Whole Foods Market

Ben and David are once again live on the scene, this time covering the biggest disruption in grocery since… well, sliced bread: Amazon’s $13.7B purchase of Whole Foods Market. We place this deal in context by diving deep into the long, intertwining history of grocery, tech and Amazon, from the infamous dotcom flameout Webvan (domain name now owned by Amazon) to its much more successful progeny Kiva Systems (acquired by Amazon in 2012) to current Silicon Valley unicorn Instacart (founded by former Amazon logistics engineer Apoorva Mehta). One thing is clear: for Amazon and Jeff Bezos, realizing the longterm vision of the Everything Store truly means building the everything store. Sponsors: Vanta: https://bit.ly/acquiredvantaServiceNow: https://bit.ly/acquiredservicenow26Legora: https://bit.ly/acquiredlegoraStatsig: https://bit.ly/acquiredstatsig26 More Acquired! Get email updates https://www.acquired.fm/email with hints on next episode and follow-ups from recent episodesJoin the Slack http://acquired.fm/slackSubscribe to ACQ2 https://pod.link/acquiredlpMerch Store https://www.acquired.fm/store! © Copyright 2015-2026 ACQ, LLC Topics covered include: The origins of Whole Foods Market as “Saferway” in the late 70’s Austin, TX hippie scene http://www.wholefoodsmarket.com/company-info/whole-foods-market-history, founded by CEO John Mackey (“the Steve Jobs of grocery stores”) and his then-girlfriend Renee Lawson HardyWhole Foods’ expansion through acquisition throughout the 80’s and 90’sThe company’s recent struggles with competition, leading to sales declines and attracting activist shareholder interest from Jana Partners https://www.nytimes.com/2017/04/10/business/dealbook/whole-foods-investor-jana-partners.html Amazon’s acquisition of the company http://phx.corporate-ir.net/phoenix.zhtml?c=176060&p=irol-newsArticle&ID=2281414 on June 16, 2017 for $13.7 billion, a 27 percent premium to the stock's previous day closing priceIn depth history and analysis of the four keys to understanding this deal: Webvan http://www.sfgate.com/news/article/Webvan-runs-out-of-gas-Online-grocer-closes-it-2901363.php, Kiva Systems https://www.bloomberg.com/news/articles/2016-06-29/how-amazon-triggered-a-robot-arms-race, AmazonFresh http://www.reuters.com/article/amazon-webvan-idUSL2N0EO1FS20130616 and Instacart https://qz.com/627605/inside-instacarts-fraught-and-misguided-quest-to-become-the-uber-of-groceries/Followups: Walmart/Jet buys Bonobos for $310M https://www.nytimes.com/2017/06/16/business/walmart-bonobos-merger.htmlThe Carve Out: Ben: Mark Zuckerberg’s 2005 CS50 guest lecture https://www.youtube.com/watch?v=xFFs9UgOAlEDavid: Exponent on Podcasting and Centralization http://exponent.fm/episode-118-podcasting-and-centralization/

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

• 0:00Ben Gilbert?

  Yep, yep, completely agreed. Podcasting is the new groceries.

• 0:07Speaker 01

  Yeah, well, good thing we're here on the scene.

• 0:20Ben Gilbert?

  Welcome back to episode 39 of Acquired, the podcast about technology acquisitions and IPOs. I'm Ben Gilbert.

• 0:28Speaker 01

  I'm David Rosenthal.

• 0:30Ben Gilbert?

  And we are your hosts. Today, we are coming in hot with the just announced Amazon acquisition of Whole Foods for $13.7 billion, all in cash.

• 0:40Speaker 01

  Are we ever?

• 0:42Ben Gilbert?

  We are not planning on doing an episode today, but David and I woke up, saw the news, and absolutely could not resist.

• 0:47Speaker 01

  We live for this.

• 0:48Ben Gilbert?

  So here we are. We do. It's 4:00 PM PST on Friday, June 16th.

• 0:53Speaker 01

  The day the acquisition was announced, this morning.

• 0:56Ben Gilbert?

  And hot takes flying all over the internet. David and I do not purport to have any of the answers, but we do have hot takes of our own. So in true Acquired fashion, we will probably be wildly speculative. We have no idea what they're going to do with this acquisition, and we certainly cannot give it a grade that we feel very confident about, but it's going to be real fun to talk about.

• 1:18Speaker 01

  Before we dive in, though, important, important announcement. So Ben's birthday is coming up this week, and if you want to get him a present, like me, you should leave Acquired a review on Apple Podcasts. See what we did there. No, seriously.

• 1:37Ben Gilbert?

  David gets some of my birthday present, too, apparently.

• 1:40Speaker 01

  I'll write you a review, Ben. But no, seriously, we have some... Acquired is growing a lot, and we have some amazing guests coming on this summer, and that's possible because of the growth. And the way to keep the growth going is through Apple Podcasts reviews. So if you have a minute, please leave one. We really, really appreciate it, and thanks for being a listener.

• 2:01Ben Gilbert?

  We do. And now I get to skip my section where I normally ask for Apple Podcasts reviews.

• 2:06Speaker 01

  My present to you is giving you a break from this.

• 2:09Ben Gilbert?

  Perfect, perfect. Well, listeners do know that we have a Slack. We're 750 strong now, and it was blowing up today. So if you're a new listener to the show and you want to talk about any awesome news that is dropping on the day that it drops in technology, join us, acquired.fm. You can join the Slack and be part of the discussion. 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.

• 2:46David Rosenthal?

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• 3:07Ben 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.

• 3:29David 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.

• 3:47Ben 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. Now, David.

• 4:16Speaker 01

  Let's do this. So for the show today, we are of course going to do history and facts as always, but it's going to be a little different than usual. One, because we didn't have the time to do the in-depth research that we usually do into Whole Foods, so it'll be a somewhat truncated history and facts on Whole Foods, but we'll still tell some fun stories. But we don't think that we can actually... Give kind of the full analysis and treatment of this deal and what it means without looking at a couple other companies too. So we're also going to talk about Webvan, Kiva Systems, and of course Instacart, which will be a big topic of conversation today and already is

• 4:58Speaker 01

  in the media, given what happened and Whole Foods being an investor in Instacart. But so to start off, Whole Foods was started in 1978 in Austin, Texas by a young man named John Mackey and his then-girlfriend Renee Lawson-Hardy. And it was originally not called Whole Foods. It was a natural foods store, you know, mostly for hippies, which they were in the late 70s in Austin. And they called it Safer Way, which was an intentional dig at Safeway.

• 5:31Ben Gilbert?

  I have not heard that. That is awesome.

• 5:34Speaker 01

  It was great. John was on a podcast recently and I think it was NPR's How I Built This. And he said that they called it that and they were sort of hoping that Safeway would sue them because then it would be like free publicity. But they were so small and insignificant that Safeway didn't even notice.

• 5:50Ben Gilbert?

  I think I'd heard in the past that Whole Foods is this Texas-owned company. And it's shocking. Like, growing up, you know, we got one in Ohio. I remember thinking like, oh, this is probably something like San Francisco. Like, you know, where are they eating like this? And where would there be like a hippie commune that would inspire this and, you know, keep Austin weird, but shocking that it was in Texas to me?

• 6:09Speaker 01

  Well, I mean, as we all know, Austin and its stereotypes about it are not always true. But Austin is definitely hippie mecca and was in the 70s even more so. But so Mackey kind of basically goes on. He's still the CEO of Whole Foods many years later, will continue to be under Amazon, it was announced. But he's basically like the Steve Jobs of grocery stores. So he dropped out of UT to start the company. And he talks about kind of when he was at UT, he sort of had this very Jobs-like experience, you know, like Jobs had at Reed in Portland when he was there for a semester. You know, Mackey kind of didn't like the structure of college and having to have a major. And so he just decided

• 6:53Speaker 01

  he was gonna bum around and take whatever classes interested him. And he ended up

• 6:58Ben Gilbert?

  He's like exactly the Steve Jobs.

• 7:00Speaker 01

  Exactly the Steve Jobs experience and he ended up through kind of that route, getting involved with a vegetarian co-op on campus. That's where he met Renee and started getting into food and natural foods and whole foods. And the two of them had this idea that they should start their own store. So they borrowed $10,000 and then they raised another $35,000 from investors. And they start safer way and they put it in an old building and the store was on the first floor. And then they had a restaurant on the second floor and then they lived on the third floor.

• 7:36Ben Gilbert?

  Oh, that is awesome.

• 7:37Speaker 01

  Super cool. So they do it for a couple of years and it starts really working and they get lots of business and people really love what they're doing. But of course, because Austin's a hippie town, there are other natural foods markets in town. And there's one called the Clarksville Natural Grocery. And that was run by two guys, Mark Skiles and Craig Weller. And Mackie, the Whole Foods CEO, kind of admired what they were doing. And he approaches them about merging and becoming a bigger store combined together. So they do, and then they had to rename the business and they renamed it Whole Foods Market. And thus, Whole Foods is born.

• 8:18Ben Gilbert?

  It's funny, we've done other ones that have origin stories in these like small mergers too. Like you look at Il Journal and Starbucks, kind of a similar, similar thing.

• 8:27Speaker 01

  Very, very similar here. He's, Mackie's basically the Howard Schultz and Steve Jobs combined of the grocery business. So, so they do, they do the merger and then a couple of years later, they start expanding first elsewhere in Texas. And then they go to New Orleans and they buy a company there called The Whole Food Company. And then basically they kind of learn that growing through acquisition, there are lots of, you know, local natural food stores throughout the country, especially in kind of more liberal hippie areas.

• 8:57Ben Gilbert?

  Is so true. It is like shockingly true. I did like a weird little anecdote, but I was doing this bike trip up the coast of California last summer and we'd get into these little towns that had like, it became the running joke of the trip, like the little towns that had like three or four buildings and it seemed like there wasn't much going on there, but it have like an incredible natural market.

• 9:16Speaker 01

  Yep.

• 9:16Ben Gilbert?

  And it is amazing. Like when you get into these, you know, if those were any bigger, you could totally see the Whole Foods just gobbling that up and it being, you know, right under their brand.

• 9:25Speaker 01

  Yep. And that's really how they grew by acquiring a lot of those little stores and little chains and then slowly over time, turning them into Whole Foods and into, you know, the big, big box store that Whole Foods is today. But kind of as they do that, they're over the decades, you know, the sort of, they catch the wave of whole natural foods, organic foods. They really help start the organic food wave and publicize it among not just hippies, but kind of everybody and especially young people in the American population. So they, they keep growing and by the mid 2000s, they're above a $10 billion market cap, one of the largest grocery chains in America. Then the recession happens in 2008

• 10:10Speaker 01

  and the financial crash and the stock craters then, but then it kind of goes right back up and growth continues. By 2014, Whole Foods has become the 30th largest retailer period in the US.

• 10:23Ben Gilbert?

  Wow.

• 10:24Speaker 01

  But then over the last couple of years, unfortunately for them, growth kind of stopped. So as of, you know, today, when Amazon acquired them for the last seven quarters straight, they've had declining sales, declining same-store sales and the stock has fallen precipitously.

• 10:41Ben Gilbert?

  Huh. Declining same-store sales. Like it seems like, I mean, this is like the urban Seattle bubble I'm in, but it sure seems like the health food movement is in more full swing than it's ever been.

• 10:53Speaker 01

  Yeah.

• 10:53Ben Gilbert?

  People are woke, David.

• 10:55Speaker 01

  This is, uh, this is really odd to me too. I just don't know enough about the grocery industry to know what was happening, but the little I was able, you know, to read, and this makes sense is that it was actually kind of mostly growing competition from other stores that are, you know, be it Trader Joe's or plenty of other, even regular grocery stores now are offering plenty of natural and organic foods.

• 11:16Ben Gilbert?

  Ah, yeah.

• 11:16Speaker 01

  Often cheaper than Whole Foods. I mean, the knock on Whole Foods is it's expensive.

• 11:20Ben Gilbert?

  And you totally see that here. Like, I've been shocked with Kroger-owned QFC here in Seattle.

• 11:25Speaker 01

  Yep.

• 11:25Ben Gilbert?

  Is, you know, the last couple of years really stepped up their game to the point where I can get enough, you know, really healthy stuff there where I'd actually, you know, I can totally see why the same-store sales would be declining for Whole Foods.

• 11:35Speaker 01

  Yep. So the stock's been under a lot of pressure for the last couple of years. And actually, there's an activist hedge fund, Jana Partners, that I believe pushed for, I believe ended up getting board seats and has been kind of really pushing the company to, you know, take a corporate action, meaning sell itself.

• 11:55Ben Gilbert?

  This is totally interesting. So last fall, Amazon was, at least this was, I think it was a Bloomberg story, that it was reported that Amazon was considering buying Whole Foods, but then Jana stepped in as an activist investor, and that calmed down for a little while. And, you know, there's been other talks recently, we'll get into the Albertsons stuff, but Albertsons was considering to take over a bit more recently. But on this Jana Partners thing, Jana acquires, I think it was 8.3% of Whole Foods last fall, and then, you know, is able to flip it for the premium that they got to Amazon today. And Amazon was interested before Jana stepped in. So I'd love to know that story of, you know, how did, how did Jana manage to make that happen when

• 12:38Ben Gilbert?

  Amazon knew the price was only going to go up when, when that happened?

• 12:41Speaker 01

  Yep, yep. Well, nothing drives acquisition interest like other acquisition interests and viable alternative paths, too. So we don't know now, but I'm sure lots of stories will come out in the coming months. But yeah, so as you, as you mentioned, back in April, it was rumored that Albertsons was looking at buying the company. And then today, the big announcement that Amazon finally would acquire the company for 13.7 billion in cash, so $42 a share, which is 27% premium to where the stock closed yesterday. And on a sort of price-to-earnings, you know, multiple ratio of 31 versus kind of 14 and a half, which is where the average

• 13:23Speaker 01

  grocery store is trading these days, which, which I assume that's kind of how grocery chains trade. But disclaimer, we don't know much about the industry.

• 13:32Ben Gilbert?

  Well, David, this is fascinating. I just, I just had this conversation with a coworker, and I was doing some of the research for the show. The annual sales last year for Whole Foods was 15.6 billion. And I was like, wait a minute. So the market cap of this grocery store is actually less than a single year of revenue. Which to us in the tech business, like you get a two, three, four, 10x multiple on revenue. And if you look, you know, at the grocery store business, like apparently not the case. And I think actually retail all up. I heard another stat and when I was talking to someone who's kind of in the know about this, that boutique retail, actually the general valuation for that is around a quarter of your annual sales. So it really, you know, it's a totally different ballgame than we're used to covering.

• 14:15Speaker 01

  And that just comes down to margins, right? I mean, the margins in retail generally are tiny. I mean, Amazon trades, I believe trades at a much lower revenue multiple than other tech companies because it is a retail business and has lower margins. And grocery is like razor, razor thin margins. Makes Amazon look like a software business.

• 14:35Ben Gilbert?

  Yeah. And then, well, the other interesting thing, so you mentioned that 29%, or I'm sorry, 27% premium. Listeners, David and I were chatting with a friend who's kind of in the know before the show today and mentioned that Whole Foods had been aggressively pursuing a sale six months ago after Jana Partners came in and, you know, their, their main intention was to slim operations or streamline operations, which I don't really know how much you can do in the timeframe from when they took that position until now. So I can't really speak to if that actually happened, but they were aggressively looking for a seller, you know, for the last six months. And it's fascinating to see like 27% premium over where they're trading in the public markets. It's in the range of what you would expect from these things, but it's certainly on the high end.

• 15:19Ben Gilbert?

  And it's really interesting and certainly implies that there was a tremendous amount of competitive pressure that even when they were looking to sell so hard, they still had enough leverage to get that sort of a premium.

• 15:31Speaker 01

  Yeah, well, and it, you know, speaks to what Amazon can do with business that nobody else can. And so, so let's put a pin in that for a minute. We'll come back to Whole Foods, of course, but we want to talk about these three other companies quickly. So that are pretty key to the story. So the first is the infamous Webvan. So, you know, the, the brunt of all dot com jokes, you know, back in the day. This company was founded in 96 by Louis Borders, who is the same Louis Borders, who was co-founder and CEO of the Borders bookstore.

• 16:02Ben Gilbert?

  No way.

• 16:03Speaker 01

  Same.

• 16:04Ben Gilbert?

  I never knew that.

• 16:05Speaker 01

  All of the intersections across this whole story between, you know, with Amazon at the center and books and retail and like, it's all the same people and it's really key. And I think this is something that hasn't been talked about yet, you know, in the few hours since the deal was announced in the press, but like to really understand what's going on here, you have to understand this background. So Borders started, Lewis Borders, it was a separate company from Borders, the bookstore, but he started Webvan in 96 and immediately, you know, he was a superstar, raised capital, raised about $10 million. He invested a third of it and Benchmark and Sequoia each invested the other third in

• 16:46Speaker 01

  97. Sequoia later put in another 50 million. SoftBank put in another 160 million quickly after that. Then Goldman Sachs put in another 50 million. This is all, you know, very quickly in kind of 97, 98. And what the company was doing was delivering groceries to people's homes. Webvan, grocery van. And so they started in the Bay Area, but then they, even before they'd really proved that it was working in the Bay Area, because they never proved it really worked anywhere, they immediately started investing all this capital to roll out across the country. I mean, this were the go-go, you know, dot com days that we talked about in the Amazon IPO episode. So Amazon was of course, watching this with

• 17:30Speaker 01

  great interest. So the company ended up going public at the end of 1999. So just a couple of years after being founded, they raised another $375 million in their IPO and their market cap at IPO was close to $5 billion. So, and at this point, the company had done a grand total of just under $400,000 in sales.

• 17:53Ben Gilbert?

  Oh my god.

• 17:54Speaker 01

  I mean, this is why this is, you know, the cautionary tale about the, the, the dot com bubble. And pretty quickly, I mean, the musical chairs stopped playing and the company just imploded. So shortly, a little over a year after that, in the middle of 2001, they filed for Chapter 11 bankruptcy, laid off all 2,000 employees that they had at that point, you know, and they lost all the money. So basically, the whole, you know, nearly billion dollars that they raised, they just burned all of it. And so this was sort of the initial view that the world had on technology and internet approach to grocery delivery was that, you know, you don't want to be webvan, like, look what they, look what they did.

• 18:33Ben Gilbert?

  Yeah, I mean, that's like the very long extended and very painful visualization of that hype cycle curve where it's, you know, the value isn't there yet, but the hype is really high. It comes completely crashing down and then has to slowly build back up to what it once was and may never even reach the hype that it previously hit.

• 18:52Speaker 01

  Yeah, but what's super interesting about it is how much of that DNA from webvan kind of has still to this day held on to the dream of grocery delivery and sort of, there's been this perception in the world that grocery delivery doesn't work, that webvan proved it. But really what webvan proved is like how not to run a startup, not necessarily anything about the market.

• 19:15Ben Gilbert?

  Right, right.

• 19:15Speaker 01

  And so there was a company that actually came directly out of webvan called Kiva Systems. And Kiva was founded in 2003, I believe.

• 19:27Ben Gilbert?

  Wait, Kiva came out of web? It's, this is incredible.

• 19:30Speaker 01

  Yeah.

• 19:30Ben Gilbert?

  This web is ridiculous.

• 19:31Speaker 01

  Yeah, so Kiva Systems, which Amazon ends up acquiring in 2012, was founded by a guy named Mick Mounts. And Mick had been, he'd been at webvan and he was in charge of logistics in the fulfillment centers that webvan had all around the country. And, you know, webvan knew that the margins on what they were doing were terrible. They were losing tons of money on every order, which is why they, as they grew, they went belly up so quickly. And, and his job had been to try and turn it around and he didn't have enough time. But he kind of stayed obsessed with this idea about how could you make a fulfillment center, you know, more efficient and be able to eke out better margins out of a fulfillment center?

• 20:11Ben Gilbert?

  It's like Amazon's whole promise.

• 20:13Speaker 01

  This is basically the entirety of, you know, Amazon's retail operations today is just solving that problem. So Mick founded Kiva, and what Kiva did, he saw an opportunity to use robotics to not just replace human labor. And actually, what Kiva Systems do is they don't necessarily replace human labor, but they make human labor much more More efficient. They're robots that take pallets and racks that are in fulfillment centers. And rather than them just being in the same place and having the employees walk around to pick the items from them, they actually, the robots move the racks themselves to the employees and the employees stay stationary. And it's been a major improvement and innovation in distribution and fulfillment center systems, so much so.

• 20:56Ben Gilbert?

  And actually, listeners should note, it's probably worth saying, this is a very different Kiva than the kiva.org that is the sort of micro lending.

• 21:02Speaker 01

  Not micro lending, different Kiva.

• 21:06Speaker 01

  So in 2012, Amazon acquired the company for just under $800 million and started, Kiva had been, had had customers like Staples and actually both Zappos and diapers.com were Kiva customers, which was probably why Amazon started.

• 21:23Ben Gilbert?

  Let's make the web even bigger.

• 21:24Speaker 01

  Exactly. Probably why Amazon started to realize after they acquired those companies, the power of Kiva systems in fulfillment centers. Amazon buys the company and then completely shuts down all other third-party customers and brings all the tech in-house. And has since kind of remade, I believe at this point, probably the majority, if not all of their US fulfillment centers into Kiva-run fulfillment centers.

• 21:49Ben Gilbert?

  Yeah, I'm not sure. I know, I know someone recently that went and did some work in one of the fulfillment centers that wasn't Kiva-enabled.

• 21:55Speaker 01

  Yeah, it may not be, I believe, you know, the goal is to convert every FC into a Kiva center, but they may not be fully done yet because it requires a huge amount of CapEx and time to make these conversions. So this has become a big, big part of Amazon and you kind of directly came out of the ashes of Webvan. Separately, Amazon acquired the, acquired the domain name for Webvan. So if you go to webvan.com today, it won't resolve, but Amazon actually owns it.

• 22:24Ben Gilbert?

  Oh, wow.

• 22:25Speaker 01

  And, uh, and they've been, you know, as the world knows, and we've been talking about on this show for a long time, Amazon's been thinking about groceries, you know, they didn't just wake up this morning and say, gosh, we should buy Whole Foods.

• 22:38Ben Gilbert?

  Why did they not point that at Amazon Fresh?

• 22:40Speaker 01

  Yeah, it's bizarre. You would think it would just redirect.

• 22:43Ben Gilbert?

  They must have been waiting for the, the Whole Foods acquisition and now it'll be the name of the Instacart.

• 22:47Speaker 01

  Yeah, totally. Oh, man, what a, that would be just amazing.

• 22:54Speaker 01

  So in, back in 2007, even before they acquired Kiva Systems, Amazon started thinking about groceries and launched Amazon Fresh in Seattle. So if, you know, like us, many listeners in the show, you have lived in Seattle for the last few years, um, you see Amazon Fresh bags on doorsteps all over the city.

• 23:15Ben Gilbert?

  Is Fresh only here?

• 23:16Speaker 01

  So for many years, uh, actually for six years, it was only in Seattle and sort of the, the lesson that they took and, and many, not just the Kiva founders, but many former Webvan employees actually work at Amazon now and are part of Amazon Fresh. And the sort of key lesson that they took from Webvan after spending, you know, many years analyzing it, both on the Amazon side and, and folks having lived through it, is that the problem with Webvan wasn't that the business didn't work, it was that they grew way too quickly. And because the margins are so small, growing a new market is incredibly costly because you need density and scale to be able to, to leverage your fixed costs enough and the distribution costs enough to be able to actually turn a profit. And so

• 23:59Speaker 01

  if you grow too quickly, you'll really quickly flip the boat upside down, which is what, which is what Webvan did.

• 24:05Ben Gilbert?

  Hmm. Hmm. Makes sense.

• 24:07Speaker 01

  So for six years, Amazon Fresh was just in Seattle. Then in 2013, they launched in LA and then at the end of 2013, they launched in San Francisco. The next year, they went to New York and San Diego and Philadelphia. And basically, the rollout has been accelerating ever since. So they're in most major US cities at this point. They're international, they're in London, they're in Berlin, they're in Tokyo. And it's really been accelerating as they've started to perfect the business. At the same time.

• 24:36Ben Gilbert?

  It's funny, but Instacart, I think, is actually more pervasive in the US.

• 24:40Speaker 01

  Yes.

• 24:41Ben Gilbert?

  Like, I know, like, Instacart just launched in Columbus, I know. And, you know, that's, they're getting into a lot more markets than these sort of major top 10, 20 markets.

• 24:50Speaker 01

  Well, you're foreshadowing the next company being Instacart. But just to wrap up on Fresh, you know, they've also been, Amazon has been doing a ton of innovation. As we've talked about, you know, around grocery with Amazon Go, the pilot that they're launching with cashierless stores in Seattle and pickup. They actually have a location in Seattle now where you can order your, as a, as a consumer, you can order groceries online, drive your car to a center and then have the groceries put in your car. So they're doing lots of innovative things around, kind of around Fresh and around groceries in general, even before Whole Foods. So separately, kind of the third track here is, of course, Instacart. And Instacart was founded in 2012 by a guy named Approva Metta.

• 25:35Speaker 01

  And Approva had been an engineer at Amazon. And in particular, an engineer focused on fulfillment centers. And he was in Seattle and actually left Seattle, moved down to the Bay Area a couple of years before, and started working on a bunch of startup ideas, knew he wanted to start a company. And eventually came back around to this idea of grocery delivery. But he took a very different approach because he knew from the get-go, he talks about this on, I think he was actually also on the NPR, How I Built This, talks about it, he kind of.

• 26:05Ben Gilbert?

  He also has a really great talk at Startup School one year about how the whole thing got started.

• 26:09Speaker 01

  But he knew that Amazon was going to be his main competitor and he had to take a different approach. And so what Instacart, as most listeners know, has done is said, you know, screw this whole logistics thing. Like, that's really hard. And actually, grocery stores, you know, are pretty good at it in terms of, you know, keeping the produce fresh and things frozen that need to be frozen and refrigerated and managing the inventory. Why don't we just build a thin layer on top of it that's just the delivery layer to give the consumers the product experience they want of grocery delivery, but just have people come directly to grocery stores, shoppers?

• 26:45Ben Gilbert?

  So basically paying that retail premium and then just solving the last mile problem instead of trying to, you know, sort of eliminate that middle man and make all that marginal.

• 26:54Speaker 01

  And do a fully integrated system, you know, like Webvan tried to do back in the day and that Amazon's been building now for, you know, 10-plus years.

• 27:01Ben Gilbert?

  As Jeff Bezos would say, "I couldn't have built Amazon without all the infrastructure already in place, the, you know, UPS, the internet, laid by the telephone wires, all these things. So now we can build Amazon on top of it." It's sort of that same approach, but with, you know, a different market at a different time.

• 27:17Speaker 01

  Yep. And so Purva, he started the company in 2012 and pretty quickly it started growing really fast. And they did Y Combinator right after he started the company. And then pretty quickly, Sequoia invested after that, I believe led the Series A. They've gone on in the last five years to raise almost $700 million. So approaching Webvan levels of investment. And what's interesting about that in terms of, you know, it's so funny how it's all the same people all over again. Mike Moritz from Sequoia led the investment and is on the board and he had led the Webvan investment back in the day.

• 27:51Ben Gilbert?

  Whoa, I didn't know that.

• 27:53Speaker 01

  Yep. So Instacart's sitting here today, having raised all this money at a $3.3 billion valuation on their latest round. One of their investors, their biggest grocery store partner that they have an exclusive relationship with, and as part of that, the company invested in Instacart, is Whole Foods. And so everybody woke up this morning and the whole world changed in this space.

• 28:18Ben Gilbert?

  Yeah, I mean, it's heavily, heavily promoted in the stores at Whole Foods. I think if you buy a certain amount, then you just get it at store cost instead of, I think this is right, instead of paying the Instacart markup for it. It's like much more heavily integrated than any of their other grocery stores. And, you know, as we'll sort of get to, Whole Foods is a super premium brand.

• 28:38Speaker 01

  Yep, yep. Just speaking from personal experience, you know, having used Amazon Fresh and Instacart and many of the other delivery services, you know, we, we would use Instacart often just solely for Whole Foods to get the premium products from Whole Foods. I mean, that was the most compelling aspect of it for us.

• 28:58Ben Gilbert?

  Yep, I love Instacart. I mean, I, I've been a user for a really long time and since it launched in Seattle and it's awesome. But, you know, you sort of have to wonder at this point, they knew Amazon was going to be their competitor at the very outset and, you know, today the news comes out and if you would have asked me a week ago, what's, you know, how does Instacart compete against Amazon or, you know, the impending Amazon? Then I would have said probably that the Whole Foods partnership was their, their greatest leverage point. And I'm super curious now, like, do these partnerships, like, much like music streaming? Like if Spotify were to get acquired, then all of their rights negotiation that they did with the, the

• 29:43Ben Gilbert?

  record labels would need to be renegotiated. Those all, you know, dissolve upon a liquidity event. I'm curious if the same sort of thing happens here or if Instacart can still hold Whole Foods to their, you know, the contractual agreements that they agreed to.

• 29:59Speaker 01

  Yeah, and I don't think we know yet. The early indications seem to be that the deal that Instacart and Whole Foods had, I believe it's looking like was a four-year deal that they were one or two years into and that it does have to be honored. But again, this is, you know, these are private agreements, we don't know. So we will, it'll be very, very interesting to see. And even if it does have to be honored, you know, you can. Bet that as soon as that deal expires, you know, Amazon is not going to renew it.

• 30:29Ben Gilbert?

  Right, right. Yeah. Tenuous position to be in. I'd be very curious, um, you know, to sit down with some Instacart folks and try and figure out what they think the mode is right now and what do you do from here? Because maybe the move is, is, uh, you know, not to double down and strive for world domination, but to try and figure out how to play in Amazon's world. I don't know.

• 30:48Speaker 01

  Well, and it's interesting. I mean, you know, we're getting into analysis now, but I think we have to, given all the players involved in, in this situation. But Porva has argued quite compellingly, I think, you know, certainly with investors, that he knows that Amazon is going to be his main competitor, but that the way you have to compete with Amazon is to compete on a different dimension and do things they can't do. And his argument is that, has always been, that by just being the thin delivery layer and being able to partner with any grocery store or other retailer for delivery, and then all of those other folks, you know, are scared of Amazon too, and sort of need Instacart as a partner, that he'll be able to provide, they'll be able to provide a better experience because Amazon itself will have a limited selection, only what they carry.

• 31:33Ben Gilbert?

  Oh, please, please, David. Come on. Amazon starts. Let me give you, let me give you a playbook. Amazon becomes, uh, they sell books on the internet and they're the retailer of these books and you buy from them.

• 31:48Speaker 01

  Well, and they would never be turn themselves into a marketplace, would they? I mean, they're a retailer.

• 31:51Ben Gilbert?

  Right, right. Gosh, how could you ever imagine third-party grocery store sellers coming on to Amazon's distribution and, and customer platform?

• 32:03Ben Gilbert?

  Yeah.

• 32:03Speaker 01

  Well, then there's also the fact that, you know, grocery is, it's a very different business than books or any other type of retail.

• 32:10Ben Gilbert?

  True, very true.

• 32:12Speaker 01

  If you look at, you know, what is differentiation in grocery stores? And this is actually probably a big reason why Whole Foods was struggling in recent years. You know, you don't, you need a lot in a grocery store, but you need a set number of stuff. And if you have the stuff that people want, which is the same, you know, you go to a Safeway around the country, or you go to a, you know, Publix in the south, or Kroger's elsewhere, like, they're the same. They have the same stuff. So as long as you have that stuff and you have, you know, the, you know, high-end natural stuff that Whole Foods has, you know, which again is differentiation. The only reason, at least me and Jenny used Instacart, you know, if you have that stuff, do you need anything else?

• 32:51David Rosenthal?

  Is selection that important anymore?

• 32:53Ben Gilbert?

  Right. Seems like selection in like all the random stuff on Amazon from a retail perspective is much more long-tail distributed than it is in a grocery store. Like in a grocery store, it seems more concentrated toward the head of the curve.

• 33:05David Rosenthal?

  Which granted is a lot of SKUs, but it's a pretty standard set.

• 33:08Ben Gilbert?

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• 33:24David Rosenthal?

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• 33:38Ben Gilbert?

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• 33:48David Rosenthal?

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• 34:05Ben 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.

• 34:21David Rosenthal?

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

• 34:38Ben 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?

• 34:47David 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.

• 34:58Ben Gilbert?

  Spend some time talking to people today and looking around for opinions. And before we get to acquisition category, I just want to like, talk about a few things to come out of this story. So, uh, one of them is that just yesterday, John Mackey was talking about how there's an activist investor called Jana Partners, which holds 8% of his $11 billion, then $11 billion grocery chain. And he says, "We need to get better and we're doing that, but these guys just want to sell us because they think they can make 40 or 50% in a short period of time." They're greedy, and I'm not going to say this because we have a clean reputation, but, you know, they're greedy guys and they're putting a bunch of propaganda out there trying to destroy my reputation, the reputation of Whole Foods, because it's in their own self-interest to do so.

• 35:40Speaker 01

  Wow, that was yesterday?

• 35:41Ben Gilbert?

  That was yesterday.

• 35:42Speaker 01

  Wow. I mean, you can't argue that John didn't know this was going to happen.

• 35:47Ben Gilbert?

  Yeah, there's no way that like, "Oh, it, it, actually, we did do the deal." And like, he, you know, he is, uh...

• 35:55Speaker 01

  So how does he really feel?

• 35:57Ben Gilbert?

  Well, right, and it's fascinating because what he doesn't really say there, the good news is, he can still be an effective CEO inside of Amazon, because he doesn't, you know, throw Amazon under the bus, but like, you know, definitely wanted to continue being an independent entity there. And these guys did get a huge pop, Jana Partners, since the time they bought.

• 36:14Speaker 01

  Oh, that they did.

• 36:15Ben Gilbert?

  Yep. Another, you know, let's, let's spend a little bit of time and cover some basically hot takes on what this could represent. And then, once we kind of cover all that, then I think acquisition categorically will start to come together and make sense. But, right now, I would imagine they're not going to immediately transform these Whole Foods into Amazon Goes, but like, holy crap, what if they know internally that Amazon Go is like, such a fantastic experience? And rather than like, slow rolling it out and allowing competitors to start coming in, and then potentially, uh, Whole Foods to go up in value as they start doing similar things, or go up in value for Amazon, as people start seeing the obvious, you know, synergies? What if it's just like, "Uh, we should own this now, so that we can go big, fast, with this Amazon Go concept."

• 36:58Speaker 01

  Yep. Which is, you know, on the one hand, and Go's been delayed, the public launch supposedly because of, you know, trouble getting it to work public facingly, but... You know, at this point, I think the point that I was trying to make, that we were trying to make in telling the full story and all these other companies, Webvan, Kiva, Instacart, Amazon didn't just wake up yesterday or today and decide to do this. They've been thinking about this category for over 10 years at this point. So if they're going to do this, you can be sure they have a very clear plan.

• 37:28Ben Gilbert?

  Yep. Okay. So they're really the only ones who can do this. There's a $400 million breakup fee on this. So if Instacart gets another bid or pulls out in some way.

• 37:37Speaker 01

  Or Whole Foods, you mean?

• 37:38Ben Gilbert?

  Or, I'm sorry, Whole Foods.

• 37:39Speaker 01

  To be clear, Instacart is not being acquired right now.

• 37:42Ben Gilbert?

  Yes, yes. Let's be clear about that.

• 37:44Speaker 01

  We'll talk about that later, but.

• 37:46Ben Gilbert?

  Right, right. You know, it's a $400 million breakup fee. So you start thinking like, who even else could bid on them? And the thing is, like, nobody in the grocery world has $14 billion in cash. In fact, in the physical retail world at all, like Walmart has $6.5 million of cash. So unless Apple or Google steps in, like Kroger only has $400 million. Dan Primack was raising this point on Twitter. Amazon's really the only one who could win this deal. And so that's sort of an interesting, interesting thing to consider.

• 38:20Speaker 01

  Yep, totally. Nobody in the grocery world would have the capital to do this.

• 38:24Ben Gilbert?

  Nope, nope. Another good one. Geekwire was reporting that a really interesting thing here is that it's really a training ground for AI retail research. Amazon has all these incredible machine learning, artificial intelligence PhDs, and Whole Foods has probably zero. I mean, maybe some small amount of data science, but you start to marry the amount of data coming in from Whole Foods and having Amazon have the ability to deploy that all over their ecosystem, not only to make Whole Foods better, but to use that in other parts of the business. It sure seems to contribute to the flywheel.

• 38:56Speaker 01

  Yep, absolutely.

• 38:57Ben Gilbert?

  Yep. Another good one. I was reading Freight Waves, a friend who's in the trucking industry, working on a startup there, sent this over. And they were talking about how the thing that's really interesting about this deal is it could dramatically reduce their transportation costs because if they're using Whole Foods, you know, in the back as like urban warehouses for things that they want to start putting around to unlock, you know, imagine Amazon Prime now launching everywhere there's a Whole Foods because they can keep things in Whole Foods in a non-customer facing way, or maybe they can actually just deliver things directly out of the Whole Foods retail area. It really opens up the potential of reduced freight costs because you just have so many more nodes on the network.

• 39:35Speaker 01

  Yep, absolutely.

• 39:37Ben Gilbert?

  So then another one that I was, another thing I was thinking about is Whole Foods has, let's see, 456 stores in the US and Canada. Now, that's zero international. So, Amazon has a global footprint. Will they, you know, will we see them start to make international grocery moves?

• 39:55Speaker 01

  Well, they're already, Fresh is already in London and Berlin and Tokyo, so.

• 40:00Ben Gilbert?

  Right, right.

• 40:01Speaker 01

  You gotta imagine, yes.

• 40:02Ben Gilbert?

  Will they need M&A? Like, whatever they're doing with Whole Foods, like, will it make sense to buy a big international chain as well?

• 40:08Speaker 01

  Which, as we talked about, is how Whole Foods grew through acquisition.

• 40:12Ben Gilbert?

  Yep, absolutely. And then lastly, this one might be a little bit more out there, but who knows? Amazon has reportedly been working on some prescription and pharmacy efforts. And CNBC reported that if Amazon wants to sell prescription drugs, Whole Foods could provide the real estate on top of not just prescription drugs, but incredibly high-value real estate with, you know, high net worth clientele all over the place. So, you know, it's a premium customer set at premium real estate, and they can do all sorts of things with that, including launch a pharmacy brand.

• 40:45Speaker 01

  I feel like we should, we should call this a new, new section on the show, call it just like, pure speculation.

• 40:53Ben Gilbert?

  Yeah.

• 40:54Speaker 01

  I know, onto pure speculation.

• 40:55Ben Gilbert?

  Ben and David widely speculate, including a whole bunch of things they read on the internet.

• 40:59Speaker 01

  If it's on the internet, it must be true. That's the mantra of Acquire.

• 41:04Ben Gilbert?

  Yep.

• 41:05Speaker 01

  So, all right, with that, should we come, come back to our acquisition category here?

• 41:10Ben Gilbert?

  Let's do it. Yeah, what do you think?

• 41:12Speaker 01

  Well, I, I think I have to say two here. And the two are business line, with the caveat that Amazon already had this business line. This is just a massive accelerant and reshaping of that business line. And then the other one is, is asset, you know, as you were alluding to in the wild speculation section of the show, you know, this is now instantly, you know, 450-plus new, you know, in last-mile distribution centers in cities that are extremely proximate to the majority of Amazon's customer base, which is, you know, people, middle to high-income, people, mostly younger demographics that live in cities.

• 41:55Speaker 01

  So, this is an incredible real estate asset that they just acquired.

• 41:59Ben Gilbert?

  David, it is like you are literally reading out of my text. Like I had those, those two bolded. Like new listeners to the show, we have people, technology, product, business line, asset or other. And those are my two as well.

• 42:12Speaker 01

  And what's, I mean, I don't think either of those is, you know, even in the couple hours since the acquisition, you know, I don't think there's any great depth of insight in, in either of those.

• 42:20Ben Gilbert?

  No.

• 42:21Speaker 01

  Well, I'm, I'm looking forward to talking about tech themes, but before we do that, should we hop to what would have happened otherwise? And we should talk about Whole Foods and Amazon, but in particular, I want to talk here about what's the future for Instacart?

• 42:34Ben Gilbert?

  Yeah. Um, okay. Wait, pausing on Instacart real quick. What would have happened otherwise? So, you know, when we're thinking about what we were talking about earlier with, you know, Amazon, a marketplace and, you know, they have fulfillment by Amazon for customers who are merchants who are on the marketplace. It's interesting to think about first they had to be their own retailer and then they could open up the marketplace. You know, in this case, it seems to me like first they're going to be their own sort of grocer, which let's not forget. Um, I don't think we've said this on the show yet. Grocery is an $800 billion market, like grocery is the market and it's like a massive.

• 43:11Speaker 01

  If you look at all of retail, not just e-commerce, but all of US retail, grocery is about 15% of that. So it was enormous, enormous. I mean, it is, it is as big as Amazon's entire business. It is as big as all, bigger than all of e-commerce combined right now.

• 43:28Ben Gilbert?

  Well, I mean, it's basic human stuff, right? Like look at Maslow's hierarchy. Like we need food. We need food. We need shelter. And actually, if you look at household spend in order, it's taxes, house, car, food.

• 43:40Speaker 01

  If you're looking purely at retail, the first two of those don't apply. Uh, house and taxes and it's car and food, right? And like, think about, think about Uber and Lyft and, you know, and, and well, I'm, okay, I'm gonna. Pause here. I'm going to save this for tech themes. Continue.

• 43:58Ben Gilbert?

  Yeah, yeah. Okay. So, so massive, unbelievable, ridiculous market. People need to eat. And it's interesting that to me, Amazon is going the direct route with being, you know, the place where you buy the food when they buy owning Whole Foods and not opening it up as a marketplace. Like one direction they could have gone is to go to every physical grocery store at scale and say, you can reach customers online using our platform, the way that Instacart did. And it's interesting that they sort of went the other direction with it and really bought their way into possibly unfolding it in the same way that they unfolded from their, their normal retail business.

• 44:38Speaker 01

  Yeah, absolutely.

• 44:39Ben Gilbert?

  Yeah. I don't know. Like if they didn't buy Whole Foods, like would they have bought a different grocery store? I mean, the, if you look at Albertsons bought Safeway for $9 billion a couple of years ago. And so that I suppose Albertsons could have bought Whole Foods. I know they were considering it. You know, Amazon maybe could have bought Albertsons. At the end of the day, it's, I think Whole Foods was the best one to buy because it has the

• 45:03Speaker 01

  It actually had

• 45:04Ben Gilbert?

  best selection and the most premium customer segment and the most premium real estate.

• 45:07Speaker 01

  And it actually had, to the extent any large chain did, it actually had differentiation. I mean, I don't think it was lost on Amazon that, you know, I seriously doubt Jenny and I were the only folks that used Instacart to get Whole Foods. And I, and I really doubt that that was lost on Amazon.

• 45:22Ben Gilbert?

  Yeah, I think you're right. So to me, Amazon gets a heck of a lot more leverage out of buying Whole Foods than Albertsons would get out of buying Whole Foods. And so from a value creation perspective, I guess it's a, you know, creates more value for the world for Amazon to own the asset.

• 45:37Speaker 01

  So let's talk quickly about, about Instacart. I mean, what, uh,

• 45:41Ben Gilbert?

  Yeah.

• 45:41Speaker 01

  You know, what, what do we think is, is the future for them here? I mean, they're, uh, they have a very large valuation. The product is great. You know, I completely agree with you, Ben. I mean,

• 45:52Speaker 01

  we love it, uh, but we love it to get Whole Foods, right?

• 45:56Speaker 01

  This is, you know, big for them. What, um, what's the path forward? I have some thoughts, but, uh, well, I'll go first. So, um, on the surface, I mean, this is a bad day. It's a very, very bad day for, for Instacart. On the other hand, though, you know, there, I don't think all is lost for them by any means. They have

• 46:18Speaker 01

  I think the the only model that makes sense to that is capable of scaling quickly in anything less than a decade long timeframe in this space, which is let the stores that are and the companies that are good at logistics, do logistics and we'll do the last mile. Right. Zero inventory. Zero inventory risk. I mean, that was when we talked about, you know, the web van boat flipping upside down. It was that they had plowed so much money into into inventory and their fulfillment centers. And then when they were losing money on every order and demand, you know, a tidal wave of demand came in. It didn't fail because people didn't want the product, you know, it failed because they just,

• 47:00Speaker 01

  the capital demands got too great on the business. That's how they lost all of the, you know, $800 million they raised. Instacart doesn't have that problem. More demand is more, you know, gross margin for them. So that's good. And I think with this acquisition, you know, what this is certainly going to do in the medium term is it is going to drive everybody from, you know, in the grocery pharmacy, you know, any local retail space. You know, if they weren't afraid of Amazon already, they're going to be driven into the arms of Instacart. You know, I think probably starting with Trader Joe's, right? Like if Instacart can land Trader Joe's, to my mind, they're sort of the last bastion of differentiation in this space.

• 47:43Speaker 01

  And there sure is heck not going anywhere near Amazon after the Whole Foods acquisition. So I don't think any all is lost. Then the other thing for Instacart is, is of course, you know, the other player in the commerce space, which is Walmart, you know, which has been very acquisitive, acquired Jet, just also, you know, acquired Bonobos today in a, in a story that was vastly overshadowed by Whole Foods. But acquired ModCloth, plenty of others.

• 48:10Speaker 01

  You know, they are gonna be very interested in this space, too.

• 48:14Ben Gilbert?

  And Walmart's in food. I mean, they have the superstores that are effectively just huge grocery stores attached to Walmart.

• 48:19Speaker 01

  Now, the problem has been, as you mentioned, Walmart only has $6.5 billion of cash on their balance sheet, and Instacart's sitting at a $3.3 billion valuation. So, you know, Walmart's not gonna spend all their cash on this deal if they buy Instacart. So, returns are limited there.

• 48:36Ben Gilbert?

  Yeah. Ooh, that's interesting. If you're a poorva, do you take Walmart stock?

• 48:40Speaker 01

  Yeah, well, you better think hard about that. I mean, I believe Jet was all cash, right?

• 48:49Ben Gilbert?

  Uh, I don't actually remember.

• 48:51Speaker 01

  I think it was.

• 48:52Ben Gilbert?

  Sounds right.

• 48:52Speaker 01

  I think it was, you know, which.

• 48:54Ben Gilbert?

  With heavy, heavy earnouts.

• 48:55Speaker 01

  Heavy earnouts, right, but all cash. So, you know, Mark Laurie didn't have to make that bet.

• 49:00Ben Gilbert?

  Yep. Hey, I mean, look, you can go head to head with Amazon. Like, Instacart might actually just deliver like a way better consumer experience. I mean, maybe, I don't know.

• 49:14Speaker 01

  Keep going.

• 49:16Ben Gilbert?

  Yeah, I mean, one thing, here's another thing.

• 49:17Speaker 01

  Thread of logic that you go down when you start thinking that way, but go.

• 49:21Ben Gilbert?

  Right, right. Well, I'll pivot a little bit, because I hit it when you did, too.

• 49:27Speaker 01

  What I hit on is price, right? Like, the thing is, Instacart is more expensive than going to the grocery store. And if Amazon now owning Whole Foods can make it cheaper, like, you just can't compete, right? And this is how Amazon won retail.

• 49:42Ben Gilbert?

  And maybe there's a play for Amazon to aggregate, or I'm sorry, Instacart to aggregate the long tail of all these sort of independent grocery stores and smaller grocery stores and everything that is not Whole Foods. But you have to imagine at some point, Amazon will open up a marketplace for this. But the thing is, so with grocery delivery.

• 50:05Ben Gilbert?

  Amazon Fresh is much more on like this sort of, I've actually never done it, but I think on this sort of weekly cadence or bi-weekly cadence, right? Whereas Instacart is much more on demand.

• 50:16Speaker 01

  Yeah, I think that's right. You can do on demand from Amazon too, I believe, but, but they try and funnel you to, to a weekly cadence.

• 50:23Ben Gilbert?

  Yeah. And so this thing for Instacart, the ability to aggregate third-party sellers on a platform in a sort of, in an aggregated way where you can, I can go to Amazon and order from three different third-party sellers. And since they're all fulfillment by Amazon, they sort of get to my house at the same time. It's all through the same system. Since Instacart uses a on-demand system, it's, you, you really can't actually order from multiple grocery stores because the logistics of that, sending a shopper in the next two hours to both grocery stores is prohibitively expensive and time-consuming. And so, you know, there, there actually isn't really a play to aggregate the long tail to go to multiple stores.

• 51:03Ben Gilbert?

  But maybe there's a play to aggregate the long tail where in, in every local market, you have all the smaller stores on there that, that Amazon doesn't have with Whole Foods. I don't know.

• 51:16Speaker 01

  I mean, yep, but you're competing with the everything store and, and aggregation theory, as we've talked about.

• 51:24Ben Gilbert?

  Yeah.

• 51:27Speaker 01

  It's, well, we'll see. I mean, I don't think, I certainly don't think, you know, Monday, a starting Monday or today, that, that Instacart is doomed. And actually, you know, there, there certainly are plenty of ramifications from this deal that are positives for them.

• 51:43Ben Gilbert?

  Yep.

• 51:44Speaker 01

  But it does just speak to, you know, in the world we live in right now, you know, Amazon is the new, you know, Microsoft from the 1990s, you know?

• 51:54Ben Gilbert?

  Yeah. Dude, that's okay. I'm glad you're going there because that's, that's my first tech theme.

• 51:59Speaker 01

  Take it away.

• 51:59Ben Gilbert?

  And I think probably one of yours too. In one sense, they're the new Microsoft. In another sense, the big five right now, Facebook, Amazon, Microsoft, Google, Facebook are way more powerful, just way more powerful because of machine learning and because of the data assets that they have than Microsoft of that era. Because I really do think that like, there is this like, well, we can out-execute, you know, this company right now because they don't know how to do consumer. They don't know how to... With these companies, like, it's just a matter of time. Like, I really thought like, wow, Amazon Fresh isn't as good as an experience for a long time as Instacart. But like, at some point, like, Amazon just has so much cash and these companies have

• 52:41Ben Gilbert?

  so much cash, they just go in and they buy

• 52:45Speaker 01

  Yep.

• 52:45Ben Gilbert?

  this huge asset. And they get this incredible data asset out of it. And they learn how to optimize every single experience for every single customer based on exactly their wants and needs. And I think that, also with the availability of cloud computing, like, you know, you start your two pizza team inside Amazon and it's small and you work on a thing. And then suddenly, if it's working and you find product market fit, like, you get the power of Amazon's cloud behind it. I really do think that, you know, the big companies now have ability to enter markets that, you know, they just compete with everyone and they're fierce.

• 53:24Speaker 01

  Yes. Well, I think it highlights the importance of, you know, if you're gonna do the crazy thing and attack one of these guys head-on, well, you can't attack head-on, but attack them on their turf. The angle you enter at has to be completely, you know, orthogonal to the angle that they're approaching the market. And I think Instacart, you know, you listen to Purva, and again, he's very articulate and makes a good case for why Instacart can do things and offer things that Amazon couldn't and probably still can't. But I don't know that the angle, like, it was a little too acute, you know, like, as we've

• 54:06Speaker 01

  been talking about it. It's not so totally different that enables a completely different customer experience. And, you know, that's, I think you're right. Like, the power that the big five, big four, big five, however you want to categorize it, have right now. Our, you know, make the power that Microsoft had in the 90s, you know, look quaint.

• 54:33Ben Gilbert?

  I agree. And to pile on that point one more time, the market really doesn't believe that Amazon can, can, that anyone can compete with Amazon. And once Amazon decides to enter a market like that's the, Amazon is by far the scariest of those five horsemen right now, because here's how the market responded today when, when this deal happened. Targets down 9%, Walmart's down 5%, Costco 6%, Sprouts 11%, and Kroger 13.

• 55:01Speaker 01

  Wow.

• 55:02Ben Gilbert?

  Like, Amazon signals they're going to enter a market and just.

• 55:06Speaker 01

  Which is ironic too. I mean, like, this should not be news to anyone. Like, Amazon has signaled for 10 years that they're coming for groceries, so.

• 55:15Ben Gilbert?

  David, the irrationality of, of the market will never, will never cease to be a topic on this show.

• 55:21Speaker 01

  Yep. But actually, that is a good point that I think we should, is worth a moment, that as scary as Amazon is, they can't start from zero and destroy you. They, you know, it really, I don't think this would have happened without the 10 years of, you know, from, from Webvan to, you know, to Tequila, to Fresh, you know, and then to observing Instacart. Everybody knew this was coming. So, so, you know, I don't think like, you know, if you're, you know, if you're Airbnb, and you're, you know, you have another amazing marketplace, but you're nowhere near Amazon.

• 56:02Speaker 01

  Like, I don't think Amazon can launch, you know, Amazon, you know, stays tomorrow.

• 56:08Ben Gilbert?

  Right, right.

• 56:09Speaker 01

  So, so there is some solace there. There's plenty of.

• 56:12Ben Gilbert?

  Especially in those marketplaces, right, of building up a big supply and a big demand.

• 56:16Speaker 01

  Yep, absolutely. They do not happen overnight, regardless of who you are. But I think it also highlights something else that, you know, if I were.

• 56:25Speaker 01

  I don't happen to believe necessarily the bare case on Amazon right now, but nobody seems to be making it. So I'll take a stab. Like, here's my bare case on Amazon. As they grow and everything you were just saying and enter so many new markets, there is going to be this incredible, incredible human capital management problem there. And I think Jeff Bezos is amazing. He's one of the best management leaders of ever to be able to grow Amazon as it is in such a decentralized fashion.

• 57:04Speaker 01

  But at some point, even in as efficient an organization as Amazon, those communication costs within the organization are going to get higher and higher. So there is probably a natural human limit to how much they can scale in terms of businesses.

• 57:24Ben Gilbert?

  Yeah, I mean, that's always been the case against big companies and the case against conglomerates for a long time. Question is, has Amazon really found the formula to make that?

• 57:36Speaker 01

  Well, I think they've done better than just about anybody else in history.

• 57:39Ben Gilbert?

  Right. But what is the upper limit of their current model?

• 57:42Speaker 01

  Right. And you know, you could certainly argue that in today's world and in tech, we've talked about this, I think we're in tech themes now on the show about how technology is a lever, right? And like the two pizza teams and Amazon, like a two pizza team started, you know, Prime Now and Amazon Go and Amazon Fresh and all these things.

• 58:00Ben Gilbert?

  Right.

• 58:01Speaker 01

  So.

• 58:02Ben Gilbert?

  One thing that we shouldn't lose, though, like we're finding this two pizza teams. The Amazon Fresh team is around, I'm sorry, the Amazon Go team with one location that is only open internally to Amazon employees is like 1,000 people.

• 58:15Speaker 01

  And those are 1,000 people with individual personalities and politics and wants and needs and desires.

• 58:23David Rosenthal?

  So again, I'm not sure, you know, I don't want to compete head on against Amazon. But, but if you were to articulate a bear case, to me, that's the, that's the best one right now.

• 58:34Ben Gilbert?

  Yeah. 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.

• 58:48David Rosenthal?

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

• 59:05Ben 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.

• 59:20David Rosenthal?

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

• 59:44Ben Gilbert?

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

• 1:00:03David Rosenthal?

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

• 1:00:33Ben Gilbert?

  Truly insane numbers, and that is the real test. Plenty of things demo well, but the question is whether a busy associate actually reaches for it during crunch time, or whether a partner trusts it before going into a conversation with a major client. If your legal team wants to check it out, whether you're a law firm or you're in-house at a company, you can learn more at lagora.com/acquired and just tell them that Ben and David sent you. Another interesting, it's not as much a tech theme, but an Amazon theme is, Amazon's never done an acquisition on this order of magnitude before. Like, all of their, their, their M&A strategy sort of changed from buying, buying these sort of properties that they can integrate into their systems, Audible and, and Zappos

• 1:01:17Ben Gilbert?

  and things like that, to buying like technologies that were even cheaper. And then they, they sort of stay on this, like buying lesser expensive technologies for a while, or maybe more expensive in the sort of Kiva or elemental technologies or things like that. But really, like, they haven't been acquiring these sort of, I guess in the media world to be like properties or like, you know, like retailers. And so it's really interesting to come out swinging so hard, like, they're really putting a stake in the ground that this is a huge business for us. And there's this great chart on Axios, and I'll just read it from the bottom up, of, of deals above $500 million. So you have Quidsy in 2010, Kiva in 2012, Zappos in, in 2009, and those were like 500, 700,

• 1:02:01Ben Gilbert?

  900 million. Twitch for 970 million in 14. Then the, you have Whole Foods at $13.7 billion. And the next step down from Whole Foods, it's kind of the between Twitch and Whole Foods, is an office building that they bought in, in, in 2012 from Vulcan for $1.16 billion.

• 1:02:22Speaker 01

  So, so literally, Salt Lake Union is the next acquisition down.

• 1:02:27Ben Gilbert?

  Yes, they bought an, an office building, yeah, for, you know, one order of magnitude less than this deal, and that was their next one down.

• 1:02:37Speaker 01

  That talks about, you know, well, anything else you wanted to say on that?

• 1:02:42Ben Gilbert?

  No, it's it.

• 1:02:43Speaker 01

  Perfect lead in to the tech theme that I really want to talk about here, which is the power of big markets. And the lead in that I was, the connection I was making is that, you know, the real estate market is enormous. If you're going to pay more for an office building than you would for Twitch. But, you know, take a step back here. I think a lot of people, and certainly the press and the public, you know, kind of look at this whole situation that we have discussed in all these companies and say, man, Silicon Valley is crazy. Venture capitalists are nuts. These people are so stupid. How could

• 1:03:24Speaker 01

  you put so much money into Webvan, you know, into, you know, who knows, hopefully Instacart has a bright future ahead, but maybe that goes to zero, too. Like, maybe Amazon just killed it. You know, like, how could you do that? How could you be so irresponsible? And I think the answer is that when you're talking about a market as large as grocery, I mean, literally, a trillion dollar market, you know, 15% of US retail, you have to think about it in terms of like, what if I'm right, you know? And, and this is how Amazon and Jeff Bezos thinks about things, right? Is like, the power of attacking a large market, it's going to be very hard by necessity because there's going to be a ton of competition.

• 1:04:08Speaker 01

  And your odds of success are certainly not 100%. But if you get it right, I mean, if Amazon gets this right, it's literally going to double the size of Amazon. And think about how big Amazon is already. You know, and those are

• 1:04:21Ben Gilbert?

  And people thought AWS was a big business.

• 1:04:23Speaker 01

  Yeah. And these are the kind of bets that, that lead to, I use the word bet. I don't, I don't like the word bet because it's not a bet. It's, it's about, you know, the hard work that you do over a decade long period that Amazon has done to get here. And they have another decade ahead to continue to realize it. But if you can be successful in that, you know, that's how you build Amazon scale businesses.

• 1:04:50Ben Gilbert?

  Yeah, I love that. I love that. And in venture, it's not about all the ones you lose. It's only about the ones.

• 1:04:57Speaker 01

  Well, right. I mean, you know, 800, close to a billion dollars lost on Webvan, right? But already, you know, if you're, if you take those learnings and you had bought, you know, Amazon shares, or, you know, or even Instacart shares, right? Like, you would be getting a nice return on that.

• 1:05:16Ben Gilbert?

  Yep. You want to grade it?

• 1:05:19Speaker 01

  Um, one other one I wanted to do real quick. I mean, I don't know that there's too much more insight to add, but I don't think we can, I don't think we've talked about it yet, and we can't have an episode on Amazon without talking about the flywheel. And because, I mean, that is really, that is the other, you know, besides making big bets, you know, that is the other core element to Bezos and Amazon's philosophy. And if you think here about, kind of, especially, you know, Alexa, right? And, and Echoes, and like, where do Echoes live? Like, they live in the kitchen, you know? And, and, and that, how that business has grown within Amazon, and then attaching a grocery business to that, and, you know, Alexa, bring me some milk, you know? You can start to see the flywheel spinning, and

• 1:06:03Speaker 01

  that's how you, you can create this just, you know, unsurmountable competitive advantage in a space.

• 1:06:09Ben Gilbert?

  Yep. Absolutely.

• 1:06:12Speaker 01

  All right. Should we go back to wild speculation and grade this thing?

• 1:06:16Ben Gilbert?

  Yeah, yeah. I mean, I don't know. Like, it's, it's a...

• 1:06:26Speaker 01

  Okay, so, so they've spent, what was it, 13.7 billion dollars, right?

• 1:06:32Ben Gilbert?

  Yep.

• 1:06:33Speaker 01

  And, you know, I mean, what, what's the, what's, what's the return they get? I mean, that's what...

• 1:06:41Ben Gilbert?

  Yeah, so here's an interesting, what else could they have done with that? That could have possibly, let's, let's see if we can do like an expected value calculation. So, you, you pour that into something else, and we can think of what that something else could be, and then I guess, like, try and figure out what the coefficient of possible success is.

• 1:06:55Speaker 01

  Every city in America.

• 1:06:57Ben Gilbert?

  Right, right. Like, there aren't that many more, like, bigger markets than this.

• 1:07:03Ben Gilbert?

  That, and especially that Amazon's already playing in.

• 1:07:05Speaker 01

  Transportation. Well, there's, there's, there's three. There's government and taxes, there's US real estate, and there's transportation. Those are the only markets that are bigger than this.

• 1:07:20Ben Gilbert?

  Wow.

• 1:07:22Ben Gilbert?

  It's funny, Amazon doesn't, I mean, other than the buildings they own, they don't really play in real estate. They so far aren't really playing in transportation, other than logistics, like certainly no consumer transportation. Do we want to make any calls on this show? I know this isn't grading it, but we should like make a long bet or something that in five years, are they competing with Waymo, Uber, Lyft?

• 1:07:46Speaker 01

  And Airbnb in real estate.

• 1:07:48Ben Gilbert?

  Yeah. Yeah. There is so much that Amazon's not competing in yet.

• 1:07:52Speaker 01

  Yep. I mean, well, what you're talking about is, is, you know, no longer a big five in tech, but a big one.

• 1:08:00Ben Gilbert?

  Yeah.

• 1:08:01Speaker 01

  I don't know. I have a hard time seeing that happen.

• 1:08:05Ben Gilbert?

  Well, you know, if we're, if we're grading this acquisition and we're being that speculative, I just didn't think it was that much further of a leap.

• 1:08:11Speaker 01

  Yeah. Well, um, well, I mean, I think right now I, I'm going to give it an A minus, which is in line, I kind of, this feels weird to say, given the difference in magnitude between the two of them, but I'm thinking about our last episode and Sound Jam. And in some ways, this feels like a Sound Jam to me, like Amazon was going to do this anyway. Clearly, you know, they've been doing it for a decade.

• 1:08:45Speaker 01

  This is an acceleration to their plans. And hopefully for them, it works out like Sound Jam worked out for Apple.

• 1:08:55Speaker 01

  But, but, but I can't give it more than an A minus, even if it does work out beautifully, because I don't think it's a fundamental transportation or transformation. It's not like a, this isn't like an Instagram that's going to come in and just completely take the whole organization in a, in a direction that it wasn't going. It was already going this way.

• 1:09:16Ben Gilbert?

  Right. Yeah. The only interesting, the only caveat on that is it could actually be their biggest business in five years.

• 1:09:22Speaker 01

  Yep.

• 1:09:25Speaker 01

  But if, for me, you know, if, if, if our A is a, is a next or Instagram, you know, a, a business that

• 1:09:33Ben Gilbert?

  Yeah.

• 1:09:33Speaker 01

  Uh, and a team that just completely transforms a company like this is not transformative.

• 1:09:39Ben Gilbert?

  Nope. That's a great point. And, and, and, well, it certainly won't.

• 1:09:47Ben Gilbert?

  Yeah.

• 1:09:47Speaker 01

  And, and honestly, if it fails, like, well, then there was a lot of money to spend on this. So.

• 1:09:53Ben Gilbert?

  Right, right. It's really just the opportunity cost of that capital.

• 1:09:55Speaker 01

  So assuming if, if they succeed, I give it an A minus, maximum grade.

• 1:10:02Ben Gilbert?

  Hmm. Maximum.

• 1:10:03Speaker 01

  Yeah, there we go. Maximum grade.

• 1:10:05Ben Gilbert?

  Really? I mean, what if they, what if they start commanding six of the $800 billion in this market?

• 1:10:11Speaker 01

  Oh, but I think they could do that anyway. They didn't need to buy Whole Foods to do that.

• 1:10:14Ben Gilbert?

  Hmm. Okay. All right. A minus. Sounds good to me.

• 1:10:18Speaker 01

  All right. There we go.

• 1:10:22Speaker 01

  Follow ups?

• 1:10:23Ben Gilbert?

  Follow ups and hot takes.

• 1:10:24Speaker 01

  Well, we mentioned Walmart buying, uh, Bonobos.

• 1:10:28Ben Gilbert?

  Which I don't, you know, whatever, like, great, Jet, Jet is gonna.

• 1:10:32Speaker 01

  Doesn't seem like a target customer fit to me.

• 1:10:36Ben Gilbert?

  No, but I think what the deal is, is I think that Amazon, or I'm sorry, I think at Walmart, you know, through Jet is really just trying to buy a bunch of these sort of smaller e-commerce companies that, that people love and figure out, you know, can they just own a portfolio of these things? They may not sell them, you know, in Walmart or something like that, but, um, you know, i- i- if the goal is to go around and buy a bunch of these, like Casper and, uh, you know, Harry's and sort of internet and now, and Warby Parker, like those sorts of businesses, like, does it make sense for Walmart to own a big portfolio of those?

• 1:11:20Ben Gilbert?

  I don't know, but I don't think this was, like, this wasn't a huge outcome for Bonobos.

• 1:11:25Speaker 01

  No, I mean, not, not given how long the company was around and, and how much money they raised, but, um,

• 1:11:31Ben Gilbert?

  Yeah.

• 1:11:31Speaker 01

  But, you know. Nice exit.

• 1:11:35Ben Gilbert?

  Honestly, what it feels like, and I think this is a Ben Thompson tweet earlier, but like, these being announced on the same day is just like, the contrast, it really showed how stark the contrast is where like Walmart's kind of playing checkers and Amazon's

• 1:11:50Speaker 01

  Oh yeah, I love, this is, throw in one more tech theme that actually I've been thinking about a lot lately, and I think is a very powerful one, is that Amazon is playing offense, Walmart is playing defense. You don't win by playing defense. And especially as a startup, not that Walmart's the opposite of a startup, but like, when you're a startup, like, you have nothing to defend. You can't play, you can only play offense, that's the only way to win.

• 1:12:16Ben Gilbert?

  Right. Are you insinuating that Amazon may be playing like a day one company?

• 1:12:23Speaker 01

  I hadn't thought of that.

• 1:12:27Speaker 01

  So insightful.

• 1:12:28Ben Gilbert?

  I know. All right, carve outs?

• 1:12:31Speaker 01

  Let's do it.

• 1:12:32Ben Gilbert?

  So mine is a friend of the show, Brian McCullough, from the Internet History Podcast, which, if you're listening to this show, you would love that show, tweeted this link out the other day, and I had to just go watch the whole thing, because it was like, just, it's one of these things you can't take your eyes away from. It is Mark Zuckerberg in 2005, coming back to Harvard to give a guest lecture in CS50.

• 1:12:54Speaker 01

  Oh man, I saw that. I haven't watched it yet, I need to.

• 1:12:58Ben Gilbert?

  It is unreal. Like, he's taught, first of all, it's super insightful from like a technology perspective to understand how Facebook succeeded in a way that a lot of other, a lot of their other precursors of social networking sites failed. So it's interesting to learn about Facebook's early architecture from a tech perspective, but then on top of that, it is just so stark to see Mark Zuckerberg speaking the way that he spoke in 2005 juxtaposed against the way that we all, you know, hear him today, and, you know, Mark without PR training, and Mark without a team of writers, and, you know, Mark without a perfect diet and hitting the gym all the time, and he's, you know, he's just insanely off the cuff and almost a little like, bro-y?

• 1:13:43Ben Gilbert?

  Like, there's a little streak of that in there?

• 1:13:45Speaker 01

  Remember when, the, well, two things, one, wire hog.

• 1:13:51Ben Gilbert?

  Yeah.

• 1:13:51Speaker 01

  Facebook was, he was just aside, a way for him to launch like a Napster competitor. And then to the Sequoia pajama pitch.

• 1:14:01Ben Gilbert?

  Oh, my God.

• 1:14:01Speaker 01

  Yeah.

• 1:14:03Ben Gilbert?

  Yep, yep. And in this pitch, he probably earned this, this lecture. He's like, we have two hours. I'll probably talk for like 15 minutes because I don't know what you guys want me to talk about. And then like probably 15 or 20 times. I know, right? Over the course of the, of the two hours, he says like, yeah, I don't know if this is interesting to you guys at all. I don't know if this is relevant. Like, I don't know what you want me, what you want me to say. I don't know. You know, like, I don't know. Like, I don't know if this is relevant. And he just keeps saying that over and over and over again. You're like, wow.

• 1:14:31Speaker 01

  This guy.

• 1:14:31Ben Gilbert?

  It's so different.

• 1:14:33Speaker 01

  And look at him today.

• 1:14:35Ben Gilbert?

  Yep.

• 1:14:36Speaker 01

  What, what matters is potential, not, not the current state of things.

• 1:14:42Ben Gilbert?

  Potential and network effects.

• 1:14:43Speaker 01

  And flywheels and big markets and playing offense, not defense. All of the things.

• 1:14:51Speaker 01

  All right. My podcast is the episode this week of Exponent. The Ben Thompson and James Allwes, great podcast that I'm sure many of you guys listen to and should if you don't already. On podcasts. We've talked about this on this show. We did the episode a while back on Midroll and Stitcher. But it really feels like with Apple announcing that they're going to bring a whole bunch of changes and improvements to the platform of podcasting. Like now might be the time. I mean, we've argued on this show where podcasting is obviously near and dear to our hearts.

• 1:15:30Speaker 01

  And we are, you know, in the startup and venture world, but that it's just too soon. The, the market's too small. You can't build big, big businesses here. But I wonder if now's the time that things are changing.

• 1:15:42Ben Gilbert?

  It's a great time to be in podcasting, David.

• 1:15:44Speaker 01

  It is. Which is also why it's a great time to tell your friends about Acquired.

• 1:15:49David Rosenthal?

  Couldn't help myself.

• 1:15:50Ben Gilbert?

  That is, no, it's great. It leads exactly into our show close.

• 1:15:55David Rosenthal?

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

• 1:16:02Ben 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.

• 1:16:13David 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.

• 1:16:33Ben 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.

• 1:16:45David 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.

• 1:16:57Ben Gilbert?

  So listeners, happy Friday night. You probably will listen to this in another time, but David, enjoy your weekend.

• 1:17:04David Rosenthal?

  You too, Ben.

• 1:17:07Ben Gilbert?

  Listeners, if you haven't subscribed and you want to hear more, you can subscribe from your favorite podcast client. And if you feel so inclined, we would love, love, love a review on Apple Podcasts. So with that.

• 1:17:20David Rosenthal?

  With that.

• 1:17:21Ben Gilbert?

  Go shop at Whole Foods.

• 1:17:22David Rosenthal?

  Go shop at Whole Foods. To more wild speculation in the future.

• 1:17:26Ben Gilbert?

  Yes.

• 1:17:27David Rosenthal?

  All right. Thanks, everyone.

• 1:17:29Ben Gilbert?

  Thank you.