10 Years of Acquired (with Michael Lewis)

0:30Happy 10 years. Happy 10-year anniversary, Ben. It's crazy it's been 10 years. I know. Here we are. Brought you down here to Silicon Valley to record our 10-year anniversary holiday special here. I wanted a special place. Yeah, what are we doing? You keep teeing up. Like, oh, just come down. Oh, we'll just record it here. Clearly, we're not at your house. I was actually thinking we should try and find the Silicon Valley house, Ehrlich Bachman Aviato. Aviato. Aviato. Aviato. Aviato. No, the reason I brought you down here is I booked us a very

1:01special place to record. It's actually right over here. It's a house. Is this the Google house? It's the house. Where they had their first office in the garage? This is Google's first office right here. They gave it to us for the day. Like we can do our holiday special in it? Come on in. Welcome to the fall 2025 season finale of Acquired. It's a house. It's a house. It's a house. It's a house. It's a house. It's a house. It's a house. It's a house. It's a house. Welcome to the fall 2025 season finale of Acquired, the podcast about great companies and the stories and playbooks behind

1:36them. I'm Ben Gilbert. I'm David Rosenthal. And we are your hosts. Well, listeners, today we're going to do something very different than our holiday specials of years past. We've received a bunch of requests over the years to do an Acquired episode on Acquired itself and to unpack why Acquired worked when 99% of podcasts do not. But it's always felt a little bit strange to me. And we've always shied away from analyzing our own company. Yep. But then this year, we turned 10 years old and thought, well, maybe it's time for something.

2:06At least a sort of pause and reflection, you know, to shout out the Coca-Cola episode on our journey to this point and why Acquired has worked. And so we thought, well, if we're going to do something, we should bring someone in to do it with us. And we'd want someone who is great at dissecting the mechanics behind teams or companies, someone who distills complexity into simplicity, someone who himself knows how to tell a great story. And there was really only one choice. Michael Lewis. Author of Moneyball, Liar's Poker, The Blind Side, The Undoing Project,

2:37Going Infinite, on and on and on. And, of course, host of his own podcast, Against the Rules. And, Ben, you and I have looked up to Michael forever, so this was really special. Yes. And then, of course, there's the venue. We thought it'd be a fitting way to cap off the year of our three-part Google series to record in the literal garage where that nearly $4 trillion company got started. Yes, indeed. Well, listeners, if you want to know every time an episode drops, vote on future episode topics, and get corrections on past episodes, check out our email list at acquired.fm slash email.

3:11And that email list just got a whole lot better with our first overhaul in five years, so you'll now get episode summaries, our big takeaways, and exclusive photos from our research process. That's acquired.fm slash email. Chat about this episode with us and the whole Acquired community in Slack, acquired.fm slash Slack. And if you want more acquired, check out our interview show, ACQ2. Our last episode was with Andrew Ross Sorkin, founder of the New York Times Dealbook, host of CNBC's Squawk Box, and author of 1929. That's ACQ2 and any podcast player. And before we dive in, we want to briefly thank our presenting partner, JPMorgan Payments.

3:45Yes. Just like how we say every company has a story, every company's story is powered by payments. And JPMorgan Payments is a part of so many of their journeys from seed to IPO and beyond. So with that, this show is not investment advice. David and I may have investments in the companies we discuss, and this show is for informational and entertainment purposes only. With that, on to our conversation with Michael Lewis. Well, Michael, thank you for joining us. Total pleasure. We have a little something since this is our 10-year anniversary that we're celebrating that we need to

4:17do before we start. Okay. So you went to Princeton. I went to Princeton. Yep. My senior thesis would become impactful for Acquired. I was a French literature major. I wrote my thesis on the history of Dom Perignon and the marketing history of Shakespeare. Very serious college student. Very serious college student. A little different than yours. They let you do that? Somehow, I conned the French department into letting me do this. And what, probably 12, 13 years later, we made our LVMH episode. And it was a big moment for Acquired. Mouet and Chandon has just released the 2015 vintage of Dom Perignon.

4:512015 is the year we started. So I thought you were going to say that the effect that the Princeton thesis had on Acquired. I didn't think it was as specific as that. But I feel like when I'm listening to your episodes, I'm listening to someone who's worked for up to a thesis. It is thesis-like immersion in a subject. Well, I can tell you our episodes are much better than my actual thesis was. But that is exactly how it feels. But that is the process we go through. Yeah. And claiming for finals the night before.

5:22There's a lot of academic feelings that happen as we get close to recording day. So it's your show, and I don't want to take it over. But I wanted to start by saying that I didn't discover it until this year. In July. I was at Google Camp, which is kind of a good way to discover Acquired. We should talk about where we are now, too. And we are sitting in the Google garage. Yes. I mean, I don't know exactly what happened in the Google garage. So this was the office. It's a nice idea. Like, literally, Susan Wojcicki lived here.

5:55She had, I think, just bought the house. She had just bought the house. And was looking to sublet part of it. Like, just make some extra money on other people using the house. And posted a bulletin notice on the Stanford campus that there was space available here. And so Larry and Sergey's first desks, when they got kicked out of Stanford's offices, were right there. Right here? Yeah. All right. I actually think this actual door desk sawhorse is the one that they were using, because Google pulled it out of storage for us. So I'm at this camp with a lot of kind of

6:28well-known people. And a prominent CEO says to me, have you listened to Acquired? And I didn't know what he was talking about. And I went and listened. I can't remember what I listened to first. I think it might have been the Morris Chang episode. But I had about eight different reactions to it, all positive. And I thought, it's kind of amazing, which you all are doing. So then from July until now, I've listened to maybe 10 of the episodes, which is a lot of hours of listening time. It is. The first thing that struck me, could not believe you were getting away with a

7:02four-hour podcast. And I couldn't believe that even after four hours, I was still looking for even more, that you created the environment with the podcast that I tried to create with the book. You grab the listener, like I try to grab a reader, and get them to the state of mind where they'll let you take them anywhere and teach them about stuff that they don't even know they want to learn about. I think if we're doing this as a 10th anniversary sort of celebration. Please, yeah. I'm honored, and I feel kind of like I'm a little out of my depth here because I'm

7:36just a new listener, and I haven't listened to all of it. I'm hardly the world's authority on your podcast, and I didn't prepare at all except to listen to it, except I did one thing. And that was I went back and listened to your very first house. Oh, God. Oh, wow. Just to compare. Be kind, please. It is shocking how different it is from where you started from where you have. You probably haven't ended up, but where you are now. So I'm going to start by this 10-year journey. I think I can see some things you've learned.

8:08Oh, all right. But I want to know what you think you've learned. Let's do the 10 lessons from the 10-year journey. Do you have yours, like, crystallized? Because I don't want to taint you. No, no, no, no, no. I do have – it's actually one big thing. And if you say it, I'll acknowledge that you, you know, sunk my battleship, and I have nothing to add. But it's – I'm curious what you think. There's no way that first thing you did was ever going to become a hit. Well, I'm curious if you think – I've always believed something that's always been there from the beginning is the

8:44magic between me and Ben. That's interesting to me. You all meet at, like, a Passover Seder? Yes. And you're – you end up being colleagues at a VC firm? Yep. I'll come back to that. I want to talk a little bit about you as investors, but we'll come back to that. Oh, boy. And how that's different from being a podcaster. But at what point do you decide that, oh, there's a kind of odd chemistry here? We really just wanted to spend more time together. It was one of these things where – You're both straight.

9:14Yeah. Yes. Okay. Both married. It's not a romantic relationship. No. We like to say that we each have two spouses. We have our actual romantic spouses that we have families with, and then we have each other. David and I shared a bank account before my wife and I shared a bank account. So are either of your spouses threatened by the relationship? No. Just from a sheer time perspective. Yeah, yeah, yeah. A little bit. My spouse loves it because she doesn't actually want to spend that much time with me. She likes it. I used to – all of the stuff we do on Acquired, I used to just talk

9:47at her, and she wasn't interested. That is true. My wife loves that it's an outlet. And now she loves it because I get to talk to – Yeah. Although she gets the rough draft. Like, my wife won't listen to episodes because she's like, I've already heard four versions of the episode. And unfortunately, I heard, like, four worse versions. And because I endure that and give you feedback, the listener actually gets the better version. Right. So you meet and there's a chemistry. Yeah. Explain that chemistry. Like, what is it that you – what is it that makes you excited to see each other?

10:19David knew all the Apple rumors in real time just like I did. Yeah. You had read all the latest Stratechery posts. We bonded over Ben Thompson originally. And I think – you can tell me if this is mutual, but I looked up to you because you were doing a thing that was mysterious to me, which was venture capital. I was a software engineer, and I got hired to work at a venture firm to do some incubation work, but I didn't know anything about, like, the real job of venture capital. And here's David, someone who's just a few years older than me, like, doing that thing but kind of in

10:53my, like, peer age group. And I could, like, lean over and be like, what are they talking about? Well, it's – I kind of felt like a fraud in a lot of ways as a – like, I repressed this deep down. Like, but if I'm honest with myself, I think I felt like a fraud as a VC because I'd never – I went to Princeton. I was a French literature major. I worked on Wall Street. I worked briefly at the Wall Street Journal, and then I became a venture capitalist. I had no qualification to – Have you ever coded or you ever done anything?

11:25I mean, I took some CS classes in college, but, like, I'd never built anything. And so I was like, Ben had built all these things. Like, you built the this for that website. You built so many products. You had products that millions of people used. And I was like, I'm just masquerading here. So you could see that Ben knew stuff. It was exciting for you to know about. Yes. Did you feel that David knew stuff? Absolutely. What kind of stuff? Business. Really? It wasn't French literature. No, no, no. I only found out years into doing Acquired. He was a French lit major. But that's important, that French – That background.

11:59It ended up becoming – This kind of broad curiosity about things other than business and technology. I hear it in your program. I hear it in your podcast. So what I'm thinking of in my head is Kahneman and Tversky. I wrote a book called The Undoing Projects. And you could see two people. And then it got me thinking about collaboration. And I've had exciting collaborations with people. And the feeling I get is this person is bringing out a better version of me, which is why I asked if your spouses were threatened. Because Kahneman and Tversky's spouses were – threatens too strong a word.

12:31But they were very aware that the relationship that was most important in their lives was with – not with their spouse, but with – I got the sense from The Undoing Project that Kahneman and Tversky's relationship was very intense. I don't know that I would describe our relationship as – Yeah, no, it was. It was – Argumentative. Yes, it was. And competitive. It was not competitive on – Danny Kahneman felt – was always felt at risk of being dismissed, thought the lesser partner. There was a status difference between the two of them. Right going into it, everyone in the world thought Amos was the smartest person they'd ever met.

13:05You two didn't have that – ever have any of that. Not for me. But you said you felt like a fraud. I think I felt lesser. Like, there were a lot of things when we started doing Acquired where we were doing this, like, business analysis podcast, but I didn't know finance. Like, it was – Which is funny, because you've become more, you know, the keeper of the analysis on Acquired. Yeah. And I'm more the keeper of the story. It's different, though, than a difference in status. I don't feel that you or I have ever felt we had a difference in status.

13:36And the number of, like, fights we've had or real tension we've had is, like, two, three ever in ten years. I mean, it's weirdly – Let's come back to those. Yeah. And let's get to the lessons. What have you learned? We started thinking about what have we learned from the companies we've covered that we've then applied to Acquired. All right. In particular, it's – Acquired has clearly worked. Why? And does that why have something to do with the fact that we study the world's best companies? Like, is there some osmosis that happens from the subject matter bleeding into the property itself?

14:07And? So that's our frame. Okay. Let's go with that frame. Yes. So the one I was going to start with is the NFL. The product is scarce. 162 baseball games a year. It's called America's Pastime. You pass a lot of time with it. But with the NFL, because the product is scarce and then they have very smartly cultivated that and engineered it to be more scarce, more of an event-driven sport, that's made all the difference. And, like, to me, as I look at – like, what we do is insane for the podcasting industry. Like, it's completely insane. We release – for the last three years, we've released 12 episodes.

14:41The next year, we're going to do eight. Eight episodes for the whole year. Now, as a hobbyist podcaster, what I get told is you have to be on all the time. Yep. And I can't do it, and so I'm not going to do it. Podcasting is, like, your second or third thing that you do, right? Correct. And you make more episodes, I think, per year than we do. That's correct. But they're just – you know, except for the scripted ones, which I do throw myself into, it really is – I do no preparation, and it is a conversation.

15:11And I don't do very much of those. The scripted ones, I do put time into. But it's a different sort of thing than what you're doing. It tends to be a very narrow little story that I'm telling. You didn't start out, though. We used to make 26 episodes a year, you know. They were 40 minutes long to an hour 20. And so how do you go from that to realizing – and did you really learn it from the NFL, or did you just do it and then – We were starting to do it, and then we covered the NFL, and we were like, aha, this is what we're doing.

15:44Most of these things are actually, I think, our confirmation bias. We get some inkling that, like, we should continue to go in this direction. Like, in calling out Hermes, it's because I think quality and scarcity have become an important part of Acquired. And in some ways, we, like, learned that from Hermes, but we covered Hermes last year. I think we found our way to that probably four-ish years ago, maybe five years ago, where we used to feel like we were bad at podcasting because we couldn't make very many, and because we didn't have a whole production team, and we didn't have professional ad sales people, and we didn't have – We weren't full-time for a

16:19long time. Yeah, and at some point, we kind of looked at each other, and we were like, maybe if we just admit that we are heavily constrained and then try to just lean into that constraint in the way that Hermes leans into every single Birkin bag must be handmade by one artisan, and we're going to build a business model around that. And it turns out to be a great business. We sort of thought every episode is going to be entirely handcrafted by us, all the research, all the recording. We work with this amazing audio engineer, Stephen, who does the, like, literal waveform editing, but, you know, we go

16:52in and in a transcript highlight a thousand cuts per episode. Like, it's this made-with-love product, and it turned out we could actually build a big platform and a good business out of something heavily constrained. But that's not where you start. No. No, no, no. So let's just for people who don't know. Where you start is, you're two guys who've met each other and got a crush on each other. You love being with each other, and you get this idea that, oh, it would be really cool to do a podcast on corporate acquisitions that worked. Yeah. That worked. Bad idea. Well, it is an idea. It was a starting space.

17:26You could easily have started the opposite, the corporate acquisitions that didn't, and you'd have done much, you'd have much more material. Which is what most press at the time was. Right. It was, let's talk about how crappy this acquisition was. So it's interesting to me that your first step, right from the start, is positive. It's like, what worked? Not what didn't work. It's what worked. That's because we were VCs, and I was trying to build companies. I mean, the goal was create things that have enough value to get bought or go public. And when people buy things, it's because they're working. They're working, yeah.

17:58So let's try to reverse engineer what works. Understand why things worked. Right. So that's a different starting spot from almost all journalism. Yeah. In fact, if most journalists started there, they'd be accused of hagiography of- Yes. But because of where you're coming from, and because you're thinking of this in very practical terms, like why did this work, you do get away with it. It's just that first episode, you're almost like different people. But I'm going to hold back on what I think you learned, because I want to see if you get to it. So what's the third episode that you have learned a lesson from?

18:30I think Berkshire, we learned so many things from. We did this three-part saga on Berkshire Hathaway. God, I have not listened to it, and I am a big investor in Berkshire Hathaway. Good for you. Congratulations. Since when? I bought it right in the middle of the financial crisis. Because I thought- Nice. I mean, I had done a take- I mean, it's putting it a little strongly. But oddly, I had written a takedown of Warren Buffett on the cover of the New Republic magazine called The Temptation of St. Warren. You can probably dig it off of the way back machine.

19:01What was the thesis? The thesis was that he may have started out being who he says he is, but that he's become this very different thing in the marketplace. His money's not like other people's money. That's true. And you don't have a couple of things Warren Buffett has. And his money is valued differently. But secondly, he was willing to do deals that at the time bothered the hell out of me. And what had happened was- Like the Goldman deal? He said it was a Solomon Brothers deal that bothered the hell out of me. He kept a CEO in place who I thought should not have been allowed- Were you there?

19:34I was there! Yeah, you lived through it. No, I was through it. This is a huge part of our Berkshire series. It turned me briefly, only briefly actually, cynical about Warren Buffett. And then I came out of it and fell in love with him all over again. But I had written this thing and pissed him off entirely. I mean, it would clearly upset him. And then kind of started watching him for longer. And I thought, you know, I just liked him. Just liked him. You couldn't help but like him. So I started to soften. And when we get to the financial crisis, I thought, well, his money's going to be so valuable here.

20:09What is needed is credit. And I think it might, if he stays alive long enough, it might happen again soon. So you invested in Berkshire before the legendary deals coming out of the financial crisis. Yeah. And so I bought a chunk of the A shares. And I've just sat on them. And let me tell you, can I tell you a Warren Buffett story? Yeah. I mean, this is a little talking, I'm a little bit out of school. But I've never met him. I know he was really irritated with me. And then I actually look back at that. It's the only time I've ever looked back at a piece I

20:42wrote. And I thought, I overdid that. I went right back to the New Republic and wrote another 5,000-word thing about Warren Buffett, in which I basically apologized for the first piece. I bought these shares in 2008. When I was working on Going Infinite, I was working on the Sam Bankman-Fried book. And I was talking to a publicist, completely unrelated to Warren Buffett. And she said, you know, I also represent Warren. And she said, and I told Warren that I've been talking to you. And he said, he has a question for you. And I said, what? He says, is he the Michael Lewis who bought shares back in the mansion?

21:16No, no, no. Yeah, I swear to God. I swear to God. So this tells you something more about Warren Buffett than me. And he said he bought it like, the book value to that thing, that ratio. He bought it as cheap as it's ever been. And he says, but he- You made the best trade in your Berkshire stock history. Hold on, but then he says, then he says, so he's the Michael Lewis who sold some Berkshire Hathaway two years ago and four years ago. And he was like, why did he sell? So he's tracking. I don't know. What? Yeah, I can't imagine you're like- He's tracking.

21:48You're not like Vanguard here. No, no, no. And I said, well, actually, I actually just gave him a charity is what I'd done. I would give him the money away. That's unbelievable. And when he heard, she said, he'll be relieved to hear that kind of thing. It's like, so can you imagine? Can you imagine that Warren Buffett is taking the time to watch who is coming in and out of the A shares and thinking about it? I mean, I just thought, he and Munger had that whole thing about don't put your money in an index fund. Put your money in a big bundle of stocks.

22:20Put it in a few stocks and watch those stocks like a hawk. It's like, they watch that thing in a way that like, just in history, has anybody ever done anything like that? I mean, all these people are, they're maniacs. You don't build something like this if you're not a maniac. That's exactly right. So anyway, sorry, I just digressed here. But what did you learn from your Berkshire Hathaway? There are three episodes of Berkshire Hathaway. Well, as it applies to acquired, we got really obsessed with the circle of competence, that it's okay to have a giant too hard pile. There's a bunch of things that like, I'm not intelligently saying no to.

22:55We used to say this all the time. We'd be like, too hard pile, too hard pile. Every phone call we'd have would be like, eh, too hard pile. Wait, what is this expression you're using? So Warren and Charlie had this thing. There was the yes pile, the no pile, and then the too hard pile. The too hard pile. I see. Okay. All of technology was a too hard pile. Yeah, it was like, there might be something in here, but I'm just too hard. It's basically admitting that our opportunity cost is so high, the things that we say yes to are so awesome,

23:26that it's okay to say too hard to just a giant amount of things. Yep. And that was really freeing once we started just like, I mean, truly on most of our phone So what's an example of something that you, I'm surprised you say this. What's too hard for you? The reason that, one of the reasons, besides just wanting to meet you, because you've been an inspiration to us forever, that I wanted to meet you a few months ago was Hollywood. We've had lots of opportunities to work with Hollywood. It keeps being too hard. To this point, they have thus always invariably ended up in the too hard pile.

23:59Are you talking about doing episodes in Hollywood? No, no, no, no, no, no, no, no. Or to become a movie star? Creating TV shows, creating documentaries, adapting these stories into films. They all sound good until we start digging in and then we're like, the time it would take us to think through all the implications of this is- We should just make another episode. The answer almost always is, we should just make another episode. That's a really intelligent place to land. Because what they will do is woo you with their enthusiasm and then take you down a rabbit hole where you will spend years of your life and have nothing to show for

24:33you. Well, this is one of the reasons I want to talk to you. Michael's a very smart guy. You've been very successful. I've gone down the rabbit holes. Yeah. But you love writing books. I've gone down the rabbit holes knowing that it didn't have a whole lot else better to do at the time. It's like between books. It's a palate cleanser. You don't have a between books, period. You know- We need to, yeah. Yeah, I don't have that. I don't have the machine you have. You've got an assembly line going. And it's a compounding asset. I mean, this is the craziest, craziest thing about podcasting and a giant amount of

25:09why this has worked for us is we do a lot of work that looks a lot like the research and the writing of a book. But when we make our book and we release it to the world, people click subscribe. And so when we release the next one- Get the next book. Those same people go listen. And it's almost guaranteed- We're always growing our base. Podcasting, being an author, there's loose compounding elements to it, but there's not a literal- Not nearly what I thought when I got into the business of writing books. I thought there was going to- I thought about this a

25:44little bit. So you're right. I mean, you've probably done it better than any other. You're one of the few people who probably does have such a brand. I'm going to move around America to the various arenas of ambition. Wall Street, Silicon Valley, Washington, movie business, sports, the various things. And I'll naturally attract the audience that is interested in that arena. Yep. And then I'll drag them along to the others. And it hasn't really happened that way. Even for you? Not really. Not really. The books have a kind of market.

26:14And it's a big market, big-ish market. But it doesn't- I see no evidence that I'm dragging people along with me. I feel like each book feels like another startup. And then I've got to go out and make it happen almost as if I've not written one. Now that's- Moneyball audience is not necessarily- Correct. The fifth risk. Exactly. And the audiences end up just being different. So it's just the way it is. But that's not true with yours. That's not true for Acquired. So every time, if you were to take time off to go do something in Hollywood, you'd be abandoning this

26:47glorious network. The opportunity cost is so high of spending a month not making an Acquired episode because when we publish an episode of Acquired, the base does come with us. I mean, not all of it, but we make epic systems about healthcare and all the people who listen to LVMH are now learning how doctor's office IT works. Right. So podcasts are unique in that it does have that true subscriber base. But unlike anything else where you click subscribe, there's not an algorithmic platform that disintermediates you. I mean, you think YouTube or Twitter or any of these.

27:20When someone clicks follow or subscribe, it's like signal in the algorithm, but it's not guaranteed. But like you subscribe in Apple Podcasts or Spotify, and those people are actually subscribed and they're going to get the next episode. Right. And they learn to trust you. Yeah. They learn to trust you that if you're interested, they'll be interested. In fact, what they're buying into is not the subject, but your interest in the subject. Yes. And I am terrified of betraying that trust. Like anytime we make an episode, I think of it as

27:50a churn opportunity. If we put this in the feed, if we don't live up to the expectations that our listeners have, if we will burn them and they will leave us forever. In the what has acquired work framework, there's a strong element of terror of why it works. We're constantly terrified every time we make an episode. Every minute is a churn opportunity. Are we letting people down? All right, listeners. Now is a great time to thank our presenting partner, JPMorgan Payments. And we want to tell you about something pretty cool that we just did with them last week, which was

28:24a big live show in Las Vegas together. I acquired residency in Las Vegas, baby. No, no, no, no. But what we did do is we took the stage at the beautiful Venetian Theater at AWS reInvent. We did four really just incredible interviews with the CEOs of Netflix, Perplexity, AWS, and JPMorgan Payments. And I will say, Ben, it was extra special in retrospect. We were talking with Greg Peters, the co-CEO of Netflix, and asking him how Netflix is reshaping Hollywood just a few hours before they announced the Warner Brothers acquisition. He has a pretty good poker face, given that we were,

28:57you know, in Vegas and all that. Yeah, that he does. Also, very funny to interview Matt Garman from AWS at his own event. And I will say, one of the most interesting conversations was with Max Newkirchen, the global co-head of JPMorgan Payments. We dug into this question that I've always wondered about. How did the leading global bank also come to own this technology business that does $18 billion a year in annual revenue on its own, separate from the rest of JPMorgan? Yeah, it's wild. If JPMorgan Payments were a standalone company, it would very likely be in the Fortune 500.

29:30But it's also part of JPMorgan. Max also told us about JPMcoin, developed by Conexus by JPMorgan, and how it's helped the bank and even Jamie evolve their thinking on how blockchain technology is transforming financial infrastructure. Overall, it was a great week. We hung out at JPMorgan's booth on the show floor and got to see their developer portal being demoed live in action to customers, too. Yep. So if you want to learn more about these innovations and payments and how JPMorgan can help power your business, head on over to jpmorgan.com slash acquired. Are you more terrified than you were two years ago?

30:04Yes. So the terror is growing. The terror is growing. At some point, it's not going to be a good thing. It's good to be a little on edge. Yes. But you don't want to get yourself in a situation where you feel like you have to do the same thing over and over again. Because eventually it will get old. We'll come back to it. This is where we're going to get to the bull in the bear case at the end. But it's – this is – so back to your – the lesson that you gleaned from Munger and Buffett,

30:37it's okay to have a too hard pile. And you said – and the too hard pile is like doing things in Hollywood. But when I asked the question, did you ever run across this? Have you run across this? Have you ever had a subject where you thought, ah, this is just too hard to do? Yeah. Oh, yeah. What would be an example of that? We got pretty far down the line on doing an episode on the Fed. Yeah. And walked away from it. Yep. So you walked away from it.

31:07Yeah. We might come back, but it's been like three years. It'll be a moment to come back to it. Yeah, yeah. I'm glad we didn't do it in the past. No, no. Now this would be better. Now it's the moment. Although it's going to violate your rule about doing newsy things. We always try and find things – must be – timelessness is like a must, must. Everything we do must be timeless, the company we're covering. Nothing's timeless. So what do you mean by that? It must be that like if you listen to this, an

31:39episode that we make five years after we made it, it's 80% as relevant. It will still be an important institution in the world. Right. But like a CNBC article is worth 2% of its original value within a month. Right. And we want to be worth 80% of our original value five years from now on any given piece of content. So does that mean you're picking institutions that you think will survive? Yes. Yes. Okay, so that's like baseline, bedrock. Dog, because you're in such a volatile – so much of your

32:09stuff is tech and finance where there's so much churn. Well, yes. This didn't used to be true. You look at anything pre-2020, 2021, we had not yet discovered this principle. But our real bangers are timeless and timely. Doing Google this year was timeless and timely. Right. Having that – however you do it. You're getting to something that I try to get to when I'm picking subjects, but you're doing it in a slightly different way. What I like, when my socks start to go up and down about a subject, is when I'm really interested

32:40in it and nobody else is, that there aren't people – it's not hot. And I found with – I think it's true of basically all my books, maybe a couple exceptions, but a lot of the books. That if I'm at a dinner party and someone asks me, what are you working on? And after about 60 seconds, I can see their eyes glaze over. Like, why is he interested in that? You know, it's just not registering with them in any way. Yeah. And I've learned just to not even talk about it because it kills my interest to watch it kill

33:11their interest. But I know why I'm interested and why it's important. And I'm not relying on the world telling me it's important. That that's a really good sign. This is a difference between what you do and what we do. Because I feel like when I think through all your books, they're almost always a story of obscurity that once it becomes a Michael Lewis book, then it becomes a well-known phenomenon. Moneyball. Like, you are discovering these things that kind of nobody's talking about. Whereas when we do something like Trader Joe's, someone says, what are you working on?

33:42And we're like, Trader Joe's. They're like, I love Trader Joe's. Yeah, yeah, yeah. So that is a difference. Your subjects are not obscure. Right. They're the most famous corporations in the world. Right. People love it, but they don't really understand it. Yeah, there's a secret hiding in plain sight. A secret in hiding in plain sight. Like, people didn't understand Trader Joe's. Or people didn't understand Google, we thought. Right. There's three things that make a great Acquired episode. One, there's a compelling hero protagonist that takes a hero's journey. Where we're going from obscurity to ubiquity. How it starts is this thing that nobody cares about, and then it

34:16becomes the most important thing in the world. Right. Two is, there's a secret hiding in plain sight. Like, Costco. I think when the ordinary consumer sees Costco, they're like, oh, I love Costco. But when someone who's listened to the Acquired episode on Costco thinks about Costco, they see, like, all the gears turning of the machine. Like, we, there has to be some way that we can expose something. And then our third criteria is it has to be important in the world. And I think that's something we picked up later. I mean, we used to do these, like, little $10 million

34:48acquisitions. And now, when we're going to go spend two months of our life researching and making that, like, the Acquired episode, it has to be something worthy of the Acquired stage. When did that happen? So I'm a little unclear, again, getting back to this first episode you did and where you are now and the difference between them, what sort of compelled you or propelled you into the current form of Acquired? The decision to make it a business and the decision to actually live off of what you earned from your podcast so it had to work commercially, so then you started to make these adjustments.

35:21Is that how it works? Yes and no. You're on the right track. Look, I like the Berkshire. I thought you were going to say partnership as a lesson from it. So we did a series on Sequoia Capital, the venture firm. Yep. I went full-time on Acquired in 2020. Five years in. Ben didn't go full-time until January 24, right? Correct. End of 23, beginning of 24. You remained equal partners. Yes. Oh, it wasn't a business when we started. It was just like, I mean, we didn't make money until our third year. But those three years while you were full-time and you were part-time, it was an equal?

35:55Equal. Yes. David was never once raised the issue. I'm depending on this for my livelihood, and it's my only thing, so I should own more or get a greater share that never once came up. That's great. It never crossed my mind. There we go. That's an important point. You all are. I guess I'm glossing over it because it wouldn't even, like, it didn't even cross my mind now. Like, it's always been, a card has always been the two of us. Right. Equal. Okay. It would be profane for it to be anything. It would actually break it if we ever started trying to figure out, like, little carve-outs or pieces of the

36:30pie for, well, I did this, therefore I should get. It's true collaboration. You don't recognize there's no boundary where you start and you start. Okay. This is where I'm going with the story. It's funny you bring up Sequoia because it's actually benchmark-y in that way. Well, it's the quote. It's Leonie's quote. Okay. So, end of 22, FTX happens. Interest rates go up. All the podcast advertising market, you know, falls off a cliff. Our revenue dropped 40%. So, we went from this wasn't a business. I went full-time. We made it a business. It worked amazingly well.

37:03From 20 to 22. From 20 to 21 into 22. Right. And then our revenue dropped 40% overnight. And that was the moment when we changed everything. Oh, yeah. So, how many episodes are you making in 2021? A lot. Oh, I see. Okay. But it's no longer just corporate acquisitions. We started broadening with the Tesla episode in, like, 2019, maybe? 18? And why did you broaden? It was David's idea. And he said, I have this thesis that the audience doesn't listen to us because they want to hear if

37:33a tech acquisition worked or not. They want to hear the story and strategy of the most important technology companies. There you go. We would get all this feedback. So, you kind of foul-hooked your audience. Yes. They were listening. What's a foul hook? When you go fishing and you catch the fish by the belly rather than the mouth. It's like the hook gets in some weird way. Yes. You didn't actually catch the fish in an honest way. Yes. Yeah. But we would get all these emails. Every time we'd meet people and they'd talk about the show,

38:06I'd be like, I love the story. Like, you guys are just gifted storytellers. That's what we'd hear over and over and over again. And, like, eventually we were like, well, we should believe that. So, at that moment, I'm going to interject what I noticed because in that first episode, you were so unsure of yourselves. You were so choked, both of you. And you have a background in theater. You were a kid. We both did. So, you did not come across as people who'd been on stage. It was kind of an effectless performance. There was a flatness to it.

38:40You were afraid to, whether you knew it or not, exhibit a lot of emotion. You didn't realize that one of your secret sauces is emotion. It's the way you respond to each other when you're presenting material is helping the audience understand how they should feel about it. That you're giving them sometimes very dry facts. Like, I don't know, their revenue's doubled every year for 100 years straight. And the audience may not know that that's an incredible thing. Right. And the way you respond, even sophisticated listeners are helped.

39:10Oh, pay attention now. This was a, that's an important thing. I should, I should get excited about that. We used to share our research such that we were doing research in the early days. Yeah. I think we only had a single Google Doc that we worked out. Yeah, we were just dumping everything into the same shared document. And we were on the, so by the time we would actually go to record the episode, it was stale. Yeah, there's no surprise. There's no disagreement. You can't pretend to be surprised.

39:41Yeah, we can't pretend, yeah. Or you would be pretending to be surprised. Neither of us are good actors. I don't, when did we? We did a little cold intro. So this is really important. So you added an improvisational component. Yes. There's another way of putting that. You're at a risk. You're taking risks when you don't know what's going to happen when you come on. 100% agree. Every episode now going into recording day feels like a high wire act because we haven't fully scripted it out. I'm like, I think this is going to come together.

40:14But we had to add this thing called a production meeting. About six months ago, one week before recording, we are required to get together and share, agree on an episode structure, but not share any details. Yeah, that's fine. Because we got so into this like improvisation thing that some of our episodes would sort of end and you're like, that had no flow to it. Like you guys had two completely different ideas for the episode. You're taking risks if it doesn't work sometimes. Yeah. Right? Right. But it's the difference between, I mean, do you know how your heart sinks when someone gets up at

40:48a podium with a script, with a speech, and they're going to read their speech? The audience is waiting for you to get through this thing because they know nothing is going to happen. Like whatever's on that page, that's what's going to happen. It's like pre-announcing the score to the Super Bowl. It's exactly right. And that if you get up and you just start talking, the audience also knows, oh my God, this could be a disaster. They don't know where it's going. Just having just some of that has a huge effect on

41:19the way the audience responds to the performance. And so that is not in the beginning. Do you remember when we started doing that? Well, I think in the first ten episodes, first five episodes, we got feedback saying, you guys need to disagree more. But I don't think we quite realized that we should reveal surprises for each other until five years ago, four years ago. But at some point we made it an unwritten rule of like, we have separate documents, we prepare separately. We try to do separate research calls. That was five years ago, you say?

41:50So we start with the corporate acquisitions in 2015. And you two, knowing everything that you're going to say when you get on, basically. And it's short. And it's 40 minutes. And we're not confident. What you're hearing too is like, I'm supposed to be doing financial analysis as someone who's never been taught how to read a financial statement. And so you're also hearing a little bit of like… Imposter syndrome. I can't get overenthusiastic because I'm afraid David's going to catch me and be like, you don't know what you're talking about. Okay. So plus there's an uncertainty about your own abilities.

42:23All right. So first thing that happens is you move off the corporate acquisitions? We went from acquisitions to IPOs. Right. Which was unbelievable timing in 2017, 18 when Uber, Pinterest, Slack… Yeah. There's like eight IPOs in a row of tech companies that everyone had been following. And then it went really for two years and kind of culminated at the end of 2020 with DoorDash and Airbnb, which we recorded and released one day apart. Yeah. Because we wanted to be there on IPO day. Yeah. But once again, you're constraining yourself unnecessarily. Yeah. Exactly. Eventually you get to, we're just going to do stories.

42:57Big success stories, basically. So it was acquisitions, IPOs, then it was broad histories and strategies of tech companies, and then broad histories and strategies of companies, period. All companies, yeah. And people. And people. And people. Yeah. You frame them as… Yeah. We frame them as companies. In a funny way, you're still constraining yourself. You feel like you need this frame. Yeah. And you actually, you're not really living in a frame anymore. Yeah, but constraints are good. Like format, forcing yourself into a format. Sure, but you should, but at some point you're going to wake up and say, you know, we should be

43:31doing more biography. We should be doing more people. And if that person is not, you know, is not naturally a huge corporation, you may still… I have a feeling there's more, there's an evolution to come. That you're not just… There might be. You haven't reached like the end point of this. So at what point do you start to feel confident? Like we know what we're doing. Well, when the crash, you know, crash, when the reset happened in 2022, 2023. So pretty recently. Crypto bubble, tech stocks plummet. Podcast advertising. Advertising budgets kind of dry up end of 2022. Ben and I looked at each other and it was like,

44:07it wasn't even like really a conversation. We just knew what we had to do. We watched a lot of other people go for easy, secure money now. Try and keep the music playing. Right. And we were just like, party's over. We need to get to work. We need to focus on only what is enduring and like make great, great, great work and stop doing everything else. Like up until that point, we used to do these things called specials. We would just do, you know, not totally random, but essentially random kind of interviews and topics.

44:38Undifferentiated topics. And we said, you know, we need to start making stuff that is only out of one, only we can do, will only be great. We need to stop doing everything else. And we did it on the commercial side too. We said, let's go cut deals with our favorite partners. Get rid of most of our sponsors. And try to just figure out when we come out the other side of this that we have like the best companies to work with commercially as well as the most durable stories and brands associated with us because of the editorial side of the house.

45:12That's the JP Morgan's of the world. Did they join before you proved that this new way of doing it? No, we did a year. 2023 was the first year of this. And what were those episodes? That was LVMH. That was the NFL. Okay. That was Porsche. It's deep dives. That was the beginning of what we were really doing. These long episodes. Yeah, yeah. And I think that's when we started to build the confidence of like, oh, we can do something that. But isn't it interesting that you grabbed this kind of commercial attention only after you went

45:44really long? Yes. And so then JP Morgan came in in the January 24. So we had done that year of kind of building this out. You're right. It was only after we had sort of leaned into Acquired as a brand about durability, about compounding over decades and, you know, centuries. And I don't think I appreciated that as a person in the early days of Acquired. And it certainly wasn't what the show was about. Yeah. Anyway, so I got us a little off track. Your lesson number three was Berkshire Hathaway and don't be afraid to have a too hard pile.

46:17Yeah. Pick another. Okay. We're going to have 10 of these. My frame for all this story was Sequoia. So this story is very different than Sequoia, but we interviewed Doug Leone, who was one of the, I guess, two stewards ago of Sequoia. And he told us that after the dot-com crash for the Sequoia fund that was the dot-com bubble fund, every other venture firm out there after the bubble popped were taking mulligan funds. They went to their LPs and they said, you know, there's nothing we can do on this one.

46:47We're going to be more disciplined next time. And we said, absolutely not. We will never lose money for our investors, ever. We will do everything we can possibly do to make this fund in the black. And he said the best, I think the best line anyone's ever said on Acquired, he said, we looked at each other and you could burn cigarettes on our arms and we wouldn't flinch. And they spent the next, like, five years, they didn't raise another fund, and they just, like, went to work with their portfolio. I think they stopped taking fees for a while until they were back in.

47:22They stopped taking fees, yeah. And got it back and it ended up being a positive returning fund. This is how you get a reputation. Exactly. And that was that moment for us. And easy to lose one, too. And so, I mean, they were really sensitive to reputation. Yeah. We'd studied enough businesses by that point where we saw what led to durability. And I think we already were awake to the idea that all that matters is the late years of compounding. Like, in any given year, you look at a Mag 7 company and their profits from the last year are

47:55greater than the first 20 years combined or whatever. And I think realizing that being around and being respected on the other side of this, you know, economic chasm is, like, the key to everything. Who cares about making money this year? It's about 5, 10, 20 years from now. And we have to, like, have the brand that people want to be a part of then. Right. But you don't know that you are a Mag 7 podcast. It's kind of ridiculous to compare. When you make this decision, you don't know that there's going to be great

48:25riches 10 years out or 5 years out or 3 years out. Yeah. But really, like, I think we were just, we both so believed. It was like the burn cigarettes on our arm. Like, I think we just both so believed that that was the right thing to do. Something has happened. Yeah. So something had happened before that. And you had figured out how to do this. You'd figured out how to study a business in a way that was really interesting. The first episode's not that interesting. Yeah. There's just not that much I didn't know, thought of, you know, whatever.

48:55Why do you study business and tell a story? And it's 30 minutes or whatever it is. Now, in that first episode, I think there are more ads than there are you two speaking. And now we pride ourselves on having the lowest ad percent in the entire industry. So let's pause here before we get to number four. How do you study a business? Like, what have you learned about how to study a business that's different from when you started out? Explain to the audience what you do to prepare, what you do to learn about a business. Great. He'll read everything ever about them. So, yep.

49:27You do what I do. Yeah. Yeah. You go, whatever's out there. Right. Right. So you do an AI. That's just the AI part of it. Who started with canonical? Yes. Who's done great canonical work in the past? Right. And then what ideas do you have from reading the previous canonical work? And, you know, you then say, like, I wonder if I can find this old YouTube video. And then those YouTube videos mention something else. And the spider web always starts with the pre-existing canonical work. Right. And at what point do you pick up the phone and start calling people who maybe have information that

49:59isn't on the worldwide web? Zero ever until about 2023. And now that is the most important way that we do research. But probably about 50%, for me at least, about 50% of the way through the, like, start to get your arms around, then start calling. Right. You don't call uninformed. No. You call knowing as much as there is to know. And then you start picking the brains of people who might know more and have not said. There's, like, the obvious people to talk to. Like, you know, for Google, we talk to, you know, Sundar or Demis or, like, you know, like, obvious. Then there's, like, the less, slightly less obvious.

50:32You just say that so casually. Who gets to pick up the phone and talk to the CEO of Google about Google? I mean, nobody. We're in a scale economy business. We're in a compounding business. Right? So the fact that you, when do you first realize that you can pick up the phone. That's a good question. And call Tim. You know, you're on this first name basis with all these people. When does that start? I think it was our Microsoft series when we talked to Steve. To Bomber. Steve. Here we go, Steve. Past acquired guest. Past acquired guest. Steve Bomber. I love name dropping in your world.

51:04It's so different from the name dropping in, like, Hollywood. None of your names mean anything in Hollywood. Yeah, yeah. But they mean everything. And the arenas are so funny because, like, these people aren't, most of them aren't famous. And they're 1,000 to 10,000 times wealthier than these Hollywood stars. Yes. It's just different yardsticks. Well, what's funny with Microsoft, so we had some access, because Ben used to work at Microsoft before. Which got us zero access. Well, no, no, no, no, but you knew some people, like, here's, in my mind, what sort of happened with this, as I'm trying to think about how to answer Michael's question.

51:37Because we had started in Seattle, and you still live in Seattle, and you had worked at Microsoft, when we started our Microsoft journey, we knew some people. Yeah, that's true. And we were like, well, let's see if we can talk to Steve. And so then we talked to Steve, and we got his, you know, perspective on things. And it completely changed how we were. Was that a cold email? I think it might have. Is that the first time you do that? First time we reached that high. Okay. Yeah. And you know what? This is where reputation matters. Steve didn't get back to us for a day, and then we heard back, and

52:11he said, I don't listen to podcasts. I haven't listened to your podcasts. I talked to some people. But I talked to some people that I trust, and they say, you're great. Yeah. So let's hop on a call. And we wouldn't have gotten the response back if— And he gave us probably three hours, four hours in research for— He did. Yeah. And you learned a lot. Yeah. Before we even interviewed him, that was later. Right. But just in research. I see. And we learned a lot. Did you all have a moment where you thought, oh, my God, let's keep doing that. That worked. Yes. Well, yeah. So then we were like, that worked great.

52:44Because it kind of worked with Jensen, too. So originally, when we had the idea in 2021 to do NVIDIA, we thought we were like an interview show then. We thought the interviews would be better than our core storytelling episodes because we hadn't discovered that the Ben and David storytelling is our N of One product. It is the thing that we uniquely can do that no one else can do. And we thought getting these big gets would be the key to success, which is funny because usually they underperform our standard format. And so in 2021, we emailed NVIDIA through the warmest connection we could find and said, can

53:15we interview Jensen? We're planning to come to the company. Can we interview Jensen? And they said, they gave us a nice party line back. He's very busy. And then in 2022, we did our NVIDIA part one. We did our standard research process. And I think we did our part two. We did part two. And then we got a note from NVIDIA saying, Jensen has listened and wants to know who your inside sources are because it's the most correct telling of NVIDIA's story ever. And we were like, oh, this was all just public information. And if you're good at spidering the internet and just like digesting it and thinking about why he would have

53:48said something at this point in time to this audience in these various random university talks and stuff, you can kind of piece together the story. And so that's sort of like— But you're still flying by radar a bit. Yeah. Oh, we were totally flying by radar. Right. Yeah, yeah. But that landed us. They were like—that started the relationship and eventually— Then they're like, all right, he wants to meet you and then— Do you want to do an interview and follow up on your episodes? But you did an interview episode with him, but it doesn't do as well as your own NVIDIA episode. That one may have been like at some particular peak of NVIDIA buzziness.

54:21So it was probably our then largest episode. Well, here's what happens with interviews. But everything makes it look small. They spike faster. Yeah, and then they go. And those listeners don't retain the way that— Whereas if you look at our Costco episode, which is now two and a half years old, or LVMH, Hermes, Rolex, like, they just keep going. I mean, I'm sure your books are like this. Like, they just keep going. Yeah. Every time I bring out a new book, it has the same effect on the old books that a new podcast has on old podcasts. Yeah, it sells all the back lists.

54:52So, yes. All right. So I was asking you how you studied a business. You told me you read everything there is. Yeah, yeah, yeah. So, and you must find, when you go and read everything there is, you're very polite and you're very generous about citing your sources and all that. But you must find— My wife is an academic. My wife has a PhD. She was trained as an academic. And she was like, you guys got to cite your sources. Like, what are you doing? Oh, well, yeah. But it's also—but you—are you ever surprised by the weakness of the source material? Yeah. Yes. In fact, literally today— We are no longer surprised, but— We got an email from a

55:26company that we recently covered saying, you said a factually incorrect story in the episode, and we know the book that you got it from because it was factually incorrect in that book. We told the author that it was factually incorrect, and it went out anyway. Right. And now you're repeating the incorrect story. And, you know, we have now an errata section where we publish to our email list. And I bet you're mainly correcting other people's errors that you just repeated. I mean, sometimes they're ours. Sometimes they're ours. Yeah. Sometimes we make a financial calculation error or something like that. Right. So we read all source material. Yeah. And then we start to make phone calls in 2023.

56:00And now the phone calls have become extremely important, and you're making— Extremely, yeah. —25 of them in episode. Google was 40, probably, across the series. And do you find that when you're reaching out by phone to all of these people that they always want to talk to you? No. No. Sometimes it makes— Yeah. But usually when you approach it with a spirit of— I'm just trying to understand it's on background. Yes. We are going to tell a narrative here. Our biggest question to you is, what is most misunderstood? And what incorrect stories are out there where we can set the record straight?

56:30Right. And you get lots of great information after that. Yeah, yeah, yeah. It's a very good way to go about it. Yeah. I do the same thing. When I'm researching something, I don't know what the story is for the longest time. And I'm holding everything very loosely. And almost all the relationships I have with people I'm interviewing is, Hey, this is all on background. I just want to try to understand this. Yeah. Can I hop on a call with you? And they're usually pretty open to it. And, like, I just want to be educated kind of thing. And it's a great way to say, like, what's the stupid thing people say?

57:03Because everybody has an opinion. But it's not a trick. Like, this isn't—here's one cool trick to get people to talk to you. I think you mean it earnestly and we mean it earnestly of, like, I want to make something that— That's good. Yeah. Everybody has different beliefs about the truth. But I want to make the story that most correctly approximates the average truth that exists from all these different truthy sources. Yeah. Yeah. Yeah, I don't think of it quite that way. But I do think it's, like, I want to make something that's good and pure and true and is, like, the thing that will—once it's said, there's nothing else to say.

57:36It's, like, done. Yeah. I got to imagine for your subjects, and I think a big part of us, too, is, like, there's the truthy aspect, which is very, very important. But there's also the, like, this is going to be great. Like, this is going to be really fun. This is going to be entertaining to read. And people are going to consume it. That's, I think, a huge motivation for our sources. Have you—so, when you're working on one of these episodes, do you—are you aware of how much fun you're having learning? And do you ever—have you ever ever shut something down just because, oh, this isn't that much fun?

58:08The Fed. Maybe the Fed. That's kind of why we killed the Fed. We've definitely killed other episodes. If you can find fun in the Fed, man, you are doing—you can find fun in the Fed. You were doing—yeah. We can generate all that enthusiasm for each other's insights about the Fed. We killed Bell Labs because we couldn't find a through line. There were so many different stories and so many different characters. Ooh, what a good subject, though. We might come back to it. Bell Labs. That's one that, if I saw it, I'd say, yes, I want to listen to it. It feels like a Michael Lewis book. You could kind of do it as the history of the transistor, but

58:43then you miss all these other things like radar and— Yeah, there's so much stuff that came out of Bell Labs. Did you do Xerox Park? No. No, no, but similar. That's a good— Yeah. It's another one. Right. Yeah. I guess Google still has this spirit where they're doing lots of stuff that maybe you can't identify instantly. Quantum competing. Yeah, the payoff that's right around the corner. It's kind of like, let's just fiddle around, see what we find stuff. I mean, yeah. But corporate America, I think, just generally does less of that than it used to do a long time ago. But the big tech— Am I wrong?

59:15Yeah. You're looking at me like— No, I'm trying to think. That's an interesting—so I'm stealing this idea from our friend Hamilton Helmer, but he brought up this idea in conversation with us that there is a positive benefit to monopolies because they create the cash flows that fund these sorts of boondoggle basic research. And a lot of the most important technologies that move society forward— You need some waste. —come out of these— You need fat. Yes. And like, boy, does Google have that. I mean, you just—their last quarter was their first $100 billion quarter ever. Right. Astonishing. I know. And that's how they fund, you know, the next Gemini.

59:47Yeah, all this. Right. And Waymo, and yeah. So actually, you just bring out your friend Hamilton Helmer. Yes. Who I'd never heard of until I listened to your podcast, and you do that thing at the Seven Powers thing. Seven Powers, yeah, yeah. Let's just briefly, since we're here, how you study a business. That has been a useful analytical framework for you. Yeah. Whatever these Seven Powers are, and I'll never remember any of them. But it's like network effects and all that stuff. Yeah, yeah. What is about Hamilton—like, where did you find him, and why is it you making him so famous?

1:00:18There's a lot of good frameworks out there for analyzing business strategy, and this one just clicked. I just read it, and I was like, that is actually the complete list. When did you read it? You found the book. I think it was 2020. I look at that list. I read the list, and it was all gobbledygook to me. There were these—I mean, it didn't—the words did not mean things. You have to know what they mean. If I asked you in plain English, can you brainstorm all the ways in which a industry-leading company gets away with being more profitable than their competitor and gets to keep being more

1:00:52profitable? Right. That's the list you would come up with. You might find other words. What creates the moat. Yes. So why did you decide you even needed that framework? We— Oh, it goes hand-in-hand with the durability. Yeah. If you're trying to study why is a business durable, the cause is the power. We'd always been searching for a way to land the plane on the episodes. Like, we tell this story, and we finish the story, but that felt unsatisfying. What's the takeaway? Yeah, and so we've had all various permutations of analysis at the end. Buy or sell or hold. Right. Yeah, yeah. You know, we did bull and bear and grading and blah, blah,

1:01:27blah. Once we shifted to, like, hey, we're studying these great companies, these durable businesses, power felt like a really good part of that, like, so what? Right. Why? For me, a critical, critical part of process—it goes back to writing a senior thesis at Princeton. Everything needs to pass through multiple cycles of source material, through my brain, through my fingers, onto a keyboard, and recycle back through about three times. Yep, yep. And so, like, I don't use AI note-taking. I do write physical notes in hard copy books. Like, if I'm not doing that, I feel like— You haven't

1:01:58thought about it. It's not going to work. Yeah, yeah. His annotated books are— What do you do? So I have exactly the same issue. And I discovered I wanted to be a writer writing my senior thesis and no ambition to do it before then. And then all of a sudden I thought, oh, my God, I love this. And what I loved was just that, was the constant recycling of the thought. And so what I do, the process—I don't want to get too far away from your podcast. But so here I'm sitting here with my notepad. Yeah, yeah.

1:02:28So this is a filter. Like, if I'm talking to you, it takes effort to put it down on the page. I don't record anything, that I've filtered it. Yeah. It's interesting enough to me that it belongs on the page. Then I go home, and I write the notes up quickly. And that's another filter. If what's on the page interests me enough to put it in a Word document, then I've got—it's filtered again. Yeah. And I keep those notes while I'm working on a book, and the file will be 500 pages long, by the time. It may be longer, by the time.

1:03:00And it's just stuff. And then I start thinking about, how do you frame this story? What is this story? But that's months, usually down the road. Like, and there are times when I get into something, and I am months into it, and I realize, oop, there's nothing here. With Sam Beckman-Fried, I was a year into it, and I did not know what I was going to do with it until it blew up. And then I thought, oh, my God! I had the story when it blew up. You had been sitting there for a year watching other things, too.

1:03:31Do you think you would have not published the book if it hadn't— Oh, no. Wow. You would have killed the book. Well, I might have found a way to do it. I might have found a way to do it, but I hadn't found a way to do it. And it was always the same conversation with my editor. It was, I just don't know where this is going. I don't know what the end is. When I don't know what the end is, I don't know what the beginning is. And it's that simple. And it wasn't that, oh, I smelled fraud or anything like that.

1:04:04It was just—it didn't have shape to it. It was just—it was picaresque experience after picaresque experience. It was like Don Quixote, but the first chapter over and over and over and over. And so there was material there, which is why I kept coming back. It was fun. There were endless scenes. There were, you know—but it was just like, I don't know. Yeah, but scenes don't make a— No. Scenes don't make a play. They're necessary but insufficient. Yeah. So—but the bigger point, I hate to—I don't want to be talking about me. We'll be talking about you. But this—you are doing—I smell this from your work.

1:04:35You're doing something that rhymes with what I do. You are gathering before you make judgments. You're open to learning things. You're trying to be the world's best student. You want people to want to teach you. And then if people want to teach you, they will teach you. And then you can take what you learn and you can present it in the way—the best way you can present it. I basically take a note in two scenarios. One is, oh, I just figured out how that works, and that is so cool. Like, when I learned how a mechanical watch worked— You're the master of the, like, this is such a cool

1:05:08thing. It was like— You got excited. This is in some ways irrelevant to the business success of Rolex, but I—it will make my year to explain on air how a mechanical watch works and how an escapement is a thing. And my excitement around that— Those are some of the greatest moments. It is— Or the Costco ballet or, like, yeah. Yeah. So there's the, I just figured out how something worked, and then there's the, I just made a connection. Yes. Yep, yep. Like, I'll be on a run. I'll be listening to an audiobook. It'll be the third audiobook that I've listened to about a certain subject.

1:05:40Yep. And I'll hear something and think, oh, that's why—and I'll stop, and I'll write my little Apple note. This timestamp in this book, you know, just realized why—I can't think of an example right now. This happened. Yeah. And then later, I go and I look it up in the Kindle book, and I figure out, like, how I want to explain the connection that I just learned on air. But it has to come from the—I have to, like, remember and bottle up my excitement of learning it in that moment to share that enthusiasm with the listener. Yeah. Yep, that's all very familiar to me. All right, listeners.

1:06:12Now is a great time to tell you about a great friend of the show, WorkOS. Yes, and since we recorded this episode in the garage where Google started, we thought this would be a fitting moment to talk about when a startup exits their proverbial garage phase and starts to become a real business. Yeah. Garages were a little more popular back in the day with HP or Apple or in the 90s with Google and Amazon, all founded in garages. Today, though, it's more likely an SF apartment or a coffee shop or a hacker house. But, you know, the key question remains, what do you do after you find product market fit

1:06:46and when you start scaling? One big answer is moving upmarket and finding your first enterprise customers. And the best way to do that is WorkOS. WorkOS makes it easy to add all the things that enterprises require—single sign-on, skim, permissions, audit logs—all with simple drop-in APIs. It lets you scale revenue bigger and faster, earlier in the life of your company, or if you already have some of this functionality, to just simplify your code base. As we've been saying all season, this is even more important in the AI era. AI products need deep access to sensitive data to be impactful, so these security features are just the price of

1:07:18admission for enterprises. You really don't want to be late to this. We talked on our Google series about, even with how successful they are today, by initially ignoring the enterprise, Google left the door open to competitors for a while. Google Docs and their original G Suite were so good. I mean, amazing productivity apps on the web, but they lacked enterprise features for years, leaving the door open for Microsoft to catch up and respond with Office 365. Yeah, it's funny. We were talking with WorkOS founder Michael Greenwich about this, and he was making an impassioned pitch to us that Google should have won the entire web-based productivity market, given they were first and they had better technology.

1:07:53Get your enterprise story right early on. OpenAI, Anthropic, Cursor, Perplexity, Sierra, Replit, Vercel, hundreds of other AI startups, too. They all rely on WorkOS as their enterprise-ready auth solution, and you should, too. So if you're ready to get started with just a few lines of code for SAML, SCIM, RBAC, SSO, authorization, authentication, and everything else to please IT admins and their checklists, check out WorkOS. It's the modern software platform to make all this happen. That's WorkOS.com, and just tell them that Ben and David sent you. So give me a fourth example of a lesson learned from an episode. This we learned, I feel like I learned from Ben Thompson, which is...

1:08:27Tell the audience who Ben Thompson is. Ben Thompson is the author of Stratechery. Proprietor of Stratechery. Proprietor. Founder of Stratechery. We did an episode on him and with him a few years ago. But his writing is sort of the thing that we bonded over when we met. He's a great strategy technology writer. A, the internet niches are way bigger than you think they are. So if you think you're writing about a niche topic, the internet being a global community of four-ish billion people means that any little niche... There might be six people in your geography that care about it in your local

1:08:58town, but there's millions of people online. Right. And the internet is your way to reach them. So no matter how niche you are, it's actually way, way bigger. And the corollary to that is in the media business, in podcasting, you can grow your audience and thus your revenue and thus your importance in the world. All outputs can scale completely independently of your inputs. David and I effectively do the same thing that we did not 10 years ago, but two years ago to make an episode. But the audience has grown so much that like every output from the business is dramatically different,

1:09:29even though all the inputs are the same. And so we really like took to heart the niche of smart people who care about how these businesses work and why the world is arranged in this way is large. And we don't have to scale our operation to reach them. We just have to keep making the highest quality stuff and giving people reason to share it. What is your operation? I mean, we're in here with a large group of large men. Thanks, guys. This is a bigger operation than usual. But this isn't your normal operation. No, no. What is your operation? I have a basement studio.

1:10:00You know, it's an office that we happen to have some lights and a camera in. I built a studio in my backyard. So that's the YouTube. You mentioned that you send your stuff to an editor without naming the editor. His name's Steven. Steven is a critical part of what we do. He does. I'm not sure he'd want us to share on air. So Steven. So the mysterious Steven. He's an independent contractor. We're his only client. And he works only for you. And he's the best. He's the best. So he's clearly good at his job. Steven is as maniacal about creating the best audio product.

1:10:32And video when we do it. But we, yeah, no, we, no assistance. No, we do everything. You don't sell, you don't have an ad sales. There's no agent. We do all the selling. We love doing the ad sales ourselves. We love doing the business. You do it right. We love doing the business equally as much as we love making the show. And I love the alignment. The business and the content are equally important. And they're, like, married. Yeah, it's funny. You're preparing for this. Like, we're always tempted, like, to just talk about the business. Because we love the business as much as the show.

1:11:03But we never talk about the business. So let's just stop here for a moment. Because I want to talk about this. First, before we move on from Steven. So Steven is in this rare position of basically being the only person who helps you create this thing. Yeah. How different is the... We hired a wonderful production crew because we wanted to have a great video for today. Right. So how different is what you give, what comes out of Steven from what you give him? Eight, nine hours of raw audio with dozens of retakes. Sometimes hundreds of retakes. We produce each other as we go.

1:11:35Hundreds of retakes? Yeah. David will say a paragraph. And I'll be like... Wait, wait. I want to do that in an acquired tone. Wow, that's amazing. Hundreds of retakes? You do hundreds... That's incredible. I would have guessed, like, if you just asked me. Five. Hundreds. You sound like a millennial. Yeah. I just want to be appropriately amazed. The number of... The number of... You can't do hundreds of retakes. Literally's that we cut. We need to cut literally all the time. Literally. I see. Totally's. But the retakes, though, are a different thing. The retakes are... We didn't say that clearly enough. We didn't land the point.

1:12:06I made a point where I wasn't paying enough attention to what David was saying because I was, like, looking over at my notes. And then I make the same point. And he's like, oh, I think you missed it. I just said that. Can you just say the last thing as an acknowledgement of mine? Just give me an uh-huh and then we'll move on. Or I explain something in twice the amount of time and David's, like, getting bored. And he's like, that was a real monologue. I think we got to keep the story moving. And I'm like, I agree. When I wrote it in my notes, I was really excited about it.

1:12:37But now that we're in the moment, I can feel that it's slowing down the energy. So let me take two minutes. Let me retype some stuff. And let me figure out if there's a condensed way to say that so that it can flow seamlessly in the energy of the story. Right. But that is all in the eight, nine hours that we delivered to him. So he's cutting it in half. Yeah. Yeah. And when it comes back to you from him. So he turns eight, nine hours of that into an intelligible. Into, like, five-ish? I think it's probably appropriate to call it, like, release candidate one to use, like, a software

1:13:07analogy. All right. And then we make five to 800 additional cuts to cut another hour off of it. And that stuff we're cutting. Are you doing it on the page? Are you doing it by listening? On the page. We use a tool called Descript, which we sort of use it not. But you're not listening to it. You're reading it. We are listening to it. And we are watching. Yeah, yeah. I'm watching that. And how long does that take? Days. Three days. Three days to edit. Yeah. Because we usually do two cycles of that. And then do you send it back to him after you've done that? Yeah. And then we do it again. And then you do it again.

1:13:40I listen at 1x, and you have to, like, feel where you get bored or feel where you're just, like, I don't care. Like, you have to get so sick of the material where you're just, like, cutting the bone. You're the hero of this. I can't bring myself to do it. I listen on 2.5x just, it's, it's, you're the hero for doing that. You don't actually listen to it at normal speed? Ah, it's so, like, Ben really jumps on the grenade for this. Almost always. You can cut the beginning of almost everything you, there's always throat clearing. Our beginnings always drag. Yeah, wind up. You don't need it. You just go right to it. Yeah. And then once I start to feel it get taut, I just love

1:14:14it. I love it. I love it. And, like, I like making, the hardest thing is getting the stuff out in the first place. And then once it's out on the page, then you can start, ah, each time it gets better. I find there's no despair associated with it. And there's stuff in the original draft that is a remnant of the point you thought you were going to make. And by the time you get to the end, you're like, that's actually not the important thing here. I no longer need that whole setup or that aside. Or it's in there in all kinds of other ways. Yes. Yeah. But it's important that you had the idea, but it's buried in the story some which way.

1:14:48David will often highlight something and go, at Ben, okay to cut, belaboring. So the minute you're there, you know it's got to be cut. Yeah. Yeah. Mostly, right? Oh, yeah. If one of us wants to cut, it's cut. Yeah. And so you get five hours down to whatever it is, three and a half, four. Three and a half is the sweet spot. And how do you know when you're done? We run out of time. Yeah. So deadlines. Yeah, yeah. Deadlines. It isn't like you're never really done. I would love one more edit. We'd always, there's always more. Yeah, yeah, yeah. We have both the gift and the curse of deadline and next

1:15:19episode coming, whereas you have an infinite timeline, right? No, no, no. I have a, I mean, I owe a book on June the 1st that will come out September the 29th that I will start writing on January the 5th. And I will write it in five chunks and each chunk will be delivered at the end of the month and I won't be able to go back. Okay, wait, wait, wait, what happens if you get to June and you're like, I'm not, I'm not, I can't, I can't. Okay, so it's a hard deadline. It's a drop dead. Yeah. But I always find that once I establish that deadline, which is a reasonable deadline because I've done all,

1:15:51spent a year doing the work, I have the material. By the way, it's very polite of you to ask me questions about myself. Are you kidding me? No, no, no, no, no. It's like this great modern thing. No, but it's somehow if you take your deadline seriously, that's the key. You take the deadlines deadly seriously and you just refuse to violate them. Then you're serious when you establish them and your mind just finishes when it needs to finish. And I'm always like a couple of days ahead of it. Yeah. So I would talk a little bit about the business side because this is something that I certainly don't

1:16:26know anything about in your lives, but you've turned this into a very lucrative franchise and you go out and you, and unlike most podcasts, you're not, you're not subcontracting the sale of ads to some other company and you're not just promiscuous in who you have as advertisers. So you have two or three, four, whatever it is, major advertisers. Four every season. And some stability there, when you go, walk me through, pretend Michael Lewis Inc. is your target, that you want me to be like the anchor tenant in your building. And you're coming in to tell me why I should do this.

1:17:00Give me a sense of it, what that sounds like. I'll let David give you the sales pitch. The philosophy of the whole thing comes from we want to create a durable business on our side and a great listener experience on the listener side. And I always feel, as a listener, so disrespected when there is this content of the podcast that is diamond quality. And then there's a record scratch. And then they are running McDonald's ads in the middle. Usually not read by the host, usually with some jingle playing underneath. It bothers the hell out of me too, and I haven't been able to do anything about it.

1:17:35But I agree. And it's the biggest complaint I get about my podcast. It's like, hmm, I've got to listen to these ads. The very first ad we ever sold, we said, what sponsor could we get that would make people perceive acquired to be a higher quality brand? So we could have our cake and eat it too. We'll get revenue. I tried this. I had a thought about this on mine, and no one ever took me up on it. Really? Just find the things I actually use, and it will be fun to talk about them.

1:18:06I want to tell the whole world about ex-officio underpants, and I can't get ex-officio to return my calls. I mean, that kind of thing. Foolish. I just... Are they asleep at the... Wait, so literally, you're telling me that Michael Lewis calls ex-officio and they don't... I didn't. I just gave my podcast a list of things that I really love, just love. Oh. You've got to call them. That's the problem. Well, that probably is the problem. That's the problem, yeah. Or that my podcast company does not actually sell the ads. Another company sells the ads. Right. And so it's just...

1:18:38I thought that was the way to make it seamless, is actually what's integral to my life will be the things that we're talking about. So that is a structural blocker to creating the best experience. Right. And everything has a trade-off. The trade-off for us is we spend an enormous amount of time engaging with our sponsors. We write a custom read for every single sponsor, every single episode. We try to write it as if we're almost talking about what we think is interesting about the business. We're doing this mini two-minute analysis. And there's some horse trading there of, we have to make these points, okay.

1:19:12But for the most part, and the best sponsor relationships are the ones where they say, yeah, your listeners are going to respond the best when you... To what you have to say. Yeah. So if you're Michael Lewis Inc., we want you to be a sponsor, I would say we're not coming to pitch you, but we're deciding a year in advance... Now two. ...when we're now two years in advance, like, what do we want our slate of partners to look like? So we start... Michael Lewis Inc., we think, is going to be super strategic for us in 2027, 2028.

1:19:45We start planning, like, okay, how are we going to make this happen? How are we going to make sure that we really... You, Michael Lewis Inc., is as good as we think it could be. How are we going to make sure that we're going to work really well together, that you're going to see massive ROI from us? At any point, do you sit there worrying that you're compromising the shows because of the relationship you're about to have with an advertiser? No. There's been companies that don't feel Switzerland enough that come to us that want to sponsor, and we just like the idea of not picking a venture capital firm to say,

1:20:20we think this is the best venture capital firm. It's like too much of a picking teams thing. I've never heard anybody say that. They don't feel Switzerland enough. Is this a cliche in the VC business? No, I think I just... That's a lovely line. So you're looking for Switzerland. Yes. And what do you mean by that? Companies that we think are great, where we don't have to take a side in like a big contentious current thing conversation. Yeah. Would you take Coca-Cola? We don't really deal with consumer companies. We don't. Okay, number one. Okay, here we go. B2B companies with very high LTV products.

1:20:53So not ex-officio underwear. Basically, we want companies that are doing a significant number of multi-million dollar annual deals with customers. Because we want to feel like we can deliver a couple incremental of those for you. So you can charge lots of money. Yeah. And then it's just a no-brainer. Many of our sponsors have been ROI positive on signing one large customer who heard about them on Acquired. That is awesome. And often it's not even just heard about on Acquired. It's events are a big part of this. So we do events with almost all of our sponsors.

1:21:24So there's the funnel of like heard about on Acquired that helps. But then like we're doing an event together with them. We're sitting next to their best prospects. So I'm thinking about hiring you. What kind of event will you do for me? We're happy to join for a customer dinner. We're happy to speak at your big annual customer conference. We're happy to go to a sporting event with you with your top clients. We're happy to... And at that sporting event, will you do like some... Fireside chats. Yeah, fireside chats. Yeah, yeah, yeah. Interview your CEO.

1:21:54Interview a legend from the sport. How many hours of your time am I going to get? A couple days. A couple days. We're there full. And while we're there with you, it's like, hey, how can you maximize using us? You promise to be my friend? Yeah, of course. You'll be my friend too in the bargain? We're great friends with a whole bunch of... Okay, so then it gets even better. So we... Let me tell you more. Tell me more. I'm getting interested. I'm at the edge of my seat here. The reason this whole thing works is the people who listen to Acquired are the most valuable audience in the

1:22:29world. And so if you want to market your B2B software or financial product or whatever, founders are executive decision makers. Right. But really, I'm going to take a step back. I think the whole business side, and a lot of the content too, but the whole business side of Acquired starts with we were venture capitalists. We're not media people. So we have just always taken an approach. You're aspiring to be a great partner to them. You know, you're going to help recruit employees. You're going to help with whatever. And so we just like, great, that's how we approach our partners.

1:23:00Right. Why do you think, maybe you've just answered the question, why do you think no other podcast has approached their business in the way you approach your business? I think we just came at it from like this totally different space. You think everybody was coming at it from a kind of media space, and the media space was kind of bad business. Okay. Here's a take. I think the media business model of splitting the commercial activity from the editorial is a societal benefit that we all benefit from, from publications like the New York Times. Yep. It was started for journalism. It is really good for journalism that exists.

1:23:34The rest of media seems to have adopted it, and everyone doesn't need to. Right. If we're the host of Acquired, it's kind of great if you're going and learning about your sponsor's business and working with them and trying to build partnerships with them, it was almost like we had the luxury of getting to rethink what our operational model looks like. So then the thing that brought it full circle a couple years ago is we added an investment fund. So not our public company sponsors, but almost all of our private company sponsors, we invested them. So it came full circle.

1:24:05But you all, you created an investment fund. Yeah. You two are, you are, you are, you are the ones who are making the investments. Yes. Is it, how are you doing? It's quite full circle. Yeah. We're only a year in, but we've, we've invested in five of our sponsors and several of them are more valuable than when we've invested. Yeah. We, we, we, we asked ourselves, we're like, how do we do this? The focus is the show. If we're, if we're a venture capital firm with a podcast, it doesn't, it doesn't work. We need to be a podcast for the venture capital firm.

1:24:37The way we make this work is we just invest in our sponsors. We put all this work into finding the best partners for our sponsors in every category that we think are great. Why wouldn't we just invest in them? We don't do any incremental work. Do you invest in all of your sponsors? No, but a lot of the time, like, we'll just get a call that, hey, we're raising it up round. We, we want to talk about it in the next ad read. And we say, oh, that's cool. Can we, can we invest a couple million dollars?

1:25:07And they're like, the round's like 300 million. So no one on the cap table is going to care. And we love that you're more aligned with us now. So we'll make room. So you, you're only really accepting as sponsors, companies that you would like to invest in. That's essentially the frame we put on the whole thing. It's not a perfect overlap, but it's- No, JP Morgan is not an example. Right, right, right. We think it, we like having a couple public companies, JP Morgan, Shopify, ServiceNow. And how deep is this market? How many acquireds could be created on the back of this business model?

1:25:39Oh, I think a lot. The question that I'm always wondering is why aren't there more acquireds out there? I'm asking that question now, like why? Here's the ingredients. Yeah. Two hosts that independently go do research and through storytelling, like narrative storytelling and analysis, create a conversational audio book. Could be about businesses, could be about sports teams, could be about- Hollywood, movies. Political parties, could be about any, how- Any arena of ambition, as you would say. There should be an acquired in all these other verticals. In fact, the business vertical could be 10 more. A lot more money in business.

1:26:10Yes. In tech and finance. That's one. I think there's a bit of a cold start. If you were to propose going and creating and acquired for sports, you would, the sort of risk I guess we took, we didn't think about it as risk at the time because it was just a hobby, was you're looking at years of no or little monetization. Right. Because it's going to take a long time to build up the audience. Right. Versus, oh, I could go join a network. I could make a show on The Ringer. I could do whatever. Acquired was path dependent on us having day jobs. For sure.

1:26:43Right. And day jobs in the industry that you're going to cover. Right. Yeah. We built half the relationships and all the know-how and all the shorthand from being in the industry before. So I asked you how many acquires could be created in just your space. What percentage of the advertising revenues do you think you're hoovering up in the way you're hoovering them up? In like business podcasts? The B2B, the B2B, like the things you pick, the kind of people you will accept as your sponsors. How many times over? Well, fortunately, there are a lot more people who want to sponsor Acquired

1:27:14than- That's what I mean. No. Like how many more are there? A lot. We're probably three or four X oversubscribed on like people who really could convert on becoming sponsors if we said, sure, we'll take you. How come you don't spawn an extra Acquired or two? I think that- Why don't you create the next yous? Then we're not Acquired. Then we're not us. I see. Do less. Then we become CEOs. Right. We do not want to build a company. Yeah, so no, it's funny. There's a line that you don't have bosses. Yeah. You have incentives. Yeah. But you don't have bosses.

1:27:45And we're not other people's bosses. That's like my life too. I have a lot of incentives. I have no bosses. When you're in any kind of creative thing, there is this benefit to not just following the financial incentives and not trying to kind of like milk every last penny out of it and to creating scarcity, not just for the sake of the scarcity, but for the sake of the quality. Yeah. And only do it if it's great. If you only do it, it's a long-term strategy. I mean, it's not that I think all my books are great. I don't write them though, unless I think they're going to be great.

1:28:18Yeah. I just don't. Well, why would you allocate it? Let's say you have a portfolio of however many more years you think you're going to write, 20, 30. Why would you allocate, I don't know how long- A year. A year and a half. Why would you blow a slot on a bad book? That's a gaping hole. I give you a reason why some people might. A publisher offers me a gazillion dollars to write a book about X. I know the book's going to suck because it's not actually a good idea for a book. And it's not going to be fun to do because all the fun is and it may be great.

1:28:51Is there any chance any of those dollars make your life better? No. At this point? Zero. So this is the thing people miss. What is Lane Kiffin going to get out of an extra couple of million dollars going to LSU from Ole Miss? Yeah. The average athlete who's taking a few million dollars more to move his wife and kids from one family, one city that loves him and that he loves, to some strange place where everybody's going to be unhappy. People do this all the time. All dollars do not have equivalent value. No. The marginal dollars have way smaller value than the early dollars.

1:29:22Sometimes they end up having kind of negative value. And you become a person who that's what you're about. It's like you're saying, I'm going to be the person who just follows the financial incentives rather than I'm going to control the – I'm going to let these incentives do – they could be useful. They get you out of bed in the morning for a while. But you have to kind of control them. So I love that you're not milking the market. I think there's two different things that we're talking about here. One is milking the market, yes or no. The other one is do you want to build an enterprise or

1:29:55do you want to stay a boutique? So to your question for us, why don't we create more acquires? We don't want to manage other shows, podcast hosts. People often tell us like, oh, you're building this business. You guys are sort of foolish because there's all this key man risk. Like you're building this great business, but if either of you leave – Yeah, what's the enterprise value? Unfortunately, your business has low enterprise value. And we're like, but if we sold this business, then we would just go start acquired. We're already doing the thing to do. Yeah, the dream is what we're doing. All right, so I took us off on a sidetrack.

1:30:28We've only gotten through four. I want to hear the fifth. We've gotten like five or six or seven. We've got a bunch of these. I want to hear what's the fifth lesson you've learned from that episode. Founder control was a huge one. Is this from Google? I think we – Meta. Again, this is one of these things that we like learned early, but then got reinforced through episodes. Meta, Rolex, Trader Joe's. Ikea. Yeah. Like stay private, be family owned. You don't even have to say – Meta's a public company, but founder control. I mean, Google too. Google's founder control. The important things in the world probably should be big publicly traded corporations,

1:31:01but like there's these amazing, wonderful things you can create by being boutique and maintaining control. I think there's an argument to be made that in any industry where they're both private and public companies, the private companies end up being much better run. And I mean like mostly bad things happen when companies go public, and certainly less pleasant. So public or private, your point is founder control. But there's also just like a personal choice element. Last year, we had like an existential crisis. It's way too dramatic. But I think something that was on our minds was like, are we being wussies? We're not doing Hollywood. We're not adding more shows. We're not building an enterprise.

1:31:35What triggered this? Are we being wussies? We were currently researching Bell Labs, and I think I felt like we were like chasing this like esoteric-ness. So we sought some advice, and we went to one of the best investors ever, who we've gotten to know who's a fan of the show. You know, somebody everybody would know. And we asked him to dinner, and we just sort of like, hey, we've got this, you know, we could do all these things. We're not like Hollywood, et cetera. And we sort of expected his comment to be like, dream bigger, like, you

1:32:06know, go for it. Like, you know, you guys are being wussies. And he sort of sat there, and he thought a minute, and he said, I have seen so many founders become trapped in prisons of their own making in their own companies. And they're successful prisons. Yeah, yeah. You guys have avoided that fate. Don't go down that road. But what is, I'm missing actually the connection. Why, if you were less wussie-ish, would you have created a- Oh, hire people, take on a business project, start a second show. Oh, I see. Go make a Hollywood movie.

1:32:36Yeah, business wussies. I thought you were saying you were avoiding like the controversies. Oh, yeah, that's a whole separate wussies. But no, no, we asked ourselves, are we being business wussies? Right, I see. But they sort of go hand in hand. Like, cheap growth is covering the current thing. It will, I've been toying with this idea of stored potential energy. That like great businesses have a stored potential energy that you can't see in the current financials. And- Great people have that too. Great people have that too. They have these reserves that you just, that come out when they need them.

1:33:08And they're not like presented in the obvious markers. Yes, they aren't sparkling there in front of your eyes. And I think we're trying to like store up as much potential energy and acquire it as we can rather than anytime there's a way to make it show up on the financial statements. Sort of like letting out the pressure and being like, yup, second show. Yup, more ads. Yup, dynamic ads from an ad network. Like just, you can say yes to all these things and you can sugar high the current profits. Right. Or you can try to like figure out how to store up as much potential energy as you can.

1:33:42Right. And I think once you kind of hit the point in life where money won't make you any happier, then there's actually not a point to letting any of that potential energy out. It just creates goodwill for everyone, most principally, selfishly yourself, to keep it bottled. Right. All right. So how do we get on that? I don't know how we get on that from the founder control. That was founder control control. So that was number five. Number six. Okay. I've got one from, this is a non-obvious one. Also, can I just say like sometimes we do some stuff like this.

1:34:14We are not like saints. We're capitalists. Yeah, yeah, yeah. Like we're running a capitalist enterprise here. Sometimes we hire a production crew. Sometimes we, last year we added a fourth ad slot. We always had three. Last year we looked at ourselves and we said, there's four hour podcast episodes. We're currently at like 2%, 3% ad load. Everyone else is at 15%. Right. God forbid we go to 4.5% of time. So like we indulge occasionally. All right, listeners. This is a great time to thank our friends at Sentry. That's S-E-N-T-R-Y. Like someone's standing guard. Which is exactly what they do for developers.

1:34:46Sentry helps teams debug everything from errors to latency issues and fix them before users get mad. And since this episode we are reflecting on 10 years of Acquired, it's fitting to look at Sentry's journey, which actually looks a lot like our story. They started in 2008 as a tiny open source project, not even a company. And the goal was to solve one simple problem. Alert me when something is broken. It wasn't born out of a big budget or a funding round, no big strategy off-site, just a developer seeing something broken in the world and fixing it.

1:35:17And from there, they just listened to what developers needed. More language support, insight into what happened before an error, who was affected, which release broke, and where the bug lived. Sentry delivered all these and slowly started compounding and making the product better every week for 17-ish years. And that's why more than 150,000 organizations trust them today. And the range of those companies is incredible. Disney+, Duolingo, friends of the show over at Vercel and Anthropic, there's Cloudflare, GitHub, Atlassian, also a ton of indie developers who are shipping features at 2 in the morning. Sentry has just become a key part of how modern software gets built.

1:35:50The product has grown the way the best companies do, expanding organically into other tools that give developers granular context, like tracing, profiling, and session replays. And now Sentry is taking the next step with AI. Their agent, Seer, can pinpoint root causes with nearly 95% accuracy by using everything that Sentry already knows, including errors, logs, traces, and code. It even suggests fixes. And because Seer has that full context, it can review a pull request and spot bugs before they ever ship. This is not noisy code review. This is like real error prediction. So as Acquired celebrates our own decade of learning and improvement, it is fitting

1:36:23to partner with a company that has been on a learning and improvement journey right along with the rest of the software industry over that same time. Yes. So thanks to Sentry for helping make sure that everyone's favorite apps work the way they should. You can check them out at Sentry.io slash Acquired. That's S-E-N-T-R-Y dot I-O slash Acquired. And just tell them that Ben and David sent you. Okay, so sometimes we make episodes that either we think are going to be great or we're just really interested in them and they like, in the numbers-wise, they don't care.

1:36:54Perform. They don't, you know, the great thing about podcasting is like it's always within like a 20-30% range. Right. So it's not like, it's a total flop. Well, give me an example of the podcast, the extreme version of the one you all were most excited about that didn't resonate with your audience in the same way. Okay, well, so the lesson here is going to be, yeah, Nintendo. We thought Nintendo was going to be a big, such a great, it's an incredible history, incredible story, incredible company, N of one company, durable over 100 years plus, has been through so many iterations.

1:37:26People love it. You know, 20% underperformed our benchmark at the time. We were like, oh, yeah. And then we did a part two to really dig ourselves deeper. Really like, yeah, just like. And you know what people don't love is part twos. Yeah. And they really don't love part twos when they didn't love part one. Let me tell that joke again. It's so funny that you like it better the second time. Exactly, exactly, exactly. It's a necessary subset. You never tune into something called part two without part one. And so the dumbest thing you can do if you're focused on growth is have an underperforming part one followed

1:38:00by a part two. Right. Yeah, yeah, yeah. But we did it. And you liked it. We had a great time. Nintendo, it's like one of the most interesting companies ever. It started as a Yakuza company. Like, it's crazy. How did it start? It was playing cards. Playing cards. So gambling was illegal in Japan after the Meiji Restoration. Okay. And so they made Hanafuda cards, which are cards in Japan. And the Yakuza was the main customer. And then they got into toys. And then they way later found their way into video games. The Japanese Mafia was the main customer. Yes. That's funny.

1:38:32Yeah, this is an amazing, amazing story. They have this philosophy called lateral thinking with withered technology, which is, if you look at Nintendo systems, even go way, way, way back, it's not bleeding edge technology. It's like a couple generations back technology. How can we take withered technology and think outside the box with it? So, like, the Wii is the best example of this. The Game Boy was the original example of this. The Game Boy is basically a calculator. But, like, you know, it didn't have a color screen, two buttons, like, you know. But it was this incredible success. You can see the passion.

1:39:05I feel like I'm about to get you into part three. Yeah, exactly. We're going to do part three. Okay, okay, okay. But here's the lesson. Another episode that was totally like this, Indian Premier League cricket. Underperformed. Love that show. Incredible story. Thanks. Incredible story. You either really loved it or didn't listen at all. Yeah, this is the lesson. It's the first of your shows I listened to. You started with IPL. You know why? You are making the point here. This is why we did IPL. This is the point. It's all worth it if we just got Michael. I'm a partial owner of the Rajasthan Royals.

1:39:38You are not. No way. I have a Royals jersey. You and Minaj is the majority owner, right? Yes, that's right. You read the book. He's the majority owner. So it's a very tiny slice. But I haven't been over. I still can't explain the game. But the league. Wait, wait, wait. How did you become a minority owner? Two friends. I leave their names out of it. But you know who they both were. OK. Call and said, there's this guy who's got this cricket team. He wants to make it the money ball of. Oh, they're the Oakland A's of the IPL.

1:40:08Yeah, exactly. I got it. Yeah, yeah, yeah. And he'd be open to having you invest. And they were both good filters. Like, if they were interested, it was already smart. And I also thought it was small enough that if it went wrong, it would be an amazing story. And even if it goes right, even if it goes right. Have you met Lalit? Modi? No. No, no. I haven't met anybody but Manoj. Oh, boy. And it's. Oh, boy. Oh, boy. Oh, boy. No, I know. There's a whole. Have we got a subject for you? But I'm not going to. I don't want to redo your podcast.

1:40:40It's just like there may be some way down. So that was the other thing I was thinking. Like, a number of. This could work out a number of ways. So anyway, that was the first one I listened to. And you. That was a. That was an. It's an unbelievable story. Oh, it's unbelievable. Everybody in the world should listen to this thing. And it underperformed. And yet it underperformed. Okay. But here's the lesson. Both Nintendo and IPL. We. They were the first listening experiences for some. Incredibly influential people who have changed the direction. Actually here. Let's. I think we can share the whole story. Yeah.

1:41:12Nintendo was. Specifically listened to by one person on the meta executive team who found it. Thought it was amazing. Sent it to the entire meta executive team. Right. And then they all listened. Right. We built a relationship with them. And then when JPMorgan called us and said. We've got Chase Center. Yeah. And they were like, well, what would you do? And we asked this person, like, hey, do you think Mark would want to do it? And. And he said, I don't know, but I'm going to ask him right now. Right. And so without the Nintendo episode. Without the Nintendo episode, Mark Zuckerberg doesn't join us at Chase Center.

1:41:45No 6,000 person. And we have some similar stories with IPL. The point is that doing episodes that we, one or both of us, is just, like, insanely passionate about. Where did you learn this from? From doing these episodes and, like, underperforming. But. No. We learned it from LVMH. Oh. I pitched that, like, three times. And you were like, okay. No, no, but LVMH was a banger. It performed great. Which is why we learned the lesson that if one of us feels passionate about something. Go for it. Oh, no, no. But I'm making a different point, which is that if one of us feels

1:42:17passionate about something, even if the episode is a relative dud, it's still worth doing. Because invariably, somebody latches onto that passion. This is exactly right. If you don't feel anything, there's a chance nobody's going to feel anything. But if you feel a lot, someone's going to feel it. Someone's going to feel something. Yes, that's right. Yeah. That's right. So go, so trust that feeling. Yeah. Yeah. It's about the magnitude of the way a small number of people feel about episodes, often more than the. Yeah. That's spread. I think that's right. Yeah. Yeah. Now, sometimes we're passionate about something, and it becomes a banger.

1:42:48That's the ideal. Rentech, Renaissance Technologies. That was amazing. That was an incredible episode. That's one of the episodes I've listened to. I loved it, too. So great. It's one of the two great mysteries on Wall Street. How they do what they do. And who is Satoshi. Yes, and those are the two. Those are the two. Yeah, yeah, yeah. I kind of like the take that they invented machine learning a decade or two before and kept it secret that resembles LLMs, and that they were able to find signal that existed only in really weak ways in a predictable alpha generating. But that nobody else found it, too, so that it all went away because

1:43:23they hid it at the same time that they found it. Yes. Yeah. That's mind-blowing, if true, that that could still be going on with – I mean, you can see why it worked through the 90s. Yeah. Yeah, yeah. It's really hard with, like, Jane Street and Citadel and all these other places looking for every bit of signal in the marketplace. It is an amazing story. And that is, of the books I didn't write that I wished I'd written. Did you consider doing that? Oh, I – so Jim Simon's son had a kid in my oldest child's class

1:43:53in high school, and I tried – I said, look, I can't do it unless you want me to do it. There's no point. And he said, like, Dad, just like, no, no, no, no. This whole business of kind of doing it by radar completely from the outside, you know you're going to get so many things wrong. Yeah. And it's like – and embarrass yourself that you need to be so inside so that you don't – so that the person you're writing by doesn't read it and say, like, that's just completely wrong. And I could have done that book, but why?

1:44:24You know, that didn't appeal to me. What appealed to me was he was at the end of his career. I didn't need all the secrets. But I needed some of the secrets. And I would need him. And I – but that's one – that's on my – oh, that's too bad that one got away. Yeah. If a butterfly had flapped its wings differently and he collaborated. It would have been a fabulous book. Yeah. Yeah. It would have been a fabulous book. All right. Number seven. There's a different twist on the NFL, but we definitely learned it from the NFL.

1:44:55Create spectacle. All right. We now think – Our live event strategy. Yeah. There's twofold. One, we now have stopped thinking about acquired as a habit for people. Most podcasts, your dream is to create a habit. Yeah. And ours, we've thrown that out the window and said – You don't do enough of them. Right. Right. So we need to create events. It needs to be the current thing when we release an episode for whatever your group of friends or acquaintances is. Like, it has to be the water-cooled conversation. It has to be Monday Night Football. And then, once a year, we have to have a Super Bowl.

1:45:28Yeah. And doing the Chase Center show and then the Radio City show, very small amount of people in the audience. I mean – 6,000? 6,000. So it's – yeah, great. It's the world's largest indoor theater. It's 6,000 people in this incredible venue in New York City. Relative to the number of people who listen to our episodes, it's 0.4% of the audience. It's a very small. It's a tiny percentage. But the amount of heat and light created from the idea that you did that show is more impactful to building the franchise of Acquired than any given episode, maybe even than

1:45:59a whole season of episodes. What's the first spectacle you created? Well, Chase Center was the first. How long ago was that? We had been – that was – 18 months. So you just started doing – September 24th. Yeah. This is a new thing. We had been – we did a show in Climate Pledge Arena in Seattle, but it was one section. But actually, by being able to say we did an arena show, even though it was only 1,000 people, we talked about it on air as the Acquired Arena show, and that had some – We were able to say to J.P. Morgan, to Chase Center, to the Warriors, like, we have done this before.

1:46:35I'm going to ask a couple of rude questions. Your Radio City Music Hall event was with Jamie Dimon, 6,000 people. And Meredith Kopit-Levian, New York Times CEO, and Barry Diller. Okay. So the three – how many people are there for them, and how many people are there for you? We did not announce the guests. Oh. So they were all there for Acquired. Mostly because I wanted to give this answer. Yeah, yeah. We knew Michael at the end of the year was going to ask this question. So all I knew was it was going to be Acquired with the guest.

1:47:06Was it sold out before you announced the guest? We didn't announce the guest until I hit the stage. So the guest is a surprise? Yeah. Yeah. Oh. It hurt in my soul when we did Chase Center. Afterwards, reflecting on it, there was this little thing of, like, did all those people show up because it said Mark Zuckerberg on the poster? Yeah. Well, now you know. So now we know. So now you know. So this is your form of spectacle is these big public shows. Yeah. Any other forms of spectacle on the horizon? Well, we are doing the actual Super Bowl.

1:47:37So this is – we basically manifested this – Are you the halftime show? I wish. Yeah, we're collabing with – Us and Bad Buddy were going to be on – I would love the reaction of the NFL fan base. Yeah, yeah, yeah, yeah. If they were told that it's not going to be music this year. Ben and David are coming out. It's just going to be an Acquired episode. Yes. Yes, with Peyton and Eli Manning. The NFL – That would actually be – That would be so good. That would crush. Manning cast is, like, the only way I watch Monday Night Football now.

1:48:08Oh, that's good. We're doing the Innovation Summit. So the NFL is launching – Launching an Innovation Summit the Friday before the Super Bowl because the Super Bowl is here in San Francisco this year. So they're launching an Innovation Summit Friday before the Super Bowl with all the, you know, big partners in the NFL, with Roger Goodell. It'll be in the city in San Francisco, and we're going to emcee it. Okay. So do you know who your guests are going to be? We do. They haven't been announced yet, but it'll be on par with our past. Where are you doing this? SF MoMA. SF MoMA. Oh, okay.

1:48:39It's not going to be open to the public. It'll be streamed. Yep. So it'll be a different style of event than – It'll be VIPs from the Super Bowl. It's for the NFL's partners. Right. But, yeah, it's going to be incredible. All right. Let's go to – I think we're on number nine. All right. Two more. So we made Costco in the back half of 2023, but it was one or two episodes after we made Nike. Nike, I think, ended up being a fine episode, but I tried way too hard, like way too much pressure on myself. I want to speak for you on the Nike episode, and it came

1:49:12out flat. We read nine books between us to prepare. I think it was 11. It was just too much for all sorts of reasons. And so we were like burnt out. We were not happy. We decided to do Costco. I said like, I just got to take a different approach here. I got to play loose on this one. Like I can't play tight to use the sports analogy. And I said like, let's find the one book, like the right book. Right. Helped that there was only really one book. Read that book, Saul Price's Autobiography. Right. Read that. Right. Use that as the main source.

1:49:44You got maybe one of the best primary source interviews ever. The CFO of Costco gave you a one-on-one presentation. Come over to the office, and I'll sit you down and give you the entire whiteboard and PowerPoint on how the Costco business model works. And we spent the whole afternoon together, and it was unbelievable. And between those two things, the book and that time that you spent with Richard, that was the other. And we didn't need to do more than that. When you went into it, did you know anything? Yes. What did you know? When we went into starting work on Costco, we do nothing.

1:50:15Correct. But I knew a lot going into that meeting with Richard. I wanted to be able to hear the things he was saying that were different than common wisdom. There's a lot of think pieces out there about Costco. The Wall Street Journal loves to write about it. And investors love to write about the stock. So you can kind of read that stuff. It was Charlie Munger's favorite company. There's lots of stuff out there. And I wanted to hear—this was actually one of the last pieces of research because I wanted to be really prepped. What did you know you were talking about when you're working on an

1:50:47episode and you're going for a run and you make some connection or some insight occurs to you and you stop and you write it down? Give me a few of the ones about Costco. Low skew count drives everything. Oh. All right. That's the starting point. The number of things they have on the— Do you want the Charlie Munger talk? This is the— The number of things they have on the shelf. So unlike Walmart, they have billions of things on the shelf. Walmart has 100 to 200,000 skis. You get what you get and you don't pitch a fit. Whatever's there is there. 4,000 things. Yep. Walmart is 100 to 200,000.

1:51:20Yeah. And here's like all the knock-on effects of that. If you only sell 4,000 things, it doesn't take a lot of volume before very quickly you are a meaningful seller to every single one of those vendors. Suddenly you become really important to that vendor. Right. Yep. Your merchandisers, since you only have 4,000, so your incentives start to inline. Yes. The merchandisers have a very small portfolio. Yeah. You're not dealing with 100 vendors. If you're a Walmart buyer, you're dealing with hundreds of vendors. You're dealing with seven. So— And you would know the absolute crap out of their product line.

1:51:51Right. If you sell chocolate, you monitor the price in the cocoa commodities markets. Right. And if it takes someone who's managing a very small portfolio to stay that attuned to each one of the things, small skew count means that any given thing on the shelf flies off the shelf pretty quick. So there's not— Yeah. So the turnover is faster, so there's more flow. They're getting— They get paid. In some cases, they're getting multiple turns of cash flow before they pay the first time. On average, it takes them 27 days to sell through their entire inventory, which means that's, on net 30

1:52:24terms, three days of grace, where the inventory is actually financed by the vendors and then some. I think, on average, it's 27. So some skews are selling in two days that they're turning. They're turning it 10 times a month. There's no working capital in this business other than building more Costco's. Right. Low skew count for Costco is like low episode volume for you. Yeah, right, right, right. Yes. A hundred percent, yes. Right. And low number of partners so we can put, like, all of our energy behind very few. You know, it's not really natural for a business to sell less of things, sell fewer things when you could

1:52:58sell more things. And everybody— They're actually doing that. And when you walk into— It is the odd experience when you walk into Costco is the absence of choice. Yeah. And, in fact, consumers kind of like not having too much choice. This is the— There's all this research showing that if you sell 30 different kinds of jams in the supermarket, you will sell less jam than if you sell three kinds of jam. Yeah. Because the people just be paralyzed by the choice. Yes. And you smell—you feel like Costco. Someone has made all these decisions for me.

1:53:29Yeah. And they're good decisions. Yes. It's curated. Yeah. You can't just run this strategy willy-nilly. If you're only going to sell very few things, you're only going to make very few episodes, it puts a lot of onus on making exceptional choices on the things that you do choose to carry. Right. So it's, like, a very high-leveraged strategy. But you didn't know anything about any of this when you went into the episode. No. We were just—the only reason we did the episode was it was Charlie Munger's favorite company. All right. Give me another—give me another lesson. How are we doing on time?

1:54:01Is this the last— This is acquired, Michael. I know. I know. I know. You said you didn't have any plans tonight. We were sitting down with Morris Chang, and he was talking about TSMC. Yep. And he told us that one of the ways that they erred was trying to exit the integrated circuit market or diversify from that market and go into— They went into— Solar. Memory. Yeah. Memories. And there was one other thing, too. And none of those were as good of a business. And the key insight was you're already in the best business.

1:54:32Integrated circuits are the future and will be for a long time, and you're already the best at them. So stop trying to do other things and just do that really well. Probably to a fault and with a bias, we believe that about acquired. Every time we look at anything else. We're already doing the thing we should be doing. We're already doing, yes. Don't go do something that we're less good at or it's going to be less fun or— We should always just make another episode. However, you have decided to become venture capitalists again. So here's a question. I'm curious. What's the difference between what you do and what a normal Silicon Valley venture

1:55:08capitalist does before they put money in a company? Do you think you know more than they do? Well, I think there's a top-level misconception about what the venture capital industry is. All right. I think a lot of people think it is an analytical industry. You're learning all about the company. You're doing diligence. It's not that you're not. You are doing that. But that's the commodity. It's an access business. Especially at the growth stage. Early stage, there's more picking involved. But that picking is like a super art. Early stage picking is not understanding a company.

1:55:40It's a whole different thing. So the entire bet that we've made in this chapter of our venture capital careers is a bet that getting into the best companies is just an access thing. The growth stage private companies, you can tell what the good ones are. Most people can't get in. If you can, you should. All right. I mean, we do the work in choosing our sponsors. And then we do like, okay, great. That box checked. Our sponsors are not non-obvious companies that all growth stage investors don't want to get into.

1:56:12But the kind of work that you do to do a podcast episode about a company, does it bear any resemblance to the kind of work a VC does about a company before they invest in it? I don't think so. I wrote a lot of investment memos in my early stage career. They're all about how big could this thing be if it goes right. But you're almost always investing, at least I was, at the napkin stage. And so you're mostly making stuff up. You're dreaming what this market could look like when it materializes.

1:56:44But you don't know. You're really just making a founder bet. And then you're trying to support it with all this structural information that is very imprecise. Right. You're acting like you know the third or fourth decimal place when in reality you barely know the first one. You answered my question was, are these two things similar? And you're saying basically not so much? No, they're not. So that means that being a venture capitalist in no way really prepared you to create these podcast episodes because they're very different things. Well, I think it prepared us to create the business that we created, for sure.

1:57:20But what have you learned? I'll put the question another way. What have you learned about telling a story that you didn't know how to do when you started? Reading your books and being a liberal arts major at Princeton for me. Studying the businesses that we studied for Acquired helps me make Acquired far more than any investment memo I ever wrote. In fact, I remember in one of my last few years of being a venture capitalist, one of my partners asked me how I learned so much so quickly about different industry dynamics.

1:57:52And I was like, it's not because I'm talking to all these early stage companies, none of which know what the future looks like. It's studying these mature businesses and understanding what markets can look like at maturity. Acquired helped me be an investor much better than the other way around. Gotcha. What can you do now as storytellers that you couldn't do 10 years ago? I think we think about narrative structure and acts and what a story is. When we're reading books sometimes, a lot of books, especially corporate history books, are this happened and then this happened

1:58:26and then this happened and then this happened. That's fine for cataloging history. It's not a story. That is not a story. And at a certain point, we realized like, you can't do and this happened. Right. It's the why of it. It's the... It's the story flow. The queen died and then the king died is not a story. The queen died and then the king died of heartbreak is. Yeah. If someone just told you, if told me 10 years ago, that two guys without any previous really literary,

1:58:56podcasting, any kind of experience, we're going to create this four-hour conversation about an individual company and people are going to be mesmerized by it. People are going to listen to the whole thing and want even more. I said, that doesn't sound like very promising. Like I wouldn't put money into that. Yeah. If you were in an early stage... So it's like why it works is a really good question because it's not obvious. It's counter to much of what's going on in the culture, like tension spans supposedly getting shorter, blah, blah, blah. But it does work. It clearly works.

1:59:28It works as a business, but it also works as just a creative thing. And the why of it is like, I mean, you must think about this all the time, the why of it. Yeah. I mean, there's a bunch of different answers to this. One giant tailwind for us is a year after we started the podcast, AirPods came out. Yeah. And it became societally acceptable to just listen to stuff while you're moving about the world. While you're talking to your mother. Yes. Yeah. So our brains all got two input channels. Like we used to only focus on one thing at a time.

2:00:00Everyone now focuses on two things at a time. You can't do the same thing. Like you can't read and listen at the same time, but you can drive and listen. You can run and listen. You can do the dishes and listen. And so we have this massive tailwind of people have like a large number of minutes throughout the day where they're doing stuff that they can also listen. Right. Yeah. Which that's true for all podcasts, but like... There are a couple of things that are true for all podcasts. One is AirPods. It's basically all the platform stuff that happened over the last 10 years.

2:00:32And we started at the right time to advance. So AirPods, Spotify. Spotify didn't enter podcasts until 2018 and now is, I think, over half of the market. Brought hundreds of millions of people into podcasting. Apple Podcasts not becoming YouTube was actually great for us. Right. That it's a place to... When you get a listener, you really get a listener. And it's like this durable, incredibly valuable place to accumulate listeners. Spotify is too, but... YouTube in its own way too. But there are zillions of podcasts and not many are doing what you're doing. So they all have the best. Yeah, yeah, yeah. We're down to the question.

2:01:06Corporate America becomes ever more important. Yeah, that's huge. That's completely right. Yeah. Right? It's like what is going on in the economy is mysterious to people. Yeah. The financial crisis. These companies, a lot of your episodes have been about these companies, about Tesla and NVIDIA and Microsoft and Google and people don't really get them explained to them. So that's a big part of it. If I had pitched you on Acquired in 2015, there's no way I would have said Acquired helps you understand why the world is arranged the way it is. Yeah. But now I think that is absolutely the promise that we come through on.

2:01:39I think the biggest reason Acquired works is kind of how you started off the conversation. It's just it's our partnership. Like it's if just one of us were making Acquired, it would be a shadow of itself. Like the magic exists between us. And there's so many. There's a million times over the last 10 years where like if we hadn't just been, you know, that burn cigarettes on our arms aligned, that like it wasn't even a conversation. But like had our partnership been slightly different, like it would have fractured, that's why we're still here. So I know what I want you to do. I want to conclude this conversation because we don't want to

2:02:14go three hours. But I want to do it by doing the seven powers and apply it. I want you to apply. I want you to apply. I want you to apply. One of our most requested seven powers for Acquired. Apply it to Acquired. Great. And then I can learn what these seven powers are. All right. So we are definitely a scale economies business. The fact that there's a large number of listeners to amortize all the inputs across makes it so that we can do an unreasonable amount of things for each episode. I mean, if you were going to try to compete with Acquired today, you couldn't do all the stuff that

2:02:48we do. You don't start with a million listeners. Right. Or the access or the, yeah. And you could do it for one or two or three episodes. But if it didn't grow quickly, at some point, you'd be like, it's not even about the money. It's about, like, why am I doing all this work when no one is listening to it? Right. And it would feel like that. So there was this path-dependent thing of we always had the right product for the current amount of value that it created in the world, which you can use a listener base as

2:03:19a proxy for. And now, because the listener base is large, we can afford to do things other people can't, which is sort of the definition of scale economies. Or even put this even much more simply. Let's say we and another podcast made the exact same episode. We've got a million and a half subscribers. They have zero. Our episode is a lot more valuable, even if we said the exact same words in the exact same way. Yep. Yep. Okay. Scale economies, yes. Oh. Counterpositioning everywhere. Counterpositioning everywhere. Explore counterpositioning. Okay. We're going to do a little meta thing and also explain these powers.

2:03:52Okay. Explain these powers. Okay. Counterpositioning is when you do something that your competitors just cannot respond. Give me an example outside of the podcasting world. Yeah. So what's a great example of this? Southwest Airlines launches. They only use 737s. Everyone else who already has fleets of other planes can't do all the streamlined operations that Southwest is going to do because they have all these other sunk costs in this diversified fleet. Yep. Or counterpositioning. We're not volume driven. Most podcasts sell their ads on a CPM basis and they are incentivized to make as many episodes as possible. Right. With as many ad slots as possible.

2:04:26Right. Our business is entirely structurally different. Yes. To your benefit. We also don't have shareholders. So we can do all these non-economic things because the thing we're solving for, the quotient, is actually our lives. Right. That's why you need four episodes as opposed to six or eight or one. Yep. Right. Right. It'd be cool if it ends up being just one episode a season. This is David's dream. No, no, no, no, no, no. It's going to be... No, no, no, no, no. That's my nightmare is that we actually, we can't end up, if we end up at one episode a year or one episode a season, it's time to hang it up.

2:05:02Time to hang it up. Okay. Here's a rule. We don't work with agencies. If an agency reaches out and says, we want to place ads on your podcast, we write them a very nice note. If we're able to get to the email and say, oh, we don't work with agencies, but thank you so much for your interest. And working at a podcast network where there's a revenue opportunity and you're saying, sorry, we just don't, you're a middleman in a transaction and so therefore we won't take your dollars. Right. Yeah. So you're... Counterpositioning, yeah. Counterpositioning is in the number of shows you do.

2:05:35So the kind of shows you do. That's how it expresses itself, but because our business is structurally different than most others, like others can't do what we're doing. Right. So network economies, not really, but there's some water cooler effect of people talk about acquired episodes, especially within companies. Right. So we release an episode, it becomes a topic of discussion. Right. That's not really a network effect. This is a weak power, but it exists to a small extent. If you like acquired, more people liking acquired is valuable because you get to talk about it with more people.

2:06:06Right. No switching costs. Switching costs is a power, but it's super easy to... Explain switching costs. Salesforce. Yes. Anything with an implementation. You've got your CRM on Salesforce. Okay. And to switch to another CRM is just a huge amount of cost associated with that. Even though, let's say on a day-to-day basis, it's the same price or cheaper, it's just such a pain and an economic tax to do a new implementation of something. Right. Yep. There's none of that. People can... Another podcast is one click away. Listeners can switch. There's no cost of switching out of acquired into whatever might come along.

2:06:39No. No cost. We're going to replace acquired. Yep. Don't have that. Can I just also say, this is so weird and uncomfortable for me. Because while I think we've created this beautiful gem and I love thinking about it and talking about it with you, it is terrifying to talk about it with everyone and also feel so self-aggrandizing to talk about what a great painting I've made. No, no, no. But it's very useful to think about this in this way. You've got a framework. Let's think about you and your framework. What's the next power? Branding. Yes. Yes. Again, thought exercise.

2:07:11Same product released by a different podcast. Not called Acquired. People just acquired more. Right. Yep. And that's just growing. Yeah. Yeah. Cornered resource. The business owns us. Explain cornered resource. Give me an example. Ben Gilbert and David Rosenthal. Intellectual property. Okay. Patents. Disney owns the likeness of Mickey Mouse. Okay. You don't get to build a business that benefits from the economic value driven by Mickey Mouse. Right. Now, we're assuming- Hard to value Ben Gilbert and David Rosenthal. Now, it's funny, we're assuming that you're a cornered resource, that the reasons that people are tuning in is that it's your lovely voices and the way you enthuse over this stuff.

2:07:44It could be that you've just actually found a thing- It could be. That everybody wants, and that if two other people came in, they'd do it even better. And there are people who create, it's early, they're small, but things that resemble Acquired a lot, the Step Change podcast by our friend Ben Idelson is one of them, where it's doing really well for a podcast that has three episodes, because there's magic in the format, even if it's not us. That is, if there is a cornered resource that you, or your editor. Or, yeah, or your editor. Yeah, totally. Whose name you won't divulge.

2:08:16So, suggesting that perhaps- Yeah, yeah, yeah. Yes. It could be a cornered resource. Okay. And then the last one is process power. Which almost always businesses don't have. We have in spades. We totally have. It's the same thing you have. Because we kind of fail to articulate how an episode comes together. We tried on this conversation three times. I don't think we could regrade it. And we didn't really explain to you exactly, mechanically, how an episode comes together. Except I can understand the iterations, but you vomit out eight hours if your editor decides what's the best five,

2:08:46it comes back to you, and you cut and cut. But what do I show up with on recording day? Oh, I see. So, we should maybe do this a little bit here. Process. Can I guess? Sure. Because I actually don't know what you show up with on recording. You both, I assume you each take a kind of part of the story, like either the history or current analysis of the business, and you're responsible for that. And you go learn about it. But there's got to be some improvisation here so that you don't tell each other exactly what you've learned.

2:09:17More or less. I'm responsible for the story with, we carve out one or multiple chunks that Ben will take, and then Ben is responsible for the analysis. Right. And then you probably have some lines you want to say that you know you want to say. But you want to say them naturally. So, you kind of have them stored in the back of your head, and you wait for the moment where you can drop it where it sounds casual-like. But if that doesn't happen, you set it up. Like Ben's point, skew is everything in Costco. That kind of insight, you can reduce it to something you want

2:09:49to get across in a line or two. What's hard about improv is disposing of all the things you imagined that were going to happen in a conversation before they happen, and nobody does it perfectly. And so there's this tension between the script and what's happening organically between the two of you. The truth is, it's both. It's both, right. So I write a script. I write 10,000 to 20,000 words. You do? In sentence form, word for word. Do you read it? Uh, no. Well, I mean, I read it. It doesn't come out of my mouth. It comes out as a natural conversation.

2:10:21So you write it, but then you put it to one side. I have three screens in front of it. You're kind of reading it. I'm kind of reading it. Yeah, yeah. Are you? But Ben interjects, and it doesn't come out exactly as I wrote it. It doesn't sound like a script. That's good. But part of my process is I need to write a script. To know what you think. Yeah. Yeah, it makes complete sense. But also to have it as a crutch there when we're performing. Right. We can't keep all this in our heads. But the real crutch you have is you can go, you're

2:10:53going to do it for nine hours, and it's only going to be four. So you can make any, you know, you don't have to be perfect. You can screw it up every which way. And you have a real-time feedback agent. Where, like, I'm like, this is dragging. I don't care about any of this free history. Like, cut, cut, cut, cut. Yeah, yeah, yeah. And then, but yet, all we hear, the audience hears is, that's amazing. Oh, that's so interesting. Like, it's incredible. I never thought of it that way. You're the best. I love you. So we don't see any of the other stuff.

2:11:25No, no, no. Yeah, yeah. It's in there. It's in there somewhere. Yeah. Okay. All right. So take me further into the process. And so you have a script, and you don't, Ben, you don't have a script. I have a giant text edit document with, like, just a whole bunch of mechanical points I want to get across. Right. So I have some story points in there that I know I want to interject in David's story. But I know the things that I'm going to bring to the episode that I really care deeply about are explaining how something works. So I have, like, written out bullet point by bullet point by bullet point.

2:12:00And then- And we've usually identified where that's going to enter in. Right. Yeah. But it only, this thing works because it doesn't sound like you're reading anything. Yeah. It sounds like- But the reality is it's a hybrid. Okay. The reality is that this is a hybrid. Yeah. And there's all sorts of stuff in there that, like, we are sort of looking at about six hours into recording. And we're like, that's not going to make it in. Yeah. And that's okay. That's okay. That turned out it was not at a salient point. Right. But the point of process power, there's, like, we can describe all this.

2:12:32You could probably, I'm sure you have described in painstaking detail- How I do a book. How you do. But that doesn't mean anybody else can write a Michael Lewis book. The process, but your point is you have the process power that- But the point of process power is you can tell them it's uncopiable. Oh, I see. Oh, I see. Yeah. Yeah. That's interesting. You have a process that can't be replicated even if you explain- Even if we explain excruciating detail exactly what it is. What pops to my mind is that the magic, the pixie dusk in a

2:13:03process is trust. That it's like something that you get when you trust a process. Hear it. Trust the process. Yeah, yeah, yeah. Darrell Moore goes to Sam Hinckley, but the ownership of the Phyllis 76ers, they didn't trust the process. Yeah, yeah, yeah. They wanted the process. Yeah. They wanted to replicate what they've been doing in Houston, but they didn't trust it. Where does trust show up? For you. And I was just about to say that I think I trust my process. And it's self-trust, but that's a form of trust. And I know if I just told it to someone and they went and tried to do it, they'd be

2:13:36thinking, they'd make them, they'd wig out. Yeah. I got to record the things. I got to do this. And so that, in fact, doing it my way would be a kind of weird handicap for them. That's the process. If you were to copy-paste the process, it wouldn't have the same results and it might, in fact, be a handicap. Right. But there's something emotional going on there. The difficulty in replicating it. I also think it's because when you describe your process, it is lossy compression. The way compression works in computing is you're taking a large amount of data and you're compressing it down into

2:14:08a smaller amount of data, a different file format. And if it's lossy, it means that you can never fully recreate the original work. This is the MP3 Kodak. Okay. Or a JPEG. Okay. A JPEG doesn't actually contain all the RGB values from the original photo. But, like, a human kind of can't tell most of the time. And so it's fine. Right. Explaining a process is a lossy compression of the actual process. That's true. That's true. You're actually not giving them everything. And you're not doing it intentionally. No, it's just impossible. Language is a lossy compression of thought. Yeah. True. That's an interesting observation.

2:14:41Language is a lossy compression of thought. Try to think of the reverse is also true for some people. Well, and uncompressing information, it's so funny. When you and I are communicating, I had a thought. I compressed it into a very narrow bandwidth thing of speech. I told it to you. You uncompressed it into your brain. It might actually mean a pretty different thing to you than it means to me. That insight is at the bottom of my creative process. I assume when I write a book that what goes into people is something different than came out of me, that they are going to take it and reassemble it in a different way.

2:15:13And so I have to construct it in a way that there's a hole for the reader to go in and just do what they need to do with it. Like that the more I just let the story tell itself, the less I tried to influence the way he thought about the story, the more the story landed. And then, of course, when you do that, you're giving people lots of options in how they see the story, how they understand the story. It's the risk you take. But it's what makes it alive. And it's why you get this huge range of response to a given story. But you've got to actually just accept that when you're saying something, the other person gets to understand it however

2:15:47they want to understand it. And if you don't do that, what you get is something that's dead the next day. It's like, yeah, yeah, you made your point. But I didn't hear it. I don't want it. It's so funny. This is always one of our key goals with every episode is no matter what you think about the company, you're going to enjoy this episode and you're going to learn something from it. And then you may come away thinking like, this company is terrible. You may come away thinking this company is righteous. Sometimes we don't nail it. We don't always nail it, but that's the goal. I think it's the creatively fun goal because that's the challenge

2:16:19rather than just imposing your editorial view on the world. Present it in as elegant way as possible and let the reader make what they make of it. Once you realize that's the thing to do, it's so much more fun than trying to muscle people around. It's all of a sudden you're dancing with a reader instead of hurling them all over the dance floor. It also requires you to learn something new while you're making the creative work. Like if you come in with a point of view and you come in, let's say we try to, I was so afraid when we were making Trader Joe's that we were going to remake the Costco episode.

2:16:50And I was like, this episode is going to suck because we're not going to have the original enthusiasm that we had. It's just like Costco but not as good. Yeah, yeah. Or it's Costco but it's for furniture. And then we get to go and we're like, oh, this is totally different than Costco. You have to have new insights that delight you as you're researching it so that you can make something great. And I think the reasons acquired will eventually fail, I don't think come from like platform disruption. Like, oh, TikTok's going to make it so people want short form instead of acquired. Maybe, but the more likely reason that we eventually fail is we stop being delighted by new things we discover.

2:17:23So we have nothing new to deliver to listeners. Right. I agree with that. If you were to ask me how you were going to fail, that's exactly the kind of thing I would say. You just run out, you'd run out of gas or run out of material that made your socks go up and down. Okay, listeners, now is a great time to thank one of our very favorite partners, Shopify. And David, we recorded this episode with Michael the week after Thanksgiving. And while you and I were nice and festive and coming off of some relaxing time with family, the Shopify team had been cranking because Black Friday and Cyber Monday is, of course, the biggest sales weekend of the year

2:17:56for merchants around the world. Yeah. At the very same time as we were recording, Toby was sharing the final stats. So Shopify merchants did $14.6 billion in sales over the weekend, which was up 27% from last year. Over 15,000 entrepreneurs made their first sales and 81 million unique shoppers bought from Shopify merchants. That is absolutely nuts. That four-day sales volume number, that's almost twice as much as Shopify's entire annual volume when they went public in 2015. Of course, as we chronicled on our acquired episode on Shopify back a few years ago. Just wild. And part of that growth was that for the first time this year, a few merchants were

2:18:26able to sell on Black Friday directly inside ChatGPT, thanks to Shopify's partnership with OpenAI. So like no links or redirects, consumers could ask ChatGPT about Black Friday deals for products they're interested in. And Shopify loaded actual checkout flows directly within their ChatGPT conversations. This is super cool. Glossier, Away, Nike Strength, Mejuri, Spanx, and Skims were all live on ChatGPT on Black Friday with Shopify. This is just one example of why Shopify is so awesome and one of our very favorite companies in the acquired universe. Shopify lets anyone sell in seconds online, in-store, on mobile, on social, on marketplaces, and now with AI agents. And it's not just startups. It's General Motors, it's Estee Lauder, it's Mattel, and on and on

2:18:59and on. So whether you are just starting out or you're operating at global scale, Shopify helps you sell anywhere your customers are. So get started at shopify.com slash acquired and just tell them that Ben and David sent you. All right, how are we going to end this? This is your show. Carveouts? Carveouts. Yeah, we got to do... Why do you call them carveouts? What does this even mean? Okay, so you'll appreciate this. It was my wife's idea back towards the beginning of the show. So she used to listen to Slate's, I think it was the Culture Gab Fest. Yes. And they do cocktail chatter at the end of episodes. And it's just like, hey, something unrelated. And she was like, you guys should do that.

2:19:33That's fun. Well, I understand the idea of it. Why is it called a carveout? Well, okay, so then we were like, this was in a phase of acquired where we wanted to brand everything as like around acquisitions. Okay, there we go. And so we thought, okay, what can we call this? We're not going to call it cocktail chatter. We came up with the idea of a carveout. Like in an M&A transaction, a carveout is like, this piece of the purchase price goes to like this set of shareholders for special reasons, their employees or whatever. Okay. So these are the things we're carving out as things that delight us that have nothing to do with the

2:20:05rest of the episode. Yes, yes. Right. But the name is just residual, it's just a residue of your former incarnation. Yeah. We used to brand, we used to have a thing called the LP show because of, you know, we had all these little branding cards. Playbook is sort of a remnant of the older version. Okay, yeah, yeah, yeah. So what are we going to do? What are carveout? What are the specific things? We have some categories that we're going to throw out and then you got to tell us and we'll tell you things this year that we loved in this category. Typically pieces of media or products or something like that.

2:20:35All right. We usually start with books. That's kind of funny. I mean, you here. I mean, so many of your books have been carveouts over the years. Really? Absolutely. So it's books that I've read in the last year? Yeah, books this year that, yeah. So I've got to confess, I've had a very weak reading year because I've been really deep in two projects where I've been working and when I'm working, often all I'm reading is for work. But I can think of a couple, one at the beginning of the year, one I just put down. First one I read because my son was in high school at the time, had read it, and he was

2:21:07enthusing about this 800-page novel. And I thought that just didn't happen very often. And it's been out a long time. It's called The Name of the Wind by Patrick Rothfuss. And it's a fantasy trilogy. He never got to the third book. And I don't know what's happened to him. He's like blocked. But I'm not found. It's like a George R. R. Martin situation. I'm hoping he's an acquired listener. And I would tell him, I can come help get you unblocked. I know how to unblock writers. I have a secret power here. And so... Do you have a secret life as a fiction ghost writer? I do not. That would be... But I do have a secret life as a coach to writers and other

2:21:41writers. And this thing, it was so compelling. I couldn't believe how good it was. And I couldn't believe how good it was that he hasn't, he's just gotten stalled. But The Name of the Wind, Patrick Rothfuss, right at the beginning of the year. Very beginning of the year. At the end of the thing I just finished, it's not like it's a great book. But I think it's like, it's so short and it's of, it's something that is speaking to our moment in our, especially how we govern ourselves. It's, I always mispronounce his name. It's Vannevar Bush. Oh, yeah, yeah, yeah. Who essentially created the American Science Project. And it's a little, it's a basic, I think he started it as a memo to FDR and then FDR

2:22:16died and it ended up being a memo to Terry Truman about what America could do if the government in the right way got behind science. He was saying, look, what we did with the Manhattan Project, we can do with biology. We can do, we can do with the other hard sciences. He was describing not a top-down approach, not like the government is going to just decide. We're going to, we're going to fund it and let the scientists figure out what they need to work on. It was, that was the, that was the big insight. So those are two books. How about you? What books do you? Similar to you, we've been, it's been a research heavy year.

2:22:48Yeah, we have young kids. So fun books are. Right. One great book I read for research was Last Man Standing to prep for the Jamie Dimon interview. That was really good. Total page turner made it, it was a great time. Is it about him? It's about, yeah, it's about the ascendancy of his career. Jamie, yeah. And then two is, I just love reading Morgan Housel and his new book, The Art of Spending Money is, is really fun. I mean, it's where I get most of my like latent ideas of, hey, hey, dummy money's not going to make you any happier. He's a great explainer.

2:23:20Oh, great explanation. So good. My two are, first one is a reach back to December of last year with the Mars episode, Emperors of Chocolate by Joel Glenn Brenner. Uh-huh. You ever read that? It's so good. You know, I once, I had a chocolate related story and I flipped through it and I didn't ever have time to read the whole one. But yes, I know the book. So it's the dual history of Hershey and Mars together. Yep, yep, yep. She, it's the, I believe the only big book she ever wrote and it's just a masterpiece. It's so, it's so good. The other one, Morris Chang's autobiography.

2:23:53Oh. That we got to read. It is currently only in Chinese, but we got to read an English version of it to prep. It's, it's so, I mean, Morris Chang's. How did you do that? Who translated for you? This woman, Karina Bao, did a translation for us. Just for you. Yeah. She was working on it as a, as just a pet project anyway and accelerated it for us. Okay, books, podcasts, number two. Well, this is, this is a layup. The only, the, your podcast is the big addition to my rotation this year. Well, thank you. It started in July and I've listened to, I don't know, 10 of them or something.

2:24:27Well, thank you. Yeah. But what in your, what is in your rotation besides Acquired? I'll listen. And against the rules, of course. Again, well, I don't listen to my own thing. I'll listen to Malcolm Gladwell's Revisionist History. Yep. I'll listen to the Smartless Guys because I like them. Oh, yeah. Your interview on that was great too. It was fun to do it. What else will I, listen to The Daily Sum. Every now and then I'll dip into a right wing thing just to hear it. Just, you know, that, that. Any, any of your recommendations? No. Not really. And, and then kind of, you know, random stuff.

2:25:00Like every now and then Bill Simmons will have something I want to hear. I love Bill Simmons. I just don't have time. Like it's, it's. He's prolific. You have eaten my podcast hours. You've eaten a lot of my podcast. Apologies to Bill. No, no. And I can, and I can tell you where I was. Like treadmill in Denmark when I listened to the Indian cricket thing. Isn't that the most fun thing about listening? You remember a place. You do remember a place. They're very place specific. And no, it's, the acquired podcast is the new thing. I've been, yeah. All right. How about you all? I listened to an episode of Invest Like the Best about

2:25:36a year ago, which was a really, really long interview with Graham Duncan. Oh yeah. That was really good. That was really good. That was originally, didn't he, Patrick do that as like a private podcast and then, yeah, yeah. And then he did a shorter version. I didn't listen to the shorter version. I only listened to the like super long one. But one of my biggest takeaways from that is about having a, the correct grip that you don't want to have too tight of a grip on your work, but you don't want to have too loose of a grip. You need to play with an appropriate grip for whatever the

2:26:10task is that you're trying to do and you'll, if you're gripping too tight, you know, you're going to pull it or you're going to, it's going to feel too mechanical, too unnatural. And if it's too loose, like you're not minding the shop enough, you know, you're, you get, you're going to get your head back in the game and there's an, I've been amazed my career how, just how useful sports analogies are to, to writing. I'm sure to everything. But these physical memories translate pretty neatly to how the mind, what the mind is doing too. And that like when I write a book, I'm on a pitcher's mound.

2:26:43It takes me back to pitching in high school. And I know, and I'm, I'm thinking of the, of the reader as the hitter. Getting meaning across to a reader is, is tricky in a way that fooling a hitter is tricky. And, and it's just, I can feel that connection. And so these physical analogies are really useful, even if there's sometimes a stretch. Speaking of sports, mine is the glue guys podcast, which I think we both went on this year, which actually was the origin of us, of us meeting. Those guys are great. They are great. I think we told them on the episode.

2:27:15I tell them, I'm like, you guys got it. Like, you guys got some magic here. You gotta, gotta keep doing this. You keep telling everybody that they run their, their podcast business in the wrong way. And you're right. You, that you, that you, and you, you depress everybody else. You figured out how to do it. Nobody else has. Well, I tell them, they just, they just, they've got magic. Like, and they just like, they, they are taking it seriously and keeping doing it. But like, I think it's a really, really, they have the really rare dynamic of like, just the three of

2:27:47them together, regardless if they have a guest, don't have a guest. Like it's, they're, they're equally good. They're very different personalities. Yeah. It helps. Can I just, I'm so, uh, like something inside of me feels so crunchy. I don't think we've figured out a better way to do it. Like, I don't think we figured out the way to do it and everybody else should just snap to our way. It's like, we have an enormous amount of privilege that we can run a business in this way. And most people have constraints that prevent them from doing this. It's not that we're right and everybody else is wrong.

2:28:20It's that we have like set up a particular system that works for us. But it is like, you're right and I'm wrong. Um, that, that it really is a way of running a business that we could have done with against the rules. And it, and I'm going to go think about it. Uh, but anyway, so what's our next car? Okay. Okay. Next, next category is, um, videos, videos, movies, TV shows. So I just saw a movie two days ago, two nights ago, we went to the theater, whole family went to the theater and Jay Kelly. It's new. Noah Baumbach, new movie.

2:28:51And it is, it's George Clooney. And he, I guess you'd say he's playing, he's playing George Clooney with a midlife crisis that he, that it's, it's, it's a fame. He's playing a famous actor who's trying to sort out, uh, the meaning of his life. It's just magical. It's a beautiful movie and, and, and an ambitious, really ambitious movie. And that I was, I've been thinking about it kind of since I saw it, like what exactly it was getting across. And getting across, I think being famous, like a movie star is, puts you at a certain distance to the world around you. And that distance has a price.

2:29:24And it was sort of taking the measure of that price. But, and, and, and which, which makes that more general is that I think everybody has to make some decisions about the distance that they keep the world at. And, uh, this was a, this is a way of having that, that conversation and entertaining it with that distance should be. Got to see it. I have so many, but there's one that's like, you're, you're like a, you're a TV guy. I love movies and I love television. The, um, like I have no video games to recommend, but I

2:29:55have lots of these. The one that's just head and shoulders, everything else, and is the greatest performance art I've ever seen in my entire life is the rehearsal season two. All right. Nathan Fielder and Eric Natarnikola, who we actually got to work with, uh, Eric and A24 Films shot the sort of concert film part of our Radio City show and collaborating with Eric was unbelievable. Yeah, he was so great. But before any of that, I saw the rehearsal season two and my jaw is just on the floor with the level of ambition. You were talking about this for months.

2:30:25Ambition, uh, Nathan's a complete psycho and it's the highest commitment to the bed I've ever seen in any form of media. I mean, I don't want to spoil anything, but have you seen it? I have not seen it. I will now go see it. It is, uh, uh, I was shaking. Okay. All right. I'm, I'm a lighter, uh, video guy. I'm a YouTube guy. Mostly, um, my, my YouTube, uh, uh, for the year is, is when I've recommended before a past collab, uh, Doug DeMiro is still like killing it. I just like, I think Doug is probably my favorite YouTuber. Like he's just, uh, what does he do? Cause I don't know.

2:30:58He is, uh, he's the biggest car reviewer. Like I'm not really that into cars, but he, he's just delightful. Well, the car guys did this first. They got everybody interested in cars who weren't interested in cars. Yeah. Yeah. Yeah. And Doug is like, he does these delightful reviews of like, I just love, you know, watching like mid-range SUV reviews that I'm never going to buy. I just love them. So listeners will like this. David falls asleep to this. Yeah, yeah, yeah. Like you watch Doug in other things too, but like Doug is your. Yeah, yeah. Like he'll, he'll release a new review and I'll like watch it as a one sleep over like

2:31:31five nights. Is this what you watch before you go to bed? Totally. So how does it affect your dreams? That's a good question. Do you dream? Do you like have lightning and the queen dreams? What do you have? What do you kind of dream? No, no, no, no. The beauty of Doug, his, his key insight was, you know, all the other car YouTubers are making, making videos for car enthusiasts. Right. But he makes videos for like people who need to buy a family SUV. Oh, I see. Gotcha. Like, so, I mean, he also reviews supercars and like, et cetera, et cetera. But like most of his content is about like the Hyundai.

2:32:03No, seriously, I thought you would spend half your dreams in automobiles. No, no, no. No, it's not. I want to list like a bunch. I'm not going to give commentary on them just because a lot of people are watching stuff over the holidays and here's a bunch of things I've loved in the last year. Tires, the TV show, so funny. F1, the movie, I thought was very entertaining. I got to watch it. Beautiful production quality. My favorite tribute, Expensify paid $40 million for the- Rumored. Rumored $40 million for the sponsorship of the fake team in the movie. That's right. That's right. That's so great. Andor, some of the best thing, if not the best thing in the

2:32:37Star Wars, modern Star Wars franchise available on Disney+. The show Fallout, so good, and season two is about to come back. I think that's Jonah Noland and Lisa Joy, again, artists, like I was saying about Nathan Fielder. Severance was amazing. Silo has a new season coming out that I can't wait. Nice. It's been excellent. The books are really good. Yes. I like the books. Yeah. Those are my TV recommendations. Nice. Next category, which might just be me, is video games. Just you. Just me. Yeah. So, one of the greatest moments in my parenting journey, thus far my older daughter is four, is I got her into video games. We play video games together now every night, and it's just

2:33:11like, it's the best. Like, this is what I have been waiting for. But I need to give a shout out again to Sea of Stars, which is an indie throwback RPG, which I bought just for me on my Steam Deck. And we were on vacation in Santa Barbara, and she was like, Dad, what are you doing? And that was it. Like, I wasn't trying. It was like, she came up to me as I'm playing, you know, this, like, indie RPG, and, like, she started playing it. Like, that was, like, I never would have guessed that this was my daughter's entry into video games. And then, two, Kirby and the Forgotten Land on the Switch is, like, perfect.

2:33:45We can play it together. It's co-op. It's great for me. It's great for her. It's awesome. So, your daughter is in an age where she'll do anything you want to do. No. Because she wants to be with you. No. No, no, no, no, no, no, no. You don't know my daughter. She is extremely independent. It's anomalous and awesome. Yes. This is a rare occurrence. Okay. All right. She runs the house. Like, yeah. No, no. So, this is, like, so much joy for me. Great. Products. What are some products that you have come to own in the last year that you have just thought are awesome or improved your quality of life? I found a new pen.

2:34:18I got it here. Let's see what it is. And it's just like, I needed a pen that had just the right sort of fine point. And then it's kind of generous with the ink, but it doesn't explode on an airplane. And doesn't smear, I imagine. It doesn't smear it. I'm looking at it now. The Ars Teca Rollerball Pen. 0.7 fine. And I just ordered a whole case of them because it's finally got a pen I just love. Listeners, if you want to write like Michael Lewis, we have the answer. This is an example of explaining someone's process. So, that pen is a thing. What else? Other products this year? The Fujifilm X100 VI.

2:34:51I previously specifically did not carve it out and carved out a different camera. I've started carrying the Fujifilm and now love it. It's amazing. I've got a two-year-old, and it's just so nice to have more than just smartphone pictures of family. It's awesome. Nice. I'm just looking at what I have on. Like, it came up here. So, and I'm thinking- Oh, wait, wait. Ex officio. That's- No, no. So, we're not going to talk about those. That wasn't this year. That wasn't- We'll only talk about if they sponsor you. Not until they sponsor me. Yeah. But anyway, that wasn't this year. But this year, actually, on my feet, these are things.

2:35:22These socks, I ran out of white socks in London. I went over to, is it Uniqlo? Yeah. Yeah, yeah, yeah. And they didn't have any. I was just looking for athletic socks, right? And they have these other things instead. They've turned out to be so much better than the athletic socks. And they come in different colors. So, you can, like, a light gray. You can wear them as dress socks. You can wear them as athletic socks. And they, like, whenever I- I don't know about you. Whenever I find something I love, what's about to happen is it's about to be discontinued. So, you need to buy all of them. You need to buy all of them.

2:35:55Yes. Right. So, I- I- I got- I didn't get quite all of them because I was flying- I got them in London. I was going to have to fly back with them. But I bought- I bought basically what was in the store at the moment. And these shoes. So, um- Those Ons? These are Ons. Nice. And, um, oddly, I spent a couple days with Roger Federer this summer. And I- and I just discovered them. So, I- we had the, uh, the On conversation. And it made me kind of, like, acceptable to him. But it was- but the- I think these- these Ons- I was a Hoka guy.

2:36:26Ah. Also great. Also great. Nike basically blew it, right? They let these- 100%. 100%. They let- they got rid of their stores. Yep. They thought it's all going to be online. And On and Hoka roll in. Yep. And I'm a little torn, but not that torn. I'm kind of- these Ons are just, like, un- they're- Ons are cool clippity. And I don't know what it is. It's- it's, uh, especially the white ones. I get- I- I'm getting criticized for it because I started wearing them instead of even dress shoes. And, like, On- I went on the Colbert with- with these. And, like, I got eight calls saying you can't do that again.

2:36:58Really? Yeah. Like, it looks- I see people wearing Ons all the time. Like, it's- Yeah, they just don't look good on TV or whatever. So- but I've been- I've been over-wearing both the Uniqlo socks and the- But that's a sign of enthusiasm. That's right. There you go. And isn't- isn't the Federer-On deal, like, one of the best endorsement deals by an athlete ever? Measured by how? How much money he gets paid? Didn't he do, like, an equity deal early with On? Yeah, I think that might be right. He only aligns with companies whose products he really likes. Rolex. Rolex, yeah. It's an amazing- It's amazing how easy it is, right?

2:37:30Also, he's Roger Federer. He's also Roger Federer. Right, right, right. It's similar, but- I bought a Ramoah suitcase this year, and I love it. It's just a suitcase, but, like, I love it. I got- What's it called? I can tell you. Ramoah. LVMH bought this. It's a suitcase- German suitcase company. They make the, like, aluminum shell suitcase. Yeah. You get a little pep in your step every time you show up. Yeah. Well, I got the- It's exciting to find new luggage. Totally. I mean, I don't know why it is so exciting, but it's hard to find new luggage. Well, my whole life- Three middle-aged men sitting around talking about luggage on the podcast.

2:38:02No, no. You know, when you find the new bag, you know your life is going to be different. I've always been a minimal packing, like, backpack only, like, just maximum efficiency. You assume you're going to be washing your clothes wherever you go? Yeah, yeah. But this is the first time I've just been like, you know what? I'm just going to get a nice piece of luggage. And, like, it's not the most efficient way to put it, but, like, I just like it. It makes me happy. That's great. The- Parenting? Parenting. Yeah, let's go to parenting. Feel free to decline on this. We- You both have really little kids.

2:38:33Yeah, yeah, yeah. Two and four and one. Four and 18 months. Yeah. So, the first is discovering guided access on the iPad. It's an accessibility setting where you can make it so none of the buttons do anything, and it doesn't respond to taps. So, on an airplane, they can't mess with Miss Rachel. Yeah, that's going to last about six months for you. And then he's going to be like, F you, Dad. Make it work. So, these are products for parenting. These are products, if you are a parent of kids' age. The last one is the movie Toy Story. It's the first movie we introduced him to.

2:39:05It was my favorite movie growing up, and it's been really fun. He took to it? He took to it. He loves Mr. Potato Head. He calls it Tape-o-head. And so, he always runs into the room and says, Tape-o-head TV, and that means I want to watch Toy Story. So, as I alluded to, my older daughter is an independent woman, shall we say. We bought this when she was younger, and she completely rejected it. The slumber pod. Do you have one of these? Oh, yeah. Yeah. So, this is a blackout tent. We have two of these. We left one at my mom's house. That you put over a portable crib.

2:39:38So, when you're traveling, you basically just put your baby in like a sensory deprivation chamber. Oh, you set up the noise machine right next to it, too? You really isolate them. And for most kids, I remember hearing about this from people that it's a miracle. I tried it with our older daughter, and she was just like, absolute nuclear. Like, no way is this going to work. And so, I shied away from it. And then, we went on a trip recently, and I brought it back for my younger daughter. Because I was like, all right, we'll give it a shot. It worked like a charm. Can I just interrupt here for a moment?

2:40:12Yeah. Is it a kind of end zone dance you're doing of your business model that you're just at the end of this offer-free endorsements of consumer products? Yes. Without actually having to pay you for it? No, no, no. You just do it. You do this with a flick of the wrist. This is fun. Because we don't even need the advertising revenues. No, we just started because it was fun. These are things we like. That's good. It's good. Yeah, yeah. That's good. And then, my last one. This is fun because it's a tie-in with our Radio City show. I brought the whole family to New York for Radio City.

2:40:44Bluey. We've got to do a Bluey episode someday. It's this incredible phenomenon. I don't know if it's across to your readers. No, what is it? Bluey is the greatest kids' show ever made. Bar none. That's a big claim. It's this guy in Australia, in Brisbane, and he made it. He was, I think, an animator for Peppa Pig, and then made this. But the claim isn't that crazy. I love Bluey. Disney agrees with David. Yeah. Disney has been trying to buy Bluey for years. Oh. For ever-escalating amounts of money. And they just did a deal, which I think is the first of its

2:41:15kind, to use Bluey IP in the Disney universe without owning it. I think news just came out today that Bluey is coming to Animal Kingdom in Disney World in 2026. It's basically like, it's the Pixar. Who owns Bluey? Think of it as Pixar of this generation. Is Bluey owned by his creator? Yeah, yeah. Who is this creator? Joe Brum. This is Guy. It's like the Muppets. Yeah, yeah, it is. It's like Jim Henson in the Muppets. So in New York, in New York City, you can buy tickets. You get like a 45-minute window. You can take your family. You can take your kids to Bluey's house, a recreation of Bluey's house inside a building in Union Square.

2:41:50That's like great. If you've got kids into Bluey, go to New York. Take them to Bluey at the camp. My kids would find that a little strange. Okay? It's true. We keep saying kids. Kids of, you know, eight and under. Yeah, eight and under. But yeah. All right. All right. That's all we got for Carvettes. That's all we got too. Michael, anything else? Oh, pleasure. Thank you so much. This is so much fun. What a joy. Thank you for giving us your evening. This is the longest I've spoken to anyone in the last four years. Thank you for doing this with us. My pleasure. Anytime.

2:42:22I'll see you at your 20th. Great. We'll see you in 10 years. All right, listeners. Thank you so much for listening and being on this journey with us. David, very fun way to try to unpack why Acquired worked there with Michael. If you had told us 10 years ago when we made the Pixar episode that we'd be sitting down with Michael Lewis to analyze ourselves. And trade notes. Oh, this is how my creative process works. Yeah. Unbelievable. Unbelievable. Thank you, Michael, for doing this with us. So good. We have another thank you to Shep Films. This is the crew that made this one look so good.

2:42:54You'll notice that this was not just David and I setting up a few cameras like we've done with Steve Ballmer or Morris Chang. This was actually produced. And so we have a giant thank you to the Shep Films, S-H-E-P Films Company. They do amazing work. They've made like full two-hour movies with Pedro Pascal and, you know, make sci-fi movies. And they do stuff like this. And so we're just delighted to have worked with them. Thank you to our partners this season. JPMorgan Payments, trusted, reliable payments infrastructure for your business, no matter the scale. That's jpmorgan.com slash acquired. To Sentry, the best way to monitor for issues in your software and fix them before

2:43:28users get mad. That's sentry.io slash acquired. To WorkOS, the best way to make your app enterprise-ready, starting with single sign-on in just a few lines of code. Shopify, the best way to sell, whether online, offline, AI, anywhere, whether you are a large enterprise or just a founder with a big idea. That's shopify.com slash acquired. Listeners, if you like this episode, go check out our episodes on TSMC, Hermes, Costco, the NFL, Berkshire, or any other episode that we talked about there with Michael. After this episode, check out ACQ2. We had Andrew Ross Sorkin on, and it was awesome. Speaking of trading notes on the creative process, very different job that he does, but, you know, rhymes with acquired

2:44:03in some ways. So you can search ACQ2 in any podcast player. Come talk about this with us in the Slack. Or if you don't want the Slack, but you do want email, we just did a huge, huge overhaul to our email system. It's no longer just going to notify you when a new episode comes out. There's all sorts of goodies in that notification email, like our takeaways from the episode, some behind-the-scenes photos, corrections from past episodes. It's the place to be. So you can join that at acquired.fm slash email. It really is beautiful. And we might have some more upgrades to all the...

2:44:34That's right. What do you call it? Like the chrome around Acquired? Yes. Coming in 2026. So stay tuned. That's a great way to put it. Well, with that, listeners, we'll see you next time. We'll see you next time. Who got the truth? Is it you? Is it you? Is it you? Who got the truth now? Huh. Who got the truth now? Who got the truth now? Who got the truth now? Who got the truth now? Who got the truth now? Who got the truth now? Who got the truth now? Who got the truth now? Who got the truth now? Who got the truth now? Who got the truth now?

2:45:07Who got the truth now? Who got the truth now? Who got the truth now? Who got the truth now? Who got the truth now? Who got the truth now? Who got the truth now? Who got the truth now? Who got the truth now? Who got the truth now? Who got the truth now? Who got the truth now?