastructure that Statsig now has to support these data volumes is pretty wild, especially since the company was founded less than three years ago. You know, and it's not like they just execute these events. They then take all the data from them, run huge statistical jobs across the whole corpus to compute the experiment results that their customers are running for all these, you know, one billion plus end users. It is just wild. At this rate, they're gonna need to call up Andy Jassy and, uh, [chuckles] talk about some of those AWS bills.
- BGBen Gilbert
Yes, and it's funny, I hadn't thought to make this comparison until right now. So you said one point seven million events a second. If you look at the Visa numbers, I just pulled up my Visa notes, Visa does eight thousand six hundred transactions per second. So that's what? Two hundred times as much throughput at Statsig than at Visa?
- DRDavid Rosenthal
So that's on the metrics side that they can share publicly. On the customer side, Statsig added arguably almost all of the most important AI companies in the world this year, including OpenAI, which uses Statsig for ChatGPT, Microsoft, Atlassian, Anthropic, many, many others, along, of course, with regular old companies like Notion and UiPath and Lattice and Brex and friends of the show, Rec Room, many, many others. The team also kept shipping super fast. At the start of the year, they had just one core product, which was hosted product experimentations. Today, they're a full-fledged product understanding platform. They have dedicated feature flagging, warehouse native experimentation, and product analytics.
- BGBen Gilbert
Yep. We can't wait to see where they're going in 2024. So if your team wants the best platform in the world for making data-driven product decisions, you should reach out, statsig.com/acquired, and as always, there is special white glove onboarding for all Acquired listeners. Our huge thanks to Statsig. So in January, David and I looked at each other, and we said, "We should stop doing specials."
- 34:56 – 39:17
From “specials” to rare, high-signal interviews: why they changed strategy
- DRDavid Rosenthal
Specials is what we called the non-season episodes that we did on the feed until this year, and they were almost all interviews in practice, but anything that wasn't a canonical season episode.
- BGBen Gilbert
Yep. And the reasons that we decided we wanted to discontinue them were, as David, you said, they're almost always an interview. And what is an interview? An interview is a episode where you have a person who is not a part of your enterprise, something you control, come on the show and say something that they very likely are going to say somewhere else, too. So by their very inherent value of it, it is not an N of 1 product, whereas when we make a Costco episode, that's an N of 1 product. And so no matter how good you do the interview, you are starting on your back foot in terms of, can you create this diamond, this unique thing in the world, the way that we can on a season episode?
- DRDavid Rosenthal
And also, there are other people and other podcasters out there who are world-class interviewers.
- BGBen Gilbert
Yep.
- DRDavid Rosenthal
And they are incredible masters of their craft, and we were kind of looking at what we were doing and being like, "Why are we doing this, too?"
- BGBen Gilbert
... Yep, and you can see it in the numbers. Every time we would do one, even with the biggest names, you know, these people where you're like, "I imagine that really moved the needle for you." No, it didn't. Every single time we did a special, it had less downloads than the most recent season episode we did, which is crazy. Never once was a special our biggest episode ever.
- DRDavid Rosenthal
To your point about analytics, that was telling us something, and that was screaming at us in the face for years.
- BGBen Gilbert
Which is, when you make a unique product, that is the thing that people are here for. You have a format and a product that people want, so make that. Don't go do something that's one click over in the commodity spectrum. And we tried all sorts of things. We tried to do the ACQ sessions, where we really, like, you know, tried to make it feel more casual, and we'd pour wine. And I think all the different specials we did and sessions we did and collabs we did, there's something to be learned from to bring into mainstream Acquired.
- DRDavid Rosenthal
And what interviews now are. [chuckles]
- BGBen Gilbert
Yes. So here's where the lesson we learned around don't clutch your pearls too tightly. We swore 'em off. We said, "You know what? We're done."
- DRDavid Rosenthal
Yep. We had made the decision that there was never gonna be another interview on Acquired.
- BGBen Gilbert
This is gonna be a great year going forward, where once a month, we have this very pure thing that we do that's r- you know, release a LVMH-style episode. And then we have the opportunity to fly to Stockholm and interview Daniel Ek about Spotify. And then we get the opportunity to interview the CEO of the then eighty billion dollar market cap, Uber. And we would call each other and say, "We said we weren't gonna do this, so what do we do?"
- DRDavid Rosenthal
Well, and what we had decided, you know, we have ACQ2, and we started calling that the Acquired interview show.
- BGBen Gilbert
Yeah, briefly, for, like, two weeks.
- DRDavid Rosenthal
Legitimately, this is where the rubber hit the road. We were going to put Daniel and Dara on ACQ2, and that was the decision, and we were ready to do it. Then we just kinda looked at each other [chuckles] and we're like, "What are we doing here?"
- BGBen Gilbert
Right. We are getting far too precious, and I think our preciousness has made Acquired what it is. I believe that, but you can get too precious. ACQ2 is awesome, but it has one-tenth the distribution of Acquired, and that's great because it lets us play around with stuff, and it lets us do follow-ups to episodes, where we don't feel like every single person that listened to this big episode would wanna listen to the follow-up, and we get to talk about up-and-coming companies. It's a lower stakes thing for us to do an ACQ2 episode, which is great to have as a part of our ecosystem. But it was really dumb, and I'm really [chuckles] glad we didn't go through with it, to put the CEOs of Spotify and Uber there. And so the year went on, we had the opportunity to then interview Jensen, as he's becoming the most highlighted CEO of one of the top five most important companies in the entire world. And then, of course, we got to spend time with Charlie Munger, gosh, a month and a half before he passed away, which is... I feel so unbelievably lucky.
- DRDavid Rosenthal
Yeah. Well, we'll come back to Charlie.
- BGBen Gilbert
But it turns out, with interviews, the answer is, we still don't do interviews. We don't do specials. Acquired is what it is, except for, you know, Charlie and [chuckles] Jensen.
- 39:17 – 45:01
Interview playbook: protagonists, long lead times, and making interviews evergreen
- DRDavid Rosenthal
Well, I think there's a couple themes here, too. It all kind of stumbled into real time with Daniel and Dara. Those interviews actually happened on the calendar pretty close to one another. And then I think we kind of crystallized this by the time Jensen and Charlie happened. We still can do something unique and special, and in most cases, I don't want to say this will be every case going forward, but if you look at those four interviews that we did this year, they were all the CEOs or, you know, sort of protagonists in Charlie's case, of companies that we had covered extensively on Acquired. And I think that, to me, is at least one example, there may be more, of how we can do something unique and special. And that's not to take away from all the other many masters of their craft out there, like Patrick O'Shaughnessy and many others that are world-class interviewers, of which I don't think we are in a vacuum. But in cases where we've done a hundred hours [chuckles] of work, or in Nvidia's case, in Berkshire's case, many hundreds of hours of work on these companies, I think we then can do something special with the protagonist that other people can't do.
- BGBen Gilbert
Right. This is something that my dad would always say to me when I was younger. He's like: "I legitimately don't think I'm the smartest person, but I do think I'm the hardest working." And whether it was in school or whether in his career, the answer was grind for more hours and become the most knowledgeable to make the most informed decisions. And I kinda feel that way as an interviewer. I'm not Andrew Ross Sorkin, you know? Plain vanilla, walking into a pretty new subject, he's gonna be just a lights-out interviewer. But the place where I can be one of the best in the world is if I have done hundreds and hundreds and hundreds of hours of research on a topic. You know, we can start with Jensen on the Riva one twenty-eight, and that's not how other interviews are gonna start.
- DRDavid Rosenthal
Right, and that was just obvious to us. I think that was your idea to do it. You were just like, "Of course, we have to start with the Riva one twenty-eight."
- BGBen Gilbert
Right. You can't know a story as well as the protagonist knows the story, but try to get as close as you can.
- DRDavid Rosenthal
Sometimes I think we save ourselves from ourselves here, but I'm glad that we didn't cut these, and I think it can end up... Well, we'll get to the stats in a second, but clearly, they have ended up being something special. But the cool thing about the core thing that we do, our season episodes, is, like, that is the natural by-product. It's not like we need to go carve out time to do a hundred hours of work to go interview Jensen or Charlie. It's like, no, no, we've already just done that. It's the core thing that we do.
- BGBen Gilbert
Right.
- DRDavid Rosenthal
So to throw out the opportunity to continue doing those would have been really silly.
- BGBen Gilbert
Yep. So you might be wondering, Charlie Munger was by far our biggest episode ever. Jensen was bigger than any previous season episode. Dara and Daniel were right around the ballpark of what our season episodes were doing at that point in time when we had interviewed them. We sort of figured out there is a style and a type of person where the episodes behave as N-of-one episodes. The sort of decay curves look similarly over time of people seeking them out in an evergreen way. You know, we have seen just as many people-... 92 days later, which is what today is, referencing the Jensen interview that we would see referencing the Nike episode 92 days later. These things, if we do them right, stay just as evergreen. And so, you know, we wanna stay as precious as possible about them. And so what does that mean? Like, how can we change Acquired's business to make it so that the answer is, we don't do interviews on the, the main show, unless, of course, it's an interview that we need to do on the main show. And after some early conversations we've had with some of the sponsors for next year, we just sell them differently. I think that was a key insight for us. We used to do, in a season, six main episodes and six specials, and we would sell them in both and say, "Here's what you'll get in this period of time." And that's still how we sell the sponsorships for the season. You know that it's gonna happen over six months. You know it's gonna be about once a month. We'll give you a heads-up as soon as we know the topic that we're gonna be covering. And we would try to do the same thing with specials, and that drove us to create specials, which is entirely the wrong thing to do.
- DRDavid Rosenthal
Right. It was broken. It was slot filling. You know, and again, not to take away from our guests, we had incredible guests, but the conversations themselves were slot fill. We had slots that we needed to fill. That works for us with the season episodes because we're gonna make an episode once a month, that's in our control, but with interviews, you can't slot fill [chuckles] if you want them to be special.
- BGBen Gilbert
If you're sitting around waiting serendipitously for a Charlie Munger or a Jensen interview to happen, which is basically what we've decided [chuckles] the strategy is for guests-
- DRDavid Rosenthal
You can't have pre-sold a commitment to your partners that you're gonna do, you know, six of those every six months.
- BGBen Gilbert
Exactly. So stay tuned for how this will work in practice, but the way we're thinking about it for next year and, and some early conversations, seems like this is gonna work, is you get the next three interviews. We promise you they're gonna be world-class, and we have no idea when they will come out. And they're probably going to come out next year, but we can't tell you much beyond that. [chuckles] And I think that to the extent that we find and continue to find great partners who wanna work with us as sponsors in that way, that works really well to make sure that the content bar is where it needs to be, the audience is happy, and that we can frankly blow it out of the water the way that we do on the season episodes for our sponsors. So what does that mean for ACQ2? I should say ACQ2 next year is gonna be so much better, 'cause there's all this inbound that we get for Acquired that we've decided doesn't make sense on Acquired, and what that means is we are getting crazy good guests for ACQ2. So it would feel silly not to point people toward that when I know it's coming next year. So, yeah, I'm excited about that, too.
- 45:01 – 52:16
“Shoot your shot” dream guest list (and Taylor Swift) + Charlie Munger reflections
- DRDavid Rosenthal
So I completely, obviously, agree with you, you know, on the implications for the business model and not slot filling, and you can't predict when serendipitously you're gonna get a chance to interview Jensen or interview Charlie, but this is our opportunity. What interviews do we want, in a perfect world, to do in the next, you know, set of time here for Acquired?
- BGBen Gilbert
Well, David, I think that's the right question, and I think the answer is sort of obvious. You just have to look at our episode list. I mean, who are the people that we feel like we've studied the way that we studied Jensen, but we haven't had a conversation with yet? I mean, it's Bernard Arnault, it's Morris Chang, it's Phil Knight, it's Bob Iger. I think they're people whose stories we know, but we don't know, and those would make for special interviews.
- DRDavid Rosenthal
Ben, I'm gonna give you a hall pass on this one [chuckles] because, uh, you're literally one month into parenting, and Lord knows I have empathy and sympathy for you, but you missed the obvious one that I was teeing you up for there, which we're gonna make our appeal, and we're gonna shoot our shot right here. Taylor, if you are listening- [laughing]
- BGBen Gilbert
[laughing] Or Travis-
- DRDavid Rosenthal
We will meet you-
- BGBen Gilbert
... if you can make an intro.
- DRDavid Rosenthal
Or Travis, if you can make an intro, we'll maybe have you on for a little segment of it.
- BGBen Gilbert
We'll go to the Long Pond Studios. We can meet you, you know, anywhere at a posh restaurant around New York City.
- DRDavid Rosenthal
You're on the South American leg of the tour. You know, we'll fly down there, literally anywhere, anytime.
- BGBen Gilbert
Yep, absolutely. [laughing]
- DRDavid Rosenthal
[laughing] Um, all right, let's talk about Charlie.
- BGBen Gilbert
Let's talk about Charlie.
- DRDavid Rosenthal
First, we just have to... You know, we said in the episode, but again, say a huge thank you to Andrew Marks, who's become such a good friend of the show.
- BGBen Gilbert
I feel like Andrew sends us more research material than... Like, Andrew is, like, a source for every episode. We're not just gonna write his name in the sources, but, like, ten sources from every episode are things that Andrew texts us, like, "Have you found this? Have you found that? Have you found that?"
- DRDavid Rosenthal
The minute that we solidify what the next episode is gonna be, we text Andrew and say, you know, like: "All right, what do you got?" And he's always got something.
- BGBen Gilbert
Not to mention, he's got, like, a 20-company-long request list with a reason for why each of those companies should be Acquired episodes, kind of making the, the appeal, and so he always, uh, celebrates when we pick one off of his list.
- DRDavid Rosenthal
So big, big thank you to Andrew. He is literally the Acquired MVP of 2023. It's not you, it's not me, it's Andrew, and also our other friend, too, who knows who he is. Thank you to them for making that happen. [chuckles] I mean, it was just, uh... It was a life experience. Uh, I don't know what else to say. I can't believe we got to do it.
- BGBen Gilbert
There's a strangeness that comes... And if anybody who is listening to this is, like, a long-form journalist, like a, a New Yorker writer or something like that, or has written a book on a company, or maybe even, like, a PhD research dissertation, you sort of know this feeling where even though something happened in real life, you've done enough research about it, where it feels like a story to you. And-
- DRDavid Rosenthal
Yes
- BGBen Gilbert
... at some point, you meet the protagonist, and you're like: "Oh, right. You're, like, a person in addition to being the main character of a story that I know very well," and that in Berkshire's case, there's a cult following of millions and millions of people who all know the story, who can all cite passages from, you know, uh, scripture.
- DRDavid Rosenthal
It is. It's like a religion.
- BGBen Gilbert
Charlie is a person, a wonderful person, in addition to being this character, and I think-
- DRDavid Rosenthal
A figure, yeah.
- BGBen Gilbert
Yeah. The surreality of the moment, I think, hit me the most when there was a question we asked Charlie, and he responded, "I'm not interested in being any more of a guru than I already am."
- DRDavid Rosenthal
Yes.
- BGBen Gilbert
And you could sort of see that-... even though it's worked so well for him to get so much of his wisdom to the masses, and he has-- he and Warren both have been these incredible teachers their whole, you know, last fifty-plus years. In addition to their main job of being great investors, capital allocators, operators, they're sort of these educators on the side, but that education and universe that they've created has blown up to the point where I think it weighs a little bit heavy, at least on Charlie.
- DRDavid Rosenthal
Yeah.
- BGBen Gilbert
It's almost like the burden he carries to get his wisdom out is that he has to sort of be treated as a guru or a character in a story, rather than just a person. And I guess-
- DRDavid Rosenthal
I have no idea what Charlie would say to that, obviously, but I think for people who find themselves in those positions, you know, Steve Jobs was that for sure. Obviously, Warren and Charlie are that. Jensen may be on his way to becoming that.
- BGBen Gilbert
Naval has become that.
- 52:16 – 57:48
Spotify, podcasting economics, and platform-driven growth observations
- BGBen Gilbert
So we happened to find ourselves in Stockholm, which, uh... That actually was a highlight for me this year. I know it was only three days, David, but that crazy-- I mean, we had three beautiful days in May in Stockholm.
- DRDavid Rosenthal
What a gorgeous, gorgeous city.
- BGBen Gilbert
The run, we did a couple runs around the city while we were there and just made sure to kind of take it all in.
- DRDavid Rosenthal
And the people at Spotify were so nice, hosting us. I mean, just rolled out the red carpet.
- BGBen Gilbert
Yep. By the way, I just want to say, I know a lot of people are lambasting Spotify's podcasting strategy. I think people are entirely missing the forest through the trees on calling that a failure.
- DRDavid Rosenthal
Completely agree.
- BGBen Gilbert
I think Spotify, in their music business, has gotten to scale and has no potential to create a high operating leverage business. They're always gonna be giving the same percentage of the profits to the record labels, who have an unbelievable amount of bargaining power over them. So the question is, what do you do next? Audiobooks is a good bet. Podcasting is a good bet, something where you can eventually gain operating leverage, and the fact that they did the huge Rogan deal, they bought The Ringer, they bought Gimlet... Well, if you look at the dollars and cents today, you're like: Geez, they've spent a lot of money, but they haven't generated a lot of profit from podcasting yet. They totally bootstrapped their way to become the scale player in podcasting. So to the extent that there is a big pile of money waiting to be the scale player in podcasting, they're well-positioned to make it, given the half billion dollars or three-quarters of a billion dollars that they spent on content. They now have bootstrapped to scale.
- DRDavid Rosenthal
Yeah. That was the price of entry, and, like, we see it in our analytics. Spotify is the majority of consumption of Acquired out there.
- BGBen Gilbert
No, it is our largest single player, but I don't think it's over fifty percent yet. But one stat that's interesting is from Spotify Wrapped for podcasters, they make a Wrapped to give to you, in addition to the ones to distribute to your audience, is that seventy-six percent of the people who listen to Spotify, Acquired on Spotify, found us this year. That is crazy on platform growth.
- DRDavid Rosenthal
And I think the corresponding stat is we grew something like a hundred and seventy-six percent on Spotify [chuckles] or something like that, off an already decently sized base.
- BGBen Gilbert
Yeah. So, I mean, in many ways, I'm predisposed to think podcasting is more interesting and important in the world than it is, but if you sort of write off the idea that Spotify will ever make-... decent margins in music. They needed to make another bet. This feels like a pretty good bet, this and audiobooks.
- DRDavid Rosenthal
Yep. I think the other side that we see of it is, this will lead into some of our, um, you know, discussion of Acquired, the franchise, in twenty twenty-four. Podcasting is a great business. I do not doubt that it is a very valuable, very large market for them to be in.
- BGBen Gilbert
Yep, if you can figure out how to make being the scale player translate into lots of profits, which no one has done yet.
- DRDavid Rosenthal
Well, no one has done yet, and the previous scale player, almost like a did not start, you know, [chuckles] like, uh, didn't even run the race.
- BGBen Gilbert
Apple, yeah, which, as we've talked about before, we are immensely grateful for, because it enabled this open, free podcasting medium that we have today, which is to our advantage.
- DRDavid Rosenthal
Yes.
- BGBen Gilbert
All right, so David, that was the content this year, and before we, uh, shift over to the state of the franchise here at Acquired, we want to tell you listeners about our friends at Crusoe.
- DRDavid Rosenthal
Yes. Crusoe, as you know by now, is a cloud infrastructure provider specifically built for AI workloads and powered by clean energy. So Nvidia is one of their major partners, and Crusoe's data centers are filled with all the latest Hopper GPUs linked up with InfiniBand and optimized for the best possible performance for all of your workloads.
- BGBen Gilbert
Yep, Crusoe's strategy is super straightforward: make the best AI cloud solution for customers using the best available GPU hardware on the market, and invest heavily in an optimized cloud software stack.
- DRDavid Rosenthal
Yep, and do it all using stranded energy that otherwise would cause environmental harm, and instead, use that energy to lower the cost of running your AI workloads.
- BGBen Gilbert
Yep. As an AI company, Crusoe, like Acquired, has had a great twenty twenty-three, with, uh, pretty incredible growth. So to wrap up the year, they and we wanted to highlight one of their customers that started building on Crusoe the beginning of this year, just as a baby startup, and closed a one hundred and two million dollar Series A.
- DRDavid Rosenthal
Series A!
- BGBen Gilbert
Series A, from a whole bunch of great venture investors at Kleiner, Emergence, Lux, and Nvidia itself, called Together AI.
- DRDavid Rosenthal
Yep. Together AI is actually itself a cloud that allows customers to train and run their own instances of open source models like Llama Two and Stable Diffusion, and their secret sauce is that they've enabled really fast and performant inference. So once the models are fine-tuned and trained to customers' use cases, they can scale their applications really fast and really big. And guess what? Part of that performance optimization under the hood comes from Together building on Crusoe's infrastructure. It's a huge success.
- BGBen Gilbert
Yep. There are a bunch more stories like this coming, so if you, your company, or your portfolio companies could use lower cost and more performant infrastructure for your AI workloads, check out crusoecloud.com/acquired. That's C-R-U-S-O-E cloud.com/acquired, or click the link in the show notes. Okay, David, let's talk about Acquired, the franchise.
- 57:48 – 1:08:16
State of the franchise: audience fit, YouTube algorithm trade-offs, and sponsor evolution
- DRDavid Rosenthal
Yeah. Well, to kick things off on that front, I feel like you had a little more to say on, uh, our discussion earlier about: Is growth good? I mean, certainly this is relevant.
- BGBen Gilbert
Yeah. So my thinking on this has gotten simpler, which is basically, I am extremely open to fully saturating the niche of smart people who care about what makes businesses work, and great technology is successful and durable in the world. And I think last year, again, I was being too precious about, like, "I don't think it's good for our lives if we become too famous." I mean, a by-product of podcasting is you're not on video that often, so you actually do get to stay less famous than YouTubers or less visually recognizable, which is good. I just kind of generally believe recognizability is fun until you get to a certain level, and then it's bad, and then you can't put the genie back in the bottle, and your life's horrible, and I would like to not become that. But if we can keep doubling and doubling and doubling, and it turns out the set of people who like studying business history and being thoughtful about it and can write us with little tidbits saying, "Oh, I happen to think about it this other way," and have thoughtful responses and wanna be a part of the Acquired community, if that turns out to be five million people or ten million people, great. That's only goodness, but I think my view on growth is, we have a natural governor to our growth, which is the universe of that set of people is a fixed number, and I'm just not interested in discovering a second market outside of that. So to the extent that we can stay true to making the stuff that we love to make and serving that group of people, awesome, and I just don't ever wanna, like, you could say, lower the bar or create some different product or whatever, but to appeal to a different mass audience, that part is not really interesting to me.
- DRDavid Rosenthal
Yeah. This has become more evident to me, too, in, um, some of our episodes this year, like particularly the Porsche episode that we did with Doug DeMuro, have blown up on YouTube. YouTube... Let's completely put Acquired aside for a second. My feelings about YouTube are, like, it is an amazing platform. It is an incredible gift to the world that YouTube exists, and one of my carve-outs later in the episode is gonna be The QB School on YouTube, which is a former NFL quarterback who makes amazing detailed breakdowns of what is actually going on every week on your, like, favorite teams.
- BGBen Gilbert
Oh, that's awesome.
- DRDavid Rosenthal
It's incredible, like, the fact that that is available and accessible for free-
- BGBen Gilbert
I'm literally gonna subscribe to that right now.
- DRDavid Rosenthal
Oh, it's amazing. J.T. O'Sullivan. We'll talk more about it later. Go subscribe if you care at all about football, even if you don't. That said, for our episodes that have gotten big on YouTube, [chuckles] if you go look at the comments-
- BGBen Gilbert
It's awful
- DRDavid Rosenthal
... It is a hundred percent not even the same universe of experience that the Acquired Slack community is. And, like, this kinda crystallized for me what you're talking about, of, like, anybody who is the type of person who really cares about knowledge, understanding these great businesses, these stories we tell, and learning from them-... Come on in. Like, we want as many people of those in the world. The YouTube comment world out there is not what we want.
- BGBen Gilbert
Right. And I'm not trying to be pretentious. I'm not saying, like, "You must have thought about it as much as I have in order to be a part of the..." No, I feel like this has been an eight-year journey for us, and for me, a twenty-year journey of learning about what makes these technologies and these businesses become powerful forces in our world. Anyone who is anywhere on that journey, including far past you and I, David, on that journey, I would love to have a relationship with, either two-way through the Slack, or even if it's just one way, through people listening to Acquired. So I'm not saying, like, I just wanna appeal to the people who are like, "Ah, here's a gotcha on, there actually is an eighth power." It's not that. It's the curious, thoughtful people who are not in the YouTube comments of the Porsche episode.
- DRDavid Rosenthal
This had never happened to any of our episodes before. Until this year, we were not exposed to this part of the internet.
- BGBen Gilbert
Well, nothing had, like, algorithmically blown up-
- DRDavid Rosenthal
Yes
- BGBen Gilbert
... and reached a lot of people quickly. The only way anybody had really heard of Acquired until this year was their friend told them, and that is always gonna be a really high-quality way to grow your audience. But if an audience grows quickly, it's like the masses just enter, and you get who shows up.
- DRDavid Rosenthal
Yep. I think for both of us, this really kind of clarified what we really want and meant by this, "Uh, we're a little wary about growth." Like, it's not that we're wary about growth, it's that we wanna keep this, you know, a place that's about knowledge.
- BGBen Gilbert
Yeah. Well, and last year, I think we were talking about... We were getting a little bit, um, shaky about the impact on our business from growing the show, because getting larger wasn't equating to growing the size of our revenue, and it also was creating problems for the classic sort of startup and growth stage companies that had been our longtime sponsors, where we were going to them and saying, "Okay, the audience is four times bigger than when we worked with you two years ago. Let's have a conversation [chuckles] about what it should cost to sponsor the show." It was just like an immovable object meeting a, an unstoppable force. There just wasn't anything to be done, and so we've had to get creative in figuring out, what do we do to continue to grow the business? Well, it doesn't have to be commensurate with the audience, but the audience growing should make Acquired a more viable platform for larger sponsors, deeper partnerships, ways that we can sort of increase both the size of our business, but also, like, the durability and importance in the world of our business.
- DRDavid Rosenthal
Yep. So as we've started experiencing some of the growth that we talked about, we realized that we'd kind of hit a scale now where Acquired is a viable platform and partner to new sponsors that we can work with. And just to talk about what those are, for season fourteen, starting in January, two of our three sponsors are going to be JP Morgan, specifically JP Morgan's Payments Division, and ServiceNow, both of which are incredible companies. We are super excited to work with them. But in both of those cases, we knew those companies and knew those people there for several years now.
- BGBen Gilbert
Right. We should say, the teams that have decided to partner with us from each of those companies have been longtime Acquired fans, and we've gotten to know over the course of years and years and years, and the answer has sort of always been, "Hey, we should do something together." And then, like, we talk about it for a while, and then the answer is always kind of like, "Okay, you're sort of this, like, little niche. Maybe there's something to do." And now the conversation is very much like, "Oh, wow, you show up in the world in a big way with an important set of people, and you're now in this category that we can totally work with you as a durable partner, that we wanna, like, build this deeper relationship with." And especially now that we're in our eighth year, it's a very different thing to be partnering with Acquired than it was when we were in our third year. It's not like a scrappy startup thing. It's a trusted entity in the world.
- DRDavid Rosenthal
Yep. It would've been odd for Fortune 500s to work with us before recently, and now, starting to work with their teams, how a JP Morgan thinks about their brand and their positioning and their kind of whole set of marketing activities is a completely different animal than how startups and, you know, earlier-stage tech companies do. [chuckles]
- BGBen Gilbert
Yep. And it's an intensely coordinated effort with a calendar that is already full. By the time you're finishing twenty twenty-three, twenty twenty-four is largely known. There's a whole set of events. There's a set of campaigns that are gonna happen at different times, and these things are adaptable, but my gosh, the level of foresight and planning that we've gotten to work with from those teams has just been, like, a whole different [chuckles] animal than what we're used to. And we love the nimbleness of small companies, and that enables us to do special things together. And sort of our fun task for next year, which I'm excited to unveil some of the stuff we're doing, will be to bring that custom thing that we're able to do with these small companies and create native content for the medium and do other collaborations with them as a company, for example, the way that we invest in our sponsors or the way that we speak at their conferences and things like that, to bring that to, like, large Fortune 500 enterprises, and that's such an amazing dance. Like, the way that these marketing organizations are able to figure out, "Okay, can we talk about this partner of ours, and in what way can we talk about it? And how much leeway can we give Ben and David to natively work in an Acquired theme from six episodes ago and trust them that, in this episode, it's gonna come across right on air?" It takes a very special marketing department to be able to behave the way that the Vantas and the Modern Treasuries and the Vouchers of the world do while stewarding a twenty, thirty, hundred-year brand.... And a few other things we've got up our sleeve, I think the goal is to be able to continue to work with these sort of recent product market fit, you know, Series B-ish companies that we've always worked with. So between the back catalog, between interviews, we will figure out ways that we can still work with those companies, 'cause frankly, those are the types of companies that David and I love using for Acquired. I mean, we're customers of Vouch, and we use Modern Treasury. We like playing with it. We like following the founders on their journeys. We like having the founders on ACQ2, so we can kind of learn about how they're building their companies. We also [chuckles] like getting the exposure to be able to invest, so it's awesome to be able to build these really tight relationships with those companies, especially when they're founded. Like, I just keep going back to Dmitriy and his co-founders coming up to us at our very first live show after they had come out of YC, and t- telling us about this tiny little Modern Treasury at the time, and you just look at the behemoth amount of money that they move now. There are dozens of companies in the Acquired ecosystem that we have relationships with, that we wanna be able to continue to be a partner to, and just figure out the right way to structure that.
- DRDavid Rosenthal
Yep, and just as importantly, dozens, if not more than dozens, that are gonna be coming up over the next set of years.
- 1:08:16 – 1:11:58
Investing together in 2024: Acquired-native capital allocation and the show-first flywheel
- BGBen Gilbert
Yeah, David, what you're getting to here is, now that we're both full-time on Acquired, we finally have the opportunity to do our investing together, and then do it in a way that's uniquely Acquired, and that is sort of native to Acquired. And so there's no big announcement or anything, but that's the thing to share with the Acquired community is, I've been writing these little angel checks into probably ten-ish of our sponsors at this point, and ACQ2 guests, and companies we've gotten to know, and we're finally gonna be able to kinda do that at scale and do it together in a way that we're not spending a lot of our time hearing early-stage pitches or anything like that. But for companies that we already know well, David and I are, are gonna join our investing forces and invest more in those growth-stage, market-leading tech companies.
- DRDavid Rosenthal
Yep, and as an early example of this, our great friends over at Vanta and their CEO, Christina, have been, um, very, very kind guinea pigs for us. So Vanta has been a longtime partner of the show. We've helped grow their business, and last year, Kindergarten Ventures, the early-stage angel list fund that I run with my friend Nat, we did a ten million dollar SPV in Vanta's Series B. And that was a great test of: Can we invest in a market-leading company and put meaningful capital to work? So that's a playbook that we're now gonna be able to run more often.
- BGBen Gilbert
More, and together, and specifically, as a part of Acquired. I just have this funny, uh, thing that's happened so much over the last two, three years, which is a company is raising great upround from, you know, one of the best few investors in the world in technology companies, and says, "Would you like an allocation? I can give you one or two or ten [chuckles] million dollars in this big growth round." And I, you know, write some little angel check, and, like, that's been great, but it's time to do more with that opportunity.
- DRDavid Rosenthal
Yep. This is all part of you coming full time, and it's time. It's time for all this to happen.
- BGBen Gilbert
Yep, it's time. So that's sort of the state of what we're thinking about for investing, which we'll put into action early next year, and sort of the direction that our sponsorships have been going to. And we should say, we're excited to welcome back for next season, in the third slot, friends of the show, Pilot and Vanta are splitting slot number three. So first three episodes are gonna be Vanta, second three are gonna be Pilot. And I think we figured out a nice balance to be able to work with Fortune 500s as sort of a scale platform, and also to be in business, both investing and on a sponsorship basis for their go-to-market with growth stage companies.
- DRDavid Rosenthal
All of which we are super excited about, but you and I are super clear with each other, and we wanna be super clear, listeners, with all of you, too. The show is the most important thing. Acquired is the show. That is what you and I love doing. That is why [chuckles] you and I are full-time podcasters now, and all of our effort is gonna go into the show.
- BGBen Gilbert
Right. It's what we're most excited about, but it's also, if you just think about the Mungerism, you know, "You show me the behavior, and I'll show you the incentives," it's literally the thing that makes it all work. If you look at the Acquired flywheel, it is produce unbelievably high-quality, deep dives on these companies, and try to create some of the deepest business content in the world in a very, very approachable, fun, conversational way, and share the learning journey that we're on with everyone. And like you said a minute ago, we're really clear with each other. Like, I feel like that mantra comes up on our phone call once a week or something, and it's like, the quality of the episodes is all that matters. And, you know, we just spent ten minutes talking about how we're evolving the franchise and working with Fortune 500s and, you know, how we're gonna be doing more investing together and all that stuff. The only thing that matters, that drives all of it, is quality of episodes.
- 1:11:58 – 1:23:22
2024 content philosophy: new categories, avoiding current events, and becoming historians
- DRDavid Rosenthal
Yes. So on that front, we've got some fun stuff planned for next year. Episode one, we are already deep in research for... We're not gonna give it away what it is, but it is a new category for Acquired, which is-
- BGBen Gilbert
I don't think we've ever touched it in all two hundred and eighty episodes or whatever, and it's one of the largest categories of spend for most countries' GDPs in the world.
- DRDavid Rosenthal
Yeah, I think gotta be probably every [chuckles] country's GDP in the world.
- BGBen Gilbert
Depending on their level of dysfunction, yeah.
- DRDavid Rosenthal
[chuckles] Yeah, good point. Anyway, we're already deep in the research. The story itself, like, industry aside, financials aside, you know, market cap aside, this is a century-long incredible story, too, so I'm really, really pumped.
- BGBen Gilbert
It turns out there's a lot of them out there. We often get the question: Are you afraid you're gonna run out of episodes to do? No. Everywhere we look, there's, like, some new, fascinating, multi-generation business that you'd never expect could have thrived through all these times that they have, and have five unique, amazing vignettes to tell through their whole history to today. Like, as long as we wanna keep doing this, there will be-... fuel to keep doing it.
- DRDavid Rosenthal
This year, it was brands, and luxury, and retailers. It'll be, you know, this other thing hopefully next year. But, like, we look around the corner, and there's a whole new category of companies to cover. [chuckles]
- BGBen Gilbert
Yep.
- DRDavid Rosenthal
So we're pumped for that. Ben, you have already spilled the beans that another-
- BGBen Gilbert
Luxury
- DRDavid Rosenthal
... luxury brand is in the works. [chuckles]
- BGBen Gilbert
Absolutely.
- DRDavid Rosenthal
Absolutely. What else we got cooking?
- BGBen Gilbert
We'll hit some big tech. We have to. It feels like a obligatory nod. We'll hit something in the sort of entertainment, gaming, streaming world, and we could keep naming categories, but one listener question that we got that I think is worth chatting about here is, how do we handle current events? Because there are lots of episodes that would be very appealing to do. For example, the dozens of requests we got two weeks ago or three weeks ago for OpenAI after the boardroom drama. We very much have moved away from current events, and I think that is, in part, because of what we talked about earlier, that we want to create N of 1 content. And the way to create the most possible commodity content is to try to cover the current news cycle that literally everyone else is covering concurrently. I think that's a way to get completely drowned out in the noise, create something that's not special, and create something that, even if you blow it out of the water, has a shelf life in this world of about eight hours. And so we have decided to move as far away from that as possible. And the other reason, I think, is a little bit our disposition, where, David, when you and I are looking at something brand-new that's unfolding in real time, I think we've really started trusting our gut that there's probably more here than there seems to appear on the surface. And years ago, I don't think we felt that. I think we thought, "Uber's going public? Cover Uber." Even three years ago, "Airbnb is going public? Cover Airbnb." And, you know, there was an Acquired way to do it, where most of the episode could actually focus on, you know, the last ten years, and only a little bit at the end was focused on the last few months. But the more current an event is, the less evergreen value that it will have, and the more likely it is that you could really blow it. Like, I feel super self-conscious that we interviewed Sam Bankman-Fried, and, like, you know, we're not investigative journalists. We weren't going to spend the time to, like, try to unfold and dig up, "Hey, is this all legit?" It's like Sequoia had just invested a huge amount of money. Like, everyone and all the possible signals had validated this person and this company. It was seemingly enormously free cash flow positive-
- DRDavid Rosenthal
And yet, yeah, we regret doing it.
- BGBen Gilbert
We totally regret doing it.
- DRDavid Rosenthal
And we're gonna try our best not to set ourselves up to do something like that again in the future.
- BGBen Gilbert
So the question becomes, what should you do? And what we are structurally well set up to do is these huge retrospectives where the story is written, and the story is known, and it's about really synthesizing it and applying it to today's world, where there is just no way that we are ever going to do the sort of, uh, investigative journalism and, frankly, like, investment diligence, often with private information, that you need to do to get a real-time story right. It is structurally impossible for us, so swear it off. I think that's the answer.
- DRDavid Rosenthal
I would even go so far as to say, you know, something that I've taken from, especially the last couple years of Acquired, is the story is always deeper than you think. And so let's even say we were set up to do investigative journalism and deep diligence that [chuckles] we would then share with the public on a company-
- BGBen Gilbert
In real time.
- DRDavid Rosenthal
In real time, I still think it's impossible to get it right. I mean, look at the best VCs out there. They are, at least on the diligence and investing side of the equation, making these calls in real time, and the very best of them only get it right, what? 20% of the time at most, you know, 30% of the time. I don't think it is possible to do.
- BGBen Gilbert
I mean, now, fraud is different.
- DRDavid Rosenthal
Yes. I'm not talking about fraud. I'm just talking about getting the story right, like the story of Uber that we did on, you know, IPO day, back when we did that episode. [chuckles] Like, that was not the full story of Uber.
- BGBen Gilbert
Yeah. To revisit the SBF interview in particular, I haven't listened to it in a long time. I do think we've generally had our wits about us enough to always sort of be question askers in terms of, like, "Hey, this seems really crazy. How did that happen?" And you and I have sort of never been the types to be like, "Everyone should be extremely excited about this, and we urge you to go get involved with this now." I always sort of chuckle when we say the not investment advice, but that's more my demeanor. I truly mean it, as like, "Hey, I've done a certain amount of work on this. I'm going to tell you what I learned, and also, I am not recommending you act on this in any way, ever." And I think that, fortunately, our disposition, especially among some of the crypto and Web3 media, was a little bit more of that. But we've learned lessons from that, and those lessons are, you get to choose the games you play, and we don't need to play the current manias game.
- DRDavid Rosenthal
Totally, and as much as I want to take as a kind personal compliment, all the things you're saying and apply it to myself, too, but I really gotta give credit to you. I think this is a big part of the demeanor that you bring and your personality to the show. Like, you are a optimist, as we both are, and we've talked about a lot on the show.
- BGBen Gilbert
But a skeptic. [laughs]
- DRDavid Rosenthal
[laughs] Well, in the big picture, you're an optimist.
- BGBen Gilbert
Yeah.
- DRDavid Rosenthal
And so I think this is one of the things that makes us a really good team. Like, in terms of the actual goal and what we're trying to do here, and Acquired, and what it is, and what we want it to be, we are 100% aligned, and you do a really good job keeping us in check on this front.
- BGBen Gilbert
Thank you. And if we didn't have you, then we would just tell stories of old retailers and [laughs] old oil companies that-
- 1:23:22 – 1:46:47
Listener Q&A: books, purchases, mottos, relationships, focus, and saying no
- DRDavid Rosenthal
Well, keeping on this topic of audience Q&A, a couple of weeks ago, we got this kind email from listener Martin from Scotland. In it, he had a list of questions for us and said: "If you have time to answer a few of them, I would really appreciate it." And we looked at it, and we said: "Gosh, these are awesome questions!"
- BGBen Gilbert
Should this be the entire episode? [chuckles]
- DRDavid Rosenthal
This should be our holiday special. So thank you, Martin. We are gonna dive into a bunch of them here, and they are just fantastic. So number one: What is the book or books you've given most as a gift, and why? Or what are one to three books that have greatly influenced your life? Ben, you wanna go first?
- BGBen Gilbert
Yeah. I am not actually a huge book gifter. I love the practice, I just never remember to do it. Like, it's great that when people are able to do that. I think a huge one for me is Psychology of Money. There's a recency bias on it, and we mentioned Morgan Housel at the top of the show, good friend of the show, great, great human. I mean, truly, I massively changed the way that I personally [chuckles] invest-
- DRDavid Rosenthal
Yeah, me too
- BGBen Gilbert
... based on that book and the way that I just think about spending my time, and family, and demeanor throughout the day. Another one is this book, and I haven't read it in probably twelve, fourteen years. It's called The Artist's Way by Julia Cameron.
- DRDavid Rosenthal
Oh, yeah. Tim Ferriss loves this book, right?
- BGBen Gilbert
Yeah, I read it as a part of a college class, a cool class at Ohio State called Personal Creativity and Innovation, and one of the mechanics in the book is called Morning Papers. And the rule is you must write three pages, stream of consciousness, before getting out of bed in the morning. And it is so cool 'cause it flushes out all the crap from your head so that you can go and have a clean slate to start the day, and you're not wasting your time processing... You're not, like, wasting CPU cycles in your brain, processing something and ruminating on something that you really just need to get out, get it on the page, and then you can focus on other things. Or perhaps focus on that thing, but at least now you have a little bit of clarity on it because you've written. I should do it more often, but I think it's a s- amazing practice and kind of like a, I hate the phrase, but life hack that I remember feeling like it really worked for me while I was doing it. David, while you give your answer, I'm gonna turn around and look at my bookshelf to find a third one.
- DRDavid Rosenthal
... I have a bunch more books to talk about later in the episode, but the one that I've gifted the most is a book called Transitions by William Bridges, which was first given to me by Ben and my good friend Mark in Seattle. Ben, have I given you this book?
- BGBen Gilbert
I don't think so. You've mentioned it.
- DRDavid Rosenthal
Okay, we need to rectify this right away. Watch your Amazon deliveries. I'm gonna send it to you.
- BGBen Gilbert
It's not like anything's randomly showing up to my house-
- DRDavid Rosenthal
[chuckles]
- BGBen Gilbert
-three times a day from Amazon right now.
- DRDavid Rosenthal
Yeah, right. [laughing] You'll find it again in, like, six months or so when you're cleaning out your basement.
- BGBen Gilbert
Great. [laughing]
- DRDavid Rosenthal
This book is a super cool concept. It was written, I think, in 1980, and the idea- it's about major transitions in your life. Could be a good transition, like having a baby, welcoming a new family member. Could be a bad transition, like a death in the family or career-related, uh, you know, losing a job, something like that. But the thesis of the book is that when this happens in your life, and it will many times, this is gonna sound a little gruesome, but you need to sort of kill your old self and be reborn as your new self. That sounds super woo woo, but if you actually think about it, it makes sense. Your identity, who you thought you were before a major transition, it has to change. There is no way around it, and you'll go through the five stages of, you know, denial, anger, you know, blah, blah, blah, all the stuff. This book is a great sort of way to streamline that process, but you have to accept that, that you that you were before is no longer, and then you can create the new you. And I found it incredibly helpful, both for big challenges in my life and for great positive stuff, like having a baby.
- BGBen Gilbert
Hmm. All right, that's awesome. I will, uh, watch my front doorstep. My third one is a classic, Thinking, Fast and Slow by Kahneman and Tversky. It's just everything you think you know about the way your brain perceives the world and how you make decisions is wrong. And reading it doesn't make you get any better, but at least makes you aware of how wrong your decision-making is, unless you pay unbelievably close attention and write down exactly why the decision is being made and look at all the data, and even then, you'll probably get it wrong.
- DRDavid Rosenthal
Ben, there is a very fun Easter egg that is gonna be buried later in this episode for you to find related to this book recommendation.
- BGBen Gilbert
Ooh, sweet!
- DRDavid Rosenthal
So Ben and listeners can go on a little treasure hunt.
- BGBen Gilbert
Great.
- DRDavid Rosenthal
All right, next question: What purchase of two hundred dollars or less has most positively impacted your life in recent memory? This is a super easy one for me, ah, no-brainer. My Zojirushi hot water heater. For people who don't know about these, and I think this is probably most of the world outside of Japan, this is a device that sits on your kitchen counter and keeps several gallons of water at a set temperature constantly. I am a huge tea drinker. I use this thing four or five times a day and have for the past decade plus. It is amazing. I set it at a hundred and ninety-five degrees. I drink green tea every day. I re-steep my teapot constantly throughout the day, and, like, it has unquestionably made my life better and probably [chuckles] will extend my lifespan by, like, several years from drinking tons of green tea every day.
- BGBen Gilbert
Whoa! That's awesome. Zojirushi is the brand?
- DRDavid Rosenthal
We'll link to it in the show notes. Zojirushi is the brand. It's a Japanese company. Everybody in Japan has one of these things.
- BGBen Gilbert
Awesome. Mine might be a pair of Nike shoes. So living in Seattle, it rains all winter, or at least it's wet all winter, and there's a particular pair, I'm gonna look up what it actually is, so that if you wanna buy it, you can, called the Nike Men's Pegasus 4 GORE-TEX. And the GORE-TEX is so good. It makes winter running possible, and they even have a few of the colorways that are not, like, totally insane, so that you can kind of wear them as everyday sneakers. But I basically wear them all day, every day in the winter, and it makes me far less afraid to go out in the world 'cause I don't like having wet feet.
- DRDavid Rosenthal
Amazing. Okay, next one is the Tim Ferriss question. I don't think anybody's ever asked us that before. If you had a gigantic billboard anywhere with anything on it, metaphorically speaking, what would it say and why? Maybe the most random fact about me, I was a French literature major in college, particularly a, um, seventeenth and eighteenth century, uh, [chuckles] French literature expert. I'm hardly an expert, but that's what I majored in in college. And, um, something that has stuck with me from then, and the older I get and the world we live in becoming more the world it is, has stuck with me more and more, is the last line of Voltaire's Candide: "Il faut cultiver notre jardin." We must cultivate our own garden.
- BGBen Gilbert
Mm.
- DRDavid Rosenthal
And especially today, like, there's just so much in the world that you don't have any control over. The only thing you have control over is your garden and cultivating your own garden, and for us, that's Acquired, and for me, that's Acquired and my family and, you know, maybe some other things over time. But just focus on what is in your control and be great at that and be good at that. Be great and be good at those things, and that is what you can do. [chuckles] At least, those are the words that I have come to live by.
- BGBen Gilbert
I love that. I actually don't have my own answer to this question. There is someone else that I know that has an answer to this question that I quite like, so I'm just gonna recant their story, but I should go find some words to live by.... A good friend of mine, his dad had a saying when he was growing up that, uh, he would always remind his kids, "Just be kind. Hey, whatever the thing is, just be kind." You know, someone might be being a jerk to you, and, you know, they deserve some kind of repercussion, but you should just be kind, and certainly the world will figure out a way to deal with this person's action at some point. And, uh, the thing my friend did is, at some point, as his dad was getting older, he asked him to, um, write down the motto on a piece of paper and sign it. And, uh, he went and got a tattoo on his back-
- 1:46:47 – 2:26:07
Holiday bookshelves + extended carve-outs, then year-end thank-yous
- DRDavid Rosenthal
All right, well, as we sort of drift towards the end, to borrow a Ben Gilbert phrase, uh, drift towards the close of our twenty twenty-three holiday special and our traditional extended carve-outs, we have a very special carve-out to kick things off.
- BGBen Gilbert
This might be my favorite sponsorship segment of all time.
- DRDavid Rosenthal
So for our last segment for this year, with Blinkist and their parent company, GoOne, we have something really, really special.
- BGBen Gilbert
A little treat for listeners from David and his email pen pal.
- DRDavid Rosenthal
Yes. So one of the many amazing things about doing Acquired is the people, all of you who listen, and then we get to meet many of you and build relationships with you. Sometimes this really blows us away. So we asked Blinkist if we could highlight two of those people who have been important to us over the past couple of years and have Blinkist build bookshelves for them to share with you all of the books that have been most important to them in their lives and careers. So the first of those people is someone that is kind of surreal for me to say here, but has been a huge supporter of the show and a mentor of mine now for the past few years. He told me when we first met that he will never come on the show. [chuckles]
- BGBen Gilbert
And has reiterated that three or four times.
- DRDavid Rosenthal
Yes. Once we tell you who this is, you'll understand why, or many of you will understand why. But he did say that if there ever were another opportunity to pass along some wisdom, he would love to do it, and this is the perfect venue. So our first holiday bookshelf is from Mark Leonard, the founder and CEO of Constellation Software. So if you go over to blinkist.com/mark, you'll find an annotated list of Mark's favorite books with some very rare insights from him on why he values them.
- BGBen Gilbert
Yeah, Mark is a absolute legend in, uh, sort of value investing circles, right up there with Warren and Charlie. And if you don't know Mark or know of Mark, it's worth looking up Constellation Software. Uh, anything you can glean on the internet is gonna be totally fascinating about the company that they've built.
- DRDavid Rosenthal
Yeah, we're very lucky to get to know him. So our second holiday bookshelf is from another good friend, who in the, um, opposite vein of Mark, is I think maybe more publicly well-known as a business biography expert than just about anybody in the world, and we'll let him tell you his own top favorite books here, I think maybe for the first time ever that he's done this. David Senra, welcome to the Acquired holiday special.
- SPSpeaker
Thanks for thinking of me. Thanks for having me, David.
- DRDavid Rosenthal
I know this is like picking your favorite children, but-
- SPSpeaker
[laughing]
- DRDavid Rosenthal
... your favorite business biographies of twenty twenty-three?
- SPSpeaker
... So I wanted to do some that I absolutely loved, and where there was actually an Acquired founders overlap. And the very first recommendation would be the new Stripe Press edition of Poor Charlie's Almanac, that just happened to be published a week after he passed away. There's something on the back, there's a quote from Charlie Munger, and he says, "There's an old two-part rule that often works wonders in business, science, and elsewhere. Number one, take a simple, basic idea, and two, take it very seriously." And so I really feel that you and I are taking Charlie's advice to heart. We're just taking a very simple idea of learning from history, and then we take it very, very seriously. And then the idea that we got to spend time with him in his very last year, I don't take that lightly. To the degree that I can, and you guys definitely did it with your excellent interview with him, it's like I really think being a steward of his ideas and trying to push it forward to past generations so it- they're not forgotten, is a very important part of, like, my mission.
- DRDavid Rosenthal
Okay, your number two I'm looking forward to, because this was actually my personal favorite episode that you did this year.
- SPSpeaker
This book is almost impossible to find. So it's The Dream of Solomeo: My Life and the Idea of Humanistic Capitalism by Brunello Cucinelli, and I had to have him on my list. Out of, you know, the 330 entrepreneurs that I've studied for the podcast so far, it's shocking how many of them made the mistake of over-optimizing for their professional success at the detriment to their personal life, their relationships, and their happiness. And Brunello, along with Sol Price and Ed Thorp, is really up there with how I want to pattern my own life. And he says, "I've always been firmly convinced that in order to successfully stand out, you need to focus on one single project representing the dream of your life." And then it just speaks to the first-class person that he is and the first-class organization that he runs. The podcast comes out, it became very popular. Him and his team listened to it, and they send me a handwritten note. I've never felt paper that's more luxurious than this. And then they do the most Italian thing ever, they send me a bottle of their Cucinelli olive oil. [laughing] So again, just- he's very thoughtful. It's very obvious when you read the book, and it just-- You can tell by the way he's running the company that he's paying attention to everything.
- DRDavid Rosenthal
All right, what's number three?
- SPSpeaker
Okay, so number three and number four are actually related. You find these weird, hard-to-find books, and so this is one of them, where it's like it blew my mind that the fact that in the 1980s, the richest American was somebody that no one ever heard of. And so there's only one book on him, and it's this book called The Invisible Billionaire: Daniel Ludwig. It's a biography of Daniel Ludwig written by Jerry Shields. And the book starts off saying that this photographer located the richest man in the world, and no photographs have ever been taken of him. I'm like, "What are you talking about?" And then you learn that Daniel was just excessively focused on just his work. He had no other hobbies besides physical fitness and building his business, and he did that till, again, till he died. And what I love about it is, you just find somebody that is completely focused on doing the best job possible for his customers and for his own sense of satisfaction of building a business that he is proud of and that is operating... The way I would describe his approach to his business, it's like an artist painting a canvas. So number four is The Taste of Luxury. You've got to pronounce his name.
- DRDavid Rosenthal
[chuckles] Bernard Arnault.
- SPSpeaker
Can you just pronounce the whole thing? Since you have-
- DRDavid Rosenthal
[laughing]
- SPSpeaker
I butchered all the French names in this episode. [laughing]
- DRDavid Rosenthal
Ah, so fun. The Taste of Luxury: Bernard Arnault and the Moët Hennessy Louis Vuitton Story.
- SPSpeaker
Okay, so this is on the list, one, because I highly suspect he might be the best entrepreneur on the planet that's still operating and running his company right now. And if you think about the fact of he knows everything down from the tiniest details, which there's crazy stories about this, to the big strategy, to the capital allocation decisions, I don't know if there's another more talented entrepreneur than him. His relentless dedication to really pay attention to every aspect of his business is something that I'm trying to do for mine. But the Acquired episode on LVMH is one of the best episodes of any podcast I've ever heard.
- DRDavid Rosenthal
Aw.
- SPSpeaker
Not just Acquired, any podcast. It's incredible. I can't tell you how many people I sent that to, how many times I listened to it. And then you were kind enough, we were together at your house in San Francisco, and you were kind enough to give me this book, which allowed me to do the podcast, because at the time, you had a copy that you spent several hundred dollars on, and then if I wanted to order the book, the book was, like, I think three thousand dollars.
- DRDavid Rosenthal
Yeah, nuts.
- SPSpeaker
I think the important thing is identifying an opportunity that no one else sees. There's this great writer, Cedric Chin, that I really like, and he actually wrote something about Mark Leonard, is that the foundation of a great career is based on finding an earned secret and exploiting it for multiple decades. And the reason this book is so amazing was because it ends, and Bernard is forty-two years old!
- DRDavid Rosenthal
Yeah, it ends at the beginning.
- SPSpeaker
And he is saying, "Hey, uh, these luxury brands, uh, they're kind of hard to compete with, because if you are to have one, it's usually, you know, fifty, a hundred years old." And then everybody from the outside is telling him, this is a quote, "I remember people telling me, 'It does not make sense to put together so many of these brands.' But it was a success. It was a recognized success, and for the last ten years, every competitor is trying to imitate." And so the book ends, and he's calling his shot. He's like, "Hey, these seem to be good assets. I'm just gonna keep buying them and then just keep compounding." And then you fast-forward thirty years later, and he's the richest man in the world.
Episode duration: 2:26:07
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Transcript of episode UVetwUitW78
