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Holiday Special 2023

Season 13, Episode 5

ACQ2 Episode

December 17, 2023
December 17, 2023

Ben has some big news. Actually, double big news! On what has become a holiday tradition here at Acquired, we cozy up to the fire to do our annual review of the show “in public”. We reflect on what can only be described as an absolutely mind-blowing 2023 (LVMH! Jensen! Costco! Charlie! Half a million plus listeners!) and look ahead to some big things cooking for 2024. Plus as always, we wrap with extended carve outs (joined this year by some surprise guests) for anyone still shopping for those perfect holiday gifts.

Huge thank you to everyone for making 2023 an amazing year again here in Acquired-land, and cheers to even greater things to come in 2023!

Sponsors:

Thanks to our fantastic partners, any member of the Acquired community can now get:

More Acquired!:

Links / Extended Carve Outs!

We finally did it. After five years and over 100 episodes, we decided to formalize the answer to Acquired’s most frequently asked question: “what are the best acquisitions of all time?” Here it is: The Acquired Top Ten. You can listen to the full episode (above, which includes honorable mentions), or read our quick blog post below.

Note: we ranked the list by our estimate of absolute dollar return to the acquirer. We could have used ROI multiple or annualized return, but we decided the ultimate yardstick of success should be the absolute dollar amount added to the parent company’s enterprise value. Afterall, you can’t eat IRR! For more on our methodology, please see the notes at the end of this post. And for all our trademark Acquired editorial and discussion tune in to the full episode above!

10. Marvel

Purchase Price: $4.2 billion, 2009

Estimated Current Contribution to Market Cap: $20.5 billion

Absolute Dollar Return: $16.3 billion

Back in 2009, Marvel Studios was recently formed, most of its movie rights were leased out, and the prevailing wisdom was that Marvel was just some old comic book IP company that only nerds cared about. Since then, Marvel Cinematic Universe films have grossed $22.5b in total box office receipts (including the single biggest movie of all-time), for an average of $2.2b annually. Disney earns about two dollars in parks and merchandise revenue for every one dollar earned from films (discussed on our Disney, Plus episode). Therefore we estimate Marvel generates about $6.75b in annual revenue for Disney, or nearly 10% of all the company’s revenue. Not bad for a set of nerdy comic book franchises…

Marvel
Season 1, Episode 26
LP Show
1/5/2016
December 17, 2023

9. Google Maps (Where2, Keyhole, ZipDash)

Total Purchase Price: $70 million (estimated), 2004

Estimated Current Contribution to Market Cap: $16.9 billion

Absolute Dollar Return: $16.8 billion

Morgan Stanley estimated that Google Maps generated $2.95b in revenue in 2019. Although that’s small compared to Google’s overall revenue of $160b+, it still accounts for over $16b in market cap by our calculations. Ironically the majority of Maps’ usage (and presumably revenue) comes from mobile, which grew out of by far the smallest of the 3 acquisitions, ZipDash. Tiny yet mighty!

Google Maps
Season 5, Episode 3
LP Show
8/28/2019
December 17, 2023

8. ESPN

Total Purchase Price: $188 million (by ABC), 1984

Estimated Current Contribution to Market Cap: $31.2 billion

Absolute Dollar Return: $31.0 billion

ABC’s 1984 acquisition of ESPN is heavyweight champion and still undisputed G.O.A.T. of media acquisitions.With an estimated $10.3B in 2018 revenue, ESPN’s value has compounded annually within ABC/Disney at >15% for an astounding THIRTY-FIVE YEARS. Single-handedly responsible for one of the greatest business model innovations in history with the advent of cable carriage fees, ESPN proves Albert Einstein’s famous statement that “Compound interest is the eighth wonder of the world.”

ESPN
Season 4, Episode 1
LP Show
1/28/2019
December 17, 2023

7. PayPal

Total Purchase Price: $1.5 billion, 2002

Value Realized at Spinoff: $47.1 billion

Absolute Dollar Return: $45.6 billion

Who would have thought facilitating payments for Beanie Baby trades could be so lucrative? The only acquisition on our list whose value we can precisely measure, eBay spun off PayPal into a stand-alone public company in July 2015. Its value at the time? A cool 31x what eBay paid in 2002.

PayPal
Season 1, Episode 11
LP Show
5/8/2016
December 17, 2023

6. Booking.com

Total Purchase Price: $135 million, 2005

Estimated Current Contribution to Market Cap: $49.9 billion

Absolute Dollar Return: $49.8 billion

Remember the Priceline Negotiator? Boy did he get himself a screaming deal on this one. This purchase might have ranked even higher if Booking Holdings’ stock (Priceline even renamed the whole company after this acquisition!) weren’t down ~20% due to COVID-19 fears when we did the analysis. We also took a conservative approach, using only the (massive) $10.8b in annual revenue from the company’s “Agency Revenues” segment as Booking.com’s contribution — there is likely more revenue in other segments that’s also attributable to Booking.com, though we can’t be sure how much.

Booking.com (with Jetsetter & Room 77 CEO Drew Patterson)
Season 1, Episode 41
LP Show
6/25/2017
December 17, 2023

5. NeXT

Total Purchase Price: $429 million, 1997

Estimated Current Contribution to Market Cap: $63.0 billion

Absolute Dollar Return: $62.6 billion

How do you put a value on Steve Jobs? Turns out we didn’t have to! NeXTSTEP, NeXT’s operating system, underpins all of Apple’s modern operating systems today: MacOS, iOS, WatchOS, and beyond. Literally every dollar of Apple’s $260b in annual revenue comes from NeXT roots, and from Steve wiping the product slate clean upon his return. With the acquisition being necessary but not sufficient to create Apple’s $1.4 trillion market cap today, we conservatively attributed 5% of Apple to this purchase.

NeXT
Season 1, Episode 23
LP Show
10/23/2016
December 17, 2023

4. Android

Total Purchase Price: $50 million, 2005

Estimated Current Contribution to Market Cap: $72 billion

Absolute Dollar Return: $72 billion

Speaking of operating system acquisitions, NeXT was great, but on a pure value basis Android beats it. We took Google Play Store revenues (where Google’s 30% cut is worth about $7.7b) and added the dollar amount we estimate Google saves in Traffic Acquisition Costs by owning default search on Android ($4.8b), to reach an estimated annual revenue contribution to Google of $12.5b from the diminutive robot OS. Android also takes the award for largest ROI multiple: >1400x. Yep, you can’t eat IRR, but that’s a figure VCs only dream of.

Android
Season 1, Episode 20
LP Show
9/16/2016
December 17, 2023

3. YouTube

Total Purchase Price: $1.65 billion, 2006

Estimated Current Contribution to Market Cap: $86.2 billion

Absolute Dollar Return: $84.5 billion

We admit it, we screwed up on our first episode covering YouTube: there’s no way this deal was a “C”.  With Google recently reporting YouTube revenues for the first time ($15b — almost 10% of Google’s revenue!), it’s clear this acquisition was a juggernaut. It’s past-time for an Acquired revisit.

That said, while YouTube as the world’s second-highest-traffic search engine (second-only to their parent company!) grosses $15b, much of that revenue (over 50%?) gets paid out to creators, and YouTube’s hosting and bandwidth costs are significant. But we’ll leave the debate over the division’s profitability to the podcast.

YouTube
Season 1, Episode 7
LP Show
2/3/2016
December 17, 2023

2. DoubleClick

Total Purchase Price: $3.1 billion, 2007

Estimated Current Contribution to Market Cap: $126.4 billion

Absolute Dollar Return: $123.3 billion

A dark horse rides into second place! The only acquisition on this list not-yet covered on Acquired (to be remedied very soon), this deal was far, far more important than most people realize. Effectively extending Google’s advertising reach from just its own properties to the entire internet, DoubleClick and its associated products generated over $20b in revenue within Google last year. Given what we now know about the nature of competition in internet advertising services, it’s unlikely governments and antitrust authorities would allow another deal like this again, much like #1 on our list...

1. Instagram

Purchase Price: $1 billion, 2012

Estimated Current Contribution to Market Cap: $153 billion

Absolute Dollar Return: $152 billion

Source: SportsNation

When it comes to G.O.A.T. status, if ESPN is M&A’s Lebron, Insta is its MJ. No offense to ESPN/Lebron, but we’ll probably never see another acquisition that’s so unquestionably dominant across every dimension of the M&A game as Facebook’s 2012 purchase of Instagram. Reported by Bloomberg to be doing $20B of revenue annually now within Facebook (up from ~$0 just eight years ago), Instagram takes the Acquired crown by a mile. And unlike YouTube, Facebook keeps nearly all of that $20b for itself! At risk of stretching the MJ analogy too far, given the circumstances at the time of the deal — Facebook’s “missing” of mobile and existential questions surrounding its ill-fated IPO — buying Instagram was Facebook’s equivalent of Jordan’s Game 6. Whether this deal was ultimately good or bad for the world at-large is another question, but there’s no doubt Instagram goes down in history as the greatest acquisition of all-time.

Instagram
Season 1, Episode 2
LP Show
10/31/2015
December 17, 2023

The Acquired Top Ten data, in full.

Methodology and Notes:

  • In order to count for our list, acquisitions must be at least a majority stake in the target company (otherwise it’s just an investment). Naspers’ investment in Tencent and Softbank/Yahoo’s investment in Alibaba are disqualified for this reason.
  • We considered all historical acquisitions — not just technology companies — but may have overlooked some in areas that we know less well. If you have any examples you think we missed ping us on Slack or email at: acquiredfm@gmail.com
  • We used revenue multiples to estimate the current value of the acquired company, multiplying its current estimated revenue by the market cap-to-revenue multiple of the parent company’s stock. We recognize this analysis is flawed (cashflow/profit multiples are better, at least for mature companies), but given the opacity of most companies’ business unit reporting, this was the only way to apply a consistent and straightforward approach to each deal.
  • All underlying assumptions are based on public financial disclosures unless stated otherwise. If we made an assumption not disclosed by the parent company, we linked to the source of the reported assumption.
  • This ranking represents a point in time in history, March 2, 2020. It is obviously subject to change going forward from both future and past acquisition performance, as well as fluctuating stock prices.
  • We have five honorable mentions that didn’t make our Top Ten list. Tune into the full episode to hear them!

Sponsor:

  • Thanks to Silicon Valley Bank for being our banner sponsor for Acquired Season 6. You can learn more about SVB here: https://www.svb.com/next
  • Thank you as well to Wilson Sonsini - You can learn more about WSGR at: https://www.wsgr.com/

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

Ben:  I am loving that you also busted out the holiday sweater. It feels very appropriate.

David: Yes, I purchased this holiday sweater at the Seattle Nordstrom for our 2019 live show at the University of Washington.

Ben: It's two months before the pandemic hit.

David: That's right. I think I wore it last year, too.

Ben: I feel like you did. Yeah, you were right behind me. I wish we were doing it again this year, but it seems prudent to not have a father of a toddler hop on an airplane and then sit in a confined space with me for five hours right now.

David: A lot of germs in my life right now.

Ben: Thank you for your precautions.

Welcome to season 13, episode 5, the season finale and holiday special of Acquired, the podcast about great companies and the stories and playbooks behind them. I'm Ben Gilbert.

David: I'm David Rosenthal.

Ben: And we are your hosts. Did you see what I did there, David?

David: I did. No ‘technology.’

Ben: No technology. Yes, I motioned to the whole board of directors here that we drop ‘technology’ from our intro since I crunched the numbers, and 4 of the 14 episodes we did this year were technology companies.

David: All right. It's a good thing that there are no other board members for Acquired besides you and me, because I am in full agreement.

Ben: Unanimous.

David: Otherwise, we would have had a deadlocked vote there one to one.

Ben: That's true. I don't think our charter really actually ever accounts for what to do in that circumstance. Yes, listeners, if you count Lockheed Martin, it's five, if you count Visa, it's six. But the minority of the episodes that we did in 2023 were tech companies, which is a very fascinating evolution to me based on where Acquired started analyzing technology acquisitions that actually went well.

Of course, we will keep doing deep episodes on tech companies since we are nerds, and that's where we've spent our whole careers so far. If you liked the programming and assembly language on air from NVIDIA, I guess assembly language pseudocode, or our Qualcomm episode where we tried to describe how the CDMA protocol works, we're still here for you. We're just going to do a lot of LVMH, NFL, Visa, Costco, Nike mixed in there.

What are we doing here today? David and I are going to bring you good tidings, good cheer (hopefully), and keep you company.

David: Yes, happy holidays. Cheers.

Ben: Cheers.

David: I've got my cinnamon-infused hot chocolate here. It's delicious.

Ben: You're feeling very festive. Yes, we are here to keep you company on your long drives, flights, workouts, housecleaning, or whatever over the holidays.

Our agenda today is a recap of Acquired this year, both the state of the franchise from the board of directors themselves. We will also be giving you some new tidbits on our favorite episodes behind each one of them, why we picked them, how they came to be, what listeners helped us select, that sort of thing.

We're going to talk about how we see Acquired fitting into the broader media landscape, how our views about the show and the stuff that we cover have changed over time, what's in store for Acquired in 2024, new carve-outs, and answering listener questions from the Slack. At the end of the episode, we're going to share a little bit about David and my investing lives and how those will be changing in 2024 as David, you and I are going to get to do much more of our investing together.

David: I know. It's going to come full circle. We started both at Madrona investing together. We'll just have to talk about this later in the episode.

Ben: We will. But first, listeners, I mentioned in one quick line on the Charlie interview and have not said anything on any social media or anything like that since, but I am a parent. I'm joining David on the parenting journey with approximately a one-month-old here at the Gilbert household.

David: Ben, Jenny and I are so, so, so happy for you guys. Parenting, as you know now, is the most joyous, difficult, wonderful, biggest thing you will ever do in your life. There is no way to understand or describe it until you become one, so welcome to the club.

Ben: Thank you. I think that's right. I think any words that I would say about what it's been like so far are words that other people tried to use to describe it to me, and I found them largely meaningless. I could say the same things that everyone else always says, and there have been some amazing things written. I think I read the Paul Graham article on kids. I read The Fourth Trimester and Wait But Why piece.

David: You read the Michael Lewis book, right?

Ben: The Michael Lewis book.

David: Yeah, that was good.

Ben: I don't know, the words bounce off you. You're like, well, why would that be fun? Why would that be rewarding? Why would I wake up at 3:00 AM to change a diaper and soothe the screaming? Why is that?

Actually, Morgan Housel put it to me in a really lovely way where he just said, what greater gift could you have than helping another human, another member in your family, who's new to the world and their most intense time of need? That intense time of need comes a dozen or two dozen times a day, but the privilege of being able to soothe someone when they're experiencing that intense emotion. They may not be fully formed, but babies are people too.

David: Absolutely. It's so great. That is a big, big change number one since we last reconvened here. Big change number two is GeekWire reported about this already, but you are joining me full-time next year on Acquired. I'm so, so excited.

Ben: It's about freaking time, huh, David?

David: I wasn't going to say it.

Ben: I can't wait. You and I are so just fired up to double down on Acquired, and it feels very fun to be going all in on it together. On the one hand, it feels like it's been a long time coming. On the other hand, Acquired has been such a slow burn over the last eight-plus years that there was not an obvious moment to do it.

It was one of these moments where you look back and you're like, whoa, how am I not spending all of my waking time and energy on this when it is something that is just our life's work, as our friend Patrick O'Shaughnessy likes to say about the types of entrepreneurs he's looking for. This is definitively our life's work. It wasn't when we started and somewhere along the way, gradually it just became that.

David: Totally.

Ben: The way it's going to work, I'm transitioning to a venture partner at PSL (Pioneer Square Labs) here in Seattle. I still get to keep my board seats, which I think keeps me sharp for the show and stay a friend of the family there. I'm excited to change my role at PSL, but of course, all of my real time and energy going forward is Acquired.

David: I'm so happy not only as a 50% shareholder in Acquired, but even more so, you're my best friend. This means we're going to spend even more time together and just outside of the show, outside of anything that that means for us, our business, the episodes, all of which are going to get so much better. It brings me joy. I'm so happy.

Ben: Thanks, man. We should say before we get too far in, this is not investment advice. This whole show, David and I may have investments in the companies we discuss, and the show is for informational and entertainment purposes only. Somebody here has to follow the rules. I've got a nice script that's well-built out in front of me.

I also must apologize to the listeners. I am coming in hot from podcast or paternity leave here. If anything I say is completely incoherent, I am on pretty minimal sleep, so thank you for bearing with me.

David: All the parents out there will understand and appreciate you being here, as do I.

Ben: Yeah.

David: Let's start the 2023 Acquired year-in-review recap. Dude, this has been freaking wild. You were talking about Acquired has been a slow burn, we have doubled every year, and we've always been this example of exponential growth that starts small. First year, we doubled from two to four listeners. But no, it wasn't exactly that.

Ben: No. I worked it backwards one time. I think it was 500,000 or something. Actually, I should crunch that number. There is a number you can figure out in year one since you know what our current numbers are. But a small base. It was a small base, kind of small base, still pretty small base.

David: There were many years where nobody would have imagined that this would be either of our full-time gigs. Actually, when I looked it up last year on our holiday special, I was both pretty excited, proud to announce, and also terrified that we had hit a quarter of million listeners to the pod. It felt like, holy crap, that's a big number. This is real, what we do. I was terrified because I was like, we talk all the time. Ben talks all the time about how we double every year. How on earth are we going to do that?

Ben: You were like, you should stop saying that, because it's eventually going to not be true.

David: Because it's about to end.

Ben: Which is true. Eventually, it will not be true.

David: Of course, unless literally, we start expanding galactically or something like that.

Ben: The question is, how big is the addressable market for people who want an in-an-audio-only medium consume four-hour essentially books, conversational audio books about business histories often in an esoteric way. Granted you and I have gotten much better at becoming storytellers over time, each one of those concentric circles niches it down. I think you and I just thought that that addressable market was a hundred thousand people or something at first, but now we know it's at least half a million.

David: Yes. The big news is we hit half a million listeners this year, which is pretty wild. Hopefully we can put up the chart, the Ben Gilbert Acquired chart that you make obsessively every month showing our episode growth over time.

Ben: Which at some point, I do want to stop making, because I said last year on the show at the holiday special, I don't think growth is inherently virtuous for us, for the goals of our business here. And yet, I am the person who's obsessively trying to compile the numbers and figure out, is it going to double again organically since we don't advertise or anything?

Do I want to be known for the Ben Gilbert chart? I don't really think so, because it's actually antithetical to how I think about what we do. But I do make the chart. I put a lot of thought into it, what episodes will do what, and try to predict the numbers. I think a lot of people describe it as virtuous to, oh, I don't pay attention to the analytics. I think to each his own. I pay a lot of attention to the analytics. I think that helps you become better at making a product that people like.

I don't understand why you wouldn't immerse yourself in every single number you possibly could all the time. It may lead you to a different outcome, but that outcome, as long as you're measuring correctly, seems to make something that people want more. Yes, I obsessively look at the numbers. I look at the completion rates. I think that's super important.

David: A related side part of that, thank you to all of you, a half a million of you now for spending all this time with us this year. There's a lot to discuss.

For me, I've gone back and forth. You started saying I think about two years ago, growth is not a goal. I don't know that growth is good for Acquired. I nodded my head, but I wasn't totally sure.

This year (I think) has really helped crystallize my thoughts on this as we've grown so much. I do completely agree with you. Growth in and of itself should not be a priority and in fact, can be very detrimental to what I think we both want to do here if we optimize just for growth.

What I think we've done this year. It goes back to the very start of this episode and you changing the intro. We went from a podcast about great technology companies and the stories and playbooks behind them to a podcast about great companies and the stories and playbooks behind them.

Yes, we have continued to grow in the tech world and our core niche, and I think that audience and audience potential is way bigger than we ever realized, but we've also added everybody else in the world now who is interested in business, runs a brand, and thinks about brand management, runs a retailer, or runs a large hardware business like Home Depot or something like that, and also all around the world too.

Some of our biggest episodes this year were: (a) not American companies, (2) even if they were American companies, they were truly global brands and global companies. A lot of what we do, if we just wanted to optimize for growth, we would do differently. We would not make four-hour episodes. We would release more frequently, et cetera.

Ben: It's interesting. Growing from a podcast about great technology companies to a podcast about great companies is certainly a growth strategy, or a byproduct of doing that is growth because the addressable market is larger. But I think it would fail if that wasn't just you and I following what our natural interests were.

People ask us all the time, how do you pick episodes? The answer is, you and I talk for hours a day. We wander around our house and our neighborhoods, putting on AirPods, calling each other and talking about what's currently in our email inbox, what we're researching, what we need to do to ship an episode, prep for guests, that sort of thing.

One of the conversations that's always happening is, what are you interested in right now? How have your views shifted over X period of time? What is fascinating to you now? I think the growth is a byproduct of our obsessions shifting and becoming these durable businesses, and trying to understand what makes a company worthy of being a century-long company, regardless of where it came from, how it was funded, or what technologies were used in creating it.

David: I think that's been what's so cool for me. My big lessons and takeaways from everything we've done this year is that those stories and studying the LVMHs, the Costcos, the Nikes of the world, if anything, that's even more important than studying the great technology companies for building a great technology company. We found this just incredible response, especially to the LVMH episode, of like wow, here are these lessons that are not well talked about and known in our world.

Ben: It is strange becoming canon. I never thought Acquired would get to the point where when we do an episode on something, it has the possibility to become an undertone of themes that people are discussing.

Certainly years one through six or seven, that was never the case, but with LVMH, with Costco, maybe with Porsche, certainly with Nike, I think there was an element of, we released the episode and suddenly we noticed the discussion, especially amongst the tech sphere, about that topic massively picked up. People would go on CNBC, make a point that we made, and I'd call you David and go like, oh, I wonder how that comparison got made.

David: It's just great. Maybe they didn't even listen to the episode, but what was cool is that enough people now have been consuming this, talking about it, and getting value out of it.

Ben: It gets in the water.

David: It gets in the water, yeah, It's wild. My favorite was a friend of mine who's a VC at Lightspeed texted me about two weeks after the Costco episode came out and said, dude, I've gotten three pitches this week from startups where at some point in the deck, they talk about how their business model is similar to Costco.

Ben: I don't want to overtoot our own horn on this, but that has been a huge change this year that we have never seen in previous years. Once we do an episode, it gets in the water.

David: All right, let's talk about the episodes. We started the year actually with the NFL, which I think a lot about that episode still to this day. We did the Visa episode that we finished the year with the NFL Coda part two. Then we did LVMH, which I feel like we have even more to talk about. Nintendo, Lockheed, Porsche, Nike, Costco, NVIDIA part three, and then Visa.

Our interviews this year—we should talk about our change in strategy from what used to be specials last year to Acquired interviews this year—Daniel Ek, Dara Khosrowshahi from Uber, Jensen from NVIDIA, and then Charlie. But let's stick with the season first. What was your favorite that we did this year, like Ben Gilbert's personal favorite episode?

Ben: I think the most interesting businesses or businesses that tickle me are Costco and Visa, because there's a purity to them. Costco's is the purity of the way that the puzzle pieces fit together in a way that is just artful. It's almost like a discovery of laws of physics the way that Sol Price, Jim Senegal, and the rest of the crew have built that business over the years. It's just beautiful. It's like watching a ballet. I think that we likened it to that in the episode.

Visa on the other hand is the best operating leverage business. They have over 50% net income margins. They seem like they're locked in forever for better or for worse as we described in the episode. I wouldn't ask someone like, what is the best at scale business model? It's probably Visa to do this least work for the most free cash flow. If you look at Costco, not that much free cash flow, crap ton of work. It's almost like the complete opposite over in Visa land.

David: Total opposites.

Ben: But you asked me what my favorite episode was, and my favorite episode was LVMH, because it was so not on my radar at all and not something that I valued at all. I scorned luxury before doing the research, I didn't understand any of the history, and now I feel like a whole new world has been opened to me of understanding brand and value.

David: And now you have a whole closet in your house filled with Louis bags.

Ben: I do not. I only own one thing from one luxury brand in all my possessions. Actually, that item is not made by LVMH.

David: Dude, you're just going to leave it at that?

Ben: I want to reveal it in a 2024 episode we are planning.

David: Okay. All right. You heard it here first. There will be at least one luxury episode in 2024. Is that what you're telling me?

Ben: Absolutely. I should say, I own probably a lot of things that are LVMH, but none that I would consider luxury. I don't mean like a Louis Vuitton suitcase. I have some Woodinville whiskey in the closet that LVMH somehow, over the last few years, came to own Woodinville whiskey. I think there are a lot of those sorts of things where I've bought a lot of things at Duty Free Shoppers.

David: You're talking about an item that is truly a luxury item, which is on a whole different rubric.

Ben: It has a sense of place.

David: It has a sense of place. It is not a premium item. You could look at it through a certain lens and say this is utterly ridiculous, and how on earth is this piece of raw material worth that?

Ben: Right. I only own one of those things.

David: Yes. Okay.

Ben: I'm curious. Would you describe anything that you own that way other than things that are obviously that way, other than some like Louis Vuitton suitcase that you have? I don't know what you have, but you've got some Rolexes.

David: Yeah, I have some watches, but honestly, those are mostly from my dad. My dad is really into watches, and a few of those have trickled to me over the years. I was thinking about it while preparing for this. I do not. Maybe part of that is having a two-year-old, which is not good for the health of the objects in your home. I was thinking about that and I was like, I would like to change that and have something that is meaningful on a different level beyond just what it physically is.

Ben: I guess any jewelry would count as that. These things may not be branded the way that we're talking about luxury branding, but a diamond engagement ring is inherently not premium, but luxury.

David: Certainly, I would count my wedding ring amongst that.

Ben: Or a real world NFT for the crypto folks out there.

David: Oh, boy. All right, let's keep it moving here.

Ben: Which, by the way, I think is actually the best way to think about diamonds. I spent some time recently looking into lab grown versus mined diamonds. I know we're a diatribe here, but you asked me about my favorite episode, LVMH came up, and here we are.

There is a fixed supply of diamonds in the world, and there is a rate at which humans can mine them. Regardless of the intrinsic qualities of diamonds, it is a thing that can only come out at a certain volume. Largely, they go through the GIA to be identified with a serial number and actually gets laser etched microscopically onto the diamonds, so these things are verified that they came out of the ground, you know the year they were mined, you know where they were mined, and all that stuff.

David: Yup. De Beers would be a fun episode to do someday.

Ben: Totally. The lab grown diamonds are chemically identical, and it's a huge accomplishment of humankind that we've figured out how to do this. On the one hand, they're identical. You look at them, you right click, you download the JPEG, and these things are identical. But on the other hand, we are only going to get better, Moore's Law–style, at creating lab grown diamonds.

They will asymptotically approach zero, maybe not zero, but some number. Every year, presumably, they should get cheaper and cheaper and cheaper. Whereas for something where there's a known finite supply of them like GIA-certified number-etched diamonds, there's a strong argument for that to hold its value to the extent that you care about an engagement ring holding its value. But that will hold its value much longer and much more durably.

Truly, the best way to articulate it is, well, if you believe that this JPEG has value, but that other JPEG doesn't have value, and that other JPEG is the exact same bitmap as this one, why do you believe that? Oh, I see, it's got an on-chain location and blah-blah-blah. It's literally the exact same thing with diamonds.

David: All right, we're going have to do a De Beers episode at some point because this warrants a full Acquired deep dive, I think.

Ben: Yup, agree. David Rosenthal, what was your favorite episode this year?

David: I was thinking about this. To not bury the lead, my favorite episode was Nike, but I don't think it was our best episode. I think our best episodes this year were LVMH, Costco, and Visa. I've come to think that there's a sweet spot for you and me in terms of preparation and our emotional states preparing for and leading up to an episode that leads to it being good, and I don't think Nike was bad. I think it was perfectly acceptable. My level of work preparation and emotional concern and stress heading into Nike was the peak that it has ever been about an Acquired episode.

Ben: Yeah, you were a wreck. How many books did you read?

David: Over 10, and part of that was it was the first episode of the season. Part of that was I went to Stanford Business School, which is the Knight Management Center, and this is Phil Knight. I've never met Phil Knight, but I felt an extra debt of gratitude to him and obligation to do it right.

Part of it too was our friend, David Lidsky at Fast Company, was trailing us, following along with us as we were making it, which was super cool. The article that he wrote was wonderful and very complimentary.

Ben: He's a talented writer.

David: All of that stew, I felt like, okay, I really got to bring it on this one. What was interesting, that's why it was my favorite. I'm proud of all the work that I and we did for it, but I think I finally went too far. If you look at that episode, I was trying too hard.

Ben: Which may not come out in the final edit. I got to be honest. If you go back and look, listeners, you may not hear it. I could hear it in the first edit and certainly while we're recording here live. The number of things that we end up cutting is massive, but David, I completely agree with you.

Until this year, I don't think I would have agreed with the statement that the quality of our episodes is governed just as much by our headspace the day of recording as it is by the quality of the research that we did. Now I believe that that is immensely the case.

The flow of the episode, the excitement about the topic, the clarity of the points that we're trying to make, it's about treating it like Sunday if you're an NFL player and having a game day routine in the way that it teaches you how to perform at your highest.

David: This is going to sound incredibly self-aggrandizing here, but this is how I've come to think about it, like NFL Sunday when we're going out there. We go back to our NFL episode at the beginning of the year. It takes me right back to playing football in high school. The games that I prepared the hardest for felt I really put the effort in.

Those were not the ones where I played the best. The ones where I played the best were when you play loose. You go out there, you have fun, you enjoy yourself, and you let it flow. It is the exact same with Acquired episodes.

Ben: All right. I wasn't going to share this, but now we're on the topic. At the top of my show notes document for every episode, there are two things written. One is, what should the listener take away from this? I have some bullet points of make sure you nail these points and are clear about these things. The other one is a one-liner that I have written that says, have fun, laugh, you're good at this. The mantras are powerful.

David: Those things are so important, I think. Again, for folks who are listening, who are or have been athletes, I suspect this will resonate. That's the past part of my life that it resonates with. All of those are important. Have fun. You're going to play your best when you're having fun. Laugh, related to that, but also to me it makes me think about. your team, your teammates. You and I, we're a team.

The last piece, maybe it's the most important, but you're good at this. The sports psychology element, the self-confidence element is huge. Who are we to think that we can go make these ridiculous episodes?

Ben: That's exactly the headspace that I get into that causes episodes to be bad. When we restart an episode, and listeners, we restarted this episode, we got 15 minutes in and we were like, it feels forced, and we restarted it. I can guarantee you that the quality of this episode is already better.

That's the negative self-talk that I start getting into. Who are you? What are your credentials? What qualification? Are you sure you looked under every rock? Those are the things that start ripping me apart if I start thinking about them moments before recording.

David: That's why Nike is my favorite episode, because I feel like this way of thinking about what we do finally clicked for me. It's like you have to take yourself past the breaking point before you realize, I might need to think about this differently.

Ben: It is funny how doing the episodes and studying these people in these businesses teaches us things that we internalize in our own business. I would not have been able to describe Acquired as a luxury brand or a luxury product prior to LVMH. Luxury is probably still not right. I don't know if it's ultra premium or if it's just like a prestige brand.

David: I want to talk about this later in the episode, but my quick take is we are not a luxury product, but we share a lot of traits.

Ben: Yeah. Scarcity is the biggest one. That's a thing where I was unable to understand what to do with our scarcity before studying LVMH. But then afterwards, I came to the realization of, oh, we should embrace the fact that we only have the throughput to be able to do one episode a month. Rather than trying to figure out how to scale that, there is a very fair path to owning it and staying a boutique little shop that's you, I, and Steven, our wonderful editor who worked with us on a contract basis.

This is the team. This is what we do. We can only make so much. If we make more, the quality drops, or we have to scale in some way that feels unnatural to us. That's okay, rather than every other person in the podcast ecosystem that we had spoken with up until that point was, well, you have to figure out how you layer that second show, or how you introduce more hosts, or how you get research assistance so you don't have to do that. And the boutiqueness is one of our greatest strengths, and it was something I think I was trying to run away from for a while.

Now, people ask what's going to be different for Acquired when you go full-time. You're doing way more episodes. No, absolutely not. We're going to make the same number or fewer of even better episodes.

David: We got to be careful, or we're going to turn into Dan Carlin here and do one episode a year.

Ben: Hardcore History, yeah, I know.

David: The luxury strategy, which was part of our preparation for LVMH, was reading this incredible book, The Luxury Strategy, which contains the 24 anti laws of marketing. I just want to call out the anti law of marketing number 18.

Ben: You just have this on your desk?

David: I put it on my desk ahead of recording this episode, but actually I've had it on my desk for large portions of this year. Anti law of marketing number 18: do not relocate your factories. This is our version of that. We're never going to relocate our factories.

Ben: We happen to be in a particular business that scales extremely elegantly with a word of mouth, go-to market, a product that is infinitely replicable, and a revenue stream that scales nearly in lockstep with the size of the distribution. I say nearly is important. We should talk about nearly later.

We do have a business model that lets you grow the business indefinitely without compromising at all. If you are an LVMH, you do have to go build another factory in order to go serve more customers. There's not that infinite scaling that can happen by the virtue of the Internet and media on the Internet.

David: To put a bow on the very easy question of what was your favorite episode.

Ben: So far, you spent a lot of time not answering me.

David: No, I did. It was Nike. Nike was my favorite. But I think the other part of the coin question of what was our best episode, I think Visa was our best episode.

Ben: Nice.

David: There were others that were more impactful. I think LVMH, that episode alone completely changed Acquired.

Ben: As did Costco.

David: As did Costco. But Visa, I think, was the perfect blend of an NFL Sunday gone extremely right. We prepared the right amount, and we played the least. We had fun. We laughed. We remembered that we were good at this. I think you can see it in the finished product.

Ben: Yeah, it's the ones where we didn't put too much pressure on ourselves that I think came out the best.

David: Which for me were LVMH, Costco, and Visa.

Ben: Yup. All right, David, before we move out of talking about our season episodes this year to the interviews that we did, this is the perfect time to talk about one of our favorite companies, Statsig.

David: Yes, and man, it has been a big year for Statsig, too. When we had Vijaye on ACQ2 earlier this year, they were already a pretty impressive Series B stage startup with a killer team, early product/market fit and all that. But what's happened since and the scale that they're operating at now is pretty wild.

Ben: This is where we get lucky in being very choosy with our sponsors. Sometimes these things happen to them while we're mid flight.

David: Yes. I asked them for some fun stats that we can share publicly with everyone to give folks a sense of scale of what happened in 2023 for Statsig. The first one, in the past month, Statsig shipped actual live product experiments to over 1.2 billion end-users around the world.

That stat is not deduplicated across apps, so there's some overlap in terms of actual people. But even if you cut that in half to approximate actual flesh and blood human people out there, that's almost 10% of the world's population.

Ben: Crazy.

David: Okay, that's one. Two, Statsig now processes about 130 billion events per day from its customers. That is 1.7 million events every second. The infrastructure that Statsig now has to support these data volumes is pretty wild, especially since the company was founded less than three years ago.

It's not like they just execute these events. They then take all the data from them, run huge statistical jobs across the whole corpus to compute the experiment results that their customers are running for all these one billion–plus end-users. It is just wild. At this rate, they're going to need to call up Andy Jassy and talk about some of those AWS bills.

Ben: Yes. It's funny, I hadn't thought to make this comparison until right now. You said 1.7 million events a second. If you look at the Visa numbers—I just pulled up my Visa notes—Visa does 8600 transactions per second. That's 200 times as much throughput at Statsig than at Visa?

David: That's on the metrics side that they can share publicly. On the customer side, Statsig added arguably almost all of the most important AI companies in the world this year, including OpenAI, which uses Statsig for ChatGPT, Microsoft, Atlassian, Anthropic, and many, many others along of course with regular old companies like Notion, UiPath, and Lattice, Brex, and friends of the show, Rec Room, and many, many others.

The team also kept shipping super fast. At the start of the year, they had just one core product, which was hosted product experimentations. Today, they're a full-fledged product understanding platform. They have dedicated feature flagging, warehouse native experimentation, and product analytics.

Ben: Yup. We can't wait to see where they're going in 2024. If your team wants the best platform in the world for making data-driven product decisions, you should reach out statsig.com/acquired. As always, there is special white glove onboarding for all Acquired listeners. Our huge thanks to Statsig.

Ben: In January, David and I looked at each other and we said, we should stop doing specials.

David: Specials are what we called the non season episodes that we did on the feed until this year. They were almost all interviews in practice, but anything that wasn't a canonical season episode.

Ben: The reasons that we decided we wanted to discontinue them were, as David said, they're almost always an interview. What is an interview? An interview is an episode where you have a person who is not a part of your enterprise, something you control, come on the show and say something that they very likely are going to say somewhere else, too. By their very inherent value of it, it is not an N of 1 product. Whereas when we make a Costco episode, that's an N of 1 product.

No matter how good you do the interview, you are starting on your back foot in terms of, can you create this diamond, this unique thing in the world, the way that we can on a season episode.

David: And also, there are other people and other podcasters out there who are world class interviewers. They are incredible masters of their craft, and we were looking at what we were doing and be like, why are we doing this too?

Ben: Yup. You can see it in the numbers. Every time we would do one, even with the biggest names, these people where you're like, I imagine that really moved the needle for you. No, it didn't. Every single time we did a special, it had less downloads than the most recent season episode we did, which is crazy. Never once was a special our biggest episode ever.

David: To your point about analytics, that was telling us something and that was screaming at us in the face for years.

Ben: Which is, when you make a unique product, that is the thing that people are here for. You have a format and a product that people want, so make that. Don't go do something that's one click over in the commodity spectrum.

We tried all sorts of things. We tried to do the ACQ sessions where we really tried to make it feel more casual and we'd pour wine. I think all the different specials we did, sessions we did, and collabs we did, there's something to be learned from to bring into mainstream Acquired.

David: And what interviews now are.

Ben: Here's where the lesson we learned around don't clutch your pearls too tightly. We swore them off. We said, you know what? We're done.

David: Yup. We had made the decision that there was never going to be another interview on Acquired.

Ben: This is going to be a great year going forward where once a month we have this very pure thing that we do. We release an LVMH-style episode, and then we have the opportunity to fly to Stockholm and interview Daniel Ek about Spotify. Then we get the opportunity to interview the CEO of the then $80 billion market cap, Uber. We would call each other and say, we said we weren't going to do this, so what do we do?

David: What we had decided was we have ACQ2, and we started calling that the Acquired interview show.

Ben: Yeah, briefly for two weeks.

David: Legitimately, this is where the rubber hit the road. We were going to put Daniel and Dara on ACQ2. That was the decision, we were ready to do it, and then we just looked at each other and we're like, what are we doing here?

Ben: Right. We are getting far too precious. I think our preciousness has made Acquired what it is. I believe that, but you can get too precious. ACQ2 is awesome, but it has one tenth the distribution of Acquired.

That's great, because it lets us play around with stuff, and it lets us do follow-ups to episodes where we don't feel like every single person that listened to this big episode would want to listen to the follow-up, and we get to talk about up and coming companies. It's a lower stakes thing for us to do an ACQ2 episode, which is great to have as a part of our ecosystem. But it was really dumb. I'm really glad we didn't go through with it to put the CEOs of Spotify and Uber there.

The year went on. We had the opportunity to then interview Jensen as he's becoming the most highlighted CEO of one of the top five most important companies in the entire world. Of course, we got to spend time with Charlie Munger a month-and-a-half before he passed away, which I feel so unbelievably lucky.

David: Yeah. We'll come back to Charlie.

Ben: But it turns out with interviews, the answer is we still don't do interviews. We don't do specials. Acquired is what it is, except for Charlie and Jensen.

David: I think there are a couple of themes here, too. It all stumbled into real time with Daniel and Dara. Those interviews actually happened on the calendar pretty close to one another. I think we crystallized this by the time Jensen and Charlie happened. We still can do something unique and special.

In most cases—I don't want to say this will be every case going forward—if you look at those four interviews that we did this year, they were all the CEOs, protagonists (in Charlie's case) of companies that we had covered extensively on Acquired. I think that (to me) is at least one example. There may be more of how we can do something unique and special.

That's not to take away from all the other many masters of their craft out there like Patrick O'Shaughnessy and many others that are world class interviewers, of which I don't think we are in a vacuum. But in cases where we've done 100 hours of work or in NVIDIA's case and Berkshire's case, many hundreds of hours of work on these companies, I think we then can do something special with the protagonist that other people can't do.

Ben: This is something that my dad would always say to me when I was younger. He's like, I legitimately don't think I'm the smartest person, but I do think I'm the hardest working. Whether it was in school or whether it is a career, the answer was to grind for more hours and become the most knowledgeable to make the most informed decisions.

I feel that way as an interviewer. I'm not Andrew Ross Sorkin. Plain vanilla walking into a pretty new subject, he's going to be just a lights-out interviewer. But the place where I can be one of the best in the world is if I have done hundreds and hundreds and hundreds of hours of research on a topic. We can start with Jensen on the RIVA 128, and that's not how other interviews are going to start.

David: That was just obvious to us. I think that was your idea to do it. You were just like, of course we have to start with the RIVA 128.

Ben: You can't know a story as well as the protagonist knows the story, but try to get as close as you can.

David: Sometimes I think we save ourselves from ourselves here, but I'm glad that we didn't cut these. We'll get to the stats in a second, but clearly they have ended up being something special.

But the cool thing about the core thing that we do, our season episodes, is that the natural byproduct. It's not like we need to go carve-out time to do 100 hours of work to go interview Jensen or Charlie. It's like, no, no, we've already just done that. It's the core thing that we do. To throw out the opportunity to continue doing those would have been really silly.

Ben: You might be wondering, Charlie Munger was by far our biggest episode ever. Jensen was bigger than any previous season episode. Dara and Daniel were right around the ballpark of what our season episodes were doing at that point in time when we had interviewed them. We figured out, there is a style and a type of person where the episodes behave as N of 1 episodes.

The decay curves look similarly over time of people seeking them out in an evergreen way. We have seen just as many people 92 days later, which is what today is, referencing the Jensen interview that we would see referencing the Nike episode 92 days later. These things, if we do them right, stay just as evergreen.

We want to stay as precious as possible about them. What does that mean? How can we change Acquired's business to make it so that the answer is we don't do interviews on the main show, unless of course it's an interview that we need to do on the main show? After some early conversations we've had with some of the sponsors for next year, we just sell them differently. I think that was a key insight for us.

We used to do, in a season, six main episodes and six specials. We would sell them both and say, here's what you'll get in this period of time. That's still how we sell the sponsorships for the season. You know that it's going to happen over six months, you know it's going to be about once a month, we'll give you a heads up as soon as we know a topic that we're going to be covering, and we would try to do the same thing with specials. That drove us to create specials, which is entirely the wrong thing to do.

It was broken. It was slot-filling. Again, not to take away from our guests. We had incredible guests, but the conversations themselves were slot-filled. We had slots that we needed to fill. That works for us with the season episodes because we're going to make an episode once a month that's in our control. But with interviews, you can't slot-fill if you want them to be special.

Ben: If you're sitting around waiting serendipitously for a Charlie Munger or a Jensen interview to happen, which is basically what we've decided the strategy is for guests.

David: You can't have pre-sold a commitment to your partners that you're going to do six of those every six months.

Ben: Exactly. Stay tuned for how this will work in practice. But the way we're thinking about it for next year and some early conversations—it seems like this is going to work—is you get the next three interviews. We promise you they're going to be world class, and we have no idea when they will come out. They're probably going to come out next year, but we can't tell you much beyond that.

I think that to the extent that we find and continue to find great partners who want to work with us as sponsors in that way, that works really well to make sure that the content bar is where it needs to be, the audience is happy, and that we can frankly blow it out of the water the way that we do on the season episodes for our sponsors.

What does that mean for ACQ2? I should say, ACQ2 next year is going to be so much better because there's all this inbound that we get for Acquired that we've decided doesn't make sense on Acquired. What that means is we are getting crazy good guests for ACQ2. It would feel silly not to point people toward that when I know it's coming next year, so I'm excited about that too.

David: I completely obviously agree with you on the implications for the business model and not slot-filling. You can't predict when serendipitously, you're going to get a chance to interview Jensen or interview Charlie, but this is our opportunity. What interviews do we want in a perfect world to do in the next set of time here for Acquired?

Ben: David, I think that's the right question, and I think the answer is obvious. You just have to look at our episode list. Who are the people that we feel like we've studied the way that we studied Jensen but we haven't had a conversation with yet?

It's Bernard Arnault, it's Morris Chang, it's Phil Knight, it's Bob Iger. I think they are people whose stories we know, but we don't know. Those would make for special interviews.

David: Ben, I'm going to give you a hall pass on this one, because you're literally one month into parenting. Lord knows I have empathy and sympathy for you, but you missed the obvious one that I was teeing you up for there, which we're going to make our appeal. We're going to shoot our shot right here. Taylor, if you are listening.

Ben: Or Travis if you can make an intro.

David: Or Travis, if you can make an intro, we'll maybe have you on for a little segment of it.

Ben: We'll go to The Long Pond Studios. We can meet you anywhere at a posh restaurant around New York City.

David: If you're on the South American leg of the tour, we'll fly down there literally anywhere, anytime.

Ben: Absolutely.

David: All right, let's talk about Charlie.

Ben: Let's talk about Charlie.

David: First, we said in the episode, but again, say a huge thank you to Andrew Marks, who's become such a good friend of the show.

Ben: I feel like Andrew sends us more research material. Andrew is a source for every episode. We're not just going to write his name in the sources, but ten sources from every episode are things that Andrew texts us like, have you found this? Have you found that? Have you found that?

David: The minute that we solidify what the next episode is going to be, we text Andrew and say, all right, what do you got? And he's always got something.

Ben: Not to mention, he's got a 20-company long request list with a reason for why each of those companies should be Acquired episodes making the appeal. He always celebrates when we pick one off of his list.

David: A big, big thank you to Andrew. He is literally the Acquired MVP of 2023. It's not you, it's not me, it's Andrew. Also our other friend too who knows who he is, thank you to them for making that happen. It was a life experience. I don't know what else to say. I can't believe we got to do it.

Ben: There's a strangeness that comes. If anybody who is listening to this is a long-form journalist, like a New Yorker, writer or something like that, or has written a book on a company, or maybe even a PhD research dissertation, you know this feeling where even though something happened in real life, you've done enough research about it where it feels like a story to you.

At some point, you meet the protagonist and you're like, oh, right, you're like a person in addition to being the main character of a story that I know very well. In Berkshire's case, there's a cult following of millions and millions of people who all know the story, who can all cite passages from the scripture.

David: It is, it's like a religion.

Ben: Charlie is a wonderful person in addition to being this character.

David: A figure, yeah.

Ben: Yeah. The surreality of the moment I think hit me the most when there was a question we asked Charlie and he responded, I'm not interested in being any more of a guru than I already am. You could see that even though it worked so well for him to get so much of his wisdom to the masses—and he and Warren both have been these incredible teachers their whole last 50-plus years—in addition to their main job of being great investors, capital allocators, operators, they're these educators on the side. That education and universe that they've created has blown up to the point where I think it weighs a little bit heavy at least on Charlie. It's almost like the burden he carries to get his wisdom out is that he has to be treated as a guru or a character in a story rather than just a person.

David: I have no idea what Charlie would say to that, obviously. But I think for people who find themselves in those positions, Steve Jobs was that, for sure, obviously Warren and Charlie are that, Jensen may be on his way to becoming that.

Ben: Naval has become that.

David: Yeah. Taylor Swift is that 100%.

Ben: It's almost like the Batman thing. What's the line from Batman begins, where he's talking about the frailness of being a person, and then when he becomes Batman, he says, as a symbol, I can be incorruptible, I can be everlasting, something elemental? It's that idea.

David: Totally. All these people are both people and symbols. I'm just imagining, once you become a symbol, you have two options. You could bemoan it, or you could embrace it. I think Charlie would say, look, it's going to weigh on you no matter what. No matter which one you choose, there's no going back. It's going to weigh on you. So you might as well embrace it.

Ben: One other behind the scenes point to make, which I think listeners might find interesting on these for Daniel, Dara, Jensen, and Charlie, they all were these massive lead time interviews. They don't just get coordinated a couple of weeks before. The story behind each of them was that Charlie was maybe a six month thing. It was once we started digging into Costco. Andrew suggested, hey, what if you interview Charlie for a follow-up?

Jensen, I think we originally reached out to NVIDIA before we started our NVIDIA part one research almost two years ago. This was a very different time for Acquired. We thought the dream is to interview Jensen, not the dream is to go learn as much as we can about NVIDIA and tell the story ourselves.

We reached out and said, can we interview Jensen? Even though we had a good friend of the show who was able to introduce us to someone on their executive team, we got a canned response of, he's very busy, that sort of thing. It wasn't until we did the work and then we made part one, part two, where then it caught NVIDIA's attention. The folks were like, geez, we should do something together.

It still took another year to figure out exactly what the thing was to do together and when. The same thing with Dara at Uber. Actually, a friend of the show, Brad Gerstner, had his investor day for Altimeter. I met Dara there. I think it took probably nine months after that to figure out a good time on the earnings calendar, on the PR calendar, when it could actually make sense to the interview.

David: Daniel was the quickest.

Ben: What did we say? Like, oh, next time we're in Stockholm, we'd love to do it. He was like, oh, yeah, next time you're here, let's do it.

David: It turns out, of all those four cast of characters, only one has a professional podcast studio in his office. That would be the one who runs a podcasting company.

Ben: So we happened to find ourselves in Stockholm, which actually was a highlight for me this year. I know it was only three days, David, but we had three beautiful days in May in Stockholm.

David: What a gorgeous, gorgeous city.

Ben: We did a couple of runs around the city while we were there and just made sure to take it all in.

David: The people at Spotify were so nice hosting us and just rolled out the red carpet.

Ben: Yup. By the way, I just want to say, I know a lot of people are lambasting Spotify's podcasting strategy. I think people are entirely missing the forest through the trees on calling that a failure.

David: Completely agree.

Ben: I think Spotify, in their music business, has gotten to scale and has no potential to create a high operating leverage business. They're always going to be giving the same percentage of the profits to the record labels who have an unbelievable amount of bargaining power over them. The question is, what do you do next? Audiobooks is a good bet, podcasting is a good bet, something where you can eventually gain operating leverage.

The fact that they did the huge Rogan deal, they bought the Ringer, they bought Gimlet, if you look at the dollars and cents today, you're like, geez, they've spent a lot of money, but they haven't generated a lot of profit from podcasting yet. They totally bootstrapped their way to become the scale player in podcasting. To the extent that there is a big pile of money waiting to be the scale player in podcasting, they're well-positioned to make it given the half billion dollars or three quarters of a billion dollars that they spent on content. They now have bootstrapped to scale.

David: That was the price of entry. We see it in our analytics. Spotify is the majority of consumption of Acquired out there.

Ben: No, it is our largest single player, but I don't think it's over 50% yet. One stat that's interesting is from Spotify Wrapped for podcasters. They make a Wrapped to give to you in addition to the ones to distribute to your audience, 76 percent of the people who listen to Acquired on Spotify found us this year. That is crazy on platform growth.

David: I think the corresponding stat is we grew something like 176% on Spotify or something like that, off an already decently sized base.

Ben: In many ways, I'm predisposed to think podcasting is more interesting and important in the world than it is. But if you write off the idea that Spotify will ever make decent margins in music, they need to make another bet. This feels like a pretty good bet, this and Audiobooks.

David: I think the other side that we see of it is this lead into some of our discussion of Acquired, the franchise, in 2024. Podcasting is a great business. I do not doubt that it is a very valuable, very large market for them to be in.

Ben: If you can figure out how to make being the scale player translate into lots of profits, which no one has done yet.

David: No one has done yet. The previous scale player was almost like a did-not-start. It didn't even run the race.

Ben: Apple, yeah, which as we've talked about before, we are immensely grateful for, because it enabled this open free podcasting medium that we have today which is to our advantage.

All right, David, that was the content this year. Before we shift over to the state of the franchise here at Acquired, we want to tell you listeners about our friends at Crusoe.

David: Crusoe, as you know by now, is a cloud infrastructure provider specifically built for AI workloads and powered by clean energy. NVIDIA is one of their major partners, and Crusoe's data centers are filled with all the latest Hopper GPUs linked up with InfiniBand and optimized for the best possible performance for all of your workloads.

Ben: Crusoe strategy is super straightforward, make the best AI cloud solution for customers using the best available GPU hardware on the market and invest heavily in an optimized cloud software stack.

David: Yup, and do it all using stranded energy that otherwise would cause environmental harm, and instead use that energy to lower the cost of running your AI workloads.

Ben: As an AI company, Crusoe, like Acquired, has had a great 2023 with pretty incredible growth. To wrap up the year, they and we wanted to highlight one of their customers that started building on Crusoe the beginning of this year just as a baby startup and closed a $102 million Series A from a whole bunch of great venture investors at Kleiner, Emergence, Lux, and NVIDIA itself called Together AI.

David: Together AI is actually, itself, a cloud that allows customers to train and run their own instances of open source models like Llama 2 and Stable Diffusion. Their secret sauce is that they've enabled really fast and performant inference. Once the models are fine-tuned and trained for customers’ use cases, they can scale their applications really fast and really big. Guess what? Part of that performance optimization under the hood comes from together building on Crusoe's infrastructure. It's a huge success.

Ben: There are a bunch more stories like this coming. So if you, your company, or your portfolio companies could use lower cost and more performant infrastructure for your AI workloads, check out crusoecloud.com/acquired or click the link in the show notes.

Okay, David, let's talk about Acquired, the franchise.

David: To kick things off on that front, I feel like you had a little more to say in our discussion earlier about, is growth good. Certainly, this is relevant.

Ben: My thinking on this has gotten simpler, which is basically, I am extremely open to fully saturating the niche of smart people who care about what makes businesses work, and great technology is successful and durable in the world. I think last year, again, I was being too precious about, I don't think it's good for our lives if we become too famous.

A byproduct of podcasting is you're not on video that often, so you actually do get to stay less famous than YouTubers or less visually recognizable, which is good. I just generally believe that recognizability is fun until you get to a certain level, and then it's bad, and then you can't put the genie back in the bottle, and your life's horrible. I would like to not become that.

If we can keep doubling, doubling, doubling, and it turns out the set of people who like studying business history, being thoughtful about it, and can write us with little tidbits saying, oh, I happen to think about it this other way, have thoughtful responses, and want to be a part of the Acquired community, if that turns out to be 5 or 10 million people, great. That's only goodness.

But I think my view on growth is, we have a natural governor to our growth, which is the universe of that set of people is a fixed number, and I'm just not interested in discovering a second market outside of that. To the extent that we can stay true to making the stuff that we love to make and serving that group of people, awesome. I just don't ever want to, you could say lower the bar, create some different product, or whatever. But to appeal to a different mass audience, that part is not really interesting to me.

David: This has become more evident to me, too, in some of our episodes this year, particularly the Porsche episode that we did with Doug DeMuro that blew up on YouTube.

Let's completely put Acquired aside for a second. My feelings about YouTube is that it is an amazing platform. It is an incredible gift to the world that YouTube exists. One of my carve-outs later in the episode is going to be The QB School on YouTube, which is a former NFL quarterback who makes amazing detailed breakdowns of what is actually going on every week on your favorite teams.

Ben: That's awesome.

David: It's incredible. The fact that that is available and accessible for free.

Ben: I'm literally going to subscribe to that right now.

David: It's amazing. JT O'Sullivan. We'll talk more about it later. Go subscribe if you care at all about football, even if you don't. That said, for our episodes that have gotten big on YouTube, if you go look at the comments, it is 100% not even the same universe of experience that the Acquired Slack community is.

This crystallized for me what you're talking about of, anybody who is the type of person who really cares about knowledge, understanding these great businesses, these stories we tell, and learning from them, come on in. We want as many people of those in the world. The YouTube comment world out there is not what we want.

Ben: Right. I'm not trying to be pretentious. I'm not saying you must have thought about it as much as I have in order to be a part of that. No, I feel like this has been an eight-year journey for us and for me, a 20-year journey of learning about what makes these technologies and these businesses become powerful forces in our world.

Anyone who is anywhere on that journey, including far past you and I, David, on that journey, I would love to have a relationship with either two-way through the Slack or even if it's just one way through people listening to Acquired. I'm not saying I just want to appeal to the people who are like, ah, here's a got-you on there actually is an eighth power. It's not that. It's the curious, thoughtful people who are not in the YouTube comments of the Porsche episode.

David: This had never happened to any of our episodes before. Until this year, we were not exposed to this part of the Internet.

Ben: Nothing had algorithmically blown up and reached a lot of people quickly. The only way anybody had really heard of Acquired until this year was their friend told them. That is always going to be a really high quality way to grow your audience. But if an audience grows quickly, the masses just enter and you get who shows up.

David: I think for both of us, this really clarified what we really want and meant by this. We're a little wary about growth. It's not that we're worried about growth. It's that we want to keep this place that's about knowledge.

Ben: And last year, (I think) we were getting a little bit shaky about the impact on our business from growing the show because getting larger wasn't equating to growing the size of our revenue.

It also was creating problems for the classic startup and growth stage companies that had been our long time sponsors, where we were going to them and saying, okay, the audience is four times bigger than when we worked with you two years ago, let's have a conversation about what it should cost to sponsor the show.

It was just like an immovable object meeting or an unstoppable force. There just wasn't anything to be done. So we've had to get creative in figuring out, what do we do to continue to grow the business?

It doesn't have to be commensurate with the audience, but the audience growing should make Acquired a more viable platform for larger sponsors, deeper partnerships, ways that we can increase both the size of our business, but also the durability and importance in the world of our business.

David: As we started experiencing some of the growth that we talked about, we realized that we'd hit a scale now where Acquired is a viable platform and partner to new sponsors that we can work with.

Just to talk about what those are for season 14 starting in January, two of our three sponsors are going to be JP Morgan, specifically JP Morgan's payments division and ServiceNow, both of which are incredible companies. We are super excited to work with them. In both of those cases, we knew those companies and knew those people there for several years now.

Ben: We should say the teams that have decided to partner with us from each of those companies have been longtime Acquired fans, and we've gotten to know over the course of years and years and years, and the answer has always been, hey, we should do something together. And then we talk about it for a while, and then the answer is always, okay, you're this little niche. Maybe there's something to do.

Now the conversation is very much like, oh, wow, you show up in the world in a big way with an important set of people. You're now in this category that we can totally work with you as a durable partner that we want to build this deeper relationship with. Especially now that we're in our eighth year, it's a very different thing to be partnering with Acquired than it was when we were in our third year. It's not a scrappy startup thing, it's a trusted entity in the world.

David: It would have been odd for Fortune 500s to work with us before recently. Now, starting to work with their teams, how a JP Morgan thinks about their brand, their positioning, and their whole set of marketing activities is a completely different animal than how startups and earlier stage tech companies do.

Ben: It's an intensely coordinated effort with a calendar that is already full by the time you're finishing 2023. 2024 is largely known. There's a whole set of events. There is a set of campaigns that are going to happen at different times, and these things are adaptable. But the level of foresight and planning that we've gotten to work with from those teams has just been a whole different animal than what we're used to. We love the nimbleness of small companies, and that enables us to do special things together.

Our fun task for next year—I'm excited to unveil some of the stuff we're doing—will be to bring that custom thing that we're able to do with these small companies, create native content for the medium, and do other collaborations with them as a company. For example, the way that we invest in our sponsors, the way that we speak at their conferences and things like that, to bring that to large Fortune 500 enterprises. That's such an amazing dance.

The way that these marketing organizations are able to figure out, okay, can we talk about this partner of ours? In what way can we talk about it? And how much leeway can we give Ben and David to natively work in an Acquired theme from six episodes ago and trust them that in this episode, it's going to come across right on air? It takes a very special marketing department to be able to behave the way that the Vantas, the Modern Treasuries, and the Vouches of the world do while stewarding a 2000–3000 year brand.

A few other things we've got up our sleeve, I think the goal is to be able to continue to work with these recent product/market fit, Series B-ish companies that we've always worked with. Between the back catalog, between interviews, we will figure out ways that we can still work with those companies.

Frankly, those are the types of companies that David and I love using for Acquired. We're customers of Vouch, and we use Modern Treasury. We like playing with it. We like following the founders on their journeys. We like having the founders on ACQ2 so we can learn about how they're building their companies. We also like getting the exposure to be able to invest. So it's awesome to be able to build these really tight relationships with those companies, especially when they're founded.

I just keep going back to Dimitri, his co-founders coming up to us at our very first live show after they had come out of YC and telling us about this tiny little Modern Treasury at the time. And you just look at the behemoth amount of money that they move now. There are dozens of companies in the Acquired ecosystem that we have relationships with, that we want to be able to continue to be a partner to and just figure out the right way to structure that.

David: And just as importantly, dozens, if not more than dozens that are going to be coming up over the next set of years.

Ben: David, what you're getting to here is now that we're both full-time on Acquired, we finally have the opportunity to do our investing together, then do it in a way that's uniquely Acquired, and that is native to Acquired. There's no big announcement or anything, but that's the thing to share with the Acquired community.

I've been writing these little angel checks into probably 10-ish of our sponsors at this point, ACQ2 guests, and companies we've gotten to know. We're finally going to be able to do that at scale and do it together in a way that we're not spending a lot of our time hearing early stage pitches or anything like that. But for companies that we already know well, David and I are going to join our investing forces and invest more in those growth-stage market-leading tech companies.

David: An early example of this, our great friends over at Vanta and their CEO, Christina, have been very, very kind guinea pigs for us. Vanta has been a long-time partner of the show. We've helped grow their business. Last year, Kindergarten Ventures, the early stage angel list fund that I run with my friend Nat, we did a $10 million SPV in Vanta's Series B. Now is a great test of, can we invest in a market leading company and put meaningful capital to work? That's a playbook that we're now going to be able to run more often.

Ben: More and together and specifically, as a part of Acquired. I just have this funny thing that happened so much over the last 2–3 years, which is a company is raising a great up round from one of the best few investors in the world in technology companies, and says, would you like an allocation? I can give you $1, $2, or $10 million in this big growth route. I write some little angel checks and like, that's been great. But it's time to do more with that opportunity.

David: This is all part of you coming full-time, and it's time. It's time for all this to happen.

Ben: Yup, it's time. That's the state of what we're thinking about for investing, which we'll put into action early next year and the direction that our sponsorships have been going to. We should say, we're excited to welcome back for next season, in the third slot, friends of the show, Pilot and Vanta, are splitting slot number three. First three episodes are going to be Vanta, second three are going to be Pilot.

I think we figured out a nice balance to be able to work with Fortune 500s as a scale platform and also to be in business, both investing and on a sponsorship basis for their go-to market with growth stage companies.

David: All of which, we are super excited about. You and I are super clear with each other, and we want to be super clear listeners with all of you, too. The show is the most important thing. Acquired is the show. That is what you and I love doing. That is why you and I are full-time podcasters now, and all of our effort is going to go into the show.

Ben: It's what we're most excited about. Also, if you just think about the Mungerism, you show me the behavior and I'll show you the incentives, it's literally the thing that makes it all work. If you look at the Acquired flywheel, it is produced unbelievably high quality, deep dives on these companies, and try to create some of the deepest business content in the world in a very, very approachable, fun, conversational way, and share the learning journey that we're on with everyone.

Like you said a minute ago, we're really clear with each other. I feel like that mantra comes up on our phone call once a week or something. It's like, the quality of the episodes is all that matters. We just spent 10 minutes talking about how we're evolving the franchise, working with Fortune 500s, and how we're going to be doing more investing together and all this stuff. The only thing that matters that drives all of it is the quality of episodes.

David: On that front, we've got some fun stuff planned for next year. Episode one, we are already deep in research for, we're not going to give it away what it is, but it is a new category for Acquired, which is...

Ben: I don't think we've ever touched it in all 280 episodes or whatever. It's one of the largest categories of spend for most countries' GDPs in the world.

David: I think it's got to be probably every country's GDP in the world.

Ben: Depending on their level of dysfunction, yeah.

David: Yeah, good point. Anyway, we're already deep in the research. The story itself, industry aside, financials aside, market cap aside, this is a century-long incredible story too, so I'm really, really pumped.

Ben: It turns out, there are a lot of them out there. We often get the question, are you afraid you're going to run out of episodes to do? No. Everywhere we look, there's some new, fascinating, multi generation business that you'd never expect could have thrived through all these times that they have and have five unique, amazing vignettes to tell through their whole history to today. As long as we want to keep doing this, there will be fuel to keep doing it.

David: This year. It was brands, luxury, and retailers. It'll be this other thing hopefully next year, but we look around the corner and there's a whole new category of companies to cover. We're pumped for that. Ben, you have already spilled the beans that another luxury brand is in the works. Absolutely. What else we got cooking?

Ben: We'll hit some big tech, we have to. It feels like an obligatory nod. We'll hit something in the entertainment, gaming, and streaming world. We could keep naming categories, but one listener question that we got that I think is worth chatting about here is, how do we handle current events? There are lots of episodes that would be very appealing to do.

For example, the dozens of requests we got two or three weeks ago for OpenAI after the boardroom drama. We very much have moved away from current events. I think that is, in part, because of what we talked about earlier that we want to create N of 1 content.

The way to create the most possible commodity content is to try to cover the current news cycle that literally everyone else is covering concurrently. I think that's a way to get completely drowned out in the noise, create something that's not special, and create something that even if you blow it out of the water has a shelf life in this world of about eight hours. We have decided to move as far away from that as possible.

The other reason I think is a little bit our disposition where David, when you and I are looking at something brand new that's unfolding in real time, I think we've really started trusting our gut that there's probably more here than there seems to appear on the surface. Years ago, I don't think we felt that. I think we thought Uber is going public, cover Uber. Even three years ago, Airbnb was going public, cover Airbnb.

There was an Acquired way to do it, where most of the episode could actually focus on the last 10 years, and only a little bit at the end was focused on the last few months. But the more current an event is, the less evergreen value that it will have, and the more likely it is that you could really blow it.

I feel super self conscious that we interviewed Sam Bankman-Fried, and we're not investigative journalists. We weren't going to spend the time trying to unfold and dig up, hey, is this all legit? It's like Sequoia had just invested a huge amount of money. Everyone and all the possible signals had validated this person in this company. It was seemingly enormously free cash flow positive.

David: And yet, yeah, we regret doing it.

Ben: We totally regret doing it.

David: And we're going to try our best not to set ourselves up to do something like that again in the future.

Ben: The question becomes, what should we do? What we are structurally well set up to do is these huge retrospectives where the story is written, and the story is known, and it's about really synthesizing it and applying it to today's world.

There is just no way that we are ever going to do investigative journalism and frankly, investment diligence often with private information that you need to do to get a real time story right. It is structurally impossible for us, so, swear it off. I think that's the answer.

David: I would even go so far as to say something that I've taken, especially the last couple of years of Acquired. The story is always deeper than you think. Let's even say, we were set up to do investigative journalism and deep diligence that we would then share with the public on a company.

Ben: In real time.

David: In real time. I still think it's impossible to get it right. Look at the best VCs out there. They are, at least on the diligence and investing side of the equation, making these calls in real time, and the very best of them only get it right 20% of the time, at most 30% of the time. I don't think it is possible to do.

Ben: Fraud is different.

David: Yes. I'm not talking about fraud, I'm just talking about getting the story right, like the story of Uber that we did on IPO day back when we did that episode. That was not the full story of Uber.

Ben: To revisit the SBF interview in particular—I haven't listened to it in a long time—I do think we've generally had our wits about us enough to always be question askers in terms of, hey, this seems really crazy. How did that happen? You and I have never been the types to be like, everyone should be extremely excited about this, and we urge you to go get involved with this now.

I always chuckle when we say they're not investment advice, but that's more my demeanor. I truly mean it. I was like, hey, I've done a certain amount of work on this. I'm going to tell you what I learned. Also, I am not recommending you act on this in any way ever.

I think that fortunately, our disposition, especially among some of the crypto and Web3 mania was a little bit more of that. But we've learned lessons from that, and those lessons are you get to choose the games you play, and we don't need to play the current mania's game.

David: As much as I want to take as a kind personal compliment all the things you're saying and apply it to myself, too—but I really got to give credit to you—I think this is a big part of the demeanor that you bring in your personality to the show. You are an optimist as we both are, and we've talked about it a lot on the show.

Ben: But a skeptic.

David: In the big picture, you're an optimist. I think this is one of the things that makes us a really good team. In terms of the actual goal and what we're trying to do here in Acquired, what it is, and what we want it to be, we are 100% aligned. And you do a really good job keeping us in check on this front.

Ben: Thank you. If we didn't have you, then we would just tell stories of old retailers and old oil companies that carry no risk associated with them.

David: Maybe we should do that because those are our biggest episodes.

Ben: Yeah, thank you. I'll take the compliment. You do need both. You need someone who's staying attuned to, maybe this new thing everyone is talking about is a breakthrough, interesting thing. And you also need the, hey, let's pay attention to history.

I think someone asked a question in the Slack, do you consider yourselves journalists? If anything, because we've gotten the question, are you analysts, are you journalists, we're certainly not reporters. But I think on that spectrum, we've shifted much more toward historians than journalists.

I don't ever expect that we are going to get a story right about something in flight, but hopefully given a couple of months to prepare, we can get the story right about something that's happened over a long period of time with a lot of perspectives where people are willing to share everything they know since the hatchets are buried. Does anyone have the story right on what happened in the OpenAI boardroom right now? I don't think so.

David: I don't think so either. Reflecting on this too, I think, ironically, moving to this role as our and my over the past couple of years official job function and identity of being historian versus venture capitalist investor, has made me a much better investor.

Ben: Isn’t it the truth?

David: For me, specifically, when I was only an investor or investor was the primary thing, everything we were just talking about were both strengths and weaknesses for me. I would fall in love with companies, deeply in love with companies.

Obviously for people who listen to us, I still do this with Acquired episodes with the companies we cover. That was a great strength, too. You can really help companies and founders can really feel like you are on their team and aligned and pulling with them.

Also, just purely in terms of making the right investments, having a bit more arm's length objectivity and perspective helps. Shifting my focus to the show certainly has made me a better investor.

I just look at the investments that I've done and I've been more active in the past few years than I was when I was a VC, you and I are going to be even more active together going forward. I never would have expected this, but it has really helped me.

Ben: It turns out, knowing history is very helpful in analyzing the present.

David: Yes. Just having this other thing be my obsession has allowed me to have a little more arms length.

Ben: It's also very nice, because what it does is it puts most things in your ‘too hard’ pile. The fact that your main job isn't to go pick early stage companies. When the whole world is your ‘too hard’ pile because you need to research an Acquired episode, only the no brainers end up actually grabbing your time.

David: A hundred percent, yes.

Ben: The no brainers that don't take up weeks and weeks of your time to decide if you should do it or not are the ones that end up actually becoming the investments that you do. Especially when you can take something you've learned from history and apply it to the present, I think that's the David Rosenthal sweet spot.

David: Yes.

Ben: It's funny. Marketing in particular, I think doing Acquired has made me such a more savvy marketer. Perhaps the most useful I am in boardrooms now is being a reality check on, are you actually reaching people (a) in a medium that's going to convert to what you want them to do, and (b) with a messaging that people will care about?

Most of the time, most people are creating lots and lots of copy and work products that nobody cares about at all. That goes for podcasts and startups. I think breaking through and creating something where people know, oh, I should pay attention to this, that's still so rare.

David: We're having this discussion, you and me on Zoom, a couple of months ago with a world class investor. The frame that we put on it was taste.

Ben: This conversation, yeah.

David: You can't really teach it. You certainly can develop it, but this is a version of that.

Ben: Yup. Okay, what's next on the docket?

David: Keeping on this topic of audience Q&A, a couple of weeks ago, we got this kind email from listener Martin from Scotland. In it, he had a list of questions for us and said, if you have time to answer a few of them, I would really appreciate it. We looked at it and we said, gosh, these are awesome questions.

Ben: Should this be the entire episode?

David: This should be our holiday special. Thank you, Martin. We are going to dive into a bunch of them here, and they are just fantastic. “What is the book or books you've given most as a gift and why? Or what are 1–3 books that have greatly influenced your life?” Ben, you want to go first?

Ben: I am not actually a huge book gifter. I love the practice, I just never remember to do it. It's great when people are able to do that. I think a huge one for me is The Psychology of Money. There's a recency bias on it, and we mentioned Morgan Housel at the top of the show, a good friend of the show, great human.

Truly, I massively changed the way that I personally invest based on that book, and the way that I just think about spending my time, family, and demeanor throughout the day.

Another one is this book, and I haven't read it in probably 12-14 years. It's called The Artist's Way by Julia Cameron.

David: Tim Ferriss loves this book, right?

Ben: Yeah, I read it as a part of a college class, a cool class at Ohio State called Personal Creativity and Innovation. One of the mechanics in the book is called Morning Papers. The rule is you must write a three page stream of consciousness before getting out of bed in the morning.

It is so cool, because it flushes out all the crap from your head so that you can go and have a clean slate to start the day, and you're not wasting your time processing. You're not wasting CPU cycles in your brain processing and ruminating on something, that you really just need to get out, get on the page, and then you can focus on other things. Or perhaps focus on that thing, but at least now you have a little bit of clarity on it because you've written.

I should do it more often, but I think it's this amazing practice. I hate the phrase, but life hack that I remember feeling, it really worked for me while I was doing it.

David, while you give your answer, I'm going to turn around and look at my bookshelf to find a third one.

David: I have a bunch more books to talk about later in the episode. But the one that I've gifted the most is a book called Transitions by William Bridges, which was first given to me by Ben and my good friend Mark in Seattle. Ben, have I given you this book?

Ben: I don't think so. You've mentioned it.

David: Okay, we need to rectify this right away. Watch your Amazon deliveries. I'm going to send it to you.

Ben: It's not like anything's randomly showing up to my house three times a day from Amazon right now.

David: You'll find it again in six months or so when you're cleaning out your basement. This book is a super cool concept. It was written (I think) in 1980. The idea is about major transitions in your life. It could be a good transition like having a baby, welcoming a new family member. It could be a bad transition like a death in the family, career related, losing a job, or something like that.

The thesis of the book is that when this happens in your life—and it will many times; it's going to sound a little gruesome—you need to kill your old self and be reborn as your new self. That sounds super woo-woo, but if you actually think about it, it makes sense. Your identity who you thought you were before a major transition has to change.

There is no way around it, and you'll go through the five stages of denial, anger, blah-blah-blah, all this stuff. This book is a great way to streamline that process, but you have to accept that you that you were before is no longer, and then you can create the new you. I found it incredibly helpful both for big challenges in my life and for great positive stuff like having a baby.

Ben: All right, that's awesome. I will watch my front doorstep. My third one is a classic Thinking Fast and Slow by Kahneman and Tversky. It's just everything you think you know about the way your brain perceives the world and how you make decisions is wrong. Reading it doesn't make you get any better, but at least it makes you aware of how wrong your decision making is unless you pay unbelievably close attention, write down exactly why the decision is being made, look at all the data, and even then you'll probably get it wrong.

David: Ben, there is a very fun Easter egg that is going to be buried later in this episode for you to find related to this book recommendation.

Ben: Sweet.

David: Ben and listeners can go on a little treasure hunt.

Ben: Great.

David: All right, next question. “What purchase of $200 or less has most positively impacted your life in recent memory?” This is a super easy one for me. No brainer, my Zojirushi hot water heater. For people who don't know about these, and I think this is probably most of the world outside of Japan, this is a device that sits on your kitchen counter and keeps several gallons of water at a set temperature constantly.

I am a huge tea drinker. I use this thing four or five times a day and have for the past decade plus. It is amazing. I set it at 195 degrees. I drink green tea every day. I resteep my teapot constantly throughout the day. It has unquestionably made my life better and probably will extend my lifespan by several years from drinking tons of green tea every day.

Ben: Whoa, that's awesome. Zojirushi is the brand?

David: We'll link to it in the show notes. Zojirushi is the brand. It's a Japanese company. Everybody in Japan has one of these things.

Ben: Awesome. Mine might be a pair of Nike shoes. Living in Seattle, it rains all winter, or at least it's wet all winter. There's a particular pair. I'm going to look up what it actually is so that if you want to buy it, you can. It's called the Nike Men's Pegasus 4 GORE-TEX.

The GORE-TEX is so good. It makes winter running possible, and they even have a few of the colorways that are not totally insane so that you can wear them as everyday sneakers. But I basically wear them all day every day in the winter, and it makes me far less afraid to go out in the world, because I don't like having wet feet.

David: Amazing. Next one is the Tim Ferriss question. I don't think anybody's ever asked us that before. “If you had a gigantic billboard anywhere with anything on it, metaphorically speaking, what would it say and why?”

Maybe the most random fact about me, I was a French literature major in college, particularly a 17th and 18th century French literature expert. I'm hardly an expert, but that's what I majored in in college.

There's something that has stuck with me from then. The older I get and the world we live in becoming more of the world it is, has stuck with me more and more is the last line of Voltaire's Candide, Il faut cultiver notre jardin. We must cultivate our own garden. Especially today, there's just so much in the world that you don't have any control over. The only thing you have control over is your garden and cultivating your own garden.

For us, that's Acquired. For me, that's Acquired, my family, and maybe some other things over time. Just focus on what is in your control, be great at that, and be good at that. Be great and be good at those things, and that is what you can do. At least, those are the words that I have come to live by.

Ben: I love that. I actually don't have my own answer to this question. There's someone else that I know that has an answer to this question that I quite like, so I'm just going to recant their story, but I should go find some words to live by.

A good friend of mine, his dad had a saying when he was growing up that he would always remind his kids, just be kind. Hey, whatever the thing is, just be kind. Someone might be being a jerk to you, and they deserve some kind of repercussion. But you should just be kind, and certainly the world will figure out a way to deal with this person's action at some point.

The thing my friend did is, at some point, as his dad was getting older, he asked him to write down the motto on a piece of paper and sign it. He went and got a tattoo on his back of just be kind signed by his dad's name. I love that.

David: I now know who you're talking about. That's amazing.

Ben: I just think that's the coolest. I often remind myself of that. There's almost nothing to be gained by me exuding anything but kindness in this moment. It doesn't mean let someone roll all over you, but it does mean always realize that it's the Michelle Obama thing of when they go low, we go high. You going high is never going to hurt you in the long run.

David: There's never any reason not to be kind.

Ben: Right.

David: I love that. That's so good.

“What is one of the best or most worthwhile investments you have ever made? It could be an investment of any type.”

Ben: Cultivating the relationship with my wife, hands down, 100%. The second best is cultivating the relationship with you, which has led to so many things that have made my relationship with my wife and building a family possible. There is no if, ands, or buts about that.

The house I'm standing in is thanks to Acquired. The lifestyle I enjoy is a hundred percent Acquired, the fact that I wander around all day listening to audiobooks, the thing that it's done to my demeanor and my personality. Truly, the life that myself and my family enjoy is because of what you and I have built, and thank you.

David: I have the same answer. I actually didn't write down Jenny, but I should thank you for reminding me. Jenny, I love you. Ditto. Nothing more to add.

Ben: And probably therapy. That's probably the second.

David: I agree. I started doing weekly therapy. I've done it off and on before, but I started doing it weekly committing to that this year, and it's just immensely helpful.

Ben: If you feel like it's not helpful, just switch therapists. You'll eventually find someone who's helpful for you.

David: All right. “What is an unusual habit or absurd thing that you love?”

Ben: I eat a Starbucks spinach, feta, and cage-free egg white bite wrap every single day, and I have for years and years and years. I actually go to Starbucks and buy them still in the package cold. I buy them 10 at a time, and then I'll just make them every morning at home.

David: We were in the airport flying back from LA. We're at LAX after interviewing Charlie Munger, and you got one of these at the Starbucks at LAX. I've known this about you for years. I just looked at you and I was like, Ben, I think you have eaten more spinach feta wraps than any other human being in the world. You thought about it and you were like, yeah, I think that's right.

Ben: Because I think I've consumed probably close to 3000 of them.

David: This is amazing. This is the very best Ben Gilbert trivia that exists. When did you start?

Ben: I'm going to guess around 10 years ago. I think it really ramped like seven-ish years ago, so maybe 2000–2500. Pretty much every day, breakfast or lunch.

David: Speaking of special, unique interviews that only we could do. I don't even need to finish that sentence. We're just going to leave it at that.

Ben: One day, yeah.

David: Okay. I'm not even going to answer that because I can't top that.

Ben: “In the last five years, what new belief, behavior, or habit has most improved your life?”

David: I was going to say, adding weekly therapy this year. And related to that, just listening to my instincts, in particular my physical reactions to things. It takes a while to train your instincts, so I don't know if I just listened to my instincts and followed my instincts when I was 25 that that would have been the right thing, but I'm pretty dialed at this point on what's right for me. I find that I have physical reactions in my body to things. Listening and tuning into that usually is the right way to go.

Ben: I like that.

David: And just being more aware of it.

Ben: I think you have a good sense of that, too. If somebody is a 1% huckster, I notice you get physically uncomfortable and try to create distance between you and them.

David: Yes. That's just me. I don't know if everybody has that.

Ben: I think mine is a thing that I'm still working on, but the amount that I have done it has dramatically improved my life. Be more present, be a better listener. The answer is almost always tune in more to the person that you're talking to and really understand them. I think listen harder is usually the way to better understand what someone else around you wants. It's often not what they're saying. It's what they're feeling.

My therapist regularly uses the phrase, it's about the feelings, not the content. If you can figure out how to be present, listen better, and meet someone else at their feelings level, you don't even have to make their feelings feel better because they might feel fine, but how do I tune into you emotionally and not try to just have a conversation about the content you're saying? You're much more likely to both have a positive outcome and have a better rest of your day.

David: Dude, you're going to crush parenting.

Ben: Well, easier said than done.

David: Yeah, right. Easier said than done when you're on hour three of intense feelings, shall we say? “What advice would you give a smart, driven college student about to enter the ‘real world,’ and what advice should they ignore?”

Ben: Oh man, let's see. Some advice I gave three years ago that I really deeply believe in is harvest when everyone else is harvesting, and build skills when there's no harvesting to be done. In particular, this person had the opportunity to go work at a big consulting thing and make good money first year.

They were thinking about doing that or working for a nonprofit as their first job, because their heart was in the right place. They just wanted to do good for the world work. I was like, we're in a weird time where I don't know when it's going to end, but everyone's making stupid money right now.

While there's harvesting to be done, go participate in that. You should build the best foundation you can, but I promise you there will be a time where this job opportunity is not available to you, and you will look back at a few years of making a small salary in your first few years out of school and wish that you had built a little bit more of a foundation, because I just think this time is going to end. It flies in the face of be fearful when others are greedy and greedy when others are fearful.

David: This is be greedy when others are greedy, and build when others are fearful.

Ben: And be mindful that you're in this temporary moment. When there's opportunity to harvest, harvest.

David: Reflecting on the 2020–2022 timeframe, that is a huge takeaway for me. Bill Gurley has, for years, said this. You got to play the game on the field.

Ben: Benchmark is very good at that.

David: Yes, they are. My answer, I would just repeat what I said on The Art of Investing podcast that we went on a few months ago, which those guys have just built such a great show. They're teachers. They've been teachers for years.

Ben: Rick and Paul are investors, capital allocators, and great partners to the people that they work with, but even their demeanor in one on one conversations is that of a learner and a teacher.

David: So wonderful. What I said there, literally, two college students was both the following your own path has never been more rewarding in this world that we live in, and never been harder. There's so much pressure out there. Social media and everything else about the world we live in, there's so much pressure to conform. That makes standing out and following your own path that much more valuable. Harder and valuable.

Ben: People are underrated. In my harvesting comment, it was interesting that what I did was to describe two job opportunities. I think there's another way to make decisions, which is surround yourself with—if you're an ambitious person—the most intelligent people you possibly can who are the closest to ground zero for your industry. Be where the interesting thing is with the people who are the best at it.

David: This is the Marc Andreessen's go to Denny's.

Ben: Yes, always go to Denny's.

David: Always go to Denny's.

Ben: They can't just be smart. They have to be unbelievably trustworthy people worthy of your time and partnership. That's the harder thing I think to suss out over time. That's hard advice to give a college student.

David: I don't think those two things are at odds.

Ben: I don't think they're at odds either, but your circle of opportunity gets smaller when you require more constraints when you require both of them.

David: “In the last five years, what have you become better at saying no to distractions, invitations, et cetera? What new realizations and/or approaches helped? Any other tips?”

Ben: Oh, man. David, there's a thing that you do that I'm so much worse at, which is you never feel compelled to respond. You never feel like somebody else can give you a task to do.

David: It's not my most flattering quality.

Ben: But it's the thing that allows you to give energy to the people in your life that matter the most to you. That's the thing that I've long been jealous of. I'm very okay with somebody emails me a form email that I've never heard of them or their name. It's very easy to archive that. It's harder when it's like somebody that I met three years ago, that I really enjoyed getting coffee with. Now I have eight of those in my inbox, and I want to at least say I don't have the bandwidth for this right now. You do those eight times, and suddenly...

David: Two hours have gone by.

Ben: It's actually taken away some of your energy and your life force, exactly. You do it to me sometimes, so I know what it feels like to be on the receiving end of it. You have a remarkable tendency to truly wake up every morning and say, what actually is important and needs to get done? You don't do the other stuff, and it's okay if that has a little bit of collateral damage.

David: I was going to say the same thing, and you said it for me. Like I said, this is not my most flattering natural tendency. But as I've thought about this over the years, what I've come back to is I reach out to lots of people. How do I feel if I don't get a response to all of those? I feel fine. I assume that folks that I reach out to have something going on, they're busy.

Especially now, having kids. It's just like, I get it for them and I get it for me more. There's nobody more important to me than my daughter, nobody, and my wife and you. Okay, outside that circle, you are my most important people, and there are only so many hours in the day. It's like a version of you got to put your mask on before helping others. It's like, I got to put those relationships on before others.

Ben: Yup, and everything's a trade-off. In a vacuum, sure, you should give your time and your life force to everyone. But you have a finite amount, so it's a priority thing.

David: Okay, last one. “When you feel overwhelmed, unfocused, or have lost your focus temporarily, what do you do? What questions do you ask yourself?” This is so easy, and this is the perfect one to end on. We go make a great Acquired episode.

This has been such a gift to me in my life because up until we started doing Acquired and up until Acquired became my full-time job three years ago, I didn't have anything that I could control like that. I don't know what I would have answered to that question. So much of everything was out of my control. When you're a venture investor, you don't control anything.

Ben: Oh, my gosh, yeah. What do you mean? Just go do a good deal. That way in 10 years, you'll know if it was good or not.

David: Exactly. We're so lucky now that we have this thing that we do, that we can do, and we're good at, and we know how to do. No matter how bad things get or no matter what's going on, we can just go in a lab and we know we can make a great episode. We also know it's the best thing we can do. No matter how good or bad things are going, it's always the best thing we can do.

Ben: It's an interesting derivation that I want to take this down. I've had this life advice that I've been thinking about to give to my son when he's old enough to understand life advice, which is not right now.

David: You're going to have to wait a while.

Ben: He'd scream in my face. It's interesting that he can listen to all of this. I don't think he ever will, but it's crazy that there are hundreds of hours of his dad talking. Do you ever think about that? Our kids will get to watch us grow up. I guess there's not video until year five or so, but still listen to us form who we became, assuming that we do this for decades and decades to come.

One of the pieces of life advice, and David, I was telling you about this on our walk in LA up at Runyon Canyon. We were down there interviewing Charlie. When you're a young person, you should try to become singularly productive. I mean productive in the economic sense that you are able to, soup-to-nuts within your control, make something of economic value, and put it in the world in a way that you own the design, engineering, creation, marketing, distribution, monetization.

Everybody shouldn't do that. The corporation is a great structure that enables people to work together in a creative way to produce an output, but your life is way better if you have the capability to singularly produce something on your own, and then it's always your choice of how much stuff outside your control you want to let in.

You might be a singularly productive individual who then goes on to be Craig Federighi and run all of Apple software, but then it's your choice. You're not reliant on a bureaucratic structure for you to thrive and politic inside of.

David: This is another one of those paradoxes, I think. The way the world works today, this has, on the surface, never been harder. Organizations are bigger, things are more complex, things are more interdependent. The idea that you could as a person and especially a young person be able to do that is hard to fathom. And yet it's also never been more true than ever. All you need is an internet connection, and you can find and learn some version of this.

Ben: It's pretty wild.

David: All right. As we drift towards the end, to borrow a Ben Gilbert phrase, drift towards the close of our 2023 holiday special and our traditional extended carve-outs, we have a very special carve-out to kick things off.

Ben: This might be my favorite sponsorship segment of all time.

David: For our last segment for this year with Blinkist and their parent company, Go1, we have something really, really special.

Ben: A little treat for listeners from David and his email pen pal.

David: One of the many amazing things about doing Acquired is the people, all of you who listen, and then we get to meet many of you and build relationships with you, sometimes this really blows us away.

We asked Blinkist if we could highlight two of those people, who have been important to us over the past couple of years, and have Blinkist build bookshelves for them to share with you all of the books that have been most important to them in their lives and careers.

The first of those people is someone that is surreal for me to say here, but has been a huge supporter of the show and a mentor of mine now for the past few years. He told me when we first met that he will never come on the show.

Ben: And has reiterated that three or four times.

David: Yes. Once we tell you who this is, you'll understand why, or many of you will understand why. He did say that if there ever were another opportunity to pass along some wisdom, he would love to do it. This is the perfect venue.

Our first holiday bookshelf is from Mark Leonard, the founder and CEO of Constellation Software. If you go over to blinkist.com/mark, you'll find an annotated list of Mark's favorite books with some very rare insights from him on why he values them.

Ben: Mark is an absolute legend in value investing circles right up there with Warren and Charlie. If you don't know Mark or know of Mark, it's worth looking up Constellation Software. Anything you can glean on the Internet is going to be totally fascinating about the company that they've built.

David: We're very lucky to get to know him. Our second holiday bookshelf is from another good friend who in the opposite vein of Mark is (I think) maybe more publicly well-known as a business biography expert than just about anybody in the world. We'll let him tell you his own top favorite books here. I think maybe for the first time ever that he's done this, David Senra, welcome to the Acquired holiday special.

DS: Thanks for thinking of me. Thanks for having me, David.

David: I know this is like picking your favorite children, but your favorite business biographies of 2023.

DS: I wanted to do some that I absolutely loved and where there was actually an Acquired founders overlap. The very first recommendation would be the new Stripe Press edition of Poor Charlie's Almanac that just happened to be published a week after he passed away. There's something on the back.

There's a quote from Charlie Munger, and he says there's an old two-part rule that often works wonders in business science and elsewhere. (1) Take a simple, basic idea, and (2) Take it very seriously. I really feel that you and I are taking Charlie's advice to heart. We're just taking a very simple idea of learning from history, and then we take it very, very seriously.

The idea that we got to spend time with him in his very last year, I don't take that lightly. To the degree that I can, and you guys definitely did it with your excellent interview with him, I really think being a steward of his ideas and trying to push it forward to past generations so they're not forgotten, is a very important part of my mission.

David: Okay, you're number two, I'm looking forward to, because this was actually my personal favorite episode that you did this year.

DS: This book is almost impossible to find. It's The Dream of Salomeo: My Life and The Idea of Humanistic Capitalism by Brunello Cucinelli. I had to have him on my list. Out of the 330 entrepreneurs that I've studied for the podcast so far, it's shocking how many of them made the mistake of over optimizing for their professional success at the detriment to their personal life, their relationships, and their happiness.

Brunello, along with Sol Price and Ed Thorpe, is really up there with how I want to pattern my own life. He says, “I've always been firmly convinced that in order to successfully stand out, you need to focus on one single project representing the dream of your life.”

It just speaks to the first class person that he is in the first class organization that he runs. The podcast comes out, it became very popular, him and his team listened to it, and they sent me a handwritten note. I've never felt paper that's more luxurious than this.

They do the most Italian thing ever. They sent me a bottle of their Cucinelli olive oil. Again, he's very thoughtful. It's very obvious when you read the book. By the way, he's running the company that he's paying attention to everything.

David: All right. What's number three?

DS: Okay. Number three and number four are actually related. You find these weird hard-to-find books. This is one of them where it blew my mind that the fact that in the 1980s, the richest American was somebody that no one ever heard of. There's only one book on him. It's this book called The Invisible Billionaire: Daniel Ludwig. It's a biography of Daniel Ludwig written by Jerry Shields.

The book starts off saying that this photographer located the richest man in the world, and no photographs have ever been taken of him. I'm like, what are you talking about? You learned that Daniel was just excessively focused on just his work. He had no other hobbies besides physical fitness and building his business. And he did that till he died.

What I love about it is you just find somebody that is completely focused on doing the best job possible for his customers and for his own sense of satisfaction of building a business that he is proud of and that is operating. The way I would describe his approach to his business, it's like an artist painting a canvas. Number four is The Taste of Luxury. You got to pronounce his name.

David: Bernard Arnault.

DS: Can you just pronounce the whole thing? I butchered all the French names in this episode.

David: It's so fun. The Taste of Luxury: Bernard Arnault and the Moet-Hennessy Louis Vuitton Story.

DS: Okay. This is on the list because I highly suspect he might be the best entrepreneur on the planet that's still operating and running his company right now. If you think about the fact that he knows everything down from the tiniest details, which there are crazy stories about this, to the big strategy, to the capital allocation, decisions, I don't know if there's another more talented entrepreneur than him. His relentless dedication to really pay attention to every aspect of his business is something that I'm trying to do for mine.

The quiet episode on LVMH is one of the best episodes of any podcast I've ever heard, not just Acquired, any podcasts. It's incredible. I can't tell you how many people I sent that to and how many times I've listened to it. We were together at your house in San Francisco, and you were kind enough to give me this book, which allowed me to do the podcast. Because at the time, you had a copy that you spent several hundred dollars on. And then if I wanted to order the book, the book was, I think, $3000.

David: Yeah, nuts.

DS: I think the important thing is identifying an opportunity that no one else sees. There's this great writer, Cedric Chin, that I really like. He actually wrote something about Mark Leonard. The foundation of a great career is based on finding an earned secret and exploiting it for multiple decades. The reason this book is so amazing was because it ends, and Bernard is 42 years old.

David: Yeah, it ends at the beginning.

DS: He is saying, hey, these luxury brands are hard to compete with because if you are to have one, it's usually 50–100 years old. Everybody from the outside is telling them, this is a quote, "I remember people telling me, it does not make sense to put together so many of these brands, but it was a success. It was a recognized success, and for the last 10 years every competitor is trying to imitate."

The book ends and he's calling his shot. He's like, hey, these seem to be good assets. I'm just going to keep buying them and then just keep compounding. You fast forward 30 years later, and he's the richest man in the world.

David: I got to tell you, giving you the book was a selfish act on my part, because I'd already read the book. I wanted your episode on it. I didn't just do it out of the goodness of my heart. Okay, speaking of number five.

DS: This is Sol Price: Retail Revolutionary written by his son, Robert Price. This is another Acquired founders crossover. The episode I made on Sol Price, I titled purposely. The most influential retailer to ever live, because if you look at the people who are on record saying they benefit ideas from him—Sam Walton, Jim Senegal, Jeff Bezos, Bernie Marcus—it all stems from this guy.

Really, the reason I picked this is it's a perfect crossover for your guys excellent Costco episode. This goes back to finding people that you admire not just for their business success, but their success in life. Imagine that your son, after you pass away, writes a biography on your life. This is one of the last paragraphs.

If you don't mind, let me just go out and read this whole paragraph. “Sol was a poster child for the American dream. His immigrant parents were born in a small Russian village. Sol was the first in his family to graduate college. He earned a law degree. He became an exceptionally successful businessman and philanthropist, and he celebrated 70 years of marriage. He was a good father who instilled high values in his sons, and he never walked away from responsibility.” It doesn't get much better than that.

David: Amazing.

Ben: David, so fun for you and David Senra to get to have that conversation. I love it, David. I wish I could have joined you, and thanks for doing that while I'm on podcast paternity. You can find his bookshelf at blinkist.com/senra. And our thanks to Blinkist for allowing us to share our good friend's bookshelves with you for the holidays.

David: Ben, you're in my traditional extended carve-outs to end the holiday special. I have a special family one that I want to start with, if that's okay. My brother-in-law, Dave, Jenny's sister's husband, is the most beloved member of our entire family, including my daughter who, no doubt about it, loves him way more than mom and dad. He's the best.

He, until this year, was an early employee at a venture-backed startup here in San Francisco. He changed jobs. He joined a company called Mill this year. He was telling me about the company. I was pretty skeptical, honestly, to start.

Mill was founded by Matt Rogers. Matt was Tony Fadell's co-founder at Nest back in the day. Mill is the Nest thermostat version of a compost bin. It's an internet-connected compost bin.

Ben: I have heard of this, yes.

David: At first I was like, okay, Dave, I'm glad you're passionate about this. I can't imagine how many people out there really need an internet-connected compost bin. He joined the company. He said, this is really great. I was like, okay, I'll support the family, we'll get one. This thing is freaking awesome.

I was totally wrong. Obviously, this is a luxury good. It's not a luxury good. It's compost bin, but it's a premium good. I did not realize how much I needed this thing. For basically my entire adult life, I have had fruit flies in my kitchen on and off in the compost bin. If I didn't have fruit flies, it's compost bin. It's compost in your kitchen.

This thing roasts your compost overnight and is internet-connected. It runs overnight, you put all the food scraps in there, it roasts and churns it. It turns it into chicken feed. Every morning it gets fully roasted, which means no smell, no mess, and it absorbs. This thing is like a black hole of compost. It's a big bin.

We will go weeks as a family of just putting everything in there. No emptying, no going into the garbage, no smell, no nothing. When it gets full, your app tells you that you put it in a box. They send you a bunch of boxes, like a bag in a box. You send it off to them, and they sell it as chicken feed.

This is the most brilliant thing ever. I was so skeptical, and I'm 100% convert. Mill.com. I'm not to say it because Dave's my brother-in-law. Actually, this is the best thing I bought this year.

Ben: Did you or did you not get yours for free?

David: No, I paid for it. I didn't get any discount.

Ben: This is not, in any way, an endorsement.

David: No. The only connection I have with the company is that my brother-in-law joined them, and I thought it was a really bad idea.

Ben: All right. I'm trying to decide if your problems are real problems at this point or if you've gotten so comfortable in life that you're solving these.

David: I recognize that I just recommended an internet-connected compost bin, but it really is awesome.

Ben: But it's a great one. Yes, I recognize the value of good gadgets. I've been using a June Oven for the last six months, also life-changing. You might be like, why do you need a small oven instead of your big oven? And why does it need to be on the counter?

David: Spinach feta wraps.

Ben: Every morning, spinach feta wraps in the June.

David: It's perfect.

Ben: Okay, I have a litany of carve-outs.

David: Go for it.

Ben: I'll save my baby-related ones for later. My TV show my wife and I just binge watched is holy crap good. Some of the best TV I've watched in a long time. Very different genre than succession, but succession-level quality. It's called Silo on Apple TV.

It is excellent. It's based on a book, maybe book series. And the for-TV adaptation is just very good. Dialogue, the cinematography is good, the sets are really impressive. The premise is just beautiful and so simple.

The premise is, this is going to be spoiler-free. There is a civilization of humans that exist in a big silo. I don't want to say the exact number of people, because some might consider that spoiler, but a civilization in a silo.

David: Okay, on earth or in outer space?

Ben: Presumably on earth is the premise. It is all about people trying to figure out what's going on, because it opens with this idea that at some point, it will be safe to leave the silo. We don't know when that day will be, but we know that day is not today. It's a whole civilization of people living in a silo.

David: This sounds like a great premise.

Ben: That's the setting, and I'm giving no plot details about what then transpires, but it's awesome. It's great sci-fi.

David: As you know, I'm not a TV person, but that is up my alley.

Ben: The female lead is the woman from the last two Mission Impossibles, who's a really good actress. Who else is in it? The woman from The Office. Rashida Jones is also in it. It's a good show. I highly recommend it.

David: She's Quincy Jones' daughter, is that right?

Ben: I think that's right.

David: Super cool.

Ben: That is awesome. For less good TV but still very entertaining, part of our paternity/maternity leave has been watching Alias. Neither of us watched it back in 2002. It's like an early JJ Abram's. Jennifer Garner's the lead.

David: You've already done this as a carve-out.

Ben: Have I? All right.

David: Yeah, recarve-out, it's fine.

Ben: It's great. It gets worse as the seasons go on, but seasons one, two, and three are great. Very worth watching.

A product that I've been loving, I just got some new Warby Parker glasses. I believe they're made out of vinyl, but the frame is called Amari. They are much lighter than any other glasses frames that I've ever gotten. It's totally game-changing to feel like they're just floating on your face all day. Some might view them as not as stylish as some of the more stylish options, but they're my at-home glasses for sure.

David: One of your carve-outs I picked up recently, Hoka slides. I actually didn't get the slides, I got the recovery shoes.

Ben: Hoka slides, it's so good.

David: I got the same technology in the more shoe, more enclosed form factor. I think they also called the Oras. It's so great, the best house shoes I've ever had, per your recommendation.

Ben: Happy to recommend. Another one is a feature of a product that I found a couple of days ago that is freaking insane. I've had this thing where as iPhone cameras have gotten better and better, the computational photography, what Apple does to photos makes them look a certain way. I've gotten used to that way that photos look.

Now that I'm using the big camera again, because we have a baby, I've gone back to using the Alpha 7C's and this very flexible lens that can either be a wide or a zoom lens that we're going to use actually for some upcoming interviews next year to get a tighter shot on the subject, I've been using that.

I've been feeling like, God, these images are so grainy. Basically, anything that I shoot indoors feels like it has this really terrible grain. You look and of course, it's like this super high ISO, but the iPhone does so much smoothing that I've forgotten that film green is a thing.

Lightroom shipped this unbelievable ML-powered denoise feature. I found out about it, because Nilay Patel was just on the talk show with John Gruber. He is right to say it totally pegs your GPUs while you're using it, but it is pure magic.

You open up Lightroom, you select the photos, you can even select ones that don't seem noisy to you, and you come back. Unless you crank the setting way up, they look totally realistic. It doesn't look overly AI'd, but your photos just all get magically way better. So huge kudos to the Adobe team.

I've been so impressed with everything that they're cranking out on the AI side. I think they are the enterprise company that has probably the best at rapidly commercializing these generative AI advancements. This one is immediately useful for me for everything that I shoot not with my iPhone.

David: We did that ACQ2 episode with Chris from Runway. This sector application of AI in image and video, we're only just scratching the surface. The surface is already unbelievable. I just can't wait for what's coming.

Ben: Totally agree. I think I may have made this a carve-out at some point, but I want to re-highlight it because it's been at least 12 months, because I remember reading it over Christmas last year. It's an article by Derek Thompson called the Eureka Theory of Everything is Wrong.

David: This is awesome.

Ben: It's so good. I just reread it. It's just such a pleasant reminder that it's not about the idea. It's about the implementation. It's often about the unsexy distribution work.

The article highlights a number of different instances where we know the famous inventor, but we don't know about the heroic effort made by governments around the world to actually roll things out like vaccines and things that are a huge part of the public good. I highly recommend reading it if you're in for a perspective-changing read on what is important to advance society forward.

David: Love it. All right, I'll jump in with a couple before we get back to you. First, a book that I alluded to earlier in the episode, The Luxury Strategy by Jean-Noel Kapferer and Vincent Bastien. This book was a core part for both you and me in LVMH prep. It's so good. It's so counterintuitive and worth reading for anybody who has a brand, any company that has a brand which is everybody. Even enterprise software, SaaS company, you have a brand, you should read this book.

I'm just going to read. You have tweeted this and I think maybe even on air said them all, but I'm going to say them again. “This book contains the 24 anti laws of marketing. (1) Forget about positioning, luxury is not comparative. (2) Does your product have enough flaws? (3) Do not pander to your customers wishes. (4) Keep non-enthusiast out. (5) Do not respond to rising demand. (6) Dominate the client. (7) Make it difficult for clients to buy. (8) Protect clients from non clients.

(9) The role of advertising is not to sell. (10) Communicate to those you are not targeting. (11) The presumed price should always seem higher than the actual price. (12) Luxury sets the price, price does not set luxury. (13) Raise your prices as time goes on in order to increase demand.” Think about that one. “(14) Keep raising the average price of your product range. (15) Do not sell. (16) Keep stars out of your advertising. (17) Cultivate closeness to the arts for initiates.”

Numbers 18 through 24, I was like, this is Acquired right here. It smacks me in the face. “(18) Do not relocate your factories.” We talked about that earlier, and then it continues. “(19) Do not hire consultants. (20) Do not test. (21) Do not look for consensus. (22) Do not look after group synergies. (23) Do not look for cost reduction. (24) Just sell marginally on the Internet.”

Ben: It's so good. It's good to get the reminders too.

David: Yeah. That's one. The next one I want to mention I also talked about earlier in the episode is The QB school on YouTube. JT O'Sullivan who was a 10-year long journeyman backup quarterback in the NFL briefly started for the 49ers I think in the late 2000s.

After he finished playing, he went and got a PhD in Leadership Studies, and then started this YouTube channel, where he breaks down quarterbacks performances every week and does behind the scenes of basically just lets you ride along with how a quarterback and an NFL offense from the offensive coordinator down to the quarterbacks coach, down to the players, what is actually happening.

There was a quote that I think we cut from our NFL episode, but that sums up what's going on here from one of the books that we read. It said that "Baseball fans love baseball because they think they understand the game. Football fans love football, because they know they don't understand the game." I played football for 10 years, and this is the first time I'm getting a glimpse of understanding the game. It's so good. This guy is awesome.

Ben: I can't wait. That's totally been a thing that we've done this fall. As you know, we are getting ready for the birth of our son. As we've been on the couch a lot, it's like watch an insane amount of college football and NFL games. Yeah, I'm all over this YouTube channel.

David: You just watch these games, and the drama is so compelling. But what's going on is at such another level.

Ben: The production of football and the story lining around the teams and the players, it's the great at-scale storytelling of our time. To your point, there's a whole nother thing going on underneath it all.

It's funny. The carve-out I was going to do next before you jumped in with a couple is Monday Night Football Manningcast. It's been so good this year. I actually didn't get into it until this season. I just didn't watch that much NFL until this season because I grew up a Browns fan.

David: Enough said.

Ben: Yeah, but I've watched a lot of NFL this year and Eli. For anyone who doesn't know about Manningcast, when you're watching Monday Night Football, you can choose either to watch the normal announcers, or there's a completely second production using the same cameras plus a couple of cameras in Peyton Manning and Eli Manning's homes, where they're basically just watching the game on Zoom together. It's a holdover from the pandemic.

They have guests on. They had Will Ferrell on, but I think it's actually better without guests. Even when it's just Eli and Peyton analyzing the game, it's similar to what you're talking about, David. It's a little bit of like helping you understand what's going on behind the scenes, but of course, by two brothers that are very fun to be around. They often act like they're still 8 and 10 years old.

David: I would say, if you think about the NFL broadcasts, that's one level. Then there's Manningcast that's several clicks deeper in getting a window into what's going on. Then QB School is like as far to the other side of the spectrum as you could go while still being really fun. JT is a great host, but it's very technical.

Ben: Cool. All right, I'm pumped. Okay, we are entering the baby products section of recommendations. Is that okay with you?

David: I've got one other first that I want to throw out, which is going to be a recommendation to nobody because you've already seen it. The Eras Tour.

Ben: I haven't watched it yet.

David: You haven't watched it yet? Oh, my God.

Ben: Unbelievably, yeah.

David: It's available at home now.

Ben: Also, did we call that or did we call that? It's been two years since we did the T-Swift episode.

David: Amazing. Like we said, open invitation, Taylor. We will fly to wherever you are.

Ben: It is true.

David: Dude, you got to watch it. When the baby's sleeping, maybe over the course of two naps, because it's a long movie, but she's just done another level from anybody. She's Time's Person of the Year this year. It is one of the best movies that I've ever seen, not just a concert film.

Ben: Awesome. Can't wait. All right, baby recommendations?

David: Go for it.

Ben: I feel like I finally have strollers dialed. Granted I only have a one month old, so the needs massively change over time, but forever I was trying to figure out, for non parents out there, the right car seat stroller combos for all the different needs at home, travel.

When there are different ages, you have different needs. Right now we have a lien setup. There's a way to be dialed in your setup by just having four strollers, but I'm pretty pumped where we landed with two.

David: I'm super pumped for your recommendations because I really trust you on this. Ben, you are such an optimizer. When it comes to this stuff, this is your wheelhouse, so I can't wait.

Ben: All right, here's the current setup. This is after buying a few other strollers and returning them, because there were things I didn't like about them ergonomically. The UPPAbaby Vista is the home stroller. That's the one that's big. You don't want to be in the business of folding that and taking it. That has the newborn bed in it.

David: This is like the Chevy Suburban of strollers.

Ben: Yes. You do not ever want to pick this thing up, but it's got great shocks. We take it on a trail near our house and the arboretum in Seattle. The fact that it has a huge bassinet on it, a lot of his naps happen there, so I can go on walks while the baby's napping even as a newborn.

For a lot of strollers, newborns can't nap if they're upright, or newborns can even sit in a normal looking stroller. So you need a bassinet stroller. That's the home situation. The travel situation, and we haven't flown anywhere yet, but we will in a month or so. It's the Joolz Aer+.

David: Okay, I've not heard of this device.

Ben: I hadn't either. But we went to Nordstrom, and we tested all the strollers.

David: Amazing.

Ben: The one that we had ordered, I really hated the way that the handlebars sat and made my wrist feel, so we got this the Joolz Aer+ instead. It has adapters for the car seat that we bought, the Clek Liing, and it just snaps right in. This Joolz Aer+ is superlight, it's 11 pounds. It fits in the overhead of an airplane. When we travel starting in a month, we'll be able to do that.

When we're home, it always sits in the back of the car. Whenever we take the baby out, we leave the baby in the car seat, and we just snap the car seat, which by the way is the safest. The Clek Liing is the safe car seat.

David: You do not want to be transferring baby out of car seat when baby's asleep, ever.

Ben: No. The car seat just snaps right in. For doctor's visits and stuff, we just take the travel stroller with the car seat snapped in, no interruption to sleep. It took a lot of finagling, but this is where we've arrived for now. The optimizations are some people recommend the Thule running stroller in addition to this. We'll have to see if that's a category we dip into.

David: You're not at that phase yet.

Ben: Yeah. Other people are swearing by this. In fact, listener to the show, Alex, I think texts me a lot about this stroller. I think he's probably their number one fan. There's a car seat that converts to a stroller.

David: Yeah, the Doona.

Ben: The Doona.

David: I was literally waiting with bated breath for your opinion on the Doona.

Ben: That may enter the rotation. I haven't tried it yet.

David: Bury the lead here. Also, Jenny and I are expecting number two this year.

Ben: Yay. Congratulations. I was wondering if you're going to talk about it.

David: Obviously, Ben already knew, but I appreciate the feign surprise there. This is among the consideration set in whether we would change our strategy at all. Okay, lay it on me.

Ben: The Doona is a different philosophy of what if your car seat could become a stroller. That way, when you're going on vacation, you actually don't bring a travel stroller. You just keep the baby in the car seat all the way until you get to gate check, then you check the Doona. Or if you're so bold as to get a seat for your newborn, then I think they can stay in it. I'm not exactly sure how that works.

When you get there, the trade off then is like, is the Doona actually a good enough stroller for five-mile walks? That, I don't know. When we go on vacation, we just try to do tons and tons of walking. That's the thing that I'm playing with. Is the Doona going to enter the rotation, or do we rely on the Aer?

David: Okay, I'm waiting with bated breath for your verdict on that.

Ben: Stay tuned. At the risk of Acquired getting a lot more boring, I think we have to keep discussion of baby products to a minimum.

David: This is niche Acquired here. For the right niche, this is riveting content.

Ben: Either spin-off show, or we're going to have to create a bonus section at the end of the episode or something.

David: I was thinking about it. My daughter's two now. She'scertainly not an adult, but she moves fast.

Ben: She eats people food.

David: Yeah, especially. She is basically an adult at this point.

Ben: You sent me that picture of her eating a Costco hotdog.

David: Yeah, totally. Let's be clear. I ate the hotdog, she ate the bun, which was her choice. My kid-related carve-out, I was having trouble coming up with any of them. This isn't even that kid-related, but it's her favorite movie, which everybody should watch. I can't believe I hadn't seen it till now. It's Coco, the Pixar movie about Dia de los Muertos.

It's so good. I've now seen it 10 times. I will probably see it about 500 more times in my life. Disney+, despite all the turmoil, arguing, and all that, to hell of a drug for a parent.

Ben: Hey, that's also where you can find great show such as Alias.

David: Yeah. All right, that's it for extended carve-outs/holiday present suggestions this year from Acquired. We have one more section to close out the year, and that is thank yous.

First, we owe just the biggest thank you in the world to our wonderful editor, Steven. Steven, you are, and everybody listening I'm sure will agree, the single best podcast editor in the business.

Ben: He's unbelievable.

David: Hands down, it's not even close.

Ben: For people who are curious about how this works, Steven does a first pass after we send him 8–9 hours of raw audio and turning it into a candidate episode. That's getting rid of likes, uhms, and all that. But it's retakes, it's redos. It's David and I saying, ah, I feel like that didn't come across right. I didn't make the point succinct enough. Why don't I try to make it more succinct?

Then he sends us back this release candidate, which we then also tear apart and has a hundred more edits of, this fact is wrong, this little part of the sentence is extraneous, delete this number. Hey, can we move this section to this part? And then does a complete second pass after a week's worth of work to deal with us on a complete second copy edits. So thank you so much, Steven. You're the best. It comes out just sounding immaculate.

David: Steven, you are the man. Thank you for making the show what it is.

Second, thank you for this year is once again MVP of Acquired, Andrew Marks not only for Charlie, but really for being our thought partner behind every episode, relationships that we've built, and now heading into next year in investing, helping us think through that.

Ben: While we're thinking thought partners, we should think friend of the show, Marc Bridge, who is a good friend of mine up here in Seattle, a good friend of David's as well.

David: He gave me transitions.

Ben: He's the founder of a very cool company called At Present, which is a marketplace for very unique and cool jewelry pieces for women. David and I are actually both small investors in the company.

David: And customers.

Ben: And customers, that's right. Probably the most expensive thing I ever bought, I bought through At Present. Marc has been a thought partner on tons and tons of episodes, especially Berkshire. He actually suggested LVMH, a good thought partner on Nike. Marc, thank you for everything you've done and helping Acquired too.

David: Yes. Speaking of LVMH, Adam Pritzker helped us a ton on LVMH. Adam, of course, was one of the founders of General Assembly and now has assembled brands. And Kate, which they just sold and was a fantastic outcome for everybody there. Adam really gave us a window into actually building and running one of these companies.

Ben: The whole team at NVIDIA, initially the people that were willing to speak with us about the episodes we were doing just to help with the research for the episodes and make sure we got it right, but then subsequently their entire communications team for hosting us, putting up with all of our requests, and being willing to build the insane three-screen setup, film it with three cameras, and do everything we wanted to the production standards we wanted and way more at NVIDIA HQ. So thanks to the awesome team there.

Thank you to Doug DeMuro for consenting to join the crazy Acquired episode process for Porsche.

David: I don't think Doug knew what he was getting into when he agreed to this.

Ben: No, but he did all the research, too. For someone who has two businesses that he's trying to run at the same time, he started with a head start on the history of Porsche, but he really did a ton of work to prepare for that and had all of his facts and figures ready at hand.

David: Let us into his garage for the whole day.

Ben: Yeah, Doug rocks. Also, I'm thinking about buying my next car. I've been watching so many Doug videos to prepare.

David: He also totally set the bar for if and when we ever have another voice on a season episode. That is how we're going to do it.

Ben: Like an expert guest host. We love that format. We'd like your feedback on it too, but we thought that was the perfect amount of guest research, what they brought to the table, how we looped them in with the episode, and interacting with David and I. We were just like, this is a 10 out of 10.

David: 10 out of 10, just such a high quality guy on every dimension.

Ben: Yup.

David: On the research dimension, thank you to dozens of people who helped us with research for our episodes this year. Too many to name here, and many of you don't want to be named, but people who have way better things to do with their time than chat with me and Ben about a podcast episode we're working on, CEOs and CFOs of public companies, et cetera, immensely grateful.

Ben: For most of these folks, they do it because they listen, so they know the product that's going to come out the other side. Thank you also for listening, because I think that's the superpower of Acquired. The fact that now there are people who listen, who can really help us make sure that we get episodes right.

We love getting these notes. We can't respond to them all, but people who join the Slack or email us, acquiredfm@gmail.com and say, hi, here's the thing that I know a lot about in my industry experience. If you ever do it, feel free to reach out. We totally do when we do those episodes, so thank you.

David: Yeah, thank you. Speaking of the last and most important, thank you to all of you. This whole thing would not happen without you listening. You all are just an amazing community, and we really appreciate you. Have a wonderful, wonderful holiday season. All the best for a happy, successful, wonderful new year ahead.

Ben: With that, our huge thanks to Statsig, Blankist by Go1, and Crusoe. You can click the links in the show notes to learn more. If you want to know every time an episode drops, you can sign up for email updates at acquired.fm/email. We added two new things recently. Emails include little hints at what the next episode will be.

They're also where we're putting follow-ups and corrections to previous episodes, so thanks to the two listeners who recently wrote in correcting me on Visa that it was not North Dakota, but South Dakota that first changed their usury laws to support credit cards, which is why all of your credit cards or so many of them are bailed from there today. We'll be including three or four more Visa tidbits that we'll toss in the email for that.

Come talk about this episode with us after listening at acquired.fm/slack. Check out ACQ2. We just did this awesome Visa follow-up with our good buddy, Gaurav Ahuja from Thrive Capital. He's been in the payments industry for over a decade, founding companies, investing in companies, and help put a finer point on a lot of the things we were describing in the current ecosystem today. If you want some merch, we've got a sweet merch store, acquired.fm/store. With that listeners, we'll see you next year.

David: We will see you next year.

Note: Acquired hosts and guests may hold assets discussed in this episode. This podcast is not investment advice, and is intended for informational and entertainment purposes only. You should do your own research and make your own independent decisions when considering any financial transactions.

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