Sessions: David Senra (Founders Podcast)

David Senra 0:00 I found this guy who tweeted something a couple days ago or whenever. It was hilarious. He goes, "Most people's alarm clock is David Goggins telling them to wake up and get after it. My alarm clock is David Senra yelling at me, telling me to be like Edwin Land." [laughing]

Ben Gilbert 0:12 [laughing]

David Senra 0:12 I was like, all right, repetition works.

Speaker 0:14 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?

Ben Gilbert 0:31 Welcome to this special episode of Acquired, the podcast about great technology companies and the stories and playbooks behind them. I'm Ben Gilbert.

David Rosenthal 0:39 I'm David Rosenthal.

Ben Gilbert 0:40 And we are your hosts. Today's episode is our next installment of Acquired Sessions, a video format on YouTube that we started playing with last year. Our guest today is David Senra of the Founders Podcast. David is quite possibly the only person we know who is more obsessed than us- [chuckles] ... with business history and the lessons that great founders teach us. David, David Senra, that is, has read hundreds of founder biographies and done deep episodes on them all.

David Rosenthal 1:10 I don't know that I'm at hundreds yet as me, David, but I, I'm definitely in dozens.

Ben Gilbert 1:14 [laughing]

David Rosenthal 1:14 I aspire to be at hundreds, but David Senra is just one of our closest podcaster friends, and friends period, out there. His show is awesome. Here on this episode, we had him out to my living room here in San Francisco, and we had just a awesome, really fun multi, multi-hour conversation, just like the ones that he and I have scheduled every month on Zoom when the mics are off. And it was super organic, super unstructured. We covered a ton of ground, including that, I think two nights before we recorded, David was just coming up from LA, where he had dinner with Charlie Munger, and so we spent a lot of time talking about that, Charlie's influence on David, his and Warren's influence on all three of us, a bunch of thoughts on advice generally. And as you can imagine, David just sprinkled dozens and dozens of historical examples and founder stories throughout the episode.

Ben Gilbert 2:10 It is crazy. Every time someone's making a point, he'll dive in, "This is just like that thing Edwin Land said that one time." [chuckles]

David Rosenthal 2:16 Or David Ogilvy, or Coco Chanel, or who have you.

Ben Gilbert 2:20 David is definitely close with the eminent dead. I will say, after editing this episode, I had one enormous takeaway: David Senra is really, really into podcasting, so get fired up to meet him on his level. All right, quick things: go follow ACQ2, brand-new show. Search i- any podcast player, available for free. Become an LP. There is voting going on right now for our next episode, which LPs all have input on, and for every new LP that joins, we will shoot you an email to your inbox. Voting closes about a week after this comes out, and we are straight-up picking whatever you tell us the next episode should be, with really no editorial from us, so help us direct the next episode. Join the Slack. It is one of the only places on the internet with this super high level of incredibly thoughtful discussion by well-connected, kind folks with a deep appreciation for history. People meet co-founders, they find jobs, and they get nuanced takes on the news of the day in there. So join at acquired.fm/slack. Lastly, this show is not investment advice. David and I may have investments in the companies we discuss, and this show is for informational and entertainment

Ben Gilbert 3:30 purposes only. Now, on to Acquired Sessions. So David, do you wanna tell us who you had dinner with the other night?

David Senra 3:37 I had a three-hour dinner with Charlie Munger-

Ben Gilbert 3:40 That is awesome

David Senra 3:41 ... where I could ask him any questions that you want. Well, first of all, I guess we should back up. It's like there's a reason that he's so admired, right, by so many people, but for, for me particularly, um, you get to lot- meet a lot of really interesting people because of the work that we do, right?

Ben Gilbert 3:55 Yeah.

David Senra 3:55 And so that's, like, a, a, a blessing and something that I know we've had conversations in the past that we deeply appreciate. But Charlie's a different level for me. Like, I literally think of him like the wise grandfather I never had.

Ben Gilbert 4:07 Mm-hmm.

David Senra 4:08 Um, you know, I've met all kinds of people. I don't really get, like, nervous or starstruck. I was legitimately, like, shaking the day before. I was like, "I cannot believe..."

Ben Gilbert 4:16 [chuckles]

David Senra 4:16 I didn't, I didn't wanna tell that many people, 'cause, like, this is just... There's no way this is gonna happen. Like, I just, I won't believe it till it actually happens. We, we do very similar work, right? Where it's just like, how many people have spent six, seven years, tens of thousands of hours, reading hundreds of books about the history of entrepreneurship and investing, and then not only reading it, taking notes on it, making a podcast-

Ben Gilbert 4:36 Us, and Charlie, and Warren. [chuckles]

David Senra 4:37 Yeah. [chuckles] And so what- and the reason I bring that up is because you think about all the different companies and founders you guys have studied, all the different companies and founders that I've studied, right? And, like, even amongst a, the rarest group of people, Charlie still stands out.

Ben Gilbert 4:50 Yeah.

David Senra 4:50 And the crazy thing is, he's 99, right? And so I get there, and we start off in his library, which is, like, the best place for me that you could possibly see. And so-

David Rosenthal 5:00 How... Set, set the stage more. How, how big is the library? Like, how many books are we talking about?

David Senra 5:04 It's... And so it's not... So his, uh, his f- one of his family members was there, too, and she's like, "Oh, this is, like, nothing." [laughing] Like-

David Rosenthal 5:11 This is, like, the front room. Wait till you see the back.

David Senra 5:12 Yeah, so it's like, it, it's similar to, like, the room we're in. Like, you know, very similar size, and, you know, s- floor-to-ceiling shelves. And so I'm with a, a gr- a small group of friends. In fact, uh, mutual friends from ours. So the people that set this up for us, or for me, was, uh, Andrew Wilkinson and Chris from, the founders of Tiny-

Ben Gilbert 5:29 Mm

David Senra 5:30 ... are mutual friends. And, um, and so we're sitting there, and there's actually a funny thing, where it starts out, and they, they know both Warren and Charlie. They've talked to them before, so they go right into it. And then, like, I'm sitting there, and I had this whole list of probably, like, 25 questions. [laughing]

David Rosenthal 5:46 I was gonna ask if you, like, prepared in advance. I know you did.

David Senra 5:49 I never got the chance to open my phone. [chuckles] 'Cause I was just sitting there. I was like, I'm looking at him, and he's, you know, very close, like, you know-

David Rosenthal 5:55 Yeah

David Senra 5:55 ... maybe a little bit further from me than Ben was.

Ben Gilbert 5:57 Oh, that would feel super disrespectful to, like, take out my phone to-

David Senra 5:59 Yeah, that, too. And

David Senra 6:00 I had, you know, read every single book on Charlie. I watched all of his videos. Like, I have studied this guy forever.... and so every time he had said, "Hey, read this book," I go and read the book.

David Rosenthal 6:10 Mm.

David Senra 6:10 And then I see a bunch of the books that he has recommended behind him. So people are like, "Oh, was he as like you expected?" Like, they say, "Hey, be careful. Don't meet your heroes," right? It's like, he was unbelievably gracious.

David Rosenthal 6:23 Mm.

David Senra 6:23 You know, unbelie- Like, uh, I was like, "Hey, Charlie, do you mind if I take a look at your bookshelf?" Right? He's just like, "Do whatever you want." Just unbelievably polite. Still, like, biting intellect, ferocious intelligence.

David Rosenthal 6:34 At 99. [chuckles]

David Senra 6:35 At 99. So we were talking earlier, um, uh, downstairs, where the scary thing about Charlie is... I remember asking a question about Henry Kaiser, uh, this guy that was super famous when Charlie was younger. He built, like, 100 companies, built the Hoover Dam. Like, he was as famous in his time as, like, Elon Musk is today, right? But no one knows who he is. Um, and I was asking questions about Charlie in the book, and his recall is just insane. To the point where I asked him, I go, "How do you know all this, Charlie?" He goes, "I knew his partner." [laughs] And then he starts telling stories about being- knowing, like, having a relationship with Henry Kaiser's business partner, and then all these-

David Rosenthal 7:10 Oh!

David Senra 7:10 ... three hours of just unbelievable stories. And then I go, "Charlie, like, how do you remember all this stuff? Like, do you write wor- like, do you take notes? Do you re-read the books over and over again?" He's like, "Nope." And all I could think, I was like, imagine.

David Rosenthal 7:23 Wow.

David Senra 7:24 That guy's mind at 99 is still so sharp. I had brought a gift for him, because he's, he talks about, like, um, Rockefeller all the time. I bought him this special edition, uh, centennial edition version of Henry Flagler's biography.

David Rosenthal 7:39 Oh, Flagler!

Ben Gilbert 7:41 Oh.

David Rosenthal 7:41 Yes.

David Senra 7:41 So I, I live in Miami. The, the guy, Les Sandford, I think is his... the author of that book, um, he is good friends with... There's only, like, one local bookshop in Miami called Books & Books, and so Les is a local author who's good friends with the owner of that bookstore, so they did a sp- you can't get this book anywhere else.

David Rosenthal 7:58 Wow.

David Senra 7:58 It's a special edition book.

David Rosenthal 8:00 'Cause Flagler moved to Florida later in life, right?

David Senra 8:01 After the Standard Oil thing.

David Rosenthal 8:03 Yeah, yeah.

David Senra 8:03 Yeah. That- he, he's got a fascinating story. We talked about that, where he ma- he, unbelievably wealthy because of Standard Oil.

David Rosenthal 8:08 Yep.

David Senra 8:09 He's, you know, 50, 60, 70 years old when he's doing this, and he's just like, "Oh, what am I gonna do now? I'll build an entire state." When he gets to Miami, Miami is little less than 500 people living in a swamp. Because you can't live there. There was no AC at the time. And so then he builds the, the world's first, uh, railroad-

David Rosenthal 8:23 Right

David Senra 8:23 ... over for connecting s- uh, the Florida Keys. He just essentially, like, you read that book and you're like, "Oh, humans have no limits other than the ones we put on ourselves."

David Rosenthal 8:32 Mm.

David Senra 8:32 And so that's what Flagler does. He just stretches it. And he does some terrible things, too, where it's like-

David Rosenthal 8:36 Yeah

David Senra 8:36 ... wanted to find a way to divorce his wife, so he literally moves to another state, 'cause you couldn't get a divorce in New York. Bribes the, the, the, the government of Florida. They create the Flagler Law, which allows him to get a divorce. Then he does that, like, a few, I think a few times. I think he's, like, in his 70s, and he marries, like, a 30-year-old.

David Rosenthal 8:52 [chuckles]

David Senra 8:53 Like, so it's not all good.

David Rosenthal 8:54 Yeah.

David Senra 8:54 But that, that guy's like, "Oh, the, your rules don't apply to me. Like, I will build whatever I want." He built in- infrastructure, hotels,

David Senra 9:00 everything else.

Ben Gilbert 9:00 This is, like, one of my... the things that I keep learning from Founders Podcast, and I'm curious if you do it intentionally or if you, like, try not to do it, but, like, every single time I'm like, "Oh, people aren't perfect." Like, n- none of your heroes are perfect. And do you find yourself, like... 'Cause we, we run into this on Acquired a lot, where, like, it's not as fun to tell stories about terrible people, and so you, you, you, like, don't want to show someone's negative side-

David Senra 9:24 Mm

Ben Gilbert 9:24 ... as much, because it doesn't, like, it's just, it-

David Rosenthal 9:28 Well, we, we, like, we fall in love with them, too-

Ben Gilbert 9:30 Right

David Rosenthal 9:30 ... when we're doing that.

Ben Gilbert 9:30 Right, and you're like, "Wow, they're the most extraordinary person on this one axis to ever live," and we, we should talk about how they're a flawed person in many ways, but it's not fun to dwell on. Like, you kinda wanna, like, move through that and be like, "Yep, yep, they were flawed. Here's the next amazing thing that they did." Like, how do you handle that?

David Senra 9:47 Like, you know how a normal biography is written, right? It's like, way too much family history. Like, I wanna know some family history. I don't want five generations back.

Ben Gilbert 9:55 Right.

David Senra 9:55 Stop. Like, I don't wanna know the origination of their last name. I don't need that. I wanna know, like, wh-

Ben Gilbert 9:58 And you're like the most qualified person in the world to critique a biography [chuckles] writing style at this point, so.

David Senra 10:02 [chuckles] So why we're reading it is, like, everyone wants to know the climb, right?

Ben Gilbert 10:06 Yes.

David Senra 10:06 It's like, how did you... You guy- I just went through your entire... To get part of the prep for Charlie is listening to all of your Berkshire episodes, right? Where you guys do a fantastic ep- uh, job on this, 'cause, like, the first two is, like, the young Charlie, the young Warren.

Ben Gilbert 10:17 Yeah.

David Senra 10:17 So I would literally, and I've done this forever, it's like I don't- when you think of Warren Buffett or Ben Franklin or George Washington or anybody that's super famous, when we see them, it's like, "Oh, who's the Ben Franklin on the $100 bill," right?

Ben Gilbert 10:27 Yeah.

David Senra 10:27 Or, "Who's the Washington on the dollar bill?" Or, "Who's Buffett at the, the meeting in Omaha?" It's like, no, no, that, that's the guy that is, is enjoying the fruits of the person-

Ben Gilbert 10:37 Right, right

David Senra 10:37 ... who actually built the empire.

David Rosenthal 10:38 That's the... Yeah.

David Senra 10:39 I go, I go and stare at pictures like a freak-

David Rosenthal 10:41 [chuckles]

David Senra 10:41 ... at, like, of young Charlie Munger when he was, like, 38, or young Warren Buffett.

David Rosenthal 10:45 Yeah.

David Senra 10:45 Right? They, they, they were like us!

David Rosenthal 10:46 It's a statement, are-

David Senra 10:47 They look like they were young people once.

Ben Gilbert 10:48 Yeah.

David Rosenthal 10:49 In, in, uh, in our Berkshire series, the first... Did we end the first episode without even getting to Berkshire yet? I think we might have.

Ben Gilbert 10:54 I think we had to set up the partnerships.

David Senra 10:55 You have to.

David Rosenthal 10:55 It was just the partnerships.

Ben Gilbert 10:56 Yeah.

David Senra 10:57 You mentioned on the Walmart episode, where it's like everybody says, "Oh, Sam Walton didn't start Walmart till he was 44." Yeah, but he was doing 25 years of practice and learning-

Ben Gilbert 11:04 Yeah

David Senra 11:04 ... and he wasn't just sitting on his ass, like-

Ben Gilbert 11:06 Starting a bunch of stuff that looked an awful lot like Walmart.

David Senra 11:08 Yes!

David Rosenthal 11:08 Yep.

David Senra 11:08 Learning from that. And so the, the, the-

David Rosenthal 11:10 Which is totally, like, I mean, aside, but we have no agenda here. Uh, that is, like, I think both an advantage that, like, we have, all three of us, and, like, kind of a secret that we have, which is that, like, we wanted... We did Walmart 'cause we wanted to do Amazon, and so we were like, "How do we do Amazon," right? We gotta do Walmart first. People want this.

David Senra 11:29 Yeah.

David Rosenthal 11:30 Like, this is the right way to study things.

David Senra 11:31 I think- I'm glad you brought that up, because I think this is why people get a lot of value, and I don't want it to make us about, "Hey, this is an Acquired Founders Show." The reason that some of the people in our audiences are the most successful people in the world, they're all reading biographies, they're all studying history of, uh, of business. I told you guys, uh, a few weeks ago, I had- I was very lucky to have a two-hour one-on-one lunch with Sam Zell, that I didn't think was possible. What I realized in that conversation is, like, you don't make- you don't... Sam Zell sold his company for almost $40 billion, right?

David Rosenthal 11:58 Yeah.

David Senra 11:58 $38 billion, whatever it was. It's like, you don't build a company, sell it for $40 billion, and then learn all this shit. It's like he was doing this since he was a, since he was young. We were talking, in his autobiography, he talks about-

David Rosenthal 12:10 Well, we talked about... I, I think my favorite episode of your podcast-

David Senra 12:12 Yeah

David Rosenthal 12:12 ... is the Kobe Bryant episode. [chuckles]

David Senra 12:14 Yeah.

David Rosenthal 12:14 'Cause, like-... this is what these guys are doing. They're like Kobe Bryant.

David Senra 12:19 They're watching game tape.

David Rosenthal 12:20 They're watching game tape. They're working on the fundamentals from the time they're 12 through the time they die. They don't stop.

David Senra 12:27 I think that's what, um, we're listening to Acquired and Founders is, is you're watching game tape of history's greatest entrepreneurs. Sam did this when he was younger. But th- this ties together where, um, Bill Gurley had a, a fantastic quote about this, a tweet about this, when all that crypto was going crazy, and, like, the run-up, and people were getting rich. And he's like, "One thing I don't like..." And I'm paraphrasing, 'cause I don't- I wasn't expecting to talk about this. He's like, "I don't like that these young- y- the younger people denigrating the people that came before them."

David Rosenthal 12:52 Yeah.

David Senra 12:52 And he's like-

David Rosenthal 12:52 Yeah

David Senra 12:52 ... he made the point that none of the, none of history's greatest entrepreneurs and investors did that. They had the opposite perspective. All of them had idols. You just made the point. You can't understand Jeff Bezos until you study Sam Walton. You can't understand Sam Walton till you understand J.C. Penney, and Sol Price, and all these guys.

Ben Gilbert 13:06 And even their contemporaries. Like, the point that Walton always made was, "I don't think my competitors are stupid. I wanna go shop my-"

David Senra 13:12 Yeah

Ben Gilbert 13:12 "... competitors and get all of their very best insights, and then bring them into my store."

David Senra 13:16 Yeah, 100%. They, they're learning machines.

Ben Gilbert 13:19 Yeah.

David Senra 13:19 And so you get to Charlie's going... Tying this all back to this, you get to Charlie's bookshelf, and it's just biographies I've never even heard of, and I do this for a living! [laughing] I do it for a living. I was like, "What is this book?"

David Senra 13:30 And then I started looking. I was like, "Oh, I'm just taking picture after picture after picture." I was like, "I'm ordering every single one."

Ben Gilbert 13:34 So we're talking about this idea that, like, that, uh, the way to get truth is to weave together the tapestry of all of history's stories of things that are adjacent, to understand, like, how this opportunity to start some business came to be. And you always have to r- like, all history is revisionist, and all history-

David Senra 13:51 Mm-hmm

Ben Gilbert 13:51 ... is biased. And so I think one of the hardest things about making an Acquired episode is figuring out, like, when we're looking at a source, like someone giving an industry talk who works at a company, or, like, a biographer who chose to dedicate, you know, two years of their life to writing this book after working at Newsweek and covering the sector forever, is, like, trying to mentally account for and discount f- from whatever bias and perspective they're coming in with to create whatever the source material is that we're using to then incorporate into our version of-

David Senra 14:23 Yeah

Ben Gilbert 14:23 ... here's how this thing happened. Which is- that's like... I think it's the hardest part about what we do, and I'm curious if you ever think about that.

David Senra 14:31 I think about it all the time, 'cause people are like, "Oh, like, survivorship bias or revisionist history," and everything else. It's like, here's the problem, like, we, humans don't see things as they are. We see them as we are. So, like, we could have this super long conversation between the three of us right now, then go in the other room and write down, you know, what just occurred.

Ben Gilbert 14:45 Yeah.

David Senra 14:45 And every single version is going to be different, because it's viewed through all of our experience, the way we think, the, the words we use. And so what I'm looking at is, like, when I'm reading about Sam Walton, right? It's just, like, uh, the, the, the, the story we both hit on in all the podcasts, 'cause I've done a bunch of podcasts on Sam, too, where it's like the guy's pissed off. He's just, like, driving store to store on these, like, mountain roads, taking forever, so he buys the plane. And he realizes-

Ben Gilbert 15:06 Right

David Senra 15:06 ... like, "Oh, this is a massive advantage, 'cause I'm doing something my competitors aren't," right? "I'm flying over." And you guys mentioned it, too, which I thought was hilarious.

David Rosenthal 15:13 Sideways. [chuckles]

David Senra 15:14 Yeah. And then he just lands, and he's like, "Who owns that? Le- let me land," and I- and then he, he, you know, buys for action. So he's like, "We're gonna negotiate right now. I wanna buy it from you." And so my point is just like, okay, yes, that most likely occurred, but what is the idea behind that? It's do- you can have an advantage by doing something your competitors are not doing, right?

Ben Gilbert 15:28 Yeah.

David Senra 15:29 Um, and it... This ties so together what you're, uh, what you just said, is like they all learned from somebody else. When we're reading these books and listening to these podcasts, it's like, "What's the idea I can use in my life?" We're not building the next Walmart. There's no way, if we read Titan, that we could tell, did this actually happen?

Ben Gilbert 15:42 Right.

David Senra 15:43 I don't know, but I'm looking for the ideas behind it, not, oh-

Ben Gilbert 15:46 Yeah

David Senra 15:46 ... I can-

Ben Gilbert 15:46 Right

David Senra 15:46 ... I'm gonna verify for every single word in this book. That's ridiculous.

Ben Gilbert 15:49 Right. And it, the, the truth is always... It is always the case that the, a clean narrative is grafted onto a fact pattern.

David Senra 15:57 Mm-hmm.

Ben Gilbert 15:57 And it's like, okay, well, what I care about is the lessons I can learn from the clean narrative, not, uh, uh, does the fact pattern... If, if you had all the facts in totality, did it necessarily mean that it, you know, this was premeditated? It's like, eh, whether it was premeditated or not-

David Senra 16:12 Yep

Ben Gilbert 16:12 ... you know, the f- the facts are the facts, and, like, maybe I can duplicate it-

David Rosenthal 16:16 Which is similarly-

Ben Gilbert 16:16 ... in a different realm

David Rosenthal 16:16 ... for what we do. I mean, on Acq- I think on Acquired more than you, but especially 'cause you will do multiple episodes of different books on the same people, right?

David Senra 16:24 And multiple episodes on the same book.

David Rosenthal 16:25 Yeah, and multiple episodes on the same book, [laughing] right.

Ben Gilbert 16:27 Your format is better for that.

David Rosenthal 16:27 We're, we're doing a, a narrative weave.

David Senra 16:29 Yeah.

David Rosenthal 16:29 So, like, you know, right?

Ben Gilbert 16:31 We're shooting the moon a little bit more-

David Rosenthal 16:32 Yeah [chuckles]

Ben Gilbert 16:32 ... in this respect. Like, y- y- your format lends itself to... So if anyone is, is listening, like, Founders is more about, "Hey, I just read this book, and I wanna tell you what I learned from this book." And it's always biography, and, like, sometimes you'll do five different biographies on Edwin Land. And, like, if Acquired was gonna do Polaroid, we would do Polaroid. The episode would be Polaroid.

David Senra 16:52 Right, we would do one.

Ben Gilbert 16:52 Maybe it would be like Polaroid part one and part two, or, like, maybe at some point we'd have-

David Senra 16:56 We'd create one narrative

Ben Gilbert 16:57 ... we'd have, like, someone on to, like, talk about the story, you know, in addition to our one canonical episode. But, like, it- we would be shooting the moon on, like, let's make sure that we get the Polaroid story as right... It's almost like, how do we find the correct average of all of the other stories to create the canonical version?

David Senra 17:16 I wasn't expecting to quote Bill Gurley two times early, it's, so far, but, um, he, that fa-

David Rosenthal 17:21 This is how you know this is gonna be a good episode.

David Senra 17:22 That, that fantastic, uh, talk he gave, which to me is the best talk for entrepreneurs and investors on YouTube, it's called Running Down a Dream-

Ben Gilbert 17:28 Yep

David Senra 17:28 ... How to Survive and Thrive in a Career You Love.

Ben Gilbert 17:30 It's great.

David Senra 17:30 And he says, he's like, "Listen, in the age of the Internet," he's like, "You don't have to be the smartest person," right? Charlie Munger, after talking to him, I- whatever mind that dude has, I don't have that, and I'm cool with that. Like, I could not imagine trying to compete against that guy 40 years ago. Like, he would destroy me, right? He's got a super mind that I don't have. But what Bill says is, like, you may- like, you don't have to be the smartest person, but you can collect more, the most information, and he's- and he holds you to a high standard in that talk. Bill's like, "Listen, in the age of the Internet, the, all the information you possibly ha- need, right, is right at your fingertips. You have no excuse not to do this." And so he gives the example of if you, you, you wanna be a domain expert in whatever you're doing, like, within two years of intense study, if you're doing that and you're focused on it, it's like you're gonna get to the point where, like, you know more than maybe anybody else. And so that's my whole thing, was like-... when you talk to, you've never met a founder or an entrepreneur that's, like, kind of into, into entrepreneurship. It's like, no, it's our lives!

Ben Gilbert 18:23 Yes.

David Rosenthal 18:24 Yeah.

David Senra 18:24 So of course, the reason why so many of them listen to both of our shows, right, it's because they're building machines where they literally can turn knowledge into profit, right? Uh, I, I've become close friends, uh, with a guy through the podcast. He's a young kid. I don't, I don't, I don't mean to call him a kid, he's not a kid, but he's a lot younger than I am, and he's, like, 28 years old. And we were on the phone the other day because he had a very serious offer for a company he owns like 95% of, and they were gonna, um... They were gonna give him $100 million, right? He winds up saying no to it. But the point is, is, like, when you talk to him, um, you know, he's listened to all the episodes. He's read, like, 60 of the books. He'll text me a picture of, like... He won't even tell me what the book, and I'm like, "I'm pretty sure I read that." Like, he's like, "Oh, yeah, it's from this episode." It's like, oh, why? What if he finds one idea in a book, one idea in a podcast, and it gives a 10% improvement on his company? That's a 10 million fucking dollar idea.

David Rosenthal 19:13 Yeah. Well, we were talking about this earlier, like, this dinner that you, you have with Ch-

David Senra 19:17 Yeah.

David Rosenthal 19:17 It sounds like the- Charlie is just, like, a very curiosity-driven machine. But we know there, there's lots of folks that have regular dinners-

David Senra 19:23 Yeah

David Rosenthal 19:23 ... and have groups of people, often geographically dispersed.

David Senra 19:26 Mm-hmm.

David Rosenthal 19:27 Why do they do it? Why is it worth their time, their money, their effort? It's if they get one idea, the leverage that they can get on that is astronomical.

David Senra 19:35 Charlie tells, Charlie tells a story. He's like: Yeah, uh, I made $400 million from reading Barron's for 50 years. And you're like, "What the-

David Rosenthal 19:41 [laughs]

David Senra 19:41 ... what are you talking about, Charlie?" And Charlie's like, "Well-

David Rosenthal 19:42 And how do you quantify that?

David Senra 19:43 'Cause he does. So he goes, "I read uh..." This isn't something he said at dinner, that I've heard him say publicly. He's like: I've read Barron's every, uh, all the time for 50 years. I found one idea that I can act on. I made $50 million on that deal, and then I took that 50 million, and I gave it to Li Lu. Is that the-

David Rosenthal 19:58 Oh, yeah, yeah.

Ben Gilbert 19:59 Oh, yeah.

David Senra 19:59 I gave that 50-

David Rosenthal 20:00 In Seattle.

David Senra 20:01 I gave that 50 million to Li Lu, and Li Lu turned it into $400 million. That's how I made $400 million from reading Barron's.

David Rosenthal 20:07 Wow.

David Senra 20:07 And listen, I'm not... And this is another thing where I feel like everybody's like, "Oh, this time is different. This is new." It's like human h- nature has never changed. It will never change. This time is not different. You're just experi- the, the difference is you're, if you don't study the history of the people that came before you, you're just ignorant and making mistakes that people already solved in the past. Uh, learning from history is a form of leverage.

Ben Gilbert 20:26 Hmm.

David Senra 20:28 He has billions and billions, or not... Yeah, billions and billions of years of co- collective, like, human history. You know, this guy spent 70 years, and there's thousands of them. And, like, Sam Walton's book, how many, how many people spent 50 years in one industry, in the retail industry?

David Rosenthal 20:42 Yeah.

David Senra 20:42 And he distilled it down-

David Rosenthal 20:43 And then wrote a book about it

David Senra 20:43 ... to the most important. And then you could read it in a week, and then you could listen to Acquired's episodes, you can listen to David's episodes on Sam-

Ben Gilbert 20:51 Okay, this is good

David Senra 20:51 ... in addition to that.

Ben Gilbert 20:52 So the question is, then, do you have 90% of Sam's wisdom, or do you have 0.1% of Sam's wisdom after-

David Senra 20:59 There's no

David Senra 21:00 way you have 90%.

Ben Gilbert 21:01 Right.

David Senra 21:01 Because, like, uh, the time.

Ben Gilbert 21:03 Right.

David Senra 21:03 Like, the-

Ben Gilbert 21:04 The instincts.

David Senra 21:05 I was just rewatching, uh, Peter Thiel's talk at, uh, Y Combinator, where he says, "Competition is for losers."

Ben Gilbert 21:10 Oh, yeah.

David Senra 21:10 And he goes, "One thing that we do in Silicon-

David Rosenthal 21:12 I haven't seen this one.

Ben Gilbert 21:12 It's a classic.

David Senra 21:12 "One thing we do in Silicon Valley is we overrate, overvalue growth rates and undervalue durability."

Ben Gilbert 21:17 Mm.

David Senra 21:17 And he's like, "That doesn't make sense for a technology company because all your profits, the vast majority of profits, are 20 years in the future. And so if you're trying to optimize for growth, and that, that, that over-optimization can cause your company to go out of business, you're never gonna collect that. You optimize for durability first, dummy." Like, that's to me-

David Rosenthal 21:32 Yeah

David Senra 21:32 ... like, my interpretation of what he's, what he's saying, right? Yeah, so you're gonna get, you know, 1% probably.

Ben Gilbert 21:37 Yeah.

David Senra 21:37 Maybe 5%.

Ben Gilbert 21:38 But that's still enormous leverage, 'cause you read it in five hours, and he took 50 years to accumulate everything.

David Senra 21:44 Well, it's, it's-

David Rosenthal 21:44 And it's Sam Walton's wisdom. [laughs]

David Senra 21:45 And it's what you do with the idea.

David Rosenthal 21:46 I know you've talked about this before, but, like, what was, what was the moment where you were like, "I'm gonna, I'm gonna start this podcast?" Like, it's crazy, right, what you do. You, you talk to a microphone yourself every week.

David Senra 21:54 Yeah, um. [laughs] My friend-

David Rosenthal 21:57 Not that I think you're crazy.

David Senra 21:58 Oh, I definitely am.

David Rosenthal 21:59 You, you are, but in a good way.

David Senra 21:59 No,

David Senra 22:00 I definitely am nuts, for sure.

David Rosenthal 22:01 [laughs]

David Senra 22:01 Um, and that's g- gonna be, like, we could talk about, um... Did you guys read Jeff Bezos's last shareholder letter before he-

Ben Gilbert 22:09 Yeah.

David Senra 22:09 The one of the, the best lines he has is at the end. He's like, "Differentiation is survival." And so, like, think about that, like, how hard... Like, they say, let's say somebody says, "Damn, I love what Ben and David are doing. I'm gonna do the exact same thing." They can jump in and try to do that, right?

David Rosenthal 22:23 Yeah, right.

David Senra 22:23 But you have six years of experience-

Ben Gilbert 22:25 Right

David Senra 22:25 ... you have 600 hours out there.

Ben Gilbert 22:27 Right, you have to, you have to counterposition against us.

David Senra 22:28 You have-

David Rosenthal 22:28 Yeah.

Ben Gilbert 22:28 Or address a different audience, or-

David Senra 22:30 Exactly.

David Rosenthal 22:30 Which, by the way, they definitely should. Every time I talk to somebody who wants to start, I, I... Without fail, I'm always like, "You absolutely should do this."

David Senra 22:37 Yeah.

David Rosenthal 22:37 And, and you will, even if you never succeed in terms of any, like, numerical success or, like, you will succeed because you are learning, like-

David Senra 22:45 So being a nut job and completely crazy is, I think, makes you harder to compete with. And it's also, it, it... We're gonna go all over the map here, but it's impossible not to be that. Like, think about how steeped you guys are in the same information that I am, where it always says, "Oh, you're the sum of the first f- of your five friends," or whatever, right? Well, it's like, it's also, like, what you, you know, some of your podcasts you listen to-

Ben Gilbert 23:06 Right

David Senra 23:06 ... and the books you read. And so what happens-

Ben Gilbert 23:07 Oh, it's your five friends, including your parasocial relationships.

David Senra 23:10 And so now what happens is, like, you mentioned, dude, like, you only read, like, one book about him, you'll go crazy. And so what happens is, when I'm really interested in somebody, I will... I listen to Bill Gurley. Again, I just take advice from people who are smarter than me. Bill said, "Go collect everybody, everything you can." Okay, good, I'll do that. This is ve- these are simple ideas.

Ben Gilbert 23:27 Yeah.

David Senra 23:28 And so I'll find somebody that's interesting, I'll read everything about them. And so with Charlie, I have, like, a little Charlie Munger on my shoulder. I have a little Steve Jobs, a little Edwin Land, a little David Ogilvy, Estee Lauder, Coco Chanel, all these people that have been heroes of mine. James Dyson. And so now I'm presented with a situation, it's like, what would they do? And you'll have a... If you read and spend, and absorb everything that's out there about these people, like, you'll have an idea of, like, how they would respond. Did you guys ever read Ken Kocienda's book, Creative Selection?

Ben Gilbert 23:54 Uh-uh.

David Rosenthal 23:54 No.

David Senra 23:54 About the... Oh, that's shocking, that you guys haven't-

Ben Gilbert 23:56 He, he worked on the original-

David Senra 23:58 He-

Ben Gilbert 23:58 ... human interface for the iPhone.

David Senra 23:59 He, so he, uh, made the, the keyboard for when it was still like-

Ben Gilbert 24:03 That's right

David Senra 24:03 ... Op- Operation Purple-

Ben Gilbert 24:04 For iPhone OS

David Senra 24:04 ... or something.

Ben Gilbert 24:05 Yeah.

David Senra 24:05 Uh-

Ben Gilbert 24:06 P2

David Senra 24:06 ... keyboard. He made Safari before the iPhone. He has this excellent book that I've read, like, three times called Creative Selection. I think the, the, the desi- How Apple Designed Products in the Golden Age of Steve Jobs might be the subtitle. But he talked about that, where he, he demoed to Steve, right? And-... Steve doesn't give a shit about your idea. You're not gonna describe it to him. You're gonna demo, and you're gonna hand it to him. And so they iterate, you guys already know this, they iterate through a series of demos, and it's based on Steve's taste [chuckles] . Like, he is not, "Oh, let's talk about this." Like, "Nope, do this, do this, that."

Ben Gilbert 24:35 Right.

David Senra 24:35 And so Ken has a great line in the book where he's like, "Demoing for Steve is like asking questions to the Oracle of Delphi, except the Oracle of Delphi would, like, respond with a riddle." And he's like, "No, no, Steve was unbelievably, like, crystal clear. You understood him." Out of every single person I've ever studied, Steve Jobs is by far the clearest thinker I have ever come across.

Ben Gilbert 24:55 Hmm.

David Senra 24:55 Like, he's just gifted at that. Charlie is like the oracle, and it's crystal clear. You are not- like, you are gonna understand what he's... The idea he's trying to get into your brain, for sure. Um, but my point being is, like, all of the people that we study, they don't denigrate the past. They- S- Steve Jobs, the reason I'm so obsessed with Edwin Land, I read in a, a biography. When Steve was, like, 20- in his 20s, Edwin Land is in, like, his 70s, he goes and meets Edwin Land, and he goes, "Visiting Edwin Land was like visiting a shrine." He's like, "He is my hero. More people should try to be like that." And then you guys made the point in, that, you know, Jeff Bezos took a lot of ideas from Sam. Uh, who took a bunch of ideas from Sony, too? Steve and-

Ben Gilbert 25:37 Oh, yeah

David Senra 25:38 ... Jeff. So the- you always find these people where you're like, "Oh, I thought this was a Steve Jobs idea."

Ben Gilbert 25:42 Right.

David Senra 25:42 No.

Ben Gilbert 25:43 No, it's an Akio Morita idea.

David Senra 25:44 Yeah.

Ben Gilbert 25:45 Or an Edwin Land idea.

David Senra 25:45 Or an Edwin Land idea. Like, the- when we used to watch the, um, presentations that Steve would give, where he's like, "Oh, we're building at the intersection of technology and liberal, uh, arts," he put it, put it up on screen. It's literally-

Ben Gilbert 25:55 He ripped that off wholesale from Land.

David Senra 25:56 Edwin Land said that exact word. But that's the point. It's like you're never gonna find anybody who gets to the top of their profession without doing the work, like, studying the people that came before them, and learning from them, and admiring them.

Ben Gilbert 26:07 This is a good, like, sort of personal pivot,

Ben Gilbert 26:10 and, and something I've never asked you in all the hours we've spent. This is crazy, this is the first time we've met in person.

David Senra 26:14 Yeah.

Ben Gilbert 26:15 Like, we've spent hours, and hours, and hours on Zoom. Uh, h- how did you, like, decide that this is what you were gonna do with your time on this planet? And, like, how did... What led to this?

David Senra 26:27 Okay, so [scoffs] I... You know, Jer- our mutual friend Jeremy from Formula of Tiny.

Ben Gilbert 26:33 Yeah.

David Senra 26:33 Um, I just spent, like, s- a bunch of hours with him. He was in town. In one sentence, he, like, uh, he psychoanalyzed me better than anybody else ever has. He goes, "You didn't have any mentors growing up, so you, like, you have... Then you took it to, like, this extreme." And he said it more, much more eloquently than I am, but he's like, "You didn't have any mentors, so I view your career as, like, this psychopathic, uh, search for, like, mentors that can help you, you know?" And so, like, to answer your question, it's like, I don't wanna go into too much detail here, but, uh, like, I've only had one habit my whole life, and that was reading. I was reading for as long as I can remember. Uh, my mom passed away from breast cancer a couple years ago, and she- we didn't have, like, a lot of money. Like, long story, but, like, I was the first person not only to graduate college, but, like, high school in my family. Like, I came from a family of, like, unfortunately, both sides of the family, like, no education, a lot of, like, just bad habits. So [chuckles] I, I, identify with a lot of what Charlie Munger says, because he essentially observes bad behavior and then tries to do- do the opposite, right?

Ben Gilbert 27:26 Mm-hmm.

David Senra 27:26 So I was just... Let me give you an example. I was just up in Canada, um, actually at an event f- uh, Andrew Wilkinson was hosting for a bunch of entrepreneurs, me, Shane Parrish from The Knowledge Project, and, um, and Farnam Street was up there, Ben Wilson from How to Take Over the World, and we were doing this panel together. And Shane's the moderator, and we don't know what we're gonna talk about beforehand. And so Shane asks the question, he's like: "Oh, what, um, what did you learn most from your upbringing?" Or something like that, right? And I go, "I learned not to do cocaine and to graduate high school."

Ben Gilbert 27:53 [chuckles]

David Senra 27:53 Like, so that kind of thing, right? And so there was just a bunch of anti-models. I thought about this as I was walking through the Tenderloin [chuckles] this morning in San Francisco.

Ben Gilbert 28:02 [chuckles]

David Senra 28:02 And I was like, "I should have do this walk with my daughter as the best-

Ben Gilbert 28:07 Mm. Mm.

David Senra 28:07 ... Like, 'Hey, this is why you don't do drugs.'

Ben Gilbert 28:09 Yeah.

David Senra 28:10 Like, this is the perfect example of, like, you avoid- you observe bad behavior, and then you do the opposite. So long story short, I've always been obsessed with reading. Like, one of the best things my w- my, my mom ever did was, even if we didn't have money for books, she would take me to the bookstore and just sit there. Like, you know, bookstores are so cool-

Ben Gilbert 28:26 Yeah

David Senra 28:26 ... because they just let you read. They don't- no one comes to you and is like, "Hey, you've been reading for an hour," like, "You gotta get out of here," you know? And just read, and read, and read. So I- I-

Ben Gilbert 28:33 Was there anybody who, like, introduced you to reading and books, or you just, y- like, there was just something about you-

David Senra 28:38 Sounds like his mom. Yeah, but no, she's n- she wasn't a big reader. The only thing she read was the Bible. Um, there was no books in the house when I was younger, ever, so my parents-

Ben Gilbert 28:46 How could you be like-

David Senra 28:48 I, I can't answer that

Ben Gilbert 28:48 ... "Mom, take me to the bookstore?"

David Senra 28:49 I can't answer that. All I can say is, like, my wife knows- has known me for 15 years, and her thing, what she says is... She, like, likes my family and gets along with them, but she goes, "How did that come from that?"

Ben Gilbert 29:01 [chuckles] I had-

David Senra 29:02 She's like-

Ben Gilbert 29:02 He, it, it sounds like you have a classic, like, you're the one who made it out story.

David Senra 29:07 Sam Hinkie, our mutual friend, actually gave me the way to think about this, and it's called the founder of your family, right?

Ben Gilbert 29:13 Mm.

David Senra 29:14 And it's the person that, like... And I used to call them, and it was a terrible name, but generational inflection points. [chuckles] Because you'd read this in a biography where you have, like, generation after generation of just not good things happening, and then one person just says, "Fuck this. It stops now."

Ben Gilbert 29:28 Yeah. That's what Rockefeller did.

David Senra 29:29 And they... Rockefeller.

Ben Gilbert 29:30 Yep.

David Senra 29:30 Uh, I always think of Sam Bronfman, the guy that did, um, Seagram's.

Ben Gilbert 29:34 Oh, yeah.

David Senra 29:35 And he's in Canada growing up un- but, like, th- they were so- their par- their parents had lost so much money. I think they, they were Jewish, and they had to, like, escape from persecution in Russia. I can't remember the- where they came from. But they go, and they, they have to start all over, and they're in Canada, and, like, there's no heating, and, like, they're freezing. And, like, he- so he has this, like, psychopathic drive to change, but you s- that stays with you forever. So, like, he- once, you know, he builds this massive company and literally changes the, the trajectory of all of his, uh, descendants. And as... His, his daughter's an adult, and she tells a story in the book where Sam is sitting there in, like, a mansion by a- next to a fire, f- like, shivering, thinking about how embarrassing it was to have to go to school with tattered clothing. And so it's like, that guy's never gonna go back to that-

Ben Gilbert 30:21 Yeah

David Senra 30:21 ... and he never, never loses it. So I've just always been a reader. That's the only thing I've, um, ever, like, the only one unbroken habit I've always had. And so I just had this idea where, like, I would... I was obsessed with podcasts forever. I was obsessed with audio before there was such a thing as a podcast.

Ben Gilbert 30:34 Hmm.

David Senra 30:35 Um, like, I would listen to talk radio when I was a kid, and at that time, you know, it's-... it's not like, there's no on-demand anything.

David Rosenthal 30:41 Right.

David Senra 30:41 You would listen to sports talk radio, politics talk radio. It's embarrassing, there was, like, this woman that used to be on at night, and people would write in, like, advice for love- their love life, and I'd listen to that. Just the, the idea of like, "Oh, shit, there's all this information."

Ben Gilbert 30:52 Oh, man, I used to listen to, um, Coast to Coast AM with Art Bell. Do you ever listen to this? Like-

David Senra 30:57 No

Ben Gilbert 30:57 ... it's when all the other radio programming sort of expires, and then you enter the, like, 1:00 in the morning AM radio stuff, and it was like, you know, aliens-

David Senra 31:06 Yep

Ben Gilbert 31:06 ... and, like, tons of-

David Rosenthal 31:06 Oh, that's amazing

Ben Gilbert 31:06 ... paranormal stuff. But it was like, if you, if you listen, like, you know, the b- the Cavs game ends, I'm from Cleveland, and so, like, then you listen to, like, the sports post-game, and then it goes into, like, the politics hour, and if you still can't fall asleep, then you're into, like, aliens, and it's, like, four hours of that stuff. [chuckles] I-

David Rosenthal 31:21 Did you have a radio in your bedroom?

Ben Gilbert 31:22 Oh, yeah. Yeah, I'd like- I'd be able to... I don't- I imagine my parents probably came and turned it off, but, like, I'd leave it on while I fell asleep every night.

David Senra 31:28 Wow. And then remember, like, I remember, so you have the jump off from that, and then the, the AM radio stations would then start streaming to the, into your browser, internet.

Ben Gilbert 31:36 Yeah.

David Senra 31:36 It still wasn't on demand, so if you're not listening at 3:00-

Ben Gilbert 31:38 Right

David Senra 31:38 ... or 12:00, like, you miss it. And then once I saw pod-

David Rosenthal 31:40 Wasn't this what Mark Cuban's company was?

David Senra 31:42 His was, like, broadcasting audio for sports games, though, I think.

David Rosenthal 31:45 Mm.

Ben Gilbert 31:46 I don't actually know. It's kind of funny-

David Senra 31:47 Yeah

Ben Gilbert 31:47 ... it's like an era of the-

David Senra 31:48 It's Broadcast.com, right?

Ben Gilbert 31:49 Yeah.

David Senra 31:49 Yeah.

Ben Gilbert 31:50 And it was c- competitive with RealPlayer, which also wasn't, uh, on demand.

David Senra 31:54 Mm.

Ben Gilbert 31:54 That was just-

David Senra 31:55 No

Ben Gilbert 31:55 ... streamed radio.

David Senra 31:56 No, the first on demand was... The first time I saw this, I was like, "This is insane." Like, especially for people that are, that are, like, w- you know, learning machines, using Charlies, w- where it's like I can go to... Even today, like, the idea that you can go to any podcast player, type in whatever you want to l- learn about, and then you can hear somebody that's usually-

David Rosenthal 32:14 Yeah

David Senra 32:14 ... spent hundreds of hours teaching you about this stuff.

Ben Gilbert 32:17 You can also find intellectual, high-quality content more easily now, because i- all content, because there were a limited number of channels and a limited number of time slots, everything had to be produced for the lowest common denominator. And now you can opt into your niche and find the highest quality content in that niche.

David Senra 32:35 Yep.

Ben Gilbert 32:35 And, like, the only way to do that before was books. Like, there wasn't an audio way to f- there wasn't content, there wasn't niche audio content broadly available. And-

David Senra 32:43 And there weren't-

Ben Gilbert 32:44 Because the business-

David Rosenthal 32:44 There aren't, like, several million authors out there.

David Senra 32:46 Right.

David Rosenthal 32:46 But there's several million podcasters.

Ben Gilbert 32:47 Right.

David Senra 32:48 But you made a good- you were, I think you were getting to a good point. It's like, because the business model didn't support that, and so now, with pod-

Ben Gilbert 32:53 And there was no distribution.

David Senra 32:54 Yeah, and now with podcasting, it's like, you guys, you know, I'm sure... I think, like, 50- I don't ever look at analytics, but i- I think last time I looked it was, like, 50% of my audience was in the United States, but then everywhere. And I, so I was doing, the early days of Founders, I was just... I remember it, it all changed because I couldn't figure out, um, the business model, so you would do, like, affiliate. You know, at that time, I remember when I first started-

David Rosenthal 33:13 Yeah, you went through a bunch of business models.

David Senra 33:15 Yeah, so when I first started, they were like, "Hey," um, you, you, you contact, like, the few podcast advertising networks there were back then. You know, 'cause you guys started your show in 2016, right?

Ben Gilbert 33:23 '15.

David Rosenthal 33:24 '15.

David Senra 33:24 Okay, so I started in 2016. And you contact them, and they're like, "Yeah, we can do ads for your show. Uh, you know, you need, like, 25,000 downloads an episode." And at the time, I'm like, "I'll never get there!"

Ben Gilbert 33:34 Right.

David Senra 33:35 Like, obviously, we've, we've skyrocketed past that. But, like, I was like, "That's fu- that's impossible. That's, like, as many people as in a basketball arena." [laughing]

Ben Gilbert 33:41 Oh, when you start visualizing the audience-

David Rosenthal 33:43 Oh, yeah.

Ben Gilbert 33:43 ... it's like, oh, two and a half NFL stadiums show up at, for every Acquired episode. Like, that's an insane-

David Senra 33:49 Yes. But do you guys think... So do you guys think about that?

David Rosenthal 33:52 But I don't, I don't, yeah, only in, in, uh, adding to the pressure in a good way, like, it's a good motivator of, like-

David Senra 33:59 I never think about it.

David Rosenthal 34:00 Really?

David Senra 34:00 You know what I think about it? How my show's set up is why I say, "You and I," and I-

David Rosenthal 34:03 Yeah, yeah.

David Senra 34:04 It's like-

Ben Gilbert 34:04 Right

David Senra 34:04 ... I've picture-

Ben Gilbert 34:05 I like how you treat the audience as, like, the person you're-

David Senra 34:07 It's one person.

Ben Gilbert 34:08 Yeah.

David Senra 34:08 So, like, one... A- and I've done this forever. It's like, I've... It's funny, I remember to one of my friends that we were- met up one day, and I was like, "Man, I think I'm gonna try to make, like, a business around the fact that I read so much." And he's like, [tsks] and he called me, like, a year- like, six months ago, a year ago, he's like, "I can't believe you did that." [laughing]

Ben Gilbert 34:26 [laughing]

David Senra 34:26 Like, 'cause he's like, "I thought you were... That was the dumbest thing I ever heard." But I just picture him when I started. It's like, oh, uh, the whole f- idea behind the show was, like, what if you got to meet up once a week with your friend that reads a lot, and he just tells you the stuff that he read that week? Like, interesting ideas. And so I just picture one person.

David Rosenthal 34:38 Did it even cross your mind to, like, try and convince him to do the podcast with you or somebody else?

David Senra 34:42 No, never.

David Rosenthal 34:42 Or were you always just like, "No, I'm gonna..."

David Senra 34:43 So one th- one thing, we don't have, like, a bunch of prepared stuff, but one thing us three talked about is, like, hey, why don't we talk about, like, who was your influence on why you do what you do? And so I feel the greatest, uh, podcaster of all time is Dan Carlin from Hardcore History. That's, like, my f- I think he's like... I can't believe what that guy does, right?

Ben Gilbert 35:02 Y- you and him are, like, the only successful, uh, monologue podcasters. Like, I think it's the hardest thing to do in this medium.

David Senra 35:10 Oh.

Ben Gilbert 35:10 And I can't... I mean, there's, everyone else either has a guest on or a co-host.

David Senra 35:13 Yeah. Um, well, there's another guy that was, uh, that... So I took Dan Carlin, and I was like, I was obsessed with him, so I've listened to all his episodes. For, like, years, you talked about falling asleep, I did that, too-

Ben Gilbert 35:24 Mm

David Senra 35:24 ... but I fell asleep to Dan Carlin. So I'd over and over and over again, to now, where I listen to him, I'm like, I f- it's like, it's a, like-

Ben Gilbert 35:31 Pavlovian.

David Senra 35:32 Yeah, I was like-

David Rosenthal 35:32 Yeah

David Senra 35:32 ... "No, don't wake me."

David Rosenthal 35:33 Yeah, yeah. [laughing]

David Senra 35:33 "It's not nighttime, bro. Wake up!" [laughing]

Ben Gilbert 35:35 [laughing]

David Senra 35:35 Um, but there was another one, uh, that a friend of mine put me on to. There's this comedian named Bill Burr.

Ben Gilbert 35:40 Mm-hmm.

David Senra 35:41 He does the Monday Morning Podcast. He used to do it every Monday. Now he does, I think, Monday and Thursdays, right? He is one of the first podcasters. When he was podcasting, his, his first episodes, at the time, he would do it, he would call into a number and record, right? And then that, there was a service that would transform that recording from your phone

David Senra 36:00 into an r- a pod-

David Rosenthal 36:01 An MP3.

David Senra 36:02 An MP3 that you could publish-

David Rosenthal 36:03 You could download and put on your iPod.

David Senra 36:04 This is way before-

David Rosenthal 36:05 Yeah

David Senra 36:05 ... like, anything. And so-

David Rosenthal 36:07 It's so wild how things have... I mean, you know, we're here now in this recording setup that we have here, you know, with thousands of dollars of gear, and like-

David Senra 36:15 Yeah

David Rosenthal 36:15 ... we start- I, I remember when we first started, I don't think you'd let me do this, but I was like, "Well, why don't we just talk at the computer and, like, set up QuickTime?" [chuckles]

Ben Gilbert 36:23 Dude, when I listen back to our first few episodes, like Pixar, and I'm, I'm like, we, it sounds like we were just talking at the computer. [chuckles]

David Senra 36:28 Yeah.

David Rosenthal 36:29 Well, we basically were.

David Senra 36:30 Yeah. That's, that's why when people are like, the, I have a lot of psychos that, they're like, "I'm... I start on number one, and I go all the way through." I'm just like, "Oh, like, please don't."

David Rosenthal 36:37 Yeah, yeah. [laughing]

David Senra 36:37 "If you're gonna ha- if you're gonna do, like-"

David Rosenthal 36:38 Like, I wanna, I wanna-

David Senra 36:39 "... go in the opposite order."

David Rosenthal 36:39 This is one of the things I wanted to talk about.

Ben Gilbert 36:41 [laughing]

David Rosenthal 36:42 I, I, I used to, um-

Ben Gilbert 36:44 'Cause that way, at least by the time you get to one, you, like, w-... you, i- you, it, you're a fan, but if you, if you start at one, you're like, "Oh, these j- guys just suck."

David Senra 36:51 These guys suck. Yeah [chuckles] .

Ben Gilbert 36:52 But, like, the, the- it's almost like, um, there's great pleasure in hearing something that you think is excellent and fully baked and, like, uh, e- especially when it's been long-running, you're like, "Oh, this has always been immaculate and perfect."

David Senra 37:07 Yeah.

Ben Gilbert 37:07 And then you get to go see some of the early work, and you're like, "Oh, it's so-

David Senra 37:10 It's like, who are you talking about?

Ben Gilbert 37:11 ... it's so rough," but like-

David Senra 37:11 You wanna go, you want the early Charlie.

Ben Gilbert 37:13 I, I get the... I can see where the magic was, even though they didn't know yet. Like, the, the kernel was there.

David Senra 37:18 It's the same thing you see in the books that you're reading, though.

Ben Gilbert 37:20 Yeah.

David Senra 37:20 Like Sam Walton, when you tell the story where his, his landlord screws him over, and he goes, he goes, "I'm not whipped. I s- I found the, I found this store. I'll, I'll do it again," right?

David Rosenthal 37:29 Yeah.

David Senra 37:30 And it's like, yes, Walmart is a huge success. You guys made the point that, there was a great point where it's like you're never gonna think 25 years in the future when there's watermelons and donkey crap on the ground- [chuckles] ... that this is gonna be the richest family in the world, right? If you, right, if you add up-

Ben Gilbert 37:43 And the most standardized form of retail.

David Senra 37:45 Yeah. But and so you see, like, oh, he, that same guy that became the richest person in the world, that his now family is the richest family whatever, it's like he's imperfect, too, just like I am. And so that is the only benefit of listening to an early Acquired or early founders-

David Rosenthal 37:58 Mm-hmm

David Senra 37:58 ... is like, oh, you see the improvement. Just

David Senra 38:00 like in the books-

David Rosenthal 38:00 Yeah

David Senra 38:00 ... you see the improvement.

David Rosenthal 38:01 Well, it's fun, too. Like, I like going back and listen to some of your old episodes.

David Senra 38:03 Yeah.

David Rosenthal 38:04 'Cause I get to, like, see your journey, you know? Like-

David Senra 38:06 Yeah

David Rosenthal 38:06 ... it's like I'm proud of you [chuckles] .

David Senra 38:07 Yeah.

Ben Gilbert 38:08 Right.

David Rosenthal 38:08 The, uh, but the, I, I've been thinking about that, and I was thinking about ahead of our conversation here. Like, I used to say all the time, people are like, "Oh, I go back, I listen to the early episodes." I'm like: No, don't. It's so embarrassing. I actually think, like, we always wanna be embarrassed by our last episode. [chuckles] We've just constantly kept, like-

Ben Gilbert 38:26 Raising the bar

David Rosenthal 38:26 ... every episode, like, we try and just notch it up, and like-

Ben Gilbert 38:28 'Cause we keep picturing the stadium.

David Rosenthal 38:30 Right.

Ben Gilbert 38:30 And we're like-

David Rosenthal 38:30 That's, that's the like... That's why I think about the stadium, 'cause I think about the, like, the pressure of like, "We gotta do better next time than we did this time."

Ben Gilbert 38:36 And it's not just filled with, like, you know, Seattle's NFL fans. It's filled with, like, hundreds of thousands of the smartest people that... And this gets to, like, the psyche, like the, the, the, the deep insecurities that at least I have, of like: I want to impress those people. I want those people to think I'm smart, and so I have to produce something unbelievably worthwhile of their time.

David Rosenthal 38:57 Mm-hmm.

Ben Gilbert 38:57 And the minute that I don't, I'm, like, literally walking out in front of an F- NFL f- stadium full of people that I want to impress a- and looking like a dumbass.

David Rosenthal 39:04 It's, it's like a version of the, you know, the, uh, the old, um, you didn't prepare for the test in high school nightmare, or like you-

Ben Gilbert 39:10 That's exactly-

David Rosenthal 39:11 Yeah.

Ben Gilbert 39:11 Yeah, yeah. And, like, I didn't used to have that pressure, but, like, once we found content market fit for Acquired w- with, like, people that I've always thought highly of-

David Rosenthal 39:20 That's true

Ben Gilbert 39:20 ... that, that, that is the driver now.

David Rosenthal 39:22 I think we did r- there were a couple of years where we kinda drifted. There wasn't that pressure to keep amping the bar-

Ben Gilbert 39:27 Yeah

David Rosenthal 39:27 ... and then-

Ben Gilbert 39:28 You're right

David Rosenthal 39:28 ... and then it, it-

Ben Gilbert 39:28 It's like the 2017 era.

David Rosenthal 39:30 Yeah, yeah.

David Senra 39:30 I think you're never gonna be embarrassed about your... Your latest episode at the time we're making this is LVMH. You're never gonna be embarrassed about that. That was excellent, and like-

Ben Gilbert 39:38 That was-

David Senra 39:38 ... it, it, it doesn't mean you can't keep improving 10 years from now.

David Rosenthal 39:41 I... But no, like, I look back at that-

David Senra 39:42 Yeah

David Rosenthal 39:42 ... and I think, like, uh, yes, that's certainly an episode, I don't know how you feel, but that, like, I'm proud of. But I look b- like, I... At the time, like, so we didn't know that was gonna be a super popular episode.

Ben Gilbert 39:54 Yeah, that was totally unpredictable. It's our, it's our, it's our, uh, 'cause we haven't shared this publicly yet, it's our, our number one episode by a huge margin. 40,000 more people have listened to that episode than the next highest-

David Rosenthal 40:06 Yeah

Ben Gilbert 40:06 ... which was amazon.com.

David Rosenthal 40:07 That's incredible.

Ben Gilbert 40:08 I probably could have told you... Actually, I was like, "David, no one's gonna listen to Amazon because everyone already knows this story," which was super wrong. But I, I either thought, like, "No one will listen to this one," or, like, "This will be our most successful episode." With LVMH, even after we recorded it, I was like... Or after we edited it, 'cause we had to f- like, ed- edit a lot of stuff-

David Senra 40:26 A lot.

Ben Gilbert 40:26 But I, I was like-

David Senra 40:27 This is funny. This is how much we didn't know

Ben Gilbert 40:29 ... This is now good, but it's not-

David Senra 40:30 Uh, we were-

Ben Gilbert 40:30 ... like, our best ever, but apparently-

David Senra 40:32 Yeah

Ben Gilbert 40:32 ... this is our best ever.

David Senra 40:32 I think it might be my favorite episode of yours.

David Rosenthal 40:33 Oh!

David Senra 40:34 And I heard from a ton of other people, that how much they liked it. Like, it's-

David Rosenthal 40:38 Well, thank you

David Senra 40:38 ... it's really good.

David Rosenthal 40:39 But, but to the po- to your conversation, like, there's a bunch of stuff that we could have done better in that episode, like, a whole bunch.

David Senra 40:46 So I do this all the time, where, like, I'll go back and listen to old episodes because people are like: "That's weird you're listening to an old podcast." It's like: No, this is a tool.

David Rosenthal 40:51 That's how you get better.

David Senra 40:52 This is a tool.

David Rosenthal 40:52 Game footage.

David Senra 40:53 No, we even try to get better. It's like, I was like: "Oh, I haven't read that book in, like, two years. I'll just listen to my episode on it," and it, like- [laughing] serves its purpose. It's a tool for me. That's how I know it's good for other people, right?

David Rosenthal 41:01 Right.

David Senra 41:01 And so it's like, and then I'll listen to it. I'm like, "Oh, wow, I forgot that. I need to keep that idea in my mind," et ce- But I'll hear myself like, "Oh, you said that in two paragraphs. That could have been one paragraph. Cut that part-

Ben Gilbert 41:10 Yeah

David Senra 41:10 ... that doesn't make sense." And so, yeah, I understand the improvement. But what I'm saying is your quality's already super high. Like, it can increase and get better, don't get me wrong, but, like, you're never gonna be embarrassed. You're just like: "Oh, I could probably do it a l- 20%, 30% better," which is still excellent from the, the, the, like, the level you're at.

Ben Gilbert 41:25 So the way that we edit is our editor takes the first pass, and he's unbelievably good, and that, it's... We're so lucky to have him, and then he sends us a rough cut. I upload it to Descript, and then we listen, like, and, and read while we're listening, word for word, sentence for sentence, and try to cut every unnecessary sentence. And we end up pulling out 20-ish minutes of, like, just fluff. It's just like, "Okay, we could have been tighter in that p- point. Can- is there a way to get tighter in it without re-recording it?" And I think that has dramatically contributed to episode quality, 'cause by the time we ship it, neither of us feel that there are extraneous sentences.

David Rosenthal 42:03 All right, it is time to tell you about one of our favorite companies and returning sponsor, Vouch, the insurance of tech. Vouch is the fastest way to insure your startup when you're first getting started and the right way to insure your company as you scale. Vouch is the insurer recommended by Carta, Brex, Vanta, and more.

David Senra 42:24 And they are our insurer here on Acquired.

David Rosenthal 42:27 That's true. In this season, we're doing something new with Vouch. We are going to dive deep specifically into the nuts and bolts of how buying the right insurance for your company works, so you can be a smarter customer, no matter who you choose to work with, and we are going to be doing a different one of these every episode this season. So we all know that we are working through a cyclical reset of the entire VC-backed technology industry, and in this reset, managing risk is hugely important.

Ben Gilbert 42:56 ... any unexpected events that hit your company, you just have way less cushion to recover than you used to when money was much more free-flowing. It used to be that the most expensive mistake you could make was not to raise enough money. The market has changed, and many of us are now focused on sustainable growth, profitability, and importantly, predictable forecasting.

Host 43:17 The core skill of any entrepreneur is still to evaluate risks and allocate resources to maximize the probability of success. But in this environment, that especially means taking insurance seriously. Insurance is a critical safety net for your business and a signal to your investors, your team, and just as importantly, to your customers, that you are meeting this moment responsibly. So if you're an early-stage company, you can buy Vouch insurance online in just ten minutes, just like we did. It is a great digital experience, and insurance advisors are standing by if you have questions. If you're a founder listening right now and you don't have insurance yet, just, like, press pause, [chuckles] go get it off your to-do list. Do it right now. Go to Vouch. It's typically only a few hundred bucks for a year of coverage.

Ben Gilbert 44:06 And this is something we didn't talk about the last time Vouch was a sponsor. If you work at a larger company, like Series B, C, or beyond, your needs are different, and this is where Vouch has actually gained a ton of product functionality and sophistication as a team over the last few years. They now have a dedicated scale team that engages you and your company to understand your needs and offer a coverage recommendation, including a detailed quote and risk management guidance. They also, as you would imagine, have a full brokerage and can source any coverage on the market at exceptional value. Actually, David and I did this because we bought some specialty media insurance, and Vouch obviously doesn't have that in-house, and helped us find the right coverage. It really is changing the game for growth-stage companies, the same way they did for early stage a few years back. And so Vouch is proud to serve clients like Neighbor, MidDesk, and of course, Acquired itself. We are proud to spend this season after this episode kind of diving specifically into the nuts and bolts of how purchasing insurance actually works, what it's used for, all that stuff. So you can click the link in the show notes and save ten percent on your first year at vouch.us/acquired. Thanks, Vouch.

David Senra 45:17 So I don't know if I'm, like, that... [sighs] Like-

Host 45:21 You're still a one-man show, right? Like, you-

David Senra 45:22 I do every-

Host 45:23 You do-

David Senra 45:23 No one touches anything. So, like-

Host 45:24 Everything.

David Senra 45:25 So-

Host 45:25 Soup to nuts.

David Senra 45:27 I'm gonna answer your question, but I also think, like, we should... This is a perfect,

David Senra 45:30 uh, point to, like, how we became friends and why, like, I'm putting this out on my feed, and no one, no one... You're gonna be the first non-David Senra voices that ever heard on Founders, and I only would agree to do it, and I only agreed to do it with you guys, is because, like, this goes back to, like, why I want to be surrounded with, first of all, people who have, like, interest, su- super smart people, but also people that have, like, positive sum thinking, right? Patrick O'Shaughnessy has this gigantic, successful show, uh, Invest Like the Best. He's got the Colossus Podcast Network. His fund is called Positive Sum, and that's how he acts. I joined his network, this is, like, months later, um, and they're like: "Hey, like, like, you know, we have editors," whatever. Like, he has, like, this empire over there-

Host 46:09 Yeah

David Senra 46:10 ... and resources. He's like: "What do you want?" And I was like: "Uh, I just want you to amplify my audience and then connect me with first- first-rate advertisers," 'cause, like, I think Acquired is a luxury podcast... Not, maybe not luxury. Premium, we gotta go over the distinction there-

Host 46:24 Ooh, yeah, yeah

David Senra 46:24 ... for LVMH. But, like, we're not building, like, run-of-the-mill shit. Like, we are- we're saying, "No, no, this is, like... We're trying to set the bar here." But anyways, he's like: "Hey, do you want editors? Do you want any of this stuff?" I was like: "No, I don't want e- no one gets to touch my stuff."

Host 46:36 [chuckles]

David Senra 46:36 Like, people think, "Oh, like, does d- do they tell you what books to read?" And like, no, Patrick liked my show, and he's just like: "Why would I tell you? Like, just whatever you're doing-

Host 46:46 Yeah

David Senra 46:46 ... just do it to more people now." Um, and so to answer your question, n- no. Like, I pick the books, I record them, I edit. I'm still a one-person show. I don't know if that'll happen forever, but I do think the fact that it just hap- like, spend so much time with the material, gets it into my brain. But the reason that, uh... Like, I wanna talk about, like, the role you guys played in that, where we were getting on Zoom, and for, like, the background here is, like, you know, we had known of each other. I talked to Ben a long time ago, 'cause he was running this-

Host 47:12 Oh, that's right

David Senra 47:12 ... this private podcast. This is, like, years ago. Um, and so anyways, we're like, there, you're-

Host 47:17 It's also funny to think back, like, all the dead ends that we went... Like, we went down a ton of them. You went down a ton of them.

David Senra 47:22 Millions.

Host 47:22 We're about to talk about some of them. Like, there's so many dead ends.

David Senra 47:24 But they're in the books, too.

Host 47:25 Yeah, but they're in the book.

David Senra 47:26 Like, that's-

Host 47:26 That's exactly, yeah, we just-

David Senra 47:26 Remember when we changed the name of the show to Adapting?

Host 47:29 Oh, my God, that was, that was a dead end. [laughing]

Host 47:31 Whoa. [laughing]

Host 47:31 That was, that was on me.

David Senra 47:32 I didn't know this.

Host 47:32 That one was on me. [chuckles]

David Senra 47:33 Tell the story.

Host 47:34 Well, C- COVID happened, and we were like, "No one wants to hear these, like-

Host 47:37 Oh, man

Host 47:38 ... stories of, like, extreme capitalism." Like, we- we're like the X Games of capitalism.

Host 47:42 [laughing]

Host 47:43 And, and like, this is a, a moment where, like-

Host 47:45 The X Games of capitalism

Host 47:46 ... everyone is hurting, zero business. And, and like, uh, th- this is in that, the stock market trough, too, where you're just like, wow, like, you know, all businesses are gonna go under.

Host 47:54 Yeah.

Host 47:54 Uh, no one's ever gonna have jobs again. This is, you know, this is scary. And so we were like: Well, like, what stories should we tell? How about businesses that are adapting to make it through this tough time? And to, like, show how serious we were about it, we changed the name of the show. It was, like, our three least listened to episodes, uh, covering, uh, pretty amazing stories-

Host 48:11 Yeah

Host 48:11 ... but we just branded it wrong.

Host 48:13 Totally.

Host 48:13 Like, Canlis is, like, the most interesting restaurant story you could ever hear about.

Host 48:16 Yep.

Host 48:17 And like-

Host 48:17 We did Intel.

Host 48:17 That's the only time we've ever done Intel.

Host 48:19 That's the only time we've done Intel.

Host 48:20 But because it's Adapting-

Host 48:21 Yeah

Host 48:21 ... not Acqui- it was stupid.

Host 48:22 So stupid.

Host 48:23 But you l- there's no way to do, like, learn-

Host 48:25 Oh, so-

Host 48:25 ... rather than screw up.

David Senra 48:26 Do you wanna, do you wanna know the first name of Founders?

Host 48:29 Ooh.

David Senra 48:29 You know, like, in your RSS feed-

Host 48:30 Oh

David Senra 48:30 ... you can change the name, right? But you can't change the, the link. Like, the, it'll still say-

Host 48:34 The URL, yeah.

David Senra 48:35 So you look at it from mine, and it's Autotelic. The worst name. Autotelic comes from this book called Flow.

Host 48:40 How do you even spell that?

David Senra 48:41 A-U-T-O-T-E-L-I-C, maybe. I don't know.

Host 48:44 Wow.

David Senra 48:44 I can't spell for... I can't spell, pronounce, I have no grammar, so I... Like, "You read so much," I was like: I don't pay attention to any of that stuff.

Host 48:49 Is that the Mi- Mihaly, uh-

David Senra 48:51 Yes.

Host 48:52 Csikszentmihalyi?

David Senra 48:52 The guy that... Flow. Yes, it's, it is an activity that you do for the sake of itself. Going back to your question, it's like, why... Like, I just love to read. I'm gonna do this if no one listens. Like, that's how I know I'm gonna win, because it's like, people are like, "Oh, would you do it for free?" It's like, I... No, no, I paid to do this. Like-

Host 49:07 For, like, a long time. [chuckles]

David Senra 49:08 For a long time. Like, I literally said, "I'm gonna quit"-... and I'm gonna- I have the savings. I have a wife and a baby, or and a daughter to support, now I have a son, a wife, a daughter, and a son. And I was like, "I bet you..." I, I just put trust in myself as just like, "I'm going to... If I focus on this seven days a week, I'll figure out the business model." I know, like, I don't think I'll ever get rich from it, but I will at least pay my bills, right? And so, like, every month I'm like, "Oh, less money there." And like, so I paid to do it. So the idea where like, uh, you know, again, people get- I think Steve Jobs talks about this, like, the older he get- he said something like, the older he gets, the more he realizes why people do things matters. And so he's always asking-

David Rosenthal 49:44 Yeah

David Senra 49:44 ... those questions. Like, I always say, it's like, "How do you know, uh, that you found what you love to do?" And, uh, people are like, "Oh, 'cause, like, I wouldn't sell my company." It's like, okay, there's another level. It's like, how much would you have had to pay Steve Jobs to stop working at Apple? The answer is, he wouldn't take all the money in the world. How, how would- [chuckles] how much would you have to pay Charlie Munger?

David Rosenthal 50:04 A lot of people-

David Senra 50:05 Yeah

David Rosenthal 50:05 ... tried to stop Steve Jobs- [laughing]

David Senra 50:06 Yeah

David Rosenthal 50:06 ... from working at Apple. [laughing]

David Senra 50:07 Yeah, but like, think about that. Like, the idea is, like, he's not doing it for money. He's in a different game. He's doing it-

David Rosenthal 50:11 Yeah

David Senra 50:11 ... for the sake of itself. And so I went through a bunch of different names. Uh, History's Greatest Men, History's Greatest, like History, all this... They was terrible names. And I just started narrowing it more, and more, and more to, like, Founders. And I was like, "Oh, that's perfect." There is a question-

David Rosenthal 50:27 'Cause you weren't even... Like, you didn't, you weren't coming from the tech world. You weren't like-

David Senra 50:30 No, there's a-

David Rosenthal 50:30 This wasn't content marketing.

David Senra 50:31 No, no, there-

David Rosenthal 50:31 This was like, yeah

David Senra 50:32 ... No, it was just like inter- uh, the i- the idea I had known about, like, Warren Buffett, Elon Musk, and all these other people, and I remember you had Kevin Rose on your show a long time ago. So you guys remember his... He had, if he would've stuck-

Ben Gilbert 50:45 Again, not that long ago.

David Rosenthal 50:46 Foundation.

Ben Gilbert 50:46 Maybe a year, year and a half.

David Senra 50:47 Yeah. Yeah, it just time flies.

Ben Gilbert 50:50 'Cause it was post... It was, he was, he was uh-

David Rosenthal 50:52 It was during COVID.

Ben Gilbert 50:52 He, he was pretty much already fully Web3 by the time-

David Senra 50:56 Yeah

Ben Gilbert 50:56 ... we-

David Senra 50:57 So do you guys remember Foundation?

Ben Gilbert 50:58 Yeah.

David Rosenthal 50:58 Of course.

Ben Gilbert 50:59 Oh, yeah.

David Senra 50:59 He was like one of the first high quality-

David Rosenthal 51:01 Boom, yeah

David Senra 51:02 ... inter- Like, imagine if he would've stuck with that show.

David Rosenthal 51:04 I know.

David Senra 51:04 Like, you know what I mean?

David Rosenthal 51:05 I know.

David Senra 51:05 Like, it would've been a monster.

Ben Gilbert 51:06 Right, and it's like the e- the only episodes that ever came out was like, "Here's me interviewing Elon Musk. Here's me interviewing Sam Altman. Here's me..." And like these people, and also before they became, like, icons of our time.

David Senra 51:16 Elon had the Model S. That's it. Elon had the model... That was the only thing. He was just about to release the Model S.

Ben Gilbert 51:21 The Ro-

David Rosenthal 51:21 Yeah.

Ben Gilbert 51:21 He had the Roadster. That was the-

David Senra 51:22 No, no, they were in the factory, 'cause I watched it, I watch it all the time. They were in the factory building the Model S.

David Rosenthal 51:26 That's right.

David Senra 51:27 So it was... I don't know if you could buy it yet-

David Rosenthal 51:28 Right

David Senra 51:28 ... but it was, like, coming or whatever.

Ben Gilbert 51:30 Ah.

David Senra 51:30 And Elon looks way younger and, like, you know. And then in 2015, Tim Ferriss, I was a, a big fan of his podcast. I'd read like-

Ben Gilbert 51:38 He's great

David Senra 51:38 ... The 4-Hour Workweek.

David Rosenthal 51:39 Yeah.

David Senra 51:39 I remember the way I discovered-

Ben Gilbert 51:40 Dude, 4-Hour Body changed my life.

David Senra 51:41 Did it?

Ben Gilbert 51:42 Yeah.

David Senra 51:42 With its low carb?

Ben Gilbert 51:43 Yep, slow carb diet.

David Senra 51:44 I did that, too. [laughing]

Ben Gilbert 51:44 Slow carb diet, cold showers. Like I did- [laughing] And the funniest thing is like, that this is like the, this whole cold plunge thing that's like becoming a thing now, I'm like, "Was nobody, like, reading Tim Ferriss in 2011?"

David Senra 51:54 Yeah.

Ben Gilbert 51:54 Like, it was- [laughing]

David Senra 51:54 Oh, they were a huge part of...

Ben Gilbert 51:55 Uh, yeah.

David Senra 51:56 Well, it goes back-

David Rosenthal 51:57 'Cause only our demographic was.

Ben Gilbert 51:58 Yeah.

David Senra 51:59 Actually, that, that

David Senra 52:00 made me think of something. Let me interrupt this story, 'cause I think it's really important. You're like, "Oh, is anybody going to listen to our... Like, no one's gonna listen to our Amazon episode. They already know it." And so this is something that, like-

David Rosenthal 52:09 Oh, it's-

David Senra 52:09 And then it becomes, becomes the most successful-

Ben Gilbert 52:11 Are you gonna quote Ogilvy?

David Senra 52:12 Yes.

Ben Gilbert 52:13 Yes.

David Senra 52:13 Yeah, 100%.

Ben Gilbert 52:13 I've listened to enough founders to know.

David Senra 52:14 Yeah, because it's like, this is so key that people don't understand. It's like you're not advertising to a standing army, you're advertising to a moving parade. And so, like, I will literally get on calls with, like, media company founders that are, like, selling ads or, like, building companies, and I'm like, "Oh yeah, you must have read Ogilvy." They're like, "What?" And I was like, "These are not new lessons." Like, if, if... And again, this comes from the humility to realize, hey, Warren Buffett's smarter than me. So if that dude in his shareholder letters is saying, "Uh, David Ogilvy is a genius," I'm like, "Wait a minute, this dude, how many businesses has Warren Buffett looked at, at that point? How many founders and managers has he looked to, and he's like, 'This dude's a genius?'"

David Rosenthal 52:51 Yeah.

David Senra 52:52 This is not rocket science, guys.

Ben Gilbert 52:53 Right.

David Senra 52:53 Just go and like- [laughing] Let's search David Ogilvy on Amazon. Five books? Good. Order them all.

David Rosenthal 52:59 These days, search David Ogilvy and your podcast player of choice.

David Senra 53:02 Yeah!

David Rosenthal 53:02 Like...

David Senra 53:02 Um, that's- the, I, I went to-

Ben Gilbert 53:04 Wait, but e- explain the, the standing army versus-

David Senra 53:07 So you're not advertising to a, uh, standing army, you're advertising to a moving parade. But what happens is, like, even when you put on, uh, the Sequoia episode, right? We went, me and David went on a hike in Stanford, and I was like: "Dude, you have this crazy back catalog. Every single day, you have more people following your podcast feed than you had the day before." I was like- and I, 'cause I knew this, because I was a su- a subscription podcast, right?

David Rosenthal 53:29 Recount briefly your business model journey.

David Senra 53:31 So I, I'll give you the shorter breakdown, because, like, I went through so many of them. I just put a hard paywall, "Listen to the first 30 minutes. You wanna listen to all of them, um, then you pay," right? And it convert- the-

David Rosenthal 53:42 And this is when we had that chat-

David Senra 53:43 Yes

David Rosenthal 53:43 ... that you were talking about.

David Senra 53:44 We gotta go back to that.

David Rosenthal 53:45 We were like, we were like, "Dude-

David Senra 53:46 "You're doing it wrong."

David Rosenthal 53:46 ... do not- you, you're doing it wrong." [chuckles]

David Senra 53:48 Yeah, 'cause the- we- there's been times like this one, where we're like, "What the hell are you doing?" But there's been other times t- where you come to us and you're like, "Do you know how good your Sequoia episodes were? And, like, the fact that you have four times the audience that you have now-

David Rosenthal 53:58 Right

David Senra 53:58 ... and none of the 75% of those people have ever heard the Sequoia episode. What are you doing?" And so you guys, we had this m- hike, the, the, this, Ogilvy idea. Remember, not my idea.

David Rosenthal 54:06 Yeah.

David Senra 54:06 I don't g- like, y- everything has already been done, guys. Just to pa- and I'm speaking to the people listening, not you. You obviously know this. Like, they've already been done. Just go see, "Hey, that person's smart. Let me see some shit that he learned from 40-year career." Like, you're not gonna, you-

David Rosenthal 54:18 Yeah

David Senra 54:18 ... the ideas are not gonna pick up an idea you can use is silly. So I told David-

David Rosenthal 54:22 I do think, though, I was thinking about this. There's some cases where it's, it's not true, but I think most truly, like, iconic, world-changing businesses and founders, they build- they stand on the shoulders of giants, but they have one or multiple things that is novel that they come up with.

David Senra 54:40 It's the combination of these ideas. Like Sam Walton taking Soul Price's ideas and his competitor's ideas, and like, "Hey, what about... You guys are kind of ignoring these, like, 4,000-person com- uh, communities." I'm pretty sure, like, the thesis behind Walmart is like, "Will they just drive far distances just to save money?"

David Rosenthal 54:55 Right.

David Senra 54:56 Uh, the answer is yes. [chuckles]

David Rosenthal 54:57 Right, right.

David Senra 54:57 Five hours. [chuckles]

David Rosenthal 54:58 Right, right. But that, that-

David Senra 55:00 Yeah

David Rosenthal 55:00 ... like, that is a, a novel idea.

David Senra 55:01 Yeah, exactly.

David Rosenthal 55:02 Yeah.

David Senra 55:02 It's a very- it's- that's the whole thing.

Ben Gilbert 55:04 It's, it's combining, like, one big novel idea with a bunch of other things that you can learn from history.

David Senra 55:09 You guys combined David Ogilvy's idea by republishing your Sequoia podcast, and then you text me, you're like, "Oh, my God, like, the downloads are crazy."

David Rosenthal 55:17 Yeah. [chuckles]

David Senra 55:18 And because the vast majority, because you're not-... podcasting to a standing army or podcasting to a moving parade. And so I had known this because, through my experimentation, I would take an old episode that I had done, uh, do a preview, throw it up, and you'd get conversions every time, 'cause it was new to them. And that was like- so Ogilvy, I credit Ogilvy with that idea. That's an idea he got from Claude Hopkins and Albert Lasker, who were building advertising businesses 50 years before him.

Ben Gilbert 55:43 Is this, uh, Scientific Advertising?

David Senra 55:44 Yes.

Ben Gilbert 55:45 Yeah.

David Senra 55:45 Yes.

Ben Gilbert 55:45 Also a good Founders episode.

David Senra 55:47 Yeah. He's e- excellent. That, that, that, um, that book, Scientific Advertising, sold, like, 8 or 10 million copies. They kept it in... Albert Lasker, so Claude Hopkins worked for Albert Lasker. Cl- Albert Lasker thought that book was so good, he stored it in a vault.

Ben Gilbert 56:01 [laughs]

David Senra 56:01 He wouldn't let anybody- he's like, th- he built-

Ben Gilbert 56:03 'Cause it was, like, the secrets of the industry, right? Like, "Don't publish this, 'cause we don't want this getting out."

David Senra 56:07 I learned that because in Ogilvy and Advertising, at the very end of the book, David's like, "Here, these are the six giants that I learned from." So I was like, "Oh, okay, well, then I'm gonna Google search who's the..."

Ben Gilbert 56:16 Right.

David Senra 56:16 Like, I'm gonna read the book. This is not rocket science, again. So then he's like, "Oh, Albert Lasker made more money than anybody in- than anybody else in the history of the advertising business." I was like, "Hold up. What? How?" Like, don't quote me-

Ben Gilbert 56:26 Also, none of us know this guy's name.

David Senra 56:27 Yeah.

Ben Gilbert 56:28 Yeah.

David Senra 56:28 And so then, then you realize, it's like

David Senra 56:30 [chuckles] he, he says in the book, he's like, "His estate outside of Chicago was so big, he had 40 full-time employees." I'm like, "What?" [chuckles] Like, "What are you talking about?" Like, th- make these words make sense in my mind. That doesn't make any sense to me. So you read Albert Lasker, and then he tells you about Claude Hopkins, and he's like, "Yeah, the, the information was so good that, like, I stored that in my vault for 20 years." And then once he sold his, uh, advertising, uh... Or I think he gave it away, like a token, like $100,000, you know, to the people working, uh, there.

Ben Gilbert 56:53 Mm.

David Senra 56:54 And then they released it, and Claude went off on his own and, and everything else. So these are not, like-

David Rosenthal 56:59 Yeah. Okay, so you were doing the 30-minute hard cutoff when we- [chuckles]

David Senra 57:03 And so when-

David Rosenthal 57:03 We had that famous-

Ben Gilbert 57:03 It is so unsatisfying. It's like, I'm gonna listen to 30 minutes of this episode, and then, like, I j- have to get... Someone's asking me to pay for the rest.

David Rosenthal 57:10 But you might have a pretty good conversion rate, right?

David Senra 57:11 The conversion rates were higher, but-

David Rosenthal 57:12 Of course

David Senra 57:12 ... you guys said th- th- this is where, like-

David Rosenthal 57:14 You were at a local maximum.

David Senra 57:15 This is where, like, you were very helpful. Like, David, first of all... And you guys are nice, but this is not the language you use. You're like, "You fucking idiot." Like, [laughing]

Ben Gilbert 57:23 [laughing]

David Rosenthal 57:23 [laughing]

David Senra 57:23 That's, that's like... And but you guys are so nice, so it's like, "Dude, you're doing it wrong." Listen, for every one person, I think it was Ben that said this, like, for every one person that would buy a podcast, there's 1,000 or 100 that would listen to them for free. Like, just-

Ben Gilbert 57:34 It's about 100.

David Senra 57:35 Yeah, uh, probably even more than that, you know? And so then you guys would show me, like, you open the kimono. You're like, "This is... These are our downloads. This is who we advertise with. This is what we charge for advertising." You're just like-

Ben Gilbert 57:44 Well, the other, the other really key insight is, uh, so after spending a bunch of time with originally Kimberlite, then Glow-

David Senra 57:51 Yeah

Ben Gilbert 57:51 ... which sold to Libsyn, and still what powers the Acquired LP program, uh, an interesting learning is most podcasts should generate about 50% of their revenue from direct monetization, some kind of membership program or paywalling their feed, um, and about half from advertising. And, and it should- the math should sort of work out where that's gonna be the case. For the type of podcast that we are, where you have lots of founders and CEOs and hedge fund managers and th- these sorts of people listening, y- y- you could never ask someone to pay you in membership what they are worth to the most valuable advertiser for that slot. And so the way it sort of works out is, like, you're massively hamstringing your monetization potential if you make it membership only, 'cause you'd have to be like, "Uh, yes, please pay 2 to $5,000 a year in order to get access to this private thing," versus if you were to take that same piece of content and open it up to advertisers.

David Senra 58:47 You made the great, the good point earlier, and we can elaborate on that, right? Why you're so psychotic about, "This sentence is- needs to get out of here. Like, these two sentences, let's, let's remove it," because if you could factor in the average hourly rate of the people in your audience, it is unbelievable. So even I think if you make, what, a million dollars a year, and we know people obviously in our audiences make a lot more than that, but I think a million dollars a year is what, 500 bucks an hour or something like that? I don't know the math.

Ben Gilbert 59:09 Sounds right.

David Senra 59:09 I'm not a good math person. But, like, so you're asking if they listen to an hour-long podcast of Founders, it's like, that's $500. Like, you cannot waste these people's time.

Ben Gilbert 59:17 Yeah.

David Senra 59:17 So I never answered your question when you're like, "Hey, how do you guys think about this? Do you, do you re-edit, or do you cut them out?" I use Descript as well. I actually think the way I listen to Founders is obviously listening to it, and listening and reading.

Ben Gilbert 59:28 Yeah.

David Senra 59:28 Like, the superpower of podcasts is you can listen to it when you're doing something else. But-

David Rosenthal 59:32 But when you're editing, though, the-

David Senra 59:33 But I think I'm gonna put all my ad- all my podcasts up on YouTube, not... I don't have any video, but I think I'm gonna use Descript. So, like, if you... There is like-

Ben Gilbert 59:40 Mm.

David Senra 59:40 Some people have success just putting up the audio on audio- uh, like a sta- a static picture, and you can listen to it on YouTube.

Ben Gilbert 59:46 Yep.

David Senra 59:46 But I also think, I was like, "Well, if I'm gonna do that, I might as well just..."

Ben Gilbert 59:48 Mm.

David Senra 59:48 "I have this," and that's kinda cool if you wanna use it, but don't have to.

Ben Gilbert 59:51 We, we did not find success doing that. Like, this episode will be the first episode this year that's on YouTube, because we basically said, "If there's not interesting video, then it's not a video podcast, and you can go find it in a podcast player."

David Senra 1:00:01 I... It's- I'm using it just for search, and-

Ben Gilbert 1:00:03 Yeah

David Senra 1:00:03 ... I would use it-

Ben Gilbert 1:00:04 That's a smart play, right?

David Senra 1:00:04 It's, I'm not- I'm never gonna- I don't think I'm ever gonna do video anything, 'cause it's just, like... It's so much simpler to do. Literally, uh, what I'm saying is, like, I'm gonna upload the MP3 to YouTube. Like, I'm not making a video, just because it is... They're eventually gonna have... They're not stupid. They're eventually gonna have, like, the podcast player inside of YouTube.

Ben Gilbert 1:00:20 Yeah.

David Senra 1:00:20 Like, I- did you- th- they released this, like, 40-page document I read on the, their podcast goals-

Ben Gilbert 1:00:24 Hmm

David Senra 1:00:25 ... uh, YouTube.

Ben Gilbert 1:00:25 I didn't see that.

David Senra 1:00:25 Did I send it to you guys?

David Rosenthal 1:00:26 No.

Ben Gilbert 1:00:26 No.

David Senra 1:00:26 I'll send it to you guys. So right now, I have YouTube Premium, so you can listen to them in the background-

David Rosenthal 1:00:31 Yeah, yeah

David Senra 1:00:31 ... like a podcast player, but-

David Rosenthal 1:00:31 Which is great

David Senra 1:00:32 ... but they need to have podcast functionality. It's still like a video-

David Rosenthal 1:00:35 Yeah, yeah

David Senra 1:00:35 ... you have to make. So anyways, um, the, the way I do it is like,

David Senra 1:00:40 yes, I'm very aware that, uh, who's listening, I'm not ever gonna waste a lot of their time. And what I've found with the more practice I have for the podcast is I'm able to edit on the fly. Like, I don't have a script, right? So, like, I'll go through the book. I highlight, then write down whatever pops in my mind. I don't th- like, just, am I... First of all, the highlights, like, am I excited about that? "Oh, that's interesting," highlight.

Ben Gilbert 1:01:00 Yeah.

David Senra 1:01:00 Just go off instinct, right?

Ben Gilbert 1:01:01 Yeah.

David Senra 1:01:02 And then write down, uh, like, something that, "Oh, that's like this," or, "That made me think of this," and I just write it down, right? Then I'll reread all these highlights the night before I record, uh, so it's like the second time.

David Rosenthal 1:01:13 You're do- you're doing this in physical books, right?

David Senra 1:01:15 Physical books, yeah.

David Rosenthal 1:01:15 But you're putting your notes into Readwise?

David Senra 1:01:18 That happens after.

David Rosenthal 1:01:19 Okay.

David Senra 1:01:20 That happens after. So the fifth time, every single book I do, I think I read the highlights five times, and the fifth time is me actually taking pictures of the physical book and putting it in Readwise. So Jeff Be- I was thinking about this yesterday, 'cause, um, I'm also sl- slightly obsessed with Jeff Bezos.

David Rosenthal 1:01:34 ... You're slightly obsessed with a l- a lot of founders. [laughs]

David Senra 1:01:37 That's why when we're like-

David Rosenthal 1:01:39 [laughs]

David Senra 1:01:39 You're like, "We're sitting in chairs." I was like, "Dude, I'm gonna be Ford." [laughs]

Host 1:01:42 [laughs]

David Rosenthal 1:01:42 Yeah, we were setting up the camera angles before. [laughs]

David Senra 1:01:44 'Cause you know what I love? Like, um-

David Rosenthal 1:01:46 We're like, "I... We've gotta move David's chair back here a little bit." [laughs]

David Senra 1:01:49 [laughs] Do you ever... Have you ever watched the old Jeff Bezos interviews when he's, like, first starting Amazon?

David Rosenthal 1:01:53 Oh, oh yeah.

David Senra 1:01:53 He's, like, skinny and bald, like, bald and-

Host 1:01:55 It's the one that's, like, in that field outside the conference?

David Senra 1:01:58 Yes, I think this is the one. He's, like, sitting... Like, you see grass behind him.

Host 1:02:00 Yes.

David Senra 1:02:00 I don't know if he's in a field. So the... But he, like, leans forward, and he's like, "We're gonna be the most customer-obsessed company ever." [laughs] It's like-

David Rosenthal 1:02:06 And he's got that look on his face.

David Senra 1:02:07 Yeah.

Host 1:02:07 Yeah.

David Senra 1:02:08 That's how I am about founders.

David Rosenthal 1:02:09 [laughs]

David Senra 1:02:09 I'm like... [growls] Like, you know? [laughs]

David Rosenthal 1:02:11 [laughs] You'd be like, "That dude's a psycho." [laughs]

David Senra 1:02:12 But Jeff says something that- He is. But Jeff says something in Invent and Wander, which is an excellent book, 'cause it's all of his shareholder letters and-

David Rosenthal 1:02:19 Yep

David Senra 1:02:20 ... transcripts of his speeches.

David Rosenthal 1:02:20 Uh, Walter Isaacson-

David Senra 1:02:21 Yep

David Rosenthal 1:02:21 ... edited that, right?

David Senra 1:02:22 Yep, and all of his transcripts of his speeches, and he goes, "Do you really want to c- to, to live in a world or to compete against somebody that's, that's as good as you?" Like, I certainwo- certainly wouldn't. That's what his... he states. And he's like, his... If you read his shareholder letters and listen to him talk, he's like, he's constantly looking for unfair advantages.

David Rosenthal 1:02:39 Yep.

David Senra 1:02:39 And I think part of the fact that I have now over 20,000 highlights from hundreds of books, and I still have, like, 50 or 60 or maybe 80 books I haven't put in there yet that are in my library. So it's like that's... My Readwise account is an unfair advantage-

David Rosenthal 1:02:51 Yeah

David Senra 1:02:51 ... because any time somebody's talking, it's like I can immediately, "Oh, you said something?" I search for that term, and it pulls up. And it's like, oh, and then I see my highlight, and I see my note. It takes so long-

David Rosenthal 1:03:02 Yeah

David Senra 1:03:02 ... like, so long to do that, but it's worth the extra five or 10 minutes.

David Rosenthal 1:03:04 And that's integrated into your process of making podcasts.

David Senra 1:03:07 And that's because I'm reading something, "Mm, I remember... Mm, no, I know I've seen this before. I can't remember it." Type in that term, and it pulls up every single instant-

Host 1:03:14 Wow

David Senra 1:03:14 ... instance of it.

Host 1:03:15 It's like a brain outside your brain.

David Senra 1:03:15 It's an unfair advantage-

David Rosenthal 1:03:17 Yeah

David Senra 1:03:17 ... that I have with me all the time, and well, um, what, what I'll do is, like, whenever I'm, like, uh, waiting for an Uber today, right? Uh, just pull up Readwise, and I- Readwise has the highlights feed, and I'll show you guys, uh, what it looks like. It looks a lot like a Twitter feed, right? Completely random, so I'm not choosing this.

David Rosenthal 1:03:38 Mm.

David Senra 1:03:39 And instead of me reading Twitter all day-

David Rosenthal 1:03:40 Ah

David Senra 1:03:40 ... which is not a good use of your time, it's this highlight from the Dodge Brothers. Uh, I haven't read that book. You know, that was, like, episode, you know, probably in, like, the 115s.

David Rosenthal 1:03:48 Right.

David Senra 1:03:48 Billy Durant, who's the founder of GM.

Host 1:03:49 Ah.

David Senra 1:03:50 Uh, Sam Colt.

Host 1:03:51 And so are these ones that other people have liked a lot-

David Senra 1:03:53 No

Host 1:03:53 ... so therefore-

David Senra 1:03:54 No.

David Rosenthal 1:03:54 It's just repopulating your own-

David Senra 1:03:56 This is mine, yes.

Host 1:03:56 Oh!

David Senra 1:03:57 So it's my form of practice.

David Rosenthal 1:03:58 That's awesome. So you've got-

David Senra 1:03:59 So-

David Rosenthal 1:03:59 Whoa

David Senra 1:04:00 ... let me give you an example.

David Rosenthal 1:04:01 A healthy Twitter there on your phone.

David Senra 1:04:04 And-

David Rosenthal 1:04:04 So is that what, like... How, how many times a day, like, how often are you just pulling up Readwise and, and-

David Senra 1:04:10 Almost every day, and if I'm not doing it on Readwise, I'll go to, like, my bookshelves. So what will happen is, um, you can pull a book off my shelf, and I'm thinking about this for, like, my kids. Long after I'm gone, my kids can, like, "What was my dad into?" You know, and they can go back and see, "Oh, and when he was 35 or 38, this is the podcast he made. Let me go find that book."

Host 1:04:30 Mm.

David Senra 1:04:30 And then they can pull it off the shelf and be like, "Oh, this is the line he thought was interesting. Oh, wow, you see Dad's handwriting here." And like, so I use this for myself, where I can pick up a book and, quote, unquote, "read it," reread it in 30 minutes by rereading my highlights and notes-

Host 1:04:40 Mm

David Senra 1:04:40 ... and now I'm like, it's back in, back, like, in the front of mind. Um, and then what happens is, like, you can do this anytime. Like, people are like, "Oh, I'm running late for lunch." I don't give a shit.

David Rosenthal 1:04:50 Yeah.

David Senra 1:04:50 Like, I'll just do this, or I'll answer DMs, or I'll... I always have stuff to do with me, but I use it as a form of practice. The reason I said this is, like, it sounds stupid. People think it's maybe... Maybe they think it's silly. I don't

David Senra 1:05:00 know. But I read this book, uh, it's episode 212 of Founders. It's called Michael Jordan: The Life. It's a 600-page biography, and in that book-

David Rosenthal 1:05:06 You just have, like, this encyclopedia knowledge, too, of the numbers of your episodes, which I'm so impressed by.

David Senra 1:05:11 I don't. It's only because I reference that all the time, so when- if you look up something over and over again-

Host 1:05:15 Yeah.

David Rosenthal 1:05:16 Yeah, yeah.

David Senra 1:05:16 It's repetition. Everything in life is repetition. Sam Walton's career is repetition. You know, like, it's like, I just think you're trying to... This is what I asked Charlie. Like, he- one of the most interesting things he said, he's like, "One of the best things that ever happened to me is I got rich later in life."

Host 1:05:30 Mm.

David Senra 1:05:30 You know, like, he saw the time-

David Rosenthal 1:05:31 What do you mean by that?

David Senra 1:05:32 ... and how difficult it was. Like, he was talking about, like, um, imagine you being, like, a b- super famous or rich when you're, like, 21 or 25, and how disorienting. He's like, "I was a full-grown man-

David Rosenthal 1:05:42 Yeah

David Senra 1:05:42 ... like, with a life experience, with a wife and kids and-

David Rosenthal 1:05:44 He had a child who died.

David Senra 1:05:46 Yeah, I did not-

David Rosenthal 1:05:46 Before he got rich

David Senra 1:05:46 ... I did not mention that, yeah.

David Rosenthal 1:05:48 Yeah.

David Senra 1:05:48 Um, but, like, he had all, like, a, you know, a full life of experience, and therefore, also, the, the, a main problem that happens is people don't know. They're like, "I was the son of a poor man. Now I'm rich, and my kids live an unbelievable amount of wealth and privilege. How do I deal with that?" That comes up in the books for hundreds of years. The answer is no one fucking knows, right? [laughs]

Host 1:06:07 [laughs]

David Senra 1:06:07 And so with Charlie, though, the benefit is he didn't have a famous last name or a lot of wealth. His kids were, like, grown.

David Rosenthal 1:06:14 Right.

David Senra 1:06:14 They wouldn't have to deal with that when you're-

Host 1:06:15 Yeah

David Senra 1:06:15 ... five or seven or 10. He also gave me some advice that was fascinating.

David Rosenthal 1:06:20 You do, like... You gotta pay that bill eventually, though. Like, his grandkids have to-

David Senra 1:06:24 Well, so how do you deal with this, though, right?

David Rosenthal 1:06:25 Right.

David Senra 1:06:25 Like, he's multi-billionaire. Like, that's an insane-

Host 1:06:29 Right.

David Senra 1:06:29 I just-

Host 1:06:29 This is, this is a five-generation problem.

David Rosenthal 1:06:30 Not only is he a multi-billionaire, he's like... People like us talk for hours about him. He's like a celebrity.

David Senra 1:06:36 So I, um, just read this fantastic book. I like reading obscure books, because go back to what Jeff Bezos said, "Differentiation is survival." So, like, I'll find, like, weird books. Like, me and Sam were in this weird... I was searching for books for you guys yesterday. I couldn't find any. I will order them and bring some to you, 'cause I always bring books, and I was really... We went to three different bookstores. I'm not kidding. Like, I-

David Rosenthal 1:06:53 You brought energy drinks instead. [laughs]

David Senra 1:06:55 Yeah. But no, we lit- like, bl- bless Sam and his patience with me, and, like, drove me all around Menlo Park and Palo Alto yesterday going to bookstores.

Host 1:07:01 [laughs]

David Senra 1:07:02 Like, I was literally looking for you guys.

David Rosenthal 1:07:03 What a, what a great-

Host 1:07:04 Like, you had specific books in mind.

David Rosenthal 1:07:05 Oh, my God. [laughs]

David Senra 1:07:05 No, no, no, I like going to used bookstores-

David Rosenthal 1:07:07 And just see what-

David Senra 1:07:07 ... and then, like, I think of-

Host 1:07:08 Oh

David Rosenthal 1:07:08 ... yeah. Oh

David Senra 1:07:08 ... how I, my, my interpretation of you guys in my mind, and I'll... I just know if this book is good for that person. Like, the, the Charlie Mung- or the Henry Flagler book, I knew that was good for Charlie Munger because of what he said.

David Rosenthal 1:07:18 Wow.

David Senra 1:07:18 So I don't know what's gonna happen.

David Rosenthal 1:07:20 Wow.

David Senra 1:07:20 Now, I do have two books picked out for you guys, which I'll send you, but, um-

David Rosenthal 1:07:22 Oh

David Senra 1:07:22 ... they're not, they're, like, newer books. But anyways-

David Rosenthal 1:07:25 By the way, that sounds like a great day, driving around with Sam Pinky and-

David Senra 1:07:29 Yeah

David Rosenthal 1:07:29 ... going to bookstores. Like, what, what, what-

David Senra 1:07:30 Yeah, to talk

David Rosenthal 1:07:31 ... what better day could you spend?

Host 1:07:32 And then also, the peninsula is, like, beautiful, so like-

David Rosenthal 1:07:34 Yeah.

David Senra 1:07:35 Yeah, and, like, you know, Sam's unbelievably intelligent, and, like, she's got a weird alien brain, as I always tell him. Uh, our friend- our mutual friend, Mitchell Baldridge, that all three of us know, says, uh, Sam has a giga brain. I think he's se- I think, I think he's, like- [laughs]

David Rosenthal 1:07:47 I've heard him say that before.

David Senra 1:07:47 I think that's what he said-

David Rosenthal 1:07:48 Yeah, yeah

David Senra 1:07:48 ... his description of it. Um, but I like obscure books. I read-... uh, this book that is very hard to find. It's, like, 300 bucks. Uh, it's called The Invisible Billionaire. Daniel Ludwig, uh, was the richest person in the world in the '80s, and no one knew who he was. He paid, uh, a public relations firm to keep his name out of the papers, [chuckles] okay? And-

Host 1:08:06 Do what your competitors don't. [laughs]

David Senra 1:08:08 Yeah, so he's just like, "I don't wanna be known." And a lot of his was, like... it's, like, shipping, and oil, and refining, and mining, and, and, and all that other stuff. But the author makes the point in the book that how different a million and a billion is, going back to Charlie Munger, right?

Ben Gilbert 1:08:20 Oh, yeah.

David Senra 1:08:21 And he goes, uh, "A stack of... A million dollars in a stack of $100 bills is, like, 40 inches, you know? Uh, a billion dollars in a stack of $100 bills would be ta- would be three times taller than the Empi- Empire State Building."

Host 1:08:32 Yeah.

David Senra 1:08:33 And so, like, for us, like, "Oh, that, that guy's kinda rich." It's like, no, the billionaire and millionaires are not in the same category. It's so disorienting.

Ben Gilbert 1:08:39 I, I... This is also a thing where, like, the English language has done us a disservice by naming two things that are a thousand times different, very similar-

David Senra 1:08:48 Yeah

Ben Gilbert 1:08:48 ... words.

David Senra 1:08:48 It sounds similar.

Ben Gilbert 1:08:49 Yeah. [chuckles]

David Senra 1:08:50 So-

Ben Gilbert 1:08:50 But they're not similar at all.

David Senra 1:08:52 What was... A lot of people were asking, and, like, think about all the wealthy people that, that Charlie talks to. Um, and they asked, like, "Okay, what do I do with, like, this wealth with my kids?" And it's like, you know, it's, like, "If you give your kids a bunch of money, is it gonna demotivate them?" And Charlie goes, "Of course it's going to!" [laughing]

Ben Gilbert 1:09:09 [laughs]

David Senra 1:09:09 So he's like-

Host 1:09:10 Of course.

David Senra 1:09:10 But he's like, "You know," it's like, "Again, like, this should be obvious to you." So he says, "I don't try to steer his kids or his grandkids into what they should do for a living," which is Charlie Munger's... One of his best piece of advice that I took to heart is, like, follow your natural drift.

Host 1:09:21 Yeah.

David Senra 1:09:21 Like, how I pick books. There's been, like, 15 or 20 that I've read completely or half, and it's like, "I don't like this book. I'm not making an episode about it." It... I, I go to my bookshelf, and I have, like, probably 80 or 100 books I haven't read yet. Most come from the audience. And I was like, "What am I most excited to, to learn about now?"

Host 1:09:36 Yeah.

David Senra 1:09:36 And that's how I pick it, right? So following natural drift, which is-

Host 1:09:37 Which is also more or less how we pick episodes, too. We, we have a little bit more planning, 'cause now, like, there's such long lead times, but it's kinda like, "What's interesting to us right now?"

David Senra 1:09:47 Yeah, 100%.

Ben Gilbert 1:09:48 Very emotional.

David Senra 1:09:49 So he's like, "You know, don't try to steer them too much," and he's like... He definitely feels that they're... some of them are gonna be less motivated because they're born rich, but he said this was the most surprising thing. But he goes, "You have to give them the money anyways, or they're gonna hate you for it." [laughing]

Ben Gilbert 1:10:04 [chuckles]

David Senra 1:10:04 And I was like, "That's, like..."

Host 1:10:05 That's quite insightful.

David Senra 1:10:05 'Cause I- my answer before this, I've read so many, like, family dynasty stories-

Host 1:10:09 Right

David Senra 1:10:09 ... and I'm not saying I'm trying to predict a dynasty.

Host 1:10:09 Where they decide, "We're not gonna give them money."

David Senra 1:10:11 Or no, they did, and it ruined them.

Host 1:10:13 Mm.

David Senra 1:10:13 Like, did you guys... You guys haven't done an episode on-

Ben Gilbert 1:10:15 That's the common case

David Senra 1:10:16 ... TCI, John, John Malone-

Ben Gilbert 1:10:17 Not yet

David Senra 1:10:18 ... Cable Cowboy?

Host 1:10:18 Looking to, yeah.

Ben Gilbert 1:10:18 That's like, in... That will happen this year.

Host 1:10:21 For sure.

David Senra 1:10:21 So you know why? Um, th- that was one of the books that was recommended the most. They're like, "You gotta do Cable Cowboy. You gotta do Cable Cowboy. You gotta do Cable Cowboy."

Ben Gilbert 1:10:29 We both have read the book. It's awesome.

David Senra 1:10:31 It's excellent. And there's... So you know the story I'm about to tell you, where the crazy thing is, like, I'm always thinking about... I didn't understand this before studying- dedicating my life to studying history, right? Where it's like, "Oh, wow, the decisions I'm making now can, can reverberate through the generations." That's a crazy thing, where Bob Magnus, which is the founder of TCI-

Ben Gilbert 1:10:48 Mm-hmm

David Senra 1:10:48 ... this, you know.

Host 1:10:49 Yep.

David Senra 1:10:49 Um, he doesn't have any money, he's in rural Texas, wants to do this- jump into this new industry, cable, right? Full of cowboys, like literal cowboys.

Host 1:10:56 Literally.

David Senra 1:10:57 And he doesn't have money, so his dad gives him a $2,500 loan. So Bob takes that $2,500 loan, and then, ch- let's say 40 years later, Bob dies, and he's gotta pass on his money, right, that was created from the company he created, to his two kids. And he winds up giving them, I think... I don't know the numbers. I wanna say, like, 200 million each, two sons. So think about that one decision, and I think I talked about in the episode, and if I didn't, it's a big mess-up on my part. And I stopped in that part, and I was like-

Host 1:11:27 I'm pretty sure you did.

David Senra 1:11:28 I was like, "Hold on. Think about that." Like, what if his dad didn't give him the 2,500? He's like-

Host 1:11:33 Yeah, you talked about that.

David Senra 1:11:33 Yeah, so his $2,500 turns into 400 million, let's say 200 million each, for his grandsons. Changed his grandsons' lives.

Ben Gilbert 1:11:41 Right.

David Senra 1:11:41 That-

Ben Gilbert 1:11:41 See, that means you... rule of thumb, you take, like, I don't know, probably three more generations after that of wealth guaranteed before they-

David Senra 1:11:47 That wealth is gone, because I think it went up their nose.

Host 1:11:49 Mm.

David Senra 1:11:50 Like, that was the, the... So you-

Ben Gilbert 1:11:51 It's pretty hard in one generation to-

David Senra 1:11:53 But they... I don't know, like, the point was, is like, they... That wasn't good for them, because they were not motivated. They did a bunch of drugs. I think they went to jail, like, that kind of stuff.

Ben Gilbert 1:12:02 Mm-hmm.

David Senra 1:12:02 And you see that so much, so my thought was like, "Oh, like, get them a little bit, but not enough that they don't have to work or whatever," and Charlie's like, "They're gonna hate you."

Host 1:12:11 Yeah.

David Senra 1:12:12 And, like, what's the point?

Host 1:12:12 That's so, such a good ins- like, yeah.

David Senra 1:12:14 It's just, like, human nature.

Host 1:12:15 Yeah.

David Senra 1:12:15 This is my biggest takeaway from Charlie, and I think the biggest benefit that people that listen to Founders and Acquired, and then hopefully read a bunch of the books and do studying on their own, are gonna realize. This is, like, Charlie... I, I said it at the top of my notes, and this is the first thing. This is, like, it's comforting. The conversation I had w- with Charlie was comforting, the same way that people tell me listening to Founders is comforting. Is like, Charlie has an almost complete indifference to problems. Troubles, from time to time, should be expected. This is inescapable, so why would you let it bother you? And the difference... And, and if you think about, that's the main takeaway from the, this three-hour dinner I had with him, right? And if you think about, how does he avoid this? He avoids it by great things have less problems. You're never gonna escape problems-

Host 1:12:56 Mm

David Senra 1:12:56 ... but if you're around great people-

Host 1:12:57 Yeah

David Senra 1:12:57 ... like, they're not gonna throw up, just like a great business doesn't throw up big problem after big problem after big problem, your, your wife, your kids-

Host 1:13:05 Yeah

David Senra 1:13:05 ... your friends, your coworkers. His whole thing is aiming for the highest quality you can get, and then that's gonna solve 99% of your problems, and then when you have the problem, the inevitable problems are still gonna come, okay, you just deal with it.

Host 1:13:15 Yep.

David Senra 1:13:16 He talked about, like, when he lost the money on Alibaba. He brought that up, you know, that people try to make fun of him for or whatever.

Host 1:13:20 Yeah.

David Senra 1:13:20 It's like, you guys are missing the point. Like, you're not gonna escape, get through life without making mistakes. The, the founder of IKEA has this great quote where he says, uh, um, "Making mistakes is the privilege of the active. Only those asleep make no mistakes."

Host 1:13:35 Yeah. It's a version of the man in the marine... uh, man in the arena.

Ben Gilbert 1:13:37 Yeah.

David Senra 1:13:38 The, yeah, the Teddy Roosevelt idea.

Host 1:13:39 Yeah.

Ben Gilbert 1:13:40 So, okay, so what do you think is the ideal way to handle it if, at 35, someone becomes very wealthy, and so when their, their kids' memory starts around age three, so for their entire kids' memorable lifetime, they've grown up in wealth and privilege? Like, how does one handle that?

David Senra 1:13:57 I have no idea.... I have no idea. Like, I don't- the, the, me even giving you an answer to that is like, uh... There's this guy named Charles Kettering or Kettering. I don't know how to pronounce his name. Uh, I read his biography. I think it's episode 127 or something like that. So he invented the electric, uh, starter. He founded AC Delco. That gets acquired by GM.

Ben Gilbert 1:14:17 Oh.

David Rosenthal 1:14:17 Right.

David Senra 1:14:18 He is the head of research and development at GM when GM is the most valuable company and most, like, the, the cutting edge of technology company in the world at the time. There's a story from his wife and his daughter in that book, uh, saying, "Hey, when he dies, there's only one- there's only gonna be three words on his, um, on his tombstone: I don't know." 'Cause that's what he would say over and over and over again.

David Rosenthal 1:14:40 Yeah.

David Senra 1:14:40 And one, there's a... He's having this conversation, same thing. He was the son of a poor man. He is now a rich man. His kids are rich. He's talking to other people that had the same experience, his peers. They're like: "What do you do?" And the answer they came up with?

David Rosenthal 1:14:52 No.

David Senra 1:14:52 "I don't know."

David Rosenthal 1:14:53 Yeah.

David Senra 1:14:54 'Cause it's so dependent on who the person is.

David Rosenthal 1:14:55 Right.

David Senra 1:14:56 Like, maybe you give them money, they're going to Bob Magnus's grandsons. Maybe they're, you know,

David Senra 1:15:00 they're like Warren Buffett's kids, where, like, they, they run foundations, and they wanna give the money away. And I don't think they're coke addicts. I don't know, but, like, you don't- it's just dependent on the person. So I- if there was a simple... If there was a correct answer, I think some of these guys, some of these guys-

Ben Gilbert 1:15:13 Would've figured it out

David Senra 1:15:14 ... would've figured it out.

David Rosenthal 1:15:14 Well, that's the thing about humans, right? Like, every person is different.

David Senra 1:15:17 Yeah. Yeah, so it's- I have no idea. Um, it- uh, really, and that's the biggest thing, where I think, um, this is one of the lessons I learned from the podcast where, you know, you mentioned this at the beginning, Ben, where most of these people are just so- they're, like, best in class in this one dimension in the world, and of course, to get that, they had to, to be poor. They had to- they couldn't optimize all other areas of their life at the, at what they did for, like, their work, right?

David Rosenthal 1:15:44 Mm-hmm.

David Senra 1:15:45 You know?

Ben Gilbert 1:15:45 Mm-hmm.

David Senra 1:15:45 Sam Walton is one of the rare guys where he gets to the end, he knows he's dying, 'cause he's got cancer all over his body when he's writing that book.

David Rosenthal 1:15:50 Yeah.

David Senra 1:15:51 And he's like: "Listen, if I could do everything again," he's like, "Yeah, I missed some of my kids' childhood." They worked in the stores, and he took them with him, but he's like, "I'd do it again!" He's like [chuckles] , "I had to do this. I had to get after it. I had to improve." A lot of them, you know, get to the end of their life and like, "Oh, I, I regret..." The founder of IKEA has the best words on this. He said, um, you know, "I had three sons growing up." He started IKEA when he was, like, 17, worked on it till he was, like, 80-something, and he's like, "I sacrificed my three sons' childhoods. I regret it." He goes, " Anybody that has kids knows that childhood does not allow itself to be reconquered." Um, and so, like, we were hanging out today. We were gonna do a recording, go to dinner, and I was- my plan was I was- I wanna see my son. And he's like, "And my daughter." It's like, I'm gonna take the red-eye. And then I realized, it's like, yeah, but I wanna spend time with Dave and Ben, so I'm leaving early tomorrow morning. But it's like, I'm doing this as fast as possible, and if I had to, I'd, like, fly back and forth because, like, your kids are... Think about, like, you- the relationship-

David Rosenthal 1:16:43 Yeah

David Senra 1:16:43 ... you guys have with your parents. Are, are they still alive?

Ben Gilbert 1:16:44 Yep.

David Rosenthal 1:16:45 Yep.

David Senra 1:16:45 Okay, so you get to talk to them, see them, but you have your whole life, right?

David Rosenthal 1:16:49 Right.

David Senra 1:16:49 When your kids are small, there's, like, this tiny window when they're, like, two to five to six, where you're everything to them.

David Rosenthal 1:16:56 Oh, yeah.

Ben Gilbert 1:16:57 Mm.

David Senra 1:16:57 Even my-

David Rosenthal 1:16:57 You, you and I have talked about it.

David Senra 1:16:58 Yeah.

David Rosenthal 1:16:58 I absolutely feel this way.

David Senra 1:16:59 Even my 10-year-old-

David Rosenthal 1:17:00 We were-

David Senra 1:17:00 ... daughter, like, right now, she wants to spend time with me. Like, it was the cutest thing ever. Um, I was leaving, going to LA to see Charlie and then coming up to San Francisco to see you guys, and she texts me. She goes, uh, "I'm wearing your sweater, 'cause, like, it makes me feel close to you-

Ben Gilbert 1:17:14 Aw!

David Senra 1:17:14 ... like, while you're gone." You know what I mean? But if you ask her, "Do you wanna spend movie night with Dad and Mom, or do you wanna go play Roblox with your friends?" Every-

David Rosenthal 1:17:22 For sure the latter.

David Senra 1:17:23 Their, their friends-

David Rosenthal 1:17:24 Yeah.

David Senra 1:17:24 And she loves me. Don't get me wrong, but, like, their f- their friends are way... They're really important to them.

David Rosenthal 1:17:29 Yeah.

David Senra 1:17:29 Where, like,

David Senra 1:17:30 every day I miss, my son's about to turn three, it's like, I'm not gonna get back that day-

David Rosenthal 1:17:34 Yeah

David Senra 1:17:34 ... and there's only, like, a thousand of those days.

Ben Gilbert 1:17:36 Mm.

David Rosenthal 1:17:36 Yeah.

David Senra 1:17:37 And my wife won't have any more kids, even though I was like, "I want a bunch of kid..." [laughing] Like, once I-

Ben Gilbert 1:17:41 [laughing] Like, exactly.

David Senra 1:17:42 Because I want a bunch! And she's like: "No way." I say, "Hey, you're the... I don't have to get pregnant, so that's fine."

David Rosenthal 1:17:46 Something that Buffett and Munger did with the Graham Group that, like, was way ahead of its time, that now anybody can do, is they formed their social networks outside of geographic barriers.

David Senra 1:17:58 Yeah.

David Rosenthal 1:17:58 And they found their, like, most compatible, most like-minded, highest level of talent, you know, peers.

David Senra 1:18:05 Mm-hmm.

David Rosenthal 1:18:06 And then they just, like, got on planes and got to go see them. You know, and, like, that was really hard to do back in the day, and now anybody can do it. It's kinda like the Bill Gurley, you know, "You have no excuse not to do that."

David Senra 1:18:15 You also... But here's the thing, what people get wrong is, they're like: "Oh, I wanna meet this guy." You have to do the work necessary to make them worth your time, right? Which is, like, the unfair advantage that the three people sitting in this room have-

Ben Gilbert 1:18:26 Mm-hmm

David Senra 1:18:27 ... is that it doesn't matter. That's why, like, in the last six weeks, I've gone to lunch or dinner with multiple billionaires. This is like... And the people that, like, you get to talk to and all this other stuff, it's just like, this dude is crazy. He's read 300 biographies of entrepreneurs. There's no way I'm gonna have dinner with him and not pick up one idea.

David Rosenthal 1:18:41 Yep.

David Senra 1:18:41 Like, and then now I've built this machine where, like, "Oh, that's an interesting idea. I'll just plug it into this business." And, like, it's not a financial transaction by any means, but there's no- I- the reason- it's not that like... Charlie was the first person I met that I was actually nervous about, and it's... The reason I'm not nervous is 'cause I know I've done the work.

David Rosenthal 1:18:57 Yeah.

Ben Gilbert 1:18:57 Yeah.

David Senra 1:18:57 Like, you can't put me in a room with anybody on the fucking planet, and I'm not gonna be able to tell them at least one interesting thing.

David Rosenthal 1:19:03 Yeah.

David Senra 1:19:03 It doesn't mean I'll be the most, the best dinner they've ever had in their life. That's not what I'm saying. It's just like, they're gonna hear something that's like, "Oh, that's interesting," and that goes to their own brain, and it's only because I've spent six years, and, and same with you guys. It's like, oh, you should feel comfortable. Like you guys mentioned earlier, it's like, um, the, the- your audience feels like s- you know, two football fields, and like, oh, it's a little bit of like, uh, not... You didn't use the word insecurity, but like, you know, a little, like, nervousness. I want these people to, like, like me.

Ben Gilbert 1:19:28 Yeah.

David Senra 1:19:28 It's just like-

Ben Gilbert 1:19:29 Oh, yeah.

David Rosenthal 1:19:29 Yeah, it's like, it's like-

David Senra 1:19:30 You... You under-

David Rosenthal 1:19:31 There's a fear pushing you from behind.

David Senra 1:19:31 But you know, like, you've most likely read... You, you're, you're- you've know more about the subject than they do.

Ben Gilbert 1:19:37 Sure, I do.

David Senra 1:19:38 Oh, yeah.

Ben Gilbert 1:19:38 But I need to make something worthy of their time.

David Senra 1:19:40 Yes, that is an admirable... Yeah.

Ben Gilbert 1:19:42 It's like I could... Who cares? I could spend all the time in the world and fail to synthesize the narrative and the takeaways, and all of a sudden, then I've just, you know, then, then I've failed them.

David Senra 1:19:52 Yeah.

Ben Gilbert 1:19:52 It... Regardless of how much work I did, the, the product wasn't good, and so that, that's, that's the thing-

David Senra 1:19:57 It's hard to not have the product be good because you did the work,

David Senra 1:20:00 I guess is my point.

Ben Gilbert 1:20:01 We- yeah, I think we now have a process that-... uh, means that when you and I put in the work, the pro- the product is good, but it took a long time to, to arrive at that. It's almost like, um, uh, you know, the, uh, this is another Sam Hinkie thing: trust the process.

David Senra 1:20:20 Yep. The um-

Host 1:20:21 Oh, that was chapter.

David Senra 1:20:22 I guess the, the, the point I was making there, though, is, um, like, because you guys do such, so much preparation, and, like, it's now y- your life's work, y- like, it's just so much... It's, it's gonna be so hard not to add value to the people in your lives, whether it's, like, friends that never show up on a podcast or friends that, like, you don't have a business relationship with.

Ben Gilbert 1:20:43 Mm-hmm.

David Senra 1:20:43 'Cause it's like, and, like, you're just gonna add value because what you do is so rare. Like, I, uh, Naval Ravikant has this, uh... He's influenced my thinking a lot, too, and he has this thing in, um, in the Naval, The Almanack of Naval by our friend Eric Jorgensen.

Ben Gilbert 1:20:56 Yep.

David Senra 1:20:57 And he's just like, "If you read an hour a day, that puts you in the .0001% of humans."

Ben Gilbert 1:21:01 Right.

David Senra 1:21:01 And I'm like, "That can't be true!"

Ben Gilbert 1:21:03 Oh, yeah. No, that, that's the dirty secret of Acquired and founders, is that people don't read books. So if you just read them and then tell people what's in the books, you're gonna 100x the market for books. [chuckles]

David Senra 1:21:13 And I couldn't believe that. I was having dinner with the same friend, uh, that was telling me, like I told him, I was like, "Oh, I'll try to build a business around, like, uh, my reading." This is, like, a couple months ago. And he's like, "You vastly overestimate how much people read." He goes, "How much do you... How many books a year do you think the average person reads?" I was like, "I don't know, 12?"

Ben Gilbert 1:21:26 It's one.

Host 1:21:27 It's, like, .5.

Ben Gilbert 1:21:28 It's zero!

David Senra 1:21:29 I don't know.

Ben Gilbert 1:21:29 I remember asking-

Host 1:21:29 Yeah

Ben Gilbert 1:21:29 ... a book publisher. He go- and he said, "America reads a book a year."

David Senra 1:21:32 They, well, he, well, he quoted some other study. I, I said, "12." He's like, [laughs]

Host 1:21:36 [laughs] No!

David Senra 1:21:37 "No, not 12." He's like, "It's zero." The average is zero.

Host 1:21:41 Yeah.

Ben Gilbert 1:21:41 Huh?

David Senra 1:21:42 It's crazy. And yeah, to your point, um, I've become friends with a bunch of, uh, writers. Some of them I met through the podcast, and they've been telling me, like, teaching me about the publishing industry and just breaking down, like, 98% of books ever published sell less than 5,000 copies.

Host 1:21:57 Yeah.

David Senra 1:21:57 It's the power law, everything.

Ben Gilbert 1:21:58 The, the book-

Host 1:21:59 It's yeah.

David Senra 1:21:59 Yeah

Ben Gilbert 1:21:59 ... the book business is the venture business. It's, which is so interesting to me how, uh, the advance model works. It's, like, quite similar to a seed financing. I mean, they, they put out, you know, $50,000 for an advance on your book, which is, you know-

David Senra 1:22:12 Yeah

Ben Gilbert 1:22:12 ... covers your cost of living while you're writing it, and, like, th- they kind of don't care about recouping it because the-

David Senra 1:22:17 No, they, it's even worse

Ben Gilbert 1:22:18 ... the whole business is about, "Do I, did I sign up, you know, um, James Clear this year?"

David Senra 1:22:24 Yeah.

Ben Gilbert 1:22:24 And, like, you know when you have a Michelle Obama on your hands, and you have to pay for it, but you don't know when you have a James Clear on your hands.

David Senra 1:22:30 Yeah.

Ben Gilbert 1:22:30 And when that becomes the book that America reads this year, you better make sure it's in your publishing house and not one of the other three big or four big, whatever it is, publishing houses.

David Senra 1:22:39 Seed funding is better because their advances are recoupable.

Ben Gilbert 1:22:43 Right.

David Senra 1:22:43 So it's like this... I, we was having this long conversation, uh, we-

Ben Gilbert 1:22:45 It's the most preferred stock.

David Senra 1:22:47 Yeah, we were, we were talking before-

Ben Gilbert 1:22:48 It's par- it's participating preferred.

David Senra 1:22:50 We were talking before we started recording. I was like, "Man, Jimmy Sony would be great to do a sessions with just because he's got this historical knowledge of PayPal," PayPal being so important-

Ben Gilbert 1:22:56 Yeah

David Senra 1:22:56 ... to, like, Silicon Valley history. And he, we were talking about this, and he's like, "No, like, I have to pay that back through sales." I'm like, "Oh!"

Ben Gilbert 1:23:02 Yeah.

David Senra 1:23:02 'Cause, uh, the thing is, um, going back to, like, um... Do you guys listen to Game Craft, Blake Robbins and-

Ben Gilbert 1:23:08 Oh, yeah.

Host 1:23:08 Oh, so good.

Ben Gilbert 1:23:08 Every episode.

Host 1:23:09 Yep.

David Senra 1:23:09 So excellent.

Ben Gilbert 1:23:10 So good.

David Senra 1:23:11 Like, unbelievably good. And what I loved about is how they focused on the business model innovations and how one decision by some-

Ben Gilbert 1:23:17 Yep

David Senra 1:23:17 ... random group of programmers in the 1980s affected a business model decision 10 years later, or whatever.

Ben Gilbert 1:23:22 Yeah.

David Senra 1:23:22 And I, I was talking to Jimmy about this. I go, "The books are fantastic. They, they're the best products in the world." You can, uh... There's a great quote in Poor Charlie's Almanack, which says that, uh, "There's ideas worth billions in a $30 history book." For Charlie Munger and Warren Buffett, that is literally true, right?

Ben Gilbert 1:23:36 Yep.

Host 1:23:36 Yep.

David Senra 1:23:36 Um, and what I don't understand is, like, you guys have such a high-value product, and you haven't innovated on the business model at all.

Ben Gilbert 1:23:42 Yeah.

David Senra 1:23:42 And so I was telling, um, Jimmy, I was like, "Do you know the deal? Like, like, you just- you- think about this as, like, an entrepreneur. Like, you're not a writer, you're an entrepreneur, and your product just happens to be a book. But you can make money off that any kind of way you want. Like, you can just get creative." I go, "People think it's crazy where I'm like, I'm trying to be the Jay-Z of podcasts," and people are like, "What the hell is wrong with you?"

Ben Gilbert 1:24:00 [laughing]

David Senra 1:24:01 And, uh, I did, like, that episode-

Host 1:24:02 I should... Have you done episodes on Jay-Z?

David Senra 1:24:03 That episode I did on Jay-Z's-

Host 1:24:04 Yeah

David Senra 1:24:04 ... autobiography is one of my most popular.

Host 1:24:06 I bet.

David Senra 1:24:06 People listen to it two, three, four, five times.

Host 1:24:07 I gotta listen to it. I love Jay-Z, and I love you, so, like, I can't believe I haven't listened to that episode.

David Senra 1:24:10 Jay-Z is, has founder mentality, and he had it since he was a kid.

Host 1:24:13 Oh, 100%, yeah.

David Senra 1:24:13 And you just see everything his whole career. And people look at him and like, oh, like, d- this is another thing about... Intelligence manifests itself in d- vastly different ways. It's not always, like, credentialed. In many cases, it's not, right?

Host 1:24:23 Yeah.

David Senra 1:24:23 But, like, Jay-Z is a sh- straight-up genius if you listen to him and, and what he did. And he looked at it, he's like, "Yeah." He says it from the get-go. He's like, "I thought I told you characters, I'm not a rapper." He's like, "I'm a businessman, and rap just happens to be my product."

Host 1:24:35 Yeah.

David Senra 1:24:35 "And so I'm gonna think about it like that." I go, "Jimmy, you should do that." I go, "Why don't you just find a deal like Jim- like Jay-Z did with Samsung?" He's like, "What are you talking about?" [chuckles]

Host 1:24:42 Well, that's, like, true founders, entrepreneurs, whatever, you know, founders-

David Senra 1:24:46 Yeah

Host 1:24:46 ... in your case, is the title you wanna put on them, they care about ownership. [chuckles] Like, they own their work. [chuckles]

David Senra 1:24:51 A- and realize that you c- the, the business model matters-

Host 1:24:54 Right

David Senra 1:24:54 ... which is why I brought up Game Craft. So what Jay-Z did, this is years ago, this is his Magna Carta, Holy Grail, probably came out in 2013. So he goes, he goes, um, "You know, I could, uh, record this, this, this, uh, album, and then I could sell like normal. You know, stream it, and then sell it for $10 if you want the physical copy," et cetera, et cetera. He goes, he goes, "What if I just want my money guaranteed?" So he goes to Samsung and says, "Samsung, you're launching this new app, or uh, this new phone, and you have your own app on it. Uh, I'm gonna sell you... I will sell you, uh, a million copies, $5 each. You give me $5 million guaranteed for my album. I'm still gonna own it," so he gets the streaming, uh,

Host 1:25:27 Yep

David Senra 1:25:27 ... rights. He goes, "And so what I'll do is, like, you pay me 5 million. The first million people that get access to my album are gonna be Samsung," that, whatever phone was coming out.

Host 1:25:35 Yeah, yeah.

David Senra 1:25:35 "You download it for free if you have this device." And so it's advertising to the Samsung, and it's guaranteed money to him. I go, "Dude, you're writing about technology founders." I was like, "There's these venture capital funds that have-

Host 1:25:45 Right

David Senra 1:25:45 ... $80 billion of assets under management." Just like, "Hey, will you pay me a million dollars to write this book?" And then you say, "Hey, this book is now presented by whatever firm." This is why me and you have, uh, us, we have talked about this privately. You guys already know this, was like, there's been like, something like 15 acquisition or investment offers for Founders. I've said no to every single one. A lot of them are like this, where it's like, oh, well, you have the attention of people that are valuable.

Host 1:26:07 Yeah.

David Senra 1:26:07 You just said the worst thing that could happen to a venture firm is they miss the, the hit of that, so they have to expand. Like, they have to make sure they catch that, right?

Host 1:26:14 Yep.

David Senra 1:26:15 So it's like, "Hey-... we'll, we'll pay for Founders or whatever, give you X amount of money, pay you to do it. You do exactly what you do. The only difference is, essentially they're trying to buy up ad inventory forever. It's like, "Hey, Founders is presented by X company. If you're gonna raise money, email here," you know?

David Rosenthal 1:26:29 Yeah, yeah.

David Senra 1:26:29 And the, the response I have when these- I get these pitches is like, "If I did that, that means I'm not actually learning the lessons in the books."

David Rosenthal 1:26:36 Right. Right.

David Senra 1:26:37 Which is like, you never give up control. It's like, "No-

David Rosenthal 1:26:40 Ooh, that's interesting

David Senra 1:26:40 ... why would you ever do that?"

David Rosenthal 1:26:41 Let's, let's dive into a, like, a deal structure on that. So, like, w- what if they weren't... What if you weren't giving up control, and what if you weren't giving up economics forever? You're just doing a period of time buyout of your, all your ad inventory.

David Senra 1:26:54 This is the intelligent thing. This is what Tegus is doing with Invest Like The Best.

David Rosenthal 1:26:58 Invest Like The Best, yeah.

David Senra 1:26:59 And this is why, like, it's crazy to me when I talk to people and they don't understand this. They're... I had a conversation, uh, with a founder, and he's like, "It's really weird," I'm not gonna say who it was. He's like, "It's really weird that this company is running ads on that podcast every single episode forever." And I'm like, "Oh!"

David Rosenthal 1:27:14 Not at all.

David Senra 1:27:14 And I go, "Oh, see," [chuckles]

David Rosenthal 1:27:16 Just standing, a moving parade, not standing army. [chuckles]

David Senra 1:27:18 Exactly! I go, I go, "David Ogilvy ran the same exact ad-

David Rosenthal 1:27:21 [chuckles]

David Senra 1:27:21 ... in the same magazine for 30 years, and it was still effective."

David Rosenthal 1:27:24 Yeah. Yeah.

David Senra 1:27:25 And so I went... I was like, "This is..." I go, "What do you think Coca-Cola's been doing for 100..." [laughing] This is not new ideas!

David Rosenthal 1:27:29 [laughing] So either Coca-Cola is really dumb, or-

David Senra 1:27:32 Exactly. Exa- or exactly

David Rosenthal 1:27:33 ... And I don't think they're dumb.

David Senra 1:27:34 And I talked to-

David Rosenthal 1:27:34 Huh, Apple has the prime billboard in every major city in America to advertise whatever the latest iPhone is in a s-

David Senra 1:27:41 Forever.

David Rosenthal 1:27:41 Forever.

David Senra 1:27:42 So I talked to, uh, Michael Elnek, who's the co-founder of Tegus.

David Rosenthal 1:27:46 Tegus, yeah.

David Senra 1:27:46 And he's an a- You guy- Oh, yeah, we all know each other.

David Rosenthal 1:27:48 Great dude.

David Senra 1:27:48 Uh, and we talked about this. Like, and this is a, uh, another example, 'cause this sometimes somewhat affects our business because, uh, when there's, like, a decline in overall economics, like, uh, ad markets usually shrink a little bit, and ad rates come down, and it's like, oh, you're doing exactly what investors do.

David Rosenthal 1:28:04 Yeah.

David Senra 1:28:04 Like, when... What do, what do Charlie and Buffett do when there's a crash? They don't-

David Rosenthal 1:28:08 Right.

David Senra 1:28:08 They fucking deploy!

David Rosenthal 1:28:10 Right.

David Senra 1:28:10 Deploy.

David Rosenthal 1:28:10 Right.

David Senra 1:28:11 You read Izzy Sharp's fantastic autobiography, the, the founder of Four Seasons, right? And he says this.

David Rosenthal 1:28:15 Yeah.

David Senra 1:28:15 He goes, he's building what didn't exist at the time, the only chain of five-star hotels at the time. He- and he says, "I grow..." And this is, every founder does this. Andrew Carnegie, John D. Rockefeller, Henry Clay Frick, when they have recessions, that's when they grow.

David Rosenthal 1:28:27 Yeah.

David Senra 1:28:27 So what he would do is-

David Rosenthal 1:28:28 Mm

David Senra 1:28:28 ... his, his competitors would pull back on advertising. He would spend more.

David Rosenthal 1:28:30 Yeah.

David Senra 1:28:31 And he says, he claims, I think in the book, he, he increased his market share by, like, 25 or 28% using this over and over again, because human nature is, "Oh, crap, uh, things are sh- small-

David Rosenthal 1:28:39 Yeah

David Senra 1:28:39 ... and they cut-

David Rosenthal 1:28:40 Yeah.

David Senra 1:28:40 This is what Ogilvy said. Ogilvy's like, "If you need advertising to sell your product, it's not a marketing expense, it's a production cost." It's a pr- it's a pr- uh, it's actual, uh, cost of manufacturing your product. And so what, what Tegus, what Michael Elnek did that was such a fucking genius move was, first of all, he knew something was working, right? And he scaled up through podcast ads, and, um, he knew it was effective, and then he's like, "Oh, okay, well, like, now you have this, the, all these people in the tech industry, uh, their, their, their stock's cratering. Everybody's, like, running in retreat." What does he do? He goes like, "Oh, uh, call-

David Rosenthal 1:29:14 There's probably available

David Rosenthal 1:29:15 inventory.

David Senra 1:29:15 And so he goes, "Uh, hey, uh, Colossus Network, I'd like to buy up, uh, every single ad inventory- [chuckles] ... for 2023 on every single one of your shows." That's how you know that that likelihood, that guy's gonna win.

David Rosenthal 1:29:28 Yeah.

David Senra 1:29:28 Like, I don't know the details of his business. It's private and everything else. It's like, that's the right decision-

David Rosenthal 1:29:32 Yeah

David Senra 1:29:32 ... the same decision.

David Rosenthal 1:29:32 Yeah.

David Senra 1:29:32 That's what Ogilvy would've done. That's what Buffett and Munger do when they put money in. Like, that is... That's what Coca-Cola does. It doesn't matter the economic climate. It's, you're ever gonna see less Apple f- uh, uh, billboards.

David Rosenthal 1:29:43 Yes or no.

David Senra 1:29:43 You're gonna see less Coca-Cola? No.

David Rosenthal 1:29:44 It's interesting to, like, think about this in the, um, venture business, right? Like, uh, which obviously, as we record this here in mid-March, you know, 2023, [chuckles] there's a lot going on in the venture business.

Ben Gilbert 1:29:56 It's, it's so dynamic right now-

David Rosenthal 1:29:57 Right

Ben Gilbert 1:29:58 ... that I feel like we don't know the last two iterations of what have happened because we've been recording, and I haven't checked my phone.

David Rosenthal 1:30:05 Yeah, [chuckles] right.

Ben Gilbert 1:30:05 Like, that's how fast the world is moving right now.

David Rosenthal 1:30:07 Right. Things are happening very quickly as we speak. Uh, but I think a consequence of that, to your point about, like, you should advertise heavier during recessions, I think differenti- customer differentiation among venture firms is just declining rapidly, right? Like, like, what is-

Ben Gilbert 1:30:24 Well, no. It was until, uh, interest rates went up, but now that-

David Rosenthal 1:30:29 No, but even, like, I, I think-

Ben Gilbert 1:30:31 Capital is scarce again

David Rosenthal 1:30:31 ... I think, I think both the up and the down cycle is, both, I think, are commoditizing.

Ben Gilbert 1:30:35 I totally disagree with this. I think when c- when commod- when capital was a commodity and money was free, it was extremely hard to differentiate yourself as a venture firm or any financial firm. But, like, it, it should be easier than ever to differentiate yourself because the thing-

David Rosenthal 1:30:53 Okay, but how do you... Okay, so how do you differentiate yourself right now?

Ben Gilbert 1:30:57 Uh-

David Senra 1:30:57 You, you guys are doing it.

Ben Gilbert 1:30:58 You, you can... I mean, well, one of them... Like, let's, let's abstract away, like, speaking to the Acquired audience as, as one of them, uh, or as a gigantic means of differentiation.

David Rosenthal 1:31:06 Well, let's just say your XYZ average venture firm out there.

Ben Gilbert 1:31:09 Uh, having money and writing the checks.

David Rosenthal 1:31:11 Right, but, but yes, having money, right? But, like-

Ben Gilbert 1:31:15 I- a year from now, it's like six to 12 months from now, that's gonna be differentiating.

David Senra 1:31:20 Well, this is a great moment to pause and inject some data into this VC funding conversation from our good friends and sponsor of this episode, PitchBook Data. And to underscore my point and bolster my own argument against David-

David Rosenthal 1:31:34 Oh, here we go. Ben, you're bringing our sponsors into this debate?

David Senra 1:31:38 VCs deployed almost $85 billion into private companies in Q4 of 2021 at the peak. In Q4 of 2022, just 12 months later, that had dropped from 85 billion to right around 35 billion.

David Rosenthal 1:31:53 Oof!

David Senra 1:31:54 And just another data point, the number of funds that raised money in 2021 went from 1,270 down to 769 in 2022. And so, like, everyone already knows this, but the numbers really do help you to contextualize the market reset, uh, and obviously, the aftermath.

David Rosenthal 1:32:13 It's so crazy that, like, what? That's a well over 50% drop in capital raise and probably just about a 50% drop in number of funds-

David Senra 1:32:21 Something like that, yeah

David Rosenthal 1:32:22 ... being raised, something like that.

1:32:23 ... but it is still, like, an astronomical amount of capital and number of funds relative to 10, 20 years ago.

Ben Gilbert 1:32:30 Totally. But I do wanna cite a second, uh, research report that PitchBook put out, called What the Future Holds for Private Capital, with another interesting stat. So by 2021, VC AUM, assets under management, had peaked at about $2.6 trillion. Trillion! And due to valuation declines, PitchBook currently estimates that the net asset value is now down around $2 trillion. And of course, most of you know that AUM numbers mostly consist of dollars already deployed, and the vast majority of the rest is committed dollars that have not yet actually been called in capital calls from LPs. So when people end up referring to, like, "Oh, there's all this dry powder available," the amount of, of actual available cash is much, much smaller.

David Rosenthal 1:33:15 And that's before even considering all the dynamics about whether VCs want to call that capital right now from their LPs. [chuckles]

Ben Gilbert 1:33:23 Totally. See, David, now you're just bolstering my argument from where we're sitting with David. Listeners, we'll link to both these pieces of research in the show notes. You can get access to the very best company data. In addition to research, they have, like, just a treasure trove of information on what companies raise what money, when, at what valuations, number of employees, board composition, et cetera.

David Rosenthal 1:33:43 It really is the best. I mean, there is so much noise in this data out there if you search around on Google, on the internet. PitchBook always has the absolute cleanest, like, best data that you can trust, which is super important.

Ben Gilbert 1:33:56 Totally. They have 3.5 million companies in the dataset, 500,000 investors, and over 100,000 funds. PitchBook's awesome. They did the arena show with us last year, and they're, they're just great partners. So if you wanna sign up for PitchBook, they are currently offering a free week trial that is coming up soon. Don't miss it. You can go to pitchbook.com/acquired, get all the details, and just tell them you heard about them from Ben and David at Acquired. Thanks, PitchBook.

David Rosenthal 1:34:23 Thank you.

David Senra 1:34:25 So I have a thought on this. Uh, one, I don't know anything about venture investing. Two, I don't know anything about investing, period. Like, I get to talk to super smart investors, and I'm sure the questions I'm like, "Hold on, you gotta define that for me," and I'm sure they're like, "This kid's an idiot." [chuckles] Um, but it- when, when you guys were talking a little bit about, like, your business and, like, your... the venture game in general, is I just think of, like, what, um, one of my favorite things that I heard, uh, Jeff Bezos say, is, you know, for years, people were like, "Hey, when are you gonna do physical retail? When are you gonna do physical retail? When are you gonna do physical retail?" And he said something that was crazy. He's like, "Physical retailing is an ancient business," and I love that term.

David Rosenthal 1:35:00 Mm.

David Senra 1:35:00 He's like, "It's an ancient business, so I'm not gonna do it until I know, like, I can..." It's so hard to improve on an ancient industry.

David Rosenthal 1:35:06 Yeah.

David Senra 1:35:06 It has to be completely differentiated. You mentioned... I heard you on one of your podcasts, where you're like, uh, you went to the Amazon Go store just as, like, a, like, pure curiosity.

David Rosenthal 1:35:15 Yeah.

David Senra 1:35:15 Like, not like you needed something. And so you guys have probably read that story, too, where it's like at one time they were gonna do, like, put like, meat, and, like, all this other stuff that you'd have to, like, talk to somebody. He's like, "No, you have to redo this. This doesn't make sense." The, the key, the, the, the differentiation here is that you walk in, you walk out. Not walk in, talk to some guy, like, he's, like, cutting salami for you. [chuckles] Like, you gotta get that out of there. And so I've had this thought, 'cause I've read a bunch of biographies on investors, too, and, like, investing is an ancient business.

David Rosenthal 1:35:42 Yeah. Yep.

David Senra 1:35:43 Like, and, and we're just doing it in different ways now. And so, uh, I was like, well, if you d- if you wanted to invest, right? Uh, let's say you wanted to invest in private companies, which people have been doing forever. Um, I always think of, like, like, where did JP Morgan get his deal flow? And you know, like, you've read through the history. It's like, people are like, "Oh, he... That was JP Morgan Bank." Like, no, there's no retail bank. Like, you're not going in there. There's no ad, on, like, a sign on the door that's like, "Here's JP Morgan Company." Like, it was a relationship based.

David Rosenthal 1:36:11 Yeah. Mm.

David Senra 1:36:11 It's like you got in if you knew somebody, right?

David Rosenthal 1:36:13 Yep.

David Senra 1:36:13 I read this biography that's incredible. I highly recommend peop- people read it. Uh, it's episode one of Three of Founders. It is The Richest Woman in America, Hetty Green. I can't remember the, the subtitle.

Ben Gilbert 1:36:23 I love how he denies that he knows every number of every episode, and then busts out three more. [chuckles]

David Senra 1:36:27 Oh, it's only 'cause I, I, like, reference this all the time.

David Rosenthal 1:36:29 [chuckles]

David Senra 1:36:29 So Hetty Green, right?

David Rosenthal 1:36:31 It's only because you reference every episode all the time. [laughing]

Ben Gilbert 1:36:35 [laughing]

David Senra 1:36:35 One day it's just gonna be a recording-

Ben Gilbert 1:36:36 Yeah

David Senra 1:36:36 ... of just all the episode numbers. Um, but Hetty Green-

David Rosenthal 1:36:38 You are an algorithm.

Ben Gilbert 1:36:39 [chuckles]

David Rosenthal 1:36:39 Um, you are your Readwise app. [laughing]

David Senra 1:36:41 Well, that's how I get it. So, um, the Hetty Green, though, was so wealthy that she bailed out the city of New York. Like, that book has unbelievable stories. This is-

Ben Gilbert 1:36:50 What? I've never heard this person's name, and they bailed out the city of New York?

David Senra 1:36:53 Yes. Her family... So the richest- when she was alive, her, the richest, uh, city in the world per capita was, like, New Bedford, Massachusetts.

Ben Gilbert 1:36:59 Oh, yeah, whaling.

David Rosenthal 1:37:00 Yeah, yeah. Whaling.

David Senra 1:37:01 Bingo.

David Rosenthal 1:37:01 Yep.

David Senra 1:37:01 So her family made so much whaling, and the way they looked at the family fortune is, "I am a steward of this money. My job is to make it grow so that the next generation has more," and then v- they're on... She's, like, the third generation-

Ben Gilbert 1:37:13 Mm

David Senra 1:37:13 ... of these whaling. And then whaling decimi- like, it, it died out, I think, the generation before her, so they had to figure out how to make money. The technology stocks of her day, railroads.

David Rosenthal 1:37:23 Yeah.

David Senra 1:37:23 Like, she made a ton of money in railroads-

David Rosenthal 1:37:24 Mm

David Senra 1:37:24 ... and then she'd buy land, uh, like real estate in New York and everything else. But anyways, my point being, and, um, I had this conversation w- with Patrick one day. Um, I was like, think about it. Like, that was an ancient... Investing is an ancient business, so, like, you wouldn't do what Hetty Green did. Like, where did she get her deal fro- from? Uh, people knew her. Uh, they knew she was wealthy. They knew that she was the first person to go to in financial panics. They called financial panics what we call recessions and depressions now, and it was, like, you know, every three years back then.

David Rosenthal 1:37:50 Yep.

David Senra 1:37:51 Um, and so what she would do, she had a desk in Chemical Bank in Manhattan. So it... The, the advantage there is geography. Physical location, you're at the center of finance in America, you need to be here, you build a reputation. So literally, there are stories in the book where there'd be a line of people in financial crashes s- waiting for, at her desk. She's like, "Okay, I'll sell you my railroad stocks, t- pennies on the dollar." Cornelius Vanderbilt did the same thing. She invested with him and a bunch of other people, right? And I was like, but what would you do today?... like, you're an- you're- you want an edge. Everything we're talking about is, like, you need an edge, right?

David Rosenthal 1:38:21 Yep.

David Senra 1:38:21 You can't play... Ed Thorp has a great- the great quote in his book. He's like, "I've been a mana- money manager for 50 years. One thing I know is you, you, the surest way to get rich is only play games and make investments where you have an edge."

David Rosenthal 1:38:31 Right.

David Senra 1:38:31 Right?

David Rosenthal 1:38:32 Which is another way of saying, "Do something, do something your competitors don't, aren't, or can't."

David Senra 1:38:37 Or Edwin Land. So Edwin Land plays a huge role in my life, founder of Polaroid, Steve Jobs hero, because he said, "I have a personal model, it may not fit anybody else. Don't do anything somebody else can do." And so I was like, "Oh, okay, I don't think anybody else can do Founders the way I do it-

David Rosenthal 1:38:50 Yep

David Senra 1:38:50 ... so I'm just gonna do this," right?

David Rosenthal 1:38:51 Yep.

David Senra 1:38:51 So my point being is, like, how would you do it today? Well, um, you would... Look, it would look very much like what I think you guys are building. And I'm

David Senra 1:39:00 not an investor, so I don't know anything about your, your world, but it's just, like, I'd spend my time reading and learning about business history. Charlie Munger and Warren Buffett did that. Every single investor you guys have probably read about does that all the time. They read constantly, right?

David Rosenthal 1:39:10 Yep.

David Senra 1:39:11 Uh, I would share what I know. That's gonna build my network of other people. Those people are eventually gonna send me deals. Then I have this huge advantage that you couldn't even do 10 years ago c- or 15 years ago, 'cause there's no such thing as a podcast, right? It's like, now I can record all the stuff I'm learning, right?

Ben Gilbert 1:39:23 Which we should say, like, there have been iterations of this. Like, this is how, uh, Union Square Ventures became Union Square Ventures, or Foundry Group became Foundry Group, 'cause-

David Senra 1:39:31 Blogging.

Ben Gilbert 1:39:31 Yep, blogging, and then Brad and Jason writing the book on h- venture deals. I mean, it's like Angel, this-

David Senra 1:39:37 The, uh, Venture Hacks with Naval and Rivi.

David Rosenthal 1:39:39 Yep.

Ben Gilbert 1:39:40 Totally.

David Senra 1:39:40 I- I have two other examples. This is like, it's not even venture. Like, what is the most successful content marketing of all time?

Ben Gilbert 1:39:46 Ooh. Uh, Michelin?

David Senra 1:39:48 No, Berkshire Hathaway [laughing]

David Rosenthal 1:39:50 [laughing] Oh, totally, of course.

David Senra 1:39:50 Berkshire Hathaway letters.

David Rosenthal 1:39:51 Of course. Yep, of course. [laughing]

David Senra 1:39:52 Because this is how you know he's a genius.

David Rosenthal 1:39:54 Of course.

David Senra 1:39:54 It is the greatest act of salesmanship, 'cause you never even see the sale happening.

David Rosenthal 1:39:58 Yeah.

David Senra 1:39:58 It's like, "Hey," and they spend... You know, you guys have probably done this research, how much time they spend on those letters.

David Rosenthal 1:40:03 Yeah.

David Senra 1:40:03 It's, like, half a year, seven, eight months for every letter.

David Rosenthal 1:40:06 Right.

David Senra 1:40:06 This is not like, "Oh, I just jotted some shit down of what I learned this year." [laughing]

Ben Gilbert 1:40:09 [laughing]

David Senra 1:40:09 And the crazy thing is, like, he's, he's-

David Rosenthal 1:40:10 Old Uncle Warren. [laughing]

David Senra 1:40:11 How many people have... This is something Charlie tal- oh, so this is a great, great thing that, that, uh, this came up here. So-

David Rosenthal 1:40:17 Did you talk about the letters with him?

David Senra 1:40:18 No, I asked him about, like... So I was explaining to him, I was like, "Charlie, I'm literally in the middle of, like, reading about you when you were, like, around my age." So every time I read a book, I'm like, "Okay, I" ... First of all, I know what year they're, they're born, so every time as I go through the books, I'm like, "How old are they?" And I write down, "Okay, he's 24 here, he's 30..." I wanna know what they were doing in and around my age. And so I'm like: Charlie, I'm thinking about you guys. Like, you've just started, like, your fund starts when he's, like, 41 or something like that. I don't remember what it was, right? And um, and I was like, "Then, like, 50... " Like, you start out, you're trying to figure things out. You could see them kind of figuring out, making the mistakes. You guys did an excellent job on your episode, like, talking about what they learned from. Getting to, like, get away from the Ben Graham, like, get to wonder- excellence.

David Rosenthal 1:40:57 Yep.

David Senra 1:40:57 Great businesses are rare-

David Rosenthal 1:40:58 Yep

David Senra 1:40:58 ... we should be in there, and then just let time do all the work. And I was like, "And now, like, you guys put up the greatest investment record the world's ever seen." He's like, "Are you surprised?" He goes, "Of course!" [laughing] He's like, "Of course, I'm surprised. Like, how could you not be?" Like, we wanna be successful, and we were, like, had... We were ambitious and driven, but there's no way you could say, "Hey, I'm gonna be worth..."

David Rosenthal 1:41:17 Right.

David Senra 1:41:17 What's, what's Berkshire's market cap right now? I don't know, like, um, 500 billion?

David Rosenthal 1:41:21 500 billion.

David Senra 1:41:21 Yeah, whatever it is.

David Rosenthal 1:41:22 Yeah.

David Senra 1:41:22 But he said, um, but, uh, the, the, the reason that popped to my mind, um, when, like, when I was asking him, uh, like, these, these questions... Let me actually get the exact note, 'cause I don't wanna mess up, um, the way he said it, 'cause his lines were just excellent. Um, and so he goes, uh, he's surprised how successful him and Warren turned out, but, like, "How could you not be surprised?" And then he said something that was fascinating. He goes, "I think we get too much credit." And I was like, "Whoa, that's interesting. Like, why do you think that, Charlie?"

David Rosenthal 1:41:52 Yeah.

David Senra 1:41:52 And he's like, uh, "It's very..." He goes, "It's..." He, he, "I find it odd to be so wealthy and loved. That's not..." These are not exact words, these are my interpretation of his words. Let me just be clear here. "I find it so odd to, that to be wealthy and loved, I- that's not a usual human reaction"-

David Rosenthal 1:42:07 Yeah

David Senra 1:42:07 ... And then my note, tied to why I think the Berkshire letters are the greatest content marketing of all time, he goes, I- and I go, "I wonder if this is because they spent so much time teaching others."

David Rosenthal 1:42:15 Mm.

David Senra 1:42:15 So what is... When you listen to Acquired, you guys are teaching, right?

Ben Gilbert 1:42:18 Mm.

David Senra 1:42:18 Berkshire, I'm gonna go with Paul Graham, too. Berkshire, they're teaching. Like, you could just not read a fucking book and just read Berkshire's letters, and you're gonna get-

David Rosenthal 1:42:25 Get a little, yeah

David Senra 1:42:25 ... a fantastic education, right?

Ben Gilbert 1:42:27 Yeah.

David Senra 1:42:27 And then in there, it's like, "Oh, by the way, we'd like to be the buyers of choice."

David Rosenthal 1:42:31 Right.

David Senra 1:42:31 "So if you happen, if you happen to know of this business, like, this business that you wanna get your hands on, like, you know, and you care about it, and he does this excellent product differentiation, call me."

David Rosenthal 1:42:41 Yeah.

Ben Gilbert 1:42:41 Yeah.

David Senra 1:42:41 The greatest content mark- what are the, what is... Like, how much money do they make off of that? And obviously, um-

David Rosenthal 1:42:47 And I think this is probably, I don't even know if it's on the list of things that they care about, but, like, it's also marketing for their businesses, like-

David Senra 1:42:53 Totally

David Rosenthal 1:42:54 ... I have GEICO car insurance because it's a Berkshire Hathaway company. [laughing]

David Senra 1:42:58 [laughing] This is how we talk. I'm drinking-

Ben Gilbert 1:42:59 I feel an extra kinship for Brooks Running Shoes, for sure.

David Rosenthal 1:43:01 Absolutely. I'm wearing Brooks right now.

David Senra 1:43:03 Okay, so I, I-

David Rosenthal 1:43:03 I'm wearing Arena shoes.

David Senra 1:43:04 I changed-

Ben Gilbert 1:43:05 There you go

David Senra 1:43:05 ... I changed out, I was in a Polo hoodie right before I came over. I watched a documentary on Ralph Lauren. I just did a podcast on-

Ben Gilbert 1:43:11 I just listened to your episode.

David Senra 1:43:12 Yeah, I think it's episode 288. I wonder, I wonder if I'm right.

David Rosenthal 1:43:14 There, it is- [laughing]

David Senra 1:43:15 Let's see.

David Rosenthal 1:43:15 It is good. [laughing]

Ben Gilbert 1:43:15 [laughing]

David Senra 1:43:15 Let's see if I'm right, though.

David Rosenthal 1:43:17 Oh, wait.

David Senra 1:43:17 Let's see if I'm right. I could be wrong, I could be full of crap. It's 288. [laughing] Okay.

Ben Gilbert 1:43:21 [laughing]

David Senra 1:43:21 Um, so but before that, I had watched, uh, a documentary on him, like, years ago, and I found out that he did the... I always go to Ben for the proper pronunciation. Like, we'll do the same podcast. I will, I say, like, Akio Morita, and then he's like-

Ben Gilbert 1:43:34 [laughing]

David Senra 1:43:34 ... "Akio Morita." I'm like, "All right. " B- I go with Ben.

David Rosenthal 1:43:36 He goes-

David Senra 1:43:37 I go with Ben on that.

Ben Gilbert 1:43:37 Oh, you get the... I, I, I will give you the correct American pronunciation of something. [laughing]

David Senra 1:43:41 [laughing]

David Rosenthal 1:43:41 [laughing]

Ben Gilbert 1:43:41 And it's unclear if it's actually right or not, but-

David Senra 1:43:42 So he did the same thing that Akio did, you know, like, they, they were struggling in the early days of Sony. They get this huge order, like, "We're gonna take 100,000 units," or whatever it is, "but take off Sony and put on our name." And Akio's like, "We have no money."

David Rosenthal 1:43:54 Yeah.

David Senra 1:43:54 "I'm..." But he refused to do that-

David Rosenthal 1:43:56 Refused to, yep

David Senra 1:43:56 ... 'cause, like, "I'm not building your company, I'm building mine." I love that, like, that entrepreneurial, like-

David Rosenthal 1:44:00 Yeah

David Senra 1:44:00 ... bullheaded tendency. Same thing with Ralph. Ralph was broke. Him and his wife are living in a house, or apartment, with a train running over o- on top of them. They're sleeping on a mattress, and he's making ties. And Bloomingdale's like, "We'll take them. We love them. Take that name off, you're gonna be our house brand."

David Rosenthal 1:44:15 Yeah.

David Senra 1:44:15 And he packs up his ties. He's like, "I'm not here to build your brand, I'm here to build mine." Like, that, so-... that, hearing that-

Ben Gilbert 1:44:21 Which is funny, because later in life, like, he would make so much money on just licensing out his brand. [laughs]

David Senra 1:44:26 [laughs] Right.

Host 1:44:26 100%.

Ben Gilbert 1:44:26 He's like, "I don't even make any of the products-

David Senra 1:44:28 Yeah

Ben Gilbert 1:44:28 ... I literally just license the brand."

David Senra 1:44:29 Hearing that made me buy more Polo clothes. Hearing your affinity for GEICO makes you buy GEICO. The advertisers you have on Acquired, because they love you, your- the s- the- your audience, if you, if... I know you guys vet them, and, like, uh, like, you have a ton of people that want to, uh, advertise that you don't let. It's like, your relation- the, that goodwill that you're building up, the goodwill that, that Buffett built up. Another, the second, maybe most, and you just-

Ben Gilbert 1:44:53 And by s- and by the way, there's a litmus test for that. It's, does the Acquired brand... Like, I want to only work with sponsors that I wanna so full-throatedly endorse, that I feel the Acquired brand gets stronger by working with them.

David Senra 1:45:06 Yep.

Ben Gilbert 1:45:07 And, like, if you can actually just keep doing that durably, I think that is, like, an amazing way to build a brand. And, you know, we try, and it doesn't always work, and sometimes we just don't sell ad slots, 'cause we're like, "Well, we- the bar's here."

David Senra 1:45:21 It's long-term. Like, "Okay, I miss a week on advertising, doesn't matter, I'm doing this for..." You g- uh, when we get on the phone-

Ben Gilbert 1:45:26 Yeah, right

David Senra 1:45:26 ... the first time we ever talked, "Do you guys love podcasting? I love podcasting. You gonna do it forever? And we're gonna do it forever." We say the same thing. [laughs]

Host 1:45:30 Yeah, right, right, right. [laughs]

David Senra 1:45:30 It's like, one week in a, in a... We could do this another 40 years.

Host 1:45:33 Right.

David Senra 1:45:33 So the, the, the, the same thing, it's like the same goodwill that you're talking about. It's wh- why I'm drink- I don't even drink energy drinks.

Ben Gilbert 1:45:40 [laughs]

David Senra 1:45:40 Right? But, I, like, the format for Founders-

Host 1:45:43 You showed up with five Jocko Goes.

David Senra 1:45:45 I wanted, I wanted to give you guys some.

Host 1:45:46 [laughs] And then you're like, "I don't drink energy drinks."

Ben Gilbert 1:45:47 Right.

David Senra 1:45:47 No, but this-

Ben Gilbert 1:45:48 I'm starting to not trust this guy. [laughs]

Host 1:45:49 [laughs]

David Senra 1:45:49 This is, this is, uh, the only energy drink I've found, and I only found it because, um, the... I was driving home on Thanksgiving, and all the coffee shops were closed, and I h- heard Jocko's podcast, and he- I know he has this. And he says he's in a Wawa's, and I, I was like, "Wait, there's a Wawa on the turnpike." I was like, "I can just go there," and sure shit, like, they're there. And I bought 'em, and then-

Ben Gilbert 1:46:07 [laughs]

David Senra 1:46:07 ... I was wired for the whole drive home.

Host 1:46:09 [laughs]

David Senra 1:46:09 I was like, "Oh, they work, man! This is fantastic."

Ben Gilbert 1:46:11 [laughs]

David Senra 1:46:11 But the re- the, uh, the, the point there is, like, it's not like when I went to the energy drink aisle, I was like, "Oh, maybe I'll do Rockstar or Monster." It's like, no-

Host 1:46:18 No

David Senra 1:46:18 ... they didn't make a podcast that I love.

Host 1:46:19 Right, right.

David Senra 1:46:19 Jocko made a podcast I love.

Ben Gilbert 1:46:20 You-

David Senra 1:46:20 The format-

Ben Gilbert 1:46:21 You're not evaluating energy drinks at that point in your-

David Senra 1:46:23 The, the format for our Founders I got from Jocko. I found his podcast because he was on Tim Ferriss's. His podcast, at the very beginning, was just him reading books for an hour, hour and a half, saying, "Oh, I like this section."

Host 1:46:32 I didn't know that.

David Senra 1:46:32 Yeah, and he does it for, um, autobiographies for military people. I was like, "Oh, I should do this for autobiog- for biographies of, of founders-

Host 1:46:39 Oh

David Senra 1:46:39 ... and everything else."

Ben Gilbert 1:46:39 Ah.

David Senra 1:46:40 So it's like a combination of ideas. The second-best version, and you guys know this more than me, because it's your, um, world, and I don't know anything, I... I had spent three weeks reading Paul Graham's essays. Paul Graham's essays changed my life. They're the reason I-

Ben Gilbert 1:46:52 Also, me too.

Host 1:46:52 Content marketing.

Ben Gilbert 1:46:53 Yeah, absolutely changed my life.

David Senra 1:46:54 So we're gonna get there. The full, um, the, the, the reason to finally jump and dedicate my life to Founders came, uh, I was... My wife was sleeping in bed next to me. I'm up late at night. I read Paul Graham's essay, How to Do What You Love. I talk about this on, um-

Ben Gilbert 1:47:08 Oh, that's such a good one

David Senra 1:47:09 ... episode 275, 76, and 77. Those are right, I know that for sure, are the three Paul Graham episodes I did.

Ben Gilbert 1:47:14 [laughs]

David Senra 1:47:14 I talk about this snap, how he changed my... That ep- episode changed my life, or that, uh, that essay changed my life in 275. So then I'm re- so I spent three weeks going through every single one of his, uh, essays. So something his new essays lack, that they had before, is he used to have this bright orange box at the top. It says, "Do you wanna start a startup?"

Ben Gilbert 1:47:33 Oh.

Host 1:47:33 Yeah.

Ben Gilbert 1:47:33 Apply to Y Combinator.

David Senra 1:47:34 Apply to Y Combinator.

Host 1:47:36 Yeah.

Ben Gilbert 1:47:36 Yeah.

David Senra 1:47:36 And so I was like, "Think about..." So again, it's not like you went... I, I thought about this, like, "What is the Founders version of Y Combinator? What is the Acquired version of Y Combinator?" Right? You have to be very careful, like, who you partner with-

Ben Gilbert 1:47:48 Right

David Senra 1:47:48 ... and what you're doing.

Ben Gilbert 1:47:49 Right.

David Senra 1:47:49 So I was like, "What is the orange box?" Right? It's not like you go to Paul Graham's-

Ben Gilbert 1:47:53 Yeah

David Senra 1:47:53 ... and he's got, like, fi- 10 banner ads for a bunch of shit.

Ben Gilbert 1:47:57 Right.

David Senra 1:47:57 He's just like, "No."

Ben Gilbert 1:47:58 Yeah, he worked for Yahoo!-

David Senra 1:47:59 Your, your-

Ben Gilbert 1:47:59 He knows that doesn't work. [laughs]

Host 1:48:00 [laughs]

David Senra 1:48:00 Your attention is here.

Host 1:48:02 Yeah.

David Senra 1:48:02 And it's like, he didn't know that starting Y Combinator... You can go back and read his essays about it, watch his interviews. He had no clue. Just like Charlie told me. He's like-

Ben Gilbert 1:48:10 Yep

David Senra 1:48:10 ... "No, I did not expect to build one of the most valuable" [laughs]

Ben Gilbert 1:48:13 Well, it was called the Summer Founders Program.

David Senra 1:48:15 Yeah!

Ben Gilbert 1:48:15 You know? It wasn't even-

David Senra 1:48:15 That's the best thing about learning about the company and founder history, is like, they didn't... There's no way when you could interview Sam Walton when his, his shoes, the bottom of his shoes has watermelon and donkey crap.

Host 1:48:27 Yeah. [laughs]

David Senra 1:48:27 He's not gonna be like, "Hey, guys, I'm the [laughs] richest man in the world."

Ben Gilbert 1:48:29 Right.

Host 1:48:30 Yeah.

David Senra 1:48:30 And so I love this idea of, hey, all of these discussions about the, the, the business benefit all comes from f- it's the by-product of educating people, sharing people. That's why people love Charlie and Warren, why all three of us love them.

Ben Gilbert 1:48:46 Yeah.

David Senra 1:48:46 How much have us three learned from him- them?

Ben Gilbert 1:48:48 Right.

Host 1:48:48 So much.

David Senra 1:48:49 It's like-

Host 1:48:49 Yeah

David Senra 1:48:49 ... to the point where, like-

Host 1:48:50 This is such a good point

David Senra 1:48:50 ... he, I wanted to cry-

Ben Gilbert 1:48:51 He, he, he taught marketing

David Senra 1:48:51 ... when I met him.

Host 1:48:52 Because of their content marketing.

David Senra 1:48:54 Well, he-

Host 1:48:54 I mean, it sounds trite, but like... [laughs]

David Senra 1:48:55 His lessons changed my life.

Host 1:48:57 Yeah.

David Senra 1:48:57 They're, they're gonna change the trajectory of my kids' lives.

Host 1:48:59 Yeah.

David Senra 1:49:00 Like, that is... And, you know, he probably hears that a million times a day, but it doesn't matter. It's like, I got a chance to tell him that. That's it.

Ben Gilbert 1:49:06 It is crazy that he, he educated America on investing, while still managing to do it better than anyone else.

David Senra 1:49:14 There were some funny things about that, too, where, um, he says, like, you know, they get... He says something like, "Well, you know," he, he- they're completely... He says... You both, uh, in your episode, you talk about Snowball. Snowball has that, that quote from Buffett in there. He talks about it's really important to have an inner scorecard and an outer scorecard.

Host 1:49:30 Yeah.

David Senra 1:49:30 Inner scorecard is-

Host 1:49:31 Yeah

David Senra 1:49:31 ... it's dad. It's like, "I'm doing this because I know it's good." Outer scorecard is like, "I'm doing this. Oh, what are other people gonna think about me?" Newsflash, no one's thinking about you.

Ben Gilbert 1:49:38 Right.

David Senra 1:49:38 They think about themselves, so outer scorecard people cannot have... Like, it's almost really hard to have a, uh, a, a happy life having an outer scorecard. I like Charlie's description of that better. He says, like, he w- we, uh, s- I think it was Andrew that asked him the question, maybe Chris, asked him a question. He's like, "Were you, like, were you driven to succeed, like, to, to impress your dad or your mom?" It was a great question. And he goes, "No." He goes, "I had an inner clock, and I've always had..." He goes, "I have an inner clock, and I always had an inner clock.

Host 1:50:03 Mm-hmm.

David Senra 1:50:03 And I did this because I wanted to do it, and, like, that's..." And he goes... And they're like, "Do you think Buffett's like that?" He goes, "Buffett has an inner clock, too."

Host 1:50:09 Yep.

David Senra 1:50:10 And it's just like this idea where they did it their way, uh, regardless... They don't care what other people think. He said this a- about the fact that they keep some of their, their wholly owned businesses, and like, "Oh, the profits are less," or they kind of just let them run out, and like, they'll just keep the cash. And then people are like, "Oh, you should invest the cash," and he's just like-

David Rosenthal 1:50:29 ... No, because we- we're opportunists. We're individual opportunity-driven, is the, is the line that he has about that.

Ben Gilbert 1:50:35 Right. Uh, you were going somewhere, David, earlier, with the discussion of, of being a professional investor-

David Senra 1:50:41 Oh

Ben Gilbert 1:50:41 ... and how it's less differentiated than it's ever been before.

David Senra 1:50:46 Well, where I was going with it was-

Ben Gilbert 1:50:49 I bet.

David Rosenthal 1:50:50 Look at the reaction on Twitter and elsewhere [chuckles] and, and I think in, um, you know, much of the country to, uh, what's happening with the Silicon Valley Bank situation. Not that this is a current events podcast, but, like, [laughing] uh-

Ben Gilbert 1:51:04 It's also, by the time this comes out, gonna be two weeks.

David Rosenthal 1:51:06 Gonna be old, old news, right.

Ben Gilbert 1:51:07 Yeah. Hopefully, things will just be calm and settled down, and there'll be no more, uh, impending crises.

David Rosenthal 1:51:12 Yeah, right. Hopefully.

David Senra 1:51:12 But another one's coming eventually.

Ben Gilbert 1:51:14 Right.

David Senra 1:51:14 Like, just like Charlie says, "You're gonna have another un-

Ben Gilbert 1:51:16 Right

David Senra 1:51:16 ... unintended problem a year from now."

David Rosenthal 1:51:18 Yep. I think you are right, Ben, that just having capital to invest will be differentiating going forward. However, I think the aggregate brand and reputation of the venture industry has taken a massive hit.

Ben Gilbert 1:51:30 Yeah, totally.

David Rosenthal 1:51:30 Massive hit over the last m- several years.

Ben Gilbert 1:51:34 And you're not holding up SVB as-

David Rosenthal 1:51:35 And it just keeps going down. No, no.

Ben Gilbert 1:51:37 Here's... SVB is revealing-

David Rosenthal 1:51:38 Yeah

Ben Gilbert 1:51:39 ... to how other people think of Silicon Valley.

David Rosenthal 1:51:41 What I'm, what I'm specifically referring to is VC's behavior and reactions on Twitter [chuckles] -

Ben Gilbert 1:51:47 Yeah

David Rosenthal 1:51:47 ... over the past week. But that's just emblematic of the direction things have been going for years now.

Ben Gilbert 1:51:52 Right.

David Rosenthal 1:51:52 Uh, like, and part of it's related to tech in general, but I think there's a specific, like, uh, maybe hatred is strong, but, um, brand decline of the venture capital industry. [chuckles]

Ben Gilbert 1:52:03 Yeah, I agree with that. T- tie it to differentiation among venture firms.

David Rosenthal 1:52:09 Well, so y- yes, while, uh, as the market goes down, having capital will be differentiating, and, like, the number of participants will go down in the industry and whatnot, but how do you stand out in this market as like... Like, if in aggregate, your industry is thought less of, and people don't wanna work with you-

Ben Gilbert 1:52:28 Right

David Rosenthal 1:52:29 ... how do you turn that tide?

Ben Gilbert 1:52:31 Right. Yeah, if, if the next Sam Walton has the opportunity to raise venture capital dollars, and he's like, "You know what? I think I would rather just figure it out another way-

David Rosenthal 1:52:41 Totally

Ben Gilbert 1:52:41 ... and not build in that ecosystem."

David Rosenthal 1:52:42 I think there are a lot of, uh, people out there right now who w- wanna start businesses, and they're like, "I'm not gonna raise venture capital, 'cause F that, and I don't need to." [chuckles]

Ben Gilbert 1:52:53 Right.

David Rosenthal 1:52:53 "And it was a lie that I needed to."

Ben Gilbert 1:52:55 Right.

David Senra 1:52:55 Can I tell you from the founder's perspective? 'Cause I talk to a ton of founders.

Ben Gilbert 1:52:58 Yeah.

David Rosenthal 1:52:58 Yeah.

David Senra 1:52:58 I'm gonna go down, I think, hope... Well, we'll see, talking to more founders than any non-VC, right? [chuckles] I get offers all the time like, "Hey, you wanna invest in my company?" I've said no to all of them. Um, and that, like, just 'cause I'm just- I was like, "Dude, I'm focused on founders. "

David Rosenthal 1:53:11 Yeah.

David Senra 1:53:11 "Like, I don't care about anything about my podcast."

David Rosenthal 1:53:13 Right, right. Absolutely.

David Senra 1:53:13 And so we have these conversations, and it's just like, what VCs don't understand i- is, like, how much founders fucking hate them.

David Rosenthal 1:53:21 Yeah, [laughing] yes!

David Senra 1:53:21 They, like-

David Rosenthal 1:53:22 Yes.

David Senra 1:53:22 They hate them. And it's not they hate the good ones. They love the good ones, right? Like, I'm not gonna say some of the, the brands that I've heard about. They're like, "Oh, no, like, we've raised money from a bunch of people. They're good. They don't mess with us, but if we ask a question or we need something, they jump on it," you know? And the problem is, this is not like... It's, it's a natural, like, distribution of any industry.

Ben Gilbert 1:53:42 Yeah.

David Senra 1:53:42 Like, there's going to be crappy founders and great founders. There's gonna be crappy investors and great investors. And so I really think it ties back to the, the, the principle that Buffett and Munger built their business on, is this like only associating themselves with the best people and the best companies.

David Rosenthal 1:53:56 Mm-hmm.

David Senra 1:53:56 And that solves so much other problems.

David Rosenthal 1:53:58 Right.

David Senra 1:53:58 So yeah, the... My issue is, like, there's a lot of VCs in my audience, too, and they're nice people. Don't get me wrong, right? Um, some of them I've talked to, it was just like, "Who gave you money to invest? Like, what is going on here?" [laughing]

Ben Gilbert 1:54:10 [laughing]

David Senra 1:54:10 But what I don't like is, like, uh, the, the best ones, um... Like, this is what I like about Patrick, right? If you talk to the people that Patrick has invested in, he doesn't like, "Here's a list of 10 things I took two minutes to think about." He's asking quest- he does exactly what he does on his show.

David Rosenthal 1:54:23 Right.

David Senra 1:54:24 He asks questions.

David Rosenthal 1:54:24 Yep.

David Senra 1:54:25 And if you need something, like, "I'll do whatever I can," 'cause he's got a good network and help.

David Rosenthal 1:54:28 Yeah, sure.

David Senra 1:54:28 No, but he's certainly not... He's like, "If I have to tell the founder what to do, then I... Why did I invest in the?" Like, that doesn't make any sense. So what happens is, like, I'll get these emails, like, "I love your show," etcetera, etcetera. "Here's, like, 10 ideas for you."

David Rosenthal 1:54:40 [laughing] Right.

David Senra 1:54:40 And it's just like you read-

David Rosenthal 1:54:41 Right

David Senra 1:54:41 ... you read them, it's like, you hired, like, an assistant or a researcher, or maybe you wrote this yourself. You thought about this for 30 minutes.

David Rosenthal 1:54:46 Right.

David Senra 1:54:47 Like, all-

David Rosenthal 1:54:47 I think about this all day, every day.

David Senra 1:54:48 I've thought about this every day for years, man.

David Rosenthal 1:54:50 Yeah.

David Senra 1:54:50 Like, that's not helpful. Like, what are you doing?

David Rosenthal 1:54:53 Yeah.

David Senra 1:54:53 Like, you're just making... I have a lower opinion of you, because, like, this is a fucking dumb idea.

David Rosenthal 1:54:57 Yeah. [chuckles]

David Senra 1:54:58 Um, and the only way about that is, like, do you know who Bryce Roberts is of, uh-

Ben Gilbert 1:55:02 Yeah.

David Rosenthal 1:55:03 Yeah.

David Senra 1:55:03 Okay, so he has... This is, again, I've never raised venture capital. I've never made a venture capital investment, but I talk to a ton of founders, and he has the greatest description. He's like: What is the product that founders are buying from VCs? It's not money, 'cause everybody's got money.

David Rosenthal 1:55:17 Mm-hmm.

David Senra 1:55:17 Like, that's a, like-

Ben Gilbert 1:55:19 Well, you used to have money.

David Senra 1:55:20 Or, yeah, I guess you...

Ben Gilbert 1:55:21 Right.

David Senra 1:55:21 But still, like, there's, the VC-

David Rosenthal 1:55:22 In aggregate, though, like, there's still a lot of people that are-

David Senra 1:55:23 There's still gonna be investments made in markets.

Ben Gilbert 1:55:26 Compared to the venture in the '70s, yes.

David Rosenthal 1:55:27 Yeah.

David Senra 1:55:28 He said two words: improved odds. That is the best, from a founder's perspective, that is the best description. It's like, if I take investment from you, as opposed to this other guy over here-

David Rosenthal 1:55:37 Yeah

David Senra 1:55:37 ... this other girl over there, like, who is going to meet... Founders don't give a fuck about the investors. All they care about is, will my- can you help my company succeed? Is it more likely that my company succeeds? I'm dedicating my life to this, man.

David Rosenthal 1:55:48 Yeah.

David Senra 1:55:48 This is not a fucking game.

David Rosenthal 1:55:50 Yeah.

David Senra 1:55:50 Like, can you make my company succeed? And sometimes you can do it with money, sometimes you can do it with network. There's other people sitting right across from me that could probably help with distribution, that is actually value add. Like, that is the difference. Like, if I was gonna be a venture capitalist, and God knows I would not, not be, [laughing] right? I would just start a podcast. [laughing]

Ben Gilbert 1:56:07 [laughing]

David Senra 1:56:07 And then I would do it for, and I would do it for six years, and I would get really valuable, and then my inbox is full of people. I don't have deal flow coming in.

David Rosenthal 1:56:14 This is what Patrick has done.

David Senra 1:56:15 Yeah, it comes inbound. I have a friend, Chris, uh, Chris Powers. He, uh, he's, he, um, syndicates, uh, real estate investment. You know, rich people like to invest in real estate.

David Rosenthal 1:56:23 Yep.

David Senra 1:56:23 There's all these tax benefits, and he's got- he says, "David," even with like... And this guy's done like, I think he's, he's got either a billion or $2 billion of, uh, industrial class real estate under management right now. And-... he's like, even, he's like, "David, I just was interviewing and doing my podcast." Again, same thing, educational, interviewing people operating in the real estate industry, and, and, a- a- and, uh, interviewing founders, and just doing it 'cause he liked to do it, and he wanted to talk to those-

David Rosenthal 1:56:46 Yeah

David Senra 1:56:46 ... people happened to press record, put it out there, and never really promoted it. You know, got, uh... He's like, "Even with my small audience," he goes, "I've raised..." He goes, "It go- it changes the dynamic from, 'Hey, I'm Chri...' sending an outbound, 'Hey, I'm Chris. This is what I do. This is, like, can we talk? Can we set up the meeting?' to, 'Oh, Chris, love your podcast. How can I get five million in your fund?'"

David Rosenthal 1:57:04 Mm-hmm.

Host 1:57:05 Yep.

David Senra 1:57:05 It reverses it-

David Rosenthal 1:57:06 Mm-hmm

David Senra 1:57:06 ... because, you know, like, oh-

Host 1:57:07 Totally

David Senra 1:57:08 ... they get to know you as a person. This is what I don't like also in-

David Rosenthal 1:57:11 It shortcuts the relationship.

David Senra 1:57:12 But it's- you just said, it's a relationship, right? Which I think there's too much of this, like, calendar, like, Tetris shit that-

David Rosenthal 1:57:19 Yeah

David Senra 1:57:19 ... that, no offense, that venture capitalists play. 'Cause they try to do it with me, where, or founders do this, too, where they're like, "Hey, love your show. Love to get to talk to you. Uh, can we talk?" And I reply back, "Yeah, let's set something up." Then I get, like, uh, then they're like, I'm, like, routed to their fucking assistant. [laughing]

David Rosenthal 1:57:33 [laughing]

Host 1:57:33 [laughing]

David Senra 1:57:33 And then it's like, "Oh, you know, uh-

David Rosenthal 1:57:36 "How about six weeks from now on-

David Senra 1:57:37 "Mr. Mr.-

David Rosenthal 1:57:38 "... you know, Thursday?" Yeah.

David Senra 1:57:38 ... You know, Joe Schmoe has 30 minutes three weeks from now." And I've done this, like, once or twice, and now my re- response is, "That's no way to build a relationship. Here's my phone number. Just text or call me when, when you're free." I'm not a 30-minute block in your calendar. And if, uh, dude, we have... The inbound that all us three get, it's like I- I'm already almost hitting a limit to how many deep relationships I can build. So I'd rather, instead of talking to a million pe- I'm not a fucking investor. Instead of talking to a million people for 15 minutes, I'd rather talk to five or 10 people over, and over, and over, and over again.

David Rosenthal 1:58:06 Yeah. Totally, yeah.

David Senra 1:58:06 That's what Charlie, uh, just, Charlie-

David Rosenthal 1:58:08 You and I talked a lot about this, and, like, you've rubbed off on me a lot on this. Like, I have changed my, my mindset and my daily behavior hugely because of our conversations.

David Senra 1:58:18 Charlie and Warren-

David Rosenthal 1:58:19 Yeah

David Senra 1:58:19 ... it's like they build relationships. They found people they like, admired, and trust. They repeat, "like, admire, and trust" over and over again in the letters and their talks, and then they just did business with them forever.

David Rosenthal 1:58:27 Yep.

David Senra 1:58:28 It's not this sh- wide but shallow, and that's where you get the bad behavior. And anybody that's high quality can see through it, and is not gonna work with you.

David Rosenthal 1:58:36 Yeah.

David Senra 1:58:36 And you're only gonna succeed, like you guys, y- your business is power law. You're only gonna succeed if you get the very best ones.

David Rosenthal 1:58:41 It's interesting, though, like, the... Man, just like so much in life, like Warren and Charlie, really, [chuckles] like, they're just so often right. And if you think about, like, if you, if you buy the premise that the aggregate opinion of the venture capital industry has declined a lot-

David Senra 1:58:58 Is meaningfully worse, yeah

David Rosenthal 1:58:58 ... and will- may continue to decline. Whether it does or doesn't, it's meaningfully worse than it used to be. What, what have Warren and Charlie done? And to your point about the best content marketing ever, h- w- what i- is what they do? It's a combination of a hedge fund and a private equity firm. What is the aggregate opinion, [chuckles] public opinion-

David Senra 1:59:14 Right

David Rosenthal 1:59:14 ... of hedge fund managers-

David Senra 1:59:15 It's amazing

David Rosenthal 1:59:16 ... and private equity firms over the last 50 years? Nothing but down. What is the aggregate opinion of Berkshire? Nothing but up. You know? [chuckles] It's amazing.

David Senra 1:59:24 I- this is one advantage that I have, the fact that I'm not an investor, so I don't have to keep up on, like... To some degree, venture capitalists have to, like, know what's going on, right?

David Rosenthal 1:59:32 Yeah.

David Senra 1:59:32 And I close myself off.

David Rosenthal 1:59:34 Yeah.

David Senra 1:59:34 Like, I was having dinner with Sam and his wife, and they were asking me, like, his wife was asking me, like, "Hey, do you know about this person?" "Uh, no." "Do you know about this sh-?" Like, and Sam's like, "He's got a very limited, like, [laughing] ... " He's like- he said it nicely. He's like, "You can ask him about, like, books and shit-

David Rosenthal 1:59:46 [laughing]

David Senra 1:59:46 ... but this dude's not watching TV. He's not doing any of the other stuff, right?"

David Rosenthal 1:59:49 We keep him in a, you know, hut out back. [laughing]

Host 1:59:51 [laughing]

David Senra 1:59:51 Um, and the, and the good thing about that, though, is somebody actually, um... So basically, essentially, the way I use, like, Twitter or any social media is, like, I put out little, uh, snippets from my podcast in text.

David Rosenthal 2:00:02 Yeah, you, you put out a lot on Twitter.

David Senra 2:00:03 In text, though, form, right?

Host 2:00:04 Yeah.

David Rosenthal 2:00:04 Yep.

David Senra 2:00:05 Um, and-

Host 2:00:06 Which has been really working for you.

David Senra 2:00:08 I was think- I'm gonna read something that has a million, over a million views in 24 hours-

Host 2:00:11 Wow

David Senra 2:00:11 ... because everything's going on, and because I just had dinner with Charlie.

Host 2:00:14 Yeah.

David Senra 2:00:14 So I'm gonna read this, and then I'll go back to w-

Host 2:00:16 This is an amazing tweet-

David Senra 2:00:16 ... the benefit

Host 2:00:17 ... by the way.

David Senra 2:00:17 So, uh, I go, "Charlie Munger tells a story about human nature." Now, I didn't put this because of the bank run or any of this other shit. Like, I was just thinking, I was like, "Oh, this is..." I was rereading my highlights-

Host 2:00:26 Wait, you didn't post this, uh, it, like, with regards to the bank run?

David Senra 2:00:29 No. No. I- remember, I reread my highlights every day?

Host 2:00:32 Yeah.

David Senra 2:00:32 And so when I reread my high- my, well, my Twitter is, like, when I reread highlights, like, "Oh, that's a good one. I just put it on Twitter."

Host 2:00:36 Oh, my God.

David Senra 2:00:37 Yeah.

Host 2:00:37 Then you have, like, just the greatest timing in history.

David Senra 2:00:39 Yeah, [chuckles] exactly. Well, like, it wasn't-

Host 2:00:41 All right

David Senra 2:00:41 ... intentionally. I knew it was going on, but it never said, "Oh, let me... I need an SVB tweet." I don't give a fuck about current affairs.

David Rosenthal 2:00:46 Right.

David Senra 2:00:46 Like, I don't have any money in SVB, like, whatever. So it goes, "Charlie Munger tells a story about human nature," and then this is all Charlie speaking. "One of my favorite stories is about the little boy in Texas. The teacher asked the class, 'If there are nine sheep in a pen and one jumps