10 Years of Acquired (with Michael Lewis)

Introduction

0:00Happy 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.

0:30No, the reason I brought you down here is I booked us a very special 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?

Welcome to Acquired

0:52Come 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

1:26and playbooks behind them. I'm Ben Gilbert. I'm David Rosenthal. And we are your hosts.

Special Episode

1:31Well, 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. At 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.

Guest Introduction

2:09And 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, Going Infinite, on and on and on. And, of course, host of his own podcast, Against the Rules.

Michael Lewis Introduction

2:41And, 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. And that email list just got a whole lot better with our first overhaul in five years, so you'll now get episode summaries, our big takeaways, and exclusive photos from our research process.

3:20That's acquired.fm slash email.

Community Engagement

3:23Chat 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. Yes. Just like how we say every company has a story, every company's story is powered by payments.

3:54And 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.

Conversation with Michael Lewis

4:08With 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 do 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.

4:38Very 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. 2015 is the year we started. So I thought you were going to say that the effect that the Princeton thesis had on Acquired.

5:11I 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. There'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.

5:46In 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. She 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.

6:17And 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 well-known people. And a prominent CEO says to me, have you listened to Acquired?

6:47And 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 four-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.

7:27You 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 just 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.

7:58And 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. Oh, 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?

8:30Because 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 magic between me and Ben. That's interesting to me.

9:00You 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. Yeah. Yes. Okay. Both married. It's not a romantic relationship. No. We like to say that we each have two spouses.

9:31We 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 at 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 –

10:02Yeah. 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? David knew all the Apple rumors in real time just like I did. Yeah. You had read all the latest Stratechery posts.

10:32We 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 my, like, peer age group. And I could, like, lean over and be like, what are they talking about?

11:02Well, 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? I mean, I took some CS classes in college, but, like, I'd never built anything. And so I was like, Ben had built all these things. Like, you built the this for that website.

11:34You 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. It ended up becoming – This kind of broad curiosity about things other than business and technology.

12:07I 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.

12:38But 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.

13:09There was a status difference between the two of them. Right going into it, everyone in the world thought Amos was the smartest person they'd ever met. You two didn't have that – ever have any of that. 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.

13:41I don't feel that you or I have ever felt we had a difference in status. And the number of, like, fights we've had or real tension we've had is, like, two, three ever in 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?

14:13Like, is there some osmosis that happens from the subject matter bleeding into the property itself? And? 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.

14:52And, 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. The 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.

15:27And I don't do very much of those. The scripted ones, I do put time into.

15:32But 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. Most 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.

16:09And 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 long 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.

16:51And 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 in 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.

17:21So 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. You 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.

17:52Right. 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. So 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-

18:28Yes. 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? I think Berkshire, we learned so many things from. We did this three-part saga on Berkshire Hathaway.

18:58God, 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. What was the thesis? The thesis was that he may have started out being who he says he is, but that he's become

19:31this 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? I was there! Yeah, you lived through it. No, I was through it. This is a huge part of our Berkshire series. It turned me briefly, only briefly actually, cynical about Warren Buffett.

20:03And 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. What 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.

20:39Yeah. 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 wrote. 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.

21:10And 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? No, 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.

21:45He 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. You'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.

22:15And 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. Put it in a few stocks and watch those stocks like a hawk. It's like, they watch that thing in a way that like, just in history, has anybody ever done anything like that? I mean, all these people are, they're maniacs.

22:47You 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. We 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.

23:21The 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, that 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.

23:52What'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. Are 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.

24:23They 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 you. Well, this is one of the reasons I want to talk to you. Michael's a very smart guy. You've been very successful.

24:53I'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 why this has worked for us is we do a lot of work that looks a lot like the research and the writing of a book.

25:23But 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 little 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.

25:55Wall 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. And it's a big market, big-ish market. But it doesn't- I see no evidence that I'm dragging people along with me. I feel like each book feels like another startup.

26:28And 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 glorious 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.

27:01I 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. When 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

27:35and 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 a 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.

28:07We're constantly terrified every time we make an episode. Every minute is a churn opportunity. Are we letting people down?

Sponsor Update

28:14All 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 a 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.

28:45And 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, you 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.

29:17How 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. But 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.

29:49Overall, 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? Yes. 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.

30:19Because 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, it's okay to have a too hard pile. And you said – and the too hard pile is like doing things in Hollywood. But when I asked the question, did you ever run across this? Have you run across this? Have you ever had a subject where you thought, ah, this is just too hard to do? Yeah. Oh, yeah. What would be an example of that? We got pretty far down the line on doing an episode on the Fed.

30:50Yeah. And walked away from it. Yep. So you walked away from it. Yeah. 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 episode that we make five years after we

31:21made 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 stuff is tech and finance where there's so much churn.

31:52Well, 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.

32:15What I like, when my socks start to go up and down about a subject, is when I'm really interested in 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?

32:46You 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 their interest. But I know why I'm interested and why it's important. And I'm not relying on the world telling me it's important. That 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.

33:20Moneyball. Like, you are discovering these things that kind of nobody's talking about. Whereas when we do something like Trader Joe's, someone says, what are you working on? And we're like, Trader Joe's. They're like, I love Trader Joe's. 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.

33:50One, there's a compelling hero protagonist that takes a hero's journey. Where we're going from obscurity to ubiquity. How it starts is this thing that nobody cares about, and then it becomes the most important thing in the world. 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.

34:21And then our third criteria is it has to be important in the world. And I think that's something we picked up later. I mean, we used to do these, like, little $10 million acquisitions. 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?

34:52The 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. Is 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.

35:23Ben 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? Equal. 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.

35:55You 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 pie 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.

36:25Okay. 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. From 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.

36:59Oh, 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 a 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.

37:30Yes. 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, I'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.

38:11You 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. You were afraid to, whether you knew it or not, exhibit a lot of emotion. You didn't realize that one of your secret sauces is emotion. It's the way you respond to each other when you're presenting material is helping the audience understand how they should feel about it.

38:49That 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. Oh, 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.

39:20Yeah, 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. Yeah, 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.

39:53I'm like, I think this is going to come together. But we had to add this thing called a production meeting. About six months ago, one week before recording, we are required to get together and share, agree on an episode 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 a podium with a script, with a speech, and they're going to read their speech?

40:29The 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 the way the audience responds to the performance. And so that is not in the beginning.

40:59Do 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? So we start with the corporate acquisitions in 2015.

41:30And 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. All right. So first thing that happens is you move off the corporate acquisitions?

42:04We 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.

42:34Eventually you get to, we're just going to do stories. Big 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 doing more biography.

43:09We 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.

43:41Podcast advertising. Advertising budgets kind of dry up end of 2022. Ben and I looked at each other and it was like, it wasn't even like really a conversation. We just knew what we had to do. 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.

44:12Like 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. Undifferentiated 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.

44:52That'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 really long?

45:23Yes. 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.

45:58Yeah. 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.

46:32We'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. They stopped taking fees, yeah. And got it back and it ended up being a positive returning fund.

47:06This 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 greater than the first 20 years combined or whatever.

47:39And 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 riches 10 years out or 5 years out or 3 years out.

48:14Yeah. 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. Why 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.

48:49And 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.

49:11He'll read everything ever about them. So, yep. You 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.