10 Years of Acquired (with Michael Lewis)

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

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Ben Gilbert?

  Happy 10 years.

• 0:01David Rosenthal?

  Happy 10 year anniversary, Ben.

• 0:03Ben Gilbert?

  It's crazy. It's been 10 years.

• 0:04David Rosenthal?

  I know. Here we are. Brought you down here to Silicon Valley to record our 10 year anniversary holiday special here. I wanted a special place.

• 0:13Ben Gilbert?

  Yeah, what are we doing? You keep like teeing up. Oh, just come down. Oh, we'll just record it here. And like, clearly, we're not at your house.

• 0:21David Rosenthal?

  I was actually thinking we should try and find the Silicon Valley house. Erlich Bachmann, Aviato.

• 0:27Ben Gilbert?

  This is Aviato.

• 0:28David Rosenthal?

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

• 0:39Ben Gilbert?

  It's a house. Is this the Google house?

• 0:43David Rosenthal?

  It's the house.

• 0:44Ben Gilbert?

  The where they had their first office in the garage?

• 0:46David Rosenthal?

  This is Google's first office right here. They gave it to us for the day.

• 0:50Ben Gilbert?

  Like, we can do our holiday special in it?

• 0:52David Rosenthal?

  Come on in.

• 1:19Ben Gilbert?

  Welcome to the Fall 2025 Season Finale of Acquired, the podcast about great companies and the stories and playbooks behind them. I'm Ben Gilbert.

• 1:28David Rosenthal?

  I'm David Rosenthal.

• 1:30Ben Gilbert?

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

• 1:54David Rosenthal?

  Yep. But then this year, we turned 10 years old and thought, well, maybe it's time for something. At least a sort of pause and reflection to shout out the Coca-Cola episode on our journey to this point and why Acquired has worked.

• 2:10Ben Gilbert?

  And so we thought, well, if we're going to do something, we should bring someone in to do it with us. And we'd want someone who is great at dissecting the mechanics behind teams or companies, someone who distills complexity into simplicity, someone who himself knows how to tell a great story.

• 2:27David Rosenthal?

  And there was really only one choice, Michael Lewis, author of Moneyball, Liar's Poker, The Blind Side, The Undoing Project, Going Infinite, on and on and on. And of course, host of his own podcast, Against the Rules. And Ben, you and I have looked up to Michael forever. So this was really special.

• 2:46Ben Gilbert?

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

• 2:58David Rosenthal?

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

• 3:09Ben Gilbert?

  And that email list just got a whole lot better with our first overhaul in five years. So you'll now get episode summaries, our big takeaways, and exclusive photos from our research process. That's acquired.fm/email. Chat about this episode with us and the whole Acquired community in Slack, acquired.fm/slash/Slack. And if you want more Acquired, check out our interview show, ACQ2. Our last episode was with Andrew Ross Sorkin, founder of the New York Times Dealbook, host of CNBC's Squawk Box, and author of 1929. That's ACQ2 in any podcast player. So with that, this show is not investment advice. David and I may have investments in the companies we discuss, and this show is for informational and entertainment purposes only.

• 3:53David Rosenthal?

  With that, on to our conversation with Michael Lewis. Well, Michael, thank you for joining us.

• 3:58Speaker 02

  Total pleasure.

• 3:59David Rosenthal?

  We have a little something, since this is our 10-year anniversary that we're celebrating, that we need to do before we start.

• 4:05Speaker 02

  Okay.

• 4:06David Rosenthal?

  So, you went to Princeton, I went to Princeton.

• 4:08Speaker 02

  Yep.

• 4:09David Rosenthal?

  My senior thesis would become impactful for Acquired. I was a French literature major. I wrote my thesis on the history of Dom Perignon and the marketing history of champagne.

• 4:22Ben Gilbert?

  Very serious college student.

• 4:23David Rosenthal?

  Very serious college student. A little different than yours.

• 4:26Speaker 02

  They let you do that?

• 4:27David Rosenthal?

  They somehow, I conned the French department into letting me do this. And, what, probably 12, 13 years later, we made our LVMH episode. And it was a big moment for Acquired. Moet & Chandon has just released the 2015 vintage of Dom Perignon. 2015 is the year we started.

• 4:49Speaker 02

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

• 5:08David Rosenthal?

  Well, I can tell you, our episodes are much better than my actual thesis was.

• 5:12Ben Gilbert?

  But that is exactly how it feels.

• 5:13David Rosenthal?

  But that is the process we go through.

• 5:14Speaker 02

  Yeah.

• 5:15Ben Gilbert?

  And clamming for finals the night before. There's a lot of academic feelings that happen as we get close to recording day.

• 5:22Speaker 02

  So, it's your show and I don't want to take it over. But I wanted to start by saying that I didn't discover it until this year. In July, I was at Google Camp, which is kind of a good way to discover Acquired. And...

• 5:37David Rosenthal?

  We should talk about where we are now, too.

• 5:39Speaker 02

  And we are sitting in the Google garage where...

• 5:43Ben Gilbert?

  Yes.

• 5:44Speaker 02

  I mean, I don't know exactly...

• 5:45David Rosenthal?

  This was...

• 5:45Speaker 02

  I'm not sure exactly what happened in the Google garage.

• 5:47Ben Gilbert?

  So, this was the office.

• 5:48Speaker 02

  It's a nice idea.

• 5:49Ben Gilbert?

  Like, literally, Susan Wojcicki lived here. She had, I think, just bought the house.

• 5:54David Rosenthal?

  This was her house, she had just bought the house.

• 5:55Ben Gilbert?

  And was looking to sublet part of it. Like, just make some extra money on other people using the house.

• 6:01David Rosenthal?

  And posted a bulletin notice on the Stanford campus that there was space available here.

• 6:07Ben Gilbert?

  And so Larry and Sergey's first desks, when they got kicked out of Stanford's offices, were right there.

• 6:13David Rosenthal?

  Right here, huh?

• 6:14Ben Gilbert?

  I actually think this actual Door Desk Sawhorse is the one that they were using because Google pulled it out of storage for us.

• 6:22Speaker 02

  So I'm at this camp with a lot of kind of well-known people and a prominent CEO says to me, "Have you listened to Acquired?" And I didn't know what he was talking about. And I went and listened, I can't remember what I listened to first. I think it might have been the Morris Chang episode. But I had about eight different reactions to it, all positive. And I thought, "This is kind of amazing, which you all are doing." So then, from July until now, I've listened to maybe 10 of the episodes, which is a lot of hours of listening time. The first thing struck me, could not believe you were getting away with a four-hour podcast. And I couldn't believe that even after four hours, I was still looking for even more.

• 7:07Speaker 02

  That you created the environment with the podcast that I tried to create with the book. You grab the listener, like I try to grab a reader, and get them to the state of mind where they'll let you take them anywhere. And teach them about stuff that they don't even know they want to learn about. I think if we're doing this as a 10th anniversary sort of celebration, I'm honored and I feel like I'm a little out of my depth here because I'm just a new listener and I've listened to all of it. I'm hardly the world's authority on your podcast. And I didn't prepare at all, except to listen to it. Except I did one thing. And that was I went back and listened to your very first episode. Oh, wow. Just to compare. Be kind, please.

• 7:51Speaker 02

  It is shocking how different it is from where you started, from where you have, you probably haven't ended up, but where you are now. So I'm gonna start by this 10-year journey. I think I can see some things you've learned. Oh. But I want to know what you think you've learned. Let's do the 10 lessons from the 10-year journey.

• 8:13Ben Gilbert?

  Do you have yours like crystallized? Because I don't want to taint you with what we think first.

• 8:17Speaker 02

  It's actually one big thing. And if you say it, I'll acknowledge that you sunk my battleship and I have nothing to add. But I'm curious what you think. There's no way that first thing you did was ever going to become a hit.

• 8:36David Rosenthal?

  Well, I'm curious if you think, I've always believed something that's always been there from the beginning is the magic between me and Ben.

• 8:44Speaker 02

  That's interesting to me. You all meet at like a Passover seder?

• 8:47David Rosenthal?

  Yes.

• 8:48Speaker 02

  And you're colleagues, you're going to be colleagues at a VC firm?

• 8:51David Rosenthal?

  Yep.

• 8:52Speaker 02

  I'll come back to that. I want to talk a little bit about you as investors, but we'll come back to that.

• 8:56David Rosenthal?

  Oh, boy.

• 8:56Speaker 02

  And how that's different from being a podcaster. But at what point do you decide that, oh, there's a kind of odd chemistry here?

• 9:04Ben Gilbert?

  We really just wanted to spend more time together. It was one of these things where...

• 9:08Speaker 02

  You're both straight?

• 9:10Ben Gilbert?

  Yeah.

• 9:10David Rosenthal?

  Yes.

• 9:11Speaker 02

  Okay.

• 9:11David Rosenthal?

  We're both married.

• 9:12Speaker 02

  It's not a romantic relationship?

• 9:13Ben Gilbert?

  No.

• 9:13David Rosenthal?

  We like to say that we each have two spouses. We have our actual romantic spouses that we have families with, and then we have each other.

• 9:20Ben Gilbert?

  David and I shared a bank account before my wife and I shared a bank account.

• 9:24Speaker 02

  So are either of your spouses threatened by the relationship?

• 9:27David Rosenthal?

  No.

• 9:30Ben Gilbert?

  Just from a sheer time perspective?

• 9:31Speaker 02

  Yeah, yeah, yeah.

• 9:32Ben Gilbert?

  I mean, nothing.

• 9:33David Rosenthal?

  My spouse loves it because she doesn't actually want to spend that much time with me. She likes that. Like, no, I used to, I used to, all the stuff we do on Acquired, I used to just talk at her, and she wasn't interested.

• 9:43Ben Gilbert?

  That is true.

• 9:44David Rosenthal?

  And now she loves it because I get to talk to, you know.

• 9:47Ben Gilbert?

  Although she gets the rough draft. Like, my wife won't listen to episodes because she's like, I've already heard four versions of the episode. And unfortunately, I heard like four worse versions. And because I endure that and give you feedback, the listener actually gets the better version.

• 9:59Speaker 02

  Right. So you meet, and there's a chemistry?

• 10:03Ben Gilbert?

  Yeah.

• 10:04Speaker 02

  Explain that chemistry. Like, what is it that you, when you, what is it that makes you excited to see each other?

• 10:10Ben Gilbert?

  David knew all the Apple rumors in real time, just like I did.

• 10:14David Rosenthal?

  Yeah.

• 10:14Ben Gilbert?

  You had read all the latest Strategery posts.

• 10:17David Rosenthal?

  We bonded over Ben Thompson originally.

• 10:19Ben Gilbert?

  And I think, you can tell me if this is mutual, but I looked up to you because you were doing a thing that was mysterious to me, which was venture capital. I was a software engineer, and I got hired to work at a venture firm to do some incubation work, but I didn't know anything about like the real job of venture capital. And here's David, someone who's just a few years older than me, like, doing that thing, but kind of in my like peer age group. And I could, I could like lean over and be like, what are they talking about?

• 10:47David Rosenthal?

  Well, I kind of felt like a fraud in a lot of ways. Like, I repressed this deep down. Like, but if I'm honest with myself, I think I felt like a fraud as a VC because I'd never... But I went to Princeton. I was a French literature major. I worked on Wall Street. I worked briefly at the Wall Street Journal, and then I became a venture capitalist. I had no qualification to-

• 11:06Speaker 02

  Have you ever coded it, coded, or have you ever done anything-

• 11:09David Rosenthal?

  I mean, I took some CS classes in college, but like, I'd never built anything. And so I was like, Ben had built all these things. Like, you built the this-for-that website. You built so many products. You had products that millions of people used. And I was like, I'm just masquerading here.

• 11:25Speaker 02

  So you could see that Ben knew stuff. It was exciting for you to know about.

• 11:30David Rosenthal?

  Yes.

• 11:30Speaker 02

  Did you feel that David knew stuff?

• 11:32Ben Gilbert?

  Absolutely.

• 11:33Speaker 02

  What kind of stuff?

• 11:35Ben Gilbert?

  Business.

• 11:36Speaker 02

  Really?

• 11:37David Rosenthal?

  It wasn't French literature.

• 11:38Ben Gilbert?

  No, no, no. I only found out years into doing Acquired, he was a French Lit major.

• 11:44Speaker 02

  But that's important, that French, that background.

• 11:46David Rosenthal?

  It ended up becoming-

• 11:47Speaker 02

  This kind of broad curiosity about things other than business and technology. I hear it in your program. I hear it in your podcast. So what I'm thinking of in my head is Kahneman and Tversky. I wrote a book called The Undoing Project. And you could see, if you could see two people, and then that's, it got me thinking about collaboration. And I've had exciting collaborations with people. And the feeling I get is, this person is making, is bringing out a better version of me. Which is why I asked if your spouses were threatened, because Kahneman and Tversky's spouses were- Threat is too strong a word, but they were very aware that the relationship that was the most important in their lives was with, not with their spouse, but with-

• 12:30David Rosenthal?

  I got the sense from The Undoing Project that Kahneman and Tversky's relationship was very intense. I don't know that I would describe our relationship as-

• 12:39Speaker 02

  You know, it was. It was, yes, it was.

• 12:43Ben Gilbert?

  And competitive.

• 12:44Speaker 02

  It was not competitive on, Danny Kahneman felt, was always, felt at risk of being dismissed, thought the lesser partner. There was a status difference between the two of them. Right going into it. Everyone in the world thought Amos was the smartest person they'd ever met. You two didn't have that, ever have any of that.

• 13:04David Rosenthal?

  Not for me.

• 13:05Speaker 02

  But you said you felt like a fraud.

• 13:07Ben Gilbert?

  I think I felt lesser. Like, there were a lot of things when we started doing Acquired, where we were doing this like business analysis podcast, but I didn't know finance. Like, it was...

• 13:16David Rosenthal?

  Which is funny, because you've become more, you know, the keeper of the analysis on Acquired.

• 13:20Ben Gilbert?

  Yeah.

• 13:21David Rosenthal?

  And I'm more the keeper of the story.

• 13:23Ben Gilbert?

  It's different, though, than a difference in status. I don't feel that you or I have ever felt we had a difference in status. And the number of like fights we've had, or real tension we've had is like, two, three ever in 10 years? I mean, it's weirdly...

• 13:38Speaker 02

  Let's come back to that.

• 13:39Ben Gilbert?

  None. Yeah.

• 13:39Speaker 02

  And let's get to the lessons. What have you learned?

• 13:43David Rosenthal?

  We started thinking about what have we learned from the companies we've covered that we've then applied

• 13:47Speaker 02

  Yep.

• 13:47David Rosenthal?

  to Acquired.

• 13:48Speaker 02

  All right.

• 13:48Ben Gilbert?

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

• 14:05Speaker 02

  And?

• 14:06Ben Gilbert?

  So that's our frame.

• 14:07Speaker 02

  Okay, let's go with that frame.

• 14:09Ben Gilbert?

  Yes.

• 14:11David Rosenthal?

  So the one I was gonna start with is the NFL. The product is scarce. 162 baseball games a year. It's called America's pastime. You pass a lot of time with it. But with the NFL, because the product is scarce, and then they have very smartly cultivated that and engineered it to be more scarce, more of an event-driven sport, that's made all the difference. And like, to me, is I look at what we do is insane for the podcasting industry. Like, it's completely insane. We release, for the last Three years, we've released 12 episodes. The next year, we're gonna do eight. Eight episodes for the whole year.

• 14:50Speaker 02

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

• 14:54David Rosenthal?

  Yep.

• 14:55Speaker 02

  And I can't do it, and so I'm not gonna do it.

• 14:57David Rosenthal?

  Podcasting is like your... Second or third thing that you do, right? And you make more episodes, I think, per year than we do.

• 15:03Speaker 02

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

• 15:24David Rosenthal?

  We used to make 26 episodes a year, you know.

• 15:28Ben Gilbert?

  And they were 40 minutes long to an hour 20.

• 15:31Speaker 02

  And so how do you go from that to realizing? And did you really learn it from the NFL? Or did you just do it and then?

• 15:36David Rosenthal?

  We were starting to do it and then we covered the NFL and we were like, aha. This is what we're doing.

• 15:40Ben Gilbert?

  Most of these things are actually, I think, are confirmation bias. We get some inkling that like, we should continue to go in this direction. Like my, in calling out Hermes, it's because I think quality and scarcity have become an important part of acquired. And in some ways, we like, learned that from Hermes, but we covered Hermes last year. I think we found our way to that probably four-ish years ago, maybe five years ago. Where we used to feel like we were bad at podcasting because we couldn't make very many. And because we didn't have a whole production team and we didn't have professional ad salespeople and we didn't have.

• 16:15David Rosenthal?

  We weren't full-time for a long time.

• 16:17Ben Gilbert?

  Yeah. And at some point, we kind of looked at each other and we were like, maybe if we just admit that we, we are heavily constrained. And then try to just lean into that constraint in the way that Hermes leans into every single Birkin bag must be handmade by one artisan. And we're going to build a business model around that. And it turns out to be a great business. We sort of thought every episode is going to be entirely handcrafted by us. All the research, all the recording. We work with this amazing audio engineer, Steven, who does the, the like literal waveform editing. But, you know, we go in and in a transcript, highlight a thousand cuts per episode. Like it's this made with love product.

• 16:56Ben Gilbert?

  And it turned out we could actually build a big platform and a good business out of something heavily constrained.

• 17:04Speaker 02

  But that's not where you start.

• 17:05Ben Gilbert?

  No.

• 17:05Speaker 02

  No, no, no. So how do we figure out where to start? So let's just for people who don't know. Where you start is you're two guys who've met each other. Yep. And, and got a crush on each, on each other. Yeah. You're being, you love being with each other. And you, you're gonna, you get this idea that it would be really cool to do a podcast on corporate acquisitions. That worked.

• 17:24Ben Gilbert?

  Yeah.

• 17:24Speaker 02

  That worked. Bad idea. Well, it is an idea. It was a starting space. You could easily have started the opposite, corporate acquisitions that didn't. And you'd have done much, you'd have had much more material.

• 17:34Ben Gilbert?

  Which is what most press at the time was.

• 17:36Speaker 02

  Right.

• 17:37Ben Gilbert?

  It was, let's talk about how crappy this acquisition was.

• 17:39Speaker 02

  It's interesting to me that your first step, right from the start, is positive. It's like, what worked? Not what didn't work, it's what worked.

• 17:48Ben Gilbert?

  That's because we were VCs and I was trying to build companies. I mean, the goal was create things that have enough value to get bought and, or go public. And when people buy things, it's because they're working. So let's try to reverse engineer what works.

• 18:01Speaker 02

  Understand why things worked. Right. So that's a different starting spot from almost all journalism. Yep. In fact, if most journalists started there, they'd be accused of hagiography of... Yes. But you, but you, because of where you, where you're coming from, and because you're thinking of this in very practical terms, like how, why did this work? You do get away with it. It's just that first episode, you're almost like different people. But I'm gonna hold back on what I think you learned. Because I wanna see if you get to it. So you've got, what's the third episode that you have learned some, a lesson from?

• 18:36Ben Gilbert?

  I think Berkshire, we learned so many things from. We did this three-part saga on Berkshire Hathaway.

• 18:42Speaker 02

  God, I have not listened to it and I am a big investor in Berkshire Hathaway.

• 18:47Ben Gilbert?

  Good for you. Congratulations.

• 18:48Speaker 02

  Well, since when? I bought it right at, in, in the middle of the financial crisis. Because I thought, I, I mean, I had done a take, I mean, it's not, it's a little, putting it a little strongly. But oddly, I had written a takedown of Warren Buffett on the cover of the New Republic magazine called The Temptation of St. Warren. You can probably dig, dig it off, off of the way back. What was the thesis? The thesis was that he may have started out being who he says he is. But that he's become this very different thing in the marketplace. His money's not like other people's money. That's true. And you don't have a couple of things Warren Buffett has. And his money is valued differently. But secondly, he was willing to do deals that, and the time bothered the hell out of me. And what had happened was... Like the Goldman deal?

• 19:33Speaker 02

  It was a Solomon Brothers deal that bothered the hell out of me. He kept a CEO in place, who I thought should not have been allowed to... Were you there? I was there! Yeah, you lived through it. No, I was through it. This is a huge part of our Berkshire series. It turned me briefly, only briefly actually, cynical about Warren Buffett. And then I came out of it and fell in love with him all over again. But I had ridden this thing and pissed him off entirely. I mean, like, it would clearly upset him. And then kind of started watching him for longer and I thought, you know, I just liked him, just liked him. You couldn't help but like him. So I started to soften. And when we get to the financial crisis, I thought, well, his money's going to be so valuable here. That what is needed is credit. And I think it might, if he stays alive long enough, it might happen again soon.

• 20:17Ben Gilbert?

  So you invested in Berkshire before the legendary deals coming out of the financial crisis?

• 20:23Speaker 02

  Yeah. And so I bought a chunk of the A shares and I've just sat on them. And let me tell you, can I tell you a Warren Buffett story? Yeah. I mean, this is a little, talking a little bit out of school, but I never met him. I know he was really irritated with me. And then I actually look back at that, it's the only time I've ever looked back at a piece I wrote and I thought, I overdid that. I went right back to The New Republican, wrote another 5,000 word thing about Warren Buffett, in which I basically apologized for the first piece. I bought these shares in 2008. When I was working on Going Infinite, I was working on the Sam Bankman-Fried book. And I was talking to a publicist, completely unrelated to Warren Buffett. And she said, you know, I also represent Warren.

• 21:07Speaker 02

  And she said, and I told Warren that I'd been talking to you. And he said, he has a question for you. And I said, what? He says, is he the Michael Lewis who bought shares back in the... No, no, no! I swear to God. I swear to God. So this tells you something about Warren Buffett, more about Warren Buffett than me. And, and he said, he bought it like, the book value to, you know, that thing, that ratio? He bought it as cheap as it's ever been. And he says, he says, but he... You made the best trade in Berkshire stock history. Then he says, then he says... So he's the Michael Lewis who who sold some Berkshire Hathaway two years ago and four years ago. And he was like, why did he sell? So he's tracking. What?

• 21:50David Rosenthal?

  I can't imagine you're like, you're not like Vanguard here.

• 21:53Speaker 02

  No, no, no. And I said, well, actually, I actually just gave him a charity is what I is what I'd done. I would give him the given the money away.

• 21:59David Rosenthal?

  That's unbelievable.

• 22:00Speaker 02

  And when he heard, and she said, he'll be relieved to hear that kind of thing. It's like, so can you imagine? Can you imagine that Warren Buffett is taking the time to watch who is coming in and out of the A shares and and thinking about it? I mean, I just thought he has that. He and Munger had that whole thing about don't put your money in an index fund. Put your money in a big bundle of stocks. Put it in a few stocks and watch those stocks like a hawk. It's like they watch that thing in a way that like, I just in history, has anybody ever done anything like that?

• 22:29David Rosenthal?

  I mean, all these people are they're the maniacs. You don't build something like this if you're not a maniac.

• 22:33Speaker 02

  That's exactly right. So anyway, sorry, I just digressed here. But you did you what did you learn from your Berkshire Hathaway? There are three episodes of Berkshire Hathaway.

• 22:40Ben Gilbert?

  Well, as it applies to acquired, we got really obsessed with the circle of competence that it's OK to have a giant too hard pile. There's a bunch of things that like, I'm not intelligently saying no to.

• 22:53David Rosenthal?

  We used to say this all the time. We'd be like, too hard pile, too hard pile.

• 22:55Ben Gilbert?

  Every phone call we'd have would be like, eh, too hard pile.

• 22:58David Rosenthal?

  So Warren Charlie had this thing. There was the the like, the yes pile, the no pile, and then the too hard pile.

• 23:06Speaker 02

  The too hard pile. I see. OK.

• 23:09Ben Gilbert?

  And it's OK to just like.

• 23:10David Rosenthal?

  And the too hard means no.

• 23:11Speaker 02

  All of technology was a too hard pile.

• 23:13David Rosenthal?

  Yeah, it was just all, yeah, it was like, there might be something in here, but like, I'm just just too hard.

• 23:17Ben Gilbert?

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

• 23:27Speaker 02

  Yep.

• 23:28Ben Gilbert?

  And that was really freeing once we started just like, I mean, truly on most of our phone

• 23:34Speaker 02

  So what's an example of something that you? I'm surprised you say this. What's too hard?

• 23:37David Rosenthal?

  The reason that one of the reasons, besides just wanting to meet you, because you've been an inspiration to us forever, that I wanted to meet you a few months ago was Hollywood. We've had lots of opportunities to work with Hollywood.

• 23:52Ben Gilbert?

  It keeps being

• 23:53David Rosenthal?

  To this point, they have thus always invariably ended up in the too hard pile.

• 23:58Speaker 02

  Are you talking about doing episodes about Hollywood?

• 24:00David Rosenthal?

  No, no, no, no, no.

• 24:01Speaker 02

  Or to become a movie star?

• 24:02Ben Gilbert?

  Creating TV shows, creating documentaries, adapting these stories into films. They all sound good until we start digging in and then we're like, the time it would take us to think through all the implications of this.

• 24:16David Rosenthal?

  We should just make another episode.

• 24:18Ben Gilbert?

  The answer

• 24:19David Rosenthal?

  The answer almost always is, we should just make another episode.

• 24:21Speaker 02

  That's a really intelligent place to land. Because what they will do is woo you with their enthusiasm. And then take you down a rabbit hole where you will spend years of your life and have nothing to show for it.

• 24:34David Rosenthal?

  Well, this is one of the reasons I want to talk to them. Like, Michael's a very smart guy. You've been very successful.

• 24:38Speaker 02

  I've gone down the rabbit hole.

• 24:38David Rosenthal?

  Yeah.

• 24:39Speaker 02

  And I've gone down the rabbit hole knowing that I didn't have a whole lot else better to do at the time. It's like between books. It's a palate cleanser. You don't have a between books period. You know.

• 24:49David Rosenthal?

  We need to, yeah.

• 24:50Speaker 02

  Yeah, I don't have that. I don't have the machine you have. You've got an assembly line going.

• 24:55Ben Gilbert?

  And it's a compounding asset. I mean, this is the craziest, craziest thing about podcasting. And like, a giant amount of why this has worked for us is we do a lot of work that looks a lot like the research and the writing of a book. But when we make our book and we release it to the world, people click subscribe. And so when we release the next one,

• 25:13David Rosenthal?

  Get the next book.

• 25:14Ben Gilbert?

  Those same people go listen. Like, it's almost guaranteed.

• 25:17David Rosenthal?

  We're always growing our base.

• 25:18Ben Gilbert?

  Podcasting, being an author, there's loose compounding elements to it, but there's not a like literal

• 25:25Speaker 02

  Not nearly what I thought. When I got into the business of writing books, I thought there was gonna, I thought about this a little bit. And so you're right.

• 25:32David Rosenthal?

  But you've probably done it better than

• 25:33Ben Gilbert?

  You're one of the few people who probably does have such a brand.

• 25:36Speaker 02

  I'm going to move around America to the various arenas of ambition. Wall Street, Silicon Valley, Washington, movie business, sports, the various things. And I'll naturally attract the audience that is interested in that arena.

• 25:51Ben Gilbert?

  Yep.

• 25:51Speaker 02

  And then I'll drag them along to the others. And it hasn't really happened that way.

• 25:56David Rosenthal?

  Even for you?

• 25:57Speaker 02

  Not really. Not really. The books have a kind of Market and it's a big market, big-ish market, but it doesn't, I see no evidence that I'm dragging people along with me. I feel like each, each book feels like another startup. And then I've got to go out and make it happen, almost as if I've not written one.

• 26:17David Rosenthal?

  Now that's Moneyball audience is not necessarily

• 26:19Speaker 02

  Correct.

• 26:20David Rosenthal?

  fifth risk.

• 26:20Speaker 02

  Exactly. And then the audiences end up just being different. So it's just the way it is. But that's not true with

• 26:27Ben Gilbert?

  That's not true for acquired.

• 26:29Speaker 02

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

• 26:37Ben Gilbert?

  The opportunity cost is so high of spending a month not making an acquired episode. Because when we publish an episode of acquired, the base does come with us. Not all of it, but like, you know, we make epic systems about healthcare and all the people who listen to LVMH are now learning how doctor's office IT works.

• 26:55Speaker 02

  Right.

• 26:55Ben Gilbert?

  So podcasts are unique in that it does have that true subscriber base. But unlike anything else where you click subscribe, there's not an algorithmic platform that disintermediates you. I mean, you think YouTube or Twitter or any of these, when someone clicks follow or subscribe, they're like, it's like signal on the algorithm, but it's not guaranteed. But like you subscribe in Apple Podcasts or Spotify and those people are actually subscribed and they're gonna get the next episode.

• 27:21Speaker 02

  Right. And they learn to trust you.

• 27:23Ben Gilbert?

  Yeah.

• 27:23Speaker 02

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

• 27:30Ben Gilbert?

  Yes. And I am terrified of betraying that trust. Like anytime we make an episode, I think of it as a churn opportunity. If we put this in the feed, if we don't live up to the expectations that our listeners have, we will burn them and they will leave us forever.

• 27:45David Rosenthal?

  In the why does acquired work framework, there's, there's a strong element of terror. Of why it works. We're, we're constantly terrified every time we make an episode.

• 27:55Ben Gilbert?

  Every minute is a churn opportunity.

• 27:56David Rosenthal?

  Are we letting, are we letting people down?

• 27:59Ben Gilbert?

  All right, listeners, now is a great time to tell you about a longtime friend of the show, Vanta. AI has scrambled the whole security picture. It used to be that you proved that you were secure once a year on audit or a static PDF, then everyone would nod and you're done. But in an AI-first world, that doesn't hold up anymore.

• 28:18David Rosenthal?

  Yep. Your risk surface changes every week now. A vendor turns on an AI feature, or someone writes in a new model without telling IT, and your posture is different than it was last week, let alone at your last audit. Vanta's own research found that around 70% of companies have this quote-unquote "shadow AI" running with no security review at all.

• 28:39Ben Gilbert?

  Right. And that's where Vanta comes in. They're the leading agentic trust platform, meaning they've built the thing that closes the gap. And the way that they close that gap is Vanta Agent. Think of it as a GRC engineer, that's Governance, Risk and Compliance, except that it's software and it doesn't sleep. It finds the issues, drafts the fixes, and cuts the time that you'd spend on vendor assessments in half.

• 29:01David Rosenthal?

  In half! Which is exactly why more than 16,000 companies today run on Vanta. Companies like Ramp, Cursor, and Snowflake all stay audit-ready and catch the risks that crop up between audits across every vendor, every AI tool, the whole environment.

• 29:19Ben Gilbert?

  And that's the real value. Trust has to be continuous now, which is why Vanta automates your security, your compliance, and the work to earn and prove trust. We're huge fans of Vanta over here, and literally hundreds of Acquired listeners have become Vanta customers at their companies over the years. So you can get $1,000 off Vanta at vanta.com/acquired. That's V-A-N-T-A dot com slash acquired for $1,000 off, and just tell them that Ben and David sent you.

• 29:47Speaker 02

  Are you more terrified than you were two years ago? Yes. So you're growing. The terror is growing. The terror is growing. At some point, it's not going to be a good thing. I mean, it's good to be a little on edge. Yes, yeah. But you don't want to get yourself in a situation where you feel like you'd do the same thing over and over again, because eventually it will get old. We'll come back to... This is, we're going to get to the bull and the bear case at the end. Okay, great, great, great. But it's, it's, this is so back to your, the lesson that you gleaned from Munger and Buffett, it's okay to have a too-hard pile. And you said, and the too-hard pile is like doing things in Hollywood. But when I asked the question, did you ever run across this, have you run across this, have you ever had a subject where you thought, ah, this is just too hard to do? Yeah. Oh, yeah. What would be an example of that?

• 30:28Ben Gilbert?

  We got pretty far down the line on doing an episode on the Fed.

• 30:31David Rosenthal?

  Yeah.

• 30:31Ben Gilbert?

  And walked away from it.

• 30:33Speaker 02

  Yep. You say you walked away from it?

• 30:35Ben Gilbert?

  Yeah, we might come back, but it's been five years.

• 30:38Speaker 02

  There'll be a moment to come back to it.

• 30:39David Rosenthal?

  Yeah, yeah, yeah, I'm glad we didn't do it in the past.

• 30:42Speaker 02

  It should be better, dude. Although it's going to violate your rule about doing newsy things.

• 30:46David Rosenthal?

  We always try and find things must be timeless is like a must, must. Everything we do must be timeless, the company we're covering.

• 30:55Speaker 02

  Nothing's timeless. So what do you mean by that?

• 30:57David Rosenthal?

  It must be that like if you listen to this, an episode that we make five years after we made it, it's 80% as relevant. It's still, it will still be an important institution in the world.

• 31:09Speaker 02

  Right.

• 31:10Ben Gilbert?

  But like a CNBC article is worth 2% of its original value within a month.

• 31:16Speaker 02

  Right.

• 31:17Ben Gilbert?

  And we want to be worth 80% of our original value five years from now on a given piece of content.

• 31:22Speaker 02

  So does that mean you're picking institutions that you think will survive?

• 31:25Ben Gilbert?

  Yes.

• 31:26David Rosenthal?

  Yes, but okay, so that's like baseline, bedrock.

• 31:29Speaker 02

  You're so much of your stuff is tech and finance where there's so much churn.

• 31:33David Rosenthal?

  Well, yes.

• 31:33Ben Gilbert?

  This didn't used to be true. You look at anything pre 2020, 2021, we had not yet discovered this principle.

• 31:40David Rosenthal?

  But our real bangers are timeless and timely. Doing Google this year was timeless and timely.

• 31:46Speaker 02

  Right. Having that, however you do it, you're getting to something that I try to get to when I'm picking subjects, but you're doing it in a slightly different way.

• 31:56Speaker 02

  What I like, what gets, when my socks start to go up and down about a subject is when I'm really interested in it and nobody else is. There isn't, that there aren't people, it's not hot. And I found with, I think it's true of basically all my books, a couple, maybe a couple of exceptions, but a lot of the books, that if I'm at a dinner party and someone asks me, what are you working on? And after about 60 seconds, I can see their eyes glaze over. Like, why is he interested in that? You know, it's just not registering with them in any way.

• 32:30Ben Gilbert?

  Yeah.

• 32:30Speaker 02

  And I've learned just to not even talk about it because it kills my interest to watch it kill their interest. But I know why I'm interested and why it's important. And I'm not relying on the world telling me it's important. That's a really good sign.

• 32:46Ben Gilbert?

  This is a difference between what you do and what we do. Because I feel like when I think through all your books, they're almost always a story of obscurity that, once it becomes a Michael Lewis book, then it becomes a well-known phenomenon. Moneyball. Like, you are discovering these things that kind of nobody's talking about. Whereas, when we do something like Trader Joe's, someone says, "What are you working on?" And we're like, "Trader Joe's." They're like, "I love Trader Joe's."

• 33:12Speaker 02

  Yeah, yeah, yeah. So that is a difference. Your subjects are not obscure.

• 33:16Ben Gilbert?

  Right.

• 33:17Speaker 02

  They're the most famous corporations in the world.

• 33:19David Rosenthal?

  People love it, but they don't really understand.

• 33:22Ben Gilbert?

  Yeah, there's a secret hiding in plain sight.

• 33:24David Rosenthal?

  A secret in hiding in plain sight. People didn't understand Trader Joe's, or people didn't understand Google, we thought.

• 33:29Ben Gilbert?

  There's three things that make a great acquired episode. One, there's a compelling hero protagonist that takes a hero's journey. Where we're going from obscurity to ubiquity. How it starts is this thing that nobody cares about, and then it becomes the most important thing in the world. Two is, there's a secret hiding in plain sight. Like Costco. I think when the ordinary consumer sees Costco, they're like, "Oh, I love Costco." But when someone who's listened to the acquired episode on Costco thinks about Costco, they see like all the gears turning of the machine. Like, there has to be some way that we can expose something. And then our third criteria is it has to be important in the world. And I think that's something we picked up later. I mean, we used to do these like little $10 million acquisitions.

• 34:09Ben Gilbert?

  And now, when we're gonna go spend two months of our life researching and making that like the acquired episode, it has to be something worthy of the acquired stage.

• 34:20Speaker 02

  When did that happen? So I'm a little unclear. Again, getting back to this first episode you did and where you are now and the difference between them. What sort of compelled you or propelled you into the current form of acquired? The decision to make it a business and the decision to actually live off of what you earned from your podcast? So it had to work commercially? So then you started to make these adjustments?

• 34:45David Rosenthal?

  Right.

• 34:45Speaker 02

  Is that how it worked?

• 34:46David Rosenthal?

  Yes and no. You're on the right track. I like the Berkshire. I thought you were gonna say partnership as a lesson from it. So we did a series on Sequoia Capital, the venture firm. I went full-time on acquired in 2020. Five years in, Ben didn't go full-time until January 24, right?

• 35:07Ben Gilbert?

  Correct.

• 35:08David Rosenthal?

  End of 23, beginning of 24.

• 35:10Speaker 02

  You remained equal partners?

• 35:12David Rosenthal?

  Yes.

• 35:12Ben Gilbert?

  Oh, it wasn't a business when we started. It was just like, I mean, we didn't make money till our third year.

• 35:16Speaker 02

  But those three years while you're full-time and you're part-time, it was an equal?

• 35:20Ben Gilbert?

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

• 35:31Speaker 02

  That's great.

• 35:31David Rosenthal?

  It never crossed my mind.

• 35:33Speaker 02

  There we go. That's an important point.

• 35:35David Rosenthal?

  I guess I'm glossing over it because it wouldn't even, like, it didn't even cross my mind now. Like, it's always been, acquired has always been the two of us. Equal. It would be profane for it to be anything.

• 35:48Ben Gilbert?

  It would actually break it if we ever started trying to figure out like little carve-outs or pieces of the pie for, well, I did this, therefore I should get.

• 35:55Speaker 02

  It's true collaboration. You don't recognize, there's no boundary where you start and you.

• 36:00David Rosenthal?

  This is where I'm going with the story.

• 36:02Ben Gilbert?

  It's funny you bring up Sequoia because it's actually benchmark-y in that way.

• 36:05David Rosenthal?

  It's the quote. It's Leonie's quote. So, end of 22, FTX happens, interest rates go up, podcast advertising market falls off a cliff. Our revenue dropped 40%. So we went from this wasn't a business, I went full-time, we made it a business, it worked amazingly well.

• 36:28Speaker 02

  From 20 to 22.

• 36:29David Rosenthal?

  From 20 to 21 into 22. And then our revenue dropped 40% overnight.

• 36:36David Rosenthal?

  And that was the moment when we changed everything. Oh, yeah.

• 36:41Speaker 02

  So how many episodes are you making in 2021?

• 36:43David Rosenthal?

  A lot.

• 36:44Speaker 02

  Oh, I see. Okay. And is it, but it's not, no longer just corporate acquisitions?

• 36:48Ben Gilbert?

  We started broadening with the Tesla episode in like 2019, maybe 18.

• 36:53Speaker 02

  And why did you broaden?

• 36:54Ben Gilbert?

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

• 37:06Speaker 02

  There you go.

• 37:07David Rosenthal?

  We would get all this feedback.

• 37:08Speaker 02

  You were, you kind of foul hooked the listener, your audience.

• 37:11David Rosenthal?

  Yes.

• 37:12Speaker 02

  They were listening.

• 37:13Ben Gilbert?

  What's a foul hook?

• 37:14Speaker 02

  When you go fishing and the fish, you catch the fish by the belly rather than the mouth. The hook gets, the hook gets in some weird way.

• 37:22Ben Gilbert?

  Yes.

• 37:22Speaker 02

  You didn't actually catch the fish in the, in an honest way.

• 37:24David Rosenthal?

  Yes.

• 37:25Speaker 02

  Yeah.

• 37:26David Rosenthal?

  But yeah, we would get all these emails every time we meet people and they talk about the show. I'd be like, I love the story. Like you guys are just gifted storytellers. That's what we hear over and over and over again. And like, eventually we were like, well, we should believe that.

• 37:40Speaker 02

  So can I, I'm going to, at that moment, I'm going to interject what I noticed. Cause, because we're, that in that first episode, you were so unsure of yourselves. There is, you were so choked, both of you. And you were, you have a background in theater. You were a kid.

• 37:57David Rosenthal?

  We both do, yeah.

• 37:58Speaker 02

  So you did not come across as people who'd been on stage. You, you, it was, it was, it was kind of an affectless performance. It was, there's a flatness to it. You were, you were afraid to, whether you knew it or not, exhibit a lot of emotion. You didn't realize that one of your secret sauces is emotion. It's the way you respond to each other when you're presenting material is teaching the, is helping the audience understand how they should feel about it. That you're giving them sometimes very dry facts, like, I don't know, their revenues doubled every year for a hundred years' strength. And, and the audience may not know that that's something.

• 38:39David Rosenthal?

  Something of every acquired episode.

• 38:40Speaker 02

  That's an incredible thing.

• 38:41Ben Gilbert?

  Right.

• 38:42Speaker 02

  And the way you respond, even sophisticated listeners are helped. Oh, pay attention now. This was, that's an important thing. I should, I should get excited about that.

• 38:53David Rosenthal?

  We used to share our research, such that we were doing research in the early days.

• 38:58Ben Gilbert?

  Yeah.

• 38:59David Rosenthal?

  I think we only had a single Google Doc that we worked on.

• 39:01Ben Gilbert?

  We were just dumping everything into the same shared document.

• 39:03David Rosenthal?

  And we were on the, so by the time we would actually go to record the episode,

• 39:06Speaker 02

  There's no surprise.

• 39:07David Rosenthal?

  Yeah, there's no surprise.

• 39:08Ben Gilbert?

  There's no disagreement.

• 39:09Speaker 02

  You can't pretend to be surprised.

• 39:10David Rosenthal?

  We can't, yeah.

• 39:11Speaker 02

  Or you would be pretending to be surprised.

• 39:12Ben Gilbert?

  Neither of us are good actors.

• 39:13David Rosenthal?

  I don't, when did we?

• 39:15Ben Gilbert?

  We did a little cold intro.

• 39:17Speaker 02

  So this is really important. So you added an improvisational component.

• 39:20Ben Gilbert?

  Yes.

• 39:21Speaker 02

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

• 39:28Ben Gilbert?

  100% agree. Every episode now, going into recording day, feels like a high-wire act because we haven't fully scripted it out. I'm like, I think this is gonna come together, but we had to add this thing called a production meeting about six months ago. One week before recording, we are required to get together and share, agree on an episode's structure, but not share any details. Because we got so into this improvisation thing that some of our episodes would sort of end and you're like, that had no flow to it. Like you guys had two completely different ideas for the episode.

• 39:59Speaker 02

  You're not taking risks if it doesn't work sometimes.

• 40:01Ben Gilbert?

  Yeah.

• 40:01Speaker 02

  Right? But it's the difference between, I mean, do you know how your heart sinks when someone gets up at a podium with a script, with a speech, and they're gonna read their speech? The audience is waiting for you to get through this thing because they know nothing's going to happen. Like, whatever's on that page, that's what's gonna happen.

• 40:19Ben Gilbert?

  Like pre-announcing the score to the Super Bowl.

• 40:20Speaker 02

  It's exactly right. And that if you get up and you just start talking, the audience also knows, oh my God, this could be a disaster. They don't know where it's going. Just having, just some of that has a huge effect on the way the audience responds to the performance. And so that, that is not in the beginning.

• 40:40David Rosenthal?

  Do you remember when we started doing that?

• 40:44Ben Gilbert?

  Well, I think in the first 10 episodes, first five episodes, we got feedback saying you guys need to disagree more. But I don't think we quite realized that we should reveal surprises for each other until five years ago, four years ago.

• 40:56David Rosenthal?

  But at some point, we made it, you know, an unwritten rule of like, we have separate documents we prepare separately.

• 41:04Ben Gilbert?

  We tried to do like separate research calls.

• 41:06Speaker 02

  That was five years ago, you say? So the B I call. So we start with the corporate acquisitions in 2015.

• 41:11David Rosenthal?

  Yeah.

• 41:11Speaker 02

  And you two, knowing everything that you're going to say when you get on, basically.

• 41:15Ben Gilbert?

  Yeah.

• 41:15Speaker 02

  And it's short and it's 40 minutes.

• 41:17David Rosenthal?

  Yeah.

• 41:18Speaker 02

  So.

• 41:19Ben Gilbert?

  And we're not confident. What you're hearing too is like, I'm supposed to be doing financial analysis as someone who's never been taught how to read a financial statement.

• 41:26Speaker 02

  Right.

• 41:26Ben Gilbert?

  And so you're also hearing a little bit of like.

• 41:28Speaker 02

  Impostor syndrome.

• 41:29Ben Gilbert?

  I'm trying, I can't get over enthusiastic because I'm afraid David's going to catch me and be like, you don't know what you're talking about.

• 41:35Speaker 02

  Okay. So plus, so there's an uncertainty about your own abilities. All right. So, so first thing that happens is you move off the corporate acquisitions?

• 41:45Ben Gilbert?

  We went from acquisitions to IPOs.

• 41:47Speaker 02

  Right.

• 41:48Ben Gilbert?

  Which was unbelievable timing in 2017, 18, when Uber, Pinterest, Slack.

• 41:54David Rosenthal?

  Yeah.

• 41:55Ben Gilbert?

  There's like eight IPOs in a row of tech companies that everyone had been following. And then it went really for two years and kind of culminated at the end of 2020 with DoorDash and Airbnb, which we recorded and released one day apart.

• 42:08David Rosenthal?

  Yeah.

• 42:08Ben Gilbert?

  Because we wanted to be there.

• 42:09David Rosenthal?

  We'd never do that today.

• 42:10Ben Gilbert?

  On IPO day.

• 42:11Speaker 02

  Yeah, so but once again, you're constraining yourself unnecessarily.

• 42:14David Rosenthal?

  Yeah, exactly.

• 42:15Speaker 02

  Eventually you get to, we're just going to do stories, big success stories, basically.

• 42:19Ben Gilbert?

  So it was acquisitions, IPOs, then it was broad histories and strategies of tech companies, and then broad histories and strategies of companies, period.

• 42:29Speaker 02

  And people.

• 42:31Ben Gilbert?

  And people with Terry Swift and.

• 42:33David Rosenthal?

  Yeah, we frame them as companies.

• 42:34Speaker 02

  In a funny way, you're still constraining yourself. You feel like you need this frame.

• 42:38David Rosenthal?

  Yeah.

• 42:38Speaker 02

  And you actually, you're not really living in a frame anymore.

• 42:41Ben Gilbert?

  Yeah, but constraints are good. Like format, forcing yourself into a format.

• 42:45Speaker 02

  Sure, but you should, but at some point, you're going to wake up and say, you know, we should be doing more biography. We should be doing more people. And if that person is not, you know, is not naturally a huge corporation, you may still, I have a feeling there's more, there's, there's an evolution to come, that you're not just, you haven't reached like the endpoint of this. So at what point do you start to feel confident? Like, we know what we're doing.

• 43:12David Rosenthal?

  Well, when the crash, you know, crash, when, when the reset happened in 2022, 2023.

• 43:19Speaker 02

  So, pretty recently.

• 43:20Ben Gilbert?

  Crypto bubble, tech stocks plummet.

• 43:22David Rosenthal?

  Podcast advertising.

• 43:23Ben Gilbert?

  Advertising budgets kind of dry up, end of 2022.

• 43:27David Rosenthal?

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

• 43:33Ben Gilbert?

  We watched a lot of other people go for easy, secure money now.

• 43:39David Rosenthal?

  Try and keep the music playing.

• 43:40Speaker 02

  Right.

• 43:41David Rosenthal?

  And we were just like, party's over. We need to get to work. We need to focus on only what is enduring and like make great, great, great work and stop doing everything else. Like up until that point, we, we were, we used to do these things called specials. We would just do, you know, not totally random, but essentially random kind of interviews and topics, undifferentiated topics. And we said, you know, we need to start making stuff that is only N of one, only we can do, will only be great. We need to stop doing everything else.

• 44:13Ben Gilbert?

  And we did it on the commercial side, too. We said, let's go cut deals with our favorite partners.

• 44:19David Rosenthal?

  Get rid of most of our sponsors, yeah.

• 44:21Ben Gilbert?

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

• 44:33Speaker 02

  The JP Morgans of the world, did they join before you proved that this new way of doing?

• 44:39David Rosenthal?

  No, we did a year, 2023 was the first year of this.

• 44:42Speaker 02

  What were those episodes?

• 44:44David Rosenthal?

  That was LVMH, that was the NFL.

• 44:46Speaker 02

  Okay.

• 44:46David Rosenthal?

  That was Porsche.

• 44:48Speaker 02

  It's deep dives.

• 44:49David Rosenthal?

  That was the beginning of what we really.

• 44:51Speaker 02

  These long episodes.

• 44:52David Rosenthal?

  Yeah, yeah. And I think that's when we started to build the confidence of like, oh, we can do something that.

• 44:58Speaker 02

  Isn't it interesting that you grabbed this kind of commercial attention only after you went really long?

• 45:04David Rosenthal?

  Yes. And so then JP Morgan came in, in the January 24th. So we had done that year of kind of building this out.

• 45:12Ben Gilbert?

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

• 45:30David Rosenthal?

  Yeah.

• 45:30Speaker 02

  Anyway, so I got us a little off track. Your lesson number three was Berkshire Hathaway and don't be afraid to have a too hard pile.

• 45:38David Rosenthal?

  Yeah.

• 45:39Speaker 02

  Pick another.

• 45:40David Rosenthal?

  Okay. Then I frame for all this story was Sequoia. So this story is very different than Sequoia, but we interviewed Doug Leone, who was one of the, I guess, two stores ago of Sequoia. And he told us that after the dot com crash for the Sequoia fund that was the dot com bubble fund, every other venture firm out there after the bubble popped were taking mulligan funds. They went to their LPs and they said, you know, there's nothing we can do on this one. We're going to be more disciplined next time. We said, absolutely not. We will never lose money for our investors ever. We will do everything we can possibly do to make this fund in the black.

• 46:25David Rosenthal?

  And he said, the best, I think the best line anyone's ever said on acquired, he said, we looked at each other and you could burn cigarettes on our arms and we wouldn't flinch. And they spent the next like five years, they didn't raise another fund and they just like went to work with the portfolio and like.

• 46:39Ben Gilbert?

  I think they stopped taking fees for a while.

• 46:40David Rosenthal?

  They stopped taking fees, yeah. And, and, and got it back and it ended up being a, you know, a positive returning fund.

• 46:47Speaker 02

  This is how you get a reputation.

• 46:48David Rosenthal?

  Exactly. And that was that moment for us.

• 46:51Speaker 02

  And easy to lose one too. And so, I mean, so they, they were really sensitive to reputation.

• 46:56Ben Gilbert?

  Yeah.

• 46:57Speaker 02

  Yeah.

• 46:58Ben Gilbert?

  We'd studied enough businesses by that point where we saw what led to durability. And I think we already were awake to the idea that all that matters is the late years of compounding. Like in any given year, you look at a mag seven company and their profits from the last year are greater than the first 20 years combined or whatever. And I think realizing that being around and being respected on the other side of this, you know, economic chasm is like the key to everything. Who cares about making money this year? It's about five, 10, 20 years from now and we have to like have the brand that people want to be a part of then.

• 47:38Speaker 02

  Right. But it, but you don't know that you are a mag seven.

• 47:45Speaker 02

  Podcast.

• 47:45David Rosenthal?

  It's kind of ridiculous to compare.

• 47:48Speaker 02

  When you make this decision, you don't know that there's going to be great riches 10 years out or five years out or three years out.

• 47:55Ben Gilbert?

  Yeah.

• 47:56David Rosenthal?

  But really, like, I think we were just, we both so believe, it was like the burned cigarettes on our arm, like, I think we just both so believed that that was the right thing to do.

• 48:03Speaker 02

  Something has happened, yeah, so something had happened up before that, and you had figured out how to do this, you'd figured out how to study a business in a way that was really interesting. The first episode's not that interesting.

• 48:15David Rosenthal?

  Yeah.

• 48:15Speaker 02

  There's just not that much I didn't know, hadn't thought of.

• 48:19David Rosenthal?

  Yeah.

• 48:19Speaker 02

  You know, whatever.

• 48:20Ben Gilbert?

  Whether you're studying business and tell a story.

• 48:22Speaker 02

  And it's 30 minutes or whatever it is. There are now, in that first episode, I think there are more ads than there are you all, you two speaking.

• 48:29Ben Gilbert?

  And now we pride ourselves on having the lowest ad per cent in the entire industry.

• 48:34Speaker 02

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

• 48:49David Rosenthal?

  Great.

• 48:51Ben Gilbert?

  I'll read everything ever about them.

• 48:54Speaker 02

  So, yep, you do what I do.

• 48:55David Rosenthal?

  Yeah.

• 48:55Speaker 02

  Yeah, whatever's out there.

• 48:57Ben Gilbert?

  Right.

• 48:57Speaker 02

  Right, so you do AI, that's just the AI part of it.

• 49:00Ben Gilbert?

  Who's, who's started with canonical, who's done great canonical work in the past? And then what ideas do you have from reading the previous canonical work? And, you know, you, you then say like, I wonder if I can find this old YouTube video, and then those YouTube videos mention something else. And the spider web always starts with the pre-existing canonical work.

• 49:19Speaker 02

  And what point do you pick up the phone and start calling people who maybe have information that isn't on the world wide web?

• 49:26Ben Gilbert?

  Zero ever until about 2023, and now that is the most important way that we research.

• 49:31David Rosenthal?

  But probably about 50%, for me at least, about 50% of the way through, they'll like, start to get your arms around, then start calling.

• 49:36Speaker 02

  Right. You don't call uninformed.

• 49:38David Rosenthal?

  No, no, no.

• 49:39Speaker 02

  You call knowing as much as there is to know, and then you start picking the brains of people who might know more and have not said.

• 49:44David Rosenthal?

  There's like the obvious people to talk to like, you know, for Google, we talked to Sundar and Demis are like, you know, like obvious. Then there's like the less slightly less obvious.

• 49:54Speaker 02

  You just say that so casually. Who gets to pick up the phone?

• 49:57David Rosenthal?

  Well, this is part of the compounding effect.

• 49:59Speaker 02

  And talk to the CEO of Google about Google. I mean, nobody.

• 50:04Ben Gilbert?

  We're in a scale economy business.

• 50:05Speaker 02

  Nobody.

• 50:06David Rosenthal?

  We're in a compounding business.

• 50:07Speaker 02

  Right? So the fact that you, when do you first realize that you can pick up the phone?

• 50:13David Rosenthal?

  That's a good question.

• 50:13Speaker 02

  And call Tim, who are, you know, that you have, you're on this first name basis with all these people. When does that start?

• 50:20David Rosenthal?

  I think it was our Microsoft series when we talked to Steve, to Bomber.

• 50:24Speaker 02

  Steve.

• 50:26Ben Gilbert?

  Past acquired guest.

• 50:27David Rosenthal?

  Past acquired guest.

• 50:28Speaker 02

  Steve Bomber. I love, name dropping in your world is so different from the name dropping in like Hollywood. None of your names mean anything in Hollywood, but they mean everything here.

• 50:38Ben Gilbert?

  And the arenas are so funny because like these people aren't, most of them aren't famous and they're a thousand to 10,000 times wealthier than

• 50:46Speaker 02

  Of course.

• 50:46Ben Gilbert?

  these Hollywood stars.

• 50:48Speaker 02

  Yes.

• 50:48Ben Gilbert?

  It's just different yardsticks.

• 50:49David Rosenthal?

  What's funny with Microsoft, so we had some access, Ben used to work at Microsoft before.

• 50:54Ben Gilbert?

  Which got us zero access.

• 50:55David Rosenthal?

  Well, no, no, but you knew some people, like here's in my mind, what sort of happened with this as I'm trying to think about how to answer Michael's question. Because we had started in Seattle and you still live in Seattle and you'd worked at Microsoft, when we started our Microsoft journey, we knew some people.

• 51:11Ben Gilbert?

  Yeah, that's true.

• 51:13David Rosenthal?

  And we were like, well, let's see if we can talk to Steve. And so then we talked to Steve and we got his, you know, perspective on things and it completely changed how we're.

• 51:23Ben Gilbert?

  Was that a cold email?

• 51:24David Rosenthal?

  I think it might have.

• 51:25Speaker 02

  Is that the first time you do that?

• 51:26David Rosenthal?

  First time we reached that high.

• 51:28Speaker 02

  Okay.

• 51:28Ben Gilbert?

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

• 51:37David Rosenthal?

  I talked to some people.

• 51:38Ben Gilbert?

  But I talked to some people that I trust and they say you're great. So let's hop on a call. And we wouldn't have gotten the response back if.

• 51:46David Rosenthal?

  And he gave us probably three hours, four hours in research for.

• 51:50Speaker 02

  He did?

• 51:50Ben Gilbert?

  Yeah.

• 51:51Speaker 02

  And you learned a lot.

• 51:52David Rosenthal?

  Yeah, this was before we even interviewed him. That was later.

• 51:55Speaker 02

  Right.

• 51:55David Rosenthal?

  But just in research.

• 51:57Speaker 02

  I see.

• 51:58David Rosenthal?

  And we learned a lot.

• 51:59Speaker 02

  Did you all have a moment where you thought, oh, my God, let's keep doing that. That worked.

• 52:02David Rosenthal?

  Yes. Well, yeah. So then we were like, that worked great.

• 52:04Ben Gilbert?

  Because it kind of worked with Jensen, too. So originally, when we had the idea in 2021 to do Nvidia, we thought we were like an interview show then. We thought the interviews would be better than our core storytelling episodes because we hadn't discovered that the Ben and David storytelling is our N of one product. It is the thing that we uniquely can do that no one else can do. And we thought getting these big gets would be the key to success, which is funny because usually they underperform our standard format. And so in 2021, we emailed Nvidia through the warmest connection we could find and said, can we interview Jensen?

• 52:36David Rosenthal?

  We're planning to come to the company. Can we interview Jensen?

• 52:37Ben Gilbert?

  And they said, they gave us a nice party line back. He's very busy. And then in 2022, we did our Nvidia part one. We did our standard research process. And I think we did our part two.

• 52:48David Rosenthal?

  We did part two.

• 52:48Ben Gilbert?

  And then we got a note from Nvidia saying Jensen has listened and wants to know who your inside sources are because it's the most correct telling of Nvidia's story ever. And we were like, oh, this was all just public information. And if you're good at spidering the internet and just like digesting it and thinking about why he would have said something at this point in time to this audience in these various random university talks and stuff, you can kind of piece together the story. And so that's sort of like.

• 53:15Speaker 02

  But you're still flying by radar a bit.

• 53:17David Rosenthal?

  Yeah. Oh, yeah. We were totally flying by radar. Yeah, yeah.

• 53:19Ben Gilbert?

  But that landed us. They were like, that started the relationship and eventually.

• 53:23David Rosenthal?

  Then they're like, all right, he wants to meet you and then.

• 53:25Ben Gilbert?

  Do you want to do an interview and follow up on your episodes?

• 53:27Speaker 02

  But you did an interview episode with him, but it doesn't do as well as your own Nvidia episode.

• 53:33Ben Gilbert?

  That one may have been like at some particular peak of Nvidia buzziness. So it was probably our then largest episode.

• 53:39David Rosenthal?

  Well, here's what happens with interviews.

• 53:41Ben Gilbert?

  Makes it look small.

• 53:43David Rosenthal?

  They spike faster.

• 53:44Speaker 02

  Yeah. And then they go.

• 53:45David Rosenthal?

  And then they.

• 53:46Ben Gilbert?

  And those listeners don't retain.

• 53:47David Rosenthal?

  Yeah.

• 53:48Ben Gilbert?

  The way that.

• 53:48David Rosenthal?

  Whereas if you look at our Costco episode, which is now two and a half years old, or LVMH or Mez, Rolex, like they just, they just keep going. I mean, I'm sure your books are like this. Like they just, they just keep going.

• 54:02Speaker 02

  Yeah. Every time I bring out a new book, it has the same effect on the old books that a new podcast has on old podcasts. Yeah, it sells all the backlist. So then, so yes. All right, so I was asking you how you studied a business. You told me you read everything there is. So, and you must find, when you go and read everything there is, you're very polite and you're very generous about citing your sources and all that. But you must find-

• 54:29David Rosenthal?

  My wife is an academic. My wife has a PhD. She was trained as an academic. And she was like, you guys got to cite your sources. Like, what are you doing?

• 54:35Speaker 02

  Well, yeah, but it's also, but you, are you ever surprised by the weakness of the source material?

• 54:44Ben Gilbert?

  Yeah.

• 54:44David Rosenthal?

  Yes.

• 54:45Ben Gilbert?

  In fact, literally today-

• 54:46David Rosenthal?

  We are no longer surprised, but-

• 54:48Ben Gilbert?

  We got an email from a company that we recently covered saying, you said a factually incorrect story in the episode. And we know the book that you got it from because it was factually incorrect in that book. We told the author that it was factually incorrect, and it went out anyway. And now you're repeating the incorrect story. And, you know, we have now an errata section where we publish to our email list.

• 55:08Speaker 02

  And I bet you're mainly correcting other people's errors that you just repeated.

• 55:12Ben Gilbert?

  I mean-

• 55:13David Rosenthal?

  Sometimes they're ours.

• 55:13Ben Gilbert?

  Sometimes they're ours.

• 55:14Speaker 02

  Yeah.

• 55:15Ben Gilbert?

  Sometimes we make a financial calculation error or something like that.

• 55:17Speaker 02

  Right. So we read all source material. And then, and then we start to make phone calls in 2023. And now the phone calls are more, are, have become extremely important. And you're making-

• 55:26David Rosenthal?

  Extremely, yeah.

• 55:27Speaker 02

  25 of them in an episode.

• 55:28Ben Gilbert?

  Google was 40, probably, across the series.

• 55:30Speaker 02

  And do you find that when you're reaching out by phone to all of these people, that, that they always want to talk to you?

• 55:36Ben Gilbert?

  No.

• 55:37Speaker 02

  No, sometimes they don't.

• 55:38David Rosenthal?

  It makes, yeah.

• 55:38Ben Gilbert?

  But usually, when you approach it with a spirit of-

• 55:41Speaker 02

  I'm just trying to understand it's on background.

• 55:43Ben Gilbert?

  Yes, we are going to tell a narrative here. Our biggest question to you is, what is most misunderstood? And what incorrect stories are out there where we can set the record straight?

• 55:53Speaker 02

  Right.

• 55:53Ben Gilbert?

  And you get lots of great information after that.

• 55:56Speaker 02

  It's a very good way to go about it.

• 55:58David Rosenthal?

  Yeah.

• 55:58Speaker 02

  I do the same thing. When I'm researching something, I, I don't know what the story is for a longest time. And I'm holding everything very loosely. And all the, almost all the relationships I have with people I'm interviewing is, hey, this is all on background. I just want to try to understand this. Can I hop on a call with you? And they're usually pretty open to it. And like, I just want to be educated, kind of thing. And it's a great way to say like, what's the stupid thing people say? Because everybody has an opinion.

• 56:25Ben Gilbert?

  But it's not a trick. Like, this isn't, here's one cool trick to get people to talk to you. I think you mean it earnestly and we mean it earnestly of like, I want to make something.

• 56:33Speaker 02

  It's good.

• 56:34Ben Gilbert?

  Everybody has different beliefs about the truth, but I want to, I want to make the story that most correctly approximates the average truth that exists from all these different truthy sources.

• 56:46Speaker 02

  Yeah, yeah.

• 56:48Speaker 02

  Yeah, I don't think of it quite that way, but I do think it's like, I want to give back something that's good and pure and true and is like, is like the thing that will, once it's said, there's nothing else to say. It's like done.

• 56:58Ben Gilbert?

  Yeah.

• 56:58David Rosenthal?

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

• 57:16Speaker 02

  Have you, so, when you were working on one of these episodes, do you, are you aware of how much fun you're having learning? And do you ever, have you ever shut something down just because, oh, this isn't that much fun? The Fed?

• 57:28Ben Gilbert?

  That's kind of why we killed the Fed. We've definitely killed other episodes.

• 57:31Speaker 02

  If you can find fun in the Fed, man, you are, you are doing, you're, you can find fun.

• 57:36David Rosenthal?

  You were doing, yeah.

• 57:37Speaker 02

  We can generate all that enthusiasm for each other's insights about the Fed.

• 57:40Ben Gilbert?

  We killed Bell Labs because we couldn't find a through line. There were so many different stories and so many different characters.

• 57:46David Rosenthal?

  I know. We might come back to it.

• 57:48Speaker 02

  Bell Labs, that's one that, if I saw it, I thought, yes, I want to listen to it.

• 57:52David Rosenthal?

  It feels like a Michael Lewis book.

• 57:54Ben Gilbert?

  You could kind of do it as the history of the transistor, but then you miss all these other things like radar and.

• 58:02David Rosenthal?

  Yeah, there's so much stuff that came out of Bell Labs.

• 58:04Speaker 02

  Did you do Xerox PARC?

• 58:05Ben Gilbert?

  No.

• 58:06David Rosenthal?

  No, no, but similar.

• 58:06Ben Gilbert?

  That's a good.

• 58:08Speaker 02

  It's another one.

• 58:08Ben Gilbert?

  Right.

• 58:08David Rosenthal?

  Yeah.

• 58:09Speaker 02

  I guess Google still has this spirit where they're doing lots of stuff that maybe you can't identify instantly.

• 58:16David Rosenthal?

  Quantum computing.

• 58:17Speaker 02

  Yeah, the payoff that's right around the corner. It's kind of like, let's just fiddle around, see what we find stuff. But corporate America is, I think, just generally does less of that than it used to do a long time ago.

• 58:28Ben Gilbert?

  But the big tech.

• 58:29Speaker 02

  Am I wrong?

• 58:30Ben Gilbert?

  No, I'm trying to think, that's an interesting, so, I'm stealing this idea from our friend Hamilton Helmer, but he brought up this idea in conversation with us that there is a positive benefit to monopolies because they create the cash flows that fund these sorts of boondoggle basic research. And.

• 58:53Ben Gilbert?

  A lot of the most important

• 58:55Speaker 02

  Yeah.

• 58:55Ben Gilbert?

  technologies that move society forward.

• 58:57Speaker 02

  You need some waste.

• 58:57Ben Gilbert?

  Come out of these.

• 58:59Speaker 02

  You need fat.

• 59:00Ben Gilbert?

  Yes. And like, boy, does Google have that.

• 59:02Speaker 02

  Right.

• 59:03Ben Gilbert?

  I mean, you just, their last quarter was their first hundred billion dollar quarter ever.

• 59:06Speaker 02

  Right.

• 59:07Ben Gilbert?

  Astonishing.

• 59:08Speaker 02

  I know, no.

• 59:08Ben Gilbert?

  And that's how they fund, you know, the next Gemini.

• 59:12Speaker 02

  Yeah, all this, right.

• 59:13David Rosenthal?

  And Waymo and yeah.

• 59:14Speaker 02

  So then, actually, you just bring up your friend, Hamilton Helmer.

• 59:17Ben Gilbert?

  Yes.

• 59:17Speaker 02

  Who I'd never heard of until I listened to your podcast and you do that thing at the seven powers.

• 59:21David Rosenthal?

  Seven powers, yeah.

• 59:22Speaker 02

  Let's just briefly, since we're here, how you study a business. That has been a useful analytical framework for you.

• 59:28Ben Gilbert?

  Yeah.

• 59:29Speaker 02

  Whatever these seven powers are, and I'll never remember any of them.

• 59:31Ben Gilbert?

  That's why we say I'm every episode.

• 59:33Speaker 02

  Network of facts and all that.

• 59:34David Rosenthal?

  Yeah, yeah.

• 59:35Speaker 02

  What is about Hamilton? Like, where did you find him and why is he making him so famous?

• 59:42Ben Gilbert?

  There's a lot of good frameworks out there for analyzing business strategy, and this one just clicked. I just read it and I was like, that is actually the complete list.

• 59:50Speaker 02

  When did you read it?

• 59:52Ben Gilbert?

  Uh, you found the book?

• 59:53David Rosenthal?

  I think it was 2020. He was, it was very scary.

• 59:57Speaker 02

  I read the list and it was all gobbledygook to me. There were these, I mean, it didn't, the words did not mean things.

• 1:00:02Ben Gilbert?

  But if you break.

• 1:00:03Speaker 02

  You have to know what they mean.

• 1:00:04Ben Gilbert?

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

• 1:00:18Speaker 02

  Right.

• 1:00:18Ben Gilbert?

  That's the list you would come up with. You might find other words.

• 1:00:20Speaker 02

  What creates the moat?

• 1:00:22Ben Gilbert?

  Yes.

• 1:00:22Speaker 02

  Yeah, right. Right, but so, so why did you decide you even needed that framework?

• 1:00:28David Rosenthal?

  We had always.

• 1:00:30Ben Gilbert?

  Hand in hand with the durability.

• 1:00:31David Rosenthal?

  Yeah.

• 1:00:32Ben Gilbert?

  If you're trying to study why is a business durable, it, the cause is the power.

• 1:00:37David Rosenthal?

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

• 1:00:42Speaker 02

  Yep.

• 1:00:42David Rosenthal?

  And we finished the story, but that felt unsatisfying.

• 1:00:45Speaker 02

  Yep.

• 1:00:46Ben Gilbert?

  What's the takeaway?

• 1:00:47David Rosenthal?

  Yeah, and so we had all various permutations of analysis at the end.

• 1:00:51Speaker 02

  Buy or sell or hold.

• 1:00:52David Rosenthal?

  Yeah, yeah. You know, we did bull and bear and grading and blah, blah, blah. Once we shifted to like, hey, we're studying these great companies, these durable businesses. Power felt like a really good part of that, like, so what?

• 1:01:07Speaker 02

  Right.

• 1:01:07David Rosenthal?

  Why? For me, a critical, critical part of. Process. It goes back to writing a senior thesis at Princeton. Everything needs to pass through multiple cycles of source material, through my brain, through my fingers, onto a keyboard, and recycle back through about three times.

• 1:01:24Speaker 02

  Yep.

• 1:01:24David Rosenthal?

  And, and so like, I don't use AI note taking. I do write physical notes in hard copy books. Like, if I'm not doing that, I feel like it's not gonna work. Yeah, yeah.

• 1:01:37Speaker 02

  His entertaining books are. So I have exactly the same issue. I discovered I wanted to be a writer, writing my senior thesis, and no ambition to do it before then. And then all of a sudden, I thought, oh my God, I love this. And my love was just that, was the, was the constant recycling of the, of the thought. And, and so what I do, it might, the process, I don't want to get too far away from your podcast. But, but, so here, I'm sitting with my notepad.

• 1:02:00David Rosenthal?

  Yeah, yeah.

• 1:02:01Speaker 02

  So this is a filter. Like, if I'm talking to you, it takes effort to put it down on the page. I don't record anything. That, I filtered it.

• 1:02:08David Rosenthal?

  Yeah.

• 1:02:08Speaker 02

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

• 1:02:22David Rosenthal?

  Yep.

• 1:02:22Speaker 02

  And I, and I keep those notes while I'm working on a book, and the file will be 500 pages long by then. It may be longer by the time. And it's just stuff. And then I start thinking about, how do you frame this story? What is this story? But it's, that's months usually down the road. Like, and there are times when I get into something, and I am months into it, and I realize, oop, there's nothing here. With Sam Beckman-Fried, I was a year into it, and I did not know what I was gonna do with it until it blew up. And then I thought, oh my God, I had the story.

• 1:02:59Ben Gilbert?

  You would have been sitting there for a year, watching it all.

• 1:03:02David Rosenthal?

  Do you think you would have not published the book if it hadn't?

• 1:03:04Speaker 02

  Oh, no.

• 1:03:05David Rosenthal?

  Wow. You would have killed the book.

• 1:03:06Speaker 02

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

• 1:03:46David Rosenthal?

  Yeah, but scenes don't make a, scenes don't make a play.

• 1:03:48Speaker 02

  They're necessary, they're, they're necessary, but insufficient.

• 1:03:51David Rosenthal?

  Yeah.

• 1:03:52Speaker 02

  So, but the bigger point, I hate to, I don't want to be talking about me. We'll be talking about you. But this, you are doing, I said, I smell this from your, your work. You're doing something that rhymes with what I do. You are gathering before you make judgments. You're open to learning things. You're trying to be the world's best student. You want people to want to teach you. And, and then if you, if people want to teach you, they will teach you. And then you could take what you learn and you could present it in the way, the best way you can present it.

• 1:04:24Ben Gilbert?

  I basically take a note in two scenarios. One is, oh, I just figured out how that works and that is so cool. Like when I learned how a mechanical watch worked.

• 1:04:37David Rosenthal?

  This is such a cool thing.

• 1:04:39Ben Gilbert?

  It was like, we.

• 1:04:40Speaker 02

  You got excited.

• 1:04:41Ben Gilbert?

  This is in some ways irrelevant to the business success of Rolex. But I, it will, it will make my year to explain on air how a mechanical watch works and how an escapement is a thing. And my excitement around that is.

• 1:04:57David Rosenthal?

  Or the Costco ballet or like, yeah.

• 1:05:00Ben Gilbert?

  Yeah. So there's the, I just figured out how something worked. And then there's the, I just made a connection. And I, it's like, I'll be on a run. I'll be listening to an audiobook. It'll be the third audiobook that I've listened to about a certain subject. And I'll, I'll hear something and think, oh, that's why. And I'll stop and I'll write my little Apple note. This timestamp in this book, you know, just realized why, I can't think of an example right now. This happened. And then later I go and I look it up in the Kindle book and I figure out like how I want to explain the connection that I just learned on air. But it has to come from the, I have to like remember and bottle up my excitement of learning it in that moment to share that enthusiasm with the listener.

• 1:05:41Speaker 02

  Yeah. Yep, that's, that's all very familiar to me.

• 1:05:45Ben Gilbert?

  All right, listeners. Now is a great time to thank our longtime friend of the show, ServiceNow. If you are running a large enterprise, AI agents are likely spread across every team, and deploying them is no longer the hard part.

• 1:05:59David Rosenthal?

  Yeah, the hard part is knowing what permissions they have, what employees are using them for, or what decisions AI is making. AI security for an enterprise at scale is not a small concern. Like, the risks are real.

• 1:06:13Ben Gilbert?

  Exactly. And the challenge with AI is governing it, securing it, measuring it, and making sure that it actually delivers value. That is why ServiceNow built the AI Control Tower.

• 1:06:23David Rosenthal?

  Yep, AI Control Tower gives enterprises a single place to see, manage, govern, and optimize AI across the entire business. And it works with any AI, not just theirs. Every device on your network, every permission across every system, every AI agent, visible and secure in one place.

• 1:06:41Ben Gilbert?

  And ServiceNow can do this because they've spent more than 20 years building the operational backbone of the enterprise: the workflows, governance, approvals, security controls, and institutional knowledge that power how work actually gets done across IT, HR, customer service, finance, and security.

• 1:06:57David Rosenthal?

  ServiceNow already runs more than 100 billion workflows annually, and trillions of transactions for more than 85% of the Fortune 500. So when companies need a place to govern AI at enterprise scale, they're building on a platform at the center of how their business already operates.

• 1:07:14Ben Gilbert?

  And in a future that isn't going to be one AI, it's going to be thousands of AI agents working across every function of the company. But the question is, who's managing them all?

• 1:07:23David Rosenthal?

  So if you're trying to turn AI ambition into real business outcomes and make it work safely, securely, at scale, go check out servicenow.com/acquired and tell them that Ben and David sent you.

• 1:07:34Speaker 02

  So give me a fourth example of a lesson learned from an episode.

• 1:07:37Ben Gilbert?

  Uh, this we learned, I feel like I learned from Ben Thompson, which is...

• 1:07:41Speaker 02

  Tell the audience who Ben Thompson is.

• 1:07:43Ben Gilbert?

  Ben Thompson is the author of Strategry.

• 1:07:45Speaker 02

  Proprietor of...

• 1:07:46Ben Gilbert?

  Proprietor, founder of Strategry.

• 1:07:48Speaker 02

  We did an episode on him and with him a few years ago.

• 1:07:51Ben Gilbert?

  But his writing is sort of the thing that we bonded over when we met. He's a great strategy, technology writer. A, the internet niches are way bigger than you think they are. So if you think you're writing about a niche topic... The internet being a global community of four-ish billion people means that any little niche, there might be six people in your geography that care about it in your local town, but there's millions of people online.

• 1:08:19Speaker 02

  Right.

• 1:08:19Ben Gilbert?

  And the internet is your way to reach them. So no matter how niche you are, it's actually way, way bigger. And the corollary to that is, in the media business, in podcasting, you can grow your audience and thus your revenue and thus your importance in the world. All outputs can scale completely independently of your inputs. David and I effectively do the same thing that we did not 10 years ago, but two years ago to make an episode. But the audience has grown so much that like every output from the business is dramatically different, even though all the inputs are the same. And so we really like took to heart the niche of smart people who care about how these businesses work and why the world is arranged in this way is large.

• 1:09:02Ben Gilbert?

  And we don't have to scale our operation to reach them. We just have to keep making the highest quality stuff and giving people reason to share it.

• 1:09:11Speaker 02

  What is your operation? I mean, we're in here with a large group of large men.

• 1:09:17Ben Gilbert?

  Thanks, guys. This is a bigger operation than usual.

• 1:09:20Speaker 02

  But this isn't your normal operation.

• 1:09:21Ben Gilbert?

  No, no.

• 1:09:21Speaker 02

  What is your operation?

• 1:09:22Ben Gilbert?

  Uh, I have a basement studio. You know, it's an office that we happen to have some lights and a camera in.

• 1:09:28David Rosenthal?

  I built a studio in my backyard.

• 1:09:29Ben Gilbert?

  So that's the YouTube.

• 1:09:30Speaker 02

  You mentioned that you send your stuff to an editor without naming the editor.

• 1:09:34Ben Gilbert?

  His name's Steven.

• 1:09:35David Rosenthal?

  Steven is...

• 1:09:36Speaker 02

  Steven has a last name?

• 1:09:38Ben Gilbert?

  Uh, he does. I'm not sure he'd want us to share on air.

• 1:09:40Speaker 02

  Okay, so Steven, so the mysterious Steven.

• 1:09:42Ben Gilbert?

  He's an independent contractor where his only client...

• 1:09:44Speaker 02

  And he works only for you?

• 1:09:45Ben Gilbert?

  He's, and he's the best.

• 1:09:47Speaker 02

  He's the best. So he's clearly good at his job.

• 1:09:49David Rosenthal?

  Steven is as maniacal about creating the best.

• 1:09:56David Rosenthal?

  Audio product.

• 1:09:58Ben Gilbert?

  And video when we do it.

• 1:09:59David Rosenthal?

  But we, yeah, no, we, no assistance, no, we do, we do everything.

• 1:10:02Speaker 02

  You don't sell, you don't have ad sales.

• 1:10:04David Rosenthal?

  We do all the selling.

• 1:10:05Ben Gilbert?

  We love doing the ad sales ourselves.

• 1:10:08Speaker 02

  You're doing it right.

• 1:10:08David Rosenthal?

  We love, we love doing the business equally as much as we love making the show.

• 1:10:11Ben Gilbert?

  And I love the alignment. The business and the content are equally important and they're, they're like married.

• 1:10:18David Rosenthal?

  Yeah, it's funny, you're preparing for this, like, we're always tempted, like, to just talk about the business, because we love the business as much as the show, but we never talk about the business.

• 1:10:24Speaker 02

  So, so let's just stop here for a moment, because I want to talk about this. First of, before we move on from Steven, so Steven is in this rare position of basically being the only person who helps you create this thing.

• 1:10:32Ben Gilbert?

  Yeah.

• 1:10:32David Rosenthal?

  Yeah.

• 1:10:33Speaker 02

  How different is the?

• 1:10:35David Rosenthal?

  We hired a wonderful production crew because we wanted to have a great video for, for today.

• 1:10:39Speaker 02

  Right. So, how different is what you give, what comes out of Steven from what you give him?

• 1:10:47Ben Gilbert?

  Eight, nine hours of raw audio with dozens of retakes, sometimes hundreds of retakes.

• 1:10:55David Rosenthal?

  We produce each other as we get.

• 1:10:56Speaker 02

  Hundreds of retakes?

• 1:10:57Ben Gilbert?

  Yeah, David will say a paragraph and I'll be like.

• 1:11:00Speaker 02

  Wait, I want to do that in an acquired tone. Wow, that's amazing. Hundreds of, hundreds of retakes? You do hun- that's incredible. I would have guessed, like, if you just asked me, five. Hundreds.

• 1:11:11David Rosenthal?

  You sound, you sound like a millennial.

• 1:11:15Speaker 02

  I just want to be appropriately amazed. A hundred, you can't do hundreds of retakes.

• 1:11:19Ben Gilbert?

  Literally's that we cut.

• 1:11:20David Rosenthal?

  We need to cut literally all the time.

• 1:11:22Ben Gilbert?

  Literally.

• 1:11:22Speaker 02

  I see.

• 1:11:23Ben Gilbert?

  Totally's. But the retakes, though, are a different thing. The retakes are.

• 1:11:27David Rosenthal?

  We didn't say that clearly enough. We didn't land the point.

• 1:11:29Ben Gilbert?

  I made a point where I wasn't paying enough attention to what David was saying, because I was, like, looking over at my notes, and then I make the same point, and he's like, "Oh, I think you missed it. I just said that. Can you just say the last?"

• 1:11:41Speaker 02

  Oh, I see.

• 1:11:41Ben Gilbert?

  Thing as an acknowledgement of mine.

• 1:11:42David Rosenthal?

  And then we'll move on.

• 1:11:43Ben Gilbert?

  Or, "I explained something in twice the amount of time," and David's, like, getting bored, and he's like, "That was a real monologue. I think we got to keep the story moving." And I'm like, "I agree. Uh, when I wrote it in my notes, I was really excited about it, but now that we're in the moment, I can feel that it's slowing down the energy. So, let me take two minutes, let me retype some stuff, and let me figure out if there's a condensed way to say that, so that it can flow seamlessly in the energy of the story."

• 1:12:10Speaker 02

  Right.

• 1:12:10Ben Gilbert?

  But that is all in the eight, nine hours that we deliver to him.

• 1:12:14Speaker 02

  So, and, so he's cutting it in half.

• 1:12:16Ben Gilbert?

  Yeah.

• 1:12:17Speaker 02

  Yeah. And when he comes, when it comes back to you from him.

• 1:12:19David Rosenthal?

  So, he, he turns. Eight, nine hours of that into an intelligible.

• 1:12:24Ben Gilbert?

  Into like five-ish?

• 1:12:26David Rosenthal?

  I think it's probably appropriate to call it like release candidate one, to use like a software analogy.

• 1:12:30Speaker 02

  All right.

• 1:12:31Ben Gilbert?

  And then we make five to 800 additional cuts to cut another hour off of it. And that stuff we're cutting.

• 1:12:38Speaker 02

  Are you doing it on the page? You're doing it by listening?

• 1:12:41David Rosenthal?

  We use a tool called Descript, which we sort of use it not.

• 1:12:46Speaker 02

  But you're not listening to it, you're reading it.

• 1:12:48Ben Gilbert?

  We are listening to it and we are watching.

• 1:12:49David Rosenthal?

  Yeah, yeah, watching it.

• 1:12:50Speaker 02

  And how long does that take?

• 1:12:52David Rosenthal?

  Days.

• 1:12:52Ben Gilbert?

  Three days.

• 1:12:53Speaker 02

  Three days to edit?

• 1:12:54Ben Gilbert?

  Yeah.

• 1:12:54David Rosenthal?

  Because we usually do, we usually do two cycles of that.

• 1:12:57Speaker 02

  And then do you send it back to him after you've done that?

• 1:12:58Ben Gilbert?

  Yeah.

• 1:12:59David Rosenthal?

  And then we do it again.

• 1:12:59Speaker 02

  And then you do it again.

• 1:13:00Ben Gilbert?

  I listen at 1X and you have to like feel where you get bored or feel where you're just like, I don't care. Like you have to get so sick of the material where you're just like cutting to the bone.

• 1:13:10David Rosenthal?

  You're the hero on this. I can't bring myself to do it. I listen on 2.5X. Just it's, it's, you're the hero for doing that.

• 1:13:16Speaker 02

  You don't actually listen to it at normal speed?

• 1:13:19David Rosenthal?

  Ah, it's so like, Ben really jumped something grenade for this.

• 1:13:24Speaker 02

  Almost always. You can cut the beginning of almost everything. There's always throat clearing.

• 1:13:30David Rosenthal?

  Our beginning is always drag.

• 1:13:32Speaker 02

  Yeah, wind up. You don't need it. You just go right to it.

• 1:13:34David Rosenthal?

  Yeah.

• 1:13:35Speaker 02

  And, and then once I start to feel like it's taught, I just love it. I love it. I love, I like, I like making, the hardest thing is getting the stuff out in the first place. And then once it's, once it's out on the page, then you can start, ah, each time it gets better. I find there's no despair associated with it.

• 1:13:51Ben Gilbert?

  And there's stuff in the original draft that is a remnant of the point you thought you were gonna make. And by the time you get to the end, you're like, that's actually not the, the important thing here. I no longer need that whole setup or that, that aside.

• 1:14:04Speaker 02

  Or it's in there in all kinds of other ways.

• 1:14:05Ben Gilbert?

  Yes.

• 1:14:06Speaker 02

  Yeah. But it's important that you had the idea, but it's buried in the, in the story some which way.

• 1:14:12Ben Gilbert?

  David will often highlight something and go, at Ben, okay to cut, belaboring.

• 1:14:17Speaker 02

  So the minute you're there, you know it's gotta be cut.

• 1:14:20Ben Gilbert?

  Yeah.

• 1:14:20David Rosenthal?

  Yeah.

• 1:14:20Speaker 02

  Mostly, right?

• 1:14:21Ben Gilbert?

  Oh, yeah. If one of us wants to cut.

• 1:14:23David Rosenthal?

  Always cut.

• 1:14:23Speaker 02

  Yeah. And so you get five hours down to whatever it is, three and a half, four.

• 1:14:27David Rosenthal?

  We, three and a half is the sweet spot.

• 1:14:29Speaker 02

  And how do you know when you're done?

• 1:14:32Ben Gilbert?

  We run out of time.

• 1:14:33David Rosenthal?

  Yeah.

• 1:14:33Speaker 02

  So deadlines.

• 1:14:34David Rosenthal?

  Yeah, deadlines.

• 1:14:34Speaker 02

  There isn't like you're never, you're never really done.

• 1:14:36Ben Gilbert?

  I would love one more edit.

• 1:14:38David Rosenthal?

  We'd always, there's always more. Yeah, yeah, yeah. We have both the gift and the curse of deadline and next episode coming, whereas like you, you have a infinite timeline, right?

• 1:14:48Speaker 02

  No, no, no. I have, I, I mean, I owe a book on June the 1st that will come out September the 29th, that I will start writing on January the 5th, and I will write it in five chunks, and each chunk will be delivered at the end of the month, and I won't be able to go back.

• 1:15:02David Rosenthal?

  So, okay, wait, wait, wait. What happens if you get to June and you're like, I'm not, I'm not a...

• 1:15:06Speaker 02

  Can't, can't.

• 1:15:07David Rosenthal?

  Okay, so it's a hard deadline. It's a drop dead.

• 1:15:09Speaker 02

  Yeah, but I always find, once I establish that deadline, which is a reasonable deadline, because I've done all, spent a year doing the work. I have the material. By the way, it's very polite of you to ask me questions about myself.

• 1:15:20Ben Gilbert?

  We want to know. It's like this great...

• 1:15:23Speaker 02

  No, but, but that it's, somehow, if you take your deadlines seriously, that's the key. You take the deadlines deadly seriously, and you just refuse to violate them. Then you're serious when you establish them, and your mind just finishes when it needs to finish. I, and I'm always like a couple of days ahead of it.

• 1:15:45David Rosenthal?

  Yeah.

• 1:15:46Speaker 02

  So I would talk a little bit about the business side, because this is something that I certainly don't know anything about in, in your lives, but you've turned this into a very lucrative franchise, and you go out and you, and unlike most podcasts, you're not, you're not subcontracting this, the sale of ads to some other company, and you're not just promiscuous in who you have as advertisers. So you have two or three, four, whatever it is, major advertisers.

• 1:16:11David Rosenthal?

  For every season.

• 1:16:12Speaker 02

  And, and some stability there. When you go, walk me through, pretend Michael Lewis Inc. is your target, that you want me to be a, like, the anchor tenant in your building, and you're coming in to tell me why I should do this. Give me, give me a, give me a sense of it, what that sounds like.

• 1:16:34Ben Gilbert?

  I'll let David give you the sales pitch. The philosophy of the whole thing comes from, we want to create a durable business on our side and a great listener experience on the listener's side. And I always feel, as a listener, so disrespected when there is this content of the podcast that is diamond quality, and then they are running...

• 1:16:54David Rosenthal?

  Record scratch.

• 1:16:54Ben Gilbert?

  McDonald's ads in the middle.

• 1:16:56David Rosenthal?

  Usually not read by the host, usually with some jingle playing underneath.

• 1:17:00Speaker 02

  It bothers the hell out of me too, and I haven't been able to do anything about it. I agree. And I, it's, it's the biggest complaint I get about my podcast. It's like, I gotta listen to these ads.

• 1:17:13Ben Gilbert?

  The very first ad we ever sold, we said, what sponsor could we get that would make people perceive Acquired to be a higher quality brand? So we could like have our cake and eat it too, we'll get revenue.

• 1:17:25Speaker 02

  I had a thought about this on mine, and no one ever took me up on it. Really? Just find the things I actually use. And I'll, and it will be fun to talk about them. I want to, I want to tell the whole world about Exoficio underpants.

• 1:17:39Speaker 02

  And I can't get Exoficio to return my calls. I mean, that kind of thing.

• 1:17:43Ben Gilbert?

  Foolish.

• 1:17:43David Rosenthal?

  Are they asleep at the, wait, so literally, you're telling me that Michael Lewis calls Exoficio?

• 1:17:49Ben Gilbert?

  We do it here for free.

• 1:17:49Speaker 02

  I didn't, I just gave them, I gave my podcast a list of things that I really love, just love.

• 1:17:54David Rosenthal?

  Oh, you gotta call them, that's the problem.

• 1:17:57Speaker 02

  Well, that probably is the problem.

• 1:17:59David Rosenthal?

  That's the problem.

• 1:18:00Speaker 02

  My podcast company does not, does not actually sell the ads. Another company sells the ads.

• 1:18:05Ben Gilbert?

  Right.

• 1:18:05Speaker 02

  And so it's just, I, that, I thought that was the way to make it seamless is actually, what's integral to my life will be the things that we're talking about.

• 1:18:13Ben Gilbert?

  So that is a structural blocker to creating the best experience.

• 1:18:17Speaker 02

  Right.

• 1:18:18Ben Gilbert?

  And everything has a trade off. The trade off for us is we spend an enormous amount of time engaging with our sponsors. We write a custom read for every single sponsor, every single episode. We try to write it as if we're almost like talking about what we think is interesting about the business. We're doing this like mini two minute analysis. And you know, there's some horse trading there of we have to make these points, okay? But like, for the most part, and the best sponsor relationships are the ones where they say like, yeah, your listeners are going to respond the best.

• 1:18:47Speaker 02

  To what you have to say.

• 1:18:48Ben Gilbert?

  Yeah.

• 1:18:48David Rosenthal?

  So if you're Michael Lewis Inc., we want you to be a sponsor. I would say, we're not coming to pitch you, but like, we're deciding a year in advance.

• 1:18:57Ben Gilbert?

  Now two.

• 1:18:57David Rosenthal?

  When we're, when we're now two years in advance, like, what do we want our slate of partners to look like?

• 1:19:03Speaker 02

  Right.

• 1:19:04David Rosenthal?

  So we start, Michael Lewis Inc., we think is going to be super strategic for us in 2027, 2028. We start planning like, okay, how are we gonna make this happen? How are we gonna make sure that we really, you, Michael Lewis, think is as good as we think it could be? How are we gonna make sure that we're gonna work really well together, that you're gonna see massive ROI from us?

• 1:19:23Speaker 02

  At any point, do you sit there worrying that you're compromising the, you know, the shows because of your, the relationship you're about to have with an advertiser?

• 1:19:32Ben Gilbert?

  No. There's been companies that don't feel Switzerland enough that come to us that wanna sponsor, and we just like the idea of not picking a venture capital firm to say, we think this is the best venture capital firm. It's like too much of a picking teams thing.

• 1:19:49Speaker 02

  I've never heard anybody say that, that they don't feel Switzerland enough. Is this a, is this a, is this a cliche in the VC business?

• 1:19:55Ben Gilbert?

  No.

• 1:19:56Speaker 02

  That's a lovely line. So you're looking for Swisselands?

• 1:19:59Ben Gilbert?

  Yes.

• 1:19:59Speaker 02

  And what do you mean by that?

• 1:20:01Ben Gilbert?

  Companies that we think are great, where we don't have to take a side in like a big contentious current thing conversation.

• 1:20:10David Rosenthal?

  Yeah.

• 1:20:10Speaker 02

  Would you take Coca-Cola?

• 1:20:13Ben Gilbert?

  We don't really deal with consumer.

• 1:20:14David Rosenthal?

  Okay, here we go. B2B companies with high, very high LTV products.

• 1:20:20Speaker 02

  So not ex officio underwear?

• 1:20:22David Rosenthal?

  Basically, we want companies that are doing a significant number of multimillion dollar annual deals with customers. Because we wanna feel like we can deliver a couple incremental of those for you.

• 1:20:35Speaker 02

  So you can charge lots of money.

• 1:20:36David Rosenthal?

  Yeah, and then like it's just a no brainer.

• 1:20:38Ben Gilbert?

  Many of our sponsors have been ROI positive on signing one large customer who heard about them on acquired. That is awesome.

• 1:20:46David Rosenthal?

  And often, it's not even just heard about on acquired, it's, events are a big part of this. So we do events with almost all of our sponsors. So there's the funnel of like heard about on acquired, that helps, but then like we're doing an event together with them. We're sitting next to their best prospects.

• 1:21:01Speaker 02

  So I'm thinking about hiring you. What kind of event will you do for me?

• 1:21:05Ben Gilbert?

  We're happy to join for a customer dinner. We're happy to speak at your big annual customer conference.

• 1:21:11David Rosenthal?

  We're happy to. We're happy to go to a sporting event with you, with your top clients. We're happy to.

• 1:21:18Speaker 02

  At that sporting event where you do like some.

• 1:21:20Ben Gilbert?

  Fireside chats.

• 1:21:21David Rosenthal?

  Yeah, fireside chat, yeah, yeah, yeah.

• 1:21:22Ben Gilbert?

  Interview your CEO.

• 1:21:24David Rosenthal?

  Interview a legend from the sport.

• 1:21:26Speaker 02

  How many hours of your time am I gonna get?

• 1:21:28David Rosenthal?

  Couple days. We're there, and while we're there with you, it's like, hey, how can you maximize using us?

• 1:21:34Speaker 02

  You promised to be my friend?

• 1:21:36David Rosenthal?

  Yeah, of course.

• 1:21:36Speaker 02

  You'll be my friend too in the bargain?

• 1:21:38David Rosenthal?

  We're great friends with a whole bunch of, okay, so then it gets even better. So we, um, let me, let me tell you more.

• 1:21:44Speaker 02

  Tell me more, I'm getting interested, I'm on the edge of my seat here.

• 1:21:47Ben Gilbert?

  The reason this whole thing works is the people who listen to Acquire are the most valuable audience in the world. And so if you want to market your B2B software or financial product or whatever to them.

• 1:21:58David Rosenthal?

  Founders or executive decision makers.

• 1:22:00Ben Gilbert?

  Right.

• 1:22:01David Rosenthal?

  But really, I'm gonna take a step back. I think the whole business side, and that's a lot of the content too, but the whole business side of Acquire starts with, we were venture capitalists. We're not media people. So we have just always taken an approach, you're aspiring to be a great partner to them. You know, you're gonna help recruit employees, you're gonna help with whatever. And so we just like, like, great, that's how we approach our partners.

• 1:22:23Speaker 02

  Right. Why do you think, maybe you've just answered the question, why do you think no other podcast has approached their business in the way you approach your business?

• 1:22:31David Rosenthal?

  I think we just came at it from like this, this.

• 1:22:34Speaker 02

  You think everybody was coming from a kind of media space? And the media space was kind of bad business.

• 1:22:38Ben Gilbert?

  Okay, here's a take. The media business model of splitting the commercial activity from the editorial.

• 1:22:46Speaker 02

  Yep.

• 1:22:47Ben Gilbert?

  Is a societal benefit that we all benefit from, from publications like The New York Times.

• 1:22:53Speaker 02

  Yep.

• 1:22:53David Rosenthal?

  It was started for journalism.

• 1:22:55Ben Gilbert?

  It is really good for journalism that exists. The rest of media seems to have adopted it, and everyone doesn't need to.

• 1:23:02Speaker 02

  Right.

• 1:23:03Ben Gilbert?

  If we're the host of Acquired, it's kind of great if you're going and learning about your sponsors' business and working with them and trying to build partnerships with them. It was almost like we had the luxury of getting to rethink what our operational model looks like.

• 1:23:18David Rosenthal?

  So then the thing that brought it full circle a couple of years ago is we added an investment fund. So not our public company sponsors, but almost all of our private company sponsors. We invested them, so it came full circle.

• 1:23:28Speaker 02

  You created an investment fund. You two are, you're the ones who are making the investments?

• 1:23:33Ben Gilbert?

  Yes.

• 1:23:34Speaker 02

  Is it how you're doing?

• 1:23:35Ben Gilbert?

  It's quite full circle. We're only a year in, but we've invested in five of our sponsors and several of them are more valuable than when we've invested.

• 1:23:43David Rosenthal?

  Yeah. We asked ourselves, we're like, how do we do this? The focus is the show. If we're a venture capital firm with a podcast, it doesn't work. We need to be a podcast for the venture capital firm. The way we make this work is we just invest in our sponsors. We put all this work into finding the best partners for our sponsors in every category that we think are great. Why wouldn't we just invest in them? We don't do any incremental work.

• 1:24:03Speaker 02

  Do you invest in all of your sponsors?

• 1:24:04Ben Gilbert?

  No, but a lot of the time, like, we'll just get a call that, hey, we're raising an up round, we want to talk about it in the next ad read. And we say, oh, that's cool. Can we invest a couple million dollars? And they're like, the round's like 300 million, so no one on the cap table is going to care. And we love that you're more aligned with us now, so we'll make room.

• 1:24:21Speaker 02

  So you're only really accepting as sponsors, companies that you would like to invest in?

• 1:24:27David Rosenthal?

  That's essentially the frame we put on the whole thing.

• 1:24:28Ben Gilbert?

  It's not a perfect mobile app, but it's...

• 1:24:30Speaker 02

  JP Morgan is not an example.

• 1:24:31David Rosenthal?

  Right, right. We think, we like having a couple of public companies, JP Morgan, Shopify, ServiceNow.

• 1:24:37Speaker 02

  And how deep is this market? How many acquired's could be created on the back of this business model?

• 1:24:43Ben Gilbert?

  Oh, I think a lot. The question that I'm always wondering is, why aren't there more acquired's out there?

• 1:24:48Speaker 02

  I'm asking that question now. Like, why?

• 1:24:50Ben Gilbert?

  Here's the ingredients. Two hosts that independently go do research and through storytelling, like narrative storytelling and analysis, create a conversational audiobook. Could be about businesses, could be about sports teams, could be about...

• 1:25:05David Rosenthal?

  Hollywood, movies.

• 1:25:06Ben Gilbert?

  Political parties, could be about any...

• 1:25:08David Rosenthal?

  Any arena of ambition, as you would say.

• 1:25:11Ben Gilbert?

  There should be unacquired in all these other verticals. In fact, the business vertical could support 10 more.

• 1:25:17Speaker 02

  There's a lot more money in business.

• 1:25:19Ben Gilbert?

  Yes.

• 1:25:19Speaker 02

  In tech and finance.

• 1:25:21David Rosenthal?

  I think there's a bit of a cold start. If you were to propose going and creating an acquired for sports, you would, the sort of risk, I guess we took, we didn't think about it as a risk at the time because it was just a hobby, was you're looking at years of no or little monetization.

• 1:25:40Speaker 02

  Right.

• 1:25:40David Rosenthal?

  Because it's going to take a long time to build up the audience.

• 1:25:43Speaker 02

  Right.

• 1:25:43David Rosenthal?

  Versus, oh, I could go join a network. I could join, make a show on The Ringer. I could, you know, do whatever.

• 1:25:49Ben Gilbert?

  Acquired was path dependent on us having day jobs.

• 1:25:52Speaker 02

  For sure. Right. And day jobs in the industry that you're going to cover.

• 1:25:57Ben Gilbert?

  Right.

• 1:25:57Speaker 02

  Right.

• 1:25:58Ben Gilbert?

  We built half the relationships and all the know-how and all the shorthand from being in the industry before.

• 1:26:05Speaker 02

  So I asked you how many acquired could be created in just your space. What percentage of the advertising revenues do you think you're hoovering up? In the way you're hoovering them up?

• 1:26:17Ben Gilbert?

  In like business podcasts?

• 1:26:20Speaker 02

  The B2B, like the things, the kind of people you will accept as your sponsors. How many times over?

• 1:26:27David Rosenthal?

  Fortunately, there are a lot more people who want to sponsor acquired than...

• 1:26:31Speaker 02

  That's what I mean. Like, how many more are there?

• 1:26:34David Rosenthal?

  A lot.

• 1:26:34Ben Gilbert?

  We're probably three or four X over-subscribed on like people who really could convert on becoming sponsors if we said, sure, we'll take you.

• 1:26:43Speaker 02

  How come you don't spawn an extra acquired or two?

• 1:26:46David Rosenthal?

  Well, I think that...

• 1:26:48Speaker 02

  Why don't you create, why don't you create the next use?

• 1:26:52David Rosenthal?

  Then we're not acquired. Then we're not us.

• 1:26:54Speaker 02

  I see.

• 1:26:55Ben Gilbert?

  Do less.

• 1:26:56David Rosenthal?

  Then we become CEOs.

• 1:26:57Speaker 02

  Right.

• 1:26:58Ben Gilbert?

  Do not want to build a company.

• 1:26:59Speaker 02

  Yeah, so no, it's funny. There's a line that you don't have bosses.

• 1:27:06David Rosenthal?

  Yeah.

• 1:27:07Speaker 02

  You have incentives.

• 1:27:08David Rosenthal?

  Yeah.

• 1:27:09Speaker 02

  But you don't have bosses.

• 1:27:11Ben Gilbert?

  And we're not other people's sponsors.

• 1:27:12Speaker 02

  That's like my life too. I have a lot of incentives, I have no bosses. When you're in any kind of creative thing, there is this benefit to not just following the financial incentives and not trying to kind of like milk every last penny out of it. And to... Creating scarcity, not just for the sake of the scarcity, but for the sake of the quality.

• 1:27:33Ben Gilbert?

  Yeah.

• 1:27:34Speaker 02

  And only do it if it's great. If you only do it, it's a long-term strategy. I mean, it's not that I think all my books are great. I don't write them, though, unless I think they're gonna be great.

• 1:27:45David Rosenthal?

  Yeah.

• 1:27:45Speaker 02

  I just don't.

• 1:27:46Ben Gilbert?

  Why would you allocate, let's say you have a portfolio of however many more years you think you're gonna write, 20, 30, why would you allocate, you know, I don't know how like-

• 1:27:54Speaker 02

  A year.

• 1:27:55Ben Gilbert?

  A year and a half.

• 1:27:55Speaker 02

  Yeah.

• 1:27:56Ben Gilbert?

  Why would you blow a slot on-

• 1:27:57Speaker 02

  Yeah.

• 1:27:58Ben Gilbert?

  A bad book.

• 1:27:58David Rosenthal?

  That's a gaping hole.

• 1:27:59Speaker 02

  I'll give you a reason why some people might. A publisher offers me a gazillion dollars to write a book about X.

• 1:28:06Ben Gilbert?

  And how much-

• 1:28:07Speaker 02

  I know the book's gonna suck, because it's not actually a good idea for a book. And it's not gonna be fun to do, because all the fun is in it may be great.

• 1:28:13Ben Gilbert?

  Is there any chance any of those dollars make your life better-

• 1:28:17Speaker 02

  No.

• 1:28:17Ben Gilbert?

  At this point?

• 1:28:18Speaker 02

  Zero. So this is the thing people miss. What is Lane Kiffin gonna get out of an extra couple of million dollars going to LSU from Ole Miss?

• 1:28:26David Rosenthal?

  Yeah.

• 1:28:26Speaker 02

  The average athlete is taking a few million dollars more to move his wife and kids from one family, one city that loves him and that he loves, to some strange place where everybody's gonna be unhappy. People do this all the time.

• 1:28:37Ben Gilbert?

  All dollars do not have equivalent value.

• 1:28:39Speaker 02

  No.

• 1:28:40Ben Gilbert?

  The marginal dollars have way smaller value than the early dollars.

• 1:28:44Speaker 02

  Sometimes they end up having kind of negative value. And you become a person who that's what you're about. It's like you're saying, I'm gonna be the person who just follows the financial incentives, rather than I'm gonna control the, I'm gonna let these incentives do, they could be useful. They get you out of bed in the morning for a while. But you have to kind of control them. So I love that you're not milking the market.

• 1:29:04David Rosenthal?

  I think there's two different things that we're talking about here. One is milking the market, yes or no? The other one is, do you wanna build an enterprise? Or do you wanna stay a boutique? So like, to your question for us, like, why don't we create more of ours? Like, we don't wanna manage other shows, podcast hosts.

• 1:29:22Ben Gilbert?

  People often tell us, like, oh, you're building this business. You guys are sort of foolish, because there's, there was all this key man risk. Like, you're building this great business, but if either of you leave-

• 1:29:31David Rosenthal?

  Yeah, what's the enterprise value?

• 1:29:32Ben Gilbert?

  Unfortunately, your business has low enterprise value. And we're like-

• 1:29:34David Rosenthal?

  Okay.

• 1:29:35Ben Gilbert?

  But if we sold this business, then we would just go start a choir.

• 1:29:40Ben Gilbert?

  We're already doing the thing we do.

• 1:29:42David Rosenthal?

  Yeah, the dream is what we're doing.

• 1:29:44Speaker 02

  All right, so I took us off on a sidetrack. We've only gotten through four. I want to hear the fifth.

• 1:29:48Ben Gilbert?

  We've gotten like five or six or seven.

• 1:29:50Speaker 02

  I want to hear what's the fifth lesson you've learned.

• 1:29:53Ben Gilbert?

  Founder control was a huge one.

• 1:29:56Speaker 02

  Is this from Google?

• 1:29:57Ben Gilbert?

  I think we, again, this is one of these things that we like learned early, but then got reinforced through episodes. Meta, Rolex, Trader Joe's.

• 1:30:06David Rosenthal?

  IKEA.

• 1:30:07Ben Gilbert?

  Yeah, like stay private, be family owned.

• 1:30:10David Rosenthal?

  You don't even have to take, I mean, Meta's a public company, but founder control. I mean, Google too. Google's founder controlled.

• 1:30:17Ben Gilbert?

  The important things in the world probably should be big publicly traded corporations, but like there's these amazing, wonderful things you can create by being boutique and maintaining control.

• 1:30:26Speaker 02

  I think there's an argument you made that in any industry where they're both private and public companies, the private companies end up being much better run. And I mean, like that mostly bad things happen when companies go public and certainly less pleasant. So, public or private, your point is founder control.

• 1:30:41David Rosenthal?

  But there's also just like a personal choice element. Last year, we, we had a like a existential crisis is way too dramatic. But I think something that was on our minds was like, are we being wussies? We're not doing Hollywood, we're not adding more shows, we're not building an enterprise.

• 1:30:59Speaker 02

  What triggered this? Are we being wussies?

• 1:31:01Ben Gilbert?

  We were currently researching Bell Labs. And I think I felt like we were like chasing this like esoteric-ness.

• 1:31:10David Rosenthal?

  So we sought some advice and we went to one of the best investors ever, who we've gotten to know, who's a fan of the show, you know, somebody everybody would know. And we asked him to dinner and we just sort of like, hey, we've got this, you know, we could do all these things, we're not like Hollywood, etc.

• 1:31:27Ben Gilbert?

  And we sort of expected his comment to be like.

• 1:31:30David Rosenthal?

  Dream bigger, like, you know, go for it, like, you know, you guys are being wussies. And he sort of sat there and he thought a minute and he said, I have seen so many founders become trapped in prisons of their own making in their own companies.

• 1:31:46Ben Gilbert?

  And they're successful prisons.

• 1:31:47David Rosenthal?

  Yeah, yeah. You guys have avoided that fate. Don't go down that road.

• 1:31:53Speaker 02

  But what is, I'm missing actually the connection.

• 1:31:55David Rosenthal?

  Oh.

• 1:31:56Speaker 02

  Why if you, why if you were less wussy-ish, would you have created?

• 1:32:00David Rosenthal?

  Hire people, take on more business projects.

• 1:32:04Speaker 02

  Oh, I see.

• 1:32:05David Rosenthal?

  Start a second show. Yeah, business wussies.

• 1:32:08Speaker 02

  I thought maybe you were, I thought you were saying you were avoiding like the controversies.

• 1:32:11David Rosenthal?

  Oh, yeah, that's a whole separate wussies. But no, no, we asked ourselves, are we being business wussies?

• 1:32:14Speaker 02

  Right, I see.

• 1:32:16Ben Gilbert?

  But they sort of go hand in hand, like cheap growth is covering the current thing. It will, I've been toying with this idea of stored potential energy. That like great businesses have a stored potential energy that you can't see in the current financials. And.

• 1:32:33Speaker 02

  Great people have that too. Great people have that too. They have these reserves that you just, that come out when they need them.

• 1:32:39Ben Gilbert?

  And they're not like presented in the obvious markers.

• 1:32:42Speaker 02

  Yes, they are sparkling there in front of your eyes. Anyway.

• 1:32:45Ben Gilbert?

  And I think we, we're trying to like store up as much potential energy and acquire it as we can. Rather than anytime there's a way to make it show up on the financial statements. Sort of like letting out the pressure and being like, yep, second show. Yep, more ads. Yep, dynamic ads from an ad network. Like just, you can say yes to all these things and you can sugar high the current profits.

• 1:33:10Speaker 02

  Right.

• 1:33:11Ben Gilbert?

  Or you can try to like, figure out how to store up as much potential energy as you can.

• 1:33:14Speaker 02

  Right.

• 1:33:15Ben Gilbert?

  And I think once you kind of hit the point in life where money won't make you any happier, then there's, there's actually not a point to letting any of that potential energy out. It just creates goodwill for everyone, most principally selfishly yourself, to keep it bottled.

• 1:33:33Speaker 02

  Right. All right, so how do we get on that? We, I don't know how we get on that from the founder control.

• 1:33:40David Rosenthal?

  That was Matt at Google.

• 1:33:42Speaker 02

  So that's number five, number six.

• 1:33:43David Rosenthal?

  Uh, okay, I've got one from.

• 1:33:47David Rosenthal?

  This is a non-obvious one.

• 1:33:49Ben Gilbert?

  Also, can I just say, like, sometimes we do some stuff like this. We are not like saints, we're capitalists. Like, we're running a capitalist enterprise here.

• 1:33:57David Rosenthal?

  Sometimes we hire a production crew.

• 1:33:59Ben Gilbert?

  Sometimes we, uh, last year, we added a fourth ad slot. We always had three. Last year, we looked at ourselves and we said, there's four-hour podcast episodes. We're currently at like 2%, 3% ad load. Everyone else is at 15%. God forbid, we go to 4.5% of time. So like, we indulge occasionally. All right, listeners. Now is a great time to talk about a new partner of ours here on Acquired, Logora, the agentic operating system that is redefining how the world's best legal teams work.

• 1:34:32David Rosenthal?

  Yep, it's sort of obvious that AI is going to completely change the legal industry. I bet most of you listening have dropped a contract into some sort of AI chatbot out there. Logora took that insight and asked the question, what if you really built something with that power from the ground up for the legal industry?

• 1:34:49Ben Gilbert?

  So the founders did exactly what great founders do, operate with obsessive customer focus. They embedded inside a massive law firm for months. They sat with the lawyers just watching how the work really gets done.

• 1:35:04David Rosenthal?

  And that's how you get features that customers love, like tabular review, where you drop in a folder of hundreds of contracts and it pulls every key term into a grid a lawyer can actually work with. Logora's bet here is interesting. Since it lets each lawyer handle more complexity, any given person can increase the quality of their work and do higher value work. And this means that the pie can grow even as each individual task takes less time.

• 1:35:28Ben Gilbert?

  And they recently launched Logora Agent, offering greater intelligence and performance. The agent lets lawyers set an objective, then it can handle the planning and the execution and delivery of the final product. Legal teams get to maintain full control and transparency since they're still involved where judgment is required.

• 1:35:47David Rosenthal?

  And Logora works where you already work. You can use it within Microsoft Word while redlining or drafting. The early Logora numbers essentially speak for themselves. When they have a head-to-head pilot with their top competitor, they win 70% of the time. Logora now has over 100,000 lawyers on the platform from 1,200 legal teams in 50 countries. And crazily, they went from 1 million to 100 million in ARR in about 18 months.

• 1:36:17Ben Gilbert?

  Truly insane numbers. And that is the real test. Plenty of things demo well, but the question is whether a busy associate actually reaches for it during crunch time, or whether a partner trusts it before going into a conversation with a major client. If your legal team wants to check it out, whether you're a law firm or you're in-house at a company, you can learn more at lagora.com/acquired and just tell them that Ben and David sent you.

• 1:36:42David Rosenthal?

  Okay, so sometimes we make episodes that either we think are going to be great, or we're just really interested in them and they like, and the numbers-wise, they don't

• 1:36:53Speaker 02

  Perform.

• 1:36:53David Rosenthal?

  They don't, you know, the great thing about podcasting is like, it's always within like a 20, 30% range.

• 1:36:58Speaker 02

  Right.

• 1:36:59David Rosenthal?

  So it's not like, it's a total flop.

• 1:37:00Speaker 02

  But give me an example of the podcast, the extreme version of the one you all were most excited about that didn't resonate with your audience in the same way.

• 1:37:09David Rosenthal?

  Okay, well, so the lesson here is gonna be, yeah, Nintendo. We thought Nintendo was gonna be a big, it's such a great, it's an incredible history, incredible story, incredible company, and of one company, durable over 100 years plus, has been through so many iterations, people love it.

• 1:37:30David Rosenthal?

  You know, 20% underperformed our benchmark at the time. We're like, oh, man.

• 1:37:36Ben Gilbert?

  And then we did a part two to really dig ourselves deeper.

• 1:37:38David Rosenthal?

  Really like, yeah.

• 1:37:39Ben Gilbert?

  And you know what people don't love is part twos.

• 1:37:41David Rosenthal?

  Yeah. And they really don't love part twos when they didn't love part one.

• 1:37:44Speaker 02

  Let me tell that joke again. It's so funny that you'll like it even better the second time.

• 1:37:48David Rosenthal?

  Exactly, exactly, exactly.

• 1:37:50Ben Gilbert?

  It's a necessary subset. You never tune into something called part two without part one. And so the dumbest thing you can do if you're focused on growth is have an underperforming part one followed by a part two.

• 1:38:02David Rosenthal?

  Right, yeah, yeah. But we did it, and you liked it. We had a great time.

• 1:38:08Ben Gilbert?

  Nintendo, it's like one of the most interesting companies ever.

• 1:38:11David Rosenthal?

  It started as a Yakuza company. Like, it's crazy.

• 1:38:15Speaker 02

  How did it start?

• 1:38:17David Rosenthal?

  It was playing cards, so gambling was illegal in Japan after the Meiji Restoration. And so they made Hanafuda cards, which are cards in Japan, and the Yakuza was the main customer.

• 1:38:27Ben Gilbert?

  And then they got into toys, and then they way later found their way into video games.

• 1:38:31Speaker 02

  The Japanese mafia was the main customer.

• 1:38:33David Rosenthal?

  Yes.

• 1:38:34Speaker 02

  That's funny.

• 1:38:34David Rosenthal?

  Yeah, this is amazing, amazing story, and they have this philosophy called lateral thinking with withered technology, which is, if you look at Nintendo's systems, you can go way, way, way back, it's not bleeding-edge technology, it's like, a couple generations back technology. How can we take withered technology and think outside the box with it? So like, the Wii is the best example of this. The Game Boy was the original example of this. The Game Boy was basically a calculator, but like, you know, it didn't have a colored screen, it had two buttons, like, you know, but it was this incredible success.

• 1:39:06Ben Gilbert?

  You can see the passion.

• 1:39:07Speaker 02

  I feel like I'm about to get you into part three.

• 1:39:09David Rosenthal?

  Yeah, yeah, yeah, exactly, we're gonna do part three. Okay, okay, but, buddy, here's the lesson. Another episode that was totally like this, Indian Premier League cricket, underperformed.

• 1:39:17Speaker 02

  Love that show.

• 1:39:18David Rosenthal?

  Incredible story. Incredible story.

• 1:39:20Ben Gilbert?

  You either really loved it or didn't listen at all.

• 1:39:22David Rosenthal?

  Yeah, this is the lesson.

• 1:39:23Speaker 02

  It's the first of your shows I listened to.

• 1:39:25Ben Gilbert?

  You started with IPL.

• 1:39:27David Rosenthal?

  You are making the point here.

• 1:39:28Ben Gilbert?

  This is why we did IPL. It's all worth it if we just got Michael.

• 1:39:32Speaker 02

  I'm a partial owner of the Rajasthan Royals.

• 1:39:34Ben Gilbert?

  You are not! I have a Royals jersey!

• 1:39:36David Rosenthal?

  You and Minaj is the majority owner, right?

• 1:39:39Speaker 02

  He's a majority owner. So it's a very tiny slice, but I haven't been over, I still can't explain the game, but the league...

• 1:39:46David Rosenthal?

  Wait, okay, wait, wait, wait. How did you become a minority owner?

• 1:39:50Speaker 02

  Two friends, I'll leave their names out of it, but you know who they both were.

• 1:39:55David Rosenthal?

  Okay.

• 1:39:55Speaker 02

  Called and said, "There's this guy who's got this cricket team, he wants to make it the Moneyball of..."

• 1:40:02David Rosenthal?

  Oh, they're the Oakland A's of the IPL?

• 1:40:05Speaker 02

  Yeah, exactly.

• 1:40:06David Rosenthal?

  Yeah, yeah, yeah.

• 1:40:06Speaker 02

  And he'd be open to having you invest, and they were both good filters, like, if they were interested, it was already smart, and I also thought... It was small enough that if it went wrong, it would be an amazing story. And even if it goes right, even if it goes right.

• 1:40:24David Rosenthal?

  Have you met Lolita, Modi?

• 1:40:26Speaker 02

  No. No, no, I haven't met anybody but Manoj.

• 1:40:29David Rosenthal?

  Oh, boy.

• 1:40:30Speaker 02

  And, and it's.

• 1:40:30David Rosenthal?

  Oh, boy. Oh, boy. Oh, boy.

• 1:40:32Speaker 02

  No, I know, there's a whole.

• 1:40:33David Rosenthal?

  Have we got a subject for you?

• 1:40:34Speaker 02

  But I'm not gonna, I don't want to redo your podcast. It's just like, there may be some way down the, so that was the other thing I was thinking. Like, a number of, this could work out a number of ways. So anyway, that was the first one I listened to. And you, that, that was a, that was, it's an unbelievable story.

• 1:40:49David Rosenthal?

  Oh, it's unbelievable.

• 1:40:50Speaker 02

  Everybody in the world should listen to this thing. And.

• 1:40:53David Rosenthal?

  And it underperformed.

• 1:40:54Speaker 02

  And yet it underperformed.

• 1:40:55David Rosenthal?

  Okay, but here, but here's the lesson. Both Nintendo and IPL, we got, they were the first listening experiences for some incredibly influential people who have changed the trajectory of acquired.

• 1:41:08Ben Gilbert?

  I think we can share the whole story.

• 1:41:09David Rosenthal?

  Yeah.

• 1:41:09Ben Gilbert?

  Nintendo was.

• 1:41:11David Rosenthal?

  Specifically listened to by one person on the Meta executive team who found it, thought it was amazing, sent it to the entire Meta executive team.

• 1:41:17Speaker 02

  Right.

• 1:41:18David Rosenthal?

  And then they all listened.

• 1:41:19Ben Gilbert?

  Right. We built a relationship with them. And then, when JP Morgan called us and said.

• 1:41:25David Rosenthal?

  We've got Chase Center.

• 1:41:26Ben Gilbert?

  Yeah, and they were like, well, what would you do? And we asked this person, like, hey, do you think Mark would want to do it? And.

• 1:41:33David Rosenthal?

  And he said, I don't know, but I'm gonna ask him right now.

• 1:41:35Ben Gilbert?

  Right, and so without the Nintendo episode.

• 1:41:37David Rosenthal?

  Without the Nintendo episode, Mark Zuckerberg doesn't join us.

• 1:41:39Ben Gilbert?

  No 6,000 person.

• 1:41:41David Rosenthal?

  And we have some similar stories with IPL. The point is that, uh, doing episodes, uh, that we, one or both of us is just like insanely passionate about.

• 1:41:52Speaker 02

  Where'd you learn this from?

• 1:41:54David Rosenthal?

  From doing these episodes and like, underperforming, but.

• 1:41:57Ben Gilbert?

  No, we learned it from LVMH. I pitched that like, three times, and you were like, okay.

• 1:42:01David Rosenthal?

  But LVMH was a banger. It performed great.

• 1:42:03Ben Gilbert?

  Which is why we learned the lesson, that if one of us feels passionate about something.

• 1:42:06Speaker 02

  Go for it.

• 1:42:07David Rosenthal?

  Oh, no, but I'm making a different point, which is that if one of us feels passionate about something, even if the episode is a relative dud, it's still worth doing. Because invariably, somebody latches on to that passion.

• 1:42:18Speaker 02

  Exactly right. If you don't feel anything, it's a chance, nobody's gonna feel anything. But if you feel a lot, someone's gonna feel it.

• 1:42:23David Rosenthal?

  Someone's gonna feel something.

• 1:42:23Speaker 02

  That's right. That's right. So go, so trust that feeling.

• 1:42:27David Rosenthal?

  Yeah.

• 1:42:27Ben Gilbert?

  Yeah. It's about the magnitude of the way a small number of people feel about episodes, often more than the

• 1:42:35Speaker 02

  Yeah.

• 1:42:35Ben Gilbert?

  Spread.

• 1:42:36Speaker 02

  I think that's right.

• 1:42:36David Rosenthal?

  Yeah.

• 1:42:37Speaker 02

  Yeah.

• 1:42:38David Rosenthal?

  Now, sometimes we're passionate about something and it becomes a banger. That's the ideal. Rentec, Renaissance Technologies, that was amazing. That was incredible.

• 1:42:47Speaker 02

  That's one of the episodes I've listened to. I loved it too.

• 1:42:49David Rosenthal?

  So great.

• 1:42:50Speaker 02

  It's one of like the two great mysteries on Wall Street. How they do what they do. And who is Satoshi?

• 1:42:57David Rosenthal?

  Yeah, those are the two.

• 1:42:58Speaker 02

  Those are the two.

• 1:42:59Ben Gilbert?

  I kind of like the take that they invented machine learning a decade or two before and kept it secret that resembles L L Ms. And that they were able to find signal that existed only in really weak ways in a predictable alpha generating.

• 1:43:16Speaker 02

  But that nobody else found it too. So that it all went away because they hid it at the same time as they found it.

• 1:43:22Ben Gilbert?

  Yes.

• 1:43:23Speaker 02

  That's mind blowing, if true, that that could still be going on with, I mean, you can see why it worked through the 90s.

• 1:43:32Ben Gilbert?

  Yeah.

• 1:43:33David Rosenthal?

  Yeah.

• 1:43:33Speaker 02

  It's really hard with like Jane Street and Citadel and all these other places looking for every bit of signal in the marketplace. It is an amazing story and that is of the books I didn't write that I wished I'd written.

• 1:43:44David Rosenthal?

  Did you consider doing that?

• 1:43:45Speaker 02

  Oh, I, so Jim Simon's son had a kid in my oldest child's class in high school. And I tried, I said, look, I can't do it unless you want me to do it. There's no point. And he said like, Dad, that's like, no, no, no. This whole business of kind of doing it by radar completely from the outside, you know, you're gonna get so many things wrong.

• 1:44:08David Rosenthal?

  Yeah.

• 1:44:09Speaker 02

  And it's like, embarrass yourself that you need to be so inside so that you don't, so that the person you're writing about doesn't read and say like, that's just completely wrong. And, and I could have done that book, but why? You know, that, that didn't appeal to me. What appealed to me was he was at the end of his career. I didn't need all the secrets, but I needed some of the secrets. And, and I, and I would need him. And I, but that's one, that's on my, oh, that's too bad. That one got away.

• 1:44:39David Rosenthal?

  Yeah. If a butterfly had flapped its wings differently and he collaborated.

• 1:44:42Speaker 02

  It would have been fabulous book.

• 1:44:43David Rosenthal?

  Yeah.

• 1:44:44Speaker 02

  It would have been a fabulous book.

• 1:44:47Speaker 02

  All right, number seven.

• 1:44:48Ben Gilbert?

  It's a different twist on the NFL, but we definitely learned it from the NFL. Create spectacle.

• 1:44:55Speaker 02

  All right.

• 1:44:55David Rosenthal?

  Our live event strategy.

• 1:44:57Ben Gilbert?

  Yeah, there's twofold. One, we now have stopped thinking about acquired as a habit for people. Most podcasts, your dream is to create a habit.

• 1:45:06Speaker 02

  Yeah.

• 1:45:06Ben Gilbert?

  And ours, we've thrown that out the window and said we're

• 1:45:08Speaker 02

  You don't do enough of them.

• 1:45:09Ben Gilbert?

  Right.

• 1:45:09Speaker 02

  Right.

• 1:45:09Ben Gilbert?

  So we need to create events. It needs to be the current thing when we release an episode for whatever your group of friends or acquaintances is, like, it has to be the water-cooled conversation.

• 1:45:19David Rosenthal?

  It has to be Monday Night Football.

• 1:45:21Ben Gilbert?

  And then, once a year, we have to have a Super Bowl.

• 1:45:24Speaker 02

  Yeah.

• 1:45:24Ben Gilbert?

  And doing the Chase Center show and then the Radio City show, very small amount of people in the audience.

• 1:45:32Speaker 02

  6,000?

• 1:45:33Ben Gilbert?

  6,000. So it's, yeah, great. It's the world's largest indoor theater. It's 6,000 people in this incredible venue in New York City relative to the number of people who listen to our episodes.

• 1:45:42David Rosenthal?

  It would still be.

• 1:45:43Ben Gilbert?

  It's .4% of the audience. It's very small.

• 1:45:47David Rosenthal?

  Tiny percentage.

• 1:45:48Ben Gilbert?

  But the amount of heat and light created from the idea that you did that show

• 1:45:55Speaker 02

  Right.

• 1:45:56Ben Gilbert?

  is more impactful to building the franchise of acquired than any given episode, maybe even than a whole season of episodes.

• 1:46:03Speaker 02

  What's the first spectacle you created?

• 1:46:07David Rosenthal?

  Well, Chase Center was the first.

• 1:46:09Speaker 02

  How long ago was that?

• 1:46:09David Rosenthal?

  We had been stepping, that was

• 1:46:11Ben Gilbert?

  18 months.

• 1:46:12Speaker 02

  So you just started doing this?

• 1:46:13Ben Gilbert?

  Yeah.

• 1:46:14David Rosenthal?

  We had been, we did a show in Climate Pledge Arena in Seattle, but it was one section.

• 1:46:20Ben Gilbert?

  But actually, by being able to say we did an arena show, even though it was only 1,000 people, we talked about it on eras, the acquired arena show, and that had some

• 1:46:30David Rosenthal?

  We were able to say to JP Morgan, to Chase Center, to the Warriors, like, we have done this before.

• 1:46:35Speaker 02

  I'm gonna ask a couple of rude questions. Your Radio City Music Hall event was with Jamie Dimon. 6,000 people.

• 1:46:43Ben Gilbert?

  And Meredith Kopp at Levian, New York Times CEO, and Barry Diller.

• 1:46:47Speaker 02

  Okay, so the three, how many people are there for them and how many people are there for you?

• 1:46:51Ben Gilbert?

  We did not announce the guests.

• 1:46:52Speaker 02

  Oh.

• 1:46:53David Rosenthal?

  So they were all there for acquired.

• 1:46:55Ben Gilbert?

  Mostly because I wanted to give this answer when people asked.

• 1:46:59David Rosenthal?

  We knew, Michael, at the end of the year was gonna ask this question.

• 1:47:02Speaker 02

  So all I knew was it was gonna be acquired with a guest. Was it sold out before you announced the guest?

• 1:47:10Ben Gilbert?

  We didn't announce the guest.

• 1:47:11Speaker 02

  So the guest is a surprise?

• 1:47:13David Rosenthal?

  Yeah.

• 1:47:13Ben Gilbert?

  Yeah.

• 1:47:14Speaker 02

  Oh.

• 1:47:14Ben Gilbert?

  It hurt in my soul when we did Chase Center. Afterwards, reflecting on it, there was this little thing of like, did all those people show up because it said Mark Zuckerberg on the poster?

• 1:47:22Speaker 02

  Yeah. Well, now you know.

• 1:47:24David Rosenthal?

  So now we know.

• 1:47:24Speaker 02

  So now you know. So that's, this is your form of spectacle is these big public shows?

• 1:47:29David Rosenthal?

  Yeah.

• 1:47:29Speaker 02

  Any other forms of spectacle on the horizon?

• 1:47:32David Rosenthal?

  Well, we are doing the actual Super Bowl. So this is, we basically manifested this.

• 1:47:36Speaker 02

  Are you the halftime show?

• 1:47:38David Rosenthal?

  I wish.

• 1:47:38Ben Gilbert?

  Yeah, we're collabing with.

• 1:47:39David Rosenthal?

  Us and Bad Buddy, we're gonna be on.

• 1:47:41Speaker 02

  I would love the reaction of the NFL fan base. If they were told that it's not gonna be music this year.

• 1:47:46David Rosenthal?

  Ben and David are coming out.

• 1:47:47Speaker 02

  It's just gonna be an acquired episode.

• 1:47:49David Rosenthal?

  Yes.

• 1:47:50Speaker 02

  Yes, with Peyton and Eli Manning.

• 1:47:52David Rosenthal?

  The NFL.

• 1:47:53Ben Gilbert?

  They're so good. Manning Cast is like the only way I watch Monday Night Football now.

• 1:47:57Speaker 02

  Oh, it's good.

• 1:47:58Ben Gilbert?

  We're doing the Innovation Summit. So the NFL is launching.

• 1:48:00David Rosenthal?

  Launching a Innovation Summit the Friday before the Super Bowl. Because the Super Bowl is here in San Francisco this year. So they're launching an Innovation Summit Friday before the Super Bowl with all the, you know, big partners in the NFL, with Roger Goodell. It'll be in the city in San Francisco and we're gonna emcee it.

• 1:48:17Speaker 02

  Okay. So do you know who your guests are gonna be?

• 1:48:20David Rosenthal?

  We do. They haven't been announced yet, but it'll be, it'll be on par with our past.

• 1:48:25Speaker 02

  Where are you doing this?

• 1:48:27Ben Gilbert?

  SF MoMA.

• 1:48:28David Rosenthal?

  SF MoMA.

• 1:48:29Speaker 02

  Oh, okay.

• 1:48:30David Rosenthal?

  It's not, it's not gonna be open to the public. It'll be, it'll be streamed.

• 1:48:34Speaker 02

  Yep.

• 1:48:35David Rosenthal?

  So it'll be a different style of event than.

• 1:48:36Speaker 02

  It'll be VIPs for the Super Bowl.

• 1:48:39David Rosenthal?

  It's for the NFL's partners.

• 1:48:40Speaker 02

  Right.

• 1:48:42David Rosenthal?

  But, yeah, it's gonna be, it's gonna be incredible.

• 1:48:45Speaker 02

  All right. Let's go to, I think we're at number nine.

• 1:48:47David Rosenthal?

  All right, we're homestarts. So we made Costco in the back half of 2023. It was one or two episodes after we made Nike. Nike, I think, ended up being a fine episode, but. I tried way too hard, like way too much pressure on myself. I want to speak for you on the Nike episode. And it came out flat.

• 1:49:11Ben Gilbert?

  We read nine books between us to prepare.

• 1:49:13David Rosenthal?

  I think it was 11. It was just too much for all sorts of reasons. And so we were like burnt out. We were not happy. We decided to do Costco. I said, like, I just gotta, I gotta take a different approach here. I gotta play loose on this one. Like, I can't play tight, to use the sports analogy. And I said, like, let's find the one book, like, the right book.

• 1:49:34Ben Gilbert?

  Right.

• 1:49:35David Rosenthal?

  Helped that there was only really one book. Read that book. Saul Price's autobiography.

• 1:49:39Ben Gilbert?

  Right.

• 1:49:39David Rosenthal?

  Read that. Use that as the main source. You got maybe one of the best primary source interviews ever. The CFO of Costco gave you a one-on-one presentation.

• 1:49:51Ben Gilbert?

  Come over to the office and I'll sit you down and give you the entire whiteboard and PowerPoint on how the Costco business model works. And we spent the whole afternoon together and it was...

• 1:50:00David Rosenthal?

  And between those two things, the book and that time that you spent with Richard, that was there. And we didn't need to do more than that.

• 1:50:06Speaker 02

  When you went into it, did you know anything?

• 1:50:08Ben Gilbert?

  Yes.

• 1:50:10Speaker 02

  What did you know?

• 1:50:11David Rosenthal?

  When we went into starting work on Costco, we do nothing.

• 1:50:14Ben Gilbert?

  Correct, but I knew a lot going into that meeting with Richard. I wanted to be able to hear the things he was saying that were different than common wisdom. When you, there's a lot of think pieces out there about Costco. The Wall Street Journal loves to write about it. Investors love to write about the stock. So you can kind of read that stuff.

• 1:50:32David Rosenthal?

  Was Charlie Munger's favorite company. You know, there's lots of stuff out there.

• 1:50:35Ben Gilbert?

  And I wanted to hear, this was actually one of the last pieces of research because I wanted to be really prepped.

• 1:50:41Speaker 02

  What did you, you know, you were talking about when you're working on an episode, you're going for a run and you make some connection or some insight occurs to you and you stop and you write it down. Well, give me a few of the ones about Costco.

• 1:50:56Ben Gilbert?

  Low SKU count drives everything.

• 1:50:59Speaker 02

  Oh, all right.

• 1:51:00David Rosenthal?

  That's the like, the starting point.

• 1:51:02Speaker 02

  The number of things they have on the...

• 1:51:03Ben Gilbert?

  All right, do you want the Charlie Munger talk? This is the...

• 1:51:07Speaker 02

  The number of things they have on the shelf. So unlike Walmart, they has billions of things on the shelf.

• 1:51:11David Rosenthal?

  Walmart has 100 to 200,000 SKUs.

• 1:51:13Speaker 02

  You get what you get, you know pitch a fit. Whatever's there is there.

• 1:51:15Ben Gilbert?

  4,000 things.

• 1:51:16Speaker 02

  Yep.

• 1:51:17David Rosenthal?

  Walmart is 100 to 200,000.

• 1:51:18Speaker 02

  Yeah.

• 1:51:19Ben Gilbert?

  And here's like all the knock on effects of that. If you only sell 4,000 things, it doesn't take a lot of volume before very quickly you are a meaningful seller to every single one of those products. Those vendors. Suddenly you become really important to that vendor.

• 1:51:36Speaker 02

  Right.

• 1:51:37Ben Gilbert?

  Your merchandisers, since you only have 4,000.

• 1:51:40Speaker 02

  So your incentives start to align.

• 1:51:42Ben Gilbert?

  Yes. The merchandisers have a very small portfolio. You're not dealing with like 100 vendors.

• 1:51:47David Rosenthal?

  If you're a Walmart buyer, you're dealing with hundreds of vendors.

• 1:51:49Ben Gilbert?

  You're dealing with seven and you would know the absolute crap out of their product line. If you sell chocolate, you monitor the price in cocoa commodities markets.

• 1:51:57Speaker 02

  Right.

• 1:51:58Ben Gilbert?

  And if it takes someone who's managing a very small portfolio to stay that attuned to each one of the things, small SKU count means that any given thing on the shelf flies off the shelf pretty quick.

• 1:52:11Speaker 02

  So there's not, yeah, so the turnover is faster, so there's more flow.

• 1:52:13David Rosenthal?

  They're getting, they're getting, in some cases, they're getting multiple turns of cash flow before they pay the first time.

• 1:52:19Ben Gilbert?

  On average, it takes them 27 days to sell through their entire inventory, which means that's on net 30 terms, three days of grace where the inventory is actually financed by the vendors and then some.

• 1:52:34David Rosenthal?

  I think on average it's 27, so some SKUs are selling in two days that they're turning, they're turning at 10 times a month.

• 1:52:41Ben Gilbert?

  There's no working capital in this business, other than building more Coscos.

• 1:52:44Speaker 02

  Right. Low SKU count for Costco is like low, uh, low episode volume for me.

• 1:52:50David Rosenthal?

  Yeah, right, right, yes.

• 1:52:51Ben Gilbert?

  100% we like, yes.

• 1:52:53Speaker 02

  Right?

• 1:52:54Ben Gilbert?

  And low number of partners, so we can put like all of our energy behind very few.

• 1:52:58Speaker 02

  You know, it's not nor, it's not really natural for a business to sell less of things, sell fewer things when you could sell more things.

• 1:53:04Ben Gilbert?

  And everybody.

• 1:53:04Speaker 02

  But actually doing it, and when you walk into, it is the odd experience when you walk into Costco is the absence of choice.

• 1:53:09Ben Gilbert?

  Yeah.

• 1:53:10Speaker 02

  And in fact. Consumers kind of like not having too much choice.

• 1:53:15Ben Gilbert?

  This is the

• 1:53:15Speaker 02

  There's all this research showing that if you sell 30 different kinds of jams in the supermarket, you will sell less jam than if you sell three kinds of jam. Because the people will just be paralyzed by the choice.

• 1:53:26Ben Gilbert?

  Yes.

• 1:53:27Speaker 02

  And you feel like Costco, someone has made all these decisions for me. And they're good decisions.

• 1:53:32Ben Gilbert?

  Yes, it's curated.

• 1:53:33Speaker 02

  Yeah.

• 1:53:34Ben Gilbert?

  You can't just run this strategy willy-nilly. If you're only going to sell very few things, you're only going to make very few episodes, it puts a lot of onus on making exceptional choices on the things that you do choose to carry.

• 1:53:45Speaker 02

  Right.

• 1:53:45Ben Gilbert?

  So it's like a very high-leveraged strategy.

• 1:53:48Speaker 02

  But you didn't know anything about any of this when you went into the episode?

• 1:53:51David Rosenthal?

  No. We were just, the only reason we did the episode was it was Charlie Munger's favorite company.

• 1:53:56Speaker 02

  Give me another, give me another lesson. How are we doing on time?

• 1:53:59David Rosenthal?

  Is this the last?

• 1:54:01Ben Gilbert?

  This is acquired, Michael.

• 1:54:02Speaker 02

  Okay, I know, I know.

• 1:54:04David Rosenthal?

  You said you didn't have any plans tonight.

• 1:54:08Ben Gilbert?

  We were sitting down with Morris Chang and he was talking about TSMC.

• 1:54:11Speaker 02

  Yep.

• 1:54:11Ben Gilbert?

  And he told us that one of the ways that they erred was trying to exit the integrated circuit market, or diversify from that market, and go into solar

• 1:54:22David Rosenthal?

  Memory.

• 1:54:24Ben Gilbert?

  Memories, and there was one other thing too. And none of those were as good of a business. And the key insight was, you're already in the best business. Integrated circuits are the future and will be for a long time, and you're already the best at them. So stop trying to do other things and just do that really well.

• 1:54:43Ben Gilbert?

  Probably to a fault and with a bias, we believe that about acquired. Every time we look at anything else.

• 1:54:48Speaker 02

  We're already doing the thing we should be doing.

• 1:54:50Ben Gilbert?

  We're already doing

• 1:54:50Speaker 02

  Don't go do something that we're less good at or it's going to be less fun or, right.

• 1:54:54David Rosenthal?

  We should always just make another episode.

• 1:54:56Speaker 02

  You have decided to become venture capitalists. Again, so here's a, here's a, I'm curious. What's the difference between what you do and what a normal Silicon Valley venture capitalist does before they put money in a company? Do you think you know more?

• 1:55:09David Rosenthal?

  Well, I think there's a, I think there's a, there's just a, I think there's a top-level misconception about what the venture capital industry is.

• 1:55:16Speaker 02

  All right.

• 1:55:18David Rosenthal?

  I think a lot of people think it is a analytical industry, you're learning all about the company, you're doing diligence. It's not that you're not. You are doing that, but that's the commodity. It's an access business.

• 1:55:30Speaker 02

  Yeah.

• 1:55:30Ben Gilbert?

  Especially at the growth stage.

• 1:55:32Speaker 02

  Yeah.

• 1:55:32Ben Gilbert?

  Early stage, there's more picking involved.

• 1:55:35David Rosenthal?

  But that picking is like a super art. It's not a, early-stage picking is not a, you know, understanding a company.

• 1:55:44Speaker 02

  Right.

• 1:55:44David Rosenthal?

  Early, it's a, it's a whole different thing.

• 1:55:46Ben Gilbert?

  So the entire bet that we've made in this chapter of our venture capital careers is a bet that getting into the best companies is just an access thing. The, you know, growth-stage private companies, you can tell what the good ones are. Most people can't get in. If you can, you should.

• 1:56:02David Rosenthal?

  All right, you know, I mean, with, we do the work in choosing our sponsors and then we do like, okay, great, that box checked. Our sponsors are not non-obvious companies that all growth-stage investors don't want to get into.

• 1:56:15Speaker 02

  But the kind of work that you do to do a podcast episode about a company, does it bear any resemblance to the kind of work a VC does about a company before they invest in it?

• 1:56:29Ben Gilbert?

  I don't think so. I wrote a lot of investment memos in my early-stage career. They're all about how big could this thing be if it goes right? But you're almost always investing, at least I was at the napkin stage. And so you're, you're mostly making stuff up. You're, you're like dreaming what this market could look like when it materializes, but like, you don't know.

• 1:56:50Speaker 02

  Right.

• 1:56:51Ben Gilbert?

  You're really just making a founder bet and then you're trying to support it with all this like structural information that is a very imprecise.

• 1:57:00Speaker 02

  Right.

• 1:57:00Ben Gilbert?

  You're acting like you know the third or fourth decimal place, when in reality, you barely know the first one.

• 1:57:04Speaker 02

  You answer my, my question was, are these two things similar? And you're saying basically not so much?

• 1:57:08David Rosenthal?

  No, no, they're not.

• 1:57:09Speaker 02

  So that means that being a venture capitalist in no way really prepared you to create these podcast episodes, because they're very different things.

• 1:57:17David Rosenthal?

  Well, I think, I think it prepared us to create the business that we created, for sure.

• 1:57:21Speaker 02

  But what have you learned? I'll put a question another way. What have you learned about telling a story?

• 1:57:26David Rosenthal?

  Yeah.

• 1:57:27Speaker 02

  That you didn't know what, how to do.

• 1:57:29David Rosenthal?

  Reading your books and, you know, being a liberal arts, you know, major at Princeton, for me.

• 1:57:34Ben Gilbert?

  Studying the businesses that we studied for Acquired. Helps me make acquired far more than any investment memo I ever wrote. In fact, I remember in one of my last few years of being a venture capitalist, one of my partners asked me how I like learned so much so quickly about different industry dynamics. And I was like, it's not because I'm talking to all these early-stage companies, none of which know what the future looks like. It's studying these mature businesses and understanding what markets can look like at maturity. Acquired helped me be an investor much better than the other way around.

• 1:58:09Speaker 02

  Gotcha. What can you do now as storytellers that you couldn't do 10 years ago?

• 1:58:14David Rosenthal?

  I think we think about narrative, structure and acts and what a story is.

• 1:58:20Speaker 02

  Right.

• 1:58:20David Rosenthal?

  When we're reading books, sometimes a lot of books, especially corporate history books are, this happened and then this happened and then this happened and then this happened.

• 1:58:28Speaker 02

  Yep.

• 1:58:30David Rosenthal?

  That's fine for cataloging history.

• 1:58:32Speaker 02

  Right, it's not a story.

• 1:58:33David Rosenthal?

  That is not a story. And at a certain point, we realized like, you can't do, and this happened.

• 1:58:38Speaker 02

  Right. It's the why of it, it's the...

• 1:58:40David Rosenthal?

  It's the story flow.

• 1:58:42Speaker 02

  The queen died and then the king died is not a story. The queen died and then the king died of heartbreak is.

• 1:58:46David Rosenthal?

  Yeah.

• 1:58:47Speaker 02

  If someone just told you, he told me 10 years ago, that two guys, without any previous really literary podcasting, any kind of experience, we're going to create this four-hour conversation about an individual company. And people are going to be mesmerized by it. People are going to listen to the whole thing and want even more. I said, that doesn't sound like very promising. Like, I wouldn't put money into that.

• 1:59:12David Rosenthal?

  Yeah, if you were an early-stage business.

• 1:59:14Speaker 02

  It's like, why it works is a really good question. Because it's not obvious. It's counter to much of what's going on in the culture, like tension spans supposedly getting shorter, blah, blah, blah. But it does work. It clearly works. It works as a business, but it also works as just a creative thing. And the why of it is like, and you must think about this all the time, the why of it.

• 1:59:37Ben Gilbert?

  Yeah, there's a bunch of different answers to this. One giant tailwind for us is a year after we started the podcast, AirPods came out.

• 1:59:44Speaker 02

  Yeah.

• 1:59:44Ben Gilbert?

  And it became societally acceptable to just listen to stuff while you're moving about the world.

• 1:59:50Speaker 02

  While you're talking to your mother.

• 1:59:51Ben Gilbert?

  Yes.

• 1:59:52Speaker 02

  Yeah.

• 1:59:52Ben Gilbert?

  So our brains all got two input channels. Like, we used to only focus on one thing at a time. Everyone now focuses on two things at a time. You can't do the same thing, like you can't read and listen at the same time, but you can drive and listen, you can run and listen, you can do the dishes and listen. And so we have this massive tailwind of people have like a large number of minutes throughout the day where they're doing stuff that they can also listen.

• 2:00:19Speaker 02

  Right.

• 2:00:19David Rosenthal?

  Yeah.

• 2:00:20Ben Gilbert?

  Which that's true for all podcasts, but like.

• 2:00:23David Rosenthal?

  There are a couple of things that are true for all podcasts. One is AirPods. It's basically all the platform stuff that happened over the last 10 years. And we started at the right time to advance. So AirPods, Spotify. Spotify didn't enter podcasts until 2018 and now is, I think, over half of the market. Brought hundreds of millions of people into podcasting.

• 2:00:43Ben Gilbert?

  Apple Podcasts not becoming YouTube was actually great for us.

• 2:00:46Speaker 02

  Right.

• 2:00:47Ben Gilbert?

  That it's a place to, when you get a listener, you really get a listener. And it's like this durable, incredibly valuable place to accumulate listeners. Spotify is too, but.

• 2:00:56David Rosenthal?

  YouTube in its own way, too.

• 2:00:58Speaker 02

  But there were zillions of podcasts and not many are doing what you're doing. So, so they all have.

• 2:01:03David Rosenthal?

  Yeah, we're asking the question.

• 2:01:05Ben Gilbert?

  Corporate America becomes ever more important.

• 2:01:07Speaker 02

  Yeah, that's completely right, right? It's like that what is going on in the economy is mysterious to people.

• 2:01:14David Rosenthal?

  Yeah, the financial crisis.

• 2:01:15Speaker 02

  These companies, a lot of your episodes have been about these companies, about Tesla and Nvidia and Microsoft and Google. And they, people don't really get them explained to them. So that's, that's a big part of it.

• 2:01:27Ben Gilbert?

  If I had pitched you on Acquired in 2015, there's no way I would have said Acquired helps you understand why the world is arranged the way it is.

• 2:01:37Speaker 02

  Yeah.

• 2:01:37Ben Gilbert?

  But now I think that is absolutely the promise that we come through on.

• 2:01:40Speaker 02

  Right.

• 2:01:41David Rosenthal?

  I think the biggest reason Acquired works is kind of how you started off the conversation. It's just that it's our partnership. Like it's, it's, if just one of us were making Acquired, it would be a shadow of itself. Like the magic exists between us and there's so many, there's, there's a million times over the last 10 years where like, if we hadn't just been, you know, that burned cigarettes on our arms aligned, that like, it wasn't even a conversation, but like, had our partnership been slightly different, like it would have fractured. That's why we're still here.

• 2:02:12Speaker 02

  So I want to conclude this conversation because we don't want to go three hours. But I want to do it by doing the seven powers and apply it. I want you to apply.

• 2:02:24David Rosenthal?

  It's one of our most requested seven powers for acquired.

• 2:02:27Speaker 02

  Apply it to acquire.

• 2:02:28David Rosenthal?

  Great.

• 2:02:29Speaker 02

  And then I can learn what these seven powers are.

• 2:02:31Ben Gilbert?

  All right, so we are definitely a scale economies business. The fact that there's a large number of listeners to amortize all the inputs across makes it so that we can do an unreasonable amount of things for each episode. I mean, if you were going to try to compete with acquired today, you couldn't do all the stuff that we do.

• 2:02:53Speaker 02

  You don't start with a million listeners.

• 2:02:54David Rosenthal?

  Right. Or the access.

• 2:02:56Ben Gilbert?

  And you could do it for one or two or three episodes, but if it didn't grow quickly, at some point, you'd be like, it's not even about the money. It's about like, why am I doing all this work when no one is listening to it? And it would feel like that. So there was this path dependent thing of we always had the right product for the current amount of value that it created in the world, which you can use a listener base as a proxy for. And now because the listener base is large, we can afford to do things other people can't, which is sort of the definition of scale economies.

• 2:03:25David Rosenthal?

  Put this even much more simply. Let's say we at another podcast made the exact same episode. We've got a million and a half subscribers. They have zero. Our episode is a lot more valuable, even if we said the exact same words in the exact same way.

• 2:03:39Ben Gilbert?

  Yep.

• 2:03:40David Rosenthal?

  Yep, okay, scale economies, yes.

• 2:03:43Ben Gilbert?

  Counter positioning everywhere.

• 2:03:44David Rosenthal?

  Counter positioning everywhere.

• 2:03:45Speaker 02

  Explain counter positioning. We're going to do a little meta thing and also explain these powers.

• 2:03:48David Rosenthal?

  Explain these powers, okay. Counter positioning is when you do something that your competitors just cannot respond to.

• 2:03:57Speaker 02

  Give me an example outside of the podcasting world.

• 2:03:59David Rosenthal?

  Yeah, so what's a great example of this?

• 2:04:01Ben Gilbert?

  Southwest Airlines launches, they only use 737s. Everyone else who already has fleets of other planes can't do all the streamlined operations that Southwest is going to do because they have all these other sunk costs in this diversified fleet.

• 2:04:16David Rosenthal?

  Yep. We're counting position that we're not volume driven. Most podcasts sell their ads on a CPM basis and they are incentivized to make as many episodes as possible with as many ad slots as possible.

• 2:04:28Speaker 02

  Right.

• 2:04:29David Rosenthal?

  Our business is entirely structurally different.

• 2:04:31Speaker 02

  Yes.

• 2:04:31Ben Gilbert?

  We also don't-

• 2:04:32Speaker 02

  To your benefit.

• 2:04:32Ben Gilbert?

  Don't have shareholders, so we can do all these like non-economic things because the thing we're solving for, the quotient, is actually like our lives.

• 2:04:41Speaker 02

  Right. That's why you do four episodes as opposed to six or eight or one.

• 2:04:46Ben Gilbert?

  Yep.

• 2:04:46Speaker 02

  Right. It'd be cool if it ends up being just one episode a season.

• 2:04:49Ben Gilbert?

  This is David's dream.

• 2:04:50David Rosenthal?

  No, no, no, no, no. That's my nightmare is that we actually, we can't end up, if we end up at one episode a year or one episode a season, it's time to hang it up.

• 2:04:59Ben Gilbert?

  Here's a rule. We don't work with agencies. If an agency reaches out and says, "We want to place ads on your podcast," we write them a very nice note. If we're able to get to the email and say, "Oh, we don't work with agencies, but thank you so much for your interest." Can you imagine working at a podcast network where there's a revenue opportunity and you're saying, "Sorry, we just don't..." You're a middleman in a transaction and so therefore we won't take your dollars.

• 2:05:22Speaker 02

  Right. Yeah.

• 2:05:23David Rosenthal?

  So counting position, yeah, all of them.

• 2:05:25Speaker 02

  Counting position is in the number of shows you do. So the kind of shows-

• 2:05:28David Rosenthal?

  That's how it expresses itself, but the, because our business is structurally different than most others, like others can't do what we're doing.

• 2:05:35Speaker 02

  Right.

• 2:05:36David Rosenthal?

  Network economies, not really, but there's some watercooler effect of people talk about acquired episodes, especially within companies.

• 2:05:44Speaker 02

  Right.

• 2:05:44David Rosenthal?

  So we release an episode, it becomes a topic of discussion. This is a weak power, but it exists to a small extent.

• 2:05:52Ben Gilbert?

  If you like acquired, more people liking acquired is valuable because you get to talk about it with more people.

• 2:05:57David Rosenthal?

  Right. No switching costs. Switching costs is a power that's super easy to.

• 2:06:02Speaker 02

  Explain switching costs.

• 2:06:03David Rosenthal?

  Salesforce.

• 2:06:04Ben Gilbert?

  Yes.

• 2:06:05David Rosenthal?

  You've got your CRM on Salesforce.

• 2:06:07Speaker 02

  Okay.

• 2:06:07David Rosenthal?

  And you switch to another CRM is just a huge amount of cost.

• 2:06:12Speaker 02

  Okay.

• 2:06:12David Rosenthal?

  Associated with that.

• 2:06:13Ben Gilbert?

  Even though, you know, let's say on a day to day basis, it's the same price or cheaper. It's just such a pain and an economic tax to do a new implementation of something.

• 2:06:25Speaker 02

  Right.

• 2:06:26David Rosenthal?

  Yep.

• 2:06:26Ben Gilbert?

  We, there's none of that. People can, the sponsors can switch. Listeners can switch.

• 2:06:31Speaker 02

  There's no cost of switching out of acquired into whatever might come along.

• 2:06:35Ben Gilbert?

  No.

• 2:06:35David Rosenthal?

  No cost.

• 2:06:35Speaker 02

  Or to replace acquired.

• 2:06:37David Rosenthal?

  Yep. Don't have that.

• 2:06:38Ben Gilbert?

  Can I just also say, this is so weird and uncomfortable for me. Cause like, while I think we've created this like beautiful gem and I love thinking about it and talking about it with you. It is terrifying to talk about it with everyone and also feel so self aggrandizing to like.

• 2:06:57David Rosenthal?

  We are just a little thing.

• 2:06:58Ben Gilbert?

  What a great painting I have made.

• 2:07:00Speaker 02

  No, no, no, but this is, but it's very useful to think about this in this way. You've got a framework, let's think about your frame, you and your framework. What's the next power?

• 2:07:07David Rosenthal?

  Branding.

• 2:07:09Ben Gilbert?

  Yes.

• 2:07:09Speaker 02

  Yes.

• 2:07:10David Rosenthal?

  Same, again, thought exercise, same product released by a different podcast, not called acquired, people just acquired more.

• 2:07:15Speaker 02

  Right.

• 2:07:16Ben Gilbert?

  Yep.

• 2:07:17Speaker 02

  And that's just growing.

• 2:07:18David Rosenthal?

  Yep. Yep.

• 2:07:21David Rosenthal?

  Cornered resource.

• 2:07:22Ben Gilbert?

  The business owns us.

• 2:07:24Speaker 02

  Explain cornered resource. Give me an example.

• 2:07:26David Rosenthal?

  Ben Gilbert and David Rosenthal.

• 2:07:28Ben Gilbert?

  Intellectual property.

• 2:07:29Speaker 02

  Okay.

• 2:07:30David Rosenthal?

  Patents.

• 2:07:30Ben Gilbert?

  Disney owns the likeness of Mickey Mouse.

• 2:07:33Speaker 02

  Okay.

• 2:07:34Ben Gilbert?

  You don't get to build a business that benefits from the economic value driven by Mickey Mouse.

• 2:07:39Speaker 02

  Right. Now, we're assuming.

• 2:07:40David Rosenthal?

  Hard to value Ben Gilbert and David Rosenthal.

• 2:07:42Speaker 02

  We're assuming that you're a cornered resource, that the reasons that people are tuning in is that it's your lovely voices and the way you enthuse over this stuff. It could be that you've just actually found a thing.

• 2:07:53David Rosenthal?

  It could be.

• 2:07:54Speaker 02

  That everybody wants and that if two other people came in, they'd do it even better.

• 2:07:58Ben Gilbert?

  And that we, there are people who create, it's early, they're small, but things that resemble acquired a lot. The Step Change Podcast by our friend Ben Idelson is one of them. Where like, it's doing really well for a podcast that has three episodes because the, there's magic in the format, even if it's not us.

• 2:08:13Speaker 02

  Yep. That is, if there is a cornered resource that you, or your editor.

• 2:08:16David Rosenthal?

  Or yeah, or yeah, totally.

• 2:08:18Speaker 02

  Whose name you won't rule divulge. So suggesting that perhaps.

• 2:08:21David Rosenthal?

  Yeah, yeah, yeah, yes. It could be a clear reason.

• 2:08:24Speaker 02

  Okay.

• 2:08:24David Rosenthal?

  And then the last one is process power.

• 2:08:27Ben Gilbert?

  Which almost always businesses don't have.

• 2:08:29David Rosenthal?

  We have in spades.

• 2:08:31Ben Gilbert?

  We totally have.

• 2:08:31David Rosenthal?

  It's the same thing you have.

• 2:08:32Ben Gilbert?

  Because we kind of fail to articulate how an episode comes together. We tried on this conversation three times.

• 2:08:38David Rosenthal?

  I don't think we can recreate it.

• 2:08:39Ben Gilbert?

  And we didn't really explain to you exactly mechanically how an episode comes together.

• 2:08:44Speaker 02

  Except I can understand the iterations. Would you vomit out eight hours? If your editor decides what's the best five, it comes back to you and you cut.

• 2:08:54Ben Gilbert?

  But like, what do I show up with on recording day?

• 2:08:56Speaker 02

  Oh, I see. So we should maybe do this a little bit here. Process. Can I guess?

• 2:09:02Ben Gilbert?

  Sure.

• 2:09:02Speaker 02

  Because I actually don't know what you show up with the recording. You both, I assume you each take a kind of part of the story. Like either the history or current analysis of the business. And you're responsible for that. And you go learn about it. And but there's got to be some improvisation here. So that you don't tell each other exactly what you've learned.

• 2:09:23David Rosenthal?

  More or less. I'm responsible for the story with we carve out a one or multiple chunks that Ben will take. And then Ben is responsible for the analysis.

• 2:09:31Speaker 02

  Right. And then you probably have some lines you want to say that you know you want to say. But you want to say them naturally. So you kind of have them stored in the back of your head. And you wait for the moment where you can drop it where it sounds casual like. But if you don't, if that doesn't happen, you set it up. Like Ben's point, like SKU is everything in Costco. That kind of insight, the kind of you can reduce it to some something you want to get across in a line or two. What's hard about improv is disposing of all the things you imagine that were going to happen in the conversation before they happen. And nobody does it perfectly. And so there's this tension between, you know, the script and what's happening organically between the two of you.

• 2:10:15David Rosenthal?

  The truth is, is it's both.

• 2:10:16Speaker 02

  It's both.

• 2:10:17David Rosenthal?

  So I write a script. I write 10 to 20,000 words.

• 2:10:20Speaker 02

  You do.

• 2:10:21David Rosenthal?

  In sentence form, word for word.

• 2:10:22Speaker 02

  Do you read it?

• 2:10:23David Rosenthal?

  Uh, no. Well, I mean, I read it. It doesn't come out of my mouth. It comes out as a natural conversation.

• 2:10:29Speaker 02

  So you write it, but then you put it to one side?

• 2:10:32David Rosenthal?

  I have three screens in front of me.

• 2:10:33Ben Gilbert?

  You're kind of reading it.

• 2:10:34David Rosenthal?

  I'm kind of reading it. Yeah, yeah.

• 2:10:35Speaker 02

  Are you?

• 2:10:35David Rosenthal?

  But Ben interjects and it doesn't come out exactly as I wrote it.

• 2:10:39Speaker 02

  It doesn't sound like a script.

• 2:10:40David Rosenthal?

  Uh, yes, but part of my process is I need to write a script.

• 2:10:44Speaker 02

  To know what you think.

• 2:10:45David Rosenthal?

  Yeah.

• 2:10:46Speaker 02

  Yeah, it makes complete sense.

• 2:10:47David Rosenthal?

  But also to have it as a crutch there when we're performing of like...

• 2:10:51Ben Gilbert?

  We can't keep all this in our heads.

• 2:10:53Speaker 02

  But the real crutch you have is you can go, you're gonna do it for nine hours and it's only gonna be four. So you can make any, you know, you don't have to be perfect. You can screw it up every which way.

• 2:11:02Ben Gilbert?

  And you have a real-time feedback agent. Where like, I'm like, this is dragging. I don't care about any of this pre-history. Like, cut, cut, cut, cut.

• 2:11:10David Rosenthal?

  Yeah, yeah, yeah.

• 2:11:11Speaker 02

  And then, but yet, all we hear, the audience hears is, "That's amazing. Oh, that's so interesting." "It's incredible. I never thought of it that way." "You're the best. I love you." So we don't see any of the other stuff.

• 2:11:25David Rosenthal?

  No, no, no. It's in there.

• 2:11:27Speaker 02

  It's in there somewhere. Okay. All right, so take me further into the process. So you have, you have a script and you don't, Ben, you don't have a script.

• 2:11:35Ben Gilbert?

  I have a giant text edit document with like, just a whole bunch of mechanical points I want to get across.

• 2:11:43Speaker 02

  Right.

• 2:11:44Ben Gilbert?

  I have some story points in there that I know I want to interject in David's story, but I know the things that I'm gonna bring to the episode that I really care deeply about or explaining how something works. So I have like, written out bullet point by bullet point by bullet point and then...

• 2:11:59David Rosenthal?

  And we've usually identified where that's gonna enter in.

• 2:12:03Speaker 02

  Right.

• 2:12:04Ben Gilbert?

  Yeah.

• 2:12:04Speaker 02

  But this thing works because it doesn't sound like you're reading anything.

• 2:12:08David Rosenthal?

  Yeah, but the reality is it's a hybrid.

• 2:12:10Speaker 02

  Okay, the reality is that it's a hybrid.

• 2:12:12David Rosenthal?

  Yeah.

• 2:12:13Ben Gilbert?

  And there's all sorts of stuff in there that like, we are sort of looking at about six hours into recording where we're like, "That's not gonna make it in, and that's okay." That turned out it was not a salient point.

• 2:12:23Speaker 02

  Right.

• 2:12:23David Rosenthal?

  But the point of process power there is like, we can describe all this. You could probably, I'm sure you have, described in painstaking detail.

• 2:12:30Speaker 02

  How I do a book.

• 2:12:31David Rosenthal?

  How you do, but that doesn't mean anybody else can write a Michael Lewis book.

• 2:12:35Speaker 02

  The process, but your point is you have the process power.

• 2:12:39David Rosenthal?

  But the point of process power is you can tell them it's uncopyable.

• 2:12:42Speaker 02

  Oh, I see. Oh, I see. That's interesting. You have a process that can't be replicated even if you explain it to someone.

• 2:12:47David Rosenthal?

  Even if we explain in excruciating detail exactly what it is.

• 2:12:50Speaker 02

  What pops to my mind is that the magic, the pixie dust in a process is trust. And it's like something that you get when you trust a process. Here, trust the process.

• 2:13:04David Rosenthal?

  Yeah.

• 2:13:05Speaker 02

  Daryl Morey goes to Sam Hinkie, but the ownership of the Philadelphia 76ers, they didn't trust the process. They wanted the process. They wanted to replicate what they had been doing in Houston, but they didn't trust it.

• 2:13:18David Rosenthal?

  Where does trust show up for you?

• 2:13:20Speaker 02

  I was just about to say that I think I trust my process. And it's self-trust, but that's a form of trust. And I know if I just told it to someone and they went and tried to do it, they'd be thinking, it'd make them, they'd wig out. I gotta record the things. I gotta do this. And so that in fact, doing it my way would be a kind of weird handicap for them.

• 2:13:41David Rosenthal?

  That's the process power. Like if you were to copy paste the process, it wouldn't have the same results and it might in fact be a handicap.

• 2:13:48Speaker 02

  Right. But there's something emotional going on there.

• 2:13:53Speaker 02

  The difficulty in replicating it.

• 2:13:54Ben Gilbert?

  I also think it's because when you describe your process, it is lossy compression. The way compression works in computing is you're taking a large amount of data and you're compressing it down into a smaller amount of data, a different file format. And if it's lossy, it means that you can never fully recreate the original work.

• 2:14:15David Rosenthal?

  This is the MP3 codec.

• 2:14:17Ben Gilbert?

  Or a JPEG. A JPEG doesn't actually contain all the RGB values from the original photo, but like a human kind of can't tell most of the time and so it's fine. Explaining a process is a lossy compression of the actual process.

• 2:14:32Speaker 02

  That's true. That's true. You're actually not giving them everything.

• 2:14:35Ben Gilbert?

  And you're not doing it intentionally.

• 2:14:36Speaker 02

  No, it's just impossible.

• 2:14:37Ben Gilbert?

  Language is a lossy compression of thought.

• 2:14:38Speaker 02

  Yeah, true. That's an interesting observation. Language is a lossy compression of thought. Try to think of the reverse is also true for some people.

• 2:14:46Ben Gilbert?

  And uncompressing information, it's so funny, when you and I are communicating, I had a thought, I compressed it into a very narrow bandwidth thing of speech. I told it to you, you uncompressed it into your brain. It might actually mean a pretty different thing to you than it means to me.

• 2:14:59Speaker 02

  That insight is at the bottom of my creative process. I assume, when I write a book, that what goes into people is something different than came out of me. That they are going to take it and reassemble it in a different way. And so I have to construct it in a way that there's a hole for the reader to go in and just do what they need to do with it. Like, the more I just let the story tell itself, the less I tried to, like, influence the way he thought about the story, the more the story landed. And then, of course, when you do that, you're giving people lots of options, you know, in how they see the story, how they understand the story. It's the risk you take. And, but it is, it's what makes it alive.

• 2:15:44Speaker 02

  And it's why, and it's why you get this huge range of response to a given story. But you, that you've got to actually just accept that when you're saying something, the other person gets to understand it however they want to understand it. And if you don't do that, what you get is something that's dead the next day. It's like, "Yeah, yeah, you made your point, but I didn't hear it. I don't want it."

• 2:16:06David Rosenthal?

  This is always one of our, like, key goals with every episode. It's like, no matter what you think about the company.

• 2:16:13Speaker 02

  Right.

• 2:16:14David Rosenthal?

  You're gonna enjoy this episode, and you're gonna learn something from it. And then you may come away... Thinking like

• 2:16:20Ben Gilbert?

  It's about understanding.

• 2:16:21David Rosenthal?

  This company is terrible. You may come away thinking this company is righteous.

• 2:16:25Speaker 02

  Yep.

• 2:16:25David Rosenthal?

  But like

• 2:16:26Ben Gilbert?

  Sometimes we don't nail it. Sometimes we come across.

• 2:16:28David Rosenthal?

  We don't always nail, but that's the, that's the goal.

• 2:16:29Speaker 02

  Yeah, no, that's, I think it's a, it's, it's a, it's the creatively fun goal.

• 2:16:33David Rosenthal?

  Yeah.

• 2:16:34Speaker 02

  Cause that's the challenge. Rather than just imposing your editorial view on the world. Present it in as elegant way as possible and let the reader make what they make of it. Once you realize that's the thing to do, it's so much more fun than trying to muscle people around. It's, it's all of a sudden you're dancing with a reader instead of like hurling them all over the dance floor.

• 2:16:55Ben Gilbert?

  It also requires you to learn something new while you're making the creative work. Like if, if you come in with a point of view and you come in, let's say we try to, I was so afraid when we were making Trader Joe's that we were going to remake the Costco episode. And I was like, this episode's going to suck because we're not going to have the original enthusiasm that we had.

• 2:17:14David Rosenthal?

  Costco, but not as good.

• 2:17:14Ben Gilbert?

  Yeah. Or it's Costco, but it's for furniture like Ikea.

• 2:17:17David Rosenthal?

  This is totally different.

• 2:17:18Ben Gilbert?

  You have to have new insights that delight you as you're researching it so that you can make something great. And I think the reasons acquired will eventually fail. I don't think come from like platform disruption. Like, oh, Tik Tok's going to make it so people want short form instead of acquired. Maybe, but the more likely reason that we eventually fail is we stop being delighted by new things we discover. So we have nothing new to deliver to listeners.

• 2:17:47Speaker 02

  Right. I agree with that. If you were to ask me how you were going to fail, that's exactly the kind of thing I would say. You just run out, you'd run out of gas or run out of material that, that, that made your socks go up and down.

• 2:17:59David Rosenthal?

  All right, listeners. Now is a great time to talk about one of our favorite companies, Statsig.

• 2:18:05Ben Gilbert?

  Yes, there is a reason why the best product teams rely on Statsig. Whether they are iterating on their core product features or shipping AI powered experiences at scale.

• 2:18:16David Rosenthal?

  Yep. In the crazy speed of today's AI world, shipping fast is just table stakes now. It's basically trivial to build and deploy your app constantly. The real advantage is how quickly you learn. What changes actually created value for customers? And how fast you can use that signal to guide what you ship next.

• 2:18:36Ben Gilbert?

  This is where Statsig comes in. It brings experimentation, feature flags and product analytics into one unified system. So teams can ship safely, test rigorously and directly link what they changed to how users actually behaved.

• 2:18:49David Rosenthal?

  So if you want to make learning your competitive advantage, whether you're building new AI experiences or just evolving your existing core product, go to statsig.com/acquired to get started.

• 2:19:00Speaker 02

  All right, how are we gonna end this? This is your show.

• 2:19:02Ben Gilbert?

  Carvouts?

• 2:19:03David Rosenthal?

  Carvouts, yeah, we gotta do.

• 2:19:04Speaker 02

  Why do you call them carveouts? What does this even mean?

• 2:19:08David Rosenthal?

  OK, so you'll appreciate this. It was my wife's idea back towards the beginning of the show. She used to listen to Slate's, I think it was the Culture Gab Fest.

• 2:19:19Speaker 02

  Yes.

• 2:19:19David Rosenthal?

  And they do cocktail chatter at the end of episodes. And it's just like, hey, something unrelated. And she was like, you guys should do that. That's fun.

• 2:19:30Speaker 02

  Well, I understand the idea of it. Why is it called a carveout?

• 2:19:32David Rosenthal?

  Well, OK, so then we were like, this was in a phase of acquired where we wanted to brand everything.

• 2:19:36Speaker 02

  Oh, God.

• 2:19:37David Rosenthal?

  Around acquisitions.

• 2:19:37Speaker 02

  There we go.

• 2:19:38David Rosenthal?

  And so we thought, OK, what can we call this? We're not going to call it cocktail chatter. And we came up with the idea of a carveout, like in an M and A transaction. You know, a carveout is like this piece of the purchase price goes to like this set of shareholders for special reasons, their employees or whatever.

• 2:19:53Ben Gilbert?

  OK. So these are the things we're carving out as things that delight us that have nothing to do with the rest of the episode.

• 2:19:58David Rosenthal?

  Yes.

• 2:19:58Speaker 02

  But the name is just residual. It's just a residue of your former incarnation.

• 2:20:03David Rosenthal?

  Yeah, we used to brand.

• 2:20:04Speaker 02

  You wouldn't.

• 2:20:05David Rosenthal?

  We used to have a thing called the LP show because of, you know, we had all these little branding.

• 2:20:09Ben Gilbert?

  Playbook is sort of a remnant of the older version.

• 2:20:12David Rosenthal?

  Yeah, yeah.

• 2:20:12Speaker 02

  So what are we gonna do? What are carveouts? What are the specific things?

• 2:20:15Ben Gilbert?

  We have some categories that we're gonna throw out and then you gotta tell us. And we'll tell you things this year that we loved in this category. Typically, pieces of media or products or something like that.

• 2:20:24Speaker 02

  All right.

• 2:20:24David Rosenthal?

  We usually start with books. That's kind of funny.

• 2:20:30Ben Gilbert?

  I mean, so many of your books have been our carve-outs over the years.

• 2:20:33Speaker 02

  Really?

• 2:20:33Ben Gilbert?

  Absolutely.

• 2:20:34David Rosenthal?

  Yeah.

• 2:20:35Speaker 02

  So, it's books that I've read in the last year?

• 2:20:38David Rosenthal?

  Yeah, books this year, yeah.

• 2:20:39Speaker 02

  So, I've got to confess, I've had a very weak reading year because I've been really deep in two projects where I've been working, and when I'm working, often all I'm reading is for work. But I can think of a couple. One at the beginning of the year, one I just put down. First one I read because my son was in high school at the time, had read it, and he was enthusing about this 800-page novel. And I thought that just didn't happen very often. And it's been out a long time. It's called The Name of the Wind by Patrick Rothus, and it's a fantasy trilogy. He never got to the third book, and I don't know what's happened to him. He's like blocked, but I'm not...

• 2:21:18David Rosenthal?

  It's like a George R.R. Martin situation.

• 2:21:20Speaker 02

  I'm hoping he's an acquired listener, and I would tell him, "I can come and help get you unblocked." I know how to unblock writers. I have a secret power here, and so...

• 2:21:28David Rosenthal?

  Do you have a secret life as a fiction ghostwriter?

• 2:21:31Speaker 02

  I do not. But I do have a secret life as a coach to writers, and other writers. And this thing, it was so compelling. I couldn't believe how good it was. And I couldn't believe how good it was that he hasn't, he's just gotten stalled. But The Name of the Wind, Patrick Rothfuss, read at the beginning of the year, very beginning of the year. At the end of the thing I just finished, it's not like it's a great book, but I think it's so short, and it's something that is speaking to our moment, in our, speaks to how we govern ourselves. It's, I always mispronounce his name, is Vannevar Bush.

• 2:22:06David Rosenthal?

  Oh, yeah, yeah, yeah.

• 2:22:06Speaker 02

  Who essentially created the American Science Project. And it's a little, it's a basic, I think he started it as a memo to FDR, then FDR died, and then it ended up being a memo to Terry Truman, about what America could do if the government, in the right way, got behind science. He was saying, "Look, what we did with the Manhattan Project, we can do with biology, we can do with the other hard sciences." He was describing not a top-down approach, not like the government is going to just decide, "We're going to fund it and let the scientists figure out what they need to work on." That was the big insight. So, those are two books. How about you? What books do you...

• 2:22:44Ben Gilbert?

  Similar to you, we've been, it's been a research heavy year.

• 2:22:47David Rosenthal?

  Yeah, we have young kids, so fun books are.

• 2:22:49Speaker 02

  Right.

• 2:22:50Ben Gilbert?

  One great book I read for research was Last Man Standing to prep for the Jamie Dimon interview.

• 2:22:55David Rosenthal?

  That was really good.

• 2:22:56Ben Gilbert?

  Total page turner. Made it, it was a great time.

• 2:23:00Speaker 02

  Is it about him?

• 2:23:00Ben Gilbert?

  It's about, yeah, it's about the ascendancy of his career.

• 2:23:02David Rosenthal?

  Yeah.

• 2:23:03Ben Gilbert?

  And then two is, I just love reading Morgan Housel and his new book, The Art of Spending Money is, is really fun. I mean, it's where I get most of my like latent ideas of, hey, hey dummy, money's not going to make you any happier.

• 2:23:16Speaker 02

  He's a great explainer.

• 2:23:17David Rosenthal?

  Oh, great explainer, good. My two are, first one is a reach back to December of last year with the Mars episode. Emperors of Chocolate by Joel Glenn Brenner. You ever read that?

• 2:23:31Speaker 02

  You know, I once, I had a chocolate related story and I flipped through it and I didn't ever have time to read the whole thing. But yes, I know the book.

• 2:23:38David Rosenthal?

  So it's the dual history of Hershey and Mars together.

• 2:23:40Speaker 02

  Yep, yep, yep.

• 2:23:41David Rosenthal?

  She, it's the, I believe the only big book she ever wrote. And it's just a masterpiece. It's so, it's so good. The other one, Morris Chang's autobiography.

• 2:23:54Speaker 02

  Oh.

• 2:23:54David Rosenthal?

  That we got to read. It is currently only in Chinese, but we got to read an English version of it to prep. It's, it's so, I mean.

• 2:24:01Speaker 02

  How did you do that? Who translated for you?

• 2:24:03Ben Gilbert?

  This woman, Karina Baugh.

• 2:24:05David Rosenthal?

  Yeah.

• 2:24:05Ben Gilbert?

  Did a translation for us.

• 2:24:07Speaker 02

  Just for you.

• 2:24:08Ben Gilbert?

  Yeah.

• 2:24:08David Rosenthal?

  She was working on it as a, as just a pet project anyway and accelerated it for us. Okay, books, podcasts, number two?

• 2:24:17Speaker 02

  Well, this is, this is a layup. The only, your podcast is the big addition to my rotation this year. It started in July and I've listened to, I don't know, 10 of them or something.

• 2:24:28David Rosenthal?

  Well, thank you. But what is in your rotation besides Acquired? And against the rules, of course.

• 2:24:34Speaker 02

  Again, I don't listen to my own thing. I listen to Malcolm Gladwell's Revisionist History.

• 2:24:39David Rosenthal?

  Yep.

• 2:24:39Speaker 02

  I listen to the Smartless Guys, because I like them.

• 2:24:43Ben Gilbert?

  Your interview on that was great, too.

• 2:24:45Speaker 02

  It was fun to do it. What else will I listen to? The Daily Thumb. Every now and then I'll dip into a right wing thing just to hear it. Just, you know, that, that.

• 2:24:59David Rosenthal?

  Any, any recommendations?

• 2:25:01Speaker 02

  No.

• 2:25:04Speaker 02

  Not really. And then it kind of, you know, random stuff. Like every now and then Bill Simmons will have something I want to hear. I love Bill Simmons. I just don't have time. Like it's.

• 2:25:14David Rosenthal?

  He's prolific.

• 2:25:14Speaker 02

  You have eaten my podcast, Alex. You've eaten a lot of my podcast. No, no, and I can, and I can tell you where I was, like treadmill in Denmark when I listened to the Indian cricket thing.

• 2:25:24Ben Gilbert?

  Isn't that the most fun thing about listening?

• 2:25:25David Rosenthal?

  You remember a place.

• 2:25:26Speaker 02

  You do remember a place. They're very place specific and. No, it's the acquired podcast is the new thing.

• 2:25:33David Rosenthal?

  Great.

• 2:25:35Speaker 02

  All right. How about you all?

• 2:25:37Ben Gilbert?

  I listened to an episode of Invest Like the Best about a year ago, which was a really, really long interview with Graham Duncan.

• 2:25:45David Rosenthal?

  Oh yeah, that was really good. That was really good. That was originally, didn't he, Patrick do that as like a private podcast and then?

• 2:25:50Ben Gilbert?

  Yeah, yeah. And then he did a shorter version. I didn't listen to the shorter version. I only listened to the like super long one, but. One of my biggest takeaways from that is about having a, the correct grip, that you don't want to have too tight of a grip on your work, but you don't want to have too loose of a grip. You need to play with an appropriate grip for whatever the task is that you're trying to do. And you'll, if you're gripping too tight, you know, you're going to pull it or you're gonna, it's going to feel too mechanical, too unnatural. And if it's too loose, like you're not minding the shop enough, you know, you're, you get, you're going to get your head back in the game and there's a.

• 2:26:25David Rosenthal?

  Yeah, there's a.

• 2:26:25Speaker 02

  I've been amazed my career, how, just how useful sports analogies are to, to writing. I'm sure to anything.

• 2:26:33David Rosenthal?

  Yeah.

• 2:26:33Speaker 02

  But that, these physical memories translate pretty neatly to how the mind, what the mind is doing too. And that, like when I write a book, I'm on a pitcher's mound. It takes me back to pitching in high school and I know, and I'm, I'm thinking of the, of the reader as the hitter. Getting meaning across to a reader is, is tricky in a way that fooling a hitter is tricky. And, and it's just, I can feel that connection. And so these physical analogies are really useful, even if there's sometimes a stretch.

• 2:27:02David Rosenthal?

  Speaking of sports, mine is the GluGuys podcast, which I think we both went on.

• 2:27:06Speaker 02

  Ah.

• 2:27:06David Rosenthal?

  This year.

• 2:27:06Speaker 02

  Yeah.

• 2:27:07David Rosenthal?

  Which actually was the origin of us, of us meeting. Those guys are great.

• 2:27:12Speaker 02

  They are great.

• 2:27:13David Rosenthal?

  I think we told them on the episode, I tell them, I'm like, you guys got it, like you guys got some magic here. You gotta, gotta keep doing this.

• 2:27:19Speaker 02

  You keep telling everybody that they run their podcast business in the wrong way. And you're right. And you depress everybody else. You figured out how to do it, nobody else has.

• 2:27:30David Rosenthal?

  Well, I tell them, they just, they just, they've got magic. Like, they're just like, they are taking it seriously and keeping doing it. But like, I think it's a really, really, they have the really rare dynamic of like, just the three of them together. Regardless if they have a guest, don't have a guest. Like, it's, they're equally good.

• 2:27:47Speaker 02

  They're very different personalities.

• 2:27:49David Rosenthal?

  Yeah.

• 2:27:49Speaker 02

  That helps.

• 2:27:50Ben Gilbert?

  Can I just, I'm so, like, something inside me feels so crunchy. I don't think we've figured out a better way to do it. Like, I don't think we figured out the way to do it and everybody else should just snap to our way. It's like, we have an enormous amount of privilege that we can run a business in this way. And most people have constraints that prevent them from doing this. It's not that we're right and everybody else is wrong.

• 2:28:13David Rosenthal?

  Totally.

• 2:28:13Ben Gilbert?

  It's that we have like, set up a particular system that works for us.

• 2:28:16Speaker 02

  But it is like, you're right and I'm wrong. That it really is a way of running a business that we could have done with against the rules. And it, and I'm gonna go think about it. But, anyway, so what's our next card?

• 2:28:28David Rosenthal?

  Okay, okay, okay. Next category is.

• 2:28:31Ben Gilbert?

  Videos.

• 2:28:31David Rosenthal?

  Videos.

• 2:28:32Speaker 02

  Movies.

• 2:28:32David Rosenthal?

  Videos, movies, TV shows.

• 2:28:35Speaker 02

  So I just saw a movie two days ago, two nights ago. We went to the theater, whole family went to the theater.

• 2:28:39Ben Gilbert?

  Wow.

• 2:28:40Speaker 02

  And Jay Kelly. It's new, Noah Baumbach's new movie. And it is, it's George Clooney. I guess you'd say he's playing, he's playing George Clooney with a midlife crisis. That he, that it's, it's, it's a fame, he's playing a famous actor who's trying to sort out the meaning of his life. It's just magical. It's a beautiful movie. And an ambitious, really ambitious movie. And that I was, I've been thinking about it, kinda since I saw it. Like, what exactly it was getting across? And what it's getting across, I think, being famous, like a movie star is. Puts you at a certain distance to the world around you. And that distance has a price. And it was sort of taking the measure of that price.

• 2:29:23Speaker 02

  And which makes that more general is that I think everybody has to make some decisions about the distance that they keep the world at. And this was a, this is a way of having that, that conversation and entertaining what that distance should be.

• 2:29:41Ben Gilbert?

  Got to see it. I have so many, but there's one that's like.

• 2:29:45Speaker 02

  You're like, you're a TV guy.

• 2:29:46Ben Gilbert?

  I love movies and I love television. The, like, I have no video games to recommend, but I have lots of these. The one that's just head and shoulders, everything else and is the greatest performance art I've ever seen in my entire life is The Rehearsal, Season Two.

• 2:29:59Speaker 02

  All right.

• 2:30:00Ben Gilbert?

  Nathan Fielder and Eric Natar Nicola, who we actually got to work with. Eric and A24 Films shot the sort of concert film part of our Radio City show. And collaborating with Eric was unbelievable, but.

• 2:30:15Speaker 02

  He was so great.

• 2:30:16Ben Gilbert?

  Before any of that, I saw The Rehearsal, Season Two, and my jaw is just on the floor with the level of.

• 2:30:22Speaker 02

  You were talking about this for months.

• 2:30:23Ben Gilbert?

  Ambition. Nathan's a complete psycho. And it's the highest commitment to the bit I've ever seen in any form of media. I mean, I don't want to spoil anything, but have you seen it?

• 2:30:35Speaker 02

  I have not seen it, and I will now go see it.

• 2:30:37Ben Gilbert?

  It is, I was shaking.

• 2:30:41Speaker 02

  Okay.

• 2:30:43David Rosenthal?

  All right, I'm a lighter video guy. I'm a YouTube guy mostly. My YouTube for the year is one I've recommended before a past collab. Doug Demiro is still like killing it. I just like, I think Doug is probably my favorite YouTuber. Like, he's just.

• 2:30:58Speaker 02

  What does he do?

• 2:30:59David Rosenthal?

  Cause I don't know. He's the biggest car reviewer. Like, I'm not really that into cars, but he.

• 2:31:03Speaker 02

  Well, the car guys did this first. They got everybody interested in cars who weren't interested in cars.

• 2:31:08David Rosenthal?

  Yeah, yeah, yeah. And Doug is like, he does these delightful reviews of like, I just love, you know, watching like mid-range SUV reviews that I'm never gonna buy. I just love.

• 2:31:17Ben Gilbert?

  So listeners will like this. David falls asleep to this.

• 2:31:19David Rosenthal?

  Yeah, yeah, yeah.

• 2:31:20Ben Gilbert?

  Like, you watch Doug in other things too, but like Doug is your.

• 2:31:23David Rosenthal?

  Yeah, yeah, like he'll, he'll release a new review and I'll like watch it as if one sleep over like five nights.

• 2:31:28Speaker 02

  Is this what you watch before you go to bed?

• 2:31:29David Rosenthal?

  Totally.

• 2:31:30Speaker 02

  So how does it affect your dreams?

• 2:31:33David Rosenthal?

  That's a good question.

• 2:31:34Speaker 02

  Do you dream, do you like have Lightning McQueen dreams? What do you have?

• 2:31:37David Rosenthal?

  No, no, no. The beauty of Doug, his key insight was, you know, all the other car YouTubers are making videos for car enthusiasts.

• 2:31:47Speaker 02

  Right.

• 2:31:48David Rosenthal?

  He makes videos for like people who need to buy a family SUV.

• 2:31:52Speaker 02

  Oh, I see. Gotcha.

• 2:31:52David Rosenthal?

  Like, so, I mean, he also reviews supercars, like, et cetera, et cetera. But like, most of his content is about like the Honda Civic.

• 2:31:59Speaker 02

  No, seriously, I thought you would spend half your dreams in automobiles.

• 2:32:01David Rosenthal?

  No, no, no.

• 2:32:02Speaker 02

  No, he's not.

• 2:32:02Ben Gilbert?

  I want to list like a bunch, I'm not going to give commentary on them, just because a lot of people are watching stuff over the holidays. And here's a bunch of things I've loved in the last year. Tires, the TV show, so funny. F1, the movie, I thought was very entertaining.

• 2:32:14Speaker 02

  I gotta watch it.

• 2:32:15Ben Gilbert?

  Beautiful production quality.

• 2:32:16David Rosenthal?

  My favorite, Expensify paid $40 million for the...

• 2:32:20Ben Gilbert?

  Rumored.

• 2:32:21David Rosenthal?

  Rumored $40 million for the sponsorship of the fake team in the movie.

• 2:32:24Ben Gilbert?

  That's right. That's right.

• 2:32:25David Rosenthal?

  That's so great.

• 2:32:27Ben Gilbert?

  Andor, some of the best thing, if not the best thing in the Star Wars, modern Star Wars franchise, available on Disney+. The show Fallout, so good, and season two is about to come back. I think that's a, Joan and Ollie and Lisa Joy, again, artists. Like I was saying about Nathan Fielder. Severance was amazing. Silo has a new season coming out that I can't wait.

• 2:32:49David Rosenthal?

  Oh, new season. Nice.

• 2:32:49Ben Gilbert?

  And it's been excellent.

• 2:32:49David Rosenthal?

  The books are really good.

• 2:32:50Ben Gilbert?

  Yes.

• 2:32:50David Rosenthal?

  I like the books.

• 2:32:52Ben Gilbert?

  Yeah, those are my TV recommendations.

• 2:32:53David Rosenthal?

  Nice. Next category, which might just be me, is video games.

• 2:32:57Ben Gilbert?

  Just you.

• 2:32:58David Rosenthal?

  Just me. Yeah. So, one of the greatest moments in my parenting journey thus far, my elder daughter is four, is I got her into video games. We play video games together now every night, and it's just like, it's the best. Like, this is what I have been waiting for. But I need to give a shout out again to Sea of Stars, which is an indie throwback RPG, which I bought just for me on my Steam Deck. And we were on vacation in Santa Barbara, and she was like, "Dad, what are you doing?" And that, like, that was it. Like, I wasn't trying. It was like, she came up to me as I'm playing, you know, this like indie RPG, and like, she started playing it. And like, I was like, I never would have guessed that this was my daughter's entry into video games.

• 2:33:40David Rosenthal?

  And then two, Kirby and the Forgotten Land on the Switch is like, perfect. We can play it together, it's co-op. It's great for me, it's great for her, it's awesome.

• 2:33:49Speaker 02

  So, your daughter's in an age where she'll do anything you want to do.

• 2:33:53David Rosenthal?

  No.

• 2:33:53Speaker 02

  Because she wants to be with you.

• 2:33:54David Rosenthal?

  No, no, no, no, no, no, no. You don't know my daughter.

• 2:33:58David Rosenthal?

  She is extremely independent.

• 2:34:00Ben Gilbert?

  It's anomalous and awesome.

• 2:34:01David Rosenthal?

  Yes, yes, this is a rare occurrence.

• 2:34:03Speaker 02

  Okay, alright.

• 2:34:04David Rosenthal?

  She runs the house. Like, yeah, no, no. Uh, so this is, this is like so much joy for me.

• 2:34:08Speaker 02

  Great.

• 2:34:09Ben Gilbert?

  Products. What are some products that you have come to own in the last year that you have just thought are awesome or improve your quality of life?

• 2:34:16Speaker 02

  I found a new pen. I got it here. Let's see what it is. And it's just like, I needed a pen that had just the right sort of fine, fine point, and then it, that it's kind of generous with the ink, but it doesn't explode on an airplane.

• 2:34:29Ben Gilbert?

  And doesn't smear, I imagine?

• 2:34:31Speaker 02

  It doesn't smear it. I'm looking at it now. The Ars Tecca Rollerball Pen. Point seven fine. And I just ordered a whole case of them because I, I, it just, it's finally got a pen I just love.

• 2:34:41Ben Gilbert?

  Listeners, if you want to write like Michael Lewis, we have the answer.

• 2:34:44Speaker 02

  This is an example of

• 2:34:45David Rosenthal?

  That company is gonna sell a lot of pens.

• 2:34:48Speaker 02

  So that, so that pen is, is a thing.

• 2:34:51David Rosenthal?

  What else? Other products this year?

• 2:34:53Ben Gilbert?

  The Fujifilm X100 VI. I previously specifically did not carve it out and carved out a different camera. I've started carrying the Fujifilm and now love it. It's amazing. I've got a two-year-old and it's just so nice to have more than just smartphone pictures of family. It's awesome.

• 2:35:09David Rosenthal?

  Nice.

• 2:35:09Speaker 02

  I'm just looking at what I have on, like, came over here, so.

• 2:35:13David Rosenthal?

  Oh, wait, wait, Ex officio, that's, that's

• 2:35:14Speaker 02

  No, no, so we're not gonna talk about those. That wasn't this year. That wasn't

• 2:35:18David Rosenthal?

  We're only talking about if they sponsor against the rules.

• 2:35:20Speaker 02

  Not until they sponsor me. But the, uh, but anyway, that wasn't this year. But this year, actually, on my feet. These are, these are things. These socks, I ran out of white socks in London. I went over to, is it Uniqlo?

• 2:35:32Ben Gilbert?

  Yeah.

• 2:35:32David Rosenthal?

  Yeah, yeah, yeah.

• 2:35:33Speaker 02

  And they didn't have any, I was just looking for athletic socks, right? And they have these other things instead. They've turned out to be so much better than the athletic socks, and they come in different colors, so you can, you can, like a light gray. You can wear them as dress socks, you can wear them as athletic socks, and they, like... Whenever I, I don't know about you, whenever I find something I love, what's about to happen is it's about to be discontinued.

• 2:35:54Ben Gilbert?

  So you need to buy all of them?

• 2:35:55Speaker 02

  You need to buy all of them, yes. Right, so I, I'm, I got, I didn't get quite all of them because I was flying, I got them in London, I was gonna have to fly back with them, but I bought, I bought basically what was in the store at the moment. And these shoes, so, um.

• 2:36:07David Rosenthal?

  Those Ons?

• 2:36:08Speaker 02

  These are Ons. And oddly, I spent a couple of days with Roger Federer this summer, and I, and I just discovered them. So I, we had the, uh, the On conversation, and made me kind of like acceptable to him, but it was, um, but the, I think these, these Ons, I was a Hoka guy.

• 2:36:25David Rosenthal?

  Ah. Also great.

• 2:36:26Speaker 02

  Also great. Nike basically blew it, right? They let, they let, they let, they got rid of their stores. They thought it's all gonna be online, and On and Hoka roll in.

• 2:36:37David Rosenthal?

  Yep.

• 2:36:37Speaker 02

  And I'm a little torn, but not that torn. I'm kinda, these Ons are just like, they're, and I don't know what it is, it's, it's, uh, especially the white ones, I get, I'm getting criticized for it because I started wearing them instead of even dress shoes, and like On, I went on Colbert with, with these, and like, I got eight calls saying you can't do that again.

• 2:36:58David Rosenthal?

  Really?

• 2:36:58Speaker 02

  Yeah, like it looks.

• 2:36:59David Rosenthal?

  I see them wearing Ons all the time.

• 2:37:01Speaker 02

  Yeah, they just don't look good on TV or whatever, so, but I've been, I've been over wearing both the Uniqlo socks and the,

• 2:37:06David Rosenthal?

  And Ons.

• 2:37:07Speaker 02

  But that's a sign of enthusiasm.

• 2:37:09Ben Gilbert?

  That's right.

• 2:37:09David Rosenthal?

  There you go.

• 2:37:09Ben Gilbert?

  And isn't, isn't the Federer On deal like one of the best endorsement deals by an athlete ever?

• 2:37:15Speaker 02

  Measured by how? How much money he gets paid?

• 2:37:17Ben Gilbert?

  Didn't he do like an equity deal early with On?

• 2:37:20David Rosenthal?

  I think that might be right.

• 2:37:21Speaker 02

  He only aligns with companies whose products he really likes.

• 2:37:24David Rosenthal?

  Rolex.

• 2:37:25Speaker 02

  Rolex, yeah.

• 2:37:26Ben Gilbert?

  It's an amazing.

• 2:37:27Speaker 02

  It's ama, how easy it is, right?

• 2:37:28Ben Gilbert?

  Also, he's Roger Federer.

• 2:37:29David Rosenthal?

  He's also Roger Federer.

• 2:37:30Speaker 02

  Right, right.

• 2:37:33David Rosenthal?

  It's similar, but, well, it's similar but different. I bought a Ramoa suitcase this year, and I love it. It's just a suitcase, but like, I, I love it. I got, um, what's it called? Ramoa, uh, LVMH bought this, uh, it's a suitcase, kind of a German suitcase company, company, they make the, the like aluminum shell.

• 2:37:48Speaker 02

  Yeah.

• 2:37:49Ben Gilbert?

  You get a little pep in your step every time you show up.

• 2:37:51David Rosenthal?

  Well, and I got the, um.

• 2:37:52Speaker 02

  It's exciting to find new luggage.

• 2:37:54David Rosenthal?

  It totally is.

• 2:37:55Speaker 02

  I don't know why it is so exciting, but it's hard to find new luggage.

• 2:37:58David Rosenthal?

  Well, my whole life, I've just been like a.

• 2:37:59Ben Gilbert?

  Three middle-aged men sitting around talking about luggage on a podcast.

• 2:38:02Speaker 02

  No, you know, where you find the new bag. You know your life is gonna be different.

• 2:38:07David Rosenthal?

  I've always been a minimal packing, like backpack only, like just maximum efficiency.

• 2:38:12Speaker 02

  You assume you're gonna be washing your clothes wherever you go?

• 2:38:14David Rosenthal?

  Yeah, yeah, but this is the first time I've just been like, you know what? I'm just gonna get a nice piece of luggage. And like, it's not the most efficient way to, but like, I just like it, it makes me happy.

• 2:38:23Speaker 02

  It's great.

• 2:38:25David Rosenthal?

  The, um...

• 2:38:26Ben Gilbert?

  Parenting?

• 2:38:27David Rosenthal?

  Parenting, yeah, let's go to parenting. Feel free to decline on this. We, we...

• 2:38:31Speaker 02

  You both have really little kids.

• 2:38:33David Rosenthal?

  Yeah, yeah, yeah.

• 2:38:33Ben Gilbert?

  Two and four and one.

• 2:38:36David Rosenthal?

  Four and 18 months, yeah.

• 2:38:38Ben Gilbert?

  So, the first is discovering guided access on the iPad. It's an accessibility setting where you can make it, some of the buttons do anything and it doesn't respond to taps. So on an airplane, they can't, they can't mess with Miss Rachel.

• 2:38:49David Rosenthal?

  That's gonna last about six months for you. And then he's gonna be like, "F you dad, make it work."

• 2:38:54Speaker 02

  So these are products for parenting?

• 2:38:55Ben Gilbert?

  These are products, if you are a parent of, uh, of kids our kids' age. The last one is the movie Toy Story. We, it's the first movie we introduced him to, it was my favorite movie growing up. And it's been really fun.

• 2:39:06Speaker 02

  He took to it?

• 2:39:07Ben Gilbert?

  Uh, he took to it, he loves Mr. Potato Head, he calls it Tapo Head. And so he always runs into the room and says, "Tapo Head TV." And that means I wanna watch Toy Story.

• 2:39:16David Rosenthal?

  So, as I alluded to, my older daughter is a, um, independent woman, shall we say. Uh, we bought this when she was younger and she completely rejected it, the Slumber Pod. Uh, do you have one of these?

• 2:39:28Ben Gilbert?

  Oh, yeah.

• 2:39:28David Rosenthal?

  Yeah, so this is a blackout tent.

• 2:39:31Ben Gilbert?

  We have two of these, we left one at my mom's house.

• 2:39:33David Rosenthal?

  That you put over, uh, a portable crib. So when you're traveling, you basically just put, you put your baby in like a sensory deprivation chamber.

• 2:39:39Ben Gilbert?

  Oh, you set up the noise machine right next to it too, you really, I see.

• 2:39:43David Rosenthal?

  And for most kids, like I remember reading or hearing about this from people, they're like, it's a miracle. And I tried it with our older daughter and she was just like, like absolute nuclear, you know, like no way is this gonna work. And so I shied away from it. And then we went on a trip recently and I brought it back for my younger daughter, cause I was like, alright, well we'll give it a shot. Works like a charm.

• 2:40:03Speaker 02

  Can I just interrupt here for a moment?

• 2:40:05David Rosenthal?

  Yeah.

• 2:40:05Speaker 02

  Is it a kind of end zone dance you're doing of your business model that you're just at the end of this, offer free endorsements and consumer products?

• 2:40:13David Rosenthal?

  Yes, yes.

• 2:40:13Speaker 02

  And without actually, nobody having to pay you for it?

• 2:40:15David Rosenthal?

  No, no, no, yeah, okay.

• 2:40:16Speaker 02

  You do this with a flick of the wrist?

• 2:40:17David Rosenthal?

  This is fun.

• 2:40:18Speaker 02

  Because we don't even need the advertising revenues?

• 2:40:21David Rosenthal?

  No, we just started because it was fun.

• 2:40:22Ben Gilbert?

  These are things we like.

• 2:40:23Speaker 02

  That's good.

• 2:40:24David Rosenthal?

  Yeah, yeah.

• 2:40:25Speaker 02

  That's good.

• 2:40:26David Rosenthal?

  And then my last one, this is fun because it's a tie in with our Radio City show. I brought the whole family to New York for Radio City. Bluey, we gotta do a Bluey episode someday. It's this incredible phenomenon. I don't know if it's crossed your radar.

• 2:40:42Speaker 02

  No, it isn't.

• 2:40:43David Rosenthal?

  Bluey is the greatest kids' show ever made, bar none. It is.

• 2:40:50Speaker 02

  That's a big claim.

• 2:40:51David Rosenthal?

  It's this guy in Australia, in Brisbane, and he made it. He was, I think, an animator for Peppa Pig and then made this. But it's like.

• 2:40:59Ben Gilbert?

  But the claim isn't that crazy.

• 2:41:01David Rosenthal?

  The parents, I love Bluey. Like, it's just so.

• 2:41:02Ben Gilbert?

  Disney agrees with David.

• 2:41:04David Rosenthal?

  Yeah. Disney has been trying to buy Bluey for years.

• 2:41:08Speaker 02

  Oh.

• 2:41:08David Rosenthal?

  For ever escalating amounts of money.

• 2:41:10Ben Gilbert?

  And they just did a deal, which I think is the first of its kind, to use Bluey IP in the Disney universe without owning it.

• 2:41:19David Rosenthal?

  I think news just came out today that Bluey is coming to Animal Kingdom and Disney World in 2026. It's basically like, it's the Pixar.

• 2:41:26Speaker 02

  Who owns Bluey?

• 2:41:28David Rosenthal?

  Think of it as Pixar of this generation.

• 2:41:29Speaker 02

  Is Bluey owned by his creator?

• 2:41:30David Rosenthal?

  Yeah, yeah.

• 2:41:31Speaker 02

  Who is his creator?

• 2:41:32David Rosenthal?

  Joe Brum, this is Guy.

• 2:41:33Speaker 02

  It's like The Muppets.

• 2:41:34David Rosenthal?

  Yeah, yeah, it is. It's like Jim Henson in The Muppets. So in New York, in New York City, you can buy tickets. You get like a 45 minute window. You can take your family, you can take your kids to Bluey's house, a recreation of Bluey's house, inside a building in Union Square. That's like great. If you've got kids into Bluey, go to New York, take them to Bluey at the camp.

• 2:41:54Speaker 02

  My kids would find that a little strange, but okay.

• 2:41:57Ben Gilbert?

  It's true, we keep saying kids, kids of, you know, eight and under.

• 2:42:00David Rosenthal?

  They know, yeah, eight and under, but yeah. That's all I got for Caravats.

• 2:42:05Ben Gilbert?

  That's all we got, too. Michael, anything else? Thank you so much.

• 2:42:09David Rosenthal?

  What a, what a joy. Thank you for giving us your evening.

• 2:42:13Speaker 02

  This is the longest I've spoken to anyone in the last 40 years.

• 2:42:18Ben Gilbert?

  Thank you for doing this with us.

• 2:42:20Speaker 02

  My pleasure. Anytime. I'll see you at your 20th.

• 2:42:23David Rosenthal?

  Great, we'll see you in 10 years.

• 2:42:25Ben Gilbert?

  All right, listeners, thank you so much for listening and being on this journey with us. David, very fun way to try to unpack why Acquired worked there with Michael.

• 2:42:36David Rosenthal?

  If you had told us 10 years ago, when we made the Pixar episode, that we'd be sitting down with Michael Lewis to analyze ourselves.

• 2:42:46Ben Gilbert?

  And trade notes? Oh, this is how my creative process works.

• 2:42:50David Rosenthal?

  Yeah.

• 2:42:51Ben Gilbert?

  Unbelievable.

• 2:42:52David Rosenthal?

  Unbelievable. Thank you, Michael, for doing this with us.

• 2:42:54Ben Gilbert?

  So good. We have another thank you to Shep Films. This is the crew that made this one look so good. You'll notice that this was not just David and I setting up a few cameras like we've done with Steve Ballmer or Chris Chang. This was actually produced. And so we have a giant thank you to the Shep Films, S-H-E-P Films company. They do amazing work. They've made like full two-hour movies with Pedro Pascal and, you know, make sci-fi movies, and they do stuff like this. And so we're just delighted to have worked with them. Listeners, if you liked this episode, go check out our episodes on TSMC, Hermes, Costco, the NFL, Berkshire, or any other episode that we talked about there with Michael.

• 2:43:36Ben Gilbert?

  After this episode, check out ACQ2. We had Andrew Ross Sorkin on, and it was awesome. Speaking of trading notes on the creative process, very different job that he does, but, you know, rhymes with acquired in some ways. So you can search ACQ2 in any podcast player. Come talk about this with us in the Slack. Or if you don't want the Slack, but you do want email, we just did a huge, huge overcall to our email system. It's no longer just going to notify you when a new episode comes out. There's all sorts of goodies in that notification email, like our takeaways from the episodes, some behind-the-scenes photos, corrections from past episodes. It's the place to be. So you can join that at acquired.fm/email.

• 2:44:17David Rosenthal?

  It really is beautiful. And we might have some more upgrades to all the...

• 2:44:22Ben Gilbert?

  That's right.

• 2:44:23David Rosenthal?

  What do you call it? Like the chrome around acquired?

• 2:44:25Ben Gilbert?

  Yes.

• 2:44:26David Rosenthal?

  Coming in 2026. So stay tuned.

• 2:44:28Ben Gilbert?

  That's a great way to put it. Well, with that, listeners, we'll see you next time.

• 2:44:32David Rosenthal?

  We'll see you next time.