Walmart

1. BGBen Gilbert0:00

   I love how this book is called Made in America, and the Sony story is Made in Japan. Like, I don't know-

2. DRDavid Rosenthal0:05

   Yes

3. BGBen Gilbert0:06

   ... who stole from who there or if it was just the natural title they both chose and didn't even consider it, but that's amazing.

4. DRDavid Rosenthal0:12

   Ah, so, so great.

5. SPSpeaker0:14

   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?

6. BGBen Gilbert0:31

   Welcome to Season eleven, episode one, the season premiere of Acquired.

7. DRDavid Rosenthal0:36

   Woo!

8. BGBen Gilbert0:37

   It's a podcast about great technology companies and the stories and playbooks behind them. I'm Ben Gilbert, and I am the co-founder and managing director of Seattle-based Pioneer Square Labs and our venture fund, PSL Ventures.

9. DRDavid Rosenthal0:48

   And I'm David Rosenthal, and I am an angel investor based in San Francisco.

10. BGBen Gilbert0:54

    And we are your hosts. When we did our Sony episode, we discovered that many Steve Jobsisms really started as Akio Moritisms. And in all of the research for today's episode, we learned that many of the mental models and quotes ascribed to Jeff Bezos were really the original thoughts of Sam Walton. But of course, that is also not entirely true either, since Sam Walton's greatest gift was the ability to digest, learn, adapt, test, and integrate new ideas from others. Today, we explore Sam's creation, which ushered in a new era of American retail, and now global retail, from the post-World War II period all the way to today. Some astonishing stats on the company. It is the largest by revenue in the world, doing nearly six hundred billion dollars a year in sales.

11. DRDavid Rosenthal1:48

    Although Amazon is close behind now.

12. BGBen Gilbert1:50

    It's true. It is the world's largest employer, other than public entities like governments, employing nearly two point three million people around the world. It is still controlled by the Walton family, who owns just over fifty percent of the business, a full sixty years after it was founded.

13. DRDavid Rosenthal2:08

    Oh, we're gonna get into how and why that is the case. One other fun stat for you: today, ninety percent of America lives within ten miles of a Walmart, but there are three places where that is not true, and a fourth kind of where it's technically true, but not in spirit. Do you know what those places are?

14. BGBen Gilbert2:29

    No.

15. DRDavid Rosenthal2:30

    San Francisco, Seattle-

16. BGBen Gilbert2:33

    No way!

17. DRDavid Rosenthal2:34

    ... Boston, and the fourth place is Manhattan in New York City. It is not technically true because there is a Walmart across the river in New Jersey that is less than ten miles away, but in spirit, that is true.

18. BGBen Gilbert2:45

    What, two and a half hours to get there or something? [chuckles]

19. DRDavid Rosenthal2:48

    Yes. [chuckles]

20. BGBen Gilbert2:49

    Wow, so you're saying it's not a company that, uh, is built on the urban core. Is that where you're going, David?

21. DRDavid Rosenthal2:55

    It's the biggest company in the world. It services all of America, except where we live. [chuckles]

22. BGBen Gilbert3:00

    Yeah, it's fascinating. This really is one of the most classic business stories in America or in the world, period, and I kind of can't believe that we're not covering it until now. So let's start Season eleven with a bang. There are so many lessons that are totally applicable today, and every entrepreneur can learn from Sam Walton. For our presenting sponsor this episode, we are going to break some news about a fascinating new product and strategy that is very relevant for all the founders wondering where their next round of capital will come from. It is Fundrise. Longtime listeners know about their real estate investing product, but their company journey and philosophies are absolutely fascinating, and their CEO and co-founder, Ben Miller, is with us here today. Welcome, Ben.

23. SPSpeaker3:44

    Thanks for having me, guys.

24. BGBen Gilbert3:45

    You've built the largest private investment platform in the world for retail investors, and just so listeners have some numbers around that, that's over three hundred and fifty thousand individuals invest with Fundrise, totaling seven billion dollars of real estate. You've done this with zero institutional funding. So can you tell us the story of your capital journey and how it leads to this big announcement?

25. SPSpeaker4:07

    We started Fundrise shortly after the great financial crisis, and the goal was to try to build a better financial system that was different from what just blew up. The last bubble happened because of imprudence, incompetence, bad incentives, and a little bit of greed. So I was concerned when we started Fundrise, that if we were owned and funded by the same types of financial institutions, they would actually prevent us from doing what we were trying to do.

26. BGBen Gilbert4:33

    So I know that you raised from sort of one individual early on, and then by the nature of the product, Fundrise lets individuals invest in real estate. You basically looked and realized we can actually fund our business instead of raising the traditional venture route from our customers. I think I have this number right. You've raised one hundred and fifty-five million dollars into Fundrise, the operating company itself, from your customers?

27. SPSpeaker5:01

    Right. I mean, it was a complete regulatory innovation. From a scale point of view, we dwarf most venture funds, so why would we turn around and raise money from a venture fund with all of their incentives for short-term, you know, flips, they have to raise their next fund? Our customers, they're clearly like our business, right? They're invested in our product. Why can't they also basically participate and help build the company?

28. BGBen Gilbert5:24

    So what I understand that you're doing now is you basically said, "Oh, my gosh, it worked. Raising from these individuals on the Fundrise platform for Fundrise was great. I suspect we can do this for other companies, too." So what are you launching?

29. SPSpeaker5:41

    So we are launching a registered fund called the Fundrise Innovation Fund, and what we're going to do is take all the advantages that we got, which is long-term capital, aligned from the customers, all the benefits of being public without actually having to go public. We'll handle all the regulatory burden and invest in private tech companies.

30. BGBen Gilbert6:03

    ... That's awesome. There's a lot of founders that listen to the show, many that will raise a growth stage round, you know, here in the next six, 12, 18 months. Why is it interesting for them to raise from the Fundrise Innovation Fund?

Episode duration: 3:05:36