10 Years of Acquired (with Michael Lewis)

Transcript: (disclaimer: may contain unintentionally confusing, inaccurate and/or amusing transcription errors)

Ben:  Happy 10 years.

David: Happy 10-year anniversary, Ben.

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

David: 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.

Ben: Yeah. What are we doing? You keep teeing up? Just come down. Oh, we'll just record it here, and clearly we're not at your house.

David: I was actually thinking we should try and find the Silicon Valley House, the Erlich Bachman Aviato.

Ben: This is Aviato.

David: Aviato. The reason I brought you down here is I booked us a very special place to record. It's actually right over here.

Ben: It's a house. Is this the Google House?

David: It's the house.

Ben: Where they had their first office in the garage?

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

Ben: We can do our holiday special in it?

David: Come on in.

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

David: I'm David Rosenthal.

Ben: We are your hosts. 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. It's always felt a little bit strange to me, and we've always shied away from analyzing our own company.

David: This year, we turned 10 years old and thought, well, maybe it's time for something, at least a pause and reflection to shout out the Coca-Cola episode on our journey to this point and why Acquired has worked.

Ben: We thought, if we're going to do something, we should bring someone in to do it with us. 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.

David: 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. Of course, host of his own podcast Against the Rules. Ben, you and I have looked up to Michael forever, so this was really special.

Ben: 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.

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

Ben: That email list just got a whole lot better with our first overhaul in five years. You'll now get episode summaries, our big takeaways, and exclusive photos from our research process. That's acquired.fm/email. Chat about this episode with us and the whole Acquired community in Slack, acquired.fm/slack.

If you want more Acquired, check out our interview show ACQ2. Our last episode was with Andrew Ross Sorkin, founder of the New York Times DealBook, host of CNBC's Squawk Box, and author of 1929. That's ACQ2 in any podcast player. Before we dive in, we want to briefly thank our presenting partner, JP Morgan Payments.

David: Yes. Just like how we say, every company has a story, every company's story is powered by payments, and JP Morgan Payments is a part of so many of their journeys from seed to IPO and beyond.

Ben: With that, the show is not investment advice. David and I may have investments in the companies we discuss, and the show is for informational and entertainment purposes only.

David: With that, onto our conversation with Michael Lewis. Michael, thank you for joining us.

Michael: Total pleasure.

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

Michael: Okay.

David: You went to Princeton, I went to Princeton.

Michael: Yup.

David: 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.

Ben: Very serious college student.

Michael: They let you do that?

David: Somehow I conned the French department into letting me do this. Probably 12-13 years later, we made our LVMH episode. It was a big moment for Acquired. Moet & Chandon has just released the 2015 Vintage of Dom Perignon. 2015 is the year we started.

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

David: I can tell you our episodes are much better than my actual thesis was.

Ben: That is exactly how it feels.

David: That is the process we go through.

Ben: Cramming for finals the night before, there's a lot of academic feelings that happen as we get close to recording day.

Michael: It's your show and I don't want to take it over. I wanted to start by saying that I didn't discover it until this year in July. I was at Google Camp, which is a good way to discover Acquired.

David: We should talk about where we are now too.

Michael: We are sitting in the Google garage. I don't know exactly. I'm not sure exactly what happened in the Google garage. It's a nice idea.

Ben: Literally, Susan Wojcicki lived here. I think she just bought the house.

David This was her house. She had just bought the house.

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

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

Ben: Larry and Sergei's first desks when they got kicked out of Stanford's offices were right there. I actually think this actual door desk sawhorse is the one that they were using because Google pulled it out of storage for us.

Michael: I'm at this camp with a lot of well-known people, and a prominent CEO says to me, have you listened to Acquired? I didn't know what he was talking about. I went and listened. I can't remember what I listened to first. I think it might've been the Morris Chang episode. I had about eight different reactions to it, all positive, and I thought it's amazing, which you all are doing. From July until now, I've listened to maybe 10 of the episodes, which is a lot of hour listening time.

Ben: It is.

Michael: The first thing that struck me. I could not believe you were getting away with a four-hour podcast. I couldn't believe it even after four hours. I was still looking for even more. 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, 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.

We're doing this as a 10th anniversary celebration. I'm honored and I feel like I'm let a lot 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. I didn't prepare at all except to listen to it, except I did one thing. That was I went back and listened to your very first episode.

Ben: God.

David: Wow.

Michael: Just to compare.

David: Be kind, please.

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

Ben: Do you have yours crystallized because I don't want to taint you with what we think?

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

David: I've always believed something that's always been there from the beginning is the magic between me and Ben.

Michael: That's interesting to me. You all meet at a Passover Seder.

David: Yes.

Michael: You end up being colleagues at a VC firm.

Ben: Yup.

David: Yup.

Michael: I will come back to that. I want to talk a little bit about you as investors, but we'll come back to that and how that's different from being a podcaster. At what point do you decide that, oh, there's an odd chemistry here?

Ben: We really just wanted to spend more time together.

Michael: You're both straight?

Ben: Yeah.

David: Yes. We're both married.

Michael: Okay. It's not a romantic relationship.

David: 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.

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

Michael: Are either of your spouses threatened by the relationship?

David: No.

Ben: Just from a sheer time perspective.

Michael: Yeah, a little bit.

David: My spouse loves it because she doesn't actually want to spend that much time with me. All the stuff we do in Acquired, I used to just talk at her and she wasn't interested.

Ben: That is true. My wife loves it now, although she gets the rough draft. 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. Because I endure that and give you feedback, the listener actually gets the better version.

Michael: Right. You meet and there's a chemistry.

Ben: Yeah.

Michael: Explain that chemistry. What is it that makes you excited to see each other?

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

David: We bonded over Ben Thompson originally.

Ben: 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. I got hired to work at a venture firm to do some incubation work, but I didn't know anything about the real job of venture capital. Here's David, someone who's just a few years older than me doing that thing but in my peer age group. I could lean over and be like, what are they talking about?

David: I felt like a fraud in a lot of ways. I repressed this deep down. If I'm honest with myself, I think I felt like a fraud as a VC. 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.

Michael: Have you ever coded, or have you ever done anything?

David: I took some CS classes in college, but I'd never built anything. Ben built all these things. You built this for that website. You built so many products. You had products that millions of people use now. I was like, I'm just masquerading here.

Michael: You could see that Ben knew stuff that it was exciting for you to know about?

David: Yes.

Michael: Did you feel that David knew stuff?

Ben: Absolutely.

Michael: What kind of stuff?

Ben: Business.

Michael: Really? It wasn't French literature?

Ben: No. I only found out years into doing Acquired. He was a French lit major.

Michael: That's important. This broad curiosity about things other than business and technology, I hear it in your program. I hear it in your podcast. What I'm thinking of in my head is Kahneman and Tversky. I wrote a book called The Undoing Projects. It got me think about collaboration. 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 threatened is too strong a word, but they were very aware that the relationship that was the most important in their lives was not with their spouse.

David: 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 intense.

Michael: You know what, yes, it was.

Ben: And competitive.

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

David: Not for me.

Michael: You said you felt like a fraud.

Ben: I think I felt lesser. There were a lot of things when we started doing Acquired where we were doing this business analysis podcast, but I didn't know finance.

David: Which is funny because you've become more the keeper of the analysis on Acquired, and I'm more the keeper of the story.

Ben: 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. The number of fights we've had or real tension we've had is two or three ever in 10 years. It's weirdly none.

Michael: Let's come back to those. Let's get to the lessons. What have you learned?

David: We started thinking about what have we learned from the companies we've covered that we've then applied to Acquired.

Michael: Yup. All right.

Ben: In particular, Acquired has clearly worked. Why? Does that why have something to do with the fact that we study the world's best companies? Is there some osmosis that happens from the subject matter bleeding into the property itself? That's our frame.

Michael: Okay. Let's go with that frame.

Ben: Yes.

David: 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. 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. To me, what we do is insane for the podcasting industry. It's completely insane. For the last three years, we've released 12 episodes. Next year we're going to do eight episodes for the whole year.

Michael: As a hobbyist podcaster, what I get told is you have to be on all the time. I can't do it, so I'm not going to do it.

David: Podcasting is like your second or third thing that you do, right? And you make more episodes per year than we do?

Michael: That's correct, except for the scripted ones, which I do throw myself into. It really is. I do no preparation. I don't do very much. The scripted ones, I do put time into. It's a different 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.

David: We used to make 26 episodes a year.

Ben: They were 40 minutes long to an hour and 20.

Michael: How do you go from that to realizing, and did you really learn it from the NFL or did you just do it?

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

Ben: Most of these things actually are confirmation bias. We get some inkling that we should continue to go in this direction. In calling out Hermes, it's because I think quality and scarcity have become an important part of Acquired. In some ways we 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, because we didn't have a whole production team, and we didn't have professional ad salespeople.

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

Ben: Yeah. At some point, we looked at each other and we're 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, we're going to build a business model around that, and it turns out to be a great business, we thought every episode is going to be entirely handcrafted by us, all the research, all the recording. We work with this amazing audio engineer, Steven, who does the literal waveform editing, but we go in and in a transcript highlight a thousand cuts per episode. 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.

Michael: But that's not where you start?

David: No, not all.

Michael: Suppose 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. You get this idea that, oh, it would be really cool to do a podcast on corporate acquisitions. That worked.

Ben: Yeah.

David: Bad idea.

Michael: It is an idea. You could easily have started the opposite, corporate acquisitions that didn't, and you had much more material.

Ben: Which is what most press at the time was. Let's talk about how crappy this acquisition was.

Michael: 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.

Ben: That's because we were VCs and I was trying to build companies. The goal was create things that have enough value to get bought or go public. When people buy things, it's because they're working didn't, so let's try to reverse engineer what works.

David: Yeah, understand why things worked.

Michael: Right. That's a different starting spot from almost all journalism. In fact, if most journalists started there, they'd be accused of hagiography. 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've learned because I want to see if you get to it. What's the third episode that you have learned a lesson from?

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

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

Ben: Good for you. Congratulations.

David: Since when?

Michael: I bought it right in the middle of the financial crisis. 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.

David: What was the thesis?

Michael: 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.

Ben: That's true.

Michael: You don't have a couple of things Warren Buffett has. His money is valued differently. Secondly, he was willing to do deals. The time bothered the hell out of me.

David: Like the Goldman deal or?

Michael: It was the Solomon Brothers deal. It bothered the hell out me. He kept a CEO in place who I thought should not have been allowed there.

David: Were you there?

Michael: I was there.

David: Yeah. You lived through it?

Michael: No, it was through.

David: This is like a huge part of our Berkshire series.

Michael: 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. I had written this thing and pissed him off entirely. It would clearly upset him. I started watching him for longer and I thought, you know, I just liked him. You couldn't help but like him, so I started to soften. When we get to the financial crisis, I thought, well, his money's going to be so valuable here. I think if he stays alive long enough, it might happen again soon.

Ben: You invested in Berkshire before the legendary deals coming out of the financial crisis?

Michael: Yeah. I bought a chunk of the A shares and I've just sat on them. Can I tell you a Warren Buffet story?

David: Yeah.

Michael: 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. I actually looked back at that article. 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 5000 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. I was talking to a publicist, completely unrelated to Warren Buffet. She said, you know, I also represent Warren. She said, and I told Warren that I'd been talking to you. He has a question for you. I said, what, is he the Michael Lewis who bought shares?

David: No.

Michael: I swear to God. This tells you something more about Warren Buffet than me. That thing, that ratio, he bought it as cheap as it's ever been.

David: You made the best trade on Berkshire.

Michael: Hold on. He says he's the Michael Lewis who sold some Berkshire Hathaway two years ago and four years ago. He was like, why did he sell? He's tracking.

David: You're not like Vanguard here.

Michael: No. I actually just gave him a charity. It's what I'd done. I've given the money away.

David: That's unbelievable.

Michael: She said that he'll be relieved to hear that thing. Can you imagine that Warren Buffet is taking the time to watch who is coming in and out of the A shares and thinking about it? I just thought, he has that he and Munger had that whole thing about don't put your money in an index fund, put your money in a big bundle of stocks. Put it in a few stocks and watch those stocks like a hawk. They watch that thing. In history, has anybody ever done anything like that?

David: All these people, they're the maniacs. You don't build something like this if you're not a maniac.

Michael: That's exactly right. Sorry I just digressed here. What did you learn from your three episodes of Berkshire Hathaway?

Ben: 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 I'm not intelligently saying no to.

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

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

Michael: What is the expression you're using?

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

Michael: The too hard pile. I see. Okay.

David: It means no.

Michael: All technology was a too hard pile.

David: Yeah. There might be something in here, but it's just too hard.

Ben: 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. That was really freeing once we started just truly on most of our phone calls.

Michael: I'm surprised you say this. What's too hard for you?

David: 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. To this point kept us always invariably ended up in the too hard pile.

Michael: Are you talking about doing episodes in Hollywood or to become movie stars?

David: No, other Acquired media.

Ben: 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...

David: We should just make another episode. The answer almost always is we should just make another episode.

Michael: That's a really intelligent place to land. What they will do is woo you with their enthusiasm and then take you down a rabbit hole, where you'll spend years of your life and have nothing to show for.

David: This is one of the reasons I want to talk to you. Michael's a very smart guy. You've been very successful.

Michael: I've gone down the rabbit holes. I've gone down to rabbit holes knowing that I didn't have a whole lot else better to do at the time. It's like between books. It's a pallet cleanser. You don't have a between books, period. I don't have that. I don't have the machine you have. You've got an assembly line going.

Ben: It's a compounding asset. 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, but when we make our book and we release it to the world, people click subscribe. When we release the next one, those same people go listen. It's almost guaranteed.

David: We're always growing our base.

Ben: Podcasting, being an author, there are loose compounding elements to it, but there's not a literal growing subscribers.

Michael: Not nearly what I thought. When I got into the business of writing books, I thought about this a little bit. You're right.

David: You've probably done it better than any other.

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

Michael: I thought I'm going to move around America to the various arenas of ambition, Wall Street, Silicon Valley, Washington, movie business, sports, the various things. I'll naturally attract the audience that is interested in that arena, and then I'll drag them along to the others. It hasn't really happened that way.

David: Even for you?

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

David: Moneyball audience is not necessarily coming to fit risk.

Michael: Correct. Exactly. The audiences end up just being different. It's just the way it is, but that's not true with yours.

Ben: That's not true for Acquired.

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

Ben: The opportunity cost is so high of spending a month not making an Acquired episode because when we publish an episode of Acquired, the base does come with us. Not all of it, but we make epic systems about healthcare, and all the people who listen to LVMH are now learning how doctor's office IT works. 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. You think YouTube, Twitter, or any of these. When someone clicks follow or subscribe, it's like signal in the algorithm, but it's not guaranteed. You subscribe in Apple Podcast or Spotify, and those people are actually subscribed and they're going to get the next episode.

Michael: Right, and they learn to trust you. 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.

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

David: Why does Acquired framework, there's a strong element of terror of why it works? We're constantly terrified every time we make an episode.

Ben: Every minute is a churn opportunity.

David: Are we letting people down?

Ben: All right, listeners, now is a great time to thank our presenting partner, JP Morgan 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.

David: Acquired residency in Las Vegas, baby. No. 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 JP Morgan Payments. 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 in Vegas and all that.

Ben: Yeah, that he does. Also, very funny to interview Matt Garmin from AWS at his own event. I will say one of the most interesting conversations was with Max Neukirchen, the global co-head of JP Morgan 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 JP Morgan?

David: Yeah, it's wild. If JP Morgan payments were a standalone company, it would very likely be in the Fortune 500, but it's also part of JP Morgan.

Ben: Max also told us about JPM coin developed by Kinexys by JP Morgan and how it's helped the bank and even Jamie evolve their thinking on how blockchain technology is transforming financial infrastructure.

David: Overall, it was a great week. We hung out at JP Morgan's booth on the show floor and got to see their developer portal being demoed live in action to customers too.

Ben: Yup. If you want to learn more about these innovations and payments and how JP Morgan can help power your business, head on over to jpmorgan.com/acquired.

Michael: Are you more terrified than you were two years ago?

Ben: Yes.

Michael: The terror is growing?

Ben: Yes.

David: The terror is growing.

Michael: At some point it's not going to be a good thing. It's good to be a little on edge.

David: Yes. Yeah.

Michael: You don't want to get yourself in a situation where you feel like you got to do the same thing over and over again, because eventually it will get old. We're going to get to the bull and the bear case at the end.

David: Okay, great.

Michael: This is so back to the lesson that you gleaned from Munger and Buffet, it's okay to have a too hard pile. You said the too hard pile is like doing things in Hollywood. 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?

Ben: Yeah.

David: Yeah.

Michael: What would be an example of that?

Ben: We cut pretty far down the line on doing an episode on the Fed and walked away from it.

Michael: Yup. You walked away from it?

Ben: Yeah. We might come back, but it's been probably three years.

Michael: There will be a moment to come back to it.

David: Yeah. I'm glad we didn't do it in the past.

Michael: No, this would be better, although it's going to violate your rule about doing newsy things.

David: Timelessness is a must. Everything we do must be timeless, the company we're covering.

Michael: Nothing's timeless, so what do you mean by that?

David: It must be that if you listen to an episode that we make five years after we made it, 80% is relevant. It will still be an important institution in the world.

Ben: A CNBC article is worth 2% of its original value within a month, and we want to be worth 80% of our original value five years from now on any given piece of content.

Michael: Does that mean you're picking institutions that you think will survive?

David: Yes. That's baseline.

Michael: So much of your stuff is tech and finance where there's so much churn.

Ben: This didn't used to be true. If you look at anything pre 2020-2021, we had not yet discovered this principle.

David: Our real bangers are timeless and timely. Doing Google this year was timeless and timely.

Michael: 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. When my socks start to go up and down about a subject is when I'm really interested in it and nobody else is. It's not hot. Basically all my books, maybe a couple of exceptions, but a lot of the books that if I'm at a dinner party and someone asks me what are you working on, after about 60 seconds I can see their eyes glaze over like, why is he interested in that, it's just not registering with them in any way.

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. I'm not relying on the world telling me it's important. That's a really good sign.

Ben: This is a difference between what you do and what we do. I feel like when I think through all your books, there are almost always a story of obscurity that once it becomes a Michael Lewis book, then it becomes a well-known phenomenon. Moneyball. You were discovering these things that 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.

Michael: That is a difference. Your subjects are not obscure. They're the most famous corporations in the world.

David: We look for people love it, but they don't really understand it.

Ben: There's a secret hiding in plain sight.

David: A secret in hiding in plain sight, like people didn't understand Trader Joe's or people didn't understand Google, we thought when we did.

Ben: There are three things that make a great Acquired episode. (1) 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. (2) 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 all the gears turning of the machine. There has to be some way that we can expose something.

(3) It has to be important in the world. I think that's something we picked up later. We used to do these little $10 million acquisitions. Now when we're going to go spend two months of our life researching and making that, the Acquired episode, it has to be something worthy of the acquired stage.

Michael: When did that happen? 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 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? Is that how it worked?

David: Yes and no. You're on the right track. I like the Berkshire. I thought you were going to say partnership as a lesson from it. We did a series on Sequoia Capital, the venture firm. I went full-time on Acquired in 2020. Five years in. Ben didn't go full-time until January 24, end of 2023, beginning of 2024.

Michael: You remained equal partners?

David: Yes. It wasn't a business when we started. We didn't make money till our third year.

Michael: Those three years while you're full-time and you were part-time, it was equal?

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

Michael: That's great.

David: It never crossed my mind.

Michael: See, there we go. That's an important point.

David: I guess I'm glossing over it because it didn't even cross my mind now. Acquired has always been the two of us. It would be profane for it to be anything.

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

Michael: It's true collaboration. You don't recognize. There's no boundary where you start.

David: Okay. This is where I'm going with this story.

Ben: It's funny you bring up Sequoia because its actually Benchmarky in that way.

David: It's the quote. It's Leone's quote. Okay. End of 2022, FTX happens. Interest rates go up, all the podcast advertising market falls off a cliff. Our revenue dropped 40%. We went from, this wasn't a business, I went full-time, we made it a business. It worked amazingly well from 2020 to 2021 into 2022, and then our revenue dropped 40% overnight. That was the moment when we changed everything.

Michael: How many episodes are you making in 2021?

David: A lot.

Michael: I see, okay. It's no longer just corporate acquisitions?

Ben: We started broadening with the Tesla episode in 2019, maybe 2018.

Michael: Why did you broaden?

Ben: It was David's idea. 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.

Michael: There you go. You foul hooked your audience.

David: Yes.

Ben: What's a foul hook?

Michael: When you go fishing and you catch the fish by the belly rather than the mouth. The hook gets in there in some weird way. You didn't actually catch the fish in an honest way.

David: Yes. We get all these emails every time we'd meet people and they talk about the show. They'd be like, I love the story. You guys are just gifted storytellers. That's what we hear over and over and over again. Eventually we were like, well, we should believe that.

Michael: I'm going to interject what I noticed. In that first episode, you were so unsure of yourselves. You were so choked, both of you. You have a background in theater. You were an actor. You did not come across as people who'd been on stage. It was an affectless performance. There was a flatness to it. Whether you knew it or not, you exhibit a lot of emotion. You didn't realize that one of your secret sauces is emotion.

The way you respond to each other when you're presenting material is helping the audience under understand how they should feel about it. You're giving them sometimes very dry facts, like, I don't know. Their revenues doubled every year for a hundred years straight. The audience may not know that that's an incredible thing. The way you respond, even sophisticated listeners are helped, oh, pay attention now, that's an important thing. I should get excited about that.

David: We used to share our research such that we were doing research in the early days. I think we only had a single Google doc that we worked out.

Ben: Yeah. We were just dumping everything into the same shared document.

David: By the time we would actually go to record the episode, it was stale.

Michael: There's no surprise.

David: Yeah, there's no surprise.

Ben: There's no disagreement.

Michael: You can't pretend to be surprised.

David: Yeah.

Michael: Or you would be pretending to be surprised. That's like, this is really important. You added an improvisational component.

David: Yeah.

Ben: Yes.

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

Ben: A hundred percent 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, 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 agree on an episode structure but not share any details. We got so into this improvisation thing that some of our episodes would end and you're like, that had no flow to it. You guys had two completely different ideas for the episode.

Michael: You're not taking risk if it doesn't work sometimes.

Ben: Yeah.

David: Right.

Michael: Do you know how your heart sinks when someone gets up at a podium 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's going to happen. Whatever's on that page, that's what's going to happen.

Ben: It's like pre announcing the score to the Super Bowl.

Michael: Yeah, it's exactly right. 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. That is not in the beginning.

David: Do you remember when we started doing that?

Ben: I think in the first 10 episodes. The 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.

Michael: Okay.

David: At some point we made it an unwritten rule of like, we have separate documents, we prepare separately.

Ben: We tried to do separate research calls.

Michael: That was five years ago you say? Basically, we start with the corporate acquisitions in 2015. You two, knowing everything that you're going to say when you get on, basically. It's short and it's 40 minutes.

Ben: 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. You're also hearing a little bit of like, I can't get over enthusiastic because I'm afraid David's going to catch me and be like, you don't know what you're talking about.

Michael: Okay. There's an uncertainty about your own abilities.

Ben: Yes.

Michael: All right. The first thing that happens is you move off the corporate acquisitions.

Ben: We went from acquisitions to IPOs, which was unbelievable timing in 2017-2018 when Uber, Pinterest, Slack, there were eight IPOs in a row of tech companies that everyone had been following. It went really for two years and culminated at the end of 2020 with DoorDash and Airbnb, which we recorded and released one day apart.

David: We would never do that today.

Ben: On IPO day.

Michael: Once again, you're constraining yourself unnecessarily. Eventually you get to, we're just going to do big success stories, basically.

Ben: It was acquisitions, IPOs, then it was broad histories and strategies of tech companies, and then broad histories and strategies of companies, period.

Michael: And people.

Ben: And people with Taylor Swift and Oprah.

Michael: In a funny way, you're still constraining yourself. You feel like you need this frame. You're not really living in a frame anymore.

Ben: Yeah, but constraints are good, like forcing yourself into a format.

Michael: Sure, but at some point you're going to wake up and say, you know, we should be doing more biography. We should be doing more people. If that person is not naturally a huge corporation, I have a feeling there's an evolution to come. You haven't reached the end point of this. At what point do you start to feel confident, like we know what we're doing?

David: When the reset happened in 2022-2023...

Michael: Pretty recently.

Ben: Crypto bubble, tech stocks plummet, advertising budgets dry up, end of 2022.

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

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

David: Try and keep the music playing. We were just like, party's over. We need to get to work. We need to focus on only what is enduring, make great work, and stop doing everything else. Up until that point, we used to do these things called specials. We would just do not totally random, but essentially random interviews and undifferentiated topics. We said, 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.

Ben: We did it on the commercial side too. We said, let's go cut deals with our favorite partners, even at discounts, and try to just figure out when we come out the other side of this that we have 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.

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

David: No, we did a year. 2023 was the first year.

Michael: What were those episodes?

David: That was LVMH, that was the NFL, that was Porsche.

Michael: It's deep dives and these long episodes.

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

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

David: Yes. JP Morgan came in in January of 2024, so we did the year of building this out.

Ben: You're right. It was only after we had leaned into Acquired as a brand about durability, about compounding over decades and centuries. 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.

David: Yeah.

Michael: 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.

David: My frame for all of this story was Sequoia. This story is very different than Sequoia, but we interviewed Doug Leone, who was one of the two stewards of Sequoia. 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, we're taking Mulligan funds. They went to their LPs and they said, there's nothing we can do on this one. We're going to be more disciplined next time. We said, absolutely not. We will never lose money for our investors ever. We will do everything we can possibly do to make this fund in the black.

He said 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. They spent the next five years. They didn't raise another fund. They just went to work with the portfolio.

Ben: I think they stopped taking fees for a while until they were back.

David: They stopped taking fees. Yeah. Got it back and it ended up being a positive returning fund.

Michael: This is how you get a reputation.

David: Exactly. That was that moment for us.

Michael: Easy to lose one too. They were really sensitive to reputation.

Ben: Yeah. We'd studied enough businesses by that point, where we saw what led to durability. I think we already were awake to the idea that all that matters is the late years of compounding. In any given year, you look at a Mag seven company, and their profits from the last year are greater than the first 20 years combined or whatever. Realizing that being around and being respected on the other side of this economic chasm is the key to everything. Who cares about making money this year? It's about 5, 10, 20 years from now. We have to have the brand that people want to be a part of then.

Michael: Right. You don't know that you are a Mag seven podcast.

David: It's ridiculous to compare.

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

Ben: Yeah.

David: Really, I think it was like the burned cigarettes on our arm. I think we just both so believed that that was the right thing to do.

Michael: Something had happened before that. You would figure out how to do this. You'd figured out how to study a business in a way that was really interesting. The first episodes, not that interesting. It was just not that much I didn't know, hadn't thought of, whatever. I don't know much about Pixar, 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.

Ben: Now we pride ourselves on having the lowest ads in the entire industry.

Michael: Let's pause here before we get to number four. How do you study a business? 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 did you do to learn about a business?

David: Great.

Ben: He'll read everything ever about them.

Michael: Yup. You do what I do. Whatever's out there. That's just the AI part of it.

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

Michael: Right. At what point do you pick up the phone and start calling people who maybe have information that isn't on the worldwide web?

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

David: For me, at least about 50% of the way through the start to get your arms around, then start calling.

Michael: Right. You don't call uninformed.

David: No.

Michael: 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.

David: There's the obvious people to talk to. For Google, we talked to Sundar or Demis, like obvious, and then there's the slightly less obvious.

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

David: This is part of the compounding effect.

Michael: And talk to the CEO of Google about Google? Nobody.

David: We're the compounding business.

Michael: Right. When do you first realize that you can pick up the phone and call Tim? You're on this first name basis with all these people. When does that start?

David: I think it was our Microsoft series when we talked to Steve Ballmer.

Michael: Yeah, Steve.

Ben: Past Acquired guest.

David: Past Acquired guest, Steve Ballmer.

Michael: Yeah. Name dropping in your world is so different from the name dropping in Hollywood. None of your names mean anything in Hollywood, but they mean everything here.

Ben: The arenas are so funny because these people, most of them aren't famous. They're a thousand to 10,000 times wealthier than these Hollywood stars. It's different yardsticks.

David: Ben used to work at Microsoft.

Ben: Which got us zero access.

David: Here's, in my mind, what happened with this as I'm trying to think about how to answer Michael's question. Because we had started in Seattle, you still live in Seattle, and you had worked to Microsoft. When we started our Microsoft journey, we knew some people. We were like, well, let's see if we can talk to Steve. We talked to Steve and we got his perspective on things.

Ben: Was that a cold email?

David: I think it might.

Michael: Is that the first time you do that?

David: First time we reached that high.

Michael: Okay. Yeah.

Ben: You know what, this is where reputation matters. Steve didn't get back to us for a day, and then we heard back and he said, I don't listen to podcasts. I haven't listened to your podcasts, but I, but I talked to some people that I trust, and they say, you're great, so let's hop on a call.

David: He gave us probably three hours, four hours in research.

Michael: He did?

David: Yeah.

Michael: You learned a lot?

David: Yeah. Before we even interviewed him, that was later. Just in research. We learned a lot.

Michael: Did you all have a moment where you thought, oh, my God, let's keep doing that, that works.

David: Yes. Yeah, then we were like, that worked great.

Ben: It worked with Jensen too. 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. We thought getting these big gets would be the key to success, which is funny because usually they underperform our standard format. In 2021 we emailed NVIDIA through the warmest connection we could find and said, can we interview Jensen?

David: We're planning to cover the company. Can we interview Jensen?

Ben: They gave us a nice party line back. He's very busy. In 2022, we did our NVIDIA part one. We did our standard research process. I think we did our 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. We were like, oh, this was all just public information. If you're good at spidering the internet and just digesting it and thinking about why he would've said something at this point in time to this audience in these various random university talks and stuff, you can piece together the story.

Michael: You're still flying by radar a bit.

David: We were totally flying by radar. Yeah.

Ben: That started the relationship.

David: They're like, all right, he wants to meet you.

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

Michael: You did an interview episode with him, but it doesn't do as well as your own NVIDIA episode.

Ben: That one may have been at some particular peak of NVIDIA buzziness, so it was probably our then largest episode.

David: Here's what happens with interviews. They spike faster.

Ben: And those listeners don't retain.

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

Michael: 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 list. Yes. All right, I was asking you how you studied a business. You read everything there is. When you go and read everything there is, you are very polite, you're very generous about citing your sources, and all that, but you must find...

David: My wife is an academic. My wife has a PhD, was trained as an academic, and she was like, you guys got to set your sources, what are you doing?

Michael: Yeah, but are you ever surprised by the weakness of the source material?

Ben: Yeah.

David: Yes. We are no longer surprised.

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

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

David: Sometimes there are.

Ben: Sometimes there are. Sometimes we make a financial calculation error or something like that.

Michael: Right. We read all source material, and then we start to make phone calls in 2023. Now the phone calls have become extremely important, and you're making 25 of them in an episode.

Ben: Google was 40.

Michael: Do you find that when you are reaching out by phone to all of these people that they always want to talk to you?

Ben: No.

Michael: Sometimes a mix?

David: Yeah.

Ben: Usually when you approach it with a spirit of...

Michael: I'm just trying to understand it's own background.

Ben: 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. You get lots of great information after that.

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

Ben: It's not a trick. 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. 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.

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

Ben: Yeah.

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

Michael: When you're working on one of these episodes, are you aware of how much fun you're having learning. Have you ever shut something down just because, oh, this isn't that much fun?

Ben: That's why we killed the Fed. We've definitely killed other episodes.

Michael: If you can find fun in the Fed man, you can find fun in there. We could generate all that enthusiasm for each other's insights about the Fed.

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

David: We might come back to it.

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

David: It feels like a Michael Lewis book.

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

David: There's so much stuff that came out of Bell Labs.

Michael: Did you do Xerox Park?

David: No but similar.

Ben: No.

Michael: It's another one.

Ben: Right.

Michael: I guess Google still has this spirit, where they're doing lots of stuff that maybe you can't identify instantly. The payoff that's right around the corner is let's just fiddle around, see what we find stuff. The corporate Americas I think just generally does less of that than it used to do a long time ago. Am I wrong?

Ben: No. I'm trying to think that's interesting. 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 boondoggle basic research. A lot of the most important technologies that move society forward come out of these.

Michael: You need some weight. You need fat.

Ben: Yes, and boy, does Google have that? Their last quarter was their first a hundred billion dollar quarter ever. Astonishing. That's how they fund the next Gemini.

David: Yeah, all this.

Michael: Right. Actually, you just bring up your friend Hamilton Helmer who I'd never heard of until I listened to your podcast. You do that thing.

David: The  seven powers, yeah.

Michael: Yeah. Let's just briefly, since we're here, how you study a business, that has been a useful analytical framework for you, whatever these seven powers are. I'll never remember any of them.

Ben: That's why we say them every episode.

Michael: Network effects and all that stuff. What is it about Hamilton? Where did you find him, and why is you making him so famous?

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

Michael: When did you read it?

Ben: You found the book.

David: I think it was 2020. It was very obscure.

Michael: I read the list and it was all gobbly to me. The words did not mean things. You have to know what they mean.

Ben: If I asked you in plain English, can you brainstorm all the ways in which an industry leading company gets away with being more profitable than their competitor and gets to keep being more profitable? That's the list you would come up with.

Michael: Right. What creates the moat?

Ben: Yes.

David: Yeah.

Michael: Why did you decide you even needed that framework?

Ben: Always hand in hand with the durability. If you're trying to study why is a business durable, the cause is the power.

David: We'd always been searching for a way to land the plane on the episodes. We tell this story and we finish the story, but that is so unsatisfying.

Ben: What's the takeaway?

David: Yeah. We've had all various permutations of analysis at the end.

Michael: Buy, sell, or hold.

David: Yeah. It's bull and bear, grading, and blah, blah, blah. Once we shifted to like, hey, we're studying these great companies, these durable businesses, power felt like a really good part of that like, so what? Why? For me, a 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. I don't use AI note taking. I write physical notes and hard copy books. If I am not doing that, I feel like it's not going to work.

Michael: You haven't thought about it.

David: Yeah. What do you do?

Michael: I have exactly the same issue. I discovered I wanted to be a writer writing my senior thesis and no ambition to do it before then, and then all of a sudden I thought, oh, my God, I love this. What my love was just that, was the constant recycling of the thought. I don't want to get too far away from your podcast.

Here I'm sitting with my notepad. This is a filter. If I'm talking to you, it takes effort to put it down on the page. I don't record anything. I filtered it. It's interesting enough to me that it belongs on the page. Then I go home and I write the notes up quickly. That's another filter. If what's on the page interests me enough to put it in a Word document, then it's filtered again.

I keep those notes while I'm working on a book. The file will be 500 pages long, by the way. It may be longer by the time. It's just stuff, and then I start thinking about, how do you frame this story? What is this story? That's months usually down the road.

There are times when I get into something and I'm months into it, and I realize, oh, there's nothing here. With Sam Bankman-Fried, I was a year into it. I did not know what I was going to do with it until it blew up, and then I thought, oh, my God, I have a story when it blew up.

Ben: You have been sitting there for a year watching it all.

David: Do you think you would've not published the book if it hadn't?

Michael: No.

David: Wow. You would've killed the book?

Michael: I might have found a way to do it, but I hadn't found a way to do it. It was always the same conversation with my editor. 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. It's that simple. It wasn't that, oh, I smelled fraud or anything like that. It didn't have shape to it. It was picker-esque experience after picker-esque experience. It was like Don Quixote, but the first chapter over and over. There was material there, which is why I kept coming back. It was fun. There were endless scenes, but they was just like, I don't know.

David: But scenes don't make a play.

Michael: They're necessary but insufficient. The bigger point, I don't want to be talking about me, we'll be talking about you, but you are doing it. I smell this from your work. You're doing something that rhymes with what I do. You are gathering before you make judgements. You're open to learning things. You're trying to be the world's best student. You want people to want to teach you. If people want to teach you, they will teach you. You could take what you learn and you could present it another way, the best way you can present it.

Ben: I basically take a note in two scenarios. One is, oh, I just figured out how that works and that is so cool.

David: Yeah. You're the master of the, like, this is such a cool thing.

Michael: You got excited.

Ben: This is in some ways irrelevant to the business success of Rolex, but it will make my year to explain on air how a mechanical watch works and how an escapement is a thing.

David: Those are some of the greatest moments or the Costco Ballet.

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

Michael: Yeah. Yup, that's all very familiar to me.

Ben: All right, listeners, now is a great time to tell you about a great friend of the show, WorkOS. 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.

David: Garages were a little more popular back in the day with HP, Apple, or in the 90s with Google and Amazon all founded in garages. Today, though, it's more likely an SF apartment, a coffee shop, or a hacker house. The key question remains, what do you do after you find product market fit and when you start scaling?

Ben: One big answer is moving up market and finding your first enterprise customers. The best way to do that is WorkOS. WorkOS makes it easy to add all the things that enterprises require. Single sign-on, SCIM, 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.

David: 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. These security features are just the price of admission for enterprises.

Ben: 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. 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.

David: Yeah, it's funny. We were talking with WorkOS founder Michael Greenwich about this. 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're a better technology.

Ben: Get your enterprise story right early on. Open AI, 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.

David: If you're ready to get started with just a few lines of code for SAML, SCIM, Auerbach, 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. Just tell them that Ben and David sent you.

Michael: Give me a fourth example of a lesson learned from an episode.

Ben: I feel like I learned from Ben Thompson.

Michael: Tell the audience who Ben Thompson is.

Ben: Ben Thompson is the author of Stratechery.

David: Proprietor of Stratechery.

Ben: Founder of Stratechery.

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

Ben: His writing is the thing that we bonded over when we met. He's a great strategy technology writer. (1) The internet niches are way bigger than you think they are. If you think you're writing about a niche topic, the internet being a global community of four-ish billion people, means that any little niche, there might be six people in your geography that care about it in your local town, but there are millions of people online. The internet is your way to reach them. No matter how niche you are, it's actually way, way bigger.

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. The audience has grown so much that every output from the business is dramatically different, even though all the inputs are the same.

We really 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.

Michael: What is your operation? We're in here with a large group of large men.

David: Thanks, guys.

Ben: This is a bigger operation.

Michael: But this isn't your normal operation?

David: No.

Michae: What is your operation?

Ben: I have a basement studio. It's an office that we happen to have some lights and a camera in.

David: I built a studio in my backyard.

Michael: That's the YouTube. You mentioned that you send your stuff to an editor without naming the editor.

Ben: His name's Steven.

Michael: Steven is the last name?

Ben: He does. I'm not sure he'd want us to share on air.

Michael: The mysterious Steven.

Ben: He's an independent contractor. We're his only client.

Michael: He works only for you?

David: Yes.

Ben: He's the best.

David: He's the best.

Michael: He's clearly good at his job.

David: Steven is as maniacal about creating the best audio products.

Ben: And video when we do it.

David: No assistance. We do everything.

Michael: You don't have ad sales.

David: We do all the selling.

Ben: We love doing the ads ourselves.

Michael: You doing it right.

David: We love doing the business equally as much as we love making the sales.

Ben: I love the alignment. The business and the content are equally important. They're like married.

David: Yeah. It's funny. We're preparing for this. We're always tempted to just talk about the business because we love the business as much as the show, but we never talk about the business.

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

Ben: Yeah.

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

Michael: Right. How different is what comes out of Steven from what you give him?

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

David: We produce each other as we go.

Michael: Hundreds of retakes?

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

Michael: Wait, I want to do that in an Acquired tone. Wow, that's amazing. Hundreds of retakes? That's incredible. I would've guessed like if you just asked me, five. Hundreds?

David: You sound like a millennial.

Michael: I just want to be appropriately amazed. Hundreds? You can't do hundreds of retakes.

Ben: Literally, it's that we cut.

David: We need cut literally all the time.

Michael: I see.

Ben: The retakes though are a different thing.

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

Ben: I made a point where I wasn't paying enough attention to what David was saying because I was 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 acknowledgement of mine?

David: Just give me an aha and then we'll move on.

Ben: 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, but now that we're in the moment, I can feel that it's slowing down the energy. 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. That is all in the eight, nine hours half that we delivered to him.

Michael: He is cutting it in half.

Ben: Yeah.

David: Yeah.

Michael: When it comes back to you from him?

David: He turns eight, nine hours of that into an intelligible four.

Ben: Into five-ish?

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

Ben: Then we make 500-800 additional cuts to cut another hour off of it.

Michael: Are you doing it on the page?

Ben: On the page.

David: We use a tool called Descript. We use it not in its intended way.

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

Ben: We are listening to it and we are watching.

Michael: How long does that take?

Ben: Three days.

Michael: Three days to edit?

Ben: Yeah.

David: We usually do two cycles of that.

Michael: Do you send it back to him after you've done that?

David: Yeah, and then we do it again.

Michael: And you do it again.

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

David: You're the hero on this. I can't bring myself to do it. I listen on 2.5x. You're the hero for doing it.

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

David: Ben really jumps on the grenade for this.

Michael: Almost always, you can cut the beginning of almost everything. There's always throat clear.

David: Our beginning is always dragged.

Ben: We got this big wind up.

Michael: Yeah, wind up. You don't need it, you just go right to it. Once I start to feel like it taught, I just love it. I love it. The hardest thing is getting the stuff out in the first place. Once it's out on the page, then you can start, ah, each time it gets better. There's no despair associated with it.

Ben: There's stuff in the original draft that is a remnant of the point you thought you were going to make. 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 side.

Michael: Or it's in there in all kinds of other ways. Yeah. It's important that you had the idea, but it's buried in the story, some which way.

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

Michael: The minute you're there, you know it's got to be cut.

David: Yeah.

Michael: Mostly right? Yeah.

David: Our default is always cut.

Michael: You get five hours down to whatever it is, three and a half, four.

David: Three and a half is the sweet.

Michael: How do you know when you're done?

Ben: We run out of time.

Michael: Deadline.

David: Yeah, we operate on deadlines.

Michael: You're never really done.

Ben: I would love one more edit.

David: There's always more. Yeah. We have both the gift and the curse of deadline and next episode coming, whereas you have an infinite timeline, right?

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

David: Wait. What happens if you get to June and you're like, I'm not...

Michael: I can't.

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

Michael: Yeah. Once I establish that deadline, which is a reasonable deadline because I've spent a year doing the work, I have the material. By the way, it's very polite of you to ask me questions about myself. 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.

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

David: Four every season.

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

Ben: 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. I always feel, as a listener, so disrespected when there is this content of the podcast that is diamond quality, and then they're running McDonald's ads in the middle.

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

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

Ben: 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.

Michael: I tried this, I had a thought about this on mine, and no one ever took me up on it. I just find the things I actually use, and it will be fun to talk about them. I want to tell the whole world about ex officio underpants, and I can't get ex officio to return my calls.

David: Literally, you tell me that Michael Lewis called ex officio and they don't return your calls?

Michael: I gave my podcast a list of things that I really love.

David: You got to call them. That's the problem.

Michael: That probably is the problem. My podcast company does not actually sell the ads. Another company sells the ads. I thought that was the way to make it seamless. What's integral to my life will be the things that we're talking about.

Ben: That is a structural blocker to creating the best experience. 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. There's some horse trading there of we have to make these points. For the most part and the best sponsor relationships are the ones where they say like, yeah, your listeners are going to respond the best when you...

Michael: To what you have to say.

Ben: Yeah.

David: If 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 years in advance, what do we want our slate of partners to look like? We start Michael Lewis Inc we think is going to be super strategic for us in 2027-2028. We start planning like, okay, how are we going to make this happen? How are we going to make sure that 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?

Michael: 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?

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

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

Ben: No.

Michael: That's a lovely line. You're looking for Switzerlands?

Ben: Yes.

Michael: What do you mean by that?

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

Michael: Would you take Coca-Cola?

Ben: We don't really deal with consumer base.

David: (1) B2B companies with very high LTB products.

Michael: Not ex officio underwear.

David: Basically, we want companies that are doing a significant number of multimillion dollar annual deals with customers, because we want to feel like we can deliver a couple incremental of those for you, directly terminal loss.

Michael: So you can charge lots of money.

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

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

David: Often it's not even just heard about on Acquired. Events are a big part of this. We do events with almost all of our sponsors. There's the funnel of heard about it on Acquired, that helps, but then we're doing an event together with them. We're sitting next to their best prospects.

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

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

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

Michael: At that sporting event, will you do like...

Ben: Fireside chats.

David: Yeah.

Ben: Interview your CEO.

David: Interview a legend from the sport.

Michael: How many hours of your time am I going to get?

David: A couple days. While we're there with you, it's like, hey, how can you maximize using us?

Michael: Will you promise to be my friend?

David: Yeah, of course.

Michael: You'd be my friend too in the bargain?

David: We're great friends with a whole bunch, so then it gets even better. Let me tell you more.

Michael: Tell me more. Tell me I'm getting interested. I'm in the edge of my seat here.

Ben: The reason this whole thing works is people who listen to Acquired are the most valuable audience in the world. If you want to market your B2B software, financial product, or whatever to them...

David: Founders are executive decision makers. Really, I'm going to take a step back. I think the whole business side and there's a lot of the content too, but the whole business side of Acquired starts with we were venture capitalists. We are not media people. We have just always taken an approach. You're aspiring to be a great partner to them. You're going to help recruit employees, you're going to help with whatever. We just like, great. That's how we approach our partners.

Michael: 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?

David: I think we just came at it from this totally different space.

Michael: You think it's coming from a media space and the media space was bad business?

Ben: Okay, here's a take. 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.

David: It started for journalism.

Ben: It is really good for journalism that that exists. The rest of media seems to have adopted it, and everyone doesn't need to. If we are the host of Acquired, it's great if you're going and learning about your sponsor's business, 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.

David: The thing that brought it full circle a couple of years ago is we added an investment fund. Not our public company sponsors, but almost all of our private company sponsors, we invested them, so it came full circle.

Michael: You created an investment fund. You were the ones who were making the investments?

Ben: Yes.

Michael: How are you doing?

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

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

Michael: You invest in all of your sponsors?

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

Michael: You're only really accepting sponsors, companies that you would like to invest in.

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

Ben: It's not a perfect overlap.

Michael: Yeah, but JP Morgan is not an example.

David: Right. We like having a couple public companies, JP Morgan, Shopify, ServiceNow.

Michael: How deep is this market? How many Acquireds could be created on the back of this business model?

Ben: I think a lot. The question that I'm always wondering is why aren't there more Acquireds out there?

Michael: I'm asking that question now. Why?

Ben: Here's the ingredients. Two hosts that independently go do research and through storytelling. Narrative storytelling and analysis create a conversational audio book. It could be about businesses, it could be about sports teams, it could be about political parties.

David: Any arena of ambition, as you would say.

Ben: There should be an Acquired in all these other verticals. In fact, the business vertical could supply ten more.

Michael: There's a lot more money in business.

Ben: Yes.

Michael: In tech and finance. That's one.

David: I think there's a bit of a cold start part. If you were to propose going and creating an Acquired for sports, the 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 because it's going to take a long time to build up the audience, versus, oh, I could go join a network, I could make a show on the ringer, I could do whatever.

Ben: Acquired was path dependent on us having day jobs for sure.

Michael: Right, and day jobs in the industry that you're going to cover?

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

Michael: I asked you how many Acquireds 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?

Ben: In business podcasts?

Michael: The B2B, the kind of people you'll accept as your sponsors. How many times over?

David: Fortunately, there are a lot more people who want to sponsor Acquired.

Michael: That's what I mean. How many more are there?

David: A lot.

Ben: We're probably 3x or 4x oversubscribed on people who really could convert on becoming sponsors if we said, sure, we'll take you.

Michael: How come you don't spawn an extra Acquired or two? Why don't you create the next use?

David: Then we're not Acquired, then we're not us.

Michael: I see.

Ben: Do less.

David: Then we become CEOs.

Ben: We do not want to build a company.

Michael: Yeah. It's funny. There's a line that you don't have bosses. You have incentives, but you don't have bosses.

Ben: And we're not other people's bosses.

Michael: That's my life too. I have a lot of incentives, I have no bosses. When you're in any creative thing, there is this benefit to not just following the financial incentives and not trying to 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. Only do it if it's great. It's a long term strategy. 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. I just don't.

Ben: Why would you allocate? 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 a year? Why would you blow a slot on a bad book?

David: That's a gaping hole on it.

Michael: I give you a reason why some people might. A publisher offers me 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 maybe great.

Ben: Is there any chance any of those dollars make your life better at this point?

Michael: No, zero. 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 all this? The average athlete is taking a few million dollars more to move his wife and kids from 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.

Ben: All dollars do not have equivalent value. The marginal dollars have way smaller value than the early dollars.

Michael: Sometimes they end up having 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. They could be useful. They get you out of bed in the morning for a while, but you going to have to control them. I love that you're not milking the market.

David: I think there are 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 do you want stay a boutique? To your question for us, like why don't we create more Acquireds, we don't want to manage other shows, podcast hosts.

Ben: People often tell us, oh, you're building this business, you guys are foolish because there are all this key man risk. You're building this great business, but if either of you leave, unfortunately your business has low enterprise value. We're like, but if we sold this business, then we would just go start Acquired. We're already doing the thing.

David: The dream is what we're doing.

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

Ben: We've gotten five, six, or seven.

David: We've got a bunch of these.

Michael: I want to hear a number. What's the fifth lesson you've learned?

Ben: Founder control was a huge one.

Michael: Is this from Google?

Ben: Again, this is one of these things that we learned early but then got reinforced through episodes. Meta, Rolex, Trader Joe's.

David: IKEA.

Ben: Yeah. Stay private, be family owned.

David: Meta's a public company, but founder control. Google too. Google's founder controlled too.

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

Michael: 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. Mostly bad things happen when companies go public and certainly less pleasant. Public or private, your point is founder control.

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

Michael: What triggered this? Are we being wussies?

Ben: We were currently researching Bell Labs, and I think I felt like we were chasing this esotericness.

David: We sought some advice. We went to one of the best investors ever, who we've gotten to know he is a fan of the show, somebody everybody would know. We asked him to dinner and we just like, hey, we've got this. We could do all these things. We're not like Hollywood, et cetera.

Ben: We expected his comment to be...

David: Dream bigger, go for it when you guys are being wussies. He sat there and he thought a minute. He said, I've seen so many founders become trapped in prisons of their own making in their own companies.

Ben: They're successful prisons.

David: Yeah. You guys have avoided that fate. Don't go down that road.

Michael: I'm missing actually the connection. Why if you were less wussy-ish would you have created...

David: Hire people, take on more ambitious projects, start a second show, don't make a Hollywood movie.

Michael: I see. You mean business wussies.

David: Yeah, business wussies.

Michael: I thought you were saying you were avoiding the controversy.

David: That's a whole separate wussies. We asked ourselves, are we being business wussies?

Ben: They go hand in hand. Cheap growth is covering the current thing. I've been toying with this idea of stored potential energy that great businesses have a stored potential energy that you can't see in the current financials.

Michael: Great people have that too. They have these reserves that come out when they need them.

Ben: And they're not presented in the obvious markers.

Michael: Yes. They aren't sparkling there in front of your eyes anyway.

Ben: I think we're trying to store up as much potential energy in Acquired as we can rather than anytime there's a way to make it show up on the financial statements, like letting out the pressure and being like, yup, second show, yup, more ads, yup, dynamic ads from an ad network. You can say yes to all these things and you can sugar high the current profits, or you can try to figure out how to store up as much potential energy as you can. I think once you  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.

Michael: Right. How do we get on that? From founder control. That was founder control. That's number five. Number six.

David: Okay. This is a non-obvious one.

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

David: Sometimes we hire a production crew.

Ben: Last year we added a fourth ad slot. We always had three. Last year we looked at ourselves and we said, there are four hour podcast episodes. We're currently at 2%, 3% ad load. Everyone else is at 15%. God forbid, we go to four point a half percent of time. We indulge occasionally.

Ben: 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.

David: Which is exactly what they do for developers. Sentry helps teams debug everything from errors to latency issues and fix them before users get mad.

Ben: 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. 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 offsite, just a developer seeing something broken in the world and fixing it.

David: 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, slowly started compounding, and making the product better every week for 17-ish years. That's why more than 150,000 organizations trust them today.

Ben: The range of those companies is incredible. Disney Plus, 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 2:00 AM. Sentry has just become a key part of how modern software gets built.

David: The 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. 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. Because Seer has that full context, it can review a poll request and spot bugs before they ever ship. This is not noisy code review. This is real error prediction.

Ben: As Acquired celebrates our own decade of learning and improvement, it is fitting to 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.

David: 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/acquired.com. Just tell them that Ben and David sent you.

David: Sometimes we make episodes that either we think are going to be great, or we're just really interested in them. Numbers wise, they don't perform. The great thing about podcasting is it's always within like a 20%-30% range. It's not like it's a total flop.

Michael: 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.

David: The lesson here is going to be Nintendo. We thought Nintendo was going to be big. It's such an incredible history, incredible story, incredible company, and of one company, durable over a hundred years plus, has been through so many iterations. People love it, 20% underperformed our benchmark at the time.

Ben: We did a part two to really dig ourselves deeper. You know what people don't love is part twos.

David: They really don't love part twos where they didn't love part one.

Michael: Let me tell joke again. It's so funny like getting better the second time.

David: Exactly.

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

David: Yeah, but we did it.

Michael: You liked it?

David. We had a great time.

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

David: It started as a Yakuza company. It's crazy.

Michael: How did it start?

David: It was playing cards. Gambling was illegal in Japan after the major restoration. They made Hanafuda cards, which are cards in Japan, and the Yakuza was the main customer.

Ben: They got into toys, and then they way later found their way into video games.

Michael: The Japanese mafia was the main customer.

David: Yes.

Michael: That's funny.

David: Yeah. This is 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 a couple generations back technology. How can we take withered technology and think outside the box with it? Here's the best example of this. The Game Boy was the original example of this. The Game Boy was basically a calculator, but it didn't have a colored screen, had two buttons, but it was this incredible success.

Ben: You can see the passion of why we did this episode.

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

David: Yeah, exactly. We going to do part three. Yeah. But here's the lesson, another episode that was totally like this, Indian Premier League cricket. Underperformed, incredible story.

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

David: Yeah, this is the lesson.

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

Ben: You started with IPL?

David: You are making the point here.

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

Michael: I'm a partial owner of the Rajasthan Royals.

David: You are not.

Ben: I have a Royals jersey.

David: You and Manoj is the majority owner.

Michael: Yes, that's right. He's the majority owner. It's a very tiny slice. I haven't been over, I still can't explain the game.

David: Wait. How did you become a minority owner?

Michael: Two friends, I leave their names out of it, but you know who they both were. They called and said, there's this guy who's got this cricket team, he wants to make it the moneyball of...

David: They're the Oakland days of the IPL.

Michael: Yeah, exactly. He'd be open to having you invest. They were both good filters. If they were interested, it was already smart. I also thought it was small enough that if it went wrong, it would be an amazing story, even if it goes right.

David: Have you met Lalit Modi?

Michael: No. I haven't met anybody but Manoj.

David: Oh boy. Have we got a subject for you?

Michael: I don't want to redo your podcast. It's just like, there may be some way down. That was the other thing I was thinking. This could work out a number of ways. Anyway, that was the first one I listened to. It's an unbelievable story.

David: It's unbelievable.

Michael: Everybody in the world should listen to this thing.

David: It underperformed.

Michael: Yet it underperformed.

David: Okay, but here's the lesson. Both Nintendo and IPL, they were the first listening experiences for some incredibly influential people who have changed the direction of Acquired.

Ben: I think we can share the whole story.

David: Yeah.

Ben: Nintendo was...

David: 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, and then they all listened.

Ben: We built a relationship with them. When JP Morgan called us and said...

David: We've got Chase Center.

Ben: Yeah. They were like, well, what would you do? We asked this person like, hey, do you think Mark would want to do it?

David: He said, I don't know, but I'm going to ask him right now.

Ben: Right.

David: Without the Nintendo episode, Mark Zuckerberg doesn't go to the Chase Center.

Ben: Know 6000 person.

David: We have some similar stories with IPL. The point is that doing episodes that one or both of us is just insanely passionate about...

Michael: Where'd you learn this from?

Ben: LVMH.

David: From doing these episodes and performing.

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

David: LVMH was a banger. It performed great.

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

Michael: Go for it.

David: No, but I'm making a different point, which is that if one of us feels passionate about something, even if the episode is a relative dud, it's still worth doing because invariably, somebody latches onto that passion.

Michael: This is exactly right. If you don't feel anything, no chance, nobody's going to feel anything. But if you feel a lot, someone's going to feel something.

David: Someone's going to feel something.

Ben: Yes.

Michael: That's right, so trust that feeling.

David: Yeah.

Ben: Yeah. It's about the magnitude of the way a small number of people feel about episodes often more than the spread. I think that's right.

David: Yeah. Now sometimes we're passionate about something and it becomes a banger. That's the ideal. RenTech, Renaissance Technologies, that was amazing. That was an incredible episode.

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

David: It's so great.

Michael: It's one of the two great mysteries on Wall Street. How they do what they do, and who is Satoshi?

David: Yeah, those are the two. Yeah.

Michael: Those are the two.

Ben: I 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.

Michael: But that nobody else found it too, so that it all went away because they hid it at the same time as they found it.

Ben: Yes.

Michael: That's mind blowing if true that that could still be going on. You can see why it worked through the 90s. It's really hard with Jane Street, Citadel, and all these other places looking for every bit of signal in the marketplace. It is an amazing story. That is of the books I didn't write that I wished I'd written.

David: Did you consider doing that?

Michael: Jim Simon's son had a kid in my oldest child's class in high school. I said, look, I can't do it unless you want me to do it. There's no point. He said, dad, no, no, no. This whole business of doing it by radar completely from the outside, you know you're going to get so many things wrong and embarrass yourself that you need to be so inside so that the person you're writing by doesn't read and say like, that's just completely wrong. I could have done that book, but why? 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 sequence. I would need him, but that's on my, oh, that's too bad, that one got away.

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

Michael: It would've been a fabulous book. All right, number seven.

Ben: There's a different twist on the NFL, but we definitely learned it from the NFL, create spectacle.

Michael: All right.

David: A live event strategy.

Ben: 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. Ours, we've thrown that out the window and said...

Michael: You don't do enough of them.

Ben: 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, it has to be the water cool conversation.

David: That has to be Monday Night Football.

Ben: Once a year, we have to have a Super Bowl. Doing the Chase Center show and then the Radio City show, very small amount of people in the audience.

Michael: Six thousand?

Ben: Yeah, great. It's the world's largest indoor theater. It's 6000 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 very small, but the amount of heat and light created from the idea that you did that show right is more impactful to building the franchise of Acquired than any given episode, maybe even then a whole season of episodes.

Michael: What's the first spectacle you created?

David: Chase Center was the first spec.

Michael: How long ago was that?

Ben: Eighteen months?

David: That was started September 24th?

Michael: So you've just started doing this?

Ben: Yeah.

David: We did a show in Climate Pledge Arena in Seattle, but it was one section.

Ben: By was able to say we did an arena show, even though it was only a thousand, we talked about it on air as the Acquired Arena Show, and that had some finesse.

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

Michael: I'm going to ask a couple of rude questions. Your Radio City musical event was with Jamie Dimon, 6000 people?

Ben: Yup, and Meredith Kopit Levien, New York Times CEO, and Barry Diller.

Michael: Okay, so the three. How many people are there for them and how many people are there for you?

Ben: We did not announce the guests.

David: They were all there for Acquired.

Ben: Mostly because I wanted to give this answer when people asks.

David: We knew Michael at the end of the year was going to ask this question.

Michael: Okay. All they knew was it was going to be Acquired with a guest. Was it sold out before you announced the guests?

Ben: We didn't announced the guests.

Michael: So the guests is a surprise?

Ben: Yeah.

Michael: Oh.

Ben: It hurt in my sou 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?

Michael: Yeah, now you know. Your form of spectacle is these big public shows. Any other forms of spectacle on the horizon?

David: We are doing the actual Super Bowl. We basically manifested this.

Michael: Are you the halftime show?

David: I wish.

Ben: Yeah, we're collabing with that.

Michael: I would love the reaction of the NFL fan base. We're told that it's not going to be music this year. It's just going to be an Acquired episode.

David: Yes.

Michael: Yes, with Peyton and Eli Manning.

Ben: That would actually feel so good. Manningcast, it's the only way I watch Monday Night Football now.

Michael: That's good.

Ben: We're doing the innovation summit, so the NFL is launching...

David: Launching an innovation summit the Friday before the Super Bowl because the Super Bowl's here in San Francisco this year. They're launching an innovation summit Friday before the Super Bowl with all the big partners in the NFL with Roger Goodell. It'll be in the city in San Francisco and we're going to MC it.

Michael: Okay. Do you know who your guests are going to be?

Ben: We do.

David: We do. They haven't been announced yet, but it will be on par with our event.

Michael: Where are you doing this?

David: SFMOMA.

Michael: Okay.

David: It's not going to be open to the public. It will be streamed. It will be a different style of event. It's not ticketed. It's for the NFL's partners. It's going to be incredible.

Michael: All right. I think we're at number nine. We have two more.

David: 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 won't speak for you on the Nike episode. It came out flat.

Ben: We read nine books between us to prepare.

David: I think it was 11, so it was just too much for all sorts of reasons. We were burnt out. We are not happy. We decided to do Costco. I got to take a different approach here. I got to play loose on this one. I can't play tight to use the sports analogy. I said, let's find the one book, the right book. It helped that there was only really one book. Read that book, Sol Price's Autobiography. Read that. Use that as the main source. You got maybe one of the best primary source interviews ever. The CFO of Costco gave you a one-on-one presentation.

Ben: Just said, come over to the office, I'll sit you down, and give you the entire whiteboard and PowerPoint on how the Costco business model works. We spent the whole afternoon together, and it was unbelievable.

David: Between those two things, the book and that time that you spent with Richard, we didn't need to do more than that.

Michael: When you went into it, did you know anything?

Ben: Yes.

Michael: What did you know?

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

Ben: Correct, but I knew a lot going into 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. Investors love to write about the stock. You can read that stuff.

David: It was Charlie Monger's favorite company. There's lots of stuff out there.

Ben: This was actually one of the last pieces of research because I wanted to be really prepped.

Michael: You were talking about when you're working on an episode, you're going for a run, and you make some connection or some insight occurs to you. You stop and you write it down. Give me a few of the ones about Costco.

Ben: Low skew count drives everything.

Michael: All right.

David: That's the starting point.

Ben: Do you want the Charlie Munger talk?

Michael: The number of things they have on the shelf. Unlike Walmart, it has billions of things on the shelf. In Costco, you get what you get. You don't pitch a fit. Whatever's there is there.

Ben: Four thousand things.

Michael: Yup.

David: Walmart is a hundred to 200,000.

Ben: Here's like all the knock on effects of that. If you only sell 4000 things, it doesn't take a lot of volume before very quickly, you are a meaningful seller to every single one of those products, those vendors. Suddenly you become really important to that vendor. Your merchandisers, since you only have 4000...

Michael: Your incentives start to inline.

Ben: Yes. The merchandisers have a very small portfolio. You're not dealing with a hundred vendors.

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

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

Michael: So there's more flow?

David: In some cases,  they're getting multiple terms of cash flow before they pay the first time.

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

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

Ben: There's no working capital in this business other than building more Costcos.

Michael: Right. Low skew count for Costco is like low episode volume for you.

David: Yes.

Ben: Yes, a hundred percent. Yes, and low number of partners so we can put all of our energy behind very few.

Michael: It's not really natural for a business to sell less of things. Sell fewer things when you could sell more things. It is the odd experience when you walk into Costco is the absence of choice. In fact, consumers like not having too much choice. 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. The people just be paralyzed by the choice. You feel like Costco. Someone has made all these decisions for me, and they're good decisions.

Ben: Yes. It's curated. 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. It's like a very high leveraged strategy.

Michael: You didn't know any about any of this when you did the episode?

Ben: No.

David: The only reason we did the episode was it was Charlie Munger's favorite company.

Michael: Give me another lesson. How are we doing on time?

David: Is this the last?

Ben: This is Acquired, Michael.

Michael: Okay. I know.

David: You said you didn't have any plans tonight.

Ben: We were sitting down with Morris Chang and he was talking about TSMC. He told us that one of the ways that they aired was trying to exit the integrated circuit market or diversify from that market and go into solar memories, and there was one other thing too. None of those were as good of a business. The key insight was you are already in the best business. Integrated circuits are the future and will be for a long time, and you're already the best at them, so stop trying to do other things and just do that really well. Probably to a fault and with a bias, we believe that about Acquired every time we look at anything else.

Michael: We are doing the thing we should be doing. Don't go do something that we're less good at or going to be less fun.

David: We should always just make another episode.

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

David: I think there's a top level misconception about what the venture capital industry is. 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.

Ben: Especially at the growth stage. Early stage, there's more picking involved.

David: But that picking is a super art. Early stage picking is not understanding a company. It's a whole different thing.

Ben: 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.

David: We do the work in choosing our sponsors. Okay, great. Box checked. Our sponsors are non-obvious companies that all growth stage investors don't want to get into.

Michael: 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?

Ben: 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. You're mostly making stuff up. You're dreaming what this market could look like when it materializes, but 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 a very imprecise. You're acting like you know the third or fourth decimal place, when in reality you barely know the first one.

Michael: My question was, are these two things similar, and you're saying basically no.

David: No, they're not.

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

David: I think it prepared us to create the business that we created for sure.

Michael: What have you learned about telling a story that you didn't know how to do when you started?

David: Reading your books and being a liberal arts major at Princeton, for me.

Ben: 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. I was like, it's, 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.

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

David: I think we think about narrative structure, acts, and what a story is. When we're reading books sometimes, a lot of books, especially corporate history books are, this happened, then this happened, then this happened, and then this happened. That's fine for cataloging history. That is not a story. At a certain point we realized you can't do, and this happened.

Michael: Right. It's the why of it.

David: It's the story flow.

Michael: The the queen died and then the king died. It's not a story of the queen died and then the king died of heartbreak is.

David: Yeah.

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

David: Yeah, as if you were an early stage VC.

Michael: 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 attention spans supposedly getting shorter, blah, blah, blah. It does work. It clearly works. It works as a business, but also works as just a creative thing. You must think about this all the time, the why of it.

Ben: Yeah. There's a bunch of different answers to this. One giant tailwind for us is a year after we started the podcast, AirPods came out. It became societally acceptable to just listen to stuff while you're moving about the world.

Michael: While you're talking to your mother.

Ben: Yes. Our brains all got two input channels. We used to only focus on one thing at a time. Everyone now focuses on two things at a time. You can't do the same thing, like you can't read and listen at the same time, but you can drive and listen. You can run and listen. You can do the dishes and listen. We have this massive tailwind of people have a large number of minutes throughout the day where they're doing stuff that they can also listen. That's true for all podcasts.

David: There are a couple things that are true for all podcasts, one is AirPods, basically all the platform stuff that happened over the last 10 years. We started at the right time to advance. 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.

Ben: Apple Podcasts not becoming YouTube was actually great for us, that it's a place when you get a listener, you really get a listener. It's this durable, incredibly valuable place to accumulate listeners. Spotify is too.

David: YouTube in its own way too.

Michael: There are zillions of podcasts and not many are doing what you're doing.

Ben: Corporate America becomes ever more important.

David: Yeah. That's huge.

Michael: Yeah. That's completely right. What is going on in the economy is mysterious to people. A lot of your episodes have been about these companies, about Tesla, NVIDIA, Microsoft, and Google. People don't really get them explained to them. That's a big part of it.

Ben: If I had pitched you on Acquired in 2015, there's no way I would've said Acquired helps you understand why the world is arranged the way it is. Now I think that is absolutely the promise that we come through on.

Michael: Right.

David: I think the biggest reason Acquired works is how you started off the conversation. It's our partnership. If just one of us were making Acquired, it would be a shadow of itself. The magic exists between us. There's a million times over the last 10 years, where if we hadn't just been burning cigarettes on our arms aligned, it wasn't even a conversation. Had our partnership been slightly different, it would've fractured. That's why we're still here.

Michael: I want to conclude this conversation because we don't want to go three hours. I want do it by doing the Seven Powers and apply it.

David: Great. It's one of our most requested Seven Powers for Acquired.

Michael: Apply it to Acquire, and then I can learn what these Seven Powers are.

Ben: All right. 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. If you were going to try to compete with Acquired today, you couldn't do all the stuff that we do.

Michael: But you don't start with a million listeners.

Ben: Right.

David: Or the access.

Ben: You could do it for one, 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? It would feel like that. There was this path dependent thing of we always had the right product for the current amount of value that it created in the world, which you can use, a listener base, as a proxy for. Now, because the listener base is large, we can afford to do things other people can't, which is the definition of scale economies.

David: I 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.

Ben: Yeah.

David: Okay. Scale economies, yes.

Ben: Counter positioning, everywhere.

David: Counter positioning, everywhere.

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

David: Okay. Counter positioning is when you do something that your competitors just cannot respond to.

Michael: Give me an example outside of the podcasting world.

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

Ben: 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 areas sunk costs in this diversified fleet.

David: Right. We're counter positioning, we're not volume driven. Most podcasts sell their ads on a CPM basis, and they are incentivized to make as many episodes as possible with as many ad slots as possible. Our business is entirely structurally different.

Michael: Yes, to your benefit.

Ben: 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.

Michael: Right, that's why you did four episodes as opposed to six, eight, or one.

David: Yup.

Ben: Right.

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

Ben: This is David's dream.

David: No. That's my nightmare. If we end up at one episode a year or one episode a season, it is time to hang it up.

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

David: Countering positioning, yeah, all over the place.

Michael: Counter positioning is in the number of shows you do, so the kind of shows you do.

David: That's how it expresses itself. Because our business is structurally different than most others, others can't do what we're doing.

Michael: Right.

David: Network economies, not really, but there's some water cooler effect of people talk about Acquired episodes, especially within companies. We release an episode, it becomes a topic of discussion. This is a weak power, but it exists to a small extent.

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

David: No switching costs. Switching cost is a power but super easy.

Michael: Explain switching costs.

David: Salesforce.

Ben: Yes. Anything with an implementation.

David: You've got your CRM on a Salesforce, and you switch to another CRM is just a huge amount of cost associated with that.

Ben: 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. There's none of that. Sponsors can switch.

David: Another podcast is one click away.

Ben: Listeners can switch.

Michael: There's no cost of switching out of Acquired into whatever might come along or to replace Acquired.

Ben: No.

David: No cost. Yup, we don't have that.

Ben: Can I just also say, this is so weird and uncomfortable for me. 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.

Michael: 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?

David: Branding.

Ben: Yes.

Michael: Yes.

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

Michael: Right, and that's just growing.

David: Cornered resource.

Ben: The business owns us.

Michael: Explain cornered resource. Give me an example.

David: Ben Gilbert and David Rosenthal.

Ben: Intellectual property.

David: Yeah, patents.

Ben: Disney owns the likeness of Mickey Mouse. You don't get to build a business that benefits from the economic value driven by Mickey Mouse.

Michael: 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 enthused over this stuff. It could be that you've just actually found a thing that everybody wants, and that if two other people came in, they do it even better.

Ben: It's early, they're small, but things that resemble Acquired a lot. The Step Change podcast by our friend, Ben Eidelson 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.

Michael: Right, yup. That is if there is a cornered resource or your editor, whose name you won't divulge. Suggesting that perhaps.

David: Yes. It could be a cornered resource. The last one is process power.

Ben: Which almost always businesses don't have.

David: We have in spades. It's the same thing you have.

Ben: We failed to articulate how an episode comes together. We tried on this conversation three times.

David: I don't think we could recreate it.

Ben: We didn't really explain to you exactly mechanically how an episode comes together.

Michael: Except I can understand the iterations. You vomit out eight hours. Your editor decides what's the best five, it comes back to you, and you cut and cut.

Ben: What do I show up with on recording day?

Michael: I see. We should maybe do this a little bit here, process. Can I guess because I actually don't know what you show up with the recording?

Ben: Yes.

Michael: I assume you each take a part of the story, either the history or current analysis of the business, and you're responsible for that. You go learn about it. There's got to be some improvisation here so that you don't tell each other exactly what you've learned.

David: More or less. I'm responsible for the story. We carve out one or multiple chunks that Ben will take, and then Ben is responsible for the analysis.

Michael: Right. You probably have some lines you want to say that you know you want to say, but you want to say them naturally. You 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. 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 to 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 the conversation before they happen, and nobody does it perfectly. There's this tension between the script and what's happening organically between the two of you.

David: The truth is it's both.

Michael: It's both. Right.

David: I write a script. I write 10,000-20,000 words.

Michael: You do?

David: In sentence form, word for word.

Michael: Do you read it?

David: No. I read it. It doesn't come out of my mouth. It comes out as a natural conversation.

Michael: You write it, but then you put it to one side.

David: I have three screens in front of me.

Ben: You're reading it. I'm reading it, yeah. But Ben interjects, and it doesn't come out exactly as I wrote it.

Michael: It doesn't sound like a script. That's good.

David: Yes, but part of my process is I need to write a script.

Michael: To know what you think?

David: Yeah.

Michael: Yeah, it makes complete sense.

David: Also to have it as a crutch there when we're performing of...

Ben: We can't keep all this in our heads.

David: Yeah.

Michael: The real crutch you have is you can do it for nine hours and it's only going to be four. You don't have to be perfect, you can screw it up every which way.

Ben: You have a real time feedback agent. I'm like, this is dragging. I don't care about any of this free history, like cut, cut, cut, cut.

David: Yeah.

Michael: Yet all the audience hears is, that's amazing, oh, that's so interesting. It's incredible. I never thought of it that way. You're the best, I love you. We don't see any of the other stuff?

David: No. It's in there. It's cut.

Michael: It's in there somewhere. Okay. All right. Take me further into the process. You have a script and you don't, Ben, you don't have a script.

Ben: I have a giant text edit document with just a whole bunch of mechanical points I want to get across. 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 or explaining how something works. I have written out bullet point by bullet point, by bullet point, and then the low skew count means.

David: We've usually identified where that's going to enter in.

Ben: Yeah.

Michael: This thing works because it doesn't sound like you're reading anything.

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

Michael: Okay. The reality is that it's a hybrid.

Ben: There's all sorts of stuff in there that we are looking at about six hours into recording, where we're like, that's not going to make it in and that's okay. That turned out it was not a salient point.

David: The point of process power, we can describe all this. I'm sure you have described in painstaking detail how you do it, but that doesn't mean anybody else can write a Michael Lewis book.

Michael: Your point is you have the process power.

David: The point of process power is you can tell them. It's uncopyable.

Michael: I see. That's interesting. You have a process that can't be replicated even if you explain it to something.

David: Even if explaining. Excruciating detail, exactly what it is.

Michael: What pops to my mind is that the pixie dusk in a process is trust. It's something that you get when you trust a process. Daryl Morey goes to Sam Hinkie, but the ownership of the 76ers, they didn't trust the process. They wanted the process. They wanted to replicate what they've been doing in Houston, but they didn't trust it.

David: Where does trust show up for you?

Michael: I was just about to say that I think I trust my process. It's self-trust, but that's a form of trust. I know if I just told it to someone and they went and tried to do it, they'd wig out. I got to record the things, I got to do this. In fact, doing it my way would be a weird handicap for them.

David: 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.

Michael: Right, but there's something emotional going on there, the difficulty in replicating it.

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

David: This is the MP3 codec.

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

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

Ben: And you're not doing it intentionally. Language is a lossy compression of thought.

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

Ben: 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.

Michael: 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 that came out of me, that they're going to take it and reassemble it in a different way. 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. 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. 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.

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

David: This is so funny. This is always one of our key goals with every episode. No matter what you think about the company, you're going to enjoy this episode, and you're going to learn something from it. You may come away thinking this company is terrible. You may come away thinking this company is righteous.

Ben: Sometimes we don't nail it, sometimes it comes across.

David: Yeah. We don't always nail it, but that's the goal.

Michael: Yeah. I think it's the creatively fun goal because that's the challenge rather than just imposing your editorial view on the world. Present it in as elegant way as possible and let the reader make what they make of it. Once you realize that's the thing to do, it's so much more fun than trying to muscle people around. All of a sudden you're dancing with a reader instead of hurling them all over the dance floor.

Ben: It also requires you to learn something new while you're making the creative work. I was so afraid when we were making Trader Joe's that we were going to remake the Costco episode, and I was like, this episode's going to suck because we're not going to have the original enthusiasm.

David: It's just like Costco but not as good. Yeah.

Ben: Or it's Costco, but it's for furniture like IKEA.

David: Yeah. In the beginning we're like, oh, this is totally different than Costco.

Ben: You have to have new insights that delight you as you're researching it so that you can make something great. 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, so we have nothing new to deliver to listeners.

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

Ben: Okay, listeners, now is a great time to thank one of our very favorite partners, Shopify. David, we recorded this episode with Michael the week after Thanksgiving. 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 for merchants around the world.

David: Yeah. At the very same time as we were recording, Toby was sharing the final stats. 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.

Ben: 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.

David: Just wild. Part of that growth was that for the first time this year, a few merchants were able to sell on Black Friday directly inside ChatGPT, thanks to Shopify's partnership with OpenAI. No links or redirects, consumers could ask ChatGPT about Black Friday deals for products they're interested in. Shopify loaded actual checkout flows directly within their ChatGPT conversations.

Ben: This is super cool. Glossier, Away, Nike, Strength, Mejuri, Spanx, and SKIMS were all live on ChatGPT on Black Friday with Shopify.

David: 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. It's not just startups, it's General Motors, it's Estee Lauder, it's Mattel, and on and on.

Ben: Whether you are just starting out or you're operating at global scale, Shopify helps you sell anywhere your customers are. Get started at shopify.com/acquired, and just tell them that Ben and David sent you.

Michael: All right. How are we going to end this? This is your show.

Ben: Carve-outs?

David: Carve-outs, yeah.

Michael: Why do you call them carve-outs? What does this even mean?

David: Okay. You'll appreciate this. It was my wife's idea. Back towards the beginning of the show, she used to listen to Slates, I think it was the Culture Gab Fest. They do cocktail chatter at the end of episodes. It's just like, hey, something unrelated. She was like, you guys should do that, that's fun.

Michael: I understand the idea of it. Why is it called a carve-out?

David: This was in a phase of Acquired where we wanted to brand everything. It's around acquisitions.

Michael: Okay, there we go.

David: 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 carve-out. In an M&A transaction, a carve out is this piece of the purchase price goes to this set of shareholders for special reason, their employees or whatever.

Ben: These are the things we're carving out as things that delight us, that have nothing to do with the rest of the episode.

David: Yes.

Michael: Right, but the name is just a residue of your former incarnation.

David: Yeah. We used to have a thing called the LP show because of. We had all these little branding cards.

Ben: Playbook is a remnant of the older version.

Michael: Right, yeah. What are carve-outs? What are the specific things?

Ben: We have some categories that we're going to throw out, then you got to tell us, and we'll tell you things this year that we loved in this category, typically pieces of media, products, or something like that.

Michael: All right.

David: We usually start with books. That's funny, I mean you here.

Ben: So many of your books have been our carve-outs over the years.

Michael: Really?

Ben: Absolutely.

David: Yeah.

Michael: Books that I've read in the last year?

David: Yeah, books this year.

Michael: 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. When I'm working, often all I'm reading is for work. I can think of a couple. One at the beginning of the year, one I just put down. First one I read because my son was in high school at the time had read it, and he was enthusing about this 800-page novel, and that just didn't happen very often. It's been out a long time, it's called The Name of the Wind by Patrick Rothfuss. It's a fantasy trilogy. He never got to the third book, and I don't know what's happened to him. He's blocked.

David: It's like George R. R. Martin situation.

Michael: I'm hoping he's an Acquired listener. I would tell him, I can come help get you unblocked. I know how to unblock writers. I have a secret power here.

David: Do you have a secret life as a fiction ghost writer?

Michael: No, I do not, but I do have a secret life as a coach to writers and other writers. This thing was so compelling. I couldn't believe how good it was. I couldn't believe how good it was that he just got installed. The Name of The Wind, Patrick Rothfuss, I read at the beginning of the year, very beginning of the year, at the end of the thing I just finished. It's not like it's a great book. It's so short. It's something that is speaking to our moment. It's basically how we govern ourselves.

I always mispronounce his name. It's Vannevar Bush who essentially created the American Science Project. It's basic. I think he started it as a memo to FDR, then FDR died, 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 it with biology, we can do it with the other hard sciences. He was describing not a top down approach, not like the government is going to just decide. We're going to fund it and let the scientists figure out what they need to work on. That was the big insight. Those are the two books. How about you?

Ben: Similar to you, it's been a research heavy year.

David: Yeah. We've gotten kids.

Ben: One great book I read for research was Last Man Standing to prep for the Jamie Dimon interview.

David: That was really good. Yeah.

Ben: Total page turner.

Michael: Is it about him?

Ben: Yeah, it's about the ascendancy of his project. Two is I just love reading Morgan Housel and his new book, The Art of Spending Money, is really fun. It's where I get most of my latent ideas of, hey, dummy money's not going to make you any happier.

Michael: He's a great explainer.

Ben: He's so good.

David: My two are, the first one is a reach back to December of last year with the Mars episode, Emperors of Chocolate by Joel Glenn Brenner. Have you ever read that?

Michael: No.

David: It's so good.

Michael: Once I had a chocolate related story, I flipped through it, and I didn't ever have time to read the whole thing. But yes, I know the book.

David: It's the dual history of Hershey and Mars together. It's I believe the only big book she ever wrote. It's just a masterpiece. It's so good. The other one, Morris Chang's autobiography 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 so good.

Michael: How did you do that? Who translated for you?

Ben: This woman, Karina Bow, did a translation for us.

Michael: Just for you?

Ben: Yeah.

David: She was working on it as just a pep project anyway and accelerated it for us. Okay, books. Podcasts, number two.

Michael: This is a layup. Your podcast is the big addition to my rotation this year. I started in July and I've listened to 10 of them or something.

David: Thank you. What is in your rotation besides Acquired? Against the rules, of course.

Michael: I don't listen to my own thing. I'll listen to Malcolm Gladwell's Revisionist History. I'll listen to the Smartless guys because I like them.

Ben: Your interview on that was great too.

Michael: It was fun to do it. I listen to The Daily some. Every now and then, I'll dip into a right wing thing just to hear it.

David: Any of your recommendations?

Michael: No, not really. Random stuff. Every now and then, Bill Simmons will have something I want to hear. I love Bill Simmons. I just don't have time.

David: Yeah, he's prolific.

Michael: You have eaten my podcast hours. You've eaten a lot of my podcast hours.

Ben: Apologies to Bill.

Michael: No. I can actually tell you where I was, like treadmill in Denmark when I listened to the Indian cricket thing.

Ben: Isn't that the most fun thing about listening?

David: You remember a place.

Michael: You do remember a place. They're very place specific. No, the Acquired podcast is the new thing. How about you all?

Ben: I listened to an episode of Invest Like the Best about a year ago, which was a really, really long interview with Graham Duncan.

David: Yeah, that was really good.  Didn't Patrick do that as a private podcast?

Ben: Yes, and then he did a shorter version. I didn't listen to the shorter version, I only listened to the super long one. One of my biggest takeaways from that is about having the correct grip that you don't want to have too tight of a grip on your work, but you don't want to have too loose of a grip. You need to play with an appropriate grip for whatever the task is that you're trying to do. If you're gripping too tight, you're going to pull it, or it's going to feel too mechanical, too unnatural. If it's too loose, you're not minding the shop enough. You're going to get your head back in the game.

Michael: I've been amazed in my career on just how useful sports analogies are to writing. These physical memories translate pretty neatly to what the mind is doing too. When I write a book, I'm on a picture's mound. It takes me back to pitching in high school. I'm thinking of the reader as the hitter. Getting meaning across to a reader is tricky in the way that fooling a hitter is tricky. I can feel that connection. These physical analogies are really useful, even if there's sometimes a stretch.

David: 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 meeting. Those guys are great.

Michael: They are great.

David: I think we told them about the episode. I tell them all them like, you guys got some magic here. You got to keep doing this.

Michael: You keep telling everybody that they run their podcast business in the wrong way, and you're right. You depress everybody else that you figured out how to do it, nobody else has.

David: They've got magic. They are taking it seriously and keeping doing it. They have the really rare dynamic of just the three of them together. Regardless if they have a guest, don't have a guest, they're equally good.

Michael: They're very different personalities and that helps.

Ben: Something inside me feels so crunchy. I don't think we've figured out a better way to do it. I don't think we figured out the way to do it, and everybody else should just snap 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. It's that we have set up a particular system that works for us.

Michael: But it is like you're right and I'm wrong, that there really is a way of running a business that we could have done with against the rules. I'm going to go think about it. Anyway, what's our next carve-out?

David: Okay. Next category is videos, movies, TV shows.

Michael: I just saw a movie two nights ago. We went to the theater, whole family went to the theater. Jay Kelly, it's new, Noah Baumbach. It's a new movie. It's George Clooney. I guess you'd say he's playing George Clooney with a midlife crisis. He's playing a famous actor who's trying to sort out the meaning of his life. It's just magical.

It's a beautiful movie and a really ambitious movie. I've been thinking about it since I saw it, like what exactly it was getting across. What it's getting across I think, being famous like a movie star is, puts you at a certain distance to the world around you, and that distance has a price. It was taking the measure of that price. What makes that more general is that I think everybody has to make some decisions about the distance that they keep the world at. This was a way of having that conversation and entertaining what that distance should be.

Ben: We got to see it. I have so many.

David: You're a TV guy.

Ben: I love movies and I love television. I have no video games to recommend, but I have lots of these. The one that's just head and shoulder above everything else and is the greatest performance art I've ever seen in my entire life is The Rehearsal season two.

Michael: All right.

Ben: Nathan Fielder and Eric Notarnicola who we actually got to work with, Eric and A24 films shot the  concert film part of our Radio City show. Collaborating with Eric was unbelievable. Before any of that, I saw The Rehearsal season two and my jaw is just on the floor.

David: You were talking about this for months.

Ben: Ambition. Nathan's a complete psycho, and it's the highest commitment to the bed I've ever seen in any form of media. I don't want to spoil anything, but have you seen it?

Michael: I have not seen it. I will now go see it.

Ben: I was shaking.

Michael: Okay.

David: I'm a lighter video guy. I'm a YouTube guy mostly. My YouTube for the year is one I've recommended before a past collab. Doug DeMuro is still killing it. I think Doug is probably my favorite YouTuber.

Michael: What does he do?

David: He's the biggest car reviewer. I'm not really that into cars, but he's just delightful.

Michael: The car guys did this first. They got everybody interested in cars who weren't interested in cars.

David: Yeah. Doug does these delightful reviews. I just love watching mid-range SUV reviews that I'm never getting by. I love him.

Ben: Listeners will like this. David falls asleep to this. You watch Doug and other things too, but Doug is your...

David: Yeah. He'll release a new review and I'll watch it and sleep over five minutes.

Michael: Is this really what you watch before you go to bed?

David: Totally.

Michael: How does it affect your dreams?

David: That's a good question.

Michael: Do you dream? Do you have Lightning McQueen dreams?

David: No. The beauty of Doug, his key insight was all the other car YouTubers are making videos for car enthusiasts. He makes videos for people who need to buy a family SUV. He also reviews supercars, et cetera, but most of his content is about...

Michael: No, seriously, I thought you would spend half your dreams in automobile.

David: No.

Ben: I want to list 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, it's so funny. F1 the movie I thought was very entertaining. Beautiful production quality.

David: Expensify paid rumored $40 million for the sponsorship of the fake team in the movie. That's so great.

Ben: That's right. Andor. Some of the best thing, if not the best thing in the modern Star Wars franchise available on Disney Plus. The show Fallout, it's so good. Season two is about to come back. I think that's Jonah Nolan and Lisa Joy again, artists. I was saying about Nathan Fielder. Severance was amazing. Silo has a new season coming out that I can't wait.

David: New season, nice. The books are really good. I like the books.

Ben: Yes. Those are my TV recommendations.

David: Nice. Next category, which might just be me, is video games. Just me. Yeah. 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 the best. 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 Steamdeck.

We were on vacation in Santa Barbara and she was like, Dad, what are you doing? That was it. I wasn't trying. She came up to me as I'm playing this indie RPG. She started playing it. I never would've guessed that this was my daughter's entry into video games. Two, Kirby and the Forgotten Land on the Switch is perfect. We can play it together. It's co-op. It's great for me, it's great for her. It's awesome.

Michael: Your daughter's in age where she'll do anything you want to do because she wants to be with you?

David: No. You don't know my daughter. She is extremely independent.

Ben: It's anomalous and awesome.

David: This is a rare occurrence.

Michael: Okay, all right.

David: She runs the house. This is so much joy for me.

Michael: Great.

Ben: 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?

Michael: I found a new pen. I got it here. Let's see what it is. I needed a pen that had just the right fine point. It's generous with the ink, but it doesn't explode on an airplane.

Ben: And doesn't smear, I imagine.

Michael: It doesn't smear. I'm looking at it now. The Azteca roller ball pin 0.7 fine. I just ordered a whole case of them because finally I got a pen I just love.

Ben: Listeners, if you want to write like Michael Lewis, we have the answer.

Michael: This is an example of explaining someone's process.

Ben: Yes.

Michael: That pen is a thing.

David: What else, other products this year?

Ben: The Fuji Film X100VI, I previously specifically did not carve it out and carved out a different camera. I've started carrying the Fuji film and now love it. It's amazing. I've got a 2-year-old, and it's just so nice to have more than just smartphone pictures of family. It's awesome.

David: Nice.

Michael: I'm just looking at what I have on.

David: Ex officio.

Michael: We're not going to talk about those. That wasn't this year, not until they sponsor me. Anyway, that wasn't this year, but this year actually, on my feet. These socks, I ran out of white socks in London. I went over to, is it Uniqlo?

David: Yeah.

Michael: I was just looking for athletic socks, and they have these other things instead. They have turned out to be so much better than the athletic socks. They come in different colors like a light gray. You can wear them as dress socks, you can wear them as athletic socks. I don't know about you. Whenever I find something I love, what's about to happen is it's about to be discontinued.

Ben: So you need to buy all of them?

Michael: You need to buy all of them.

Ben: Yes.

Michael: Right. I didn't get quite all of them. I got them in London. I was going to have to fly back with them. I bought basically what was in the store at the moment and these shoes.

David: Those Ons?

Michael: These are Ons. Oddly, I spent a couple days with Roger Federer this summer, and I just discovered them. We had the On conversation. It made me acceptable to him. These Ons, I was a Hoka guy.

David: Also great.

Michael: Also great. Nike basically blew it, right?

Ben: A hundred percent.

Michael: They got rid of their stores. They thought it's all going to be online, and On and Hoka roll in. I'm a little torn, but not that torn. I don't know what it is, especially the white ones. I'm getting criticized for it because I started wearing them instead of even dress shoes. I went on Colbert with these. I got eight calls saying, you can't do that again.

David: Really?

Michael: Yeah.

David: I'm wearing Ons all the time.

Michael: They just don't look good on TV or whatever. I've been over wearing both the Uniqlo socks and the Ons, but that's a sign of enthusiasm.

Ben: That's right.

David: There you go.

Ben: Isn't the Federer on deal one of the best endorsement deals by an athlete ever?

Michael: Measured by how, how much money he gets paid?

Ben: Didn't he do an equity deal early with On?

Michael: I don't know. He only aligns with companies whose products he really likes.

David: Rolex, yeah.

Michael: It's how easy it is.

Ben: Also, he's Roger Federer.

David: He's also Roger Federer. Yeah.

Michael: Right.

David: It's similar, but I bought a Rimowa suitcase this year and I love it. It's just a suitcase, but I love it.

Michael: What's it called?

David: Rimowa. LVMH bought this. It's a German suitcase company. They make the aluminum shell suitcase.

Ben: You cap in your step every time you show up there.

David: Yeah.

Michael: It's exciting to find new luggage. I don't know why it is so exciting, but it's hard to find new luggage.

Ben: Three middle aged men sitting around talking about luggage on the podcast.

Michael: When you find a new bag, you know your life is going to be different.

David: I've always been a minimal packing, backpack only, just maximum efficiency.

Michael: You assume you're going to be washing your clothes wherever you go?

David: 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. It's not the most efficient way, but I just like it. It makes me happy.

Ben: That's great. Parenting?

David: Parenting, yeah. Let's go to parenting. Feel free to decline on this for the young parent. Yeah.

Ben: Two and four and 18 months. The first is discovering guided access on the iPad. It's an accessibility setting where you can make it so one the buttons do anything, and it doesn't respond to taps. On airplane, they can't mess with Miss Rachel.

David: That's going to be like, FU, dad, make it work.

Michael: These are products for parenting?

Ben: These are products if you are a parent of kids our kids' age. The last one is the movie Toy Story. It's the first movie we introduced him to. It was my favorite movie growing up, and it's been really fun. He took to it. He loves Mr. Potato Head. He calls it Tapo Head. He always runs, runs into the room and says Tapo Head TV. That means I want to watch Toy Story.

David: As I alluded to my older daughter is an independent woman, shall we say, we bought this when she was younger. She completely rejected it, the slumber pod. Do you have one of these?

Ben: Yeah.

David: This is a blackout tent that you put over a portable crib. When you're traveling, you basically just put your baby in a sensory deprivation chamber.

Ben: You set up the noise machine right next to it too.

David: For most kids, I remember hearing about this from people that like, it's a miracle. I tried it with our older daughter and she was just absolute nuclear, like, no way is this going to work. I shied away from it. We went on a trip recently, and I brought it back for my younger daughter because I was like, all right, we'll get a shot. It worked like a charm.

Michael: Can I just interrupt here for a moment?

David: Yeah.

Michael: Is it an end zone dance you're doing of your business model that you're just at the end of this offer free endorsements to consumer products with actually nobody having to pay you for it?

David: No, that's great.

Michael: Just do it. You do this with the flick of the wrist because we don't even need the advertising revenues.

David: We just started because it was fun.

Ben: These are things we like.

David: These are the things we like.

Michael: That's good.

David: My last one, this is fun because it's a tie in with our Radio City show. I brought the whole family to New York for Radio City. Bluey. We got to do a Bluey episode someday. It's this incredible phenomenon. I don't know if it's crossed your radar.

Michael: No, what isn't?

David: Bluey is the greatest kid show ever made, bar none.

Michael: That's a big claim.

David: It's this guy in Australia, in Brisbane. He was I think an animator for Peppa Pig and then made this.

Ben: The claim, isn't that crazy?

David: I love Bluey.

Ben: Disney agrees with David.

David: Yeah. Disney has been trying to buy Bluey for years for ever escalating amounts of money.

Ben: They just did a deal, which I think is the first of its kind to use Bluey IP in the Disney universe without owning it.

David: I think news just came out today that Bluey is coming to Animal Kingdom in Disney World in 2026. It's the Pixar.

Michael: Who owns Bluey?

David: Think of it as Pixar of this generation.

Michael: Is Bluey owned by his creator?

David: Yeah, Joe Brumm. This is the guy.

Michael: It's like the Muppets.

David: Yeah. It's like Jim Henson and the Muppets. In New York City, you can buy tickets. You get a 45-minute window. You can take your family, you can take your kids to a recreation of Bluey's House inside a building in Union Square. If you've got kids into Bluey, go to New York, take them to Bluey at the camp.

Michael: My kids would find that a little strange, but okay.

Ben: We keep saying kids, kids of eight and under.

David: All right. That's what we got for carve-outs.

Ben: That's all we got too. Michael, anything else?

Michael: Total pleasure.

Ben: Thank you so much.

Michael: This was so much fun.

David: What a joy. Thank you for giving us your evening.

Michael: This is the longest I've spoken to anyone in the last 40 years.

Ben: Thank you for doing this with us.

David: Thank you.

Michael: My pleasure. Anytime. See, you're 20th.

David: Great. We'll see you in 10 years.

Ben: 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.

David: 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...

Ben: And trade notes.

David: And trade notes.

Ben: Oh, this is how my creative process works. Unbelievable.

David: Unbelievable. Thank you Michael for doing this with us.

Ben: It's so good. We have another thank you to Shep Films. This is the crew that made this one look so good. You'll notice that this was not just David and I setting up a few cameras like we've done with Steve Ballmer or Morris Chang. This was actually produced. We have a giant thank you to the Shep Films company. They do amazing work. They've made full two hour movies with Pedro Pascal, make sci-fi movies, and they do stuff like this. We're just delighted to have worked with them.

Thank you to our partners this season, JP Morgan Payments. Trusted, reliable payments  infrastructure for your business,no matter the scale. That's jpmorgan.com/acquired. To Sentry, the best way to monitor for issues in your software and fix them before users get mad, that's sentry.io/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/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 it rhymes with Acquired in some ways. You can search ACQ2 in any podcast player.

Come talk about this with us in the Slack. 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 episodes, behind the scenes photos, and corrections from past episodes. It's the place to be. You can join that at acquired.fm/email.

David: It really is beautiful. We might have some more upgrades to all the chrome around Acquired.

Ben: Yes.

David: Coming in 2026, so stay tuned.

Ben: That's a great way to put it. With that listeners, we'll see you next time.

David: We'll see you next time.