Sessions: David Senra (Founders Podcast)

ACQ Sessions returns with David Senra of the Founders Podcast. David is one of our very favorite people in the world — it’s impossible to spend an hour (or 3!) with him and not come away inspired to go take over the world. This conversation is an “extended, IRL version” of monthly calls that we do together where we share stories, swap life and podcast advice, and just genuinely enjoy sharing time with someone who shares our outlook and enthusiasm for the history of entrepreneurship. Pull up a chair, grab a beverage (or energy drink in David’s case) and join us! *Links:* - Go subscribe to Founders! https://pod.link/founders *Some of our favorite episodes:* - Bernard Arnault: https://pod.link/founders/episode/820a5119b72b76b210df24e7a4a8e1bf - Brunello Cucinelli: https://pod.link/founders/episode/41a47a7535026098511ae2c16ff22804 - Edwin Land: https://pod.link/founders/episode/b5637cb4b83ff459da8d05d804cf636f - Kobe Bryant: https://pod.link/founders/episode/bda7f5dbc148b894f7ba4ad494e45460 Timestamps: 0:00:00 Intro 0:03:30 David’s time with Charlie Munger 0:06:00 Henry Flagler after Standard Oil 0:09:00 What makes a great biography, and how to capture all sides of complex characters? 0:11:30 Studying history is a form of leverage to achieve success 0:13:30 How do we figure out what the true story is for an episode we're doing? 0:21:00 Silicon Valley should focus more on durability than growth 0:22:00 How David got into reading biographies and podcasting 0:26:10 What were each of their influences before starting Acquired and Founders? 0:36:00 How to suck less over time 0:38:00 What motivates, Ben, David, and David to get better? 0:45:30 Dead ends: business model changes, paid podcasts, changing the name to “Adapting”, and Senra's “Autotelic” 0:52:00 “You’re not advertising to a standing army, you’re advertising to a moving parade” 0:56:30 Comparison of podcasting business models 1:00:40 Senra’s insane Readwise "healthy twitter" habit 1:05:00 Is it possible for the ultra-wealthy not to mess up their kids? 1:15:00 The fleeting moments you get to spend with your kids 1:17:30 The value of building relationships with best-in-class peers 1:20:00 How the book publishing industry works 1:29:15 How to differentiate yourself as an investor in 2023? 1:39:00 The greatest historical examples as content marketing 2:02:30 The best businesses are cults (and Senra starts one on the episode) 2:07:30 Senra gives feedback to Ben and David on Acquired episode format 2:16:00 Steve Jobs’ 1997 product matrix 2:17:30 The moral imperative to market products that help people 2:23:30 Ray Kroc and Steve Jobs: deeply flawed founders 2:24:00 The founders we idolize are world-builders 2:28:30 When yachts and jets are underpriced assets 2:32:30 How to compete when money is cheap vs. when there are real interest rates 2:40:00 When Ben and David have fixed broken episodes in post-production 2:45:00 Why masters of craft are so interesting to study 2:46:00 Should you listen to advice? 2:51:30 David’s first job detailing cars 2:53:00 The Cuban experience immigrating to Miami 3:01:30 College entrepreneurship programs 3:04:30 Ben’s experience learning UNIX as a kid 3:09:00 David remembers Tim Ferriss guest lecturing in college *More Acquired:* - Get email updates https://www.acquired.fm/email and vote on future episodes! - Join the Slack http://acquired.fm/slack - Check out the latest swag in the ACQ Merch Store https://www.acquired.fm/store! _Note: Acquired hosts and guests may hold assets discussed in this episode. This podcast is not investment advice, and is intended for informational and entertainment purposes only. You should do your own research and make your own independent decisions when considering any financial transactions._

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

• 0:00Speaker 00

  I found this guy tweeted something a couple of days ago, whenever it was hilarious. He goes, "Most people's alarm clock is David Goggins telling them to wake up and get after it. My alarm clock is David Senra yelling at me, telling me to be like Edwin Land." It's like, all right, repetition works.

• 0:31Ben Gilbert?

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

• 0:39David Rosenthal?

  I'm David Rosenthal.

• 0:40Ben Gilbert?

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

• 1:10David Rosenthal?

  I don't know that I'm at hundreds yet, is me, David, but I'm definitely in dozens. I aspire to be at hundreds. But David Senra is just one of our closest podcaster friends and friends, period, out there. His show is awesome. Here on this episode, we had him out to my living room here in San Francisco and we had just a awesome, really fun, multi, multi-hour conversation, just like the ones that he and I have scheduled every month on Zoom when the mics are off. And it was super organic, super unstructured. We covered a ton of ground, including that, I think, two nights before we recorded, David was just coming up from LA where he had dinner with Charlie Munger. And so we spent a lot of

• 1:54David Rosenthal?

  time talking about that, Charlie's influence on David, his and Warren's influence on all three of us, a bunch of thoughts on advice generally. And as you can imagine, David just sprinkled dozens and dozens of historical examples and founder stories throughout the episode.

• 2:09Ben Gilbert?

  It is crazy. Every time someone's making a point, he'll dive in. This is just like that thing Edwin Land said that one time.

• 2:15David Rosenthal?

  Or David Ogilvy, or Coco Chanel, or who have you.

• 2:19Ben Gilbert?

  David is definitely close with the eminent dead. I will say, after editing this episode, I had one enormous takeaway. David Senra is really, really into podcasting. So get fired up to meet him on his level. All right, quick things. Go follow ACQ2, brand new show. Search it at any podcast player available for free. Become an LP. There is voting going on right now for our next episode, which LPs all have input on. And for every new LP that joins, we will shoot you an email to your inbox. Voting closes about a week after this comes out, and we are straight up picking whatever you tell us the next episode should be with really no editorial from us. So help us direct the

• 3:02Ben Gilbert?

  next episode. Join the Slack. It is one of the only places on the internet with this super high level of incredibly thoughtful discussion by well-connected, kind folks with a deep appreciation for history. People meet co-founders, they find jobs, and they get nuanced takes on the news of the day in there. So join at acquired.fm/slash-slash. Lastly, this show is not investment advice. David and I may have investments in the companies we discuss, and this show is for informational and entertainment purposes only. Now, on to acquired sessions.

• 3:33Ben Gilbert?

  So David, do you want to tell us who you had dinner with the other night?

• 3:37Speaker 00

  I had a three-hour dinner with Charlie Munger.

• 3:39Ben Gilbert?

  That is awesome.

• 3:40Speaker 00

  Where I could ask him any questions that you want. Well, first of all, I guess we should back up. It's like, there's a reason that he's so admired, right, by so many people. But for, for me particularly, you get to meet a lot of really interesting people because of the work that we do, right? And so that's like a blessing and something that I know we've had conversations in the past that we deeply appreciate. But Charlie's a different level for me. Like, I literally think of him like the wise grandfather I never had. You know, I've met all kinds of people. I don't really get like nervous or starstruck. I was legitimately like shaking the day before. I was like, I cannot believe. I didn't, I didn't want to tell that many people because like, this is, there's no way this is gonna happen. Like, I just, I won't believe it till it actually happens. We do very similar

• 4:23Speaker 00

  work, right? Where it's like, how many people have spent six, seven years, tens of thousands of hours, reading hundreds of books about the history of entrepreneurship and investing? And then not only reading it, taking notes on it, making a podcast.

• 4:35David Rosenthal?

  It's us and Charlie and Warren.

• 4:36Speaker 00

  Yeah. And the reason I bring that up is because you think about all the different companies and founders you guys have studied, all the different companies and founders that I've studied, right? And like even amongst the rarest group of people, Charlie still stands out. And the crazy thing is, he's 99, right? And so I get there and we start off in his library, which is like the best place for me that you could possibly see. Set the stage more, how big is the library? Like, how many books are we talking about? So it's not, so his, one of his family members was there too. And she's like, oh, this is like nothing. This is like the front room, wait till you see the back. Yeah, so it's like, it's similar to like the room we're in, like, you know, very similar size. And, you know, floor to ceiling shelves. And so I'm with a small group of friends.

• 5:21Speaker 00

  In fact, mutual friends for us, the people that set this up for us or for me, was Andrew Wilkinson and Chris from the founders of Tiny, who are mutual friends. And, um, and so we're sitting there. And there's actually a funny thing where it starts out and they, they know both Warren and Charlie. They've talked to them before, so they go right into it. And then like, I'm sitting there and I had this whole list of probably like 25 questions. I was gonna ask if you like prepared in advance, I know you did. I never got the chance to open my phone. Cause I was just sitting there, I was like, I'm looking at him and he's, you know, very close. Like, you know, maybe a little bit further.

• 5:55Ben Gilbert?

  That would feel super disrespectful to like take out my phone.

• 5:58Speaker 00

  Yeah, that too. And I had, you know, read every single book on Charlie. I watched all of his videos, like I've studied this guy forever. And so every time he had said, hey, read this book, I go and read the book. And then I see a bunch of the books that he has recommended behind him. So people are like, oh, was he as like you expected? Like they say, hey, be careful, don't meet your heroes, right? It's like, he was unbelievably gracious, you know, unbelievably like, I was like, hey Charlie, you mind if I take a look at your bookshelf? Right? He's just like, do whatever you want, just unbelievably polite, still like biting intellect, ferocious intelligence. At 99? At 99. So we were talking earlier downstairs where the scary thing about Charlie is,

• 6:42Speaker 00

  I remember asking him a question about Henry Kaiser, this guy that was super famous when Charlie was younger. He built like 100 companies, built the Hoover Dam. Like, he was as famous in his time as like Elon Musk is today, right? But no one knows who he is. And I was asking questions about Charlie in the book, and his recall is just insane. So the point where I asked him, I go, "How do you know all this, Charlie?" He goes, "I knew his partner." And then he starts telling stories about being, knowing, like, having a relationship with Henry Kaiser's business partner. And then all these three hours of just unbelievable stories. And then I go, "Charlie, like, how do you remember all this stuff? Like, do you write, like, do you take notes? Do you reread the books over and over again?" He's like, "Nope." And all I could think of was like, imagine. Wow. That guy's mind at 99 is still so sharp. I had brought a gift for him,

• 7:27Speaker 00

  because he talks about Rockefeller all the time. I bought him this special edition, centennial edition version of Henry Flagler's biography. Oh, Flagler, yes. So, I live in Miami. The guy, Les Sanford, I think is the author of that book. He is good friends with, there's only like one local bookshop in Miami, called Books of Books. And so, Les is a local author who's good friends with the owner of that bookstore. So they did a, you can't get this book anywhere else. It's a special edition book. Because Flagler moved to Florida later on. After the Standard Oil thing, yeah. He's got a fascinating story, we talked about that, where he made, unbelievably wealthy because of Standard Oil. Yep. He's, you know, 50, 60, 70 years old when he's doing this. And he's just like, "Oh, what am I doing now?

• 8:12Speaker 00

  I'll build an entire state." When he gets to Miami, Miami is little less than 500 people living in a swamp. Because you can't live there, there was no AC at the time. And so then he builds the world's first railroad over, connecting the Florida Keys. He just, essentially, like, you read that book and you're like, "Oh, humans have no limits other than the ones we put on ourselves." And so that's what Flagler does. He just stretches it. And he does some terrible things too, where it's like, wanted to find a way to divorce his wife. So he literally moves to another state because he couldn't be divorced in New York. Bribes the government of Florida. They create the Flagler Law, which allows him to get a divorce. Then he does that, like, I think a few times. I think he's like in his 70s, he marries like a 30-year-old. Like, it's not all good. But that guy's like, oh, your rules don't apply to me. Like, I will build whatever I want.

• 8:57Speaker 00

  He built infrastructure, hotels, everything else.

• 9:00Ben Gilbert?

  This is like one of my, the things that I keep learning from Founders Podcasts. And I'm curious if you do it intentionally or if you like try not to do it. But like every single time I'm like, oh, people aren't perfect. Like, none of your heroes are perfect. And do you find yourself like, because we, we run into this on Acquired a lot. We're like, it's not as fun to tell stories about terrible people. And so you, you like, don't want to show someone's negative side as much because it doesn't like, it's just.

• 9:27Speaker 00

  Well, we, we like, we fall in love with them too.

• 9:29Ben Gilbert?

  Right.

• 9:29Speaker 00

  When we're doing that.

• 9:30Ben Gilbert?

  Right. And you're like, wow, they're the most extraordinary person on this one axis to ever live. And we, we should talk about how they're a flawed person in many ways, but it's not fun to dwell on. Like, you kind of want to like move through that and be like, yep, yep, they were flawed. Here's the next amazing thing that they did. Like, how do you handle that?

• 9:47Speaker 00

  Like, you know how a normal biography is written, right? It's like way too much family history. Like, I want to know some family history. I don't want five generations back. Stop. Like, I don't want to know the origination, their last name. I don't need that. I want to know like.

• 9:57Ben Gilbert?

  And you're like the most qualified person in the world to critique a biography writing style at this point, so.

• 10:02Speaker 00

  So while we're reading it is like, everyone wants to know the climb, right? It's like, how did you, you guys, I just went through your entire, to get part of the prep for Charlie is listening to all of your Berkshire episodes, right? Where you guys do a fantastic job on this. Because like the first two is like the young Charlie, the young Warren. So I would literally, and I've done this forever. It's like, I don't, when you think of Warren Buffett or Ben Franklin or George Washington, or anybody that's super famous. When we see them, it's like, oh, who's the Ben Franklin on the hundred dollar bill, right? Or who's Washington on the dollar bill? Or who's Buffett at the, the meeting in Omaha? It's like, no, no, that, that's the guy that is, is enjoying the fruits of the person that actually built the empire. That's the whole. I go and stare at pictures like a freak at like of young Charlie Munger when he was like 38 or young Warren Buffett, right? They, they were like us.

• 10:46Speaker 00

  They were young people once.

• 10:48David Rosenthal?

  Yeah. In, in our Berkshire series, the first, did we end the first episode without even getting to Berkshire yet? I think we might.

• 10:54Ben Gilbert?

  You have a public partnership.

• 10:55Speaker 00

  It was just a partnership. You mentioned on the Walmart episode where it's like, everybody says, oh, Sam Walton didn't start Walmart till he was 44. Yeah, but he was doing 25 years of practice and learning and he wasn't just sitting on his ass.

• 11:05Ben Gilbert?

  Starting a bunch of stuff that looked an awful lot like Walmart.

• 11:07Speaker 00

  Yes, learning from that. And so the, the.

• 11:10David Rosenthal?

  Which is totally like, I mean, aside, but we have no agenda here. That is like. I think both an advantage that like we have, all three of us, and like kind of a secret that we have, which is that like, we wanted, we did Walmart because we wanted to do Amazon. And so we were like, how do we do Amazon, right? We gotta do Walmart first. People want this, like this is the right way to study things.

• 11:31Speaker 00

  I think, I'm glad you brought that up because I think this is why people get a lot of value. And I don't want it to make us about, hey, this is an acquired founder show. The reason that some of the people in our audiences are the most successful people in the world. They're all reading biographies, they're all studying the history of business. I told you guys a few weeks ago, I was very lucky to have a two hour, one-on-one lunch with Sam Zell that I didn't think was possible. What I realized in that conversation is like, you don't make, you don't, Sam Zell sold his company for almost $40 billion, right? $38 billion, whatever it was. It's like, you don't build a company, sell for $40 billion and then learn all this. It's like, he was doing this since he was, since he was young. We were talking in his autobiography, he talks about-

• 12:09David Rosenthal?

  I think my favorite episode of your podcast is the Kobe Bryant episode.

• 12:13Speaker 00

  Yeah.

• 12:13David Rosenthal?

  Cause like, this is what these guys are doing. They're like Kobe Bryant.

• 12:18Speaker 00

  They're watching game tape.

• 12:19David Rosenthal?

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

• 12:26Speaker 00

  I think that's what we're listening to acquired and founders is, is you're watching game tape of history's greatest entrepreneurs. Sam did this when he was younger. But this ties together where Bill Gurley had a fantastic quote about this, a tweet about this, when all that crypto was going crazy and like the run-up and people were getting rich. And he's like, one thing I don't like, and I'm paraphrasing because I wasn't expecting to talk about this. He's like, I don't like that these young, the younger people, denigrating the people that came before them. And he's like, he made the point that none of the, none of history's greatest entrepreneurs and investors did that. They had the opposite perspective. All of them had idols. You've just made the point, you can't understand Jeff Bezos until you study Sam Walton. You can't understand Sam Walton until you understand JCPenney and Sol Price.

• 13:05Ben Gilbert?

  And even their contemporaries, like the point that Walton always made was, I don't think my competitors are stupid. I want to go shop my competitors and get all of their very best insights and then bring them into my store.

• 13:15Speaker 00

  Yeah, 100%, they're learning machines. And so you get to Charlie's, going, tying this all back to this, you get to Charlie's bookshelf and it's just, biographies I've never even heard of, and I do this for a living. And over in London, I was like, what is this book? And then I started looking, I was like, oh, I'm just taking picture after picture after picture. It's like, I'm ordering every single one.

• 13:33Ben Gilbert?

  So we're talking about this idea that like, that the way to get truth is to weave together the tapestry of all of history's stories of things that are adjacent to understand, like, how this opportunity to start some business came to be. And you always have to, like, all history is revisionist and all history is biased. And so I think one of the hardest things about making an acquired episode is figuring out, like, when we're looking at a source, like, someone giving an industry talk who works at a company, or like, a biographer who chose to dedicate, you know, two years of their life to writing this book after working at Newsweek and covering the sector forever, is like, trying to mentally account for and discount from whatever bias and perspective

• 14:15Ben Gilbert?

  they're coming in with to create whatever the source material is that we're using to then incorporate into our version of, here's how this thing happened. Which is, that's like, I think it's the hardest part about what we do. And I'm curious if you ever think about that.

• 14:30Speaker 00

  I think about it all the time, because people are like, oh, like, survivorship bias or revisionist history and everything else. It's like, here's the problem, like, we, humans don't see things as they are, we see them as we are. So like, we could have this super long conversation between the three of us right now, then go in the other room and write down, you know, what just occurred. And every single version is going to be different, because it's viewed through all of our experience, the way we think, the words we use. And so what I'm looking at is, like, when I'm reading about Sam Walton, right? It's just like, the story, we both hit on it all the podcasts, because I've done a bunch of podcasts on Sam too, where it's like, the guy's pissed off, he's just like, driving from store to store on these like, mountain roads, taking forever, so he buys the plane, and he realizes, like, oh, this is a massive advantage, because I'm doing something my competitors aren't, right? I'm flying over, and you guys mentioned it too, which I thought was hilarious.

• 15:12Ben Gilbert?

  Sideways.

• 15:13Speaker 00

  And then he just lands, and he's like, who owns that? Let me land, and then he, you know, buys for action. So he's like, we're going to negotiate right now, I want to buy it from you. And so my point is, is like, okay, yes, that most likely occurred. But what is the idea behind that? It's do, you can have an advantage by doing something your competitors are not doing, right?

• 15:27Ben Gilbert?

  Yep.

• 15:28Speaker 00

  And this ties together with your, what you just said, is like, they all learn from somebody else. When we're reading these books and listening to these podcasts, like, what's the idea I can use in my life? We're not building the next Walmart. There's no way we read Titan. That we could tell, did this actually happen?

• 15:41David Rosenthal?

  Right.

• 15:42Speaker 00

  I don't know, but I'm looking for the ideas behind it. Not, oh, I'm gonna verify for every single word in this book. That's ridiculous.

• 15:47David Rosenthal?

  Right.

• 15:48Ben Gilbert?

  And the truth is always, it is always the case that a clean narrative is grafted onto a fact pattern. And it's like, okay, well, what I care about is the lessons I can learn from the clean narrative, not, does the fact pattern, if you had all the facts in totality, did it necessarily mean that it, you know, this was premeditated? It's like, whether it was premeditated or not, you know, the facts are the facts and like, maybe I can duplicate in a different realm.

• 16:15David Rosenthal?

  For what we do, I mean, I think on Acquired more than you, especially because you will do multiple episodes of different books on the same people.

• 16:23Speaker 00

  And multiple episodes on the same book.

• 16:24David Rosenthal?

  Yeah, and multiple episodes on the same book, right.

• 16:26Ben Gilbert?

  Your format is better.

• 16:27David Rosenthal?

  We're doing a narrative weave, so like, you know.

• 16:30Ben Gilbert?

  We're shooting the moon a little bit more in this respect. Like, your format lends itself to, so if anyone is listening, like, Founders is more about, hey, I just read this book and I want to tell you what I learned from this book. And it's always biography and like, sometimes you'll do five different biographies on Edwin Land. And like, if Acquired was gonna do Polaroid, we would do Polaroid. The episode would be Polaroid. Maybe it would be like, Polaroid, part one and part two, or like, maybe at some point we'd have, we'd have like, someone on to like, talk about the story, you know, in addition to our one canonical episode, but like, we would be shooting the moon on like, let's make sure that we get the Polaroid story as right. It's almost like, how do we find the correct average of all of the other stories to create the canonical version?

• 17:15Speaker 00

  I wasn't expecting to quote Bill Gurley two times early so far, but um,

• 17:20David Rosenthal?

  Does that mean this is gonna be a good episode?

• 17:21Speaker 00

  That fantastic talk he gave, which to me is the best talk for entrepreneurs, investors on YouTube. It's called Running Down a Dream, How to Survive and Thrive in a Career You Love, right? And he says, he's like, listen, in the age of the internet, he's like, you don't have to be the smartest person, right? Charlie Munger, after talking to him, whatever mind that dude has, I don't have that, and I'm cool with that. Like, I could not imagine trying to compete against that guy 40 years ago. Like, he would destroy me, right? He's got a super mind that I don't have. But what Bill says is like, you don't have to be the smartest person, but you can collect more, the most information, and he holds you to a high standard in that talk. Bill's like, listen, In the age of the internet, all the information you possibly need, right? Is right at your fingertips. You have no excuse not to do this. And so he gives the example of if you, you, you want to be a domain expert in whatever you're doing,

• 18:06Speaker 00

  like within two years of intense study, if you're doing that and you're focused on it's like, you're going to get to the point where like you know more than maybe anybody else. And so that's my whole thing was like, when you talk to, you've never met a founder or an entrepreneur that's like kind of into entrepreneurship. It's like, no, it's our lives.

• 18:22David Rosenthal?

  Yeah.

• 18:23Speaker 00

  So of course, the reason why so many of them listen to both of our shows, right? It's because they're building machines where they literally can turn knowledge into profit. Right? I, I've become close friends with the guy through the podcast. He's a young kid and I don't, I don't mean to call him a kid. He's not a kid, but he's a lot younger than I am and he's like 28 years old. And we were on the phone the other day because he had a very serious offer for a company he owns like 95% of. And they were gonna, um, they were gonna give him a hundred million dollars. Right? Ends up saying no to it. But the point is like, when you talk to him, um, you know, he's listened to all the episodes, read like 60 of the books. He'll text me a picture of like, he won't even tell me what the book. And I'm like, I'm pretty sure I read that. Like, he's like, oh yeah, it's from this episode. It's like, oh, why?

• 19:03Speaker 00

  What if he finds one idea in a book, one idea in a podcast, and it gives a 10% improvement on his company? It's a $10 million idea.

• 19:11David Rosenthal?

  Yeah. Well, we were talking about this earlier, like this dinner that you, you have a, it sounds like the Charlie is just like a very curiosity driven machine. But we know there, there's lots of folks that have regular dinners.

• 19:22Speaker 00

  Yeah.

• 19:22David Rosenthal?

  And have groups of people often geographically dispersed. Why do they do it? Why is it worth their time, their money, their effort? It's that they get one idea. The leverage that they can get on that is astronomical.

• 19:34Speaker 00

  Charlie tells a story. He's like, yeah, I made $400 million from reading Barron's for 50 years. And you're like, what the, what are you talking about Charlie? And how do you quantify that? Cause he does. So he goes, I read, uh, this isn't something he said at dinner, that firm said publicly. He's like, I read Barron's every, uh, all the time for 50 years. I found one idea that I can act on. I made $50 million on that deal. And then I took that 50 million and I gave it to Li Lu. Is that the?

• 19:57David Rosenthal?

  Oh, yeah.

• 19:58Speaker 00

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

• 20:05David Rosenthal?

  Wow.

• 20:06Speaker 00

  And listen, I'm not, and this is another thing where I feel like everybody's like, oh, this time is different. This is new. It's like human nature has never changed. It will never change. This time is not different. You're just experienced, the, the difference is if you don't study the history of the people that came before you, you're just ignorant and making mistakes that people already saw in the past. Learning from history is a form of leverage.

• 20:27Speaker 00

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

• 20:40David Rosenthal?

  Yeah.

• 20:41Speaker 00

  And he distilled it down.

• 20:42David Rosenthal?

  And then wrote a book about it.

• 20:43Speaker 00

  And then you could read it in a week, and then you could listen to Acquire's episodes, you can listen to David's episodes on Sam.

• 20:49Ben Gilbert?

  Okay, this is good.

• 20:50Speaker 00

  In addition to that.

• 20:51Ben Gilbert?

  So the question is then, do you have 90% of Sam's wisdom, or do you have 0.1% of Sam's wisdom after?

• 20:58Speaker 00

  There's no way you have 90%.

• 20:59Ben Gilbert?

  Right.

• 21:00Speaker 00

  Because like, the time.

• 21:01Ben Gilbert?

  Right. The instincts.

• 21:03Speaker 00

  I was just rewatching Peter Thiel's talk at Y Combinator, where he says, "Competitions for losers."

• 21:09Ben Gilbert?

  Oh, yeah.

• 21:09Speaker 00

  And he goes, "One thing that we do in Silicon..."

• 21:10Ben Gilbert?

  I haven't seen this one.

• 21:11Speaker 00

  It's a classic. "One thing we do in Silicon Valley is we overrate, overvalue growth rates and undervalue durability." And he's like, "That doesn't make sense for a technology company, because all your profits, the vast majority of profits are 20 years in the future. And so if you're trying to optimize for growth, and that, that over-optimization can cause your company to go out of business, you're never going to collect that. You optimize for durability first, dummy." Like, that's to me, like, my interpretation of what he's saying, right? Yeah, so you're gonna get, you know, 1%, probably, maybe 5%.

• 21:37Ben Gilbert?

  But that's still enormous leverage, because you read it in five hours, and he took 50 years to accumulate everything.

• 21:42David Rosenthal?

  And it's Sam Walton's wisdom.

• 21:44Speaker 00

  And it's what you do with the idea.

• 21:45David Rosenthal?

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

• 21:53Speaker 00

  Yeah. Um, my friend...

• 21:55David Rosenthal?

  Not that I think you're crazy.

• 21:57Speaker 00

  I definitely am.

• 21:57David Rosenthal?

  You are, but in a good way.

• 21:58Speaker 00

  No, I definitely am nuts, for sure. Um, and that's gonna be, like, we could talk about, um, did you guys read Jeff Bezos' last shareholder letter before he...

• 22:07Ben Gilbert?

  Yeah.

• 22:08Speaker 00

  The, the best lines he has is at the end, he's like, "Differentiation is survival." And so they think about that, like, how hard, like, they say, let's say, somebody says, "Damn, I love what Ben and David are doing. I'm gonna do the exact same thing." They can jump in and try to do that, right? But you have six years of experience, you have 600 hours out there.

• 22:25Ben Gilbert?

  You have to counter position against us. Or address a different audience, or... Exactly.

• 22:29David Rosenthal?

  Which, by the way, they definitely should. Every time I talk to somebody who wants to, I, without, I'm always like, "You absolutely should do this."

• 22:35Speaker 00

  Yeah.

• 22:36David Rosenthal?

  And you will, even if you never succeed in terms of any, like, numerical success, or like, you will succeed because you are learning, like...

• 22:44Speaker 00

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

• 23:06Ben Gilbert?

  Oh, it's your five friends, including your parasocial relationships.

• 23:09Speaker 00

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

• 23:26Ben Gilbert?

  Yeah.

• 23:26Speaker 00

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

• 23:52Ben Gilbert?

  Uh-uh.

• 23:53Speaker 00

  About the, oh, that's shocking.

• 23:54Ben Gilbert?

  He worked on the original human interface for the iPhone.

• 23:58Speaker 00

  So, he made the keyboard for, when it was still...

• 24:02Ben Gilbert?

  That's right.

• 24:02Speaker 00

  Operation Purple or something.

• 24:03Ben Gilbert?

  Yeah.

• 24:04Speaker 00

  The keyboard, he made Safari before the iPhone. He has this excellent book that I've read, like, three times, called Creative Selection. I think the, how Apple designed products in the golden age of Steve Jobs might be the subtitle. But he talked about that, where, because he demoed to Steve, right? And you're not gonna describe it to him, you're gonna demo, and you're gonna hand it to him. And so they iterate, you guys already know this, they iterate through a series of demos. And it's based on Steve's taste. Like, he is not, "Oh, let's talk about this." Like, nope, do this, do this, that. And so Ken has a great line in the book where he's like... Demoting for Steve is like asking questions to the Oracle Delphi, except the Oracle Delphi would like respond with a riddle. And he's like, no, no, Steve was unbelievably like crystal clear. You understood him. Out of every single person I've ever studied,

• 24:48Speaker 00

  Steve Jobs is by far the clearest thinker I have ever come across. Like, I was just gifted at that. Charlie is like the oracle and it's crystal clear. You are not like, you are going to understand what he's, the idea he's trying to get into your brain, for sure. But my point being is like, all of the people that we study, they don't denigrate the past. They, Steve Jobs, the reason I'm so obsessed with Edwin Land. I read in a biography, when Steve was like 20, in his twenties, Edwin Land is in like seventies. He goes and meets Edwin Land and he goes, "Visiting Edwin Land was like visiting a shrine." He's like, "He is my hero, more people should try to be like that." And then you guys made the point in that, you know, Jeff Bezos took a lot of ideas from Sam. Who took a bunch of ideas from Sony too?

• 25:33Speaker 00

  Steve and Jeff. So you always find these people where you're like, "Oh, I thought this was a Steve Jobs idea." No.

• 25:40David Rosenthal?

  It's an Akio Morita idea.

• 25:41Speaker 00

  Yeah.

• 25:41David Rosenthal?

  Or an Edwin Land idea.

• 25:43Speaker 00

  Like when we used to watch the presentations that Steve would give, where he's like, "Oh, we're building at the intersection of technology and liberal arts." He put it, put it up on screen.

• 25:52David Rosenthal?

  He ripped that off wholesale.

• 25:53Speaker 00

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

• 26:04Ben Gilbert?

  This is a good like, sort of personal pivot. And it's like, I've never asked you in all the hours we've spent. It's crazy, this is the first time we've met in person.

• 26:11Speaker 00

  Yeah.

• 26:11Ben Gilbert?

  Like, we spent hours and hours and hours on Zoom. How did you like decide that this is what you were going to do with your time on this planet? And like, how did, what led to this?

• 26:24Speaker 00

  Okay, so I...

• 26:27Speaker 00

  You know, our mutual friend Jeremy from Formula of Tiny.

• 26:30David Rosenthal?

  Yeah.

• 26:30Speaker 00

  I just spent like a bunch of hours with him. He was in town. In one sentence, he like, he psychoanalyzed me better than anybody else ever has. He goes, "You didn't have any mentors growing up." So you like, you have, then you took it to like this extreme. And he said it more, much more eloquently than I am, but he's like, "You didn't have any mentors." So I view your career as like this psychopathic search for like mentors that can help you. You know, and so like to answer questions, like, I don't want to go into too much detail here. But like, I've only had one habit my whole life, and that was reading. I was reading for as long as I can remember. My mom passed away from breast cancer a couple of years ago. And she, we didn't have like a lot of money, like, long story, but like, I was the first person, not only to graduate college, but like high school in my family. Like, I came from a family, like unfortunate,

• 27:13Speaker 00

  both sides of the family, like no education, a lot of like, just bad habits. So I identify with a lot of what Charlie Munger says, because he essentially observes bad behavior and then tries to do the opposite, right? So I was just, let me give you an example. I was just up in Canada. Actually, at an event Andrew Wilkinson was hosting for a bunch of entrepreneurs. Me, Shane Parrish from The Knowledge Project, and Farnham Street was up there. Ben Wilson from How to Take Over the World, and we were doing this panel together. And Shane's the moderator, and we don't know what we're going to talk about beforehand. And so Shane asked the question, it's like, "Oh, what, um, what did you learn most from your upbringing?" Or something like that, right? And I go, "I learned not to do cocaine and to graduate high school." Like, so that kind of thing, right? And so there was just a bunch of anti-models.

• 27:55Speaker 00

  I thought about this as I was walking through the Tenderloin this morning in San Francisco. And I was like, "I should do this walk with my daughter as the best." Like, "Hey, this is why you don't do drugs." Like, this is the perfect example of like, you would, you observe bad behavior and then you do the opposite. So, long story short, I've always been obsessed with reading. Like, one of the best things my wife, my, my mom ever did was, even if we didn't have money for books, she would take me to the bookstore and just sit there. Like, you know, bookstores are so cool because they just let you read. They don't, no one comes to her and is like, "Hey, you've been reading for an hour. Like, you gotta get out of here." You know, and just read and read and read.

• 28:30David Rosenthal?

  Was there anybody who like introduced you to reading and books? Or you just, like, there was just something about you?

• 28:35Speaker 00

  Sounds like his mom. Yeah, but no, she wasn't a big reader. The only thing she read was the Bible. There was no books in the house when I was younger, ever.

• 28:42David Rosenthal?

  So how did you be like?

• 28:44Speaker 00

  I can't answer that.

• 28:45David Rosenthal?

  Mom, take me to the bookstore.

• 28:46Speaker 00

  I can't answer that. All I can say is like, my wife knows, has known me for 15 years and her thing, what she says is, she like likes my family and gets along with them, but she goes, how did that come from that? It sounds like you have a classic, like, you're the one who made it out story. Sam Hinky, our mutual friend, actually gave me the way to think about this. And it's called the founder of your family. Right? And it's the person that like, and I used to call them, and it was a terrible name, but generational inflection points. Because you'd read this in the biography where you have like generation after generation of just not good things happening. And then one person just says, it stops now.

• 29:24David Rosenthal?

  That's what Rockefeller did.

• 29:25Speaker 00

  Rockefeller, I always think of Sam Bronfman, the guy that did Seagram's. Oh, yeah. And he's in Canada, growing up, like, they were so, their parents had lost so much money. They think they were Jewish and they had to like escape from persecution in Russia. I can't remember where they came from, but they go and they have to start all over and they're in Canada and like, there's no heating and like they're freezing and like, so he has this like psychopathic drive to change, but that stays with you forever. So like, once, you know, he builds this massive company and literally changes the trajectory of all of his descendants. And as his daughter's an adult and she tells a story in the book where Sam is sitting there in like a mansion

• 30:08Speaker 00

  by, next to a fire, like shivering, thinking about how embarrassing it was to have to go to school with tighter clothing. It's just like, that guy's never gonna go back to that and he never loses it. So I've just always been a reader. That's the only thing I've ever, like the only one unbroken habit I've always had. And so I just had this idea, like I was obsessed with podcasts forever. I was obsessed with audio before there was such thing as a podcast. Like I would listen to talk radio when I was a kid and at that time, you know, it's. It's not like, there's no on-demand anything. You would listen, sports talk radio, politics talk radio. It's embarrassing, there was like this woman that used to be on at night, people would write in like advice for love, their love life, and I'd listen to that, just the idea of like, just all this information.

• 30:47Ben Gilbert?

  Oh man, I used to listen to Coast to Coast AM with Art Bell. Do you ever listen to this? Like, it's when all the other radio programming sort of expires, and then you enter the like, 1:00 in the morning AM radio stuff. And it was like, you know, aliens and like tons of paranormal stuff. But it was like, if you, if you listen, like, you know, the Cavs game ends, I'm from Cleveland, and so like, then you listen to like, the sports post-game, and then it goes into like, the politics hour. And if you still can't fall asleep, then you're into like, aliens. And it's like, four hours of that stuff.

• 31:16David Rosenthal?

  Do you have a radio in your bedroom?

• 31:17Ben Gilbert?

  Oh yeah, I'd be able to, I don't, I imagine my parents probably came and turned it off, but like, would leave it on while I fell asleep every night.

• 31:23Speaker 00

  And then remember, like, I remember, so you have the jump up from that, and then the AM radio stations would then start streaming to your browser, internet. It still wasn't on-demand, so if you're not listening at 3 o'clock or 12, like, you miss it, and then once I saw-

• 31:36Ben Gilbert?

  Wasn't this what Mark Cuban's company was?

• 31:38Speaker 00

  His was like, broadcasting audio for sports games, though, I think.

• 31:41Ben Gilbert?

  I don't actually know, it's kind of funny, it's like an era of-

• 31:43Speaker 00

  It's broadcast.com, right?

• 31:44Ben Gilbert?

  Yeah, and it was competitive with RealPlayer, which also wasn't on-demand, that was just streamed radio.

• 31:52Speaker 00

  No, the first on-demand was, the first time I saw this, I was like, this is insane. Like, especially for people that are, that are like, you know, learning machines using Charlie's, where it's like, I can go to, even today, like, they did, you can go to any podcast player, type in whatever you want to learn about, and then you can hear somebody that's usually spent hundreds of hours teaching you about this stuff.

• 32:12Ben Gilbert?

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

• 32:30Speaker 00

  Yep.

• 32:30Ben Gilbert?

  And like, the only way to do that before was books. Like, there wasn't an audio way to, there wasn't content. There wasn't niche audio content broadly available.

• 32:39David Rosenthal?

  And there weren't, there aren't like, several million authors out there, but there's several million podcasters.

• 32:43Speaker 00

  Well, you made a good, you were, I think you were getting to a good point, it's like, because the business model didn't support that. And so now

• 32:48Ben Gilbert?

  And there was no distribution.

• 32:49Speaker 00

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

• 33:09David Rosenthal?

  You went through a bunch of business models.

• 33:10Speaker 00

  Yeah. So when I first started, they're like, hey, you contact like the few podcast advertising networks there were back then, you know, because you guys started your show in 2016, right?

• 33:19Ben Gilbert?

  15.

• 33:19Speaker 00

  Okay, so I started in 2016. And you contact, and they're like, yeah, we can do ads for your show. You know, you need like 25,000 downloads an episode. And at the time, I'm like, I'll never get there. Like, obviously, we've skyrocketed past that, but like, that's impossible. That's like as many people as in a basketball arena.

• 33:36Ben Gilbert?

  Oh, when you start visualizing the audience, it's like, oh, two and a half NFL stadiums show up for every acquired episode? Like, that's an insane.

• 33:43Speaker 00

  Yes. But do you guys think, so do you guys think about that?

• 33:47David Rosenthal?

  Only in adding to the pressure in a good way. Like, it's a good motivator.

• 33:53Speaker 00

  I never think about it.

• 33:55David Rosenthal?

  Really?

• 33:55Speaker 00

  You know what I think about it? How my show's set up is why I say you and I and I.

• 33:58David Rosenthal?

  Yeah, yeah.

• 33:58Speaker 00

  It's like, I've.

• 33:59Ben Gilbert?

  I like how you treat the audience as like the person you're.

• 34:01Speaker 00

  It's one person. So like, one, and I've done this forever. It's like, I, it's funny. I remember it's one of my friends that we were, met up one day and I was like, man, I think I'm going to try to make like a business around the fact that I read so much. And he's like, and he called me like a year, like six months ago, a year ago, he's like, I can't believe you did that. He's just like, I thought you were, that was the dumbest thing I ever heard. But I just picture him when I started, it's like, oh, the whole idea behind the show was like, what if you got to meet up once a week with your friend that reads a lot? And he just tells you the stuff that he read that week, like interesting ideas. And so I just picture one person.

• 34:33David Rosenthal?

  Did it even cross your mind to like, try and convince him to do the podcast with you or somebody else? Or you're always just like, no, I'm in it.

• 34:38Speaker 00

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

• 34:56Ben Gilbert?

  You and him are like the only successful monologue podcasters. Like, I think it's the hardest thing to do in this medium. And I can't, I mean, there's, everyone else either has a guest on or a co-host.

• 35:08Speaker 00

  Yeah. Well, there's another guy that was. That, so I took Dan Carlin, I was like, I was obsessed with his, I've listened to all his episodes. For like years, you were talking about falling asleep. I did that too, but I fell asleep to Dan Carlin. So I'd over and over and over again, to now where I listen to him, I'm like, I, it's like, it's a-

• 35:26Ben Gilbert?

  Pavlovian.

• 35:26Speaker 00

  Yeah, I was like, no, don't wake, this is not nighttime, bro, wake up. But there was another one that a friend of mine put me on, so there's this comedian named Bill Burr. He does the Monday morning podcast, he used to do it every Monday, now he does, I think, Monday and Thursdays, right? He is one of the first podcasters, when he was podcasting, his, his first episodes, at the time, he would do it, he would call into a number and record, right? And then that, there was a service that would transform that recording from your phone into an-

• 35:55David Rosenthal?

  An MP3.

• 35:56Speaker 00

  An MP3 that you could-

• 35:57David Rosenthal?

  You could download and put on your iPod.

• 35:59Speaker 00

  This is way before like, anything.

• 36:01David Rosenthal?

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

• 36:10Ben Gilbert?

  Yeah.

• 36:10David Rosenthal?

  We start, I remember when we first started, I don't think you let me do this, but I was like, well, why don't we just talk at the computer and like, set up QuickTime?

• 36:17Ben Gilbert?

  Dude, when I listen back to our first few episodes, like Pixar, and I'm like, we, it sounds like we were just talking at the computer.

• 36:23David Rosenthal?

  Yeah, well, we basically were.

• 36:24Ben Gilbert?

  Yeah. That's, that's when people are like, I have a lot of psychos that, they're like, I start on number one, I go all the way through, I was like, oh, like, please don't. If you're gonna, if you're gonna do like-

• 36:33David Rosenthal?

  This is one of the things I wanted to talk about.

• 36:35Speaker 00

  I, I, I used to, um-

• 36:38Ben Gilbert?

  Cause that way, at least by the time you get to one, you were like, you, you, you're a fan, but if you, if you start at one, you're like, oh, these guys just suck.

• 36:46David Rosenthal?

  Yeah.

• 36:46Ben Gilbert?

  But like that, it's almost like, um, there's great pleasure in hearing something that you think is excellent and fully baked and like, uh, especially when it's been long running, you're like, oh, this has always been immaculate and perfect. And then you get to go see some of the early work and you're like, oh, it's so, it's so rough.

• 37:06David Rosenthal?

  You want the early Charlie.

• 37:07Ben Gilbert?

  I, I get the, I can see where the magic was, even though they didn't know yet, like the-

• 37:13Speaker 00

  It's the same thing you see in the books that you're reading though. Like Sam Walton, when you tell the story where his, his landlord screws him over and he goes, he goes, I'm not whipped. I, I found, I found this door, I'll, I'll do it again, right?

• 37:24David Rosenthal?

  Yeah.

• 37:24Speaker 00

  And it's like- Yes, Walmart is a huge success. You guys made the point that there was a great point where it's like, you're never gonna think 25 years in the future when there's watermelons and donkey crap on the ground, that this is gonna be the richest family in the world, right?

• 37:37Ben Gilbert?

  Right, and the most standardized form of retail.

• 37:39Speaker 00

  Yeah, but, and so you see like, oh, he, that same guy that became the richest person in the world, that his now family has a rich family, whatever, it's like, he's imperfect too, just like I am. And so that is the only benefit of listening to an early acquired or early founders is like, oh, you see the improvement. Just like in the books, you see the improvement.

• 37:56David Rosenthal?

  Well, it's fun too, like, I like going back and listening to some of your old episodes. I get to like, see your journey, you know, like, I'm proud of you. Like, the, uh, but I've been thinking about that, and I was thinking about ahead of our conversation here, like, I used to say all the time, people like, oh, I go back, I listen to their early episodes. I'm like, no, don't, it's so embarrassing. I actually think like, we always wanna be embarrassed by our last episode. We've just constantly kept like, every episode, like, we try and just notch it up.

• 38:23Ben Gilbert?

  Cause we keep picturing the stadium, and we're like...

• 38:25David Rosenthal?

  That's, that's the like, that's why I think about the stadium, cause I think about the like, the pressure of like, we gotta do better next time than we did this time.

• 38:31Ben Gilbert?

  And it's not just filled with like, you know, Seattle's NFL fans, it's filled with like, hundreds of thousands of the smartest people that, and this gets to like, the psyche, like, the deep insecurities that at least I have of like, I want to impress those people. I want those people to think I'm smart, and so I have to produce something unbelievably worthwhile of their time. And the minute that I don't, I'm like, literally walking out in front of an NFL stadium full of people that I want to impress. And like, I didn't used to have that pressure, but like, once we found content market fit for acquired, with like, people that I've always thought highly of, that, that is the driver now.

• 39:08David Rosenthal?

  There were a couple of years where we kinda drifted, there wasn't that pressure to keep amping the bar, and then...

• 39:13Ben Gilbert?

  Right, it's like the 2017 era.

• 39:16Speaker 00

  I think you're never gonna be embarrassed about your, your latest episode at the time we're making this is LVMH. You're never gonna be embarrassed about that, that was excellent, and like... It doesn't mean you can't keep improving 10 years from now.

• 39:26David Rosenthal?

  No, like, I look back and I think like, uh, yes, that's certainly an episode, I don't know how you feel, but that like, I'm proud of. But I looked back, like, at the time, like, so we didn't know that was gonna be a super popular episode.

• 39:39Ben Gilbert?

  Totally unpredictable. It's our, it's our, it's our, uh, cause we haven't shared this publicly yet. It's our, our number one episode by a huge margin. Forty thousand more people have listened to that episode than the next highest, which was amazon.com. I probably could have told you, actually, I was like, David, no one's gonna listen to Amazon because everyone already knows this story, which was super wrong. But I either thought like, no one will listen to this one, or like, this will be our most successful episode. With LVMH, even after we recorded it, I was like, or after we edited it, because we had to, like, edit a lot of stuff. But I was like,

• 40:12David Rosenthal?

  This is funny. This is how much we didn't know.

• 40:14Ben Gilbert?

  But it's not like our best ever, but apparently.

• 40:17Speaker 00

  I think it might be my favorite episode of yours. And I heard from a ton of other people that how much they liked it. Like,

• 40:22David Rosenthal?

  Well, thank you.

• 40:23Speaker 00

  It's really good.

• 40:24David Rosenthal?

  But to the conversation, like, there's a bunch of stuff that we could have done better in that episode, like, a whole bunch.

• 40:31Speaker 00

  So I do this all the time, where like, I'll go back and listen to old episodes because people are like, that's weird you listen to a podcast. It's like, no, this is a tool.

• 40:36Ben Gilbert?

  It's how you get better.

• 40:37Speaker 00

  This is,

• 40:37Ben Gilbert?

  Game footage.

• 40:38Speaker 00

  No, we didn't even try to get better. It's like, I was like, oh, I haven't read that book in like, two years. I'll just listen to my episode on it. And it like, it's a tool for me. That's how I know it's good for other people. Right? And so I was like, and then I'll listen to it. I'm like, oh, wow, I forgot that. I need to keep that idea in my mind. Except, but I'll hear myself like, oh, you said that in two paragraphs. That could have been one paragraph. Cut that part. That doesn't make sense. And so, yeah, I understand the improvement. But what I'm saying is your quality is already super high. Like, it can increase and get better. Don't get me wrong. But like, you're never gonna be embarrassed. You're just like, oh, I could probably do it 20%, 30% better, which is still excellent from the, like, the level you're at.

• 41:10Ben Gilbert?

  So the way that we edit is our editor takes the first pass, and he's unbelievably good, and we're so lucky to have him. And then, he sends us a rough cut. I upload it to Descript, and then we listen, like, and read while we're listening, word for word, sentence for sentence, and try to cut every unnecessary sentence. And

• 41:30Ben Gilbert?

  We end up pulling out 20-ish minutes of just fluff. It's just like, okay, we could have been tighter in that point. Is there a way to get tighter in it without rerecording it? And I think that has dramatically contributed to episode quality because by the time we ship it, neither of us feel that there are extraneous sentences.

• 41:47Ben 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.

• 42:06David 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.

• 42:27Ben 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.

• 42:49David 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.

• 43:07Ben 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.

• 43:35Speaker 00

  So I don't know if I'm like that.

• 43:38David Rosenthal?

  You're still a one man show, right?

• 43:39Speaker 00

  I do everything. No one touches anything.

• 43:41David Rosenthal?

  Everything, soup to nuts.

• 43:44Speaker 00

  I'm gonna ask your question, but I also think like we should, this is a perfect point to like, how we became friends and why, like, I'm putting this out on my feed and no one, no one, you're gonna be the first non-David Senna voices that I've ever heard on Founders and only would agree to do it, and I only agree to do it with you guys, is because like this goes back to like why I want to be surrounded with, first of all, people that have like interest, super smart people, but also people that have like positive sum thinking, right? Patrick O'Shaughnessy has this gigantic, successful show, Invest Like the Best, he's got the Colossus Podcast Network. His fund is called Positive Sum and that's how he acts. I joined his network, this is like months later, and they're like, hey, like, you know, we have editors, whatever. Like, he has like this empire over there. And resources, he's like, what do you want?

• 44:29Speaker 00

  And I was like, I just want you to amplify my audience and then connect me with first rate advertisers. Cause like, I think Acquired is a luxury podcast, not, maybe not luxury, premium, we gotta go over the distinction there, for LVMH. But like, we're saying, no, no, this is like, we're trying to set the bar here. But anyways, he's like, hey, do you want editors? You want any of this and stuff? I was like, no, I don't want, no one gets to touch my stuff. Like, people think, oh, like, do they tell you what books to read? And like, no, Patrick liked my show. And he's just like, why would I tell you? Like, just whatever you're doing, just do it to more people now. And so, to answer your question, no, like, I picked the books, I record them, I edit, I'm still a one-person show. I don't know if that'll happen forever, but I do think the fact that it just happened, like, spend so much time with the material gets it in my brain.

• 45:13Speaker 00

  But the reason that, like, I want to talk about like the role you guys played in that, where we were getting on Zoom and for, like, the background here is like, you know, we had known of each other. I talked to Ben a long time ago because he was running this private podcast, this is like years ago. And so anyways, we're like, you're-

• 45:31David Rosenthal?

  It's also funny to think back, like, all the dead ends that we went, like, we went down a ton of them, you went down a ton of them. You're about to talk about some of them, like, there's so many dead ends.

• 45:39Speaker 00

  But they're in the books too.

• 45:39David Rosenthal?

  Yeah, but they're in the books. Merle changed the name of the show to Adapting. Oh my God, that was, that was a dead end.

• 45:45Ben Gilbert?

  That was on me. Covid happened and we were like, no one wants to hear these like stories of like extreme capitalism. Like we're like the X Games of capitalism. And like, this is a moment where like, everyone is hurting, zero business. And like, this is in that, the stock market trough too, where you're just like, wow, like, you know, all businesses are gonna go under. No one's ever gonna have jobs again. This is, you know, this is scary. And so we were like, well, like, what story should we tell? How about businesses that are adapting to make it through this tough time? And to like, show how serious we were about it, we changed the name of the show. It was like our three least listened to episodes, covering a pretty amazing stories, but we just branded it wrong.

• 46:27Ben Gilbert?

  Like Canlis is like the most interesting restaurant story you could ever hear about. Yep, we did Intel. That's the only time we've ever done Intel. That's the only time we've done Intel. Because it was adapting, not quite, it was stupid. So stupid. But you, there's no way to do, like, learn rather than screw up.

• 46:41Speaker 00

  Do you wanna know the first name of founders?

• 46:43Ben Gilbert?

  Ooh.

• 46:44Speaker 00

  You know, like in your RSS feed, you can change the name, right? But you can't change the link, like it'll still say.

• 46:49Ben Gilbert?

  Yeah.

• 46:49Speaker 00

  So you look at it from mine and it's Autotelic, the worst name. Autotelic comes from this book called Flow. A U T O T E L I C, maybe, I don't know. I can't spell for, I can't spell, pronounce, I have no grammar. So I'd be like, you read so much. I was like, I don't pay attention to any of that stuff.

• 47:04Ben Gilbert?

  Is that the Mihai?

• 47:06Speaker 00

  Yes. The guy that's Flow. Yes, it's, it is an activity that you do for the sake of itself. Going back to your questions, like why, like, I just love to read, I'm gonna do this if no one listens. Like, that's how I know I'm gonna win. Because it's like, people are like, oh, would you do it for free? It's like, I, no, no, I paid to do this.

• 47:22Ben Gilbert?

  For like a long time.

• 47:23Speaker 00

  For a long time, like I literally said, I'm gonna quit and I'm gonna, I have the savings. I have a wife and a baby, or a daughter to support. Now I have a son, a wife, a daughter and a son. And I was like, I bet you, I just put trust in myself, it's just like, I'm going to, if I focus on this seven days a week, I'll figure out the business model. I know, like, I don't think I'll ever get rich from it. But I will at least pay my bills, right? And so like every month, I'm like, oh, less money there. And like, so I pay to do it. So the idea where like, uh, you know, again, people get, I think Steve Jobs talks about this. Like the older he get, he said something like, the older he gets, the more he realizes why people do things matters. And so he's always asking those questions like, I always say, it's like, how do you know, uh, that you found what you love to do? And, uh, people are like, oh, cause like, I wouldn't sell my company.

• 48:08Speaker 00

  It's like, okay, there's another level. It's like, how much would you have had to pay Steve Jobs to stop working at Apple? The answer is, he wouldn't take all the money in the world. How, how much would you have to pay Charlie Mulgall?

• 48:19David Rosenthal?

  A lot of people tried to stop Steve Jobs from working at Apple.

• 48:22Speaker 00

  Yeah, but like, think about that, like, the idea is like, he's not doing it for money. He's in a different game. He's doing it for the sake of itself. And so I went through a bunch of different names, uh, history's greatest men, history's greatest, like history, all these, they were terrible names. And I just started narrowing it more and more and more to like founders. And I was like, oh, that's perfect. There is a

• 48:41David Rosenthal?

  Cause you weren't even like, you didn't, you weren't coming from the tech world. You weren't like, this wasn't content marketing.

• 48:46Speaker 00

  No, there's a, no, it was just like, uh, the, the idea I had known about like Warren Buffett, Elon Musk and all these other people. And I remember you had Kevin Rose on your show a long time ago. So you guys remember his, he had, if he would have

• 48:59Ben Gilbert?

  Again, not that long ago, maybe a year, year and a half.

• 49:02Speaker 00

  Yeah, yeah, it just time flies.

• 49:04Ben Gilbert?

  Cause it was post, it was, he was, he was

• 49:06David Rosenthal?

  It was during COVID.

• 49:07Ben Gilbert?

  He, he was pretty much already fully web three by the time we

• 49:11Speaker 00

  So do you guys remember Foundation?

• 49:13Ben Gilbert?

  Yeah.

• 49:13Speaker 00

  Oh, yeah. He's like one of the first high quality

• 49:16David Rosenthal?

  Yeah.

• 49:16Speaker 00

  Inter, like, imagine if he would have stuck with that show. Like, you know what I mean? Like, it would have been a monster.

• 49:20Ben Gilbert?

  And it's like the, the only episodes that ever came out was like, here's me interviewing Elon Musk. Here's me interviewing Sam Altman. Here's me, and like these people, and also before they became like icons of our time.

• 49:32Speaker 00

  That's it. Elon had the model, that was the only thing, he was just about to release the Model S.

• 49:35Ben Gilbert?

  He had the Roadster.

• 49:36Speaker 00

  No, they were in the factory, cause I watched it, I watched it all the time. They were in the factory building the Model S.

• 49:41David Rosenthal?

  That's right.

• 49:41Speaker 00

  So it was, I don't know if you could buy it yet, but it was like coming or whatever. And Elon was way younger and like, you know, And then in 2015, Tim Ferriss, I was a big fan of his podcast. I read like, you know, Four Hour Work Week. I remember the way I discovered-

• 49:54Ben Gilbert?

  Dude, Four Hour Body changed my life.

• 49:56Speaker 00

  Did it?

• 49:56Ben Gilbert?

  Yeah.

• 49:56Speaker 00

  With its low carb?

• 49:57Ben Gilbert?

  Yep, slow carb diet.

• 49:58Speaker 00

  I did that too.

• 49:59Ben Gilbert?

  Slow carb diet, cold showers. Like, I did- and the funniest thing is like, this is like, this whole cold plunge thing that's like becoming a thing now. I'm like, was nobody like reading Tim Ferriss in 2011?

• 50:08Speaker 00

  Oh, they were.

• 50:09Ben Gilbert?

  Like, that was a huge part of- yeah.

• 50:11Speaker 00

  Well, it's just only our demographic was.

• 50:13Ben Gilbert?

  Yeah.

• 50:13Speaker 00

  Actually, that, that made me think of something. Let me interrupt this story, because I think it's really important. You're like, oh, is anyone gonna listen to our- like, no one's gonna listen to our Amazon episode. They already know it. And so this is something that like, Engineered Queen becomes the most successful-

• 50:25Ben Gilbert?

  Are you gonna quote Ogilvy?

• 50:26Speaker 00

  Yes.

• 50:27Ben Gilbert?

  Yes.

• 50:27Speaker 00

  A hundred percent.

• 50:28Ben Gilbert?

  I've listened to enough founders to know.

• 50:29Speaker 00

  Yeah, because it's like, this is so key that people don't understand. It's like, you're not advertising to a standing army, you're advertising to a moving parade. And so like, I will literally get on calls with like, media company founders that are like, selling ads or like, building companies. I'm like, oh yeah, you must have read Ogilvy. They're like, what? And I was like, these are not new lessons. Like, if, if- and again, this comes from the humility to realize, hey, Warren Buffett's smarter than me. So, if that dude in his shareholder letters is saying, uh, David Ogilvy's a genius, I'm like, wait a minute. This dude, how many businesses has Warren Buffett looked at at that point? How many founders and managers has he looked at and he's like, this dude's a genius? Yeah. This is not rocket science, guys. Just go and like, let's search David Ogilvy and Amazon. Five books? Good. Order them all.

• 51:13Speaker 00

  And these days, it's search David Ogilvy and your podcast player of choice. Like- Um, that's, I went to-

• 51:18Ben Gilbert?

  Wait, but explain the, the standing army versus-

• 51:21Speaker 00

  So, you're not advertising to, uh, standing army, you're advertising to a moving parade. But what happens is like, even when you put on the Sequoia episode, right? We went, me and David went on a hike in Stanford, and I was like, dude, you have this crazy back catalog. Every single day, you have more people following your podcast feed than you had the day before. I was like, and I- because I knew this because I was a subscription podcast, right? Recount briefly your business model journey. So- I'll give you the shorter breakdown because like I went through so many of them. I just put a hard paywall, listen to the first 30 minutes. You want to listen to all of them, then you pay, right? And it

• 51:57David Rosenthal?

  This is when we had that chat that you've been talking about.

• 51:59Speaker 00

  We gotta go back to that.

• 51:59David Rosenthal?

  We were like, dude.

• 52:01Speaker 00

  You're doing it wrong.

• 52:01David Rosenthal?

  You're doing it wrong.

• 52:02Ben Gilbert?

  Yeah, because there's been times like this one where we're like, what the hell are you doing? But there's been other times where you come to us and you're like, do you know how good your Sequoia episodes were and like the fact that you have four times the audience that you have now and none of the 75% of those people have ever heard the Sequoia episode? What are you doing?

• 52:16Speaker 00

  And so you guys, we had this hike, this Olga V. Idea, remember? Not my idea. I don't like, everything has already been done, guys. Just speaking to the people listening, not you, you obviously know it's like, it's already been done, just go see, hey, that person's smart. He learned from 40 year career. Like, you're not gonna, the idea is not gonna pick up on idea you can use this silly. So I told

• 52:35David Rosenthal?

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

• 52:54Speaker 00

  It's the combination of these ideas, like Sam Walton taking Sol Price's ideas and his competitor's ideas and like, hey, what about, you guys are kind of ignoring these like 4,000 person communities. I'm pretty sure like the thesis behind Walmart is like, will they just drive for distances just to save money?

• 53:09David Rosenthal?

  Right.

• 53:10Speaker 00

  The answer is yes.

• 53:11David Rosenthal?

  Right.

• 53:11Speaker 00

  Five hours.

• 53:12David Rosenthal?

  Right. But that, like that is a novel idea.

• 53:15Speaker 00

  Yeah, exactly. It's a very, it's, that's the whole thing.

• 53:17Ben Gilbert?

  It's combining like one big novel idea with a bunch of other things that

• 53:22Speaker 00

  You guys combined David Ogilvy's idea by republishing your Sequoia podcast. And then you text me, you're like, oh, my God, like the downloads are crazy.

• 53:31David Rosenthal?

  Yeah.

• 53:31Speaker 00

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

• 53:56Ben Gilbert?

  Is this scientific advertising?

• 53:58Speaker 00

  Yes.

• 53:59Ben Gilbert?

  Yeah. Also a good founders episode.

• 54:00Speaker 00

  Yeah, he's excellent. That, that, that, um, that book, Scientific Advertising, sold like eight or 10 million copies. They kept it in Albert Lasker, so Claude Hopkins worked for Albert Lasker. Albert Lasker thought that book was so good, he stored in a vault. He wouldn't let, and he's like, he built.

• 54:17Ben Gilbert?

  Cause it was like the secrets of the industry, right? Like, don't publish this because we don't want this getting out.

• 54:21Speaker 00

  I learned that because in Ogilvy in advertising, at the very end of the book, David's like, here, these are the six giants that I went from. So I was like, okay, well then I'm going to Google search. Who's like, I'm going to read this book. This is not rocket science again. So then he's like, oh, Albert Lasker made more money than anybody, than anybody else in the history of the advertising business. I was like, hold up. What? How?

• 54:39Ben Gilbert?

  Also, none of us know this guy's name.

• 54:41Speaker 00

  Yeah. And so then, then you realize it's like, he says in the book, he's like, his estate outside of Chicago was so big, he had 40 full-time employees. I'm like, what? Like, what are you talking about? Like, make these words make sense in my mind. That doesn't make any sense to me. So you read Albert Lasker and then he tells you about Claude Hopkins. He's like, yeah, the information was so good that like, I stored that in my vault for 20 years. And then, once he sold his advertising, or I think he gave it away like a token, like $100,000, you know, to the people working there. And then they released it and Claude went off on his own and everything else. So these are not like.

• 55:12David Rosenthal?

  Yeah. Okay, so you were doing the 30-minute hard cutoff when we.

• 55:16Ben Gilbert?

  And so when it's so unsatisfying, it's like, I'm going to listen to 30 minutes of this episode. And then like, I'd have to get, someone's asking me to pay for the rest.

• 55:24David Rosenthal?

  Pretty good conversion, right?

• 55:25Speaker 00

  The conversion rates were higher, but you guys said, this is where.

• 55:28David Rosenthal?

  You were at a local maximum.

• 55:29Speaker 00

  This is where, like, you were very helpful, like, David, first of all, you guys are nice. This is not the language you use. You're like, you idiot, like, but you guys are so nice. So it's like, dude, you're doing it wrong. Listen, for every one person, I think it was Ben that said this, like, for every one person that would buy a podcast, there's a thousand or a hundred that would listen to him for free, like, just.

• 55:47Ben Gilbert?

  It's about 100.

• 55:48Speaker 00

  Yeah, probably even more than that, you know? And so then you guys would show me, like, you open the kimono. You're like, this is, these are our downloads. This is who we advertise with. This is what we charge for advertising. You're just like.

• 55:58Ben Gilbert?

  Well, the other, the other really key insight is, so after spending a bunch of time with originally Kimberly, then Glow, which sold to Libsyn and still what powers the acquired LP program. An interesting learning is most podcasts should generate about 50% of their revenue from direct monetization, some kind of membership program or paywalling their feed, and about half from advertising. And it should, the math should sort of work out where that's going to be the case. For the type of podcasts that we are, where you have lots of founders and CEOs and hedge fund managers and the sorts of people listening. You could never ask someone to pay you in membership what they are worth to the most valuable advertiser for that slot. And so the way it sort of works out is like

• 56:43Ben Gilbert?

  you're massively hamstringing your monetization potential if you make it membership only because you'd have to be like, yes, please pay $2,000 to $5,000 a year in order to get access to this private thing versus if you were to take that same piece of content and open it up to advertisers.

• 57:00Speaker 00

  You made the great, the good point earlier and we can elaborate on that, right? Why you're so psychotic about this sentence is needs to get out of here. Like these two sentences, let's remove it because if you could factor in the average hourly rate of the people in your audience, it is unbelievable. So even I think if you make what a million dollars a year, and we know people obviously in our audiences make a lot more than that, but I think a million dollars a year is what 500 bucks an hour or something like that? I don't know the math. I'm not a good math person. But like, so you're asking if they listen to an hour long podcast of founders, it's like, that's $500. Like you cannot waste these people's time. So I never answer your question when you're like, hey, how do you guys think about this? Do you re-edit? Or do you cut them out? I use the script as well. I actually think the way I listen to founders is obviously listening to it and listening and reading. Like the super power of podcasts is you can listen to it when you're doing something else.

• 57:45Ben Gilbert?

  But when you're editing.

• 57:46Speaker 00

  But I think I'm gonna put all my podcasts up on YouTube, not, I don't have any video, but I think I'm gonna use the script. So if you, there is like, some people have success just putting up the audio on, like a static picture and you can listen to it on YouTube. But I also think, I was like, well, if I'm gonna do that, I might as well just have this and that's kind of cool if you want to use it, but don't have to.

• 58:04Ben Gilbert?

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

• 58:14Speaker 00

  I, it's, I'm using it just for search and I would use it.

• 58:17Ben Gilbert?

  That's smart.

• 58:18Speaker 00

  I'm never gonna, I don't think I'm ever gonna do video anything because it's just like, it's so much simpler to do, literally, what I'm saying is like, I'm gonna upload the MP3 to YouTube. Like, I'm not making a video just because it is, they're eventually gonna have, they're not stupid. They're eventually gonna have like the podcast player inside of YouTube. Like, they released this like 40-page document I read on their podcast goals on YouTube. Did I send it to you guys?

• 58:39David Rosenthal?

  No.

• 58:40Speaker 00

  I'll send it to you guys. So, right now I have YouTube Premium, so you can listen to them in the background, like a podcast player.

• 58:45David Rosenthal?

  Which is great.

• 58:45Speaker 00

  But they need to have podcast functionality. It's still like a video.

• 58:48David Rosenthal?

  Yeah.

• 58:48Speaker 00

  So anyways, the way I do it is like, yes, I'm very aware that who's listening. I'm not ever gonna waste a lot of their time. And what I've found with the more practice I have for the podcast is I'm able to edit on the fly. Like, I don't have a script, right? So like, I'll go through the book, I highlight, then write down whatever pops my mind. I don't like, just, first of all, the highlights, like, am I excited about that? Oh, that's interesting. Highlight. Just go off instinct, right? And then write down like something that, oh, that's like this, or that made me think of this, and I just write it down, right? Then I'll reread all these highlights the night before I record, so it's like the second time.

• 59:26David Rosenthal?

  You're doing this in physical books.

• 59:28Speaker 00

  Physical books, yeah.

• 59:29David Rosenthal?

  But you're putting your notes into Readwise?

• 59:31Speaker 00

  That happens after.

• 59:33David Rosenthal?

  Okay.

• 59:33Speaker 00

  That happens after, so the fifth time, every single book I do, I think I read the highlights five times. And the fifth time is me actually taking pictures of the physical book and putting it in Readwise. So Jeff Bezos, I was thinking about this yesterday, because I'm also slightly obsessed with Jeff Bezos. And he said-

• 59:48David Rosenthal?

  You're slightly obsessed with a lot of founders.

• 59:51Speaker 00

  That's why we were like, you're like, we're sitting in chairs, like, dude, I'm gonna be forward.

• 59:55David Rosenthal?

  Yeah, we were setting up the camera angles before.

• 59:57Speaker 00

  Because you know what I love, like-

• 59:59David Rosenthal?

  We're like, we gotta move David's chair back here a little bit.

• 1:00:02Speaker 00

  Do you ever, have you ever watched the old Jeff Bezos interviews? When he's like, first starting Amazon, he's like skinny and bald, like balding.

• 1:00:09Ben Gilbert?

  The one that's like in that field outside the conference?

• 1:00:11Speaker 00

  Yes, I think this is the one, he's like sitting, like, you see grasping him, I don't know if he's in a field. So, but he like leans forward, and he's like, we're gonna be the most customer-obsessed company ever. It's like-

• 1:00:19David Rosenthal?

  And he's got that look on his face.

• 1:00:21Speaker 00

  That's how I am about founders. I'm like-

• 1:00:24David Rosenthal?

  You're like, that dude's a psycho.

• 1:00:26Speaker 00

  But Jeff says something that he is. But Jeff says something in Invent and Wander, which is an excellent book, because it's all of his shareholder letters and transcripts of his speeches.

• 1:00:34David Rosenthal?

  Walter Isaacson did that, right?

• 1:00:35Speaker 00

  Yep. And all of his transcripts of his speeches. And he goes, do you really want to live in a world or to compete against somebody that's as good as you? Like, I certainly wouldn't. That's what he states. And he's like, if you read his shareholder letters and listen to him talk, he's like, he's constantly looking for unfair advantages.

• 1:00:52David Rosenthal?

  Yep.

• 1:00:52Speaker 00

  And I think part of the fact that I have now over 20,000 highlights from hundreds of books, and I still have like 50 or 60 or maybe 80 books I haven't put in there yet that are in my library. So it's like, that's, my Readwise account is an unfair advantage. Because anytime somebody's talking, it's like, I can immediately, oh, you said something? I search for that term and it pulls up. And it's like, oh, and then I see my highlight and I see my note. It takes so long, like so long to do that, but it's worth the extra five or 10 hours a week.

• 1:01:18David Rosenthal?

  And that's integrated into your process of making.

• 1:01:20Speaker 00

  Yes, because I'm reading something, I remember, no, I know I've seen this before, I can't remember it. Type in that term and it pulls up every single instant.

• 1:01:27David Rosenthal?

  Wow.

• 1:01:28Speaker 00

  Instances up. It's an unfair advantage that I have with me all the time. And what I'll do is, like, whenever I'm, like, waiting for an Uber today, right? Just pull up Readwise. And Readwise has the highlights feed. And I'll show you guys what it looks like. It looks a lot like a Twitter feed, right? Completely random. So I'm not choosing this. And instead of me reading Twitter all day, which is not a good use of your time, it's this highlight from The Dodge Brothers. I haven't read that book, you know, that was like episode, you know, probably in like the 115th. Billy Duran, who's the founder of GM, Sam Colt.

• 1:02:04Ben Gilbert?

  And so are these ones that other people have liked a lot, so therefore?

• 1:02:08David Rosenthal?

  It's just repopulating your own.

• 1:02:09Speaker 00

  Yes. So it's my form of practice.

• 1:02:12Ben Gilbert?

  So you've got.

• 1:02:13Speaker 00

  So let me give you an example.

• 1:02:14David Rosenthal?

  A healthy Twitter. There on your phone. So is that what like? How, how many times a day? Like, how often are you just pulling up Readwise and?

• 1:02:23Speaker 00

  Almost every day. And if I'm not doing it on Readwise, I'll go to like my bookshelves. So what will happen is, um, you can pull a book off my shelf. And I'm thinking about this for like my kids, long after I'm gone, my kids can like, what was my dad into? You know, and they can go back and see, oh, and when he was 35 or 38, this is the podcast he made. Let me go find that book. And then they pull off the shelf like, oh, this is the line. He thought was interesting. Oh, wow. You see dad's handwriting here. And like, so I use this for myself where I can pick up a book and quote unquote, read it, reread it in 30 minutes by rereading my highlights and notes. And now I'm like, it's back in, back like in front of mine. And then what happens is like, you can do this anytime. Like people are like, oh, I'm running late for lunch. Like, I'll just do this or I'll answer DMs or I'll, I always have stuff to do with me, but I use it as a form of practice.

• 1:03:08Speaker 00

  The reason I said this is like, it sounds stupid. People think it's maybe, maybe they think it's silly. I don't know. But I read this book, uh, it's episode 212 of Founders. It's called Michael Jordan, the life. It's a 600 page biography. And in that book-

• 1:03:19David Rosenthal?

  You just have like this encyclopedia knowledge too of the numbers of your episodes, which I'm so impressed by.

• 1:03:24Speaker 00

  I don't, it's only because I reference that all the time. So when if you look up something over and over again.

• 1:03:28David Rosenthal?

  Yeah. Yeah, yeah.

• 1:03:29Speaker 00

  It's repetition. Everything in life is repetition. Sam Walton's career is repetition, you know, like it's like, I just think you're trying to, this is what I asked Charlie, like, he, one of the most interesting things he said, he's like, one of the best things that ever happened to me is I got rich later in life. You know, like he saw the time and how difficult it was. Like, he was talking about like, um, imagine you being like, uh, super famous or rich when you're like 21 or 25 and how disorienting. He's like, I was a full grown man, like with life experiences with a wife and kids.

• 1:03:57David Rosenthal?

  He had a child who died.

• 1:03:59Speaker 00

  Yeah. I did not, I did not mention that. Yeah.

• 1:04:00David Rosenthal?

  Yeah.

• 1:04:01Speaker 00

  But like he had all like, you know, full life of experience and therefore also- The main problem that happens is people don't know. They're like, I was the son of a poor man. Now I'm rich and my kids live in unbelievable amount of wealth and privilege. How do I deal with that? That comes up in the books for hundreds of years. The answer is no one knows, right? And so with Charlie, though, the benefit is he didn't have a famous last name or a lot of wealth. His kids were like grown.

• 1:04:26David Rosenthal?

  Right.

• 1:04:27Speaker 00

  They wouldn't have to deal with that when you're five or seven or 10. He also gave me some advice that was fascinating.

• 1:04:32David Rosenthal?

  You do that like, you gotta pay that bill eventually, though. Like his grandkids have to.

• 1:04:36Speaker 00

  Well, so how do you deal with this though, right? Like, he's a multi-billionaire. Like, that's an insane.

• 1:04:41Ben Gilbert?

  Right, this is a five generation problem.

• 1:04:43David Rosenthal?

  Not only is he a multi-billionaire, he's like, people like us talk for hours about him. He's like a celebrity.

• 1:04:49Speaker 00

  So I just read this fantastic book. I like reading obscure books because go back to what Jeff Bezos said, differentiation is survival. So like, I'll find like weird books, like me and Sam were in this weird. I was searching for books for you guys yesterday, I couldn't find any. I will order them and bring them to you because I always bring books. And I was really, we went to three different bookstores, I'm not kidding.

• 1:05:05David Rosenthal?

  You brought energy drinks instead.

• 1:05:07Speaker 00

  But no, we like, bless Sam and his patience with me. And like drove me all around Menlo Park and Palo Alto yesterday going to bookstores. Like, I was literally looking for you guys.

• 1:05:16Ben Gilbert?

  Like you had specific books in mind?

• 1:05:18Speaker 00

  No, no, no, I like going to used bookstores. And then like, I think of how I, my interpretation of you guys in my mind. And I just know if this book is good for that person. Like the Charlie, or the Henry Flagler book, I knew that was good for Charlie Munger because of what he said. So I don't know what's gonna happen. Now, I do have two books picked out for you guys, which I'll send you, but they're like newer books. But anyways.

• 1:05:37David Rosenthal?

  But that sounds like a great day, driving around with Sam Pinky and going to bookstores. Like, what better day could you spend?

• 1:05:45Ben Gilbert?

  Also, the peninsula is like beautiful, so like.

• 1:05:47Speaker 00

  Yeah, and like, you know, Sam's unbelievably intelligent and like, she's got a weird alien brain. And so I always tell him, our mutual friend Mitchell Baldrich, that all three of us know, says Sam has a giga brain. I think he's, I think, I think it's.

• 1:05:59David Rosenthal?

  I've heard him say that.

• 1:06:00Speaker 00

  I think it's what he said, his description of it. But I like obscure books. I read this book that's very hard to find, it's like 300 bucks. It's called The Invisible Billionaire, Daniel Ludwig. Was the richest person in the world in the 80s and no one knew who he was. He paid a public relations firm to keep his name out of the papers.

• 1:06:19David Rosenthal?

  Do what your competitors don't.

• 1:06:20Speaker 00

  Yeah, so he's just like, I don't want to be known. And a lot of his was like, it's like shipping and oil and refining and mining and all that other stuff. But the author made this point in the book, like how different a million and a billion is. Going back to Charlie Munger, right? And he goes, a stack of, a million dollars and a stack of hundred dollar bills is like 40 inches, you know? A billion dollars and a stack of hundred dollar bills would be tall, would be three times taller than the Empire State Building.

• 1:06:45David Rosenthal?

  Yeah.

• 1:06:45Speaker 00

  And so like for us, like, oh, that guy's kind of rich. It's like, no, the billionaire millionaires are not in the same category. It's so disorienting.

• 1:06:51Ben Gilbert?

  I, this is also a thing where like, the English language has done us a disservice by naming two things that are a thousand times different. Very similar words.

• 1:07:01Speaker 00

  It sounds similar.

• 1:07:02Ben Gilbert?

  Yeah, so they're not similar at all.

• 1:07:04Speaker 00

  Well, a lot of people are asking, like, think about all the wealthy people that Charlie talks to. And they're asked like, okay, what do I do with like this wealth with my kids? And it's like, you know, if you give your kids a bunch of money, is it going to demotivate them? And Charlie goes, of course it's going to. So he's like, but he's like, you know, it's like, again, like this should be obvious to you. So he says, I don't try to steer his kids or his grandkids into what they should do for a living. Which is Charlie Munger's, one of his best piece of advice that I took to heart. It's like follow your natural drift.

• 1:07:33David Rosenthal?

  Yeah.

• 1:07:34Speaker 00

  Like, how I pick books. There's been like 15 or 20 that I've read completely or half. And it's like, I don't like this book, I'm not making an episode about it. I go to my bookshelf and I have like probably 80 or 100 books I haven't read yet. Most come from the audience. And I was like, what am I most excited to learn about now? And that's how I pick it, right? So following natural drift.

• 1:07:50David Rosenthal?

  Which is also more or less how we pick episodes too. We have a little bit more planning, because now like there's such long lead times, but it's kind of like, what's interesting to us right now?

• 1:08:00Speaker 00

  100%. So he's like, you know, don't try to steer them too much. And he's like, he definitely feels that there, some of them are going to be less motivated because they're born rich. But he said this was the most surprising thing. But he goes, you have to give them the money anyways, or they're going to hate you for it. And I was like, that's like, because my answer before this, I've read so many like family dynasty stories. And I'm not saying I'm trying to build a dynasty.

• 1:08:23David Rosenthal?

  Where they decide we're not gonna give them money.

• 1:08:23Speaker 00

  Oh, no, they did, and it ruined them. Like, did you guys, you guys haven't done an episode on TCI, John Malone.

• 1:08:30Ben Gilbert?

  Not yet.

• 1:08:30David Rosenthal?

  Cowboy, yeah.

• 1:08:32Ben Gilbert?

  That will happen this year.

• 1:08:33David Rosenthal?

  For sure.

• 1:08:34Speaker 00

  So, you know why? That was one of the books that was recommended the most. They're like, you gotta do Cable Cowboy, you gotta do Cable Cowboy, you gotta do Cable Cowboy.

• 1:08:42Ben Gilbert?

  We both have read the book, it's awesome.

• 1:08:43Speaker 00

  It's excellent. And there's, so you know the story I'm about to tell you, where the crazy thing is like, I'm always thinking about, I didn't understand this before, dedicating my life to studying history, right? Where it's like, oh wow, the decisions I'm making now can reverberate through the generations. That's a crazy thing, where Bob Magnus, which is the founder of TCI, this, you know, he doesn't have any monies and rural Texas wants to do this, jump into this new industry cable, right? Full of cowboys, like literal cowboys. And he doesn't have money, so his dad gives him a $2,500 loan. So, Bob takes that $2,500 loan, and then, let's say 40 years later, Bob dies, and he's gotta pass on his money, right? That was created from the company he created to his two kids.

• 1:09:27Speaker 00

  And he winds up giving them, I think, I don't know the numbers, I wanna say like 200 million each. Two sons. So, think about that one decision, I think I talked about in the episode, and if I didn't, it's a big mess up on my part. And I stopped in that part.

• 1:09:39David Rosenthal?

  I'm pretty sure you did.

• 1:09:40Speaker 00

  I was like, hold on. Think about that, like, what if his dad didn't give him the 2,500?

• 1:09:45David Rosenthal?

  Yeah, you're talking about that.

• 1:09:46Speaker 00

  Yeah, so his $2,500 turns into 400 million, let's say 200 million each for his grandsons. Changed his grandson's lives.

• 1:09:53Ben Gilbert?

  Right, see, that means, rule of thumb, you take like, I don't know, you probably have three more generations after that of wealth guaranteed.

• 1:09:59Speaker 00

  That wealth is gone because I think it went up their nose. Like, that was the, so you-

• 1:10:04Ben Gilbert?

  That's pretty hard in one generation.

• 1:10:05Speaker 00

  But, I don't know, like, the point was, it's like, they, that wasn't good for them, because they were not motivated, they did a bunch of drugs, I think they went to jail, like, that kinda stuff. And you see that so much, so my thought was like, oh, like, get them a little bit, but not enough that they don't have to work, whatever, and Charlie's like, they're gonna hate ya.

• 1:10:24David Rosenthal?

  Yeah.

• 1:10:24Speaker 00

  And like, what's the point?

• 1:10:25David Rosenthal?

  Such a good instantly.

• 1:10:26Speaker 00

  It's just like, human nature. This is my biggest takeaway from Charlie, and I think the biggest benefit that people that listen to Founders and Acquired, and then hopefully read a bunch of the books and do studying on their own are gonna realize, is like, Charlie, I said it at the top of my notes, and this is the first thing, it's just like- It's comforting, the conversation with Charlie was comforting, the same way that people tell me listening to founders is comforting, is like Charlie has an almost complete indifference to problems. Troubles from time to time should be expected. This is inescapable, so why would you let it bother you? And the difference, and if you think about, that's the main takeaway from this three hour dinner I had with him, right? And if you think about how does he avoid this? He avoids it by, great things have less problems. You're never going to escape problems, but if you're around great people, like, they're not going to throw up,

• 1:11:11Speaker 00

  just like a great business doesn't throw up, big problem after big problem after big problem. Your wife, your kids, your friends, your coworkers. His whole thing is aim for the highest quality you can get. And then that's going to solve 99% of your problems. And then when you have the problem, the inevitable problems are still going to come, okay, you just deal with it. He talked about like when he lost the money on Alibaba, he brought that up, you know, that people try to make fun of him for, or whatever. It's like, you guys are missing the point. Like, you're not going to escape, get through life without making mistakes. The founder of IKEA has this great quote, where he says, "Making mistakes is the privilege of the active. Only those asleep make no mistakes."

• 1:11:47David Rosenthal?

  It's a version of the man in the marina, man in the arena.

• 1:11:50Speaker 00

  Yeah, the Teddy Roosevelt.

• 1:11:51Ben Gilbert?

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

• 1:12:09Speaker 00

  I have no idea. I have no idea. Like, I don't, the, me even giving you an answer to that is like, there's this guy named Charles Ketering, or Kettering, I don't know how to pronounce his name. I read his biography, I think it's episode 127 or something like that. So, he invented the electric starter, he founded AC Delco, that gets acquired by GM. He is the head of research and development at GM, when GM is the most valuable company and most, like, the cutting edge of technology company in the world at the time. There's a story from his wife and his daughter in that book, saying, "Hey, when he dies, there's only one, there's only going to be three words on his, on his tombstone, I don't know." Because that's what he would say over and over and over again. And one, there's a, he's

• 1:12:53Speaker 00

  having this conversation, same thing. He was the son of a poor man, he is now a rich man, his kids are rich, he's talking to other people that had the same experience, his peers, like, what do you do? And the answer that they came up with? I don't know.

• 1:13:05David Rosenthal?

  Yeah.

• 1:13:06Speaker 00

  Because it's so dependent on who the person is.

• 1:13:08David Rosenthal?

  Right.

• 1:13:08Speaker 00

  Maybe you give them money going to Bob Magnus's grandsons. Maybe they're, you know, they're like Warren Buffett's kids where like they, they run foundations and they want to give the money away and I don't think they're coke addicts. I don't know, but like you don't, it's just dependent on the person. So if there was a simple, if there was a correct answer, I think some of these guys, some of these guys would have figured it out.

• 1:13:27David Rosenthal?

  Well, that's the thing about humans, right? Like every person is different.

• 1:13:30Speaker 00

  Yeah. Yeah, so it's, I have no idea. Really, and that's the biggest thing where I think this is one of the lessons I learned from the podcast where, you know, you mentioned this at the beginning, Ben, where most of these people are just so, they're like best in class in this one dimension in the world. And of course, to get that, they had to, to be poured, they had to, they couldn't optimize all of the areas of the life at what they did for like their work, right? You know, Sam Walton is one of the rare guys where he gets to the end, he knows he's dying because he's got cancer all over his body when he's writing that book.

• 1:14:03David Rosenthal?

  Yeah.

• 1:14:03Speaker 00

  And he's like, listen, if I could do everything again, he's like, yeah, I missed some of my kids' childhood, they worked in the stores and he took them with them. But he's like, I'd do it again. I had to do this, I had to get after it, I had to improve. A lot of them, you know, get to the end of their life and like, oh, I regret. The founder of IKEA has the best words on this. He said, you know, I had three sons growing up. He started IKEA when he was like 17, worked on it till he was like 80 something. And he's like, I sacrificed my three sons' childhoods, I regret it. He goes, anybody that has kids knows that childhood does not allow itself to be reconquered.

• 1:14:36Speaker 00

  And so like, we were hanging out today, we were going to do a recording, go to dinner. And I was, my plan was, I was, I want to see my son. He's like, and my daughter. It's like, I'm going to take the red eye. And then I realized like, yeah, but I want to spend time with David and Ben, so I'm leaving early tomorrow morning. But it's like, I'm doing this as fast as possible. And if I had to, I'd like fly back and forth because like, your kids are, think about like the relationship you guys have with your parents, are they still alive?

• 1:14:57David Rosenthal?

  Yep.

• 1:14:57Speaker 00

  Yep. Okay. So you get to talk to them, see them, but you have your whole life, right?

• 1:15:02David Rosenthal?

  Right.

• 1:15:02Speaker 00

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

• 1:15:09David Rosenthal?

  Oh, yeah.

• 1:15:09Speaker 00

  Even my-

• 1:15:10David Rosenthal?

  You don't have to talk to them. I absolutely feel this way.

• 1:15:12Speaker 00

  Even my 10 year old daughter, like right now, she wants to spend time with me. Like it was the cutest thing ever. I was leaving, going to LA to see Charlie and then coming up to San Francisco to see you guys. And she texts me, she goes, uh, I'm wearing your sweater. Cause like, it makes me feel close to you, like while you're gone, you know what I mean? But if you ask her, do you want to spend movie night with dad and mom? Or do you want to go play Roblox with your friends?

• 1:15:35David Rosenthal?

  For sure, the latter.

• 1:15:36Speaker 00

  They're friends and she loves me, don't get me wrong, but like they're, they're friends are way, they're really important to them.

• 1:15:41David Rosenthal?

  Yeah.

• 1:15:42Speaker 00

  Where like every day I miss, my son's about to turn three, it's like, I'm not going to get back that day. And there's only like a thousand of those days.

• 1:15:49David Rosenthal?

  Yeah.

• 1:15:49Speaker 00

  And my wife won't have any more kids, even though I was like, I want a bunch of kids, like.

• 1:15:55Speaker 00

  I was like, I want a bunch. And it's like, no way. I say, hey, you're the, I don't have to get pregnant. So that's fine.

• 1:15:59David Rosenthal?

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

• 1:16:10Speaker 00

  Yeah.

• 1:16:11David Rosenthal?

  And they found their like most compatible, most like-minded, highest level of talent, you know, peers. And then they just like got on planes and got to go see them, you know, and like, that was really hard to do back in the day. And now anybody can do it. It's kind of like the Bill Gurley, you know, you have no excuse not to do that.

• 1:16:28Speaker 00

  You also, but here's the thing, what people get wrong is they're like, oh, I want to meet this guy. You have to do the work necessary to make them worth your time, right? Which is like the unfair advantage that the three people sitting in this room have is that it doesn't matter. That's why like in the last six weeks, I've gone to lunch or dinner with multiple billionaires is like, and the people that like you get to talk to and also stuff. It's just like, this dude is crazy. He's read 300 biographies of entrepreneurs. There's no way I'm going to have dinner with them and not pick up one idea.

• 1:16:53David Rosenthal?

  Yep.

• 1:16:53Speaker 00

  Like, and then now I've built this machine where like, oh, that's an interesting idea. I'll just plug it into this business. And like, it's not a financial transaction by any means, but there's no, the reason it's not that like Charlie was the first person I met that I was actually nervous about. And it's the reason I'm not nervous is because I know I've done the work. Like you can't put me in a room with anybody on the planet and I'm not going to be able to tell them at least one interesting thing. Doesn't mean I'll be the most, the best dinner they've ever had in their life. That's not what I'm saying. It's just like, they're going to hear something that's like, oh, that's interesting. And like goes through their own brain. And it's only because I've spent six years and same with you guys. It's like, oh, you should feel comfortable. Like you guys mentioned earlier, it's like. Your audience feels like, you know, two football fields and like, oh, it's a little bit of like,

• 1:17:36Speaker 00

  you didn't use the word insecurity, but like, you know, a little like nervousness. I want these people to like, like me.

• 1:17:41Ben Gilbert?

  Yeah.

• 1:17:41David Rosenthal?

  It's like a fear pushing you from behind.

• 1:17:44Speaker 00

  But you know, like, you've most likely read, you're, you know more about the subject than they do.

• 1:17:49Ben Gilbert?

  Sure, I do, but I need to make something worthy of their time.

• 1:17:52Speaker 00

  Yes, that is admirable.

• 1:17:54Ben Gilbert?

  It's like, who cares? I could spend all the time in the world and fail to synthesize the narrative and the takeaways. And all of a sudden that I've just, you know, then I failed them regardless of how much work I did. The product wasn't good. And so that's, that's the thing.

• 1:18:09Speaker 00

  It's hard to not have the product be good because you did the work. I guess is my point.

• 1:18:13Ben Gilbert?

  Well, yeah, I think we now have a process that means that when you and I put in the work, the product is good. But it took a long time to, to arrive at that. It's almost like, you know, this is another Sam Hinkie thing. Trust the process.

• 1:18:32Speaker 00

  Yep. The, I guess the point I was making there though is like, because you guys do so much preparation. And like, it's now your life's work. Like, it's just so much, it's, it's gonna be so hard not to add value to the people in your lives. Whether it's like friends that never show up on a podcast or friends that like, you don't have a business relationship with. It's like, and like, you're just gonna add value because what you do is so rare. Like, Naval Ravikant has this, he's influenced my thinking a lot too. And he has this thing in, in the Naval, the Almanac of Naval by our friend Eric Torgensen. And he's just like, if you read an hour a day, that puts you in the point 0001% of humans. And I'm like, that can't be true.

• 1:19:15Ben Gilbert?

  No, that's, that's the dirty secret of acquired and founders is that people don't read books. So if you just read them and then tell people what's in the books, you're gonna 100x the market for books.

• 1:19:25Speaker 00

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

• 1:19:40David Rosenthal?

  It's like point five.

• 1:19:40Speaker 00

  Zero.

• 1:19:41Ben Gilbert?

  I remember asking a book publisher, he said, America reads a book a year.

• 1:19:45Speaker 00

  Well, he quoted some other study. I said 12. He's like, No, not 12. He's like, it's zero. They average is zero. Yeah. It's crazy. And yeah, to your point, I've become friends with a bunch of writers, some of them I met through the podcast. And they've been telling me, like, teaching me about the publishing industry and just breaking down. Like 98% of books ever published sell less than 5,000 copies. It's parallel everything.

• 1:20:11Ben Gilbert?

  The book business is the venture business, which is so interesting to me how the advanced model works. It's like quite similar to a seed financing. I mean, they, they put out, you know, $50,000 for an advance on your book, which is, you know, covers your cost of living while you're writing it. And like, they kind of don't care about recouping it because.

• 1:20:29Speaker 00

  No, it's even worse.

• 1:20:30Ben Gilbert?

  The whole business is about, do I, did I sign up, you know, James Clear this year?

• 1:20:36Speaker 00

  Yeah.

• 1:20:36Ben Gilbert?

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

• 1:20:42Speaker 00

  Yeah.

• 1:20:42Ben Gilbert?

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

• 1:20:51Speaker 00

  Seed funding is better because their advances are recoupable.

• 1:20:55Ben Gilbert?

  Right.

• 1:20:55Speaker 00

  So it's like, I was having this long conversation.

• 1:20:57Ben Gilbert?

  It's the most preferred stock.

• 1:20:59Speaker 00

  Yeah, we were, we were talking before.

• 1:21:00Ben Gilbert?

  It's participating preferred.

• 1:21:02Speaker 00

  We were talking before we started recording, I was like, man, Jimmy Sony would be great to do a sessions with just because he's got this historical knowledge of PayPal, PayPal being so important to like Silicon Valley history. And he, we were talking about this and he's like, no, like I have to pay that back through sales. I'm like, oh, because the thing is, going back to like, you guys listen to Gamecraft, Blake Robbins?

• 1:21:20Ben Gilbert?

  Oh, yeah. Every episode.

• 1:21:21Speaker 00

  Yep. So excellent, like unbelievably good. And what I loved about it is how they focused on the business model innovations and how one decision by some random group of programmers in the 1980s affected a business model decision 10 years later, whatever. And I was talking to Jimmy about this, I go, the books are fantastic. They, they're the best products in the world. You can, there's a great quote in Poor Charlie's Almanack, which says that there's ideas worth billions in a $30 history book. For Charlie Munger and Warren Buffett, that is literally true, right? And what I don't understand is like, you guys have such a high value product and you haven't innovated on the business model at all. Yeah. And so I was telling Jimmy, I was like, do you know the deal? Like, like you just, you think about this as like an entrepreneur. Like you're not a writer, you're an entrepreneur and your product just happens to be a book, but you can make money off that any kind of way you want. Like you can just get creative. I go.

• 1:22:07Speaker 00

  People think it's crazy where I'm like, I'm trying to be the Jay-Z of podcasts and people are like, "What the hell is wrong with you?" And I did like that- Have you done episodes on Jay-Z? That episode I did on Jay-Z's autobiography is one of my most popular. People listen to it two, three, four, five times. I love Jay-Z and I love you, so I can't believe I haven't listened to that episode. Jay-Z is, has the founder mentality and he had it since he was a kid. 100%. And you just see everything his whole career. And people look at him like, "Oh, like..." This is another thing about, intelligence manifests itself in vastly different ways. It's not always like credentialed, in many cases it's not, right? But like Jay-Z is a straight up genius if you listen to him and what he did. And he looked at, he's like, "Yeah." He says it from the get-go, he's like, "I thought I told you characters, I'm not a rapper." He's like, "I'm a businessman and rap just happens to be my product." And so I'm gonna think about it like that. I go, "Jimmy, you should do that."

• 1:22:49Speaker 00

  I go, "Why don't you just find a deal like Jimmy, like Jay-Z did with Samsung?" He's like, "What are you talking about?" Well, that's like true founders, entrepreneurs, whatever, you know, founders in your case, the title you wanna put on them. They care about ownership, like they own their work. And you realize that you could, the business model matters, which is why I brought up Gamecraft. So what Jay-Z did, this is years ago, this is his Magna Carta Holy Grail, probably came out 2013. So he goes, he goes, "Um, you know, I could, I record this, this, this album and then I could sell like normal." You know, stream it and then sell it for $10, if you want the physical copy, et cetera, et cetera." He goes, he goes, "What if I just want my money guaranteed?" So he goes to Samsung and says, "Samsung, you're launching this new app, uh, this new phone and you have your own app on it."

• 1:23:31Speaker 00

  "I'm gonna sell you, I will sell you a million copies, $5 each. You give me $5 million guaranteed from an album." "I'm still gonna own it." So he gets a streaming app, right? He goes, "And so what I'll do is like, you pay me $5 million, the first million people that get access to my album are gonna be Samsung, they have whatever phone was coming out. You download it for free if you have this device." And so it's advertising to the Samsung and it's guaranteed money to him. I go, "Dude, you're writing about technology founders." I was like, "There's these venture capital funds that have $80 billion of assets under management." It's just like, "Hey, will you pay me $1 million to write this book?" And then you say, "Hey, this book is now presented by whatever firm." This is why me and you have, us two have talked about this privately. You guys already know this was like, there's been like, something like 15 acquisition or investment offers for founders, I said no to every single one. A lot of them are like

• 1:24:15Speaker 00

  this, where it's like, oh, well, you have the attention of people that are valuable. You just said, the worst thing that can happen to a venture firm is they miss the hit of that. So they have to expand, like, they have to make sure they catch that, right? Yep. So it's like, hey, we'll, we'll pay for founders or whatever, give you X amount of money, pay you to do it, you do exactly what you do. The only difference is, essentially, they're trying to buy up our inventory forever. It's like, hey, founders is presented by X company. If you're gonna raise money, email here, you know? Yep. And the, the response I had when these, I get these pitches is like, if I did that, that means I'm not actually learning the lessons in the books. Right, right. Which is like, you never give up control. It's like, no.

• 1:24:52Ben Gilbert?

  Ooh, that's interesting. Let's dive into like, a deal structure on that. So like, what if they weren't, what if you weren't giving up control? And what if you weren't giving up economics forever? You're just doing a period of time buyout of your, all your ad inventory?

• 1:25:06Speaker 00

  This is the intelligent thing. This is what Tegus is doing with Invest Like the Best. And this is why, like, it's crazy to me when I talk to people and they don't understand this. I had a conversation with a founder, and he's like, it's really weird, I'm not gonna say who it was. He's like, it's really weird that this company is running ads on that podcast every single episode forever. And I'm like, Not at all. And I go, oh, see. Standing, moving parade, not standing army. I go, David Ogilvy ran the same exact ad in the same magazine for 30 years, and it was still effective. And so I went, I was like, this is, I go, what do you think Coca-Cola's been doing for 100, this is not new ideas? Either Coca-Cola is really dumb, or... Exactly, exactly. And I don't think they're dumb.

• 1:25:46Ben Gilbert?

  Apple has the Prime billboard in every major city in America to advertise whatever the latest iPhone is.

• 1:25:52Speaker 00

  Forever. Forever. So I talked to Michael Elnek, who's the co-founder of Tegus. And he's an, you got, oh yeah, we all knew each other. Great dude. And we talked about this, like, and this is another example, because this somewhat affects our business, because when there's like, a decline in overall economics, like, ad markets usually shrink a little bit, and ad rates come down, and it's like, oh, you're doing exactly what investors do. Yeah. Like, what do Charlie and Buffett do when there's a crash? They don't deploy, deploy. You read Izzy Sharp's fantastic autobiography, the founder of Four Seasons, right? And he says this, he goes, he's building what didn't exist at the time, the only chain of five-star hotels at the time. And he says, I grow. And this is every founder does. It's Andrew Carnegie, John D. Rockefeller,

• 1:26:36Speaker 00

  Henry Kelly Frick. When they have recessions, that's when they grow. So what he would do is his competitors would pull back on advertising, he would spend more. And he says, he claims, I think in the book, he increases market share by like 25 or 28% using this over and over again, because human nature is, oh crap, things are small, and they cut. This is what Ogilvy said. Ogilvy's like, if you need advertising to sell your product, it's not a marketing expense, it's a production cost. It's actual cost of manufacturing your product. And so what Teigis, Michael Olenek did that was such a genius move, was first of all, he knew something was working, right? And he scaled up through podcast ads. And he knew it was effective. And then he's like, oh, okay, well, like, now you have this, all these people in the tech industry, their

• 1:27:20Speaker 00

  stocks creating, everybody's like, running in the street. What does he do? He goes like, oh,

• 1:27:25Ben Gilbert?

  There's probably available inventory.

• 1:27:26Speaker 00

  And so he goes, hey, Colossus Network, I'd like to buy up every single ad inventory for 2023 on every single one of your shows. That's how you know that likelihood that guy's gonna win. Like, I don't know the details of the business, it's private and everything else. It's like, that's the right decision. The same decision. That's what Ogilvy would have done. That's what Buffett and Munger do when they put money in. Like, that is, that's what Coca-Cola does. It doesn't matter the economic climate. You ever get to see less Apple billboards? You can see less Coca-Cola? No.

• 1:27:55David Rosenthal?

  It's interesting to think about this in the venture business, right? Like, which obviously, as we record this here in mid-March, you know, 2023, there's a lot going on in the

• 1:28:07Ben Gilbert?

  It's so dynamic right now that I feel like we don't know the last two iterations of what have happened, because we've been recording and I haven't checked my phone. Like, that's how fast the world is moving right now.

• 1:28:18David Rosenthal?

  Things are happening very quickly as we speak. But I think a consequence of that, to your point about like, you should advertise heavier during recessions, I think customer differentiation among venture firms is just declining rapidly, right? Like, what is...

• 1:28:35Ben Gilbert?

  Well, no, it was until interest rates went up. But now that...

• 1:28:40David Rosenthal?

  No, but even like, I think, I think, I think both the up and the down cycle is, both I think are commoditizing.

• 1:28:46Ben Gilbert?

  I totally disagree with this. I think when, when, when capital was a commodity, and money was free, it was extremely hard to differentiate yourself as a venture firm, or any financial firm. But like...

• 1:28:59Ben Gilbert?

  It should be easier than ever to differentiate yourself because the thing- Okay, so how do you differentiate yourself right now? You guys are doing it. You can, I mean, well, one of them, like, let's, let's abstract away, like, speaking to the acquired audience as, as one of them, or as a gigantic means of differentiation. Well, let's just say you're XYZ average venture firm out there. Having money and writing the checks. Right, but, but, yes, having money, right, but like- A year from now, it's like six to 12 months from now, that's going to be differentiating.

• 1:29:30Ben 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.

• 1:29:44David 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.

• 1:29:58Ben 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.

• 1:30:08David 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.

• 1:30:26Ben 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.

• 1:30:42David Rosenthal?

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• 1:30:59Ben 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?

• 1:31:08David 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.

• 1:31:19Speaker 00

  So I have a thought on this. One, I don't know anything about venture investing. Two, I don't know anything about investing, period. Like, I get to talk to super smart investors, and I'm sure the questions are like, "Hold on, you had to find that for me." And I'm sure they're like, "This kid's an idiot." But when you guys were talking a little bit about your business and the venture game in general, I just think of what one of my favorite things that I heard Jeff Bezos say is, you know, for years, people were like, "Hey, when are you gonna do physical retail? When are you gonna do physical retail? When are you gonna do physical retail?" And he said something that was crazy. He's like, "Physical retailing is an ancient business." And I love that term. He's like, "It's an ancient business, so I'm not gonna do it until I know..." It's so hard to improve on an ancient industry. It has to be completely differentiated.

• 1:32:03Speaker 00

  You mentioned, I heard you on one of your podcasts where you're like, you went to the Amazon Go store just as like, pure curiosity. It's not like you needed something. And so you guys have probably read that story too, where it's like, at one time, they were gonna do like, meat and like, all this other stuff that you'd have to like, talk to somebody. He's like, "No, you have to redo this. This doesn't make sense." The key, the differentiation here, is that you walk in, you walk out. Not walk in, talk to some guy, he's like, cutting salami for you. You gotta get that out of there. And so I've had this thought, because I've read a bunch of biographies on investors too. And like, investing is an ancient business. And we're just doing it in different ways now. And so I was like, well, if you wanted to invest, right?

• 1:32:46Speaker 00

  Let's say you wanted to invest in private companies, which people have been doing forever. I always think of like, where did JP Morgan get his deal flow? And you know, you've read through the history. It's like, people are like, "Oh, that was JP Morgan Bank." Like, no, no, there's no retail bank. Like, you're not going in there. There's no ad, like, a sign on the doors. Like, "Here's JP Morgan Company." It was a relationship-based. It's like, you got in if you knew somebody, right? I read this biography that's incredible. I highly recommend people read it. It's episode 103 of Founders. It is "The Richest Woman in America," Hetty Green. I can't remember the subtitle.

• 1:33:18Ben Gilbert?

  I love how he denies that he knows every number of every episode, and then busts out three more.

• 1:33:21Speaker 00

  It's only because I like, reference this all the time. So Hetty Green, right?

• 1:33:25Ben Gilbert?

  It's only because you reference every episode all the time.

• 1:33:29Speaker 00

  One day it's just gonna be a recording of just all the episode numbers.

• 1:33:32David Rosenthal?

  You are an algorithm. You are your Readwise app.

• 1:33:36Speaker 00

  Well, that's how I get it. So, um, the Hetty Green, though, was so wealthy that she bailed out the city of New York. Like, that book has unbelievable stories. What? I've never heard this person's name and they bailed out the city of New York? Yes. Her family, so the richest, when she was alive, the richest, uh, city in the world per capita was like New Bedford, Massachusetts. Oh, yeah. Whaling.

• 1:33:55David Rosenthal?

  Yeah.

• 1:33:55Speaker 00

  Bingo. So, her family made so much whaling and the way they looked at the family fortune is, I am a steward of this money. My job is to make it grow so that the next generation has more. And then they want, she's like the third generation of these whaling. And then whaling, like, it died out, I think, the generation before her. So, they had to figure out how to make money. The technology stocks of her day, railroads. Like, she made a ton of money in railroads and then she'd buy land, uh, like real estate in New York and everything else. But anyways, my point being, and I had this conversation with Patrick one day, um, I was like, think about it, like, that was an ancient, investing is an ancient business. So, like, you wouldn't do what Hetty Green did. Like, where'd she get her deal from? Uh, people knew her. Uh, they knew she was wealthy. They knew that she was the first person to go to in financial panics.

• 1:34:40Speaker 00

  They called financial panics what we call recessions and depressions now. And it was like, you know, every three years back then.

• 1:34:45David Rosenthal?

  Yeah.

• 1:34:45Speaker 00

  Um, and so what she would do is she had a desk in Chemical Bank in Manhattan. So, the, the advantage there is geography. Physical location, you're at the center of finance in America. You need to be here. You build a reputation. So, literally, there's stories in the book where there'd be a line of people in financial crashes waiting for, at her desk. It's like, okay, I'll save you my railroad stocks, pennies on the dollar. Cornelius Vanderbilt did the same thing. She invested with him and a bunch of other people, right? And I was like, but what would you do today? Like, you're an, you're, you want an edge. Everything we're talking about is like, you need an edge, right? You can't play, Ed Dorp has a great, the great quote in his book. He's like, I've been a money manager for 50 years. One thing I know is you, the sheerest way to get rich is only play games and make investments where you have an edge.

• 1:35:25David Rosenthal?

  Right.

• 1:35:26Speaker 00

  Right?

• 1:35:26David Rosenthal?

  Which is another way of saying, do something your competitors don't, aren't, or can't.

• 1:35:30Speaker 00

  Or Edwin Land. So, Edwin Land plays a huge role in my life. Founder of Polaroid, Steve Joe's hero, because he said, I have a personal model. It may not fit anybody else. Don't do anything somebody else can do. And so, I was like, okay, I don't think anybody else could do founders the way I do it. So, I'm just gonna do this, right?

• 1:35:44David Rosenthal?

  Nope.

• 1:35:44Speaker 00

  So, my point being is like, how would you do it today? Well, um, you would, it would look very much like...

• 1:35:51Speaker 00

  What I think you guys are building and I'm not an investor, so I don't know anything about your world, but it's just like I'd spend my time reading and learning about business history. Charlie Munger and Warren Buffett did that. Every single investor you guys have probably read about does that all the time. They read constantly, right?

• 1:36:03David Rosenthal?

  Yep.

• 1:36:04Speaker 00

  I would share what I know that's going to build my network of other people. Those people are eventually going to get so many deals. Then I have this huge advantage that you couldn't even do 10 years ago or 15 years ago because there's no such thing as a podcast, right? It's like now I could record all the stuff I'm learning, right?

• 1:36:16Ben Gilbert?

  Which we should say, like, there have been iterations of this. Like, this is how Unisquare Ventures became Unisquare Ventures, or Foundry Group became Foundry Group.

• 1:36:24Speaker 00

  Because blogging.

• 1:36:24Ben Gilbert?

  Yep. Blogging and then Brad and Jason writing the book on venture deals. I mean, it's like

• 1:36:31Speaker 00

  Venture Hacks with Naval and Rivi. I have two other examples. It's just like, it's not even venture. Like, what is the most successful content marketing of all time?

• 1:36:40Ben Gilbert?

  Michelin?

• 1:36:41Speaker 00

  No, Berkshire shareholders.

• 1:36:42David Rosenthal?

  No, totally, of course.

• 1:36:43Speaker 00

  Berkshire shareholders, because this is how you know a genius. It is the greatest act of salesmanship because you never even see the sale happening. It's like, hey, and they spend, you know, you guys have probably done this research, how much time they spend on those letters. It's like half a year, seven, eight months for every letter. This is not like, oh, I just jot it down what I learned this year. And the crazy thing is like, he's

• 1:37:03David Rosenthal?

  Old Uncle Warren.

• 1:37:04Speaker 00

  How many people have, this is something Charlie taught, oh, so this is a great, great thing that this came up here.

• 1:37:10David Rosenthal?

  Did you talk about the letters with him?

• 1:37:11Speaker 00

  No, I asked him about like, so I was explaining to him, I was like, Charlie, I'm literally in the middle of like, reading about you when you were like around my age. So every time I read a book, I'm like, okay, I first of all, I know what year they're, they're born. So every time as I go through the books, I'm like, how old are they? And I write down, okay, he's 24 here, he's starting. I want to know what they were doing in and around my age. And so I was like, Charlie, I'm thinking about you guys. Like, you just started, like, your fun starts when you're like 41 or something like that. I don't remember what it was, right? And, um, and I was like, then like 50, like you start out, you're trying to figure things out. You could see them kind of figuring out, making the mistakes. You guys did an excellent job on your episode, like talking about what they learned from, getting to like get away from the Ben Graham, like get to one, excellence. Great businesses are rare. We should be in there. And then just let time do all the work. And I was like, and now like you guys put

• 1:37:55Speaker 00

  up the greatest investment record the world's ever seen. It's like, are you surprised? He goes, of course. He's like, of course I'm surprised. Like, how could you not be? Like, we want to be successful and we were like, had, we were ambitious and driven, but there's no way you could say, hey, I'm going to be worth, what's Berkshire's market cap right now? I don't know, like 500 billion?

• 1:38:14David Rosenthal?

  500 billion.

• 1:38:14Speaker 00

  Yeah, whatever it is. But he said, um, But the reason that popped in my mind when I was asking him like these questions, let me actually get the exact note because I don't want to mess up the way he said it because his lines were just excellent. And so he goes, he's surprised how successful him and Warren turned out, but how could you not be surprised? And then he said something that was fascinating. He goes, I think we get too much credit. And I was like, whoa, that's interesting. Like, why do you think that, Charlie? And he's like, it's very, he goes, it's, I find it odd to be so wealthy and loved. That's not, these are not exact words. These are my interpretation of his words. Let me just be clear here.

• 1:38:55Speaker 00

  I find it so odd that to be wealthy and loved, that's not a usual human reaction. And then my note tied to why I think Berkshire letters are the greatest content marketer of all time. He goes, and I go, I wonder if this is because they spent so much time teaching others. So what is, when you listen to choir, you guys are teaching, right? Berkshire, I'm going to go to Paul Graham too. Berkshire, they're teaching, like, you could just not read a book and just read Berkshire's letters and you're going to get a fantastic education, right? And then in there is like, oh, by the way, we'd like to be the buyers of choice. So if you happen, if you happen to know of this business, like this business that you want to get your hands on, like, you know, and you care about it and he does this excellent product differentiation, call me.

• 1:39:33David Rosenthal?

  Yeah.

• 1:39:34Speaker 00

  The greatest content, what is, like, how much money do they make off of that? And obviously.

• 1:39:39David Rosenthal?

  And I think this is probably, I don't even know if it's on the list of things that they care about, but like, it's also marketing for their businesses, like.

• 1:39:46Speaker 00

  Totally.

• 1:39:46David Rosenthal?

  I have GEICO car insurance because it's a Berkshire Hathaway company.

• 1:39:50Speaker 00

  This is how we talk. I'm drinking.

• 1:39:51Ben Gilbert?

  I feel an extra kinship for Brooks running shoes.

• 1:39:54David Rosenthal?

  Absolutely. I'm wearing Brooks right now.

• 1:39:55Speaker 00

  Okay, so.

• 1:39:56David Rosenthal?

  I'm wearing our arena shoes.

• 1:39:57Speaker 00

  I changed, I changed out, I was in a polo hoodie right before I came over. I watched a documentary on Ralph Lauren. I just did a podcast.

• 1:40:03Ben Gilbert?

  I just listened to your episode.

• 1:40:04Speaker 00

  Yeah, I think it's episode 288. I wonder if I'm right.

• 1:40:07David Rosenthal?

  There it is. There it is good.

• 1:40:08Speaker 00

  Let's see if I'm right though. Let's see if I'm right. I could be wrong. I could be full of crap. It's 288. Okay. So, but before that, I had watched a documentary on him, like, years ago, and I found out that he did the, I always go to Ben for the proper pronunciation. Like, we'll do the same podcast. I will, I say like Akio Marita, and then he's like, Akio Marita. I'm like, all right, I go with Ben.

• 1:40:29Ben Gilbert?

  Oh, you get the, I will give you the correct American pronunciation of something. And it's unclear if it's actually right or not.

• 1:40:35Speaker 00

  So he did the same thing that Akio did, you know, like, they were struggling in the early days of Sony. They get this huge order, like, we're going to take 100,000 units or whatever it is, but take off Sony and put on our name. And Akio's like. We have no money.

• 1:40:47David Rosenthal?

  Yeah.

• 1:40:47Speaker 00

  But he refused to do that because like I'm not building your company, building mine. I love that like that entrepreneurial like bullheaded tendency. Same thing with Ralph. Ralph was broke. Him and his wife are living in a house, our apartment with a train running over on top of them. They're sleeping on a mattress and he's making ties and Bloomingdale's like, well, take them. We love them. Take that name off. You're going to be our house brand.

• 1:41:07David Rosenthal?

  Yeah.

• 1:41:07Speaker 00

  And he's packs up his ties. He's like, I'm not here to build your brand. I'm here to build mine. Like that. So the.

• 1:41:14Ben Gilbert?

  Which is funny because later in life, like he would make so much money on just licensing out his brand. He's like, I don't even make any of the products. I'd literally just license the brand.

• 1:41:22Speaker 00

  Hearing that made me buy more polo clothes. Hearing your affinity for Geico makes you buy Geico. The advertisers you haven't acquired because they love you, your, your audience, if you, I know you guys vet them and like, like you have a ton of people that want to advertise that you don't let. It's like your relation, that goodwill that you're building up, the goodwill that Buffett built up. Another, the second made me most.

• 1:41:45Ben Gilbert?

  And by the way, there's a litmus test for that. It's does the acquired, like I want to only work with sponsors that I want to so full throatedly endorse that I feel the acquired brand gets stronger by working with them.

• 1:41:59Speaker 00

  Yeah.

• 1:41:59Ben Gilbert?

  And like, if you can actually just keep doing that durably, I think that is like an amazing way to build a brand. And, you know, we try, it doesn't always work and sometimes we just don't sell ad slots because we're like, well, we, the bar's here.

• 1:42:14Speaker 00

  It's long-term. Like, okay, I miss a week on advertising. Doesn't matter. I'm doing this for you. When we get on the phone, the first time we talked, do you guys love podcasting? I love podcasting. You're going to do it forever? We're going to do it forever. We say the same thing.

• 1:42:22David Rosenthal?

  Right, right, right.

• 1:42:23Speaker 00

  It's like one week, you know, we could do this another 40 years. So the, the same thing. It's like the same goodwill that you're talking about. It's why I'm drinking, I don't even drink energy drinks, right? But like the format for founders.

• 1:42:35David Rosenthal?

  You showed up with five Jaco goes.

• 1:42:37Speaker 00

  This is, this is the only energy drink I found and I only found it because the, I was driving home on Thanksgiving and all the coffee shops are closed and I heard Jaco's podcast and I know he has this and he says, he's in Wawa's. And I was like, wait, there's a Wawa on the turnpike. I was like, I can just go there, like they're there and I bought them and then I was wired for the whole drive home. I was like, oh, they work, man. This is fantastic. The point there is like, it's not like when I went to the energy drink aisle, I was like, "Oh, maybe I'll do Rockstar or Monsters." Like, no, they didn't make a podcast that I love. Jaco made a podcast I love.

• 1:43:08Ben Gilbert?

  You were not evaluating energy drinks at that point in your...

• 1:43:11Speaker 00

  The format for our founders I got from Jaco, I found his podcast because he was on Tim Ferriss's. His podcast at the very beginning was just him reading books for an hour, hour and a half, saying, "Oh, I like this session." Yeah, and he does it for autobiographies for military people. I was like, "Oh, I should do this for autobiographies of founders and everything else." So it's a combination ideas. The second best version, and you guys know this more than me because it's your world and I don't know anything, I had spent three weeks reading Paul Graham's essays. Paul Graham's essays changed my life.

• 1:43:39Ben Gilbert?

  Also, content marketing.

• 1:43:41Speaker 00

  Totally changed my life. So we're gonna get there. The reason to finally jump and dedicate my life to founders came, I was, my wife was sleeping in bed next to me, I'm up late at night, I read Paul Graham's essay, "How to Do What You Love." I talk about this on...

• 1:43:55Ben Gilbert?

  Oh, it's such a good one.

• 1:43:56Speaker 00

  Episode 275, 76, and 77, those are right, I know that for sure, are the three Paul Graham essays I did. I talk about this snap, how he changed my, that episode changed my life, or that essay changed my life in 275. So then I'm, so I spent three weeks going through every single one of his essays. So something his new essays lack that they had before, he used to have this bright orange box at the top. It says, "Do you want to start a startup?"

• 1:44:21Ben Gilbert?

  Apply to Y Combinator.

• 1:44:22Speaker 00

  Apply to Y Combinator.

• 1:44:23Ben Gilbert?

  Yeah.

• 1:44:24Speaker 00

  And so, I was like, think about, so, again, it's not like you went, I thought about this, like, what is the founder's version of Y Combinator? What is the acquired version of Y Combinator, right? You have to be very careful, like, who you partner with and what you're doing. So I was like, what is the orange box, right? It's not like you go to Paul Graham's and he's got like, 10 banner ads. He's just like, no.

• 1:44:44Ben Gilbert?

  Yeah, he worked for Yahoo, he knows that doesn't work.

• 1:44:46Speaker 00

  Your attention is here. And it's like, he didn't know that starting Y Combinator, you can go back and read his essays about it, watch his interviews, he had no clue, just like Charlie told me, he's like, "No, I did not expect to build one."

• 1:44:58Ben Gilbert?

  Well, it was called the Summer Founders Program, you know, it wasn't even...

• 1:45:01Speaker 00

  That's the best thing about learning about the company and founder history, it's like, they didn't, there's no way when you could interview Sam Walton when he's, his shoes, the bottom of his shoes has watermelon and donkey crap. He's not gonna be like, "Hey, guys, I'm the richest man in the world."

• 1:45:16Ben Gilbert?

  Right, yeah.

• 1:45:16Speaker 00

  And so, I love this idea of, hey, all of these discussions about...

• 1:45:22Speaker 00

  The business benefit all comes from, it's the byproduct of educating people, sharing people. That's why people love Charlie and Warren, why all three of us love them. How much of us three learn from them?

• 1:45:34David Rosenthal?

  Right, so much.

• 1:45:35Speaker 00

  It's like, to the point where like-

• 1:45:36David Rosenthal?

  This is such a good point.

• 1:45:36Speaker 00

  I wanted to cry when I met him.

• 1:45:38David Rosenthal?

  Because of their content marketing. I mean, it sounds strange, but like-

• 1:45:41Speaker 00

  His lessons changed my life. They're gonna change the trajectory of my kids' lives.

• 1:45:45David Rosenthal?

  Yeah.

• 1:45:46Speaker 00

  Like that is, and you know, he probably hears that a million times a day, but it doesn't matter. It's like, I got a chance to tell him that. That's it.

• 1:45:52Ben Gilbert?

  It is crazy. He educated America on investing while still managing to do it better than anyone else.

• 1:45:59Speaker 00

  There were some funny things about that too, where he says like, you know, they get, he says something like, well, you know, they're completely, he says, you both, in your episode, you talk about Snowball. Snowball has that quote from Buffett in there. He talks about it's really important to have an inner scorecard or an outer scorecard. Inner scorecard is his dad. It's like, I'm doing this because I know it's good. Outer scorecard is like, I'm doing this, what are the people gonna think about me? Newsflash, no one's thinking about you. They think about themselves. So, outer scorecard people cannot have, like, it's almost really hard to have a happy life having an outer scorecard. I like Charlie's description of that better. He says, like, I think it was Andrew that asked him the question, maybe Chris asked him the question, it's like, were you like, were you driven to succeed, like, to impress your dad

• 1:46:43Speaker 00

  or your mom? It was a great question. He goes, no. He goes, I had an inner clock. And I've always had, he goes, I have an inner clock and I always had an inner clock. I did this because I wanted to do it and like, that's, and he goes, and they're like, you think Buffett's like that? He goes, Buffett has an inner clock too.

• 1:46:55David Rosenthal?

  Yep.

• 1:46:56Speaker 00

  And it's just like, this idea where they did it their way, regardless, they don't care what other people think. He said this about the fact that they keep some of their wholly owned businesses and like, oh, the profits are less, or they kind of just let them run out, and like, they'll just keep the cash. And then people are like, oh, you should invest the cash. And he's just like, no, because we're opportunists. We're individual opportunity driven is the line that he has about that.

• 1:47:21Ben Gilbert?

  Right. You were going somewhere, David, earlier with the discussion of being a professional investor and how it's less differentiated than it's ever been before.

• 1:47:32David Rosenthal?

  Well, where I was going with it was, I bet, look at the reaction on Twitter and elsewhere, and I think in much of the country to what's happening with the Silicon Valley Bank situation. Not that this is a current events podcast, but like.

• 1:47:50Ben Gilbert?

  It's also, by the time this comes out, gonna be two weeks.

• 1:47:52David Rosenthal?

  Gonna be old news, right?

• 1:47:53Ben Gilbert?

  Hopefully, things will just be calm and settled down, and there'll be no more impending crises.

• 1:47:58David Rosenthal?

  Yeah, right.

• 1:47:59Speaker 00

  But another one's coming eventually, like, just like Charlie says, you're gonna have another unintended problem a year from now.

• 1:48:04David Rosenthal?

  Yep. I think you are right, Ben, that just having capital to invest will be differentiating going forward. However, I think the aggregate brand and reputation of the venture industry has taken a massive hit.

• 1:48:16Ben Gilbert?

  Totally.

• 1:48:17David Rosenthal?

  Massive hit over the last several years.

• 1:48:20Ben Gilbert?

  And you're not holding up SVB as.

• 1:48:21David Rosenthal?

  And it just keeps going down.

• 1:48:22Ben Gilbert?

  Yours, SVB is revealing to how other people think of Silicon Valley.

• 1:48:27David Rosenthal?

  What I'm specifically referring to is VCs' behavior and reactions on Twitter over the past week. But that's just emblematic of the direction things have been going for years now. Like, and part of it's related to tech in general, but I think there's a specific, like, maybe hatred is strong, but brand decline of the venture capital industry.

• 1:48:49Ben Gilbert?

  Yeah, I agree with that. Tie it to differentiation among venture firms.

• 1:48:55David Rosenthal?

  So, yes, while as the market goes down, having capital will be differentiating, and like, the number of participants will go down in the industry and whatnot. But how do you stand out in this market as like, if in aggregate, your industry is thought less of, and people don't want to work with you?

• 1:49:14Ben Gilbert?

  Right.

• 1:49:15David Rosenthal?

  How do you turn that tide?

• 1:49:17Ben Gilbert?

  Right. Yeah, if the next Sam Walton has the opportunity to raise venture capital dollars, and he's like, you know what, I think I would rather just figure it out another way and not build in that ecosystem.

• 1:49:28David Rosenthal?

  I think there are a lot of. People out there right now who want to start businesses and they're like, I'm not going to raise venture capital because F that and I don't need to. And it was a lie that I needed to.

• 1:49:41Speaker 00

  Right. Can I tell you from the founder's perspective? Cause I talked to a ton of founders.

• 1:49:44David Rosenthal?

  Yeah.

• 1:49:44Speaker 00

  I'm going to go down, I think, hopefully, we'll see, talking to more founders than any non VC, right? I get offers all the time like, hey, you want to invest in my company? I've said no to all of them. Like, just because I'm just, I was like, dude, I'm focused on founders. Like, I don't care about anything with my podcast. And so we have these conversations and it's just like, what VCs don't understand is like, how much founders hate them.

• 1:50:06David Rosenthal?

  Yeah.

• 1:50:07Speaker 00

  They like, they hate them. And it's not they hate the good ones. They love the good ones, right? Like, I'm not going to say some of the brands that I've talked about, they're like, oh, no, like, we raised money from a bunch of people. They're good. They don't mess with us. But if we ask a question or we need something, they jump on it, you know? And the problem is, is not like, it's, it's a natural like distribution of any industry. Like, there's going to be crappy founders and great founders. There's going to be crappy investors and great investors. And so I really think it ties back to the, the, the principle that Buffett and Munger built their business on is like, only associating themselves with the best people and the best companies. And that solves so much other problems. So, yeah. The, my issue is like, there's a lot of VCs in my audience too, and they're nice people. Don't get me wrong, right?

• 1:50:50Speaker 00

  Some of them I've talked to, it was just like, who gave you money to invest? Like, what is going on here? Well, what I don't like is like, the best ones, like, this is what I like about Patrick, right? If you talk to the people that Patrick has invested in, he doesn't like, here's a list of 10 things I took two minutes to think about. He's asking questions. He does exactly what he does on his show. He asks questions.

• 1:51:10David Rosenthal?

  Yep.

• 1:51:10Speaker 00

  And if you need something, like, I'll do whatever I can because he's got a good network and help. No, but he's certainly not, he's like, if I have to tell the founder what to do, then I, why did I invest in it? Like, that doesn't make any sense. So what happens is like, I'll get these emails, like, I love your show, et cetera, et cetera. Here's like, 10 ideas for you. And it's just like you read, you read them. It's like you hired like an assistant or researcher, maybe you wrote this yourself. You thought about this for 30 minutes. Like, I think about this all day, every day. I've thought about this every day for years, man. Like, that's not helpful. Like, what are you doing? Like, you're just making, I have a lower opinion of you because like, this is a dumb idea. And the only way about that is like, do you know who Bryce Roberts is of? Yeah. Okay, so he has, this is again, I've never raised venture capital, I've never made a venture capital

• 1:51:53Speaker 00

  investment, but I talked to a ton of founders and he has the greatest description. He's like, what is the product that founders are buying from VCs? It's not money, because everybody's got money. Like, that's a, like, Well, you used to have money. Or, yeah, I guess you, but still, like, there's, In aggregate, though, like, there's still a lot of people that don't have money. There's still gonna be investments made in markets. Compared to venture in the 70s, yes. Yeah. He said, two words, improved odds. That is the best, from a founder's perspective, that is the best description. It's like, if I take investment from you as opposed to this other guy over here, this other girl over there, like, who is going to be founders? All they care about is, can you help my company succeed? Is it more likely that my company succeeds? I'm dedicating my life to this, man. This is not a game. Like, can you make my company succeed?

• 1:52:35Speaker 00

  And sometimes you can do the money, sometimes you can network. There's other people sitting right across from me that could probably help with distribution, that is actually a value add. Like, that is the difference. Like, if I was gonna be a venture capitalist, and God knows I would not, not be, right? I would just start a podcast. And then I would do it for, and I would do it for six years, and I would get really valuable, and then my inbox is full of people. I don't have deal flow. This is what Patrick is doing. Yeah, it comes inbound. I have a friend, Chris, Chris Powers. He, he syndicates real estate investment. You know, rich people like to invest in real estate. There's all these tax benefits. And he's got, he says, David, even with like, and this guy's done like, I think he's got either a billion or $2 billion of industrial class real estate under management right now. And,

• 1:53:18Speaker 00

  He's like, even, he's like, David, I just was interviewing and doing my podcast. Again, same thing, educational, interviewing people operating in the real estate industry and interviewing founders. And just doing it because he liked to do it, he wanted to talk to the sort of people, happened to press record, put it out there, never really promoted it. You know, got, he's like, even with my small audience, he goes, I've raised, he goes, it changes the dynamic from, hey, I'm Chris. I'm setting an outbound, hey, I'm Chris, this is what I do, this is like, can we talk, can we set up a meeting to, oh, Chris, love your podcast, how can I get 5 million in your fund?

• 1:53:48David Rosenthal?

  Yep.

• 1:53:48Speaker 00

  It reverses it because they're like, oh, they get to know you as a person. This is what I don't like also.

• 1:53:54David Rosenthal?

  It shortcuts the relationship.

• 1:53:55Speaker 00

  But it, you just said, it's a relationship, right? Which I think there's too much of this like calendar, like Tetris, that no offense, that venture capitalists play. Cause they try to do it with me, where our founders do this too, where they're like, hey, love your show, love to get to talk to you. Can we talk? And I reply back, yeah, let's set something up. Then I get like, then they're like, I'm like routed to the assistant. And then it's like, oh, you know.

• 1:54:18David Rosenthal?

  How about six weeks from now on, you know, Thursday?

• 1:54:21Speaker 00

  You know, Joe Smo has 30 minutes, three weeks from now. And I've done this like once or twice, and now my response is, that's no way to build a relationship, here's my phone number, just text or call me when, when you're free. I'm not a 30 minute block in your calendar. And if, dude, we have, the inbound that Austria get, it's like, I'm already almost hitting a limit to how many deep relationships I can build. So I'd rather, instead of talking to a million, I'm not a fester. Instead of talking to a million people for 15 minutes, I'd rather talk to five or 10 people over and over and over and over again. That's what Charlie.

• 1:54:50David Rosenthal?

  You've talked a lot about this and like, you've rubbed off on me a lot on this. Like I have changed my, my mindset and my daily behavior hugely because of our conversations.

• 1:55:00Speaker 00

  Charlie and Warren, it's like they build relationships, they found people they like, admired and trust. They repeat like, admire and trust over and over again in the letters and their talks. And then they just did business with them forever.

• 1:55:10David Rosenthal?

  Yep.

• 1:55:10Speaker 00

  It's not this wide but shallow, and that's where you get the bad behavior. And anybody that's high quality can see through it and it's not going to work with you. And you're only going to succeed, like you guys, if your business is parallel, you're only going to succeed if you get the very best ones.

• 1:55:23David Rosenthal?

  It's interesting though, like the, man, just like so much in life, like Warren and Charlie, really like, they're just so often right. And if you think about like, If you buy the premise that the aggregate opinion of the venture capital industry has declined a lot and will may continue to decline, whether it does or doesn't, it's meaningfully worse than it used to be. What have Warren and Charlie done? And to your point about the best content marketing ever, what is what they do? It's a combination of a hedge fund and a private equity firm. What is the aggregate opinion, public opinion of hedge funds, managers and private equity firms over the last 50 years? Nothing but down. What is the aggregate opinion of Berkshire? Nothing but up. You know, it's amazing.

• 1:56:06Speaker 00

  This is one advantage that I have, the fact that I'm not an investor, so I don't have to keep up on like, to some degree, venture capitalists have to like know what's going on, right? And I close myself off. Like, I was having dinner with Sam and his wife and they're asking me, like, his wife was asking me like, hey, do you know about this person? Oh, no. Do you know about this? And Sam's like, he's got a very limited, like, he said, I swear, he's like, you can ask him about like books, but this dude's not watching TV, he's not doing any other stuff, right?

• 1:56:31David Rosenthal?

  We keep him in a hut out back.

• 1:56:33Speaker 00

  And the good thing about that, though, is somebody actually, so essentially the way I use like Twitter or any social media is like, I put out little snippets from my podcast.

• 1:56:44David Rosenthal?

  You put out a lot on Twitter.

• 1:56:45Speaker 00

  In text, though, for them, right? Yeah. Which has been really working for you. I was like, I'm gonna read something that has a million, over a million views in 24 hours, because everything's going on and because I just had dinner with Charlie. So I'm gonna read this and then I'll go back to. This is an amazing tweet, by the way. So I go, Charlie Munger tells a story about human nature. Now, I didn't put this because of the bank run. Like, I was just thinking, I was like, oh, this is, I was rereading the highlights. Wait, you didn't post this, like, with regards to the bank run? No, no. Remember I reread my highlights every day? Yeah. And so when I reread my highlights, what my Twitter is, is like, when I reread highlights, like, oh, that's a good one, I just put it on Twitter. Oh, my God, that you have like just the greatest timing in history. Yeah, exactly. Well, like, it wasn't intentionally, I knew what was going on, but it never said, oh, let me, I need an SVB tweet. Like, I don't have any money in SVB, like, whatever. So it goes, Charlie Munger tells a story about human nature.

• 1:57:30Speaker 00

  And then this is all Charlie speaking. One of my favorite stories is about the little boy in Texas. The teacher asked the class, if there are nine sheep in a pen and one jumps out, how many are left? And everybody got the answer right, meaning eight, right? Except this little boy who said, none of them are left. And the teacher said, you don't understand arithmetic. And the little boy said, no, teacher, you don't understand sheep. And so. So effing good. How, okay, you were in the room with Charlie for several hours. How did, like?

• 1:57:59David Rosenthal?

  In natural conversation, are they just pulling out these like parables and these fables? Like, you know?

• 1:58:04Speaker 00

  Let me, I'm gonna ask that question. The best response to this tweet, I didn't even, I missed it myself. He goes, was the child Charlie himself? And I'm like, oh my God, that's exactly what he would have done. He would have been the kid.

• 1:58:17David Rosenthal?

  Totally.

• 1:58:17Speaker 00

  He would have been the kid. So the reason I think it's so powerful, like the storytelling ability you guys have, how I try to break down things to aphorisms. You ask like, why is this guy on my phone? Right? I only think in stories. I think people only learn through stories and then one-liners. Right? That's why, why is Charlie, David Ogilvie? That idea, it's like, he says it in a creative way. And you remember for Charlie Munger says, hey, if you don't learn probability, you're gonna go through life with a, as a one-legged man in an ass kicking contest.

• 1:58:42David Rosenthal?

  So good.

• 1:58:43Speaker 00

  So you laugh and then you think about it. It's like, oh, what is it? Oh, like I'm gonna get my ass kicked. Like, so that's the way, um, this is here because it's Ernest Shackleton. His family motto is by endurance we conquer. So we're in the podcast business. You know, people are like, you can't do podcasts. There's like two million of them. It's like, dude, there's like 70 or 80% of them that have quit. 98%. In the business podcast right now. Me and Patrick were just talking about this. I just saw him in person in Miami and we were talking and I showed him this. It's like, dude, for podcasts like me and Patrick's and yours.

• 1:59:16Speaker 00

  Business categorize in business, have at least 10 episodes and I think release at least once a week. You guys, I think your release schedule is less than that, right? Two weeks? Every two or three. So those three categories is like.

• 1:59:27David Rosenthal?

  But in terms of minutes of content per week, we're the same as everybody else.

• 1:59:31Speaker 00

  But like, that was one thing, like they release once a week, right?

• 1:59:36Speaker 00

  18,000. And the business category is the second most popular podcast, like the second most populated podcast category. Behind. And I go. Do you know the first? Spirituality. Faith. Yeah.

• 1:59:46David Rosenthal?

  Oh, true crime has fallen off then.

• 1:59:49Speaker 00

  Yeah. No, so this is, I'm gonna start. So there's a thing about that where I heard somebody said, they're like. Founders is like church for entrepreneurs. And I might start dropping podcasts on Sunday and no, no, I'm not kidding. And if I do video, I swear to God, I went and looked. I looked at pulpits. I was like, I'm not gonna go, I swear to God, I swear to God. You went crucifix shopping. I'm not gonna get a desk. Like, think about, my mom was like fundamentalist Christian and stuff. And like, I had to go to church my whole life. And it's just like, this is pretty crazy. Like, not in a bad way. I don't mean that majority. It was like, they're learning from the same book every week, over and over again. The stories you could tell are limitless. It's one book. I could do the same thing. I have access to all the books in the world. Like, I can do that.

• 2:00:34Speaker 00

  So I do think there's an element of Totally.

• 2:00:36Ben Gilbert?

  Five years from now, people are gonna be like, this is the moment where David started the cult.

• 2:00:41Ben Gilbert?

  It's right here on video.

• 2:00:44Speaker 00

  We're documenting it. Cults are the best businesses, though.

• 2:00:46Ben Gilbert?

  100%.

• 2:00:47Speaker 00

  If you listen to my episode, In-N-Out, episode 244. Oh, yeah. There's no way I got that right, by the way.

• 2:00:52Ben Gilbert?

  Oh, now we get to know.

• 2:00:53Speaker 00

  I did that.

• 2:00:55Ben Gilbert?

  You keep talking, I'll look up if you got this right.

• 2:00:56Speaker 00

  I did that episode because

• 2:01:02Speaker 00

  it's 244.

• 2:01:03Ben Gilbert?

  Of course. Is it? Oh, my God.

• 2:01:06Speaker 00

  I read that book because the best businesses in the world are cults. That's what Trader, the founder of Trader Joe's, he wrote his autobiography. He said that Trader Joe's was a cult for the overeducated and underpaid.

• 2:01:14Ben Gilbert?

  Right. And it's not to say that like, like, cults are amazing businesses. That's not what you're saying. You're saying the very best businesses.

• 2:01:21Speaker 00

  Cheerful. Develop a cult. In-N-Out calls them, they use this terminology in their business. Cheerful cult. It's a positive cult. I'm not talking about Jonestown, let's get together and freaking drink mass suicide. No, no, I'm talking things that, hopefully you're building a product that's good for the world.

• 2:01:35Ben Gilbert?

  We had Gary Tan on back in the day, and he was talking about Palantir at the very beginning. And he was like, oh, Palantir was a cult. That's why it worked.

• 2:01:42Speaker 00

  Well, this idea also influenced me is Zero to One, Peter Thiel's book. It's like, you know, he says that, it's like, the best businesses, like startups look like cults, like.

• 2:01:51Ben Gilbert?

  You have to, you have to inspire emotion in people. Otherwise, it's like, you just, you can't stand out in the world. And you certainly can't have repeat behavior and in a sea of choices for someone to keep choosing you over and over and over again. Just like, it's like how founders have to be weird. Like, nothing interesting was created by ordinary people.

• 2:02:09Speaker 00

  But I have to be intentional about this. I'm glad you said, oh, this is where we get in on camera and on recording that David started this cult. This is like, podcast, no, I go crazy. Like, people start talking about me, I, a bunch of them say, David's too obsessive podcast.

• 2:02:25Speaker 00

  And I'm like, I'm glad they say that because like even now.

• 2:02:28David Rosenthal?

  You're like, thank you. That's a compliment.

• 2:02:29Speaker 00

  No, it's like, I see an opportunity that other people don't, which is the same thing in the book. So I think podcasts in general are just fun to make and I'm obsessed with it. But they're also going to be wonderful businesses because they're prone to be cheerful cults. And how do you know that you have a cult? You just Google and see if the people have tattooed themselves with the brand. How many people are walking around with a Joe Rogan's face on his tattoo? Or a Joe Rogan face tattoo on their skin? A ton of them, right?

• 2:02:53Ben Gilbert?

  Really?

• 2:02:54Speaker 00

  Yes. How many people have tattoos of the Apple, Apple logo?

• 2:02:58Ben Gilbert?

  There's an insane number with Mario. We learned this in the Nintendo.

• 2:03:02Speaker 00

  Mario, Tesla, In-N-Out, there's a ton of, dude, I like, cheeseburgers are my favorite meal. I'm not tattooing an In-N-Out logo on my arm, dude. You take another level. And you see this over and over and over again. And so when I analyze businesses, I'm not just doing this, like, it's not a game to me. I was like, oh, can I use these ideas in building my business? And like Warren Buffett says the greatest thing, and this is, I think, speaks to why you guys are so like, hey, we know how big our audience is and we're going to take this seriously. Warren goes, a brand is a promise. That's the best description of a brand. It's just like, I talked about the fact that I stayed in this hotel brand, I'm not gonna say what it is. In Austin, I loved it. I stayed in Santa Monica, I loved it. I found out they had one in San Francisco. I didn't check the reviews.

• 2:03:44Ben Gilbert?

  You came here and they broke their promise.

• 2:03:45David Rosenthal?

  I told you to stay with us.

• 2:03:47Speaker 00

  And that's the biggest thing. A brand was a promise. I know this is gonna be excellent. The hotel's fine, it is in like, it's in a tenderloin, it's like.

• 2:03:56David Rosenthal?

  Not a place you want to stay.

• 2:03:57Speaker 00

  No, like if I wasn't traveling alone, there's no way I'd let my wife.

• 2:04:00David Rosenthal?

  This is the major misconception about San Francisco. Many people who don't live here think that it's, you know, an absolute hellhole and wasteland. A specific part of it is, but like, there are other, and unfortunately, that part is mostly where the hotels are.

• 2:04:17Speaker 00

  Yeah, which is not good for the city. Cause I'm like, I'm not ever staying, I'm staying with you or I'd stay in, like I'd stay out in Silicon Valley. Like I stayed at the Rosewood, which is really nice.

• 2:04:25Ben Gilbert?

  That is not the tenderloin. The most expensive hotel, which is like good.

• 2:04:29Speaker 00

  I didn't pay for it, so.

• 2:04:30Ben Gilbert?

  No one ever does. That's the whole business model.

• 2:04:33Speaker 00

  I didn't know how much it was. It was really nice though. Thank you. I gotta thank that person. Yeah, so like again, I don't mean it in like, but I am very intentional of like, hey, I'm not gonna break my promise. I'm, I want you to know, and you guys do the same thing. It's like, if I press play on an acquired episode, this is why I like Dan Carlin, is. You know, I read one book an episode. He reads like 30.

• 2:04:53David Rosenthal?

  Yeah.

• 2:04:53Speaker 00

  He only does two a year or one in a, like one a year.

• 2:04:56David Rosenthal?

  Right.

• 2:04:56Speaker 00

  But like, I know there's no way I'm gonna press play.

• 2:04:58David Rosenthal?

  It's gonna be good.

• 2:04:59Speaker 00

  And he didn't do the work necessary.

• 2:05:01David Rosenthal?

  Yeah. That's what, that's what we feel. We all feel. I mean, you, yeah. In our own ways, we all definitely feel that about what we're doing.

• 2:05:07Ben Gilbert?

  Can I get some feedback? Like, how, how can we make a choir better? Or have you ever had moments where you like paused an episode and were like, oh, I wanna like talk to Ben and David about this right now? Cause like, I have some feedback.

• 2:05:18Speaker 00

  No.

• 2:05:20David Rosenthal?

  You probably just text us if you did.

• 2:05:21Speaker 00

  No, but like I, I would, first of all, um.

• 2:05:24Ben Gilbert?

  Or the model, not just, not necessarily just the content, but like.

• 2:05:27Speaker 00

  No, what you guys said on your benchmark dinner episode, I think was like, you know, uh, there's a few podcasters, I was having this conversation with Sam yesterday. It's like, there's a few podcasters that like, they know what they're doing. And you, they know by like what their position in the market is, like how they're thinking about it. And I'm not gonna say who. But like, you guys hit it. Like what makes you special? It's the Edwin Land thing. Don't do anything somebody else can do. Right? Where you says like, your marquee thing is these super in-depth, like Blake made the funny, um, Blake Robbins said the funny thing on Twitter I saw. I loved it. He's like, only a choir could say, all right, let's bring this home. It's still an hour and a half left. That's your brand. People know it.

• 2:06:03David Rosenthal?

  Totally.

• 2:06:04Speaker 00

  Yeah. And I think what you're doing here with like the sessions is like a way to also, it's like, there's no, you can't increase your, the amount of episodes that you can do because they take so much work to do. But you also have a way to surface all this information that you guys have that's valuable to other people in different formats.

• 2:06:19David Rosenthal?

  We were, we were talking about this a little bit before, which I hate saying, we were talking about this before we were recording. Why didn't we just record? But, um,

• 2:06:28David Rosenthal?

  you, you were also thinking about potentially doing something similar.

• 2:06:32Speaker 00

  Yeah.

• 2:06:33David Rosenthal?

  And there's like.

• 2:06:34Speaker 00

  Not now, like years from now.

• 2:06:36David Rosenthal?

  Yeah. But for the core episodes, we spend, you know, so much time preparing. But then for stuff like this, we don't prepare at all because our whole career is preparing.

• 2:06:47Ben Gilbert?

  Does this make sense? Like what, what is the right? Number and format of sessions, because this is the second session. Like, we're still figuring sessions out. Like, in your dream world, as an acquired listener, what do sessions look like?

• 2:07:01Speaker 00

  I mean, your sessions should be, replace your interviews. Anything that's a non-acquired, like, long, deep, I'll just make them a session. There's enough people interviewing founders and investors.

• 2:07:10David Rosenthal?

  Right, right.

• 2:07:10Speaker 00

  But we need more conversations. So if I ever did, people are like, if you ever do an interview show, I was like, first of all, I wouldn't do an interview show. Because like, you, interview is a skill. It looks easy. Like, I always tell, I tell Patrick, I go, Patrick, you're world-class at this, dude. Like, you have, you wield, because I've, you've been on a show.

• 2:07:25David Rosenthal?

  Every week and now twice a week for eight, nine years.

• 2:07:27Speaker 00

  And he's just, it's for, I like to read, he likes to ask questions, so therefore our formats match the personality, right? And so what I tell him is like, I've been on the other side of it. It's like, you can tell, it's not, he doesn't have a list of questions in front of him, because you can tell, his good question just came off a response of what... Like, a lot of people like, um, and it's fine, but like, the Tyler Cowen thing, where he just like, he has his questions, and you just said something interesting, he's not going to follow up, and he's going to go on the next question.

• 2:07:51Ben Gilbert?

  It feels very odd, because you're like, are you guys not having a conversation?

• 2:07:55Speaker 00

  No, they're not.

• 2:07:55David Rosenthal?

  They're not, yeah.

• 2:07:56Ben Gilbert?

  That guy like, left you an opening, and how did you not take that opening?

• 2:07:59Speaker 00

  They're not, so, but Tyler, you have to do, let's tie this to Jay-Z and J. Cole, and to answer your question also about like, I'm glad you guys are so much nicer, where you're like, do you have any feedback? Because like, I can't stand feedback. We're like, not in the sense of, like, like, I told you, I text you guys this one time, we're like, one guy was like, hey, I don't like that you reference, like, the superpower of the show is that I tie, it's not like, the episode on Ralph Lauren is going to tell you how Ralph thinks like Andrew Carnegie, and Rockefeller, and Bezos, and it's like...

• 2:08:27David Rosenthal?

  You literally know all your episode numbers by heart.

• 2:08:29Speaker 00

  And like, so, to me, it's just one large conversation on History's Greatest Entrepreneurs. That's, that's how it is. To me, it just happens to be separated. And so this, I text you, and this guy's like, um, could you save that for, at the end, and just do it like, as carve out like, acquired? And I was like, don't listen to acquired, no, I'm not going to.

• 2:08:45Ben Gilbert?

  I have a singular vision for how this is going to go, and that's why I own and control and operate the entire thing.

• 2:08:52Speaker 00

  It's even further than that. It's like, I'm not putting on a show. Like, there's a lot, I loved Anthony Bourdain when he was alive, I read his books, he had a huge influence on me, like, anytime I traveled to a place that he went to, I'd go and watch it.

• 2:09:04David Rosenthal?

  Have you done an episode on him?

• 2:09:05Speaker 00

  Yeah, 219. There's no way that's right, there's no way.

• 2:09:08Ben Gilbert?

  Keep going.

• 2:09:09Speaker 00

  There's no way that's right.

• 2:09:09Ben Gilbert?

  Fact-checkers.

• 2:09:10Speaker 00

  Oral, it's called, uh, the Oral Biography. It's, that format should be done more, where his assistant, um... Had interviewed, assistant friend had interviewed a bunch of people actually knew Tony and were there in his last days. And then she organized that interview into this biography called Bourdain, the definitive oral biography, I think. And, is it 219?

• 2:09:32Ben Gilbert?

  It's 219.

• 2:09:34Speaker 00

  And so, and so like, where was I going with that? I went on a digression, but, oh, so there's a line in the book that I love. It says, "The line between Tony and his show is nonexistent."

• 2:09:44Ben Gilbert?

  Yeah.

• 2:09:44Speaker 00

  Right? That's why people like, I hear a lot of people talk about podcasting, it's like, "Oh, you don't actually know what the superpower of podcasting is." Right? Where it's like, to me, one of the superpowers of podcasting is its authenticity scaled. Right?

• 2:09:55Ben Gilbert?

  Yes.

• 2:09:56Speaker 00

  When I meet with founders, I listen to founders, and we have a three-hour dinner, they all, they all say the same thing. They're like, "This is like a three-hour episode of Founders."

• 2:10:03Ben Gilbert?

  Yeah.

• 2:10:03Speaker 00

  It's like the same person there.

• 2:10:05Ben Gilbert?

  Well, and I think that, that is a thing that, that you did really well, and we sort of accidentally did well, but I realized over time, why that makes both of the things we've built as durable as they are. A lot of people play characters on the internet, and-

• 2:10:23Speaker 00

  Which in other mediums-

• 2:10:24Ben Gilbert?

  Plays really well.

• 2:10:25Speaker 00

  Is an easy trap to fall into.

• 2:10:27Ben Gilbert?

  And like, it's a way to catapult growth. If you adopt a polarizing character, you can get a bunch of followers, there's like, there's a lot of dividends that pay to it, but it's exhausting to maintain over time, and it has a conflict, where when people meet you in real life, they're like, "Oh, weird." And, and so like, when you actually are just yourself, it's gonna probably grow more slowly, because I'm not like, as polarizing, like, it would be horrifying to live as a polarizing character that you play on the internet in real life also. And so, you have this more like, slow, organic-

• 2:11:02Speaker 00

  Yeah.

• 2:11:03Ben Gilbert?

  Growth path. But like, it is, there is this cool byproduct now, where like, I sit down with someone and they're like, "Yep, exactly the same as I expected."

• 2:11:10Speaker 00

  This is why I said, have Blake Robbins on here, because he gave me the dynamic, that spectrum that he talks about. Blake is a super smart person in general, but he's like- The way you think about this is there's a spectrum. This is not my idea, this is Blake's spectrum. Because on one end of the spectrum, he's like, how much time do people spend with you? Right? He's like, on one end of the spectrum, you have these like 30 second TikTokers that dance. Right? And then all the way on the other end of the spectrum, as you move down, they spend more time with you. All the way to the end of the spectrum, you have the Twitch streamers, right? Which he helped incubate 100 Thieves, 40 Thieves, 100 Thieves. Where they're spending like 40 hours or 50 hours a week with you. Right? He goes, David, you're like, one, you're not, they don't spend 40 hours with you, but you're one

• 2:11:50Ben Gilbert?

  One click.

• 2:11:51Speaker 00

  One click to the left. And they're gonna wind up spending 10, 20, 100, 200 hours with you. And you keep moving down and like, let's say you do 10 minute YouTube videos, you know? It's like, the deeper you go down there, it's why when I think of the guy's name is Nate Shot. When like 100 Thieves has a new product and he announces it, you'll see a line down the block. Cause hundreds of thousands of people have spent all their time with them. And so it's like, oh, Nate Shot has something to all come down here. And you see this over and over again. And then Blake says, you could have like a TikTok that has, TikToker has like 10 million followers, yet they can't even get 3,000 people to show up somewhere.

• 2:12:25Ben Gilbert?

  Right.

• 2:12:26Speaker 00

  And so I think that is like the way to think about it.

• 2:12:28Ben Gilbert?

  So that's algorithmic throttling too. TikTok, it is almost a zero signal if somebody follows you.

• 2:12:34Speaker 00

  It's all views.

• 2:12:35Ben Gilbert?

  It doesn't, it doesn't actually matter. Or YouTube, it's like, oh, they subscribe to your channel? Like, maybe that'll come up in one of the top eight videos that shows up at the top of the screen of like what they should watch next, but like, maybe not.

• 2:12:46Speaker 00

  So my point in all that is if they're spending a lot of time with you, and I love, this is my flip of what Charlie Munger says, that you need to learn the big ideas in the main domains, like physics, psychology, because they carry the most freight. I flipped that to time carries the most weight. As long as what we're doing, we, you said, we're not playing characters. We are passionately interested in this. We're not gonna quit. Then we do this over a long period of time. We'll get, you'll get what you deserve. You'll get the audience you deserve, you'll get the business opportunities and everything else. It's like, time carries the most weight. I know I'm not gonna quit. You're gonna have to pry the microphone from my cold dead hand. And I'm just gonna let the chips fall where they are. And that doesn't mean I'm like lollygagging here, like I'm on it 70 days a week. I'm, I'm gonna try to work myself in a position.

• 2:13:28Speaker 00

  So it's something I learned from, um, from, um, Steve Jobs when he came back to Apple. Right? And he's like, People hear that that that speech he gives, which he's fantastic. He's like, we're in shorts. And he's like, and it's like, I don't even know if he's in the polo, the turtleneck. But he mentions like what they're gonna do. And everybody focused on the fact that he's like, we're gonna, you know, there's no sex in the products anymore. And we're gonna do the four quadrant thing. A lot of people in the technology industry particularly know that speech and like, yeah, let's let's cut the fat and like, put all of our A players, fire the B and C players, put all of our A players in these four products that we're gonna make, right? Mobile, desktop, laptop, high end. Yep. Consumer and pro for both laptop and desktop. Those are the four categories, right? They missed what he said earlier, when he talks about Nike. He's just like, marketing.

• 2:14:11Speaker 00

  He's like, Apple sucks at marketing. We have to be a great marketing company. And so he said something where I read the quote and then my reinterpretation of this, right? And people don't know that. It's in Ken's, uh, no, it's in this book called insanely simple. Uh, I think that guy's name is Ken Siegel. And he's like, he was an ad guy at a company for Apple. And he's like. TWBA, TWBA Chiat Day. It was the ad agency. So he goes and every Wednesday, uh, actions express priority. So there's another maxim, right? He's like, I don't care what people say, I care like what they do. So when people ask me, like first people that you talk to the founders, like, hey, like, what would you do about this? I never answer like, well, David Sandler would do this. I'd say, hey, well, Charlie Munger would tell you this, or Steve Jobs would do this, or like, hey, I heard a story about here.

• 2:14:54Speaker 00

  Cause like, my opinion is useless. It's you know, my opinion on business building and how I build my business. It doesn't matter what I say. It's like, what is he, how's he approaching founders? Like, why is he making these decisions? That's the important part, right? And so Steve showed you, told you that marketing was important to his actions, because every Wednesday at like 3 o'clock, or I forgot the time, they had like a three hour meeting. He would approve, have to approve every single piece of advertising and marketing that went out for Apple. There's not a billboard in Kentucky that went out without him saying, yes, it's gonna go out, right? And so in that speech, when you're, if you actually listen to what he's saying, he's like, listen, I feel that the products we're making in Apple make people's lives better. I want. He says this line, he goes, "I want everybody in the world to own an Apple device." We know that that's not gonna happen because it's so expensive. But he goes, "And to do that, we have to get really good at marketing."

• 2:15:38Speaker 00

  So my interpretation of that on the podcast, what I said is like, if you feel your product can improve people's lives, I think you guys already know, because you get thousands of messages, just like I do, that yes, listening to acquired, listening to founders will improve people's lives and work, right? Then you have a moral obligation to get good at marketing. Well, that, all that means is not get good at marketing so our ad rates can go up, or that we can be celebrities during that. It's no, so these, this, these messages for all these of history's greatest entrepreneurs that are dead, that they don't, these ideas don't die with them. And then therefore, acquired founders can gather these ideas and push them down the generations. So that's why I mean, it's like, I'm not dilly-dallying. Yes, I'm gonna let time carry all the weight, but I'm gonna do everything I can so more people at least know.

• 2:16:23Speaker 00

  And if you try founders say, "Oh, this sucks," or whatever, whatever, I'm cool with that. But I just want you to have the opportunity to know it exists. And me and you have had these, also we've had these conversations where it's like, guys, I'm telling you right now, I've said this to you, there's millions of people that would benefit from listening to acquired, they just don't know it exists yet. So we gotta come up and find ways to make sure that people know it exists, because they will love it, and it will make their lives better. Amen.

• 2:16:46Ben Gilbert?

  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.

• 2:17:00David Rosenthal?

  Yep, it's sort of obvious that AI is gonna 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?

• 2:17:16Ben 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.

• 2:17:31David 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. Legora'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.

• 2:17:55Ben Gilbert?

  And they recently launched Legora 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.

• 2:18:14David Rosenthal?

  And Legora works where you already work. You can use it within Microsoft Word while redlining or drafting. The early Legora numbers essentially speak for themselves. When they have a head-to-head pilot with their top competitor, they win 70% of the time. Legora 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.

• 2:18:44Ben 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 legora.com/acquired and just tell them that Ben and David sent you.

• 2:19:09David Rosenthal?

  This may be an area, I'm curious what you think about this, where our shows and approaches are a little different. I'm also curious what you, Ben, think about this.

• 2:19:20David Rosenthal?

  A lot of these stories are just incredible stories, too, that are just like worth, I think, worth telling just for the sake of the story.

• 2:19:28Ben Gilbert?

  Yeah, it's interesting how sometimes I'm like, I'm not sure that we came up with a lesson that I would advise a founder to follow, but I know this was very entertaining and as true as we possibly can make it. And so, like- No, every single episode I've listened to, there's lessons in there that I-

• 2:19:50David Rosenthal?

  Oh, yeah, I'm not saying there's not lessons, of course there are. But like, sometimes we'll do an episode like- I always feel this way about the most recent episode, but we just finished making the Nintendo episode. I was like, can I, like, if you put the best fiction writers in the world.

• 2:20:04Ben Gilbert?

  That's true.

• 2:20:04David Rosenthal?

  To get, and you said, come up with the best like corporate-ish story that you could imagine, you couldn't write something this good.

• 2:20:12Ben Gilbert?

  I guess the thing I was referring to is a little bit the survivorship bias where like someone did something that I would not recommend anyone do, and it still worked. But it made for a great story. It's like more of Chang and TSMC. It's like, he invented the notion of a fabless semiconductor company before there was any demand for that. And then it turned out that his timing was exactly right, that like, within a couple of years, a whole ton of, you know, fabless companies spun up and wanted to use his foundry. But like, he created a solution in search of a problem. And like, no founder should do that, but my God, did he pull a rabbit out of a hat. There's a good number of acquired episodes where I'm like, we should be crisper, I think, about pointing out where like, I don't, this was inadvisable, but amazing that it worked.

• 2:20:58Speaker 00

  I think that goes back to the game tape analysis where we talked about Kobe Bryant. Jordan did this too, where it's like, I read this like 600-page biography of Kobe, and in the biography, they interview his high school girlfriend. And they're like, what was it like to date Kobe Bryant in high school?

• 2:21:14Ben Gilbert?

  I'm surprised he had a girlfriend in high school, right?

• 2:21:16Speaker 00

  Well, not for very long. It's like, what's it like to date Kobe Bryant in high school? She's like, well, our dates consisted of me going to his house and watching tapes of Michael Jordan and Magic Johnson.

• 2:21:28David Rosenthal?

  That's amazing.

• 2:21:29Speaker 00

  We're not leaving. I'm not taking you out to dinner. Like, we're literally gonna watch this thing. And so I think the game tape analysis of that is just like, it is helpful to realize that a lot of this stuff, it's impossible to plan in advance. It's the, one of the great, I mean, Steve Jobs has a ton of great quotes. One of the best ones is like, he's like, the commencement, it's impossible. You're only gonna connect the dots looking backwards. So you have to put something, faith in something. You can call it karma, religion, God, intuition, but you have to do something. I just did a, reread Ray Kroc's autobiography, the guy from McDonald's. Again, and it hit me, I've been thinking about the Steve Jobs quote too. And this is why it's so invaluable to re-read your past highlights.

• 2:22:09David Rosenthal?

  You mentioned this in the McDonald's episode.

• 2:22:11Speaker 00

  If you think about this, like, he's a perfect illustration of what Steve observed 50 years after Ray dies, for god's sake. He's just like, he goes from selling paper cups. Paper cups leads into selling multi-mixers, which are like, make milkshakes.

• 2:22:23David Rosenthal?

  Right.

• 2:22:23Speaker 00

  Multi-mixers goes, like, why the hell are you have eight? Why does these McDonald brothers out in San Bernardino have eight of my machines? Like, people, he'd have a hard time selling one. That goes to the franchise system, which he didn't even do well. Then he meets Harry Sonnenberg, and then Harry Sonnenberg's like, dummy. You don't even know the business you're in. You're not gonna, he's like, you don't build an empire off a 1.4% cut of a 15 cent hamburger. You build an empire by owning the land upon which that hamburger is cooked. Those five things. There's no, he's selling, he's sold.

• 2:22:49David Rosenthal?

  From paper cups to real estate.

• 2:22:51Speaker 00

  He sold paper cups for 17 years. But he just like, hey, I have to go with my gut, to the point where he got divorced over this. His wife was like, you can't do this, Harry. And he's like, you have to trust my instincts.

• 2:23:02David Rosenthal?

  That's one thing, to what Ben said way back in the beginning of the conversation, that you're really good at highlighting Ray Kroc. Like, he was a terrible person.

• 2:23:11Speaker 00

  And he didn't try to hide it. Most people in autobiographies are trying to hide it.

• 2:23:14David Rosenthal?

  Yeah.

• 2:23:15Speaker 00

  He's literally like, thank you very much, June Martino, my first employee, for missing every single one of your kids' birthdays. You're gonna get some stock at McDonald's, it's gonna get you rich, but 20 years later, I'm gonna fire you.

• 2:23:28David Rosenthal?

  Yeah.

• 2:23:30Speaker 00

  And he didn't, you didn't have to put that story in there. He put the, he chose to put that, that's crazy, dude. I said on the podcast, I was like, listen, it's interesting, like, I'm glad he persisted, interesting ideas for business, but like, not only do I would never want to do business with this guy, I wouldn't even want to be his friend.

• 2:23:46David Rosenthal?

  Yeah.

• 2:23:46Speaker 00

  Like, I wouldn't want to do business with Steve Jobs, but I want to be his friend, you know?

• 2:23:49David Rosenthal?

  Oh yeah, he'd be a very interesting person to be friends with.

• 2:23:51Speaker 00

  Oh, I feel like the opposite. What's that?

• 2:23:53Ben Gilbert?

  Like I'd want to do business with Steve because you could create incredible things together, but I'm not sure you'd want to be friends.

• 2:24:00Speaker 00

  I think the difference is from like a founder's perspective, like there is no working with Steve Jobs. It's working for. You hear the stories of how even treated like his subcontractor or not like the owners of the companies that contracted. It's like, these guys are empire builders. Like they're literally building worlds. They're not used to being like they're, Charlie was talking about this, because you know, he loves like Li Lu, the new guy, the BYD guy, Du Wan Kwai, I don't know his name, something, those guys. He loves Lee Kuan Yew from Singapore.

• 2:24:32David Rosenthal?

  Yep.

• 2:24:33Speaker 00

  And what you realize is like, it's like, these are founder types, but can't be, like founders are benevolent dictators, or in some cases, they're dictators of their own company. And like, some people call Lee Kuan Yew, you know, a dictator, it's like, oh, like, can't do that in America, even if that would be beneficial. But all of them, there's no working with them. They're like, they're gonna be in complete control of the situation, like even being in the room with them. Like, I'm not saying they'd be rude or mean, but like, you're a subordinate to them. Because everything is, Ray Kroc, everything is, he says in the book, perfection's difficult. I'm demanding perfection at McDonald's. I will constantly keep expanding this empire till I die. If you get in my way, I will run you over.

• 2:25:16Speaker 00

  He's like, he says in the movie, he's like, if my competitor was drowning, I'd walk over and put a hose in his mouth. And he goes, and he was on the other end of the call as McDonald Brothers, because they're fighting over this, he goes, would you do the same? And the state of things is like, you're gonna have to compete on my level, or else I will literally destroy you.

• 2:25:34David Rosenthal?

  Yep. What, so Warren and Charlie are so interesting, right? I'm trying to decide if they are the complete opposite of that, or if they actually are like that, just in their own ways.

• 2:25:48Speaker 00

  Every single person has some kind of, like their public persona is for that level, right? It's not like a podcast where they're gonna listen to Joe Rogan for 1,600 episodes. Like you know who Joe is, you can't, he's doing three hour shows, three days a week for 15 years. You have probably a good idea who he is. You see flashes of like, you know, imperfection, like we all have. I don't think you just, you don't get to that level without having, he's got sharp, they all got sharp elbows. Like, you ever heard, read stories about how Warren negotiates? It's like, 1250 bid. What about 14? 1250 bid. What about 13? 1250 bid.

• 2:26:22Ben Gilbert?

  Well, it's because he's already, he's spent 10 years analyzing your business and he knows exactly the price that he's gonna buy it for. And so now, he's telling you the price he's gonna buy it for. This wasn't like a new consideration that popped up and he's like, "Oh, look at this, a business." It's like, no, at the scale he's operating at, like, he knows all the businesses. Yeah.

• 2:26:40Speaker 00

  And this is from Jim Clayton's autobiography, where he buys Clayton Homes.

• 2:26:45David Rosenthal?

  Right.

• 2:26:46Speaker 00

  And he even said, like, he wanted to sell Buffett, he idolized Buffett, and he talks about like, he wasn't insulting him by any means, but he's like, Warren wants the microphone. And if you're in an area where Warren doesn't have the microphone, he is not interested. And I've heard that about Warren a lot. You know, so it's just like, they're world builders. Like, he runs everything. You think you're gonna go from being poor to having $200 billion and not distort your perception of the world?

• 2:27:09David Rosenthal?

  Yep.

• 2:27:10Speaker 00

  It's impossible.

• 2:27:11Ben Gilbert?

  Say more about Warren wanting the microphone. What does that mean?

• 2:27:15Speaker 00

  Like, literally in person. Like, they would do, I think they were doing, Jim Clayton was at either like an event to talk to the employees, or whatever the case was. Like, he, like, Jim wanted to have input. And he's like, Warren would not allow it. Like, he monopolized this, and I've heard that about Warren. Like, same thing, where like, you're gonna-

• 2:27:31David Rosenthal?

  There's gotta be an element of him that, you know, loves the shareholder meetings.

• 2:27:36Speaker 00

  Oh, of course.

• 2:27:36Ben Gilbert?

  Well, he didn't need to do that. He created an event around-

• 2:27:39David Rosenthal?

  He loves having a million people come.

• 2:27:42Speaker 00

  Yeah, you know how he loves it, 'cause he's still doing it.

• 2:27:43David Rosenthal?

  Right, right.

• 2:27:44Speaker 00

  Like, he doesn't have to do anything in the world that he doesn't want to do.

• 2:27:48David Rosenthal?

  Right.

• 2:27:49Speaker 00

  And that's how you know he loves it. Like, they're beyond, I told you, we talked about earlier, how like, just how disorienting it must be to like have, and I would love to know this feeling, don't get me wrong, like, have a $200 billion net worth. It's like, you're living life on like, god mode. Like, it's insane. Like, I was watching this video, I don't know if it's true, but it's like, Jeff Bezos' private jet has its own private jet.

• 2:28:11Ben Gilbert?

  Well, his new yacht has a chase yacht.

• 2:28:13Speaker 00

  Yeah, so like, your yacht has a yacht.

• 2:28:15Ben Gilbert?

  I think it's like a guest yacht. Like, I think it's so that, I mean, he now owns the biggest yacht in the world, and there's a yacht that will sail behind it.

• 2:28:22David Rosenthal?

  I would say, this may be, I don't, maybe will become so successful someday that I will regret my words on this, but- I gotta imagine having a yacht is actually not like additive to your life.

• 2:28:34Ben Gilbert?

  Oh, so this stuff on Ralph Lauren thing.

• 2:28:35David Rosenthal?

  I think that's more problems than.

• 2:28:36Ben Gilbert?

  Yeah, so I'm, I think it was Ralph Lauren, uh, sold his yacht and it's now a charter yacht because he was like, this thing was more work than any of the businesses I've ever run.

• 2:28:47Speaker 00

  One of the most interesting ideas I've heard, and it comes from our mutual friend Jeremy, who we, I think we mentioned early in the podcast. Hopefully we did, give him credit. I actually had, was talking to him and David Perrell. And I'm pretty sure Jeremy said this, not David, but um, he's like, I would actually make the argument because everybody's like, oh, like uh, what does Charlie talk about called the Berkshire Jet, the indefensible?

• 2:29:09David Rosenthal?

  The indefensible, yeah, yeah, right.

• 2:29:11Ben Gilbert?

  And then wasn't there a second one, the indefensible two?

• 2:29:13David Rosenthal?

  The indefensible.

• 2:29:14Ben Gilbert?

  Before they bought net jets and now it's like, we should be on net.

• 2:29:16Speaker 00

  So you look, you look at, um, you look at like those, like, how could you possibly spend like, you know, these yachts cost $25,000 an hour to operate in fuel or some crazy number that planes are the same, like, you know, how expensive they are. And Jeremy makes the point, Jeremy knows because he's been buying businesses forever and he's exposed to like great wealth, uh, people, you know, unbelievable amount of wealth. He goes, he makes the argument that they're actually underpriced assets. And I was like, oh, tell me more.

• 2:29:41David Rosenthal?

  Wow, that's, that's not what I would expect to hear.

• 2:29:43Speaker 00

  Yeah, so I'm going to tell you this book that just proved his point. I actually got to text him to tell him this. So he's like, they, they use it not for, it's, if you're like yachting, sitting there sunbathing, right? He's like, they're using it for like customers and invest and potential. And so I had heard this, I'll tell you about how this relates to Invisible Billionaire. So I had heard this, because again, I've never raised money. I don't pay attention to the venture industry. I don't know anything about it. I just have a bunch of founder friends and founders tell founders everything. And so I'll have these discussions where they're like, they describe the courting process that they get from some of these well-known, super famous people. And it's like, well, you, the process you just described to me sounds like the old rich dude that like wants to sleep with like a young woman. Like, what would you do, right?

• 2:30:26David Rosenthal?

  And there's a, we actually didn't put it in the episode, but there's a bunch of. Of this in Nintendo history, uh, because Warner Brothers bought Atari. And so Warner Brothers was running Atari as Nintendo was kind of like.

• 2:30:37Ben Gilbert?

  And this is how they courted Nolan.

• 2:30:39David Rosenthal?

  That's how they courted. Yeah. So that's how Warner Brothers courted Atari and Nolan. And then how they tried to court Nintendo was the private jets, the, uh, what was it? It was Clint Eastwood.

• 2:30:49Ben Gilbert?

  They put Clint Eastwood on the private jet with Atari flying coast to coast.

• 2:30:52Speaker 00

  So what did I tell you? History doesn't repeat, human nature does.

• 2:30:55David Rosenthal?

  Yeah.

• 2:30:55Speaker 00

  These founder dudes are running, uh, uh, technology companies now and they're like, yeah, oh yeah. This, I'm not going to name who they're like, oh yeah, he, uh, gave us, he, he picked us up in Manhattan in his private helicopter and we landed at his Hampton estate. Do you think he got the deal? He got the deal.

• 2:31:10David Rosenthal?

  Yeah.

• 2:31:11Speaker 00

  Uh, this guy said, hey, come, uh, what are you doing? It's Friday night. What are you doing Saturday morning? Okay. Come on my private jet. I'm going to take you to California with me.

• 2:31:18David Rosenthal?

  Yeah.

• 2:31:19Speaker 00

  Uh, here, you want to stay with your girlfriend at this mansion that I'm not using and you know, X, Y, Z. So Jeremy was explaining this.

• 2:31:25David Rosenthal?

  It's like the equivalent of like a, like a luxury suite at a, at a sports arena. Like it's, it's for getting deals done.

• 2:31:31Speaker 00

  So, but they're operating at a different level where it's like, oh, these influence. And some founders, the smart ones don't let, uh, like Sam Walton, you know, he's like, don't give us, don't give me a freaking gift.

• 2:31:43David Rosenthal?

  Right. That's why like the whole, everything in Bentonville is like, you can't like come in here and like.

• 2:31:47Speaker 00

  Cause they know it works.

• 2:31:48David Rosenthal?

  Yeah.

• 2:31:49Speaker 00

  If you give a Walmart salesperson like a bottle of gin or something, it's going to influence them. Where he's just like, I want your price. You guys did a great job in your episodes. Like tell me the lowest price and then I'm going to go to your, it better be your low price because I'm going to this guy. If you tell me a dollar, he sells me 98 cents, don't waste my time. I'm going, I'm not, you're not going to hear from me again.

• 2:32:05Ben Gilbert?

  I have an obligation to the customer to do this, to find the lowest price for them.

• 2:32:09Speaker 00

  Yeah. Because everything, his entire thing, the low cost structure thing. That's, that's, that's a Walton thing. That's a Sol Price thing. That's a Jeff Bezos thing. That's a Rockefeller thing. That's, that's the most common theme in the history of entrepreneurship. Every single thing. Jeff is like, we're going to have the lowest cost structure. We're going to have a low cost structure. We're going to be efficient. We're going to be efficient. Somewhere along the line, 25 years later, now the startup, the technology startups is like, we can just spread money all the time because there's no interest rate. Like there's just money coming back.

• 2:32:33Ben Gilbert?

  He built Amazon in a pretty different time than founders today. The business laws of physics were different when there were interest rates.

• 2:32:41Speaker 00

  Yeah.

• 2:32:42Ben Gilbert?

  Versus when there weren't.

• 2:32:43David Rosenthal?

  Well, he started when there were none.

• 2:32:45Ben Gilbert?

  That's true.

• 2:32:46David Rosenthal?

  And then, and then the environment changed as he was building it.

• 2:32:49Ben Gilbert?

  Yep. But like, you know, that while it would have been stupid for Amazon to spend $100 million on something on like crazy marketing activities in 1997, like you could imagine that in 2018, if all of your competitors had raised $1 billion and were, you know, trying to chase market share as fast as possible, you either have to exit that market because you're going to lose or play that game on the field.

• 2:33:17Speaker 00

  Or find, and even better, find a different way, like be more resourceful.

• 2:33:21Ben Gilbert?

  But like, be more resourceful, it's like, it's, it's easy to say, but like, hiring all, when all your competitors are hiring all the best engineers by throwing $1 million a year at them, like, you're just not going to be able to build a good product if you don't try to play that game also.

• 2:33:36Speaker 00

  Yeah, for sure. But like, the whole thing, like when Peter Thiel says this in his book, Paul Graham says it, it's just like, startups don't have the advantage, right? Of you're not going to outspend Microsoft or Netflix on, so you gotta find underdeveloped talent, right? You gotta find these people that if they were the credentialed or if they were the well-knowns, then they're gonna go take, you're gonna work for me $80,000 and some stock options or go make $1 million a year at Netflix. Like, they're gonna, so that's the whole thing. It's like, you're not gonna win unless you are capable of finding underdeveloped talent. Silicon Valley used to be able to build high-growth and profitable startups.

• 2:34:09David Rosenthal?

  Well, the rule used to be you couldn't go public until you had over $100 million in revenue and you were profitable. Like, if you didn't hit both, check both those boxes, you weren't gonna IPO.

• 2:34:18Ben Gilbert?

  And in 2021, of all the companies that went public, it had to be single-digit percentage that were profitable.

• 2:34:23David Rosenthal?

  Or any of them. Yeah, I don't know.

• 2:34:25Ben Gilbert?

  It's crazy. The game just changes.

• 2:34:28Speaker 00

  Well, to your point, if you have free money, you know, the money supply graphic expands, it's raining down, that's going to build. Did you listen to Doug Leone on, I know you guys had him on your show, but did you hear him on Invest Like the Best?

• 2:34:38Ben Gilbert?

  Yeah, he was great.

• 2:34:39Speaker 00

  Like, he said, he's like, this, he was telling crazy stories. I loved everything about that guy. I loved him when I heard him on your podcast, too. It was like that tough love. This is what I'm into, right?

• 2:34:47David Rosenthal?

  Yeah, he still has, I think maybe my favorite quote of all, favorite quote said live on an acquired podcast of, "You could burn cigarettes in our arms and we wouldn't flinch."

• 2:34:58Speaker 00

  And then he has a great line. He's like, "I want you to know, we were killers. We weren't killers to make the most money, we were killers to get the job done." But he made the point, and, you know, very few people probably know more about the venture industry than that guy, right? One of, I would imagine he's up there. And he's like, "Of course." Like, you have money raining down, he didn't use those words. It's like, it just creates bad habits.

• 2:35:16Ben Gilbert?

  It is crazy how many things in my life I falsely attributed to something that were not just interest rates. Like so many things, the answer is just like, oh, it is that way because we live in a zero interest rate environment. And I, the human brain likes to tell stories. And at the end of the day, it's like, things are the way they are because of mean reversion and what the current interest rate climate is.

• 2:35:43Speaker 00

  I wish, I'm gonna pull up something, like, this is what I mean. Goes back to Buffett. Like, if you just, we should have, I wish I knew this. I had read this. I didn't remember it, though. This is Warren Buffett on interest rates, right? He says-

• 2:35:55David Rosenthal?

  Oh, is this from-

• 2:35:57Ben Gilbert?

  Laws of Gravity.

• 2:35:57David Rosenthal?

  The log in Snowball?

• 2:35:59Speaker 00

  No, this is from his shareholder letters. And he said in 84, 88-

• 2:36:05David Rosenthal?

  I think the intro to Snowball, I think the scene that opened, the vignette that opens it, is Sun Valley, right before the bubble burst, the tech bubble burst.

• 2:36:13Speaker 00

  Oh, no, this is like decade and a half before.

• 2:36:15David Rosenthal?

  Oh, okay, okay.

• 2:36:15Speaker 00

  This is why it's like, so, it's like, god, like, you could have made such better decisions, I could have made such better decisions, if you had just known this, and he had known it for 40 years before it happened. I posted this on Twitter, and I opened up the next day, I'm like, why does this have two and a half million views? It's like Elon replied, he goes, yep. I was like, oh, okay. I was like, what the, like, what the, like, damn, you people really like interest rates.

• 2:36:40Ben Gilbert?

  I read it, read it. On steroids.

• 2:36:43Speaker 00

  So I go Warren Buffett on interest rates, and the headline is, they power everything in the economic universe. So that was what Elon was responding up to. And this is Warren, writing in the 80s. The value of every, to your, exactly what you're saying. The value of every business, the value of a farm, an apartment house, or any other economic asset is 100% sensitive to interest rates. That's because all you're doing when you're investing is transferring money to someone now in exchange for a stream of money which you expect to come back in the future. And the higher the interest rates are, the less that present value will be. Interest, this is fantastic. Interest rates are to asset prices, prices, sort of like gravity is to an apple.

• 2:37:19David Rosenthal?

  Yeah.

• 2:37:19Speaker 00

  When interest rates are low, there is little gravitational pull on asset prices. We just lived through this, right?

• 2:37:25David Rosenthal?

  Total.

• 2:37:25Speaker 00

  When interest-

• 2:37:26David Rosenthal?

  Textbook.

• 2:37:27Speaker 00

  Yeah, when interest rates are low, there is little gravitational pull on asset prices. Interest rates power everything in the economic universe. Because I found that because- All this, remember this inflation went crazy like a year or two ago, whatever. And I was like, okay, every time that happens, all I do is I have, um, you can buy the Kindle version of Buffett shareholder letters for like two bucks. I know. And I search it for like interest rates, inflation. And I just go and I read, okay.

• 2:37:52Ben Gilbert?

  You made a billion dollars off that $2 purchase.

• 2:37:55Speaker 00

  There you go. And so like you'll say, okay, this is what he said inflation and then you see what year he said it. And it's just like, and that's where I found that. I go, what did he say about interest rates? Boom, 1980, whatever. And he just laid out.

• 2:38:07Ben Gilbert?

  It's so funny because what he, what he also did right there is for every college finance sophomore that's having to go through a class to do DCFs and they're like, I don't understand this, this is complicated. Like he just explained conceptually a discounted cash flow model there in a way that was like unbelievably digestible. He's so good at that.

• 2:38:26Speaker 00

  The clarity of thought.

• 2:38:27Ben Gilbert?

  Cause he wants the microphone.

• 2:38:29Speaker 00

  But now, but also like he just educated you in a way that makes more sense and is interesting and you're entertained by, and you might build a business off that and then you might sell one day or whatever the case is. It's like the, the, this is where I've spending a lot more time of like really trying to work on storytelling ability and concision, right? Yeah. Um, the, the, the value is in the compression and the dissipation, right? If you could listen to like an audiobook for 25 hours, but if I can give you the best idea or one idea that changes your life and I could do it, you know, every week or whatever, like in a couple of minutes, like that is going, that some of that value is going to be brought back to me. And all that comes from is what I realize is all my heroes have like, what they have in common is like the unbelievable clarity of thought.

• 2:39:13Speaker 00

  Like Steve Jobs, Charlie, like you're not going to be like, oh, what does that mean? They take unbelievably complex things, like you're not advertising to a standing army, you're advertising to moving parade, make it in a memorable way. And then you carry that maxim with you forever.

• 2:39:26Ben Gilbert?

  How do you get better at that? You said you're working on it.

• 2:39:28Speaker 00

  Reps, just straight up reps, like thinking about it and then hearing yourself back. So the, the advantage I have of that edit is. Yeah. I, I, you can say something and like, oh, that was so good. And then you hear it back and sometimes it's even better or many times it's worse. It's like, oh, I lost, I was, I know what I'm saying. Yeah. But you miss this part that doesn't make any sense. And so normally I have to cut it. I, I don't think I've ever re. I don't think I've ever re-recorded something.

• 2:39:54Ben Gilbert?

  We only did that for one episode ever. It's really hard to do.

• 2:39:57Speaker 00

  What, re-record?

• 2:39:58Ben Gilbert?

  Yeah. Do you know which episode we did it for?

• 2:40:00Speaker 00

  No.

• 2:40:01Ben Gilbert?

  It was recent.

• 2:40:03Ben Gilbert?

  NFL. David and I got on and re-recorded 40 minutes of material over maybe 15 different parts of the episode.

• 2:40:11David Rosenthal?

  The original recording of that episode was really rough.

• 2:40:13Ben Gilbert?

  The NFL episode was too long. It, when we started, it took way too long to get to the interesting part, the Pete Rozell era. And so we had this massively bloated beginning. And then we had a story arc that didn't cleanly resolve. And we had a bunch of concepts where we didn't nail the explanation. And so we went in, we cut like half of the first epoch of the story. We recorded new bits to like, create nice rising action and resolution on the Rozell era. And then we recorded another like, like 10 areas where we were just like, this wasn't said super tight. And I'm really curious if people noticed, because we had to like, we basically had to voice act. Like, we had to listen to the way that we sort of came into that segment, get that in our head.

• 2:40:58David Rosenthal?

  This was your theater background, like, coming in.

• 2:41:01Ben Gilbert?

  And then like, pick it up from there. But, yeah.

• 2:41:03Speaker 00

  Your editing is so good. We've talked about like, back catalog sponsorship, and you told me what you were doing was like Zoom info. And I've been listening to your back catalog, and it's like, dude, it sounds like it was there the day you did it. It is perfect. And I know, because we talk about this, that that ad was not there. But it sounds like it's there.

• 2:41:20Ben Gilbert?

  That's the goal.

• 2:41:21Speaker 00

  The NFL episode is what I meant. I was like, it's a crazy story, but even there is like a lesson where like, you guys, I texted this to you, like, totally changed the way I think about things. Or maybe we were talking on Zoom about this. Where it's like, I never even thought of the NFL as like, the largest media company.

• 2:41:34Ben Gilbert?

  Yeah, yeah. I hadn't either. And the funny thing is, that's like, that was a David Rosenthal insight, that like, the NFL is the single largest media property by value. And the funny thing is, if you go look at the, because we did this for the Nintendo episode, you go look at the largest media properties, they list Mario, they list Pokemon, and they li, and then, and I think if you sort, the list includes like, video games and movies. And so there's like, the MCU in there, and there's Star Wars in there. But like, they don't think, the NFL is way bigger than all of those.

• 2:42:07Speaker 00

  Yeah.

• 2:42:07Ben Gilbert?

  But it's not on the list, because people don't think of it as like, a media property.

• 2:42:11David Rosenthal?

  I love looking for stuff like that, both to do episodes on and as, um... For investing too is like, what is something that is just so like in the air that people don't even realize what it is?

• 2:42:22Ben Gilbert?

  Or what's a comparison we can make that is super eye opening, but people haven't thought to compare those two things before?

• 2:42:29Speaker 00

  Yep. Which is why I tie things into past, because it's like, oh, this-

• 2:42:34David Rosenthal?

  Episode 244.

• 2:42:35Speaker 00

  The idea, no, but the idea behind this is like, we've seen this before.

• 2:42:38David Rosenthal?

  Yeah, yeah, yeah.

• 2:42:39Speaker 00

  I reread like the show notes on like the Johnny Ive episode I did. Johnny said something was great and he said, he goes, "One of Steve's talents was identifying markets full of second rate products."

• 2:42:50David Rosenthal?

  Hmm, yeah.

• 2:42:51Speaker 00

  And so like, he would be like, "Oh, there's the opportunity here." And we're both, we're all podcast addicts, right? And the reason that we get along-

• 2:42:59David Rosenthal?

  And it's a market full of second rate products.

• 2:43:01Speaker 00

  And because you know how hard it is to do.

• 2:43:02David Rosenthal?

  Yeah.

• 2:43:03Speaker 00

  And when you go and listen to other business podcasts and like, I had a friend, his friend has a podcast and he's like, "Hey, these three guys, they have large social media followings, but it does not translate to episodes, which people don't understand."

• 2:43:16Ben Gilbert?

  Yeah, rarely will.

• 2:43:17Speaker 00

  Yeah. And they're like, "Would you listen to their episode and give it feedback?" Right? And we went like, so I was like, "Yeah, listen to it." And I go, "It's three guys sitting around talking whatever happens to pop to their mind. What did you expect to happen?"

• 2:43:34Ben Gilbert?

  Which is kind of what's happening here.

• 2:43:36David Rosenthal?

  I was thinking the same thing. I was like, "Oh, we need to self-

• 2:43:38Ben Gilbert?

  To all listeners, we apologize if this episode lacks craft.

• 2:43:41Speaker 00

  There's zero chance that people aren't, do people interested in entrepreneurship and investing are not finding this interesting? Because the prep for this is not three guys that have a million other things to do. It's three guys that do this all the time-

• 2:43:55David Rosenthal?

  Spent the last eight years doing this.

• 2:43:56Speaker 00

  Over and over again, that's going to come up naturally in a conversation that you can, like, "Oh, I didn't know about this." Maybe there's a bunch of people probably like, "I didn't know who Everland was. I didn't know Ogilvy. I never thought about the NFL as a, the largest media company." Like, so, no, but their problem thing is like, there's no value proposition.

• 2:44:12David Rosenthal?

  This is actually something that ties into much of what we've talked about over the last couple of hours. People are going to do what they want to do. And if people can do what they want to do and are given unfettered freedom to run at it, they can do great things. If people are forced to do things that they don't want to do, they're not going to make great things. Or either forced to or choose, put themselves in a situation for whatever reason where they're doing something they don't want to be doing, they're not going to be very good at it.

• 2:44:39Ben Gilbert?

  I think that's one of the reasons why we find ourselves so attracted to episodes that highlight craft is because that's sort of like how we think about acquired. Like if LVMH benchmark, it's like people who do few things but do them exceptionally well are just so entrancing to study.

• 2:44:57Speaker 00

  I think this goes back to what you were just saying, like, and I want to go to the craft thing. It's like Charlie, again, has these simple ideas. Like, most of the problems are that you're just not intensely interested in what you're working on. And he's like, I don't care how smart you are. And Charlie's smarter than almost everybody else. He goes, I was not successful until I moved myself into a position where I worked on something I was intentionally interested in. That just, these like, small rules carry most of the weight. It's like, how bad do you actually want it? And if you're not willing to do those things, then there's nothing wrong with that. Like, entrepreneurship is for a very small percentage. I'm not one of these people to think everybody can be an entrepreneur. I would like to see more of them. But there's no safety net. It's like, no one's telling you what to do. No one had to tell you guys, hey, you should buy microphones and do a bunch of research and-

• 2:45:37David Rosenthal?

  We didn't buy microphones to start.

• 2:45:39Ben Gilbert?

  Oh, yeah. But like- Yeah. I think the most interesting thing is that, like, I think we've talked about this concept before on air, is that if someone's going to advise you on starting a podcast, they would say, do a 30 to 40 minute episode and like, do it weekly. And you release it at the same time all the time. Have a guest, so that way that person promotes it to you. And we're like, okay, well, we do the opposite of all of those things. And I think it's like, the conclusion I've come to is, advice is an average. And reality is a distribution. And averages suck because they hide the distribution. You kind of want to know the shape of the distribution. And you kind of want to know, like, things that apply to

• 2:46:22Ben Gilbert?

  your specific data point, not like, the average thing. And I think, like, advice is always an average that hides the distribution. And if you know that you're actually an outlier in some way, then you have to sort of like selectively follow advice because it may not apply to you.

• 2:46:40Speaker 00

  Charlie told me a fantastic story about this where he's just like he was singing the praises of BYD. That they're kicking ass like he told me like the not just me, I mean with a group of people. They make batteries for cars. Yeah, but he started out like like doing like knockoff cell phones in Korea or something and then like he he I forgot the guy's founder's name and I apologize, but like he was telling me the life story. But he was saying that the founder that Charlie and Li Lu Lu Li. Li Lu. Li Lu gave the founder advice and he ignored it and he was right. He's like, don't go in electric cars or whatever it was that he did. He's like, and he, you know, selling, I think he said like two billion car like, I forgot what two million cars, not just no way he sold two billion cars in a year.

• 2:47:25Speaker 00

  So like he's like sold two million cars. China is a big market. Yeah, so he's just like, and he did it. And he gets all the credit because Lee and me told him not to do it. And he's just like, same to your point. It's game tape. It's just like when Kobe is watching this particular particular play of Michael Jordan, that may never appear in his life. And maybe that the move he did wasn't the right move for what Kobe did, but maybe it influences his other thing. It's just like the life is complex and messy and like you can think you're really smart. And until you have a two and a half year old and they ask you, why is that the way? And you answer the question and then their follow up question is going to be why? And eventually you're going to get to 11 where like, I don't know. Yeah. Like, I don't know why. Everything ends and I don't know. It's like, I don't know.

• 2:48:09Speaker 00

  And so like, of course, there's no certainty like that's why if you have to, if you crave certainty, you've got to get a job. But there wasn't even Facebook when I was in college because I had to work full time and went at night. But um, my college did not have Facebook. It was just coming out. So we had MySpace. And my MySpace. You could put a quote, right? Like at the header. That's right. And I've always thought like this for my entire life. It was like, there's no security in life, only opportunity. And I think that's what you do. So investors and entrepreneurs are going for opportunity at the expense of security. And if you need security, you can get a job. But we see like, everybody said, go into tech, go into tech, go into tech. Look, you make all this money.

• 2:48:45Ben Gilbert?

  I think this is a super mispriced thing. I think people who crave security, which I, like, all humans crave some level of security, miss, sort of mispriced security because no jobs are as secure as we think they are. But they definitely cap your upside. And, and people, it's like, is founding a company or going into business for yourself as an entrepreneur extremely risky? Yes, it is. But is it actually that much riskier than a job where you could get laid off, where the sector could go through a downfall? Or, like, there are a lot of things about having a job that are not nearly as secure as people think they are.

• 2:49:22Speaker 00

  Steve Wozniak and Jobs. They're like, worst case scenario, if this doesn't work, let's go get jobs. We're broke anyways.

• 2:49:28Ben Gilbert?

  Right.

• 2:49:29Speaker 00

  Let's just try. And he like sells his van for like 50, Steve sells his van for like $1,500. Like, oh, I'm just all in on Apple. Like, that's, that, to me, that's like, again, I think a lot of this is like, people are asked, it's like, it's entrepreneurship, like, innate, it can be taught, can there be a school of entrepreneurship? And I was like, well, ask Charlie Munger if he taught a business class. What, what did he say? He's like, I would just teach the history of, what do you guys do? He's like, I teach the history of 100 companies. And I would talk about what went right and what went wrong. There's no security, there's no, he's not saying, yeah, take my class. And on the other end, you get this degree that guarantees business success. That doesn't exist.

• 2:50:04Ben Gilbert?

  Well, that's what's cool. Like, they have been teaching entrepreneurship for the last 50 years.

• 2:50:11Speaker 00

  So I was in, so I went to UCF, which is this like diploma mill, essentially. And they, I was in the pilot entrepreneurship program, right? The very first year. And

• 2:50:21Ben Gilbert?

  Wait, so do you, take us back to that?

• 2:50:24Speaker 00

  Yeah.

• 2:50:26Ben Gilbert?

  Were you thinking about?

• 2:50:28Speaker 00

  What was your relationship to entrepreneurship before starting the Founder's Podcast? So like, I have never been on a job review. I've only had two jobs in my life. Like, I was, but I was like, there was no entrepreneurship, there was no entrepreneurship, like, community. There was no entrepreneurship industry, right? So like, my first business was, this is a long story, but like, um, I had been accustomed, I was talking about this yesterday, by the time I was 17, I had been accustomed to working full-time and going to school. Right? So like, people were like, "Oh, you work a lot on founders." It's like, "I don't have to go to school. I can like, do this all the time." You work in half-time, as far as you're concerned. Yeah, so it's like, um, there's a long story here, like, that would take me like, 30 minutes, but like,

• 2:51:06Speaker 00

  like, my dad sat me down when I was like, 15. He's like, "Listen, you don't have to pay rent, but like, I don't have any money for you. So like, if you want something, you gotta go get it." Right? And the good thing about my dad, he's a Cuban immigrant, uh, not educated, but like, the best piece of advice that he ever gave me, and my brother, um, was a maxim. He's like, "Don't half-ass things." Right? So he does it in like, a blue collar, he's a truck driver, like, you know, that kind of thing. Where he's like, he prides himself on the fact that like, uh, like, he'll work 72 hours straight, right? But he never made a lot of money, and never had an education, like, his mom wasn't good, whatever. And they had to escape Castro's Cuba. My dad was born in Cuba. Wow. So it's like, imagine like, I talked about this on, um, cause you know Patrick's, at the end of Invest Like, every Invest Like the Best episode, he says- Yeah, he has your episode with him, yeah.

• 2:51:49Speaker 00

  Yeah, he's like, he's like, uh, "What's the nicest thing everybody, someone ever did to you, or for you, did to you?" For you. And I was like, "Man, like, something that, it was a decision that happened way before I was born." And like, my grandfather is in Cuba in 1959, um, 1958. And he, again, not an educated man, he, uh, worked as a butcher and worked in a factory that made shoes. Uh, he's married and he's got a baby. That baby is my dad. And Castro comes to power. And he doesn't have a lot of money, doesn't speak English. And yet, he had some kind of insight that- I need to get out of here, right? And he goes to a country, picks up, loses everything. Not that you had a lot anyways.

• 2:52:32Speaker 00

  Goes to country, knows nobody, doesn't speak the language. When I sat down, the first thing me and Sam Zell talked about, and I think helped bond us, to the point where at the end, he said he liked my energy and everything. So hopefully he liked me, I don't know. Was, in his story, I was like, because I had obviously read his autobiography. And one of the first things me and Sam talked about was, Sam, I understand and empathize with your story because Sam's story is his dad, being Jewish, getting the last train out of Poland before the Nazis bomb it. Literally, the last train out. Eighteen members of his family, his dad went around to saying, we gotta get out of here. This is not good. They're like, no, we're gonna stay. They're all dead.

• 2:53:17Speaker 00

  Sam, Sam's dad and his mom have a daughter. They get to America. His mom's pregnant. Sam is born in America. And so in that book, Sam's dad's always telling him, you don't understand how lucky you are to be born here. And I was like, I understand that mentality because I grew up meeting, Cubans have this thing called Noche Ovina, which is, they don't celebrate, my wife's Colombian, so they, I married into a Colombian family, they do this too. They don't celebrate Christmas on Christmas Day. They do it the night before. It's like Christmas Eve. And so I grew up, you know, for as long as I can remember, I was like, eight, seven, 10, 10 years old, meeting people that came over on rafts. And you would see these things. I've seen these in person, right?

• 2:54:00Speaker 00

  It's just like, think about how great, how bad it has to be. It's like 50 miles, right? 90 miles, right? I'm gonna go over to the study the University of Miami just did on this. 90 miles.

• 2:54:14Speaker 00

  You're, you're a parent, hopefully you might be a parent one day, like, you love your kids way more than you love yourself. Oh, yeah. There's people that came, hundreds of thousands of people went to the edge of the island and put their kids on a raft. Just hopes that they get to America. And so the problem is, is like, you don't make the announcement to the, everybody's like, "Hey, tomorrow, we're leaving on a raft, could you get caught?" Right, right, right. Prisoned, or killed, or whatever case is. And so the University of Miami did this study, was like, well, how many people did this? We know hundreds of thousands survived. Right. And they estimate that like half, at least, I think it's something like half a million people perished, never got there. There's a, the conversation with, um, there's this UFC fighter named Jorge Masvidal, who lives in Miami, he's a Cuban guy. And his dad was one of the ones that escaped.

• 2:54:59Speaker 00

  He went on a, their raft was a, made out of a, like a truck tire. Like, you know, like, think of like a, size of like a bulldozer tire, right? Wow. It's his uncle and two 14-year-old boys. They get off path, right? They run out of, their water wound up being like, uh, contaminated, so you can't drink, you'll die. How do they propel it anyway? Like, how do you make sure it gets to Florida? Uh, so, you have like, they, some have oars, and some have like, like, see that blanket over there? Like, you try to make a, uh... A sail? A sail out of like a blanket, or, you know, there, some of these are unbelievably in, in, like, the level of ingenuity is like... Yeah. For uneducated, they don't have the internet, like, they don't, it's unbelievable. And so there, in his case, they, I know they had oars, I think they had a, um, a sail.

• 2:55:44Speaker 00

  They get close enough to the Bahamas, they, they haven't drank water for like, three or four days, or something. A pigeon lands on the oar. They wind up killing the pigeon, opening it apart and drinking the blood. That's the only thing that's saved. And so now his, so he gets to America, eventually gets to go from the Bahamas to America. Now, his son is like, you know, makes millions and millions of dollars. Wow. Like, as a professional fighter, and a celebrity, and, and, and all this other stuff. So, anyways, long story short, uh, the one thing, like, I, my dad's still alive, I told you, my mom passed away. Um, but like, I really think, like, my dad, for just, like, he did not baby me at all, he's just like, you gotta, like, figure out how to get a job. Yeah. And so I worked at, um, back then, this, this is something that Paul Graham made the point of, right?

• 2:56:29Speaker 00

  He's like, dude, when I was a kid, the only jobs available were you like, you know, scoop ice cream or something. And like, you've probably met them. I met some 17 year old founders, a bunch of founders. You talk to them, they're on their second company. I'm like, what? They're like, oh yeah, when I was like ninth grade, I like did this like Gmail plugin or like, Yeah, right. Yeah. It's like I made forty thousand. I had this SaaS tool. Yeah, I made forty thousand dollars a month. And like, I'm making so much money, my parents let me drop out of high school so I can do this business. I'm like, I worked at a car wash, dude. I made four dollars and sixty five cents an hour, you know? So anyways, long story short, I would go to school year round, right? Because I had figured this out where it's like, oh, if you, most people went to summer school, they were forced to. I went to public school my whole life, right? Yep.

• 2:57:13Speaker 00

  And so like, people would go to public school, they would be forced to because you failed something else. But if you elected to do that, in six weeks, you get a full semester's credit. And there's two six week Yeah. Terms. Like mini-masters. So I always, even when I was in college, I did this. I would go to school year round, right? And so in high school, I went to school so much that by the time I got to my last two years of high school, I was in this program called OJT, which is on the job training. So instead of having six periods, you leave after the fourth period, and you'd have to have a job, and you would get two, your other credits,

• 2:57:44Speaker 00

  through your employer. So your employer would have to like, fill out paperwork, like, is David, you know, cleaning cars? And like, oh, there's a baby that came in and threw up. He did a good job with that. It was disgusting. But the benefit of that was being able to work full time, Yep. Make enough money where I could like, buy, I bought like, a new car with my own money, like, all that other stuff. And so like, then I realized, like, oh, like, I think I was making like, four hundred or five hundred dollars a week in high school, which is freaking really good. This is like, late 90s, early 2000s. And then I was, got promoted to being a detailer. That's like, you have client list. And then you start developing relationships. It's like every other business, like, Right. And they're like, hey, I love what you do. Would you do this at my house? Or would you do it on my boat that you don't do? Or like, whatever?

• 2:58:28Speaker 00

  And so my first business was just detailing cars and boats and taking all this other stuff, where it's like, okay, I spent an hour waxing this guy's car. I might make twenty bucks. I do it at his house, I make a hundred and fifty dollars. And so like I've always just had that like and again, there's not like this is a story you guys read in the books and the history stories. It's like there's no master plan here.

• 2:58:52David Rosenthal?

  Yeah.

• 2:58:52Speaker 00

  It's like, hey, I need to make money.

• 2:58:53David Rosenthal?

  The opportunity.

• 2:58:55Speaker 00

  All of my other friends were working at McDonald's Chick-fil-A where you just said something like they cap.

• 2:59:00David Rosenthal?

  Yep.

• 2:59:01Speaker 00

  You're I never had a capped upside.

• 2:59:02David Rosenthal?

  Right.

• 2:59:03Speaker 00

  Um, and then so I did all these other businesses I started in college because I thought I was gonna be a lawyer. And this is so silly because everybody, all my friends that are lawyers hate it.

• 2:59:12David Rosenthal?

  Right.

• 2:59:12Speaker 00

  I dodged a bullet there.

• 2:59:13David Rosenthal?

  Well, this is that. That's the dream. Like the immigrant dream is for like the kids to become lawyers and doctors.

• 2:59:19Speaker 00

  Well, my parents, not my parents. So my parents never said the word college to me once. Not one time because they're both high school dropouts. So like, um, they, they never like, I was one of the only kids in high school. Never have a, a, a curfew. Like my parents knew I was independent and left me. They gave, that's the best thing they get. It's like, oh, David can take care of himself.

• 2:59:41David Rosenthal?

  Yeah.

• 2:59:41Speaker 00

  They thought, my mom told me, she's like, I just thought you were a lot smarter than everybody else in our family. So the like.

• 2:59:47David Rosenthal?

  We trusted you to make the right decision.

• 2:59:49Speaker 00

  Well, I was also driven too, but she, um, because you have to understand like being smart in this family is not like being like the, the bar is low in the sense that like they're, they're both coming from multiple generations of people that did not prioritize education or self improvement. So that's why I'm so like ferocious in this because I didn't see that, you know? And so, um, the, the, this, this demonstrated when my mom was dying of cancer. Um, so like, you know, HIPAA has this thing where like they're not going to share paperwork or information unless like it gets permission from the person. And like, my mom could choose whoever she wanted to. She could have chose her husband, right? They had a bad relationship. They should have got, they got divorced and then remarried. They should have stayed divorced or whatever. And she, you see that with actions. We said that actions is a priority. She's like, we're in there.

• 3:00:34Speaker 00

  And she's like, who do you want the paperwork? Like, who do you want us to communicate? She's like, David, not her other kids, not her husband, not her sister, not. And she trusted me implicitly. And so I essentially like they never mentioned college. So I just kept this routine. I was like, people are like, oh, um, they're like, what do you want to do for a living? And like, I remember watching TV when I was younger. I was like, well, I want to be rich. And you think when you're younger, you don't anything like who's rich on TV? Like, I liked Fresh Prince of Bel Air. I was like, I could be a judge or a doctor. And I was like, oh, I can't see blood. Like, that freaks me out. So I go be an attorney. So I went to school and I worked full time. And I was trying to do hustle, anything I could do. And so the idea was like, okay, I'm just going to go undergrad for business because I'm interested in business anyways.

• 3:01:18Speaker 00

  And but I'm only doing that till I get, till I go to law school. Right? And this point of the story was not to go on this deviation, but I was in the entrepreneurship program, the pilot one. Right? Because I was already interested in trying to make money in any way possible. And this is how bad the entrepreneurship was. And this is why I'm kind of jealous of these young kids where now you actually have an entrepreneurship industry. And there's stuff you can learn from. The head, the main, the, what is it called? Like, the main subject, Entrepreneurship 101, right?

• 3:01:49David Rosenthal?

  The curriculum.

• 3:01:50Speaker 00

  Yeah, but there's all these other classes, but Entrepreneurship 101 is run the teacher. Right? What is her credentials? Her dad started a, an AC company in Florida. You're going to make a lot of money. And he died on the job because he got electrocuted to death.

• 3:02:05David Rosenthal?

  Oh, God.

• 3:02:06Speaker 00

  And she inherited the company and then she ran it. And so she's the teacher. And so like, the curriculum was terrible. It was terrible. The best thing, and this relates to what all we do for a living now, which I could have never predicted, is there was a guy that, this is kind of like Charlie, Charlie Munger says you should read if you want to learn about incentives in a really difficult business, read Les Schwab's autobiography, which I did because Charlie told me to. Did it like episode a long time ago. And he's like, this guy made a ton of money in a really hard business, which is like tires and like oil changes and stuff like that. And so the guy was coming into the class. He was going to donate like three or $5 million to have a building named after him. And he had one prerequisite. He goes, I want to talk to your entrepreneurship students before I give you this money.

• 3:02:50Speaker 00

  And I learned more in one hour from that dude than I did in two years on entrepreneurship. Because he would talk for like 20 minutes and then he's like, open up your questions.

• 3:02:57David Rosenthal?

  Yeah.

• 3:02:57Speaker 00

  And I lit him up with question after question after question. And I remember to this day, just like the simple way, this is like, you know, he was building his business in the probably the 80s and 90s. And he's like, How did you know where to expand? And he's like, we would pull the car registration data from the DMVs, right? And we would know how many car owners there were in this specific radius. And we'd have to hit like, let's say we need 40,000 car owners in a three mile radius. There's, are there any other stores? Put a store right there. And they did that over and over and over and over again.

• 3:03:30David Rosenthal?

  That's awesome.

• 3:03:30Speaker 00

  Yeah. And so like, he had ideas like that. And just like, again, you learn through experience. Like that guy could teach us way more because he actually did this compared to.

• 3:03:42David Rosenthal?

  I think probably all three of us have a like unintended impact of college entrepreneurship programs on us. You definitely do.

• 3:03:51Ben Gilbert?

  I have a minor in entrepreneurship.

• 3:03:52David Rosenthal?

  Yeah.

• 3:03:52Speaker 00

  Really?

• 3:03:53Ben Gilbert?

  Yeah, from Ohio State. Similarly, only ever went to public school.

• 3:03:56Speaker 00

  Yeah.

• 3:03:56Ben Gilbert?

  Uh, I, I was a little different. Like I, I was really into computers. Like in, when I was 10, my dad and I found a PC on the side of the road. And he was like, do you want to install Linux? And I was like, what's Linux? And like taught me to use a terminal. Like I was really lucky to have a dad is, is an engineer. And, and so I went to college for computer science, but.

• 3:04:15David Rosenthal?

  You, wait, wait, wait. Back up. You found a PC on the side of the road?

• 3:04:21David Rosenthal?

  And you were like, let's install Linux.

• 3:04:23Ben Gilbert?

  And my dad's like, I'm willing to bet that thing is just old.

• 3:04:26David Rosenthal?

  Yeah.

• 3:04:27Ben Gilbert?

  Like, he's like, I, cause we're looking at the, you know, you like, at that, at that point, you could open computers. So we're like, looking at it. He kind of like, tooks it apart, it looks inside, he's like, it's got all the pieces. Like this is just an old computer that someone's throwing away.

• 3:04:40David Rosenthal?

  That's amazing. All right, keep going.

• 3:04:42Speaker 00

  So you majored in computer science?

• 3:04:43Ben Gilbert?

  Yeah, but I, I like went in thinking like, I want to have some kind of like, I want to do business and tech. But I didn't know what that meant. And so I found my way to a, um, a club called the Business Builders Club. And they were like, oh, there's like a real, like an actual minor that you can take. And so sort of like through student organizations, found my way to actually doing something in the College of Business, which like. I go back and forth on whether undergraduate business stuff is useful because on the one hand. But it got you plugged into your network, all your buddies. It's all about people. You guys have all done amazing. We just came back from my bachelor party and half the crew is the Business Builders Club Ohio State friends that I made there.

• 3:05:19Speaker 00

  The content sucks, but the relationships are everything.

• 3:05:22Ben Gilbert?

  But the relationship, that's. And it's not, the stuff you're learning is actually super important, but you don't have the context for why yet. It's like you're working on a DCF model and you're like, I don't, this is useless to me. Or you're like, learning about depreciation and amortization, you're like, this is awful because I have nothing, whereas my physics classes were awesome. Like there's labs, like I can touch and feel the things and understand mechanical advantage and how the free body diagram works. But in these business concepts are like super abstract and it's, they weren't useful to me then, but like I went and took a Coursera class last year, two years ago on accounting because I was just like, okay, like I want to actually understand accounting.

• 3:06:05Ben Gilbert?

  In part because we talk about it on acquired all the time and Dana understands the stuff more than I do and I hate it, but like it is so much more useful when you understand where the rubber meets the road in the real world.

• 3:06:16Speaker 00

  Like it would just be beneficial, just like go out and try to sell something like, you know, like in like get real world experience, like what did Charlie, I just reread, have you guys read The Tao of Charlie Munger?

• 3:06:26Ben Gilbert?

  No. I've heard it's good.

• 3:06:28Speaker 00

  Okay.

• 3:06:28Ben Gilbert?

  I can't remember.

• 3:06:29Speaker 00

  I looked at it for the episode or not. I own, I own the hardcover, the Kindle and the audiobook. That should tell you like it's worth it.

• 3:06:35Ben Gilbert?

  By the way, I own the audiobook and the Kindle of almost every book that I own.

• 3:06:40Speaker 00

  I, including the hardcover too?

• 3:06:43Ben Gilbert?

  No. I don't own them.

• 3:06:44Speaker 00

  You're not a hardcover person. Oh, because you can also switch.

• 3:06:47Ben Gilbert?

  Yep.

• 3:06:48Speaker 00

  That's the whisper sync or whatever it's called.

• 3:06:49Ben Gilbert?

  And all the time, I actually hate that they sync and they, because it like my common workflow in doing acquired research is I listen to the book and then I'll take some notes in Apple notes of like, like half quotes where I'm like, I gotta look this up later. And then I go back in the Kindle and I search for the actual quote and like pull out the data to be able to use it in the episodes.

• 3:07:09Speaker 00

  I think listening to the audiobook before reading the book is very helpful. It gives you a basic overview. It's almost like reading a Wikipedia page before you read the biography. It's not enough detail, but like you have, okay, like watching a movie for the second or third time, you know how it ends and it gives you, you pick up on things you missed the first time.

• 3:07:23Ben Gilbert?

  Yep.

• 3:07:24Speaker 00

  In The Tao of Charlie Munger though, Charlie was talking about this where he's just like, I learned about business at the Buffett grocery store, right? From the cash register. It's like, cause that money is the lifeblood of all, I think the quote in the book is like, money is the lifeblood of all businesses and that's where the cash, that's where the money was at this point.

• 3:07:39David Rosenthal?

  Yep.

• 3:07:39Speaker 00

  And it's like you just learn, and he says like, you learn the importance of like showing up on time, how to work with people you don't like, like how to service, like take care of your customers. Like, these are things that are all like universally applicable.

• 3:07:51David Rosenthal?

  Yep.

• 3:07:51Speaker 00

  That there, it's another form of education. Like, that's the biggest, the key of experience and why it's so important. It's the most valuable form of education, cause it's education of life.

• 3:08:02David Rosenthal?

  Yep. Yeah.

• 3:08:03Speaker 00

  Like, I love to read, like, more than almost anybody else. Like, you guys obviously love to read. There's, there's just so much things you can't learn from books. So it's just like, it's not enough.

• 3:08:12David Rosenthal?

  David, what was your college entrepreneurship? Well, it's funny, it's more thematic than an actual impact, but I can't remember if I've talked about this before. Princeton had then just one entrepreneurship class. It was like one class in the Department of Electrical Engineering. I was not an electrical engineer, but people knew about this cause like, oh, this is cool. Right. And I, so senior year, I had already, the recruiting happened in the fall. So I was already like had my job, investment banking job that I was gonna go do.

• 3:08:38Speaker 00

  Yep.

• 3:08:40David Rosenthal?

  A whole nother kit of worms. But I was like, oh, you know, I'll take this class. It's supposed to be good. I'm gonna go work on Wall Street. I should learn about high-tech entrepreneurship was the name of the class. And it was like all, you know, guest lecture, it was, it was case best, case method. And Ed Shaw, the professor, would have guests come in. One of the guests, I had the last or like the second to last class was Tim Ferriss.

• 3:09:05Speaker 00

  What?

• 3:09:06David Rosenthal?

  Before he published The Four Hour Workweek.

• 3:09:08Speaker 00

  No way. He gave, he gave, he asked Buffett a question.

• 3:09:13David Rosenthal?

  At the annual meeting.

• 3:09:17David Rosenthal?

  Oh, he totally hustled this. He like traded on that name for like years before he made it as Tim Ferriss. Cause he just went in for one class? It was one class. Yeah, yeah, yeah. It was one, one day of one course. And that was like this case study class. And I think he had taken the class when he was at Princeton. And Ed, the professor, like liked him and kinda took a shine to him. So you and I then are guest lecturers at Columbia? Oh, yeah, totally. Yeah, oh, yeah, we're, yeah, we're guest lecturers everywhere. So he came in and so he was working on the book, but it was like done, but like was about to get published. And so he came in and the whole like class was like basically telling his story and then like showing the book. I remember in my notes, like for the class, I titled them, I have them still somewhere on my, on an old computer. The title was Supplement Guy.

• 3:10:04Ben Gilbert?

  Do what you love.

• 3:10:06David Rosenthal?

  Yeah.

• 3:10:06Ben Gilbert?

  That is the moral of the story.

• 3:10:07David Rosenthal?

  Oh my God. And then, oh man, afterwards, talking about missed opportunities. He was, he's like, he's older than me, but he's not that much older. He'd only been out for a couple of years. So, class ends and he was like, hey guys, anybody want to hang out? Like, I'm gonna go, you know, I'm gonna go like hang at Terrace. Like, if you want to come, Princeton has eating clubs instead of, they do have fraternities, but like, one of them is Terrace and Jenny was actually in Terrace. And, you know, it was like, basically, I'm gonna go like hang out and have a good time with anybody who wants to come along. And I was like, nah.

• 3:10:42Ben Gilbert?

  Now I'll see you on the podcast circuit later.

• 3:10:44Speaker 00

  Exactly. I love how this just was uncovered in random conversation, right? It was just like computer science, investment banking, law.

• 3:10:52David Rosenthal?

  Yeah.

• 3:10:52Speaker 00

  No, but like.

• 3:10:53David Rosenthal?

  No common denominator.

• 3:10:55Speaker 00

  No, and like, and look where.

• 3:10:56Ben Gilbert?

  I use theater more than I use computer science. Like, that was what, yeah.

• 3:10:59Speaker 00

  I, like, the idea of like, from venture capitalists and podcasters, right? I went and my daughter asked me to go speak at, at Career Day.

• 3:11:10David Rosenthal?

  Oh, hell yeah.

• 3:11:11Speaker 00

  And this is last year, so she would have been.

• 3:11:13David Rosenthal?

  That's like the greatest thing.

• 3:11:14Speaker 00

  She went into fourth grade, right?

• 3:11:15David Rosenthal?

  I can't wait.

• 3:11:16Speaker 00

  And so she's like, well daddy, like you have a weird job. Like, will you come in? Yeah, she's like, will you come in and like give a talk? And so you mentioned earlier, like entrepreneurs are like odd ducks and like crazy people. They don't like, they don't like, they see rules. It's like, oh, that's just words written down on paper. Like, I'll just do my own thing. So I show up, I was like, yeah, I'll do anything for you, like whatever you want. And so I show up and there's two, each class at the school she has has two teachers, right? And so they're like, oh, well, we didn't, hi, Mr. Senator, we didn't get your email. Uh, did you get like, did you bring like a thumb drive? I'm like, what was I supposed to email and why would I have a thumb drive? And they're like, your PowerPoint presentation. And I go.

• 3:11:53David Rosenthal?

  Have you ever made a PowerPoint presentation in your life?

• 3:11:55Speaker 00

  And I go, no, but this is right, I go, they're nine. Why would I make a PowerPoint presentation?

• 3:12:02Speaker 00

  And so I go there and I was like, I was like, listen, I'm fine. Like I'll ring like I got this. Like they're like, you're gonna wing it. They didn't use the word wing it, but I forgot what it was. So. You're like, no, really? I got this. I show up, right? And they're all like sitting on the floor and there's like 39 year olds like. Are you like, stand up? No, no, no, no, never. And so. I want to see some energy. And I was like, I talked for two minutes, right? I have 30 minute slot. I go, uh, I talked for two minutes. I was like, listen, don't listen to your parents. Don't listen, don't listen to your teachers. I go, follow whatever you're intensely. I just gave Charlie Munger's advice. What are you interested in? Keep following that, even if it doesn't, you know, there's not

• 3:12:41Speaker 00

  obvious career path. It's, and I use the word, I go, it's highly likely that the job that you're gonna have has not yet been invented. I was like, there was no such thing as a podcaster. Like I couldn't go to school for podcasting. Or whatever. And like, so that was like the two minute summary. And I said a little bit more than that. I go, okay. Now what questions do you have for me? And so I spent the next 28 minutes. I told them the importance of reading. I was like, listen, your friends are all gonna be in these stupid apps. I was like, you're gonna have no attention span. Learn how to read and read whatever you're interested in. Meanwhile, your daughter's probably like, oh my god. So I'll tell you the funny thing. So then 28 minutes and then they're telling me about books they love. They're like, oh, I like Harry Potter and I like this. And I like travel and we had like the greatest time, right? So I come back, I see, there's like nine in the morning, I leave.

• 3:13:27Speaker 00

  And I, my daughter gets out, you know, later on in the day and she goes, daddy, thank you very much. My friends thought your talk was the best. I was like, oh, that's like interesting. Like that's, I'm glad they liked it. I go, well, let me ask you a question. Who came after me? And they're like, oh, it was like, you know, John's mom or something. I was like, oh, what does John's mom do? She's like, I go, well, first I was, did she do a PowerPoint? She goes, yes, everybody did a PowerPoint. And I go, what does John's mom do? She goes, oh, she's a corporate attorney. I'm like, so you like, they're nine years old.

• 3:13:58Ben Gilbert?

  And also, that's like the alternate future for you. Like it was like.

• 3:14:03Speaker 00

  You would have had a PowerPoint.

• 3:14:04Ben Gilbert?

  It was like Bizarro David going after you.

• 3:14:07Speaker 00

  It'd be interesting like what you would, uh, yeah, but then again, I was, I was living in Florida and like the law there is not a lot of like, you'd have to move to like DC. Like the law there is like. Insurance, like, so I'm at the San Francisco Airport, right? Which is way nicer than Miami International Airport, by the way.

• 3:14:24David Rosenthal?

  I've never been to Miami.

• 3:14:25Speaker 00

  Oh, it's like Third World, man.

• 3:14:26David Rosenthal?

  Really?

• 3:14:26Speaker 00

  It's like the ceilings are low. They have the new, they built like this new part, but SFO was way nicer than mine. And I see this billboard of, it says, "The world's, or America's largest personal injury attorney." That guy was in Orlando. I was going to school in Orlando at the time. His name's John Morgan. He was famous back then, and now he has. So like that, I probably work for him. Like, I'm like chasing ambulances or whatever. No disrespect, like, whatever you gotta do to pay your bills, like, I have no problem with that. But, um, yeah, I just thought it was funny. I was like, you also have to think independently. Like, they're nine years old. Like, they don't wanna sit through. I don't even wanna sit through a PowerPoint.

• 3:15:00David Rosenthal?

  Nobody wants to sit through a PowerPoint.

• 3:15:02Speaker 00

  No, I should try to, like, I would've just brought a video game console or something. I was like, that's my video game. You know?

• 3:15:08David Rosenthal?

  That's a viable career.

• 3:15:09Speaker 00

  Hey, Blake and Mitch. Blake Robinson, Mitch Lasky made the point in one of their GameCraft episodes I never even thought of. They're like, you know how hard it is? How few pure software companies are that do over, that sell over a billion dollars a year in software? And how many game companies? They said on the podcast, like, there's so many video game companies that make so much money.

• 3:15:32David Rosenthal?

  Yeah.

• 3:15:33Speaker 00

  I think they say this is bigger than, um, the video game industry's bigger than music, movies, and books combined, or whatever.

• 3:15:39David Rosenthal?

  And it has been since the 90s.

• 3:15:40Ben Gilbert?

  Yeah, that's the, that was the interesting thing we uncovered on the Nintendo episode. Is that stat gets bandied around, bantered? Bandied?

• 3:15:47David Rosenthal?

  Bandied.

• 3:15:47Ben Gilbert?

  Bandied around a lot right now, which is, it's very interesting, because like, the video game market has done this. But, uh, the video game market has basically always been larger than TV and movies combined, but has never gotten attention, or like, been thought of as a legitimate entertainment form.

• 3:16:06David Rosenthal?

  That's been out there for 30 years that people haven't paid attention to.

• 3:16:08Ben Gilbert?

  Yeah. All right, I'm afraid of these memory cards filling up. Um, this has been wonderful.

• 3:16:12Speaker 00

  Yep, thanks for having me, guys.

• 3:16:14Ben Gilbert?

  Listeners, thank you.

• 3:16:15David Rosenthal?

  We almost never say this, but I think we gotta do this again. Let's do it again.

• 3:16:18Speaker 00

  I'll be here next week.

• 3:16:21David Rosenthal?

  Thanks, guys. We'll see you next time. All right, bye. All right, listeners. Now is a great time to talk about one of our favorite companies, Statsig.

• 3:16:31Ben 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.

• 3:16:41David 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.

• 3:17:02Ben 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.

• 3:17:14David 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.

• 3:17:25Ben Gilbert?

  Well, listeners, thank you for going on the journey with us with David. We would love your feedback on the session's format as we sort of continue to refine it. It's obviously very different than our LVMH Nintendo-style episodes, and getting your thoughts on how we can continue to improve it would be hugely helpful. Also, go check out the Founders Podcast. Search Founders in any podcast player. Also, if you want to go deeper, you can become an Acquired LP to come closer into the Acquired kitchen. We have bimonthly Zoom calls, and we just announced that we will be asking our LPs to help us pick future episodes. So you can join at acquired.fm/lp. You should subscribe to our second show, ACQ2, formerly The LP Show,

• 3:18:08Ben Gilbert?

  for expert interviews with founders and investors. Just search ACQ2, all one word, in any podcast player. Also, join us in the Slack, discuss this episode and all the others. There's now over 15,000 smart, thoughtful, kind members at acquired.fm/slash-Slack. It's pretty cool. I think, David, that represents only like 5% to 10% of those of you out there who listen every month.

• 3:18:32David Rosenthal?

  It's funny, I literally texted Ben yesterday, and I was listening to the Nintendo episode that we just released, and I was like... The way we talk about the acquired Slack, it kind of makes it sound like only 15,000 people listen to Acquired. No, that is 5% of the people that listen to Acquired.

• 3:18:48Ben Gilbert?

  Yeah, all the rest of you, come join us in the Slack, acquired.fm/slash-Slack. I don't know, it's just a great way for us to get a better pulse on all of you, who you are and what you like or don't like, or want us to improve about the show. So that's all we got, listeners. Thank you so much. We'll see you next time.

• 3:19:04David Rosenthal?

  We'll see you next time.