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Sessions: David Senra (Founders Podcast)

ACQ2 Episode

March 28, 2023
March 28, 2023

ACQ Sessions returns with David Senra of the Founders Podcast. David is one of our very favorite people in the world — it’s impossible to spend an hour (or 3!) with him and not come away inspired to go take over the world. This conversation is an “extended, IRL version” of monthly calls that we do together where we share stories, swap life and podcast advice, and just genuinely enjoy sharing time with someone who shares our outlook and enthusiasm for the history of entrepreneurship.  Pull up a chair, grab a beverage (or energy drink in David’s case) and join us!

ACQ2 Show + LP Program:


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



  • 3:30: David’s time with Charlie Munger
  • 6:00: Henry Flagler after Standard Oil
  • 9:00: What makes a great biography, and how to capture all sides of complex characters?
  • 11:30: Studying history is a form of leverage to achieve success
  • 13:30: How do we figure out what the true story is for an episode we're doing?
  • 21:00: Silicon Valley should focus more on durability than growth
  • 22:00: How David got into reading biographies and podcasting
  • 26:10: What were each of their influences before starting Acquired and Founders?
  • 36:00: How to suck less over time
  • 38:00: What motivates, Ben, David, and David to get better?
  • 45:30: Dead ends: business model changes, paid podcasts, changing the name to “Adapting”, and Senra's “Autotelic”
  • 52:00: “You’re not advertising to a standing army, you’re advertising to a moving parade”
  • 56:30: Comparison of podcasting business models
  • 1:00:40: Senra’s insane Readwise "healthy twitter" habit
  • 1:05:00: Is it possible for the ultra-wealthy not to mess up their kids?
  • 1:15:00: The fleeting moments you get to spend with your kids
  • 1:17:30: The value of building relationships with best-in-class peers
  • 1:20:00: How the book publishing industry works
  • 1:29:15: How to differentiate yourself as an investor in 2023?
  • 1:39:00: The greatest historical examples as content marketing
  • 2:02:30: The best businesses are cults (and Senra starts one on the episode)
  • 2:07:30: Senra gives feedback to Ben and David on Acquired episode format
  • 2:16:00: Steve Jobs’ 1997 product matrix
  • 2:17:30: The moral imperative to market products that help people
  • 2:23:30: Ray Kroc and Steve Jobs: deeply flawed founders
  • 2:24:00: The founders we idolize are world-builders
  • 2:28:30: When yachts and jets are underpriced assets
  • 2:32:30: How to compete when money is cheap vs. when there are real interest rates
  • 2:40:00: When Ben and David have fixed broken episodes in post-production
  • 2:45:00: Why masters of craft are so interesting to study
  • 2:46:00: Should you listen to advice?
  • 2:51:30: David’s first job detailing cars
  • 2:53:00: The Cuban experience immigrating to Miami
  • 3:01:30: College entrepreneurship programs
  • 3:04:30: Ben’s experience learning UNIX as a kid
  • 3:09:00: David remembers Tim Ferriss guest lecturing in college


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…

Season 1, Episode 26
LP Show
March 28, 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
March 28, 2023


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.”

Season 4, Episode 1
LP Show
March 28, 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.

Season 1, Episode 11
LP Show
March 28, 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
March 28, 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.

Season 1, Episode 23
LP Show
March 28, 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.

Season 1, Episode 20
LP Show
March 28, 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.

Season 1, Episode 7
LP Show
March 28, 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.

Season 1, Episode 2
LP Show
March 28, 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!


  • 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)

DS: I found this guy who tweeted something a couple days ago, whenever, it was hilarious. He goes, “Most people's alarm clock is David Goggins telling them to wake up and get after it. My alarm clock is David Senra yelling at me telling me to be like Edwin Land.” I was like, all right, repetition works.

Ben: Welcome to this special episode of Acquired, the podcast about great technology companies and the stories and playbooks behind them. I'm Ben Gilbert.

DR: I'm David Rosenthal.

Ben: We are your hosts. Today's episode is our next installment of Acquired sessions, a video format on YouTube that we started playing with last year. Our guest today is David Senra of the Founders Podcast.

David is quite possibly the only person we know who is more obsessed than us with business history and the lessons that great founders teach us. David Senra has read hundreds of founder biographies and done deep episodes on them all.

DR: I don't know that I'm at hundreds yet as me, David, but I'm definitely at dozens. I aspire to be in the hundreds, but David Senra is just one of our closest podcaster friends and friends out there. His show is awesome.

Here on this episode, we had him out to my living room here in San Francisco. We had just an awesome, really fun, multi, multi hour conversation, just like the ones that he and I have scheduled every month on Zoom when the mics are off. It was super organic, super unstructured. We covered a ton of ground, including that I think two nights before we recorded, David was just coming up from LA, where he had dinner with Charlie Munger.

We spent a lot of time talking about that. Charlie's influence on David is Warren's influence on all three of us. A bunch of thoughts on advice, generally. As you can imagine, David just sprinkled dozens and dozens of historical examples and founder stories throughout the episode.

Ben: It is crazy. Every time someone's making a point, he'll dive in. This is just like that thing Edwin Land said that one time.

David: Or David Ogilvy, Coco Chanel, or who have you.

Ben: David is definitely close with the eminent dead. I will say after editing this episode, I had one enormous takeaway. David Senra is really, really into podcasting, so get fired up to meet him on his level.

All right, quick things. Go follow ACQ2, brand new show. Search any podcast player available for free, become an LP. There is voting going on right now for our next episode, which LPS all have input on. For every new LP that joins, we will shoot you an email to your inbox. Voting closes about a week after this comes out. We are straight up picking whatever you tell us. The next episode should be with really no editorial from us, so help us direct the next episode.

Join the slack. It is one of the only places on the internet with this super high level of incredibly thoughtful discussion by well-connected folks with a deep appreciation for history. People meet co-founders, they find jobs, and they get nuanced takes on the news of the day in there, so join at acquired.fm/slack.

Lastly, this show is not investment advice. David and I may have investments in the companies we discuss, and this show is for informational and entertainment purposes only. Now, on to Acquired sessions. David, do you want to tell us who you had dinner with the other night?

DS: I had a three-hour dinner with Charlie Munger.

Ben: That is awesome.

DS: I can ask him any questions that you want. First of all, I guess we should back up. There's a reason that he's so admired by so many people. But for me, particularly, you get to meet a lot of really interesting people because of the work that we do. That's a blessing and something that I know we've had conversation in the past that we deeply appreciate. But Charlie's a different level for me.

I literally think of him like the wise grandfather I never had. I met all kinds of people. I don't really get nervous or starstruck. I was legitimately shaking the day before. I was like, I cannot believe it. I didn't want to tell many people because there's no way this is going to happen. I won't believe it till it actually happens.

We do very similar work, right, where it's like, how many people have spent six, seven years, tens of thousands of hours reading hundreds of books about the history of entrepreneurship and investing? Not only reading it, but taking notes on it.

DR: It's us, Charlie, and Warren.

DS: The reason I bring that up is because you think about all the different companies and founders you guys have studied, all the different companies and founders that I've studied. Even amongst the rarest group of people, Charlie still stands out. The crazy thing is, he's 99. I get there and we start off in his library, which is the best place for me that you can possibly see.

DR: Set the stage more. How big is the library? How many books are we talking about?

DS: One of his family members was there too. He's like, oh, this is nothing.

DR: This is the front room. Wait till you see the back.

DS: Similar to the room we're in, very similar size and floor to ceiling shelves. I'm with a small group of friends, in fact, mutual friends of ours. The people that set this up for me were Andrew Wilkinson and Chris, the founders of Tiny, our mutual friends.

We're sitting there. There's actually a funny thing where it starts out. They know both Warren and Charlie. They've talked to them before, so they go right into it. I'm sitting there, and I had this whole list of probably 25 questions.

DR: I was going to ask if you prepared in advance. I know you did.

DS: I never got the chance to open my phone because I'm just sitting there. I'm looking at him very close, maybe a little bit further from me.

Ben: It was super disrespectful to take up my phone.

DS: That too. I had read every single book on Charlie. I watched all of his videos. I've studied this guy forever. Every time he had said, hey, read this book, I go and read the book, and then I see a bunch of the books that he has recommended behind him.

People are like, oh, was he as you expected? They say, hey, be careful, don't meet your heroes. He was unbelievably gracious. I was like, hey, Charlie, do you mind if I take a look at your bookshelf? He's just like, do whatever you want. Just unbelievably polite. Still biting intellect, ferocious intelligence.

DR: At 99.

DS: At 99. We were talking earlier downstairs, where the scary thing about Charlie is—I remember asking the question about Henry Kaiser, this guy that was super famous when Charlie was younger. He built a hundred companies and built the Hoover Dam. He was as famous in his time as Elon Musk is today, but no one knows who he is.

I was asking questions about Charlie in the book, and his recall is just insane. To the point where I asked him, how do you know all this, Charlie? He goes, I knew his partner. Then he starts telling stories about having a relationship with Henry Kaiser's business partner and then all these three hours of just unbelievable stories.

I go, Charlie, how do you remember all that stuff? Did you take notes? Did you reread the books over and over again? He's like, nope. All I could think of was like, imagine. That guy's mind at 99 is still so sharp. I brought a gift for him because he talks about Rockefeller all the time. I bought him this special edition, the Centennial edition version of Henry Flagler's biography.

I live in Miami. The guy Les Standiford I think is the author of that book. There's only one local bookshop in Miami called Books & Books. Les is a local author who's good friends with the owner of that bookstore. You can't get this book anywhere else. It's a special edition book.

DR: Because Flagler moved to Florida.

DS: After the Standard Oil. He's got a fascinating story. We talked about that, where he was unbelievably wealthy because of Standard Oil. He's 50, 60, 70 years old when he's doing this. He's just like, what am I going to do now? I'll build an entire state.

When he gets to Miami, Miami is a little less than 500 people living in a swamp. You can't live there. There was no AC at the time. Then he builds the world's first railroad connecting the Florida Keys. When you read that book, you're like, oh, humans have no limits other than the ones we put on ourselves. That's what Flagler does, he stretches it.

He does some terrible things too, he wanted to find a way to divorce his wife. He literally moves to another state because you couldn't divorce in New York. He bribes the government of Florida. They create the Flagler Law which allows him to get a divorce, then he does it a few times.

I think in the 70s, he marries a 30-year-old. That's not all good. But then that guy's like, oh, your rules don't apply to me. I will build whatever I want. He built infrastructure, hotels, and everything else.

Ben: This is one of the things that I keep learning from the Founders Podcast. I'm curious if you do it intentionally or if you try not to do it. Every single time, I'm like, oh, people aren't perfect. None of your heroes are perfect.

We run it on Acquired a lot, where it's not as fun to tell stories about terrible people. You don't want to show someone's negative side as much because it doesn't...

DR: We fall in love with them too.

Ben: Right, and you're like, they're the most extraordinary person on this one axis to ever live. We should talk about how they're a flawed person in many ways, but it's not fun to dwell on. You want to move through that and be like, yup, yup, they were flawed. Here's the next amazing thing that they did. How do you handle that?

DS: You know how a normal biography is written. It's way too much family history. I want to know some family history, I don't want five generations back. Stop. I don't want to know the origin of their last name. I don't need that.

Ben: And you're the most qualified person in the world to critique a biography writing style at this point.

DS: Why are we reading it? Everyone wants to know the climax. Part of the prep for Charlie is listening to all of your Berkshire episodes, where you guys do a fantastic job on this because the first who is the young Charlie, the young Warren. I've done this forever.

When you think of Warren Buffett, Ben Franklin, George Washington, or anybody who's super famous, when we see them, it's like, oh, who's the Ben Franklin on the $100 bill, who's the Washington on the $1 bill, who's Buffett was at the meeting in Omaha? It's like, no, no, that's the guy that is enjoying the fruits of the person that actually built the Empire.

I go and stare at pictures like a freak of a young Charlie Munger when he was 38, or young Warren Buffett. They were like us. They were young people once.

DR: In our Berkshire series, did we end the first episode without even getting to Berkshire yet?

Ben: Yeah, it was the Buffet partnerships.

DS: You mentioned on the Walmart episode, where it's like, everybody says, oh, Sam Walton didn't start Walmart till he's 44. Yeah, but he was doing 25 years of practice and learning. He wasn't just sitting on his ass.

Ben: Started a bunch of stuff that looked an awful lot like Walmart.

DS: Yes, learning from that.

DR: Totally, aside, but we have no agenda here. That is I think both an advantage that we have, all three of us and a secret that we have, which is that we did Walmart because we wanted to do Amazon. We're like, how do we do Amazon? We got to do Walmart first. People want this. This is the right way to study things.

DS: I'm glad you brought that up because I think this is why people get a lot of value. I don't want us to make it about, hey, this is an Acquired founder show. The reason that some of the people in our audiences are the most successful people in the world, they're all reading biographies, they're all studying the history of business.

A few weeks ago, I was very lucky to have a two-hour one-on-one lunch with Sam Zell that I didn't think was possible. What I realized in that conversation is you don't sell Sam Zell's company for almost $40 billion, $38 billion, or whatever it was. You don't build a company, sell it for $40 billion, and then learn all this. He was doing this since he was young. We were talking in his autobiography.

DR: I think my favorite episode of your podcast is the Kobe Bryant episode because this is what these guys are doing. They're like Kobe Bryant.

DS: They're watching game tape.

DR: They're watching game tape. They're working on the fundamentals from the time they're 12 through the time they die. They don't stop.

DS: I think that's what we're listening to Acquired and founders is, is you're watching game tape of history's great entrepreneurs. Sam did this when he was younger. This ties together, where Bill Gurley had a fantastic quote about this, a tweet about this, when all that crypto was going crazy, the run up, and people are getting rich.

I'm paraphrasing because I wasn't expecting to talk about this. He's like, I don't like that the younger people are denigrating the people that came before them. He made the point that none of history's great entrepreneurs and investors did that. They had the opposite perspective. All of them had idols. You just made the point. You can't understand Jeff Bezos until you study Sam Walton, you can't understand Sam Walton, so you understand JCPenney, Sol Price, and all these guys.

Ben: Even though they're contemporaries. The point that Walton always made was, I don't think my competitors are stupid. I want to go shop my competitors, get all of their very best insights, and then bring them into my store.

DS: Yeah, 100%. They're learning machines. You get to Charlie's time to go back to this. You get to Charlie's bookshelf and it's just biographies I've never even heard of, and I do this for a living. I do it for a living. It's like, what is this book? I start looking at it, it's like, I'm just taking pictures, pictures, pictures. I'm ordering every single one.

Ben: We're talking about this idea that the way to get the truth is to weave together the tapestry of all of history's stories of things that are adjacent to understand how this opportunity to start some business came to be. All history is revisionist and all history is biased.

I think one of the hardest things about making an Acquired episode is figuring out when we're looking at a source like someone giving an industry talk who works at a company, or a biographer, who chose to dedicate two years of their life to writing this book after working at Newsweek and covering the sector forever, is trying to mentally account for and discount from whatever bias and perspective they're coming in with to create whatever the source material is that we're using to then incorporate into our version of here's how this thing happened. I think it's the hardest part about what we do. I'm curious if you ever think about that.

DS: I think about it all the time because people were like, oh, survivorship bias, revisionist history, and everything else. Here's the problem. Humans don't see things as they are, we see them as we are. We can have this super long conversation between the three of us right now, then go into another room, and write down what just occurred. Every single version is going to be different because it's viewed through all of our experience, the way we think, the words we use.

What I'm looking at is when I'm reading about Sam Walton. The story we both had on all the podcasts because I've done a bunch of podcasts on Sam too, where the guy's pissed off, he's just driving to store to store, and he's like, mountain roads taking forever, so he buys the plane and he realizes, oh, this is a massive advantage because I'm doing something my competitors aren't.  I'm flying over.

You guys mentioned it too, which I thought was hilarious. He just lands it and he's like, who owns that? Let me land, and then he buys for action. He's like, we're going to negotiate right now, I want to buy it from you. My point is, okay, yes, that most likely occurred, but what is the idea behind that? You can have an advantage by doing something your competitors are not doing.

What you just said is they all learn from somebody else. When we're reading these books and listening to these podcasts, it's like, what's the idea I can use in my life? We're not building the next Walmart. There's no way if we read Titan that we could tell, did this actually happen? I don't know, but I'm looking for the ideas behind it. I'm going to verify every single word in this book. That's ridiculous.

Ben: The truth is it is always the case that the clean narrative is grafted onto a fact pattern. It's like, okay, well, what I care about is the lessons I can learn from the clean narrative. If you had all the facts in totality, did it necessarily mean that this was premeditated? It's like, whether it was premeditated or not, the facts are the facts. Maybe I can duplicate it in a different realm.

DR: For what we do, I think on Acquired more, especially because you will do multiple episodes of different books on the same people.

DS: And multiple episodes in the same book.

DR: Yeah, and multiple episodes in the same book. We're doing a narrative weave.

Ben: We're shooting the moon a little bit more in this respect. For everyone who is listening, founders are more about, hey, I just read this book, and I want to tell you what I learned from this book. It's always a biography. Sometimes you'll do five different biographies on Edwin Land.

If Acquired was going to do Polaroid, we would do Polaroid. The episode would be Polaroid. Maybe it would be Polaroid part one and part two, or maybe at some point, we'd have someone on to talk about the story in addition to our one canonical episode, but we would be shooting the moon and let's make sure that we get the Polaroid story right. It's almost like, how do we find the correct average of all of the other stories to create the canonical version?

DS: I wasn't expecting to quote Bill Gurley two times early so far. The fantastic talk he gave, which to me is the best talk for entrepreneurs and investors on YouTube is called Runnin' Down a Dream: How to Succeed and Thrive in a Career You Love. He says, listen, in the age of the internet, you don't have to be the smartest person. Charlie Munger, after talking to him, whatever mind that dude has, I don't have that and I'm cool with that.

I could not imagine trying to compete against that guy 40 years ago. He would destroy me. He's got a super mind that I don't have. What Bill says is like, you don't have to be the smartest person, but you can collect the most information. He holds you to a high standard in that talk. Bill's like, listen, in the age of the internet, all the information you possibly need is right at your fingertips, you have no excuse not to do this.

He gives the example of if you want to be a domain expert in whatever you're doing, within two years of intense study, if you're doing that and you're focused on it, you're going to get to the point where you know more than maybe anybody else. That's my whole thing. You've never met a founder entrepreneur that's kind of into entrepreneurship. It's like, no, it's our lives.

Of course, the reason why so many of them listen to both of our shows is because they're building machines, where they literally can turn knowledge into profit. I became close friends with the guy through the podcast. He's a young kid. I don't mean to call him a kid, he's not a kid, but he's a lot younger than I am. He's 28 years old. We were on the phone the other day because he had a very serious offer for a company he owns 95% of, and they were going to give him $100 million.

He wasn't saying no to it. But the point is, when you talk to him—he's listened to all the episodes, read 60 of the books. He'll text me a picture of like, do you want to talk about the book? I'm like, I'm pretty sure I read that. Yeah, it's from this episode. It's like, oh, why? What if he finds one idea in a book, one idea in a podcast, and it gives a 10% improvement on his company? It's a $10 million idea.

DR: We were talking about this earlier, this dinner that you have with Charlie. It sounds like Charlie is just a very curiosity driven machine. There are lots of folks that have regular dinners and have groups of people often geographically dispersed. Why do they do it? Why is it worth their time, their money, their effort? It's that one idea. The leverage that they can get on that is astronomical.

DS: Charlie tells the story. He's like, yeah, I made $400 million from reading Barron's for 50 years. I'm like, what are you talking about, Charlie?

Ben: How do you quantify that?

DS: He does. This isn't something he said at dinner. I've heard him say this publicly. He's like, I read Barron's all the time for 50 years. I found one idea that I can act on. I made $50 million on that deal, then I took that $50 million, and I gave it to Li Lu. I gave that $50 million to Li Lu, and Li Lu turned it into $400 million. That's how I made $400 million from reading Barron's.

This is another thing, where I feel like everybody's like, oh, this time is different, this is new. Human nature has never changed. It will never change. This time is not different. You're just experiencing the differences if you don't study the history of the people that came before you. You're just ignorant and making mistakes that people already sold in the past. Learning from history is a form of leverage.

He has billions and billions of years of collecting human history. This guy spent seven years and there's thousands of them, and Sam Walton's book. How many people spent 50 years in one industry in the retail industry? He distilled it down to the most important. You could read it in a week, and then you could listen to Acquired's episodes, you can listen to David's episodes on Sam in addition to that.

Ben: The question is then, do you have 90% of Sam's wisdom, or do you have .1% of Sam's wisdom after?

DS: There's no way you have 90% because of the time. I was just rewatching Peter Thiel's at Y Combinator, Competition is for Losers. He goes, one thing that we do in Silicon Valley is we overvalue growth rates and undervalue durability. He's like, that doesn't make sense for a technology company because the vast majority of profits are 20 years in the future.

If you're trying to optimize for growth, and that over optimization can cause your company to go out of business, you're never going to collect that. You optimize your durability first, dummy. That to me was my interpretation of what he's saying. You're going to get 1%, probably, maybe 5%.

Ben: But that's still enormous leverage because you read it in five hours, and he took 50 years.

DR: And it's Sam Walton's wisdom.

DS: And it's what you do with the idea.

DR: I know you've talked about this before, but what was the moment where you're like, I'm going to start this podcast? It's crazy what you do. You talk to a microphone yourself every week. Not that I think you're crazy. You are, but in a good way.

DS: I definitely am not, for sure. Did you guys read Jeff Bezos' last shareholder letter? One of the best lines he has is something. He's like, differentiation is survival. If you think about that, let's say somebody says, damn, I love what Ben and David are doing, I'm going to do the exact same thing, they can jump in and try to do that, but you have six years of experience. You have 600 hours out there.

Ben: You have to counter position against us or address a different audience.

DR: By the way, they definitely should. I'm always like, you absolutely should do this. Even if you never succeed in terms of any numerical success, you will succeed because you are learning.

DS: Being a nut job and completely crazy is, I think, makes you harder to compete with. We're going to go all over the map here, but it's impossible not to be that. Think about how seeped you guys are in the same information as I am, where it always says, oh, you're some of the first of your five friends or whatever. It's also what you get to some of the podcasts you listen to and the books you read.

Ben: Oh, it's your five friends including your parasocial relationships.

DS: You mentioned, are you willing to read that one book about him? You'll go crazy. What happens is when I'm really interested in somebody, I listen to Bill Gurley. Again, I just take advice from people who are smarter than me. Bill said, go collect everything you can. Okay, good. I'll do that. These are simple ideas.

I'll find somebody that's interesting. I'll read everything about them and so with Charlie. I have a little Charlie Munger on my shoulder. I have a little Steve Jobs, a little Edwin Land, a little David Ogilvy, Estee Lauder, Coco Chanel, all these people that have been heroes of mine, James Dyson.

Now I'm presented with situations like, what would they do? If you read everything that's out there about these people, you'll have an idea of how they would respond. Have you guys ever read Ken Kocienda's book Creative Selection?

Ben: He worked on the original human interface for the iPhone.

DS: He made the keyboard when it was still purple or something. He made Safari before the iPhone. He has this excellent book that I've read three times called Creative Selection: Inside Apple's Design Process During the Golden Age of Steve Jobs might be the subtitle. He talked about that because he demoed to Steve. You're not going to describe it to him, you're going to demo and you're going to hand it to him.

You guys already know this. They iterate to a series of demos, and it's based on Steve's taste. He is not, oh, let's talk about this. It's like nope, do this, do this, that. Ken has a great line in a book where he's like, demoing for Steve is like asking questions to the Oracle Delphi, except the Oracle Delphi would respond with a riddle.

He's like, no, no, Steve was unbelievably crystal clear. You understood him. Out of every single person I've ever studied, Steve Jobs is by far the clearest thinker I've ever come across. He's just gifted at that.

Charlie is like the Oracle and it's crystal clear. You're going to understand what idea he's trying to get into your brain for sure. My point being is all of the people that we study, they don't denigrate the past.

The reason I'm so obsessed with Edwin Land is because I read his biography. When Steve was in his 20s, Edwin Land was in 70s. He goes and meets Edwin Land. He goes, visiting Edwin Land was like visiting a shrine. He's like, he is my hero, more people should try to be like that.

You guys made the point that Jeff Bezos took a lot of ideas from Sam, who took a bunch of ideas from Sony too, Steve and Jeff. You always find these people where you're like, oh, I thought this was a Steve Jobs idea. No.

DR: No, it's an Akio Morita idea.

DS: Yeah, or an Edwin Land idea. We used to watch the presentations that Steve would give, where he's like, oh, we're building at the intersection of technology and liberal arts. He put it up on screen. Edwin Land said that exact word. That's the point. You're never going to find anybody who gets to the top of their profession without doing the work like studying the people that came before them, learning from them, and admiring them.

Ben: This is a good personal pivot. It's something I've never asked you in all the hours we spent. This is crazy. This is the first time we've met in person. We spent hours and hours and hours on Zoom. How did you decide that this is what you were going to do with your time on this planet? What led to this?

DS: Our mutual friend Jeremy from forming Tiny, I just spent a bunch of hours with him. He was in town. In one sentence, he psychoanalyzes me better than anybody else ever has. He goes, you didn't have any mentors growing up, and then you took it to this extreme. He said it much more eloquently than I am. He's like, you don't have any mentors, so I view your career as the psychopathic search for mentors that can help you.

To answer your question, I don't want to go into too much detail here, but I've only had one habit in my whole life and that was reading. I was reading for as long as I can remember. My mom passed away from breast cancer a couple of years ago. We didn't have a lot of money.

Long story, but I was the first person not even graduated in college, but high school in my family. I came from a family that's unfortunately, both sides of the family with no education, a lot of just bad habits. I identify a lot with what Charlie Munger says because he essentially observes by behavior and then tries to do the opposite.

Let me give you an example. I was just up in Canada. Actually, at an event, Andrew Wilkinson was hosting for a bunch of entrepreneurs. Me, Shane Parrish from The Knowledge Project, Farnam Street was up there, Ben Wilson from How to Take Over the World, and we were doing this panel together. Shane's the moderator, and we don't know what we're going to talk about beforehand.

Shane asked the question, he's like, oh, what did you learn most from your upbringing or something like that? I go, I learned not to do cocaine and to graduate high school, that kind of thing. There's just a bunch of anti models. I thought about this as I was walking through the tenderloin this morning in San Francisco. I was like, I should do this walk with my daughter as the best. Like, hey, this way you don't do drugs. This is the perfect example.

You observe bad behavior, and then you do the opposite. Long story short, I've always been obsessed with reading. One of the best things my mom ever did was, even if we didn't have money for books, she would take me to the bookstore and just sit there. Bookstores are so cool because they just let you read. No one comes there and like, hey, you've been reading for an hour, you got to get out of here. Just read and read and read.

DR: Was there anybody who introduced you to reading books or there was just something about you?

Ben: Sounds like it's mom.

DS: No, she wasn't a big reader. The only thing she read was The Bible. There were no books in the house when I was younger, ever.

DR: How did you like, mom, take me to the bookstore?

DS: I can't answer that. All I can say is my wife has known me for 15 years. She likes my family and gets along with them, but she goes, how did that come from that?

Ben: It sounds like you have a classic you're-the-one-who-made-it-out story.

DS: Sam Hinkie, our mutual friend, actually gave me the way to think about this, and it's called the founder of your family. I used to call them and it was a terrible name, but generational inflection points because you'd read this in the biography, where you have generation after generation of just not good things happening, and then one person just says, it stops now.

DR: That's what Rockefeller did.

DS: I always think of Sam Bronfman, the guy that did Seagram. He's in Canada. Their parents had lost so much money. I think they were Jewish and had to escape from persecution in Russia. I can't remember where they came from. But they go and they have to start all over. They're in Canada and there's no heating. They're freezing.

He has this psychopathic drive to change, but that stays with you forever. He built this massive company and literally changed the trajectory of all of his descendants. His daughter's an adult. She tells a story in the book, where Sam is sitting there in a mansion next to a fire, shivering, thinking about how embarrassing it was to have to go to school with tattered clothing. That guy's never going to go back to that, and he never loses it.

I've just always been a reader. That's the only unbroken habit I've always had. I just had this idea. I was listening to podcasts forever. I was obsessed with audio before there was such a thing as a podcast. I listened to talk radio when I was a kid.

At that time, there's no on demand anything. You would listen to sports talk radio, politics talk radio. It's embarrassing. There was this woman that used to be on a night—people would write in advice for their love life. I'd listen to just the idea of all this information.

Ben: I used to listen to Coast to Coast AM with Art Bell. Do you ever listen to this? It's when all the other radio programming expires, then you enter the 1:00 AM radio stuff, and it was aliens and tons of paranormal stuff. The Cavs game ends, I'm from Cleveland, then you listen to the sports postgame, and then it goes into the politics hour. If you still can't fall asleep, then you're in the aliens. It's four hours of that stuff.

DR: Do you have a radio in your bedroom?

Ben: Yeah. I imagine my parents probably came in and turned it off because I'd leave it on while I fell asleep every night.

DS: You have the jumper from that. The AM radio stations will then start streaming into your browser, internet. It's still on demand. If you're not listening at 3:00, you’d miss it.

DR: I think this is what Mark Cuban's company was.

DS: He was broadcasting audio for sports games, though, I think.

Ben: I don't actually know.

DS: It's broadcast.com, right?

Ben: Yeah, and it was competitive with Real Player, which also wasn't on demand. That was just streamed radio.

DS: No, the first on demand, the first time I saw it, I was like, this is insane. Especially for people that are learning machines using Charlie's. Even today, they did it. You can go to any podcast player, type in whatever you want to learn about, and then you can hear somebody spend hundreds of hours teaching you about this stuff.

Ben: You can also find intellectual, high quality content more easily now. Because there were a limited number of channels and a limited number of time slots, everything had to be produced for the lowest common denominator. Now you can opt into your niche and find the highest quality content in that niche. The only way to do that before was books. There wasn't niche audio content broadly available.

DR: There aren't several million authors out there, but there are several million podcasters.

DS: I think you're getting to a good point. It's like because the business model didn't support that.

Ben: And there was no distribution.

DS: Now with podcasting, I don't ever look at analytics, but I think the last time I looked was 50% of my audience was in the United States, but then everywhere. The early days of founders, I remember it all changed because I couldn't figure out the business model, so you would do affiliate.

DR: You went through a bunch of business models.

DS: When I first started, you contacted the few podcast advertising networks there were back then because you guys started your show in 2016. I started in 2016. You contact them and they're like, yeah, we can do ads for your show. You need 25,000 downloads an episode. At the time, I was like, I'll never get there. Obviously, we've skyrocketed past that. But that's impossible to think of, as many people as in a basketball arena.

Ben: When you start visualizing the audience, it's like, oh, two and a half NFL stadiums show up for every Acquired episode? That's insane.

DR: Only adding to the pressure in a good way. It's a good motivator.

DS: I'll never think about it. You know what I think about it, how my show is set up is why I say you and I?

Ben: I like how you treat the audience as the person you're in.

DS: It's one person. I've done this forever. It's funny. I remember one of my friends. We met up one day and I was like, man, I think I'm going to try to make a business around the fact that I read so much. He called me six months ago, a year ago. He's like, I can't believe you did that. He's like, I thought that's the dumbest thing I ever heard.

I just pictured him when I started. It's like, oh, the whole idea behind the show is, what if you got to meet up once a week with your friend that reads a lot, and he just tells you the stuff that he read that week? Interesting ideas.

DR: Did it even cross your mind to try and convince him to do the podcast with you or somebody else?

DS: We don't have a bunch of prepared stuff, but one thing he talked about was like, hey, why don't we talk about who was your influence and why you do what you do? I feel the greatest podcaster of all time is Dan Carlin from Hardcore History. I can't believe what that guy does.

Ben: You and him are the only successful monologue podcasters. I think it's the hardest thing to do in this medium. Everyone else either has a guest on or a co-host.

DS: I took Dan Carlin. I was obsessed with him. I listened to all his episodes. For years, you were talking about falling asleep. I did that too, but I'd fall asleep to Dan Carlin over and over and over again, and now when I listen to him, I was like, no, wait, this is not nighttime, bro.

There was another one that a friend of mine put me on to. There's this comedian named Bill Burr. He does the Monday Morning Podcast. He used to do it every Monday night, I think Monday and Thursdays.

He is one of the first podcasters. When he was podcasting his first episodes, at the time, he would call into a number and record. There was a service that would transform that recording from your phone into an mp3 that you could publish.

DR: You can download and put on your iPod.

DS: This is way before anything.

DR: We're here now in this recording setup that we have here with thousands of dollars of gear. I remember when we first started, I didn't think you'd let me do this, but I was like, why don't we just talk at the computer and set up QuickTime?

Ben: Dude, when I listened back to our first few episodes like Pixar, it sounded like we were just talking to the computer.

DR: We basically were.

DS: I have a lot of psychos that if I started number one, I go through. I was like, oh, please don't.

Ben: That way, at least by the time you get to one, you're a fan. But if you start at one, you're like, oh, these guys suck. There's great pleasure in hearing something that you think is excellent and fully baked. Especially when it's been long running, you're like, oh, this has always been immaculate and perfect. Then you get to go see some of the early work and you're like, oh, it's so buff.

DR: It's like what you were talking about. You want the early Charlie.

Ben: I can see where the magic was, even though they didn't know yet.

DS: It's a scene that you see in the books that you're reading, though. Sam Walton, when you tell the story where his landlord screws him over, and he goes, I'm not whipped, I found the store off, I'll do it again.

Yes, Walmart is a huge success. There was a great point, where you're never going to think 25 years in the future when there's watermelons and donkey crap on the ground, that there's going to be the richest family in the world.

Ben: Right, and the most standardized form of retail.

DS: Yeah. You see like, oh, that same guy that became the richest person in the world that his family now is the richest family or whatever, he's imperfect too just like I am. That is the only benefit of listening to an early Acquired or early Founders. It's like, oh, you see the improvement. Just like in the books, you see the improvement.

DR: It's fun too. I like going back and listening to some of your old episodes. I get to see your journey. I'm proud of you. I've been thinking about that, and then I was thinking about ahead of our conversation here. I used to say all the time, people are like, oh, I go back and listen to their early episodes. It's like, no, don't, it's so embarrassing. I actually think we always want to be embarrassed by our last episode. Every episode, we try to just notch it up.

Ben: Because we keep picturing the stadium.

DR: That's why I think about the stadium because I think about the pressure of like, we got to do better next time than we did this time.

Ben: It's not just filled with Seattle's NFL fans, it's filled with hundreds of thousands of the smartest people. This gets to the psyche, the deep insecurities that at least I have of, I want to impress those people. I want those people to think I'm smart, so I have to produce something unbelievably worthwhile of their time. The minute that I don't, I'm literally walking out in front of an NFL stadium full of people that I want to impress. I didn't used to have that pressure, but once we found a content market fit for Acquired with people that I've always thought highly of, that is the vibe now.

DR: There were a couple of years where we drifted. There wasn't that pressure to keep answering the bar, and then it hit.

Ben: You're right. It's like the 2017 era.

DS: Your latest episode at the time we're making this is LVMH. You're never going to be embarrassed about that. That was excellent. It doesn't mean you can't keep improving 10 years from now.

DR: I look back and then I think, yes, that's certainly an episode. I don't know how you feel that I'm proud of, but at the time, we didn't know that was going to be a super popular episode.

Ben: Yeah, that was totally unpredictable. Because we haven't shared this publicly yet, it's our number one episode by a huge margin. 40,000 more people have listened to that episode than the next highest, which is amazon.com. I probably could have told you.

Actually, I was like, David, no one's going to listen to Amazon because everyone already knows the story, which was super wrong. I either thought, no one will listen to this one, or this will be our most successful episode. With LVMH, even after we recorded it or after we edited it, because we had to edit a lot of stuff, I was like, this is now good, but it's not our best ever.

DS: I think it might be my favorite episode of yours. I heard from a ton of other people how much they liked it. It's really good.

DR: To the conversation, there's a bunch of stuff that we could have done better in that episode, a whole bunch.

DS: I do this all the time, where I'll go back and listen to old episodes because people are like, this is weird, you listen to other podcasts. It's like, no, this is a tool. We didn't even try to get better. I was like, oh, I haven't read the book in two years, I'll just do some episodes on it. It's a tool for me. That's how I know it's good for other people.

I'll listen to them like, oh, wow, I forgot that I need to keep that idea in my mind. I'll hear myself like, oh, you said that in two paragraphs. That could be one paragraph, cut that part, that doesn't make sense. I understand the improvement.

What I'm saying is your quality is already super high. It can increase and get better. Don't get me wrong, but you're never going to be embarrassed. You're just like, oh, I could probably do 20%, 30% better, which is still excellent from the level you're at.

Ben: The way that we edit is our editor takes the first pass, and he's unbelievably good. We're so lucky to have him. He sends us a rough cut, I upload it to Descript, and then we listen and read while we're listening word for word, sentence for sentence, and try to cut every unnecessary sentence.

We ended up pulling out 20-ish minutes of just fluff. It's just like, okay, we could have been tighter in that point, is there a way to get tighter on it without re-recording it? I think that has dramatically contributed to episode quality because by the time we ship it, neither of us feel that there are extraneous sentences.

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DS: I don't know if I'm like that.

DR: You're still a one-man show.

DS: No one touches everything. I'm going to answer your question, but I also think this is a perfect point to how we became friends and why. I'm putting this out on my feet. You're going to be the first non David Senra voices that ever heard on Founders. The reason I only agree to do it with you guys is because this goes back to why I want to be surrounded with, first of all, people to have like-interest, super smart people. but also people that have positive thinking.

Patrick O'Shaughnessy has this gigantic, successful show, Invest Like the Best. He's got Colossus Podcast Network. It's fun, it's called Positive Sum, and that's how he acts.

I joined his network. This is months later. They're like, hey, we have editors, whatever. He has this empire over there and resources.

He's like, what do you want? I was like, I just want you to amplify my audience and then connect me with first rate advertisers because I think Acquired is a luxury podcast. Maybe not luxury, premium. We got to go over the distinction there for LVMH. We're saying, no, no, we're trying to set the bar here.

Anyway, he's like, do you want editors? Do you want any of this stuff? I was like, no, one gets to touch my stuff. People think, oh, do they tell you what books to read? I'm like, no, Patrick liked my show and he's just like, why would I tell you? Whatever you're doing, just do it to more people now.

To answer your question, no. I picked the books, I recorded them, I edited. I'm still a one-person show. I don't know if that happened forever, but I do think about the fact that I spent so much time with the material and got it in my brain.

I want to talk about the role you guys played in that, where we're on Zoom. The background here is we'd known of each other. I talked to Ben a long time ago because he was running this private podcast years ago.

DR: It's also funny to think back on all the dead ends that we went to. We went down a ton. I know you went down a ton. You're about to talk about some of them. There are so many dead ends.

DS: Like doing the books too.

Ben: Remember when we changed the name of the show to Adapting?

DR: Oh, my God, that was a dead end. That one was on me.

Ben: Covid happened and we were like, no one wants to hear these stories of extreme capitalism. We're the X Games of capitalism. This is a moment where everyone is hurting, zero business. This isn't the stock market trough too, where you're just like, wow, all businesses are going to go under. No one's ever going to have jobs again. This is scary.

We were like, well, what story should we tell? How about businesses that are adapting to make it through this tough time. And to show how serious we were about it, we changed the name of the show. It was like our three least listened to episodes of covering pretty amazing stories, but we just branded it wrong.

Canlis is the most interesting restaurant story you could ever hear about. That's the only time we've ever done Intel. But because it was Adapting, it was stupid. There's no way to learn rather than screw up.

DS: Do you want to know the first name of Founders? In your RSS feed, you can change the name, but we can't change the link. It'll still stay. If you look at it from mine and it's Autotelic, the worst name.

Ben: How do you even spell that?

DS: Autotelic. I can't spell, pronounce. I have no grammar. It's like, you read so much. I was like, I don't pay attention to any of that stuff.

Ben: Is that the [...].

DS: Yes. It is an activity that you do for the sake of itself. Going back to your question, I just love to read. I'm going to do this. If no one listens, that's how I know I'm going to win. People are like, oh, would you do it for free? No, I paid to do this for a long time.

I literally said I'm going to quit. I have the savings. I have a wife and a daughter to support. Now I have a wife, a daughter, and a son. I just put trust in myself. If I focus on this seven days a week, I'll figure out the business model. I don't think I'll ever get rich from it, but I will at least pay my bills.

Every month, I'm like, oh, less money there. I paid to do it. Again, I think Steve Jobs talked about this. He said something like, the older he gets, the more he realizes why people do things matters. He's always asking these questions.

I always say, how do you know that you found what you love to do? People are like, oh, because I wouldn't sell my company. It's like, okay, there's another level. It's like, how much would you have had to pay Steve Jobs to stop working in Apple? The answer is, he wouldn't take all the money in the world. How much would you have to pay Charlie Munger?

DR: A lot of people tried to stop Steve Jobs from working at Apple.

DS: Think about that. The idea is he's not doing it for money. He's in a different game. He's doing it for the sake of itself, so I went through a bunch of different games. History's Greatest Men, History's Greatest, all these terrible names, and then just started narrowing it more and more and more to Founders. I was like, oh, that's perfect.

DR: You weren't coming from the tech world. This wasn't content marketing.

DS: The idea I had known about Warren Buffett, Elon Musk, and all these other people, and I remember you had Kevin Rose on your show a long time ago.

Ben: Again, not that long ago. Maybe a year, year and a half?

DS: Yeah, just time flies.

Ben: He was pretty much already fully Web3 by the time we...

DS: Do you guys remember Foundation?

Ben: Yeah.

DS: It's one of the first high quality. Imagine if he would have stuck with that show. Do you know what I mean?

Ben: The only episodes that ever came out were like, here's me interviewing Elon Musk, here's me interviewing Sam Altman, and also before they became icons about time.

DS: That's it. That was the only thing. He was just about to release the Model S.

Ben: He had the Roadster.

DS: No, they were in the factory because I watch it all the time. They were in the factory building the Model S. I don't know if you could buy it yet, but it was coming or whatever. Elon was way younger. In 2015, Tim Ferriss, I was a big fan of his podcasts and read The 4-Hour Workweek.

Ben: The 4-Hour Body changed my life.

DS: Did it? With its little carb?

Ben: Yup, I carb diet.

DS: I did that too.

Ben: It's a low carb diet, cold showers. The funniest thing is this whole cold punch thing that's becoming a thing now. I'm like, was nobody reading Tim Ferriss in 2011?

DR: It's only our demographic back then.

DS: Actually, that made me think of something. Let me interrupt the story because I think it's really important. You're like, oh, he said nobody listens to him. No one's going to listen to our Amazon episode. They already know it. This is something that becomes the most successful...

Ben: Are you going to quote Ogilvy?

DS: Yes, 100%.

Ben: I've listened to enough Founders to know.

DS: This is so key that people don't understand. It's like you're not advertising to a standing army, you're advertising to a moving parade. I will literally get on calls with media company founders who are selling ads or building companies. I'm like, oh, yeah, you must have read Ogilvy. They're like, what? These are not new lessons.

Again, this comes from the humility to realize, hey, Warren Buffett is smarter than me. If that dude in his shareholder letters is saying David Ogilvy is a genius, I'm like, wait a minute, how many businesses has Warren Buffett looked at at that point? How many founders and managers has he looked to and he's like, this dude's a genius? This is not rocket science, guys. Just go and search David Ogilvy and Amazon. Five books, good. Order them all.

DR: These days, search David Ogilvy in your podcast player of choice.

Ben: Explain the standing army versus...

DS: You're not advertising to a standing army, you're advertising to a moving parade. What happens is even when you put out the Sequoia episode, me and David went on a hike in Stanford. I was like, dude, you have this crazy back catalog. Every single day, you have more people following your podcast feed than you had the day before. I knew this because I have a subscription podcast.

DR: Recount briefly your business model journey.

DS: I'll give you the shorter breakdown because I went through so many of them that I just put a hard paywall and listened to the first 30 minutes. You want to listen to all of them, then you pay.

DR: This is when we had that chat that you've been talking about. We're like, dude, you're doing it wrong.

Ben: There have been times like this one were like, what the hell are you doing? But there's been other times where you come to us and you're like, do you know how good your Sequoia episodes were, the fact that you 4x the audience that you have now, and none of the 75% of those people have ever heard the Sequoia episode? What are you doing?

DS: This Ogilvy idea, remember it's not my idea. Everything has already been done, guys. I'm speaking to the people listening, not you. You always know this. It's already been done, just go and see. Hey, that person's smart. He learned from a 40-year career. You're not going to pick an idea you can use as silly.

DR: I was thinking about this. There are some cases where it's not true, but I think most truly iconic world-changing businesses and founders stand on the shoulders of giants, but they have one or multiple things that are novel that they come up with.

DS: It's the combination of these ideas. Sam Walton taking Sol Price's ideas and his competitors' ideas and like, hey, you guys are ignoring these 4000-person communities, I'm pretty sure the thesis is on Walmart. It's like, will they just drive for distances just to save money? The answer is yes, five hours.

DR: That isn't a novel idea.

DS: Yeah, exactly. That's the whole thing.

Ben: It's combining one big novel idea with a bunch of other things that you can learn from history.

DS: You guys combined David Ogilvy's idea by republishing your Sequoia podcast, and then you texted me like, oh, my God, the downloads are crazy, because you're not podcasting to a standing army or podcasting to a moving parade.

I had known this because through my experimentation, I would take an old episode that I had done, do a preview, throw it up, and you'd get conversions every time because it was new to them. I credit Ogilvy for that idea. That's an idea he got from Claude Hopkins and Albert Lasker, who were advertising businesses 50 years before him.

Ben: Is this Scientific Advertising?

DS: Yes.

Ben: Also a good Founders episode.

DS: Yeah. He's excellent. That book, Scientific Advertising, sold 8 million or 10 million copies. They kept it in Albert Lasker. Claude Hopkins worked for Albert Lasker. Albert Lasker thought that book was so good, he stored it in a vault. He built.

Ben: It was the secrets of the industry like don't publish this because we don't want this getting out.

DS: I've learned that because in Ogilvy and advertising at the very end of the book, David's like, here, these are the six giants that I learned from. I was like, okay, well, then I'm going to Google Search. I'm going to read the book. It's not rocket science. He's like, oh, Albert Lasker made more money than anybody else in the history of advertising business. I was like, hold up. What? How?

Ben: None of us know this guy's name.

DS: He says in the book, his estate outside of Chicago was so big, he had 40 full time employees. I'm like, what? What are you talking about? To make these words make sense in my mind, that doesn't make any sense to me.

When you read Albert Lasker, and then he tells you about Claude Hopkins. He's like, yeah, the information is so good that I stored that in my vault for 20 years. Once he sold his advertising, I think he gave away a token of $100,000 to the people working there, and then they released it. Claude went off on his own and everything else.

DR: You were doing the 30-minute hard cut off.

Ben: It's so unsatisfying. It's like, I'm going to listen to 30 minutes of this episode, and then someone's asking me to pay for the rest?

DR: You probably did the conversion, right?

DS: The conversion rates were higher. You were very helpful. David, first of all, you guys are nice, but this is not the language you use. You're like, you idiot, but you guys are so nice. I was like, dude, you're doing it wrong.

I think it was Ben that said this. It's like, for every one person that would buy a podcast, there's a thousand or a hundred that would listen to him for free, probably even more than that. Then you guys open the kimono. You're like, this is our downloads, this is who we advertise with, this is what we charge for advertising.

Ben: The other really key insight is, after spending a bunch of time with originally Kimberlite, then Glow, which canceled Lipson, and still what powers the Acquired LP program, an interesting learning is most podcasts should generate about 50% of their revenue from direct monetization, some kind of membership program or paywalling their feed, and about half from advertising.

The mass should work out where that's going to be the case. For the type of podcasts that we are, whether you have lots of founders, CEOs, hedge fund managers, and these people listening, you could never ask someone to pay you in membership what they are worth to the most valuable advertiser for that slot.

The way it works out is you're massively hamstringing your monetization potential if you make it membership only because you'd have to be like, yes, please pay $2000-$5000 a year in order to get access to this private thing, versus if you were to take that same piece of content and open it up to advertisers.

DS: You made a good point earlier, and we can elaborate on why you're so psychotic about these sentences and need to get out of here. These two sentences, let's remove it, because if you could factor in the average hourly rate of the people in your audience, it is unbelievable. Even if you make a million dollars a year, and we know people, obviously inheritances make a lot more than that, but I think a million dollars a year is $500 an hour or something like that. I don't know the math, I'm not a good math person.

You're asking if they listen to an hour long podcast, the Founders, that's $500. You cannot waste these people's time. I never answer your question when you're like, hey, how do you guys think about this? Do you re-edit or do you cut them out? I use the scripts as well.

I actually think the way I listen to Founders is obviously listening to it and reading, the super power of podcasts that you can listen to when you're doing something else. I think I'm going to put all my podcasts up on YouTube. I don't have any video, but I think we're going to use Descript. Some people have success just putting up the audio and a static picture, and you can listen to it on YouTube, but I also think, if I'm going to do that, I have this and that's cool if you want to use it, but don't have to.

Ben: We did not find success doing that. This episode will be the first episode this year that's on YouTube because we basically said if there's not interesting video, then it's not a video podcast, and you can go find it in a podcast player.

DS: I'm using it just for search. I don't think I'm ever going to do video anything because it's so much simpler to do. Literally, what I'm saying is I'm going to upload the mp3 to YouTube. I'm not making a video. They're not stupid, they're eventually going to have the podcast player inside of YouTube. They released this 40-page document I read on their podcast goals on YouTube? Did I send it to you guys?

DR: No.

DS: I'll send it to you guys. Right now I have YouTube Premium, so you can listen to them in the background like a podcast player, but they need to have podcast functionality. It's still a video.

Anyway, the way I do it is yes, I'm very aware of who's listening. I'm not ever going to waste a lot of their time. What I found with the more practice I have for the podcast is, I'm able to edit on the fly. I don't have a script. I'll go through the book, highlight, and then write down whatever pops into my mind.

First of all, the highlight is like, am I excited about that? Oh, that's interesting, highlight, just go off instinct. Then write down something that, oh, that's like this, or that made me think of this and I just write it down. Then I'll reread all these highlights the night before I record, so it's the second time.

DR: You're doing this in a physical book, but you're putting your notes into Readwise?

DS: That happens after. Every single book I do, I think I read the highlights five times. The fifth time is me actually taking pictures of the physical book and putting it in Readwise. I'm also slightly obsessed with Jeff Bezos.

DRS: You're slightly obsessed with a lot of founders.

DS: That's why we're sitting in chairs like, dude, I'm going to be fourth.

DR: We were setting up the chair angles before.

DS: Because you know what I love.

DR: We're like, we got to move David's chair back here a little bit.

DS: Have you ever watched the old Jeff Bezos interviews? When he's first starting Amazon, he's skinny and bald?

Ben: The one that's in that field outside the conference?

DS: Yes. I think this is one. You see he's grasping and I don't know if he's going to feel, but he leans forward. He's like, we're going to be the most customer-obsessed company ever.

DR: He's got that look on his face.

DS: Yes, that's how I am about Founders.

DR: You're like, that dude's a psycho.

DS: Jeff says something that he is. Jeff says something in Invent and Wander, which is an excellent book, because it's all of his shareholder letters and transcripts of the speeches.

DR: Walter Isaacson did that, right?

DS: Yup. All of his transcripts of the speeches and he goes, do you really want to compete against somebody that's as good as you? I certainly wouldn't. That's what he states. He's like, if you read the shareholder letters, and listen to him talk, he's constantly looking for unfair advantages.

I think part of the fact that I have now over 20,000 highlights from hundreds of books, and I still have 50, 60, or maybe 80 books I haven't put in there yet that are in my library—my Readwise account is an unfair advantage because anytime somebody is talking, it's like, oh, you said something, I search for that term, and it pulls up. Then I see my highlight and I see my note. It takes so long to do that, but it's worth the extra 5 or 10 works I make.

DR: That's integrated into your process of making copies.

DS: Yes, because I'm reading something, I remember, no, I know I've seen this before, I can't remember it. I'm typing that term, and it pulls up every single instance. It's an unfair advantage that I have with me all the time.

What I'll do is whenever I'm waiting for Uber today, I just pull up Readwise. Readwise has the highlights feed. I'll show you guys what it looks like. It looks a lot like a Twitter feed, completely random. I'm not choosing this. Instead of me reading Twitter all day, which is not a good use of your time, it's this highlight from the Dodge Brothers. I haven't read the book that was episode prior with the 115th, Billy Durant, who's the founder of GM. Sam Colt.

Ben: Are these ones that other people have liked a lot?

DS: No.

DR: It just repopulated your own.

DS: Yes.

DR: That's awesome.

DS: That's my form of practice.

DR: You've got a healthy Twitter there on your phone. How often do you just pull up Readwise?

DS: Almost every day. If I'm not doing it on Readwise, I'll go to my bookshelves. What will happen is you can pull a book off my shelf, and I'm thinking about this for my kids long after I'm gone. My kids can be like, what was my dad into? They can go back and see, oh, when he was 35 or 38, this is the podcast he made. Let me go find that book. They could pull off the shelf like, oh, this is the line he thought was interesting. Oh, wow, you see dad's handwriting here.

I use this for myself, where I can pick up a book and "reread" it in 30 minutes by rereading my highlights and notes. Now it's back in front of my mind. You can do this anytime. People are like, oh, I'm running late for lunch, I'll just do this, or I'll answer DMs.

I always have stuff to do with me, but I use it as a form of practice. The reason I said this sounds stupid. People think maybe it's silly, I don't know. But I read this book, it's up to 12 founders. It's called Michael Jordan: The Life. It's a 600-page biography.

DR: You just have this encyclopedia knowledge of the numbers of your episodes, which I'm so impressed by.

DS: It's only because I reference that all the time, so when you look up something over and over again, it's repetition. Everything in life is repetition. Sam Walton's career is repetition.

This is what I asked Charlie. One of the most interesting things he said, he's like, one of the best things that ever happened to me is that I got rich later in life. He saw the time and how difficult it was. He was talking about, imagine you being super famous or rich when you're 21 or 25 and how disorienting. He's like, I was a full grown man with life experiences with a wife and kids.

DR: Yeah, the child who died.

DS: Yeah, I did not mention that. He had a full life experience. Therefore, also, the main problem that happens is people don't know. They're like, I was the son of a poor man, now I'm rich, and my kids live in an unbelievable amount of wealth and privilege. How do I deal with that? That comes up in the books for hundreds of years, the answer is no one knows.

With Charlie, though, the benefit is he didn't have a famous last name or a lot of wealth. His kids were grown. They wouldn't have to deal with that when you're 5, 7, or 10. He also gave me some advice that was fascinating.

DR: You got to pay that bill eventually, though.

DS: How do you deal with this? He's a multi billionaire.

Ben: Right, this is a five generation problem.

DR: Not only is he a multi billionaire, people like us talk for hours about him. He's a celebrity.

DS: I just read this fantastic book. I like reading obscure books because go back to what Jeff Bezos said, differentiation is survival. I'll find weird books. I was searching for books for you guys, and I couldn't find any. I will order them and bring them to you because I always bring books. We went to three different bookstores, I'm not kidding.

Bless Sam and his patience with me. He drove me all around Menlo Park and Palo Alto yesterday going to bookstores. I was literally looking for you guys.

Ben: You have specific books in mind?

DS: No. I like going to these bookstores, I think of my interpretation of you guys in my mind, and I just know if this book is good for that person. The Henry Flagler book, I knew that was good for Charlie Munger because of what he said, so I don't know what's going to happen. I do have two books picked out for you guys, which I'll send you, but they're newer books.

DR: That sounds like a great day driving around with Sam, Pinky, and going to bookstores. What better day couldn't you spend?

Ben: Also, The Peninsula's beautiful.

DS: Sam's unbelievably intelligent. He's got a weird alien brain, as I always tell him. Our mutual friend Mitchell Baldridge, all three of us now says Sam has a giga-brain. I think he already said his description of it.

I like obscure books. I read this book that's very hard to find. It's $300. It's called The Invisible Billionaire, Daniel Ludwig. He was the richest person in the world in the 80s, and no one knew who he was. He paid a public relations firm to keep his name out of the papers.

DR: And do what your competitors don't.

DS: Yeah. He's just like, I don't want to be known. A lot of his work was shipping, oil, refining, mining, and all the other stuff. But the author makes the point in the book about how different a million and a billion is, going back to Charlie Munger.

He goes, a stack of a million dollars in a stack of hundred dollar bills is 40 inches. A billion dollars in a stack of hundred dollar bills would be three times taller than the Empire State Building. For us, that guy's rich. No, billionaires and millionaires are not in the same category. It's so disorienting.

Ben: This is also a thing, where the English language has done us a disservice by naming two things that are a thousand times different, very similar words.

DS: Yeah, it sounds similar.

Ben: Yeah, but they're not similar at all.

DS: Think about all the wealthy people that Charlie talks to. They ask, what do I do with this wealth with my kids? If you give your kids a bunch of money, is it going to demotivate them? Charlie goes, of course it's going to.

Again, this should be obvious to you. He's like, I don't try to steer his kids or his grandkids into what they should do for a living. One of Charlie Munger's best pieces of advice that I took to heart is follow your natural drift, like how I pick books. There's been 15 or 20 that I've read completely or half, and it's like, I don't like this book. I'm not making an absolute about it.

I go to my bookshelf, and I have probably 80 or 100 books I haven't read yet, most come from the audience. I was like, what am I most excited to learn about now? That's how I pick it, so follow your natural drift.

DR: Which is also more or less how we pick episodes too. We have a little bit more planning because now there are such long lead times, but it's like, what's interesting to us right now?

DS: Hundred percent. He's like, don't try to steer them too much. He definitely feels that some of them are going to be less motivated because they're born rich, but this was the most surprising thing. He goes, you have to give him the money anyways or they're going to hate you for it. I've read so many family dynasty stories, and I'm not saying I'm trying to pull up a dynasty.

DR: We're not going to give the money to them.

DS: No, they did and it ruined them. Have you guys done an episode on TCI, John Malone, Cable Cowboy?

Ben: That will happen this year, for sure.

DS: You know why? That was one of the books that was recommended the most. They're like, you got to do Cable Cowboy, you got to do Cable Cowboy, you got to do Cable Cowboy.

Ben: We both have read the book. It's awesome.

DS: It's excellent. You know the story I'm about to tell you. I didn't understand this before dedicating my life to studying history, where it's like, oh, wow, the decisions I'm making now can reverberate through the generations. That's a crazy thing, where Bob Magnus, who is the founder of TCI, doesn't have any money, and rural Texas wants to jump into this new industry full of cowboys, literal cowboys.

He doesn't have money, so his dad gives them a $2500 loan. Bob takes that $2500 loan. Then, let's say, 40 years later, Bob dies and he's got to pass on his money that was created from the company he created to his two kids. He winds up giving them, I want to say like $200 million each, two sons.

Thinking about that one decision, I think I talked about it in the episode. If I didn't, it's a big mess up on my part. I stopped in that part. I was like, hold on, think about that. What if his dad didn't give him the $2500? His $2500 turns into $400 million, let's say, $200 million each for his grandsons. It changed his grandsons' lives.

Ben: That means the rule of thumb is you have probably three more generations after that of wealth guarantee.

DS: That wealth is gone because I think it went up their nose.

Ben: That's pretty hard in one generation.

DS: The point was, that wasn't good for them because they were not motivated. They did a bunch of drugs, I think they went to jail, and that kind of stuff. You see that so much. My thought was like, oh, get them a little bit, but not enough that they don't have to work or whatever. Charlie's like, they're going to hate you. It's just human nature.

This is my biggest takeaway from Charlie and I think the biggest benefit that people that listen to Founders and Acquired, and then hopefully read a bunch of the books, and do studying on their own, are going to realize. I said it at the top of my notes, and this is the first thing. The conversation I had with Charlie was comforting the same way that people that are listening to Founders are comforting.

Charlie has an almost complete indifference to problems. Troubles from time to time should be expected. This is inescapable, so why would you let it bother you? That's the main takeaway from this three-hour dinner I had with him. If you think about how he avoids this, he avoids it by doing great things and having less problems.

You're never going to escape problems. But if you're around great people, just like a great business doesn't throw up big problem, after big problem, after big problem, your wife, your kids, your friends, your co-workers, his whole thing is aimed for the highest quality you can get, and then that's going to solve 99% of your problems. When you have a problem that you know that problems are still going to come, okay, you just deal with it.

He talked about when he lost money on Alibaba. He brought up that people try to make fun of him for whatever. It's like, you guys are missing the point. You're not going to escape getting through life without making mistakes. The founder of IKEA has this great quote where he says, "Making mistakes is the privilege of the active. Only those asleep make no mistakes."

DR: It's the version of the Man in the Arena.

Ben: What do you think is the ideal way to handle it if at 35, someone becomes very wealthy, and so when their kids' memory starts around age three, so for their entire kids' memorable lifetime, they've grown up in wealth and privilege? How does one handle that?

DS: I have no idea. Me even giving you an answer to that is there's this guy named Charles Kettering. I don't know how to pronounce his name. I read his biography. I think it's episode 127 or something like that. He invented the electric starter, he founded AC Delco, which was acquired by GM. He is the head of Research and Development at GM when GM was the most valuable company and the cutting edge of technology in the world at the time.

There's a story from his wife and his daughter in that book saying, hey, when he dies, there's only going to be three words on his tombstone, “I don't know,” because that's what he would say over and over and over again. He's having this conversation, the same thing. He was the son of a poor man. He is now a rich man, his kids are rich. He's talking to other people to have the same experience, his peers, what do you do? The answer that they came up with? I don't know. It's so dependent on who the person is.

Maybe you give them money that's going to Bob Magnus' grandsons. Maybe they're Warren Buffett's kids, where they run foundations, and they want to give the money away. I don't think they're coke addicts. I don't know, but it's just depending on the person. If there was a correct answer, I think some of these guys or gals would have figured it out.

DR: That's the thing about humans. Every person is different.

DS: I have no idea, and that's the biggest thing. This is one of the lessons I learned from the podcasts. You mentioned this at the beginning, Ben, where most of these people are best in class in this one dimension in the world. Of course, to get that, they couldn't optimize all of the other areas of their life or what they did for their work.

Sam Walton is one of the rarest guys, where he knows he's dying because he's got cancer all over his body when he's writing that book. He's like, listen, if I could do everything again, I miss some of my kids' childhood. They worked in the stores and he took them with him. He's like, I'd do it again. I had to do this, I had to get after it, I had to improve. A lot of them get in and like, ah, I regret.

The founder of IKEA has the best words on this. He said, I had three sons growing up. He started IKEA when he was 17, worked on it till he was 80 something. He's like, I sacrificed my three sons' childhoods, I regret it. He goes, anybody that has kids knows that childhood does not allow itself to be reconquered.

We were hanging out today, we're going to do recording, and go to dinner. My plan was I want to see my son and my daughter. It's like, I'm going to take the red eye. I realized like, yeah, but I want to spend time with David and Ben, so I'm leaving early tomorrow morning. It's like, I'm doing this as fast as possible. If I had to, I'd fly back and forth. Think about the relationship you guys have with your parents. Are they still alive?

DR: Yup.

Ben: Yup.

DS: Okay. You get to talk to them, see them, but you have your whole life. When your kids are small, there's this tiny window when they're two to five to six, where you're everything to them.

DR: You and I have talked about this. I absolutely feel this way.

DS: Even my 10-year-old daughter, right now, wants to spend time with me. It was the cutest thing ever. I was leaving, going to LA to see Charlie, and then coming up to San Francisco to see you guys. She texted me, she goes, I'm wearing your sweater because it makes me feel close to you while you're gone. But if you ask her, do you want to spend movie night with dad and mom, or do you want to go play Roblox with your friends? Friends.

She loves me, don't get me wrong, but their friends are way more important to them. My son's about to turn three. It's like, I'm not going to get back that day. There's only a thousand of those days. My wife won't have any more kids, even though I was like, I want a bunch of kids. I was like, I want a bunch. She's like, no way. I don't have to get pregnant. That's fine.

DR: Something that Buffett and Munger did with the Graham group that was way ahead of its time that now anybody can do is they formed their social networks outside of geographic barriers. They found their most compatible, most like-minded, highest level of talent peers, and then they just got on planes and got to go see them. That was really hard to do back in the day, and now anybody can do it. It's like Bill Gurley, you have no excuse not to do that.

DS: You have to, but here's the thing. What people get wrong is they're like, oh, I want to meet this guy. You have to do the work necessary to make them worth your time, which is like the unfair advantage that the three people sitting in this room have. It doesn't matter. That's why in the last six weeks, I've gone to lunch or dinner with multiple billionaires and the people that you get to talk to.

It's like, this dude is crazy. He has read 300 biographies of entrepreneurs, there's no way I'm going to have dinner with him and not pick up one idea. Now I've built this machine where like, oh, that's an interesting idea, I'll just plug it into this business. It's not a financial transaction by any means.

Charlie was the first person I met that I was actually nervous about. The reason I'm not nervous is because I know I've done the work. You can't put me in a room with anybody on the planet, and I'm not going to tell him at least one interesting thing. That doesn't mean it's the best dinner they ever had in our life. That's not what I'm saying. It's just like, they're going to hear something that's like, oh, that's interesting, and that goes to their own brain.

It's only because I've spent six years and the same with you guys. It's like, oh, you should feel comfortable. Like you guys mentioned earlier, your audience feels like it's two football fields. You didn't use word insecurity, but a little nervousness. I want these people to like me.

DR: It's like a fear pushing you from behind.

DS: You know more about the subject than they do.

Ben: Sure I do, but I need to make something worthy of their time.

DS: Yes, that is admirable.

Ben: Who cares? I could spend all the time in the world and fail to synthesize the narrative and the takeaways, and all of a sudden, I failed them. Regardless of how much work I did, the product wasn't good.

DS: It's hard to not have the product be good because you did the work, I guess is my point.

Ben: Yeah. I think we now have a process that means that when you and I put in the work, the product is good, but it took a long time to arrive at that. This is another Sam Hinkie thing. Trust the process.

DS: The point I was making there, though, is because you guys do so much preparation and it's now your life's work, it's going to be so hard not to add value to the people in your life, whether it's friends that never show up on a podcast or friends that you don't have a business relationship with. You're just going to add value because what you do is so rare.

Naval Ravikant influenced my thinking a lot, too. He has this thing in The Almanack of Naval Ravikant by our friend, Erik Jorgensen. He's just like, if you read an hour a day, that puts you in the 0.0001% of humans. I'm like, that can't be true.

Ben: The dirty secret of Acquired and Founders is that people don't read books. If you just read them and then tell people what's in the books, you're going to 100x the market for books.

DS: I couldn't believe that. I was having dinner with the same friend that was telling me. I told him, I'll try to build a business around my reading. This was a couple of months ago. He's like, you vastly overestimate how much people read. He goes, how many books a year do you think the average person reads? I was like, I don't know, 12?

Ben: One.

DR: It's 0.5, I think.

DS: Zero.

Ben: I remember asking a book publisher. He said, America reads a book a year.

DS: He quoted some other study. I said, 12, he's like, no, not 12, it's 0. The average is zero. It's crazy. To your point, I've become friends with a bunch of writers, some of them I met through the podcast. They've been teaching me about the publishing industry and just breaking down. 98% of books ever published sell less than 5000 copies. It's a parallel of everything.

Ben: The book business is the venture business, which is so interesting to me how the advanced model works. It's quite similar to seed financing. They put out $50,000 for an advance on your book, which covers your cost of living while you're writing it. They don't care about recouping it because the whole business is about, did I sign up James Clear this year?

You know when you have Michelle Obama on your hands and you have to pay for it, but you don't know when you have a James Clear on your hands. When that becomes the book that America reads this year, you better make sure it's in your publishing house and not one of the other three big, four big, whatever it is, publishing houses.

DS: Seed funding is better because their advances are recoupable. I was having this long conversation.

Ben: To the most preferred stock. It's participating preferred.

DS: We were talking before we started recording. I was like, Jimmy Soni would be great to do a session with just because he's got this historical knowledge of PayPal, PayPal being so important to Silicon Valley history. We were talking about this and he's like, no, I have to pay that back through sales. I'm like, oh. Do you guys listen to Gamecraft, Blake Robbins?

Ben: Yeah, every episode.

DS: Excellent. Unbelievably good. What I loved about it is how they focus on the business model innovations and how one decision by some random group of programmers in the 1980s affected a business model decision 10 years later or whatever. I was talking to Jim about this. I go, books are fantastic, they're the best products in the world. There's a great quote in Poor Charlie's Almanack, which says, "Those ideas worth billions in a $30 history book." For Charlie Munger and Warren Buffett, that is literally true.

What I don't understand is you guys have such a high value product, and you haven't innovated on the business model, though. I was telling Jimmy, I was like, do you know the deal? Think about this as an entrepreneur. You're not a writer, you're an entrepreneur, and your product just happens to be a book, but you can make money off that any way you want. You can just get creative. I go, people think it's crazy, where I'm trying to be the Jay Z of podcasts, and people are like, what the hell is wrong with you?

DR: Have you done episodes on Jay Z?

DS: That episode I did on Jay Z's biography is one of my most popular. People listen to it two, three, four, five times.

DR: I bet. I got to listen to it. I love Jay Z and I love you. I can't believe I haven't listened to that episode.

DS: Jay Z has a founder mentality, and he had it since he was a kid. You just see everything in his whole career. People look at him like, oh, this is nothing about. Intelligence manifests itself in vastly different ways. It's not always credentialed. In many cases, it's not, but Jay Z is straight off genius if you listen to him and what he did.

He looked at it, he's like, yeah. He says it from the get-go. He's like, I thought I told you characters, I'm not a rapper. He's like, I'm a businessman and rap just happens to be my product. I'm going to think about it like that. I go, Jimmy should do that. I go, why don't you just find a deal like Jay Z did with Samsung? He's like, what are you talking about?

DR: That's true founders, entrepreneurs, whatever title you want to put him. They care about ownership. They own their work.

DS: I realize that the business model matters, which is why I brought up Gamecraft. This was years ago. This is his Magna Carta, Holy Grail, probably released in 2013. He goes, I could record this album and then I could sell like normal. Stream it and then sell it for $10. Do you want the physical copy, et cetera? He goes, what if I just want my money guaranteed?

He goes to Samsung and says, Samsung, you're launching this new phone and you have your own app on it. I'm going to sell you a million copies, $5 each. You give me $5 million guaranteed from the album. I'm still going to own it, so he gets the streaming lights. He goes, what I'll do is you pay me $5 million. The first million people that get access to my album are going to be Samsung's whatever phone is coming out, you download it for free if you have this device. It's advertising to Samsung and it's guaranteed money to him.

I go, dude, you're writing about technology founders. I was like, there are these venture capital funds that have $80 billion of assets under management. I was like, hey, will you pay me a million dollars to write this book? He says, hey, this book is now presented by whatever firm.

Actually, I've talked about this privately. You guys already know this. There's been something like 15 acquisition or investment offers for Founders. I've said no to every single one. A lot of them are like this, where it's like, oh, you have the attention of people that are valuable. You just said, the worst thing that can happen to a venture firm is they miss the hit of that, so they have to expand. They just have to make sure they catch that.

It's like, hey, we'll pay for Founders or whatever, give you X amount of money, pay you to do it, you do exactly what you do. The only difference is, actually, you're trying to buy out inventory forever. It's like, hey, Founders is presented by X company. If you're going to raise money, email here. The response I had when I got these pictures, it's like if I did that, that means I'm not actually learning the lessons in the books, which is you never give up control. No, why would I ever do that?

Ben: Let's dive into a deal structure on that. What if you weren't giving up control? And what if you weren't giving up economics forever? You're just doing a period of time buyout of all your ad inventory.

DS: This is the intelligent thing. This is what Tegus is doing with Invest Like the Best. This is why it's crazy to me when I talk to people and they don't understand this.

I had a conversation with a founder. I'm not going to say who it was. He's like, it's really weird. This company is running ads on that podcast every single episode forever. I go, David Ogilvy ran the same exact ad in the same magazine for 30 years, and it was still effective. I went, what do you think Coca-Cola has been doing? This is not a new idea.

DR: Either Coca Cola is really dumb, and I don't think they're dumb.

Ben: Apple has the prime billboard in every major city in America to advertise whatever the latest iPhone is forever.

DS: I talked to Michael Elnick, who's the co-founder of Tegus. We all know each other. We talked about this. This is another example because it somewhat affects our business, because when there's a decline in overall economics, ad markets usually shrink a little bit and ad rates come down. It's like, oh, you're doing exactly what investors do.

What do Charlie and Buffett do when there's a crash? They don't deploy. You read Issy Sharp's fantastic autobiography, the founder of Four Seasons. He's building, what didn't exist at the time, the only chain of five star hotels at the time. This is what every founder does, Andrew Carnegie, John D. Rockefeller, Henry Clay Frick, when they're in recession, that's when they grow.

What he would do is if his competitors would pull back on advertising, he would spend more. I think in the book, he increases market share by 25% or 28% using this over and over again because human nature is, oh, crap, things are small. This is what Ogilvy said. Ogilvy's like, if you need advertising to sell your product, it's not a marketing expense, it's a production cost. It's the actual cost of manufacturing your product.

What Michael Elnick did that was such a genius move was, first of all, he knew something was working. He scaled up through podcast ads. He knew it was effective. Then he's like, okay, now you have all these people in the tech industry, their stocks creating, and everybody's running and treating. What does he do?

Ben: There's probably available inventory.

DS: He goes, hey, Colossus network, I'd like to buy up every single ad inventory for 2023 on every single one of your shows. That's how you know that the likelihood of that guy is going to win. I don't know the details of his business. It's private and everything else. He's like, that's the right decision, that same decision.

That's what Ogilvy would have done. That's what Buffett and Munger do when they put money in. That's what Coca-Cola does. It doesn't matter, the economic climate. Have you ever seen less Apple billboards? Have you seen less Coca-Cola? No.

DR: It's interesting. I think about this in the venture business, which obviously, as we record this here in mid March, 2023, there's a lot going on in the venture business.

Ben: It's so dynamic right now that I feel like we don't know the last two iterations of what has happened because we've been recording and I haven't checked my phone. That's how fast the world is moving right now.

DR: Things are happening very quickly as we speak. I think as a consequence of that, to your point that you should advertise heavier during recessions, I think customer differentiation among venture firms is just declining rapidly.

Ben: No. It was until interest rates went up.

DR: I think both the up and the down cycle are commoditized.

Ben: I totally disagree with this. I think when capital was a commodity and money was free, it was extremely hard to differentiate yourself as a venture firm or any financial firm. It should be easier than ever to differentiate yourself.

DR: Okay, so how do you differentiate yourself right now?

Ben: Let's abstract away speaking to the Acquired audience as one of them or as a gigantic means of differentiation.

DR: Let's just say you're an XYZ average venture firm out there.

Ben: Having money and writing the check.

DR: Yes, having money.

Ben: Six to 12 months from now, that's going to be differentiating.

This is a great moment to pause and inject some data into this VC funding conversation from our good friends and sponsor of this episode, PitchBook Data. To underscore my point and bolster my own argument against David...

DR: Here we go. Ben, are you bringing our sponsors into this debate?

Ben: VCs deployed almost $85 billion into private companies in Q4 of 2021 at the peak. In Q4 of 2022, just 12 months later, that had dropped from $85 billion to right around $35 billion. Just another data point, the number of funds that raised money in 2021 went from 1270 down to 769 in 2022. Everyone already knows this, but the numbers really do help you to contextualize the market reset and obviously, the aftermath.

DR: It's so crazy that that's a well over 50% drop in capital raise and probably just about a 50% drop in the number of funds being raised or something like that. But it is still an astronomical amount of capital and number of funds relative to 10, 20 years ago.

Ben: Totally. I do want to cite a second research report that PitchBook put out called What the Future Holds for Private Capital with another interesting stat. By 2021, VC AUM, assets under management, had peaked at about $2.6 trillion. Due to valuation declines, PitchBook currently estimates that the net asset value is now down around $2 trillion.

Of course, most of you know that AUM numbers mostly consist of dollars already deployed. The vast majority of the rest is committed dollars that have not yet actually been called in capital calls from LPs. When people end up referring to, oh, there's all this dry powder available, the amount of actual available cash is much, much smaller.

DR: That's before even considering all the dynamics about whether VCs want to call that capital right now from their LPs,

Ben: Totally. See, David, now you're just bolstering my argument from where we're sitting with David. Listeners, we'll link to both these pieces of research in the show notes. You can get access to the very best company data. In addition to research, they have just a treasure trove of information on what companies raise what money, when, at what valuations, number of employees, board composition, et cetera.

DR: It really is the best. There is so much noise in this data out there if you search around on the internet. PitchBook always has the absolute cleanest, best data that you can trust, which is super important.

Ben: Totally. They have 3.5 million companies in the dataset, 500,000 investors, and over 100,000 funds. PitchBook is awesome. They did The Arena Show with us last year. They're just great partners.

If you want to sign up for PitchBook, they are currently offering a free week trial that is coming up soon. Don't miss it. You can go to pitchbook.com/acquired, get all the details, and just tell them you heard about them from Ben and David at Acquired. Thanks, PitchBook.

DR: Thank you.

DS: I have a thought on this. One, I don't know anything about venture investing. Two, I don't know anything about investing, period. I get to talk to super smart investors, and I'm sure the question is like, hold on, you got to find that for me. I'm sure they're like, this kid's an idiot.

When you guys were talking a little about your business and the venture game in general, I just thought of one of my favorite things that I heard Jeff Bezos say. For years, people were like, hey, when are you going to do physical retail, when are you going to do physical retail, when are you going to do physical retail? He said something that was crazy. It's like, physical retailing is an ancient business. I love that term.

It's so hard to improve on an ancient industry. It has to be completely differentiated. I heard you on one of your podcasts, where you went to the Amazon Go store just as a pure curiosity. It's like you needed something. You guys have probably read that story too, where at one time, they were going to meet and all this other stuff that you'd have to talk to somebody. It's like, no, you have to redo this. This doesn't make sense.

The differentiation here is that you walk and you walk out, not walk in and talk to some guy. He's like, cutting salami for you. You got to get that out of there. I've had this thought because I've read a bunch of biographies on investors too. Investing is an ancient business. We're just doing it in different ways now.

I was like, if you wanted to invest, let's say you wanted to invest in private companies, which people have been doing forever. I always think of where did JP Morgan get his deal flow? You know like you've read through history. People think, oh, it's JP Morgan bank. No, there's no retail bank. You're not going in there. There's no sign on the doors.

It's like, here are JP Morgan companies. It was a relationship based. You got in if you knew somebody. I read this biography that's incredible. I highly recommend people read it. It's episode one or three of Founders. It is the richest woman in America, Hetty Green. I can't remember the stuff.

Ben: I love how he denies that he knows every number of every episode and then busts out three more.

DS: It's only because I reference this all the time.

DR: It's only because you reference every episode all the time.

DS: Hetty Green, though, was so wealthy that she bailed out the city of New York. That book has unbelievable stories.

Ben: What? I've never heard this person's name, and they bailed out the city of New York?

DS: When she was alive, the richest city in the world per capita was New Bedford, Massachusetts. Her family made so much whaling. The way they looked at the family fortune is, I am a steward of this money, my job is to make it grow so that the next generation has more. She's the third generation of these whaling, and whaling died out I think the generation before her, so they had to figure out how to make money. The technology stocks of her day, railroads, she made a ton of money in railroads, and then she'd buy land, real estate in New York, and everything else.

Anyway, my point being, and I had this conversation with Patrick one day, I was like, think about it. Investing is an ancient business, so you wouldn't do what Hetty Green did. Where did she get her deal from? People knew her. They knew she was wealthy. They knew that she was the first person to go to in financial panic. They called it financial panics, what we call recessions and depressions now. It was every three years back then.

What she would do, she had a desk in Chemical Bank in Manhattan. The advantage there is geography, physical location, you're at the center of finance in America, you need to be here. You build a reputation, so literally, there are stories in the book, where there'll be a line of people in financial crashes waiting at her desk. It's like, okay, I'll sell you my rose stocks to pennies on the dollar.

Cornelius Vanderbilt did the same thing. She invested with him and a bunch of other people. I was like, what would you do today? You want an edge. Everything we're talking about is like, you need an edge. Ed Thorp has a great quote in his book. He's like, "I've been a money manager for 50 years. One thing I know is the surest way to get rich is only to play games and make investments where you have an edge."

DR: Which is another way of saying, do something your competitors don't, aren't, or can't.

DS: Or Edwin Land. Edwin Land plays a huge role in my life. He found the Polaroid. He's the hero because he said, I have a personal model, it may not fit anybody else, don't do anything somebody else could do. I was like, okay, I don't think anybody else could do Founders the way I do it, so I'm just going to do this.

My point being is, how would you do it today? It would look very much like what I think you guys are building. I'm not an investor, so I don't know anything about your world. But I'd spend my time reading and learning about business history. Charlie Munger and Warren Buffett did that. Every single investor you guys have probably read about does that all the time. They read constantly.

I would share what I know, that's going to build my network of other people. Those people who are eventually going to make deals, and then I have this huge advantage that you couldn't even do 10 years ago or 15 years ago because there's no such thing as a podcast. Now I could record all the stuff I'm learning,

Ben: We should say, there have been iterations of this. This is how Union Square Ventures became Union Square Ventures or Foundry Group became Foundry Group because of blogging and then Brad and Jason writing the book on venture deals.

DS: Venture Hacks with Naval and Nivi. I have two other examples that's not even venture. What is the most successful content marketing of all time?

Ben: Michelin?

DS: No, Berkshire shareholders. This is how you know a genius. It is the greatest act of salesmanship because you never even see the sale happening. It's like, hey. You guys probably have done this research, how much time they spend on those letters. It's half a year, seven, eight months for every letter. This is not like, oh, I just jot it down of what I learned this year. This is a great thing that came up here.

DR: Did you talk about the letters with him?

DS: I was explaining to him. I was like, Charlie, I'm literally in the middle of reading about you when you were around my age. Every time I read a book, first of all, I know what year they're born. Every time as I go through the books, I'm like, how old are they? And I write down. Okay, he's 24 here, he's 30. I want to know what they were doing in and around my age.

I'm like, Charlie, I'm thinking about you guys. Your fund starts when you're 41 or something like that. I don't remember what it was right. I was like, you start out, you're trying to figure things out, you could see them figuring out, and making the mistakes. You guys did an excellent job on your episode talking about what they learned from, get away from Ben Graham, excellence.

Great businesses are rare, we should be in there, and then let time do all the work. Now you guys put up the greatest investment record the world's ever seen. It's like, are you surprised? He goes, of course. He's like, of course, I'm surprised. How could you not be? We want to be successful. We were ambitious and driven, but there's no way you could say how much we are worth. What's Berkshire's market cap right now? I don't know.

DR: $500 billion.

DS: Whatever it is. The reason that popped in my mind when I was asking him these questions—let me actually get the exact note because I don't want to mess up the way he said it, because his lines were just excellent. He surprised us by how successful he and Warren turned out, but how could you not be surprised? Then he said something that was fascinating.

He goes, I think we get too much credit. I was like, that's interesting. Why do you think that, Charlie? He goes, I find it odd to be so wealthy and loved. These are not exact words. These are my interpretations of his words, so let me just be clear here. I find it so odd to be wealthy and loved. That's not a usual human reaction.

My note is tied to why I think the Berkshire letters are the greatest content marketing of all time. I wonder if this is because they spent so much time teaching others. When you say Acquired, you guys are teaching. Berkshire, I'm going to go with Paul Graham too. You could just not read a book, just read Berkshire's letters, and you're going to get a fantastic education.

In there, it's like, oh, by the way, we'd like to be the buyers of choice. If you happen to know of this business that you want to get your hands on, you care about, and does his excellent product differentiation, call me. How much money do they make off of that?

DR: I don't even know if it's on the list of things that they care about, but it's also marketing for their businesses like, I have GEICO car insurance because it's a Berkshire Hathaway company.

Ben: I feel an extra kinship for Brooks running shoes, for sure.

DR: You're wearing Brooks right now.

DS: I was in a Polo hoodie right before I came over. I watched a documentary on Ralph Lauren. I just did a podcast.

Ben: I just listened to your episode.

DS: Yeah, I think it's episode 288. I wonder if I'm right. Let's see if I'm right. I could be wrong, I could be full of crap. It's 288. Before that, I had watched a documentary on him years ago. I always go to Ben for the proper pronunciation. We'll do the same podcast. I'll say Akio Morita, and then he's like, Akiyo Marita. I'm like, all right, I'll go with Ben. I trust Ben a lot.

Ben: I will give you the correct American pronunciation. It's unclear if it's actually right or not.

DS: He did the same thing that Akio did. They were struggling in the early days of Sony. They'd get this huge order. They're like, we're going to take a hundred thousand units or whatever it is, but take off Sony and put on our name. Akio's like, we have no money, but he refused to do that because he's like, I'm not building your company building mine. I love that entrepreneurial bullheaded tendency.

The same thing with Ralph. Ralph was broke. Him and his wife are living in an apartment with a train running over on top of them. They're sleeping on a mattress. He's making ties, and Bloomingdale's like, we'll take them, we love them. Take that name off, you're going to be our house brand. He packs up his ties. He's like, I'm not here to build your brand, I'm here to build mine.

Ben: Which is funny because later in life, he would make so much money on just licensing out his brand. He's like, I'm making a product, so I'd literally just license the brand.

DS: Hearing that made me buy more Polo clothes. Hearing your affinity for GEICO makes you buy GEICO. The advertisers that you have Acquired, because they love you, I know you guys get them, and you have a ton of people that want to advertise that you don't let, that goodwill that you're building up, the goodwill that Buffett built up, the second maybe most...

Ben: By the way, there's a litmus test for that. I want to only work with sponsors that I want to so full-throatedly endorse so that I feel the Acquired brand gets stronger by working with them. If you can actually just keep doing that durably, I think that is an amazing way to build a brand. We try, it doesn't always work. Sometimes we just don't sell ad slots because we're like, the bar is here.

DS: Long term, I'm like, okay, I miss a week on advertising. It doesn't matter. When we got on the phone the first time we talked, do you guys love podcasting? I love podcasting. Are you going to do it forever? I'm going to do it forever. We say the same thing. It's like, one week, and we could do this for another 40 years. The same goodwill that you're talking about. I don't even drink energy drinks.

DR: You showed up with five Jocko ghosts.

DS: This is the only energy drink I found, and I only found it because I was driving home on Thanksgiving. All the coffee shops are closed. I heard Jocko's podcast and I know he has this. He says. I was like, wait, there's a [...] on the turnpike.

I was like, I can just go there. They're there. I bought them, and then I was wired for the whole drive. I was like, they work, man, this is fantastic. The point there is it's not like I went to the energy drink, I was like, oh, maybe I'll do Rock Star or Monsters. I was like, no, they didn't make a podcast that I love. Jocko made a podcast that I love.

Ben: You were not evaluating energy drinks at that point.

DS:  The format for Founders, I got from Jocko. I found his podcast because he was on Tim Ferriss'. His podcast at the very beginning was just him reading books for an hour or hour and a half saying, oh, I like this section. He does it for autobiographies for military people. I was like, oh, I should do this for biographies of founders and everything else. It's the combination of ideas.

The second best version, and you guys know this more than me because it's your world, and I don't know anything, I spent three weeks reading Paul Graham's essays. Paul Graham's essays changed my life. The reason to finally jump and dedicate my life to Founders came when my wife was sleeping in bed next to me. I'm up late at night. I read Paul Graham's essay, How to do what you love.

I talked about this in episodes 275, 276, and 77. Those are right, I know that for sure. They are the three program episodes I did. I talked about this snap, how that episode changed my life, or that essay changed my life in 275.

I spent three weeks going through every single one of his essays. Something his new essays lack that they had before, he used to have this bright orange box at the top. It says, do you want to start a startup? Apply to Y Combinator.

I thought about this. It's like, what is the Founders version of Y Combinator? What is the Acquired version of Y Combinator? You have to be very careful who you partner in what you're doing. I was like, what is the orange box? It's not like you go to Paul Graham's and he's got 10 banner ads. He's just like, no.

Ben: He works for Yahoo. He knows that doesn't work.

DS: Your attention is here. He didn't know about starting Y Combinator. You can go back and read his essays about it, watch his interviews. They had no clue just like Charlie. He's like, no, I did not expect to build.

Ben: It was called the Summer Founders Program.

DS: Yeah. That's the best thing about learning about the company and founder history. There's no way you could have interviewed Sam Walton when the bottom of his shoes has watermelon and donkey crap. He's not going to be like, hey, guys, I'm the greatest man in the world.

I love this idea of, hey, all of these discussions about the business benefit comes from the byproduct of educating people, sharing people. That's why people love Charlie and Warren, why all three of us love them. How much of us three learn from them?

DR: It's such a good point because of their content marketing. It sounds trite.

DS: His lessons changed my life. They're going to change the trajectory of my kid's lives. He probably hears that a million times a day, but it doesn't matter. It's like, I got a chance to tell him that. That's it.

Ben: It is crazy. He educated America on investing while still managing to do it better than anyone else.

DS: There were some funny things about that, too. In your episode, you talked about Snowball. Snowball has that quote from Buffett in there. He talks about how it's really important to have an inner scorecard or an outer scorecard. The inner scorecard is his dad. It's like, I'm doing this because I know it's good. The outer scorecard is like, I'm doing this, oh, what are other people going to think about me? Newsflash, no one's thinking about you. They think about themselves.

It's almost really hard to have a happy life having an outer scorecard. I like Charlie's description of that better. I think it was Andrew that asked him the question. Maybe Chris asked him the question. It's like, were you driven to succeed to impress your dad or your mom? That's a great question.

He goes, no, I had an inner clock. He goes, I have an inner clock and I always had an inner clock. I did this because I wanted to do it. They're like, do you think Buffett? He goes, I think Buffett has an inner clock too.

This idea where they did it their way. They don't care what other people think. He said this about the fact that they keep some of their wholly-owned businesses. Like, oh, the profits are less, so they just let them run out. They just keep the cash. Then people were like, oh, you should invest the cash. He's just like, no, because we're opportunists. We're individual opportunity driven is the lining he has about that.

Ben: Right. You were going somewhere, David, earlier with the discussion of being a professional investor and how it's less differentiated than it's ever been before.

DR: Where I was going with it was, look at the reaction on Twitter and elsewhere, and I think in much of the country to what's happening with the Silicon Valley Bank situation, not that this is a current events podcast.

Ben: Also, by the time this comes out, it's going to be too easy.

DR: It's going to be old news, right?

Ben: Yeah. Hopefully, things will just be calm and settled down. There'll be no more impending crises.

DS: But another one's coming eventually. Just like Charlie says, you're going to have another unintended problem a year from now.

DR: Yup. I think you're right, Ben, that just having capital to invest will be differentiating going forward. However, I think the aggregate brand and reputation of the venture industry has taken a massive hit over the last several years. It just keeps going down.

Ben: Here’s what SVB is revealing due to how other people think of Silicon Valley.

DR: What I'm specifically referring to is VCs behavior and reactions on Twitter over the past week, but that's just emblematic of the direction of things that have been going for years now. Part of it's related to tech in general, but I think there's a specific brand decline of the venture capital industry.

Ben: Yeah, I agree with that. Tie it to differentiation among venture firms.

DR: Yes. As the market goes down, having capital will be differentiating, and the number of participants will go down in the industry and whatnot. But how do you stand out in this market? If in aggregate your industry is thought less of and people don't want to work with you, how do you turn that tide?

Ben: Right. If the next Sam Walton has the opportunity to raise venture capital dollars, and he's like, you know what, I think I would rather just figure it out another way and not build in that ecosystem.

DR: I think there are a lot of people out there right now who want to start businesses and are like, I'm not going to raise venture capital because F that, I don't need to, and it was a lie that I needed to.

Ben: Right.

DS: Can I tell you from the Founders perspective because I talked to a ton of founders?

Ben: Yeah.

DS: I'm going to go down, I think, hopefully, we'll see, talking to more founders than any non VC. I get offers all the time like, hey, do you want to invest in my company? I've said no to all of them just because I'm like, dude, I'm focused on founders. I don't care about anything about podcasts.

We had these conversations and it's just like, what VCs don't understand is how much founders hate them. They hate them. It's not that they hate the good ones. They love the good ones. I'm not going to say some of the brands that I've heard about. They're like, oh, no, we raised money from rich people. They're good. They don't mess with us. But if we ask a question or we need something, they jump on it.

The problem is it's a natural distribution of any industry. There's going to be crappy founders and great founders. There's going to be crappy investors and great investors. I really think it ties back to the principle that Buffett and Munger build their business on. It's like, only associating themselves with the best people in the best companies. That's all so much of the problem.

My issue is there's a lot of VCs in my audience, too. They're nice people, don't get me wrong. Some of them will talk to us. It's like, who gave you money to invest? Like, what is going on?

This is what I like about Patrick. If you talk to the people that Patrick has invested in, he's like, here's a list of 10 things I took two minutes to think about. He does exactly what he does on the show, he asks questions. If you need something like, I'll do whatever I can, because he's got to go to networking help, no. He's like, if I have to tell the founder what to do, then why do I invest in them? That doesn't make any sense.

What happens is I'll get these emails. It's like, I love your show, such and such. Here are 10 ideas for you. You hired an assistant or a researcher, maybe you wrote this yourself. You thought about this for 30 minutes. I thought about this every day for years, man. That's not helpful. What are you doing? I have a lower opinion of you because this is a dumb idea. Do you know who Bryce Roberts is?

Ben: Yeah.

DS: Again, I've never raised venture capital. I've never made a venture capital investment, but I talked to a ton of founders, and he has the greatest description. He's like, what is the product that founders are buying from VCs? It's not money because everybody's got money. There still are going to be investments made in money.

Ben: Compared to venture in the 70s, yes.

DS: He said two words, improved odds. From a founder's perspective, that is the best description. It's like, if I take investment from you as opposed to this other guy over here, the other girl over there, who is going to meet founders? All they care about is, is it more likely that my company succeeds? I'm dedicating my life to this, man. This is not a game. Can you make my company succeed?

Sometimes you can make money, sometimes you can make a network. There are other people sitting right across me that could probably help with distribution, that is actually a value add. That is the difference. If I was going to be a venture capitalist, and God knows I would not be, I would just start a podcast. I would do it for six years, I'd get really valuable, and then my inbox is full of people. I don't have a deal flow. It comes inbound.

I have a friend, Chris Powers. He syndicates real estate investment. Rich people like to invest in real estate. There are all these tax benefits. This guy I think got either a billion or $2 billion of industrial class real estate under management right now.

I was interviewing him to do my podcast. Again, same thing, educational, interviewing people operating in the real estate industry, and interviewing founders. I'm just doing it because he'd like to do it for people having to press record, put it out there, never really promote it.

Even with my small audience, it changes the dynamic from, hey, I'm Chris sending an outbound, hey, I'm Chris, this is what I do, can we talk, can we set up a meeting too? Oh, Chris, I love your podcast. How can I get $5 million in your front? It reverses it. They get to know you as a person.

DR: It shortcuts the relationship.

DS: You just said it, it's a relationship, which I think there's too much of this calendar Tetris, no offense, that venture capitalists play because they try to do it with me, where our founders do this too, where they're like, hey, I love your show, love to get to talk to you. Can we talk? I replied back. Yeah, let's set something up. Then I'm routed to the assistant.

DR: How about six weeks from now on Thursday?

DS: Joe Schmo has 30 minutes, three weeks now. I've done this once or twice, and now my response is, that's no way to build a relationship, here's my phone number, just text or call me when you're free. I'm not a 30-minute block in your calendar.

The inbound that all us three get, I'm already almost hitting a limit to how many deep relationships I can build. I'm not a fester. Instead of talking to a million people for 15 minutes, I'd rather talk to five or 10 people over and over and over and over again.

DR: You and I have talked a lot about this. You've rubbed off on me a lot on this. I've changed my mind set and my daily behavior hugely because of our conversations.

DS: Charlie and Warren, they build relationships, they find people they like, admire, and trust, they repeat, like, admire, and trust over and over again in the letters and their talks, and then they just do business with them forever. It's not this wide but shallow. That's where you get the bad behavior. Anybody that's high quality can see through it, and it's not going to work with you. You guys, your business is parallel, you're only going to succeed if you get the very best ones.

DR: It's interesting, though. Just like so much in life, Warren and Charlie are just so often right. If you buy the premise that the aggregate opinion of the venture capital industry has declined a lot, it may continue to decline, whether it does or doesn't. It's meaningfully worse than it used to be.

What have Warren and Charlie done? To your point about the best content marketing ever, what is what they do? It's a combination of a hedge fund and a private equity firm. What is the aggregate opinion, public opinion of hedge fund, managers, and private equity firms over the last 50 years? Nothing but down. What is the aggregate opinion of Berkshire? Nothing but up. It's amazing.

DS: This is one advantage that I have the fact that I'm not an investor. To some degree, venture capitalists have to know what's going on. I closed myself off. I was having dinner with Sam and his wife. His wife was asking me like, hey, do you know about this person? Oh, no. Do you know about this? Sam's like, he's got a very limited—he said it, I swear. He's like, you can ask him about books, but this dude's not watching TV. He's not doing any other stuff.

The good thing about that, though, is essentially, the way I use Twitter or any social media is I put out little snippets from my podcast in texts.

DR: You put out a lot on Twitter.

DS: In text form.

Ben: Which has been really working for you.

DS: I'm going to read something that has over a million views in 24 hours because of everything's going on and because I just had dinner with Charlie. I'm going to read this, and I'm going to go back to the benefits. I go, Charlie Munger tells a story about human nature. I didn't put this because of the bank run. I was just thinking, oh, I was reading my highlights.

Ben: Wait, you didn't post this with regards to the bank run?

DS: No. Do you remember, I reread my highlights every day? My Twitter is when I reread highlights. It's like, oh, that's a good one. I'll just put it on Twitter.

Ben: Oh, my God. I knew that's just the greatest timing in history.

DS: Exactly. It wasn't intentional. I knew what was going on, but it never said, I need an SVB treat. I don't have any money in SVB. Charlie Munger tells a story about human nature.

This is all Charlie speaking. One of my favorite stories is about a little boy in Texas. The teacher asked the class. If there are nine sheep and a pen and one jumps out, how many are left? Everybody got the answer right, meaning eight, except this little boy who said none of them are left. The teacher said, you don't understand arithmetic. The little boy said, no, Teacher, you don't understand sheep.

DE: So effing good. When you were in the room with Charlie for several hours, in natural conversation, are they just pulling out these parables and these fables?

DS: I'm going to answer that question. The best response to this tweet, and even I missed it myself, he goes, was the child Charlie himself. I'm like, oh, my God, that's exactly what he would have done. He would have been the kid.

The reason I think it's so powerful is the storytelling ability you guys have, how I tried to break down things to aphorisms, you asked, why is this guy on my phone, I only think in stories. I think people only learn through stories and then one-liners.

David Ogilvy, that idea is he says it in a creative way and then you remember from it. Charlie Munger says, hey, if you don't learn probability, you're going to go through life as a one-legged man and ask him to contest. Then you think about, oh, I'm going to get my ass kicked. This is here because it's Ernest Shackleton. His family motto was by endurance, we conquer.

We're in the podcast business. People are like, you can't do podcasts. There are 2 million of them. Dude, there's 70% or 80% of them that have quit. In the business podcast right now, me and Patrick were just talking about this. I just saw him in person in Miami.

We were talking and I showed him this. It's like, dude, for podcasts like me, Patrick's, and yours, categorized in business, have at least 10 episodes, and I think release at least once a week. You guys, I think, your release schedule is less than that, two weeks?

Ben: Every two or three.

DR: In terms of minutes of content per week, we're the same as everybody else.

DS: Yeah, but that was one thing. They release it once a week. 18,000, and the business category is the second most populated podcast category.

Ben: Do you know the first? Faith.

DR: True crime is falling off then.

Ben: Yeah, thankfully.

DS: There's a thing about that, where I heard somebody say, Founders is like a church for entrepreneurs. I might start dropping podcasts on Sunday. I'm not kidding. If I do video, I swear to God, I went and looked, I looked at pulpits. I swear to God, I swear to God. I'm not going to get a desk.

My mom was fundamentalist Christian stuff, and I've had to go to church my whole life. She's like, this is pretty crazy. Not in a bad way. I don't mean the majority. They're learning from the same book every week over and over again. The stories they could tell are limitless. It's one book. I can do the same thing. I have access to all the books in the world. I can do that.

Ben: Five years from now, people are going to be like, this is the moment where David started the cult. It's right here on video.

DS: Cults are the best businesses. If you listen to my episode In-N-Out, episode 244, there's no way I got that right, by the way, I did that episode because it's 244.

Ben: Is it? Oh, my God.

DS: I read that book because the best businesses in the world are cults. That's the founder of Trader Joe's. If you go to his autobiography, he said that. Trader Joe's was a cult for the overeducated and underpaid.

Ben: It's not to say that cults are amazing businesses. That's not what you're saying. You're saying the very best businesses...

DR: Develop a cult.

DS: In-N-Out calls them. They use this terminology in their business, cheerful cult. It's a positive cult. I'm not talking about Jonestown, let's get together, and freaking drink mass suicide. No. Hopefully, you're building a product that's good for the world.

Ben: We had Garry Tan on back in the day. He was talking about Palantir at the very beginning. He was like, oh, Palantir was a cult that's why it worked.

DS: This idea also influenced me, Zero to One, Peter Thiel's book. He says that the startups look like cults.

Ben: You have to inspire emotion in people, otherwise you can't stand out in the world. You certainly can't have repeat behavior in a sea of choices for someone to keep choosing you over and over and over again. It's like how Founders have to be weird. Nothing interesting was created by ordinary people.

DS: But I have to be intentional about this. I'm glad you said, oh, this is where we get it on camera and on recording that David is starting his cult. I'm going crazy. A bunch of them say David's too obsessed with podcasts.

DR: You're like, thank you, that's a compliment.

DS: No. I see an opportunity that other people don't, which is the same thing in the book. I think podcasts in general are just fun to make, and I'm obsessed with it. But they're also going to be wonderful businesses because they're prone to be cheerful cults. How do you know that you have a cult? You just google and see if the people have tattooed themselves with the brand.

How many people are walking around with a Joe Rogan face tattoo on their skin? A ton of them. How many people have tattoos of the Apple logo? A ton of them.

Ben: There's an insane number with Mario. We learned this in the Nintendo research.

DS: Mario, Tesla, In-N-Out. Cheeseburger is my favorite meal. I'm not tattooing the In-N-Out logo on my arm, dude. You take another level, and you see this over and over and over again. When I analyze businesses, I'm not just doing this. It's not a game to me. It's like, oh, can I use these ideas in building my business?

Warren Buffett says the greatest thing. This speaks to why you guys are so like, hey, we know how big our audience is, and we're going to take this seriously. Seriously, Warren goes, a brand is a promise.

That's the best description of the brand. I talked about the fact that I stayed in this hotel brand, I'm not going to say what it is, in Austin. I loved it. I stayed in Santa Monica, I loved it. I found out they had one in San Francisco. I didn't check the reviews.

Ben: You came here and they broke their promise.

DR: I told you to stay with us.

DS: That's the biggest thing. A brand was a promise. I know this is going to be excellent. The hotel is fine. It is in the Tenderloin.

DR: Not a place you want to stay?

DS: No. If I wasn't traveling alone, there's no way I'd let my wife.

DR: This is the major misconception about San Francisco. Many people who don't live here think that it's an absolute hellhole and wasteland. A specific part of it is, and unfortunately, that part is mostly where the hotels are.

DS: Yeah, which is not good for the city because I'm not ever staying. I'm staying with you or I'd stay in Silicon Valley. I've stayed in Rosewood, which is really nice.

Ben: Is it the most expensive hotel which is so good?

DS: I didn't pay for it.

Ben: Whoever does. That's the whole business model.

DS: I didn't know how much it was. It was really nice, though. I got to thank that person. Again, I don't mean it, but I am very intentional. I'm like, hey, I'm not going to break my promise.

You guys do the same thing. If I press play on an Acquired episode, this is why I like Dan Carlin, if I read one book an episode. He reads 30. He only does two a year or one in a year, but I know there's no way I'm going to press play, and he didn't do the work necessary.

DR: That's what we all feel. In our own ways, we all definitely feel bad about what we're doing.

Ben: Can I get some feedback? How can we make Acquired better? Have you ever had moments, where you paused an episode and were like, oh, I want to talk to Ben and David about this right now because I have some feedback?

DS: No.

DR: You'd probably just text us if you did.

Ben: Or the model, not necessarily just the content.

DS: No. There were a few podcasters having a conversation with Sam yesterday. There are a few podcasters that know what they're doing. They know what their position in the market is, how they're thinking about it, and I'm not going to say who, but you guys hit it. What makes you special? It's like the Edwin Land thing, don't do anything somebody else can do.

Blake Robbins said the funny thing on Twitter I saw. I loved it. He's like, only Acquired could say, all right, let's bring this home, and so an hour and a half left. That's your brand, people know it.

I think what you're doing here with the sessions is you can't increase the amount of episodes that you can do because they take so much work to do. But you also have a way to surface all this information that you guys have that's valuable to other people in different formats.

DR: We were talking about this a little bit before, which I hate saying we were talking about before recordings. Why didn't we just record? You're also thinking about potentially doing something similar.

DS: Not now, maybe years from now.

DR: For the core episodes, we spend so much time preparing. But then for stuff like this, we don't prepare at all because our whole career is prepared.

Ben: Does this make sense? What is the right number and format of sessions? Because this is the second session. We're still figuring sessions out. In your dream world as an Acquired listener, what do sessions look like?

DS: Your sessions should be, replace your interviews. Anything that's a non Acquired long detail, just make them a session. There's enough people interviewing founders and investors, but we have more conversations.

People are like, do you ever do an interview show? First of all, I wouldn't do an interview show because interview is a skill. It looks easy. I tell Patrick, Patrick, you're world class at this, dude.

DR: Every weekend now, twice a week for eight or nine years.

DS: I like to read, he likes to ask questions. Therefore, our formats match the personality, What I tell him is like, I've been on the other side of it. You can tell, he doesn't have a list of questions in front of him because you can tell. It's fine, but the Tyler Cowen thing where he has his questions and you just said something interesting, he's not going to follow up, and he's going to go on to my next question.

Ben: It feels very odd because you're like, are you guys not having a conversation?

DS: No, they're not.

Ben: That guy left you an opening. How did you not take that opening?

DS: Let's tie this to Jay Z and Jay Cole. To answer your question, I'm glad you guys are so much nicer where you're like, do you have any feedback? I can't stand feedback.

I texted you guys this one time, where one guy was like, hey, I don't like that you reference. The episode on Ralph Lauren is going to tell you how Ralph thinks like Andrew Carnegie, Rockefeller, and Bezos.

DR: You literally know all your episode numbers by heart.

DS: To me, it's just one large conversation in the history of great entrepreneurs. That's how it is to me, it just happens to be separated. I texted you and this guy's like, could you save that at the end and just do it like it's carved out like Acquired? I was like, I'm not listening to Acquired. No, I'm not going to.

Ben: I have a singular vision for how this is going to go, and that's why I own, control, and operate the entire thing.

DS: It's even further than that. I'm not putting on a show. I loved Anthony Bourdain when he was alive. I read his books. He had a huge influence on me. Anytime I traveled to a place he went to, I'd go and watch it.

DR: Have you done an episode on him?

DS: Yeah, 219. There's no way that's right. It's called The Oral Biography. That format should be done more, where his assistant and a friend had interviewed a bunch of people that actually knew Tony and were there in his last days. They organized the interview into this biography called Bourdain: The Definitive Oral Biography. Is it 219?

Ben: It's 219.

DS: There's a line in the book that I love. It says, the line between Tony and the show was non-existent. I hear a lot of people talk about podcasting. It's like, oh, you don't actually know what the superpower of podcasting is. To me, one of the superpowers of podcasting is its authenticity scale.

When I meet with founders that listen to Founders, and we have a three-hour dinner, they all say the same thing. They're like, this is like a three-hour episode of Founders. It's like the same person there.

Ben: I think that that is a thing that you did really well and we accidentally did well. But I realized over time, why that makes both of the things we've built as durable as they are, a lot of people play characters on the internet and play really well.

DR: Witch in other mediums is an easy trap to fall into.

Ben: It's a way to catapult growth. If you adopt a polarizing character, you can get a bunch of followers. There's a lot of dividends that pay to it, but it's exhausting to maintain over time. It has a conflict, where when people meet you in real life, they're like, oh, weird.

When you actually are just yourself, it's going to probably grow more slowly because I'm not as polarizing. It would be horrifying to live as a polarizing character that you play on the internet in real life also. You have this more slow, organic growth path. There is this cool byproduct now, where I sit down with someone and they're like, yup, exactly the same as I expected.

DS: This is why I said I have Blake Robbins on here because he gave me the dynamics, that spectrum that he talks about. Blake is a super smart person in general. The way you think about this, is there's a spectrum. This is not my idea to play spectrum. It's like, how much time do people spend with you?

He's like, on one end of the spectrum, you have these 30-second TikTokers that dance. All the way on the other end of the spectrum, as you move down, they spend more time, all the way on the other end of the spectrum, you have the Twitch streamers, which he helped incubate 100 Thieves, where they're spending 40 hours or 50 hours a week with you.

He goes, David, they don't spend 40 hours with you, but you're one click to the left. They're going to want to spend 10, 20, 100, 200 hours with you. You keep moving down. Let's say you do 10-minute YouTube videos.

I think the guy's name is Nadeshot. It's like, 100 Thieves has a new product, and he announces it, you'll see a line down the block because hundreds of thousands of people have spent all their time with them. It's like, oh, Nadeshot has something to all come down here, and you see this over and over again. Blake says, you could have a TikTok. A TikToker has 10 million followers, yet they can't even get 3000 people to show up somewhere. I think that is the way to think about it.

Ben: That's algorithmic throttling too. TikTok, there is almost zero signal if somebody follows you. It doesn't actually matter. Or YouTube. They subscribe to your channel. Maybe that'll come up in one of the top eight videos that shows up at the top of the screen of what they should watch next, but maybe not.

DS: My point in all that is if they're spending a lot of time with you, and this is my flip of what Charlie Munger says that you need to learn the big ideas in the main domains like physics, psychology, because they carry the most freight, I flipped that to time carries the most weight. He said we're not playing characters. We are passionately interested in this, we're not going to quit, then we just have a long period of time. You'll get what you deserve.

You'll get the audience you deserve, you'll get the business opportunities, and everything else. It's like Christmas. I know I'm not going to quit. You're going to have to pry the microphone from my cold dead hand, and I'm just going to let the chips fall where they are. That doesn't mean I'm lollygagging here. I'm on it seven days a week. I'm going to try to work myself into positions.

It's something I learned from Steve Jobs when he came back to Apple. People hear that speech he gives, where he's fantastic. He's wearing shorts. I don't even know if he's in the turtleneck yet, but he mentioned what they're going to do. Everybody focused on the fact that he's like, there's no sex in the products anymore, and we're going to do the four quadrant thing.

A lot of people in the technology industry, particularly, know that speech. They're like, yeah, let's cut the fat and put all of our A-players. Fire the B and C-players, but all of our A-players need four products that we're going to make.

Ben: Desktop, laptop, high end, low.

DS: Yup, consumer and pro for both laptop and desktop. Those are the four categories. They miss what he said earlier when he talks about Nike. He's like marketing. He's like, Apple sucks at marketing, we have to be a great marketing company.

He said something where I read the quote and in my reinterpretation of this. People don't know that, it's in this book called Insanely Simple. I think that guy's name is Ken Segall. He's like, he was an ad guy at a company for Apple.

Ben: TBWA Chiat/Day was the ad agency.

DS: Actions express priority, so there's another maxim. He's like, I don't care what people say or hear what they do. You talk to the founders, it's like, hey, what would you do about this? I never answer. It's like, David Senra would do this, I'd say, hey, well, Charlie Munger would tell you this, Steve Jobs would do this, or hey, I heard a story about it here. My opinion is useless. You know my opinion on business building on how I build my business.

It doesn't matter what I say. It's like, how's he approaching founders? Why is he making decisions? That's the important part. Steve told you that marketing was important to his actions because every Wednesday at 3:00 or I forgot the time, they had a three-hour meeting, he would have to approve every single piece of advertising marketing that went out for Apple. There is not a billboard in Kentucky that went out without him saying, yes, it's going to go out.

If you actually listen to what he's saying, he's like, listen, I feel that the products we're making in Apple make people's lives better. He says this line, he goes, I want everybody in the world to own an Apple device. We know that it's not going to happen because it's so expensive. He goes, and to do that, we have to get really good at marketing.

My interpretation of that on the podcast, what I said is, if you feel your product can improve people's lives, I think you guys already know, because you get thousands of messages just like I do, that yes, listening to Acquired, listening to Founders will improve people's lives and work, then you have a moral obligation to get good at marketing. All that means is not get good at marketing so our ad return goes up or that we can be celebrities. No.

These messages are for all of history's great entrepreneurs that are dead, but those ideas won't die with them. Therefore, Acquired and Founders can gather these ideas and push them down the generations. That's why I'm not dilly dally. I'm going to let time carry all the weight, but I'm going to do everything I can so more people at least know. If you try Founders, oh, it sucks or whatever, whatever. I'm cool with that, but I just want you to have the opportunity to know it exists.

Actually, I've had these conversations where it's like, guys, I'm telling you right now, I've said this to you, there are millions of people that would benefit from listening to Acquired, they just don't know it exists yet. We have to come up and find ways to make sure that people know it exists because they will love it, and it will make their lives better.

DR: Amen. There's maybe an area. I'm curious what you think about this, where our shows and approaches are a little different. I'm curious what you, Ben, think about this. A lot of these stories are just incredible stories too that I think are worth telling just for the sake of the story.

Ben: It's interesting how sometimes I'm like, I'm not sure that we came up with a lesson that I would advise a founder to follow, but I know this was very entertaining and as true as we possibly can make it.

DS: Every single episode I've listened to, there are lessons in there.

DR: I'm not saying there are no lessons. Of course there are, but sometimes we'll do an episode. I always feel this way about the most recent episode, but we just finished making the Nintendo episode. If you put the best fiction writers in the world together and you said, come up with the best corporate-ish story that you could imagine, you couldn't write something that's good.

Ben: I guess the thing I was referring to is a little bit the survivorship bias, where someone did something that I would not recommend anyone do, and it still worked and what made for a great story. It's like Morris Chang and TSMC. He invented the notion of a fabless semiconductor company before there was any demand for that.

It turned out that his timing was exactly right that within a couple of years, a whole ton of fabless companies spun up and wanted to use his foundry, but he created a solution in search of a problem. No founder should do that, but my God, did he pull a rabbit out of a hat. There's a good number of Acquired episodes where I'm like, we should be crisper about pointing out, where this was inadvisable, but amazing that it worked.

DS: I think that goes back to the game tape analysis, where we talked about Kobe Bryant. Jordan did this too. I read this 600-page biography of Kobe. In the biography, they interviewed his high school girlfriend. They're like, what was it like to date Kobe Bryant in high school?

DR: I'm surprised he had a girlfriend in high school.

DS: Not for very long. It's like, what's it like to date Kobe Bryant in high school. She's like, well, our dates consisted of me going to his house and watching tapes of Michael Jordan and Magic Johnson. It's like, we're not leaving, I'm not taking you out to dinner. We're literally going to watch this thing.

I think the game tape analysis of that is helpful to realize that a lot of this stuff is impossible to plan in advance. Steve Jobs has a ton of great quotes. One of the best ones is the commencement. It's impossible. You're only going to connect the dots looking backwards, so you have to put faith in something. You can call it karma, religion, God, intuition, but you have to do something.

I just reread Ray Kroc's autobiography, the guy from McDonald's. Again, it hit me. I've been thinking about the Steve Jobs quote too. This is why it's so valuable to reread your past highlights.

DR: You mentioned this in the McDonald's episode.

DS: Yes. If you think about this, he's a perfect illustration of what Steve observed 50 years after Ray died, for God's sake. He's just like, he goes through selling paper cups. Paper cups lead into selling multi mixers which would make milkshakes. Why do these McDonald brothers out in San Bernardino have eight of my machines? He'd had a hard time saying one.

That goes to the franchise system, which he didn't even do well. Then he meets Harry Sonneborn. Harry Sonneborn's like, you don't even know what business you're in. He's like, you don't build an empire off a 1.4% cut of a 15¢ hamburger. You build an empire by owning the land upon which the hamburgers are cooked. Those five things.

DR: From paper cups to real estate.

DS: He sold paper cups for 17 years. He's just like, hey, I have to go with my gut, to the point where he got divorced over this. His wife was like, you can't do this, Harry. He's like, you have to trust my instincts.

DR: To what Ben said way back in the beginning of the conversation that you're really good at highlighting. Ray Kroc, he was a terrible person.

DS: He didn't try to hide it. Most people in autobiographies are trying to hide it. He's literally like, thank you very much, June Martino, my first employee, for missing every single one of your kids' birthdays. You're going to get some stock at McDonald's. It's going to get you rich, but 20 years later, I'm going to fire you.

You don't have to put that story in there. He chose to put that. That's crazy, dude. I said it on the podcast. It's like, listen, it's interesting, I'm glad he persisted with interesting ideas for business, but not only we never want to do business with this guy, I wouldn't even want to be friends. I would want to do business with Steve Jobs, but I want to be his friend.

Ben: I feel like the opposite. I want to do business with Steve because you could create incredible things together, but I'm not sure you'd want to be friends.

DS: I think the difference is from a founder's perspective. There is no working with Steve Jobs, it's working for. You hear the stories of how he even treated his subcontractor or the owners of the companies that contracted. These guys are empire builders. They're literally building worlds.

Charlie was talking about this because he loves Li Lu, the new guy, the BYD guy, those guys. He loves Lee Kuan Yew from Singapore. What you realize is, these are founder types. Founders are benevolent dictators or in some cases, they're dictators of their own company. Some people call Lee Kuan Yew a dictator. He's like, oh, I can't do that in America.

All of them, there's no working with them. They're going to be in complete control of the situation, even being in the room with them. I'm not saying it'd be rude or mean, but you're a subordinate to them. Ray Kroc says it in the book. Perfection is difficult. I'm demanding perfection in McDonald's. I will constantly keep expanding this empire till I die. If you get in my way, I will run you over.

He says in a movie, if my competitor was drowning, I'd walk over and put a hose in his mouth. He was on the other end of the call of McDonald brothers because they're fighting over this. He goes, would you do the same? The same thing is you're going to have to compete on my level, or else I will literally destroy you.

DR: Warren and Charlie are so interesting. I'm trying to decide if they are the complete opposite of that or if they actually are like that just in their own ways.

DS: Every single person has their public persona for that level. It's not like a podcast, where they're going to listen to Joe Rogan for 1600 episodes. You know who Joe is. He's been doing three-hour shows three days a week for 15 years. You have probably a good idea who he is.

You see flashes of imperfection, like we all have. They all got sharp elbows. Have you ever read stories about how Warren negotiates? It's like, 12.50 bid. What about 14? 12.50 bid. What about 13? 12.50 bid.

Ben: He spent 10 years analyzing your business, he knows exactly the price that he's going to buy it for, and now he's telling you the price he's going to buy it for. This wasn't a new consideration that popped up and he's like, oh, look at this, a business. No. At this scale he's operating at, he knows all the businesses.

DS: This is from Jim Clayton's autobiography, where he buys Clayton Homes. He even said he wanted to sell it to Buffett. He idolized Buffett. He wasn't insulting him by any means, but he's like, Warren wants the microphone. If you're in an area where Warren doesn't have the microphone, he is not interested. I've heard that about Warren a lot.

They're world builders. They run everything. You think you're going to go from being poor to having $200 billion and not distort your perception of the world? It's impossible.

Ben: Say more about Warren wanting the microphone. What does that mean?

DS: Literally in person, Jim Clayton was either at an event to talk to the employees or whatever the case was. Jim wanted to have input. He's like, Warren would not allow it. I've heard that about Warren. It's the same thing.

DR: There's got to be an element of him that loves the shareholder meetings. Of course.

Ben: He didn't need to do that. He created an event around this.

DR: He loves having a million people come.

DS: Yeah. You know how he loves it because he's still doing it. He doesn't have to do anything in the world that he doesn't want to do. That's how you know he loves it.

We talked about earlier just how disorienting it must be to have, and I would love to know this feeling, don't get me wrong, have a $200 million net worth. It's like you're living life in a God mode. It's insane. I was watching this video. I don't know if it's true, but Jeff Bezos' private jet has its own private jet.

Ben: His new yacht has a Chase yacht. I think it's a guest yacht. He now owns the biggest yacht in the world, and there's a yacht that will sail behind it.

DR: Maybe we'll become so successful someday that I will regret my words on this, but I got to imagine having a yacht is actually not additive to your life. I think that's more of a problem.

Ben: I think it was Ralph Lauren who sold his yacht and is now a charter yacht because he was like, this thing was more work than any of the businesses I've ever run.

DS: One of the most interesting ideas I've heard, and it comes from our mutual friend Jeremy, who I think we mentioned earlier in the podcast, hopefully we did give him credit, I actually was talking to him and David Purow. I'm pretty sure Jeremy said this, not David. He's like, I would actually make the argument because everybody's like, oh, what does Charlie talk about, called the Berkshire jet The Indefensible?

Ben: Wasn't there a second one, The Indefensible 2, before they bought NetJets? Now it's like, we should be on NetJets.

DS: These yachts cost $25,000 an hour operating fuel or some crazy number. Planes are the same in how expensive they are. Jeremy makes the point. Jeremy knows because he's been buying businesses forever and he's exposed to great wealth or unbelievable amounts of wealth. He makes the argument that they're actually underpriced assets. I was like, oh, tell me more.

DR: That's not what I would expect to hear.

DS: I'm going to tell you this book that just proved his point. I actually got to text him to tell him this. They use it for yachting and sitting there, sunbathing. They're using it for customers and potential. I had heard this. I'll tell you about how this relates to The Invisible Billionaire.

Again, I've never raised money. I don't pay attention to the venture industry. I don't know anything about it. I just have a bunch of founder friends. Founders tell founders everything. I'll have these discussions, where they describe the courting process that they get from some of these well-known super famous people. The process you just described to me sounds like an old rich dude that wants to sleep with a young woman. What would you do?

DR: We need to put it in the episode, but there's a bunch of this in Nintendo history because Warner Brothers bought Atari. Warner Brothers was running Atari as Nintendo was...

Ben: This is how they courted Nolan.

DR: That's how Warner Brothers courted Atari and Nolan. How they tried to court Nintendo was the private jets, there's Clint Eastwood.

Ben: They put Clint Eastwood on the private jet with Atari flying coast to coast.

DS: I'm going to tell you, history doesn't repeat, human nature does. These founder dudes are running technology companies now. I'm not going to name who? They're like, oh, yeah, he picked us up in Manhattan in his private helicopter, and we landed at East Hampton state. Do you think he got the deal? He got the deal.

This guy said, hey, what are you doing? It's Friday night. What are you doing Saturday morning? Okay, come on my private jet, I'm going to take you to California with me. Here, do you want to stay with your girlfriend at this mansion that I'm not using and XYZ?

DR: It's the equivalent of a luxury suite at a sports arena. It's for getting deals done.

DS: But they're operating on a different level where it's like, oh, these influences. Some founders like Sam Walton, he's like, don't give me a freaking gift.

DR: That's right. Everything in Bentonville is like, you can't come in here and ruin me.

DS: Because they know it works. If you give a Walmart salesperson a bottle of gin or something, it's going to influence him, where he's just like, I want your price. You guys did a great job in your episodes. Tell me the lowest price. It better be a low price because I'm going to this guy. If you tell me a dollar, he sells me at 98¢. Don't waste my time. You're not going to hear from me again.

Ben: I have an obligation to the customer to do this to find the lowest price for them.

DS: Everything and his entire thing. The low cost structure thing, that's a Walton thing, that's a Sol Price thing, that's a Jeff Bezos thing, that's a Rockefeller thing. That's the most common theme in entrepreneurship.

Every single day, Jeff was like, we're going to have a low cost structure, we're going to have a low cost structure, we're going to be efficient, we're going to be efficient. Somewhere along the line, 25 years later, now that technology startups are like, we can just spread money all the time because there's no interest, there's just money coming back.

Ben: I thought he built Amazon in a pretty different time than founders today? The business laws of physics were different, where there were interest rates versus when there weren't.

DR: He started when there were none, and then the environment changed as he was building it.

Ben: While it would have been stupid for Amazon to spend $100 million on crazy marketing activities in 1997, you could imagine that in 2018, if all of your competitors had raised a billion dollars and were trying to chase market share as fast as possible, you either have to exit that market because you're going to lose or play that game on the field.

DS: Or find a different way, be more resourceful.

Ben: Being more resourceful is easy to say. But when all your competitors are hiring all the best engineers by throwing a million dollars a year at them, you're just not going to be able to build a good product if you don't try to play that game also.

DS: Yeah, for sure. The whole thing, when Peter Thiel says this in his book, Paul Graham says, it's just like, startups don't have the advantage. You're not going to outspend Microsoft or Netflix, so you have to find underdeveloped talent. You have to find these people that if they were credentialed or if they were well-knowns, then they're going to go take—you're going to work from $80,000 and some stock options or go make a million dollars a year at Netflix.

That's the whole thing. You're not going to win unless you are capable of finding underdeveloped talent. Silicon Valley used to be able to build high growth and profitable startups.

DR: The rule used to be you couldn't go public until you had over $100 million in revenue and you were profitable. If you didn't check both of those boxes, you weren't going to IPO.

Ben: In 2021, of all the companies that went public, it had to be a single digit percentage that were profitable. It's crazy. The game just changes.

DS: To your point, if you have free money, the money supply graphic expands, it's raining down, that's going to build—did you listen to Doug Leone? I know you guys had him on your show, but did you hear him on Invest Like the Best?

Ben: Yeah, he was great.

DS: He was telling crazy stories. I loved everything about that guy, I loved him when I heard him on your podcast too. It was like that tough love. This is what I'm into.

DR: I think maybe my favorite quote said live on an Acquired podcast, "You could burn cigarettes in our arms, and we wouldn't flinch."

DS: He has a great line. He's like, I want you to know, we were killers. We weren't killers to make the most money, we were killers to get the job done. He made the point. Very few people know more about the venture industry and that guy. I would imagine he's up there. He's like, of course, your money raining down. He didn't use that word. It just creates bad habits.

Ben: Yeah. It is crazy how many things in my life I falsely attribute to something that were not just interest rates, so many things. The answer is just like, oh, it is that way because we live in a zero interest rate environment. The human brain likes to tell stories. At the end of the day, things are the way they are because of mean reversion and what the current interest rate climate is.

DS: I'm going to pull up something like this is what I mean. It goes back to Buffett. I wish I knew this. I had read this. I didn't remember it, though. This is Warren Buffett on interest rates.

DR: Is this from the log in Snowball?

DS: No, this is from his shareholder letters in 1984 or 1988, something like this.

DR: I think the intro to Snowball, I think the scene that opened the vignette that opens it is Sun Valley right before the tech bubble burst.

DS: No, this is a decade and a half before.

DR: Okay.

DS:  You could have made such better decisions. I could have made such better decisions if you had just known this. He had known it for 40 years before it happened. I posted this on Twitter. I open up, the next thing I'm like, why does this have two and a half million views? Elon replied, he goes, yup. I was like, oh, okay. I was like, what the fuck? Damn, it's charades.

Ben: It's Paul Graham replies on steroids.

DS: Warren Buffett to interest rates, and the headline is they power everything in the economic universe. That was what Elon was responding to, and this is Warren writing in the 80s. It's exactly what you're saying. The value of every business, the value of a farm, an apartment house, or any other economic asset, is 100% sensitive to interest rates. That's because all you're doing when you're investing is transferring money to someone now in exchange for a stream of money which you expect to come back in the future. The higher the interest rates are, the less that present value will be.

This is fantastic. Interest rates are to asset prices, like gravity is to an apple. When interest rates are low, there is little gravitational pull on asset prices. We just live through this. When interest rates are low, there's little gravitational pull on asset prices. Interest rates power everything in the economic universe.

I found that because remember, the inflation went crazy a year or two ago or whatever. Every time that happens, you can buy the Kindle version of Buffett shareholder letters for $2. I search it for interest rates, inflation, and I just go and I read.

Ben: He made a billion dollars off that $2 purchase.

DS: There you go. Like you'll say, okay, this is what he said in inflation, and then you see what year he said it. That's where I found that. I go, what do you say about interest rates? Boom, 1980 or whatever, and he just laid out.

Ben: It's so funny because what he also did right there is for every college finance sophomore that's having to go through a class to do DCFs, and they're like, I don't understand this, this is complicated, he just explained, conceptually, a discounted cash flow model there in a way that was unbelievably digestible. He's so good at that.

DS: The clarity of thought. Also, he just educated you in a way that makes more sense, is interesting, and you're entertained by. You might build a business off that, and then you might want to sell one day or whatever the case is. I'm spending a lot more time really trying to work on storytelling ability and concision. The value is in the compression and the distillation.

You could listen to an audio book for 25 hours. But if I can give you the best idea or one idea that changed your life, and I could do it every week or whatever, in a couple of minutes, some of that value is going to be brought back to me. What I realized is all my heroes, what they have in common is the unbelievable clarity of thought like Steve Jobs, Charlie Munger. You're not going to be like, oh, what does that mean? They take unbelievably complex things like you're not advertising to a standing army, you're advertising to a moving parade, make it in a memorable way, and then you carry that maxim with you forever.

Ben: How do you get better at that? You said you're working on it.

DS: Just straight up reps like thinking about it and then hearing yourself back. The advantage I have, the edit is you can say something and like, oh, that was so good. You hear it back, and sometimes it's even better or many times it's worse. I know what I'm saying, but you missed this part that doesn't make any sense. Normally, it's a cut. I don't think I've ever rerecorded something.

Ben: We only do that for one episode ever. It's really hard to do.

DS: What, rerecord?

Ben: Yeah. Do you know which episode we did it for?

DS: No.

Ben: It was recent. NFL. David and I got on and re-recorded 40 minutes of material over maybe 15 different parts of the episode.

DR: The original recording of that episode was really rough.

Ben: The NFL episode was too long when we started. It took way too long to get to the interesting part, the Pete Rozelle era. We had this massively bloated beginning, and then we had a story arc that didn't cleanly resolve. We had a bunch of concepts, where we didn't nail the explanation. We went in and we cut half of the first epoch of the story. We recorded new bits to create nice rising action and resolution on the Rozelle era, and then we recorded another 10 areas where we were just like, this wasn't said super tight.

I'm really curious if people noticed because we basically had to voice act. We'd listen to the way that we came into that segment, get that in our head.

DR: This was your theater background where you're coming in.

Ben: And then pick it up from there.

DS: Your editing is so good. We've talked about back catalog sponsorship. You told me what you're doing with Zoominfo. I've listened to your back catalog and it's like, dude. It sounds like it was there the day you did it. It is perfect. I know because we talked about this, that that ad was not there, but it sounds like it's there.

Ben: That's the goal.

DS: The NFL episode is what I meant if it's a crazy story, but even there is like a lesson, where I texted this to you. It totally changed the way I think about things, or maybe we were talking on Zoom about this. I never thought about the NFL being the largest media company.

Ben: I hadn't either. The funny thing is, that was a David Rosenthal insight that the NFL is the single largest media property by value. The funny thing is, because we did this for the Nintendo episode, if you go look at the largest media properties, they list Mario, they list Pokemon. The list includes video games and movies. There's the MCU in there, and there's Star Wars in there. The NFL is way bigger than all of those, but it's not on the list because people don't think of it as a media property.

DR: I love looking for stuff like that, both to do episodes on it and for investing too. What is something that is just so in the air that people don't even realize what it is?

Ben: Or what's a comparison we can make that is super eye opening, but people haven't thought to compare those two things before?

DS: Which is why I tie things into the past. The idea behind this is we've seen this before. I reread the show notes on the Jony Ive episode I did. Johnny said something that was great. He goes, one of Steve's talents was identifying markets full of second rate products. He was like, oh, there's the opportunity here. We're all podcast addicts.

DR: And at the market full of second rate products.

DS: And because you know how hard it is to do. I had a friend. His friend has a podcast. He's like, hey, these three guys have large social media followings, but it does not translate to episodes because people don't understand it. They're like, would you listen to their episode and give it feedback? I was like, yeah, I'll listen to it. It's three guys sitting around, talking about whatever happens or pops to their mind. What do you expect to happen?

Ben: Which is what's happening here.

DR: I was thinking the same thing.

Ben: To all listeners, we apologize if this episode lacks craft.

DS: There's zero chance that people who are interested in entrepreneurship and investing are not finding this interesting because the prep for this is not three guys that have a million other things to do. It's three guys that see this all the time over and over again that's going to crop up naturally in a conversation, that you can like, oh, I didn't know about this. There's a bunch of people that probably are like, I didn't know who Edwin Land was, I didn't know Ogilvy. I never thought about the NFL as the largest media company, but their problem is there's no value proposition.

DR: This is actually something that ties into much of what we've talked about over the last couple of hours. People are going to do what they want to do. If people can do what they want to do and are given unfettered freedom to run it, they can do great things. If people are forced to do things that they don't want to do, they're not going to make great things. Either forced to or choose to put themselves in a situation for whatever reason when they're doing something they don't want to be doing, they're not going to be very good at it.

Ben: I think one of the reasons why we find ourselves so attracted to episodes that highlight craft is because that's how we think about Acquired. If LVMH, Benchmark, it's like people who do few things, but do them exceptionally well, are just so entrancing to study.

DS: I think this goes back to what you were just saying, and I want to go craft things. Charlie again has these simple ideas. Most of the problems are that you're just not intensely interested in what you're working on. He's like, I don't care how smart you are. Charlie's smarter than almost everybody. He goes, I was not successful until I moved myself into a position where I worked on something I was intentionally interested in.

These small rules carry most of the weight. It's like, how bad do you actually want it? If you're not willing to do these things, there's nothing wrong with that. Entrepreneurship is for a very small percentage.

I'm not one of these people that think everybody can be an entrepreneur. I would like to see more of them, but there's no safety net. No one's telling you what to do. No one had to tell you guys, hey, you should buy microphones, do a bunch of research, and pick up the name.

DR: We didn't buy microphones to start.

Ben: I think the most interesting thing is that I think we've talked about this concept before on air, that if someone's going to advise you on starting a podcast, they would say, do a 30 to 40-minute episode, do it weekly, and you release it at the same time all the time. Have a guest so that way, that person promotes it too. We're like, okay, well, we do the opposite of all those things.

The conclusion I've come to is, advice is an average, and reality is a distribution. Averages suck because they hide the distribution. You want to know the shape of the distribution. You want to know things that apply to your specific data point, not the average thing. I think advice is always on average that hides the distribution. If you know that you're actually an outlier in some way, then you have to selectively follow advice because it may not apply to you.

DS: Charlie told me a fantastic story about this, where he was singing the praises of BYD that they're kicking ass. Not just me, I'm with a group of people.

Ben: They make batteries for cars.

DS: Yeah, but he started out doing knock-off cell phones in Korea or something. I forgot the founder's name and I apologize, but he was telling the life story. He was saying that the founder, Charlie and Li Lu, gave the founder advice, he ignored it, and he was right. He's like, don't go in electric cars or whatever it was that he did.

I think he said that there are 2 million cars. There's no way he sold 2 billion cars in a year. He's like, I sold 2 million cars in China. He gets all the credit because Li and I told him not to do it. I think he's like, same to your point, it's game tape.

When Kobe is watching this particular play of Michael Jordan, that may never appear in his life. Maybe the move he did wasn't the right move for what Kobe did, but maybe it influences his other thing. Life is complex and messy.

You can think you're really smart until you have a two and a half year old, and they ask you, why is that the way? And you answer the question. Their follow up question is going to be why. Eventually, you're going to get to a level where like, I don't know.

DR: Everything ends at I don't know.

DS: It's like, I don't know. Of course, there's no certainty. That's why if you crave certainty, you got to get a job. There wasn't even Facebook when I was in college because I'd worked full time at night. My college did not have Facebook, it was just coming out. We had MySpace.

In my MySpace, you could put a quote at the header. I've always thought this for my entire life. There's no security in life, only opportunity. Investors and entrepreneurs are going for opportunity at the expense of security. If you need security, you can get a job. Everybody said, go into tech, go into tech, go into tech. Look, you'll make all this money.

Ben: I think this is a super mispriced thing. I think people who crave security like all humans crave some level of security, misprice security because no jobs are as secure as we think they are, but they definitely cap your upside. Is founding a company or going into business for yourself as an entrepreneur extremely risky? Yes, it is. But is it actually that much riskier than a job, where you could get laid off or the sector could go through a downfall? There are a lot of things about having a job that are not nearly as secure as people think they are.

DS: Steve Wozniak and Jobs, they're like, worst case scenario, this doesn't work, we'll just go get jobs. We're broke anyways. Let's just try. Steve sells his van for $1500. He's like, I'm just all in on Apple.

Again, I think a lot of this is people are like, it's entrepreneurship, innate, it can be taught. Can you be a school of entrepreneurship? I was like, well, ask Charlie Munger if he taught a business class. What did he say? He's like, I would just teach the history of what you guys do.

He's like, I'll teach you the history of a hundred companies, and I will talk about what went right and what went wrong. There's no security. He's not saying, yeah, take my class, and on the other end, you get this degree that guarantees business success. That doesn't exist.

DR: They have been teaching entrepreneurship for the last 50 years.

DS: I went to UCF, which is this diploma mill, essentially. I was in the pilot entrepreneurship program, the very first year.

DR: Take us back to that. What was your relationship to entrepreneurship before starting the Founders podcast?

DS: I've never been on a job interview. I've only had two jobs in my life.  I was like, there was no entrepreneurship like community. There was no entrepreneurship industry. My first business was a long story, but I had been accustomed. I was talking about history.

By the time I was 17, I had been accustomed to working full time and going to school. People are like, oh, you work a lot on Founders. I don't have to go to school. I can do this all the time.

DR: You're working halftime is part of your concern.

DS: There's a long story here that will take 30 minutes. My dad sat me down when I was 15. He's like, listen, you don't have to pay rent, but I don't have any money for you. If you want something, you got to go get it. The good thing about my dad, he's a Cuban immigrant, not educated, but the best piece of advice that he ever gave me and my brother was a maxim. He's like, don't half ass things.

He does it in a blue collar. He's a truck driver or that kind of thing, where he prides himself on the fact that he'll work 72 hours straight. He never made a lot of money and never had an education. His mom wasn't good or whatever. They had escaped Castro's Cuba. My dad was born in Cuba.

You know Patrick's at the end of every Invest Like the Best episode. He's like, what's the nicest thing someone ever did for you? It was a decision that happened way before I was born. My grandfather was in Cuba in 1958. Again, not an educated man. He worked as a butcher and worked in a factory that makes shoes.

He's married, he's got a baby, and that baby is my dad. Castro comes to power. He doesn't have a lot of money, he doesn't speak English, and yet he had some kind of insight that I need to get out of here. He goes to a country, picks up, loses everything, not that he had a lot anyways. Goes to a country, knows nobody, and doesn't speak the language.

When I sat down, the first thing me and Sam Zell talked about and I think helped bond us to the point where at the end, he said he liked my energy and everything. Hopefully he liked me, I don't know. In his story, I had obviously read his autobiography, and one of the first things me and Sam talked about was, Sam, I understand and empathize with your story. Sam’s story is his dad being Jewish, getting the last train out of Poland before the Nazis bomb it, literally the last train out. 18 members of his family, his dad went around too saying, we got to get out of here, this is not good, they're like, no, we're going to stay. They're all dead.

Sam's dad and his mom have a daughter. They get to America. His mom's pregnant. Sam was born in America. In that book, Sam's dad's always telling them, you don't understand how lucky you are to be born here. Again, I understand that mentality because I grew up meeting—Cubans had this thing called Noche Buena. My wife's Colombian, so I'm married into a Colombian family, they do this too. They don't celebrate Christmas on Christmas Day, they do it the night before, it's Christmas Eve.

I grew up, for as long as I can remember, I was 8, 7, 10 years old, meeting people that came over on rafts. You would see these things. I've seen these in person. Think about how bad it has to be.

Ben: It's 50 miles, right?

DS: 90 miles. I'm going to go over to study at the University of Miami just on this. 90 miles. You're a parent. You might be a parent one day. You love your kids way more than you love yourself. Hundreds of thousands of people went to the edge of the island, put their kids on a raft, just hopes that they would get to America.

The problem is you don't make the announcement to everybody. It's like, hey, tomorrow we're leaving on a raft because you'll get caught, imprisoned, killed, or whatever the case is. The University of Miami did the study. How many people did this? We know hundreds of thousands survived. They estimated I think something like half a million people perished, never got there.

There's this UFC fighter named Jorge Mazvidal who was in Miami. He's a Cuban guy. His dad was one of the ones that escaped. Their raft was made out of a truck tire. Think of it like the size of a bulldozer tire. His uncle and two 14-year-old boys, they get off path. Their water winds up being contaminated, so you can't drink. You'll die.

Ben: How did they propel it anyway? How do you make sure it gets to Florida?

DS: Some have oars. See that blanket over there? You try to make a sail out of a blanket. Some of these are unbelievably for the love of ingenuity. For the uneducated, they don't have the internet. It's unbelievable.

In his case, I know they had oars. I think they had a sail. They get close enough to the Bahamas. They haven't drank water for three or four days. A pigeon lands on the oar, they wind up killing the pigeon, opening it apart, and drinking the blood. That's the only thing that saved them.

He gets to America, and then he gets to go from the Bahamas to America. Now, his son makes millions of millions of dollars as a professional fighter, a celebrity, and all this other stuff. Anyways, long story short, my dad's still alive. I told you that my mom passed away. I really think my dad did not baby me at all. He's just like, you got to figure out how to get a job.

This is something that Paul Graham made the point of. He's like, dude, when I was a kid, the only jobs available were you get a scoop of ice cream or something. You've probably met them. I met some 17-year-old founders and a bunch of founders. When you talk to them, they're in their second company. I'm like, what? They're like, oh, yeah, when I was in ninth grade, I did this Gmail plugin.

They make $40,000 a month. They make that much money. My parents let me drop out of high school so I can do this business. I'm like, I worked at a carwash, dude. I made $4.65 an hour.

Anyway, long story short, I would go to school year round because I figured this out, where most people in some schools were forced. I went to public school and all that. People would go to public school, they would be forced to because you failed something else. But if you elect to do that, in six weeks, you get a full semester's credit, and there are two six-week terms.

Even when I was in college, I did this, I would go to school year round. In high school, I went to school so much that by the time I got to my last year in high school, I was in this program called OJT, which is on-the-job training. Instead of having six periods, you leave after the fourth period, and you'd have to have a job.

You would get your other credits to your employer, so your employer would have to fill out paperwork. David was cleaning the car and like, oh, there's a baby that came in that threw up, he did a good job with that, it was disgusting. But the benefit of that was being able to work full time, I'm making up money where I bought a new car with my own money and all that other stuff.

I realized, oh, I think I was making $400 or $500 a week in high school, which is freaking really good. This is the late 90s and early 2000s. I got promoted to being a detailer. You have a client list, and then you start developing relationships. It's like every other business. They're like, hey, I love what you do, would you do this at my house, or would you do it on my boat?

My first business was just detailing cars and boats and taking all this other stuff where it's like, okay, I spent an hour waxing this guy's car, I might make $20. I'll do it at his house, I can make $150. I've always just had that.

This is a story you guys read in the books and the history stories. There's no master plan here. It's like, hey, I need to make money. All of my other friends were working at McDonald's or Chick-fil-A, where you just said something like, they cap. I never had a cap upside. I did all these other businesses. I started in college because I thought I was going to be a lawyer. This is so silly because all my friends are lawyers, I hate it. I dodged a bullet there.

DR: The immigrant dream is for the kids to become lawyers and doctors.

DS: Not with my parents. My parents never said the word college to me once, not one time, because they're both high school dropouts. I was one of the only kids in high school that didn't have a curfew. My parents knew I was independent. That's the best thing they did. It's like, you don't need to take care of yourself.

My mom told me, I just thought you were a lot smarter than everybody else in our family. I was driven too. You have to understand, being smart in this family is like, the bar is low in the sense that they're both coming from multiple generations of people that did not prioritize education or self-improvement. That's why I'm ferocious in this because I didn't see that.

This demonstrated when my mom was dying of cancer. HIPAA has this thing, where they're not going to share paperwork or information, unless it gets permission from the person. My mom could choose whoever she wanted to. She could have chosen her husband. They had a bad relationship. They got divorced and then remarried. They should have stayed divorced or whatever.

You see that with actions. We said that actions express priority. She's like, we're in there, who do you want the paperwork with? Who do you want us to communicate with? She's like, David. Not her other kids, not her husband, not her sister. She trusted me implicitly.

Essentially, they never went to college, so I just kept this routine. People are like, what do you want to do for a living? I remember watching TV when I was younger. I was like, well, I want to be rich. You think when you're younger, you know anything like, who's rich on TV? I liked the Fresh Prince of Bel Air. I was like, I'm going to be a judge or a doctor. I was like, oh, I can't see blood, that freaks me out, so I'm going to be an attorney.

I went to school, and I worked full time. I was trying to hustle anything I could do. The idea was, okay, I'm just going to go to undergrad for business because I'm interested in business anyway, but I'm only doing that till I go to law school. The point of the story was not to code on this deviation, but I was in the entrepreneurship program, that pilot one, because I was already interested in trying to make money in any way possible.

This is how bad entrepreneurship was. This is why I'm jealous of these young kids, where now you actually have an entrepreneurship industry, and there is stuff you can learn from. The main subject is Entrepreneurship 101. There are all these other classes, but Entrepreneurship 101 runs the teacher.

What are her credentials? Her dad started an AC company in Florida, you're going to make a lot of money. He died on the job because he got electrocuted to death. She inherited the company and then she ran it. She's the teacher. The curriculum was terrible. It was terrible. The best thing, and this relates to what all we do for a living now which I could have never predicted, is there was a guy that—Charlie Munger says, you should read if you want to learn about incentives in a really difficult business, read Les Schwab's autobiography, which I did because Charlie told me to. I did an episode a long time ago.

He's like, this guy made a ton of money in a really hard business, which is tires, oil changes, and stuff like that. The guy was coming into the class. He was going to donate like $3 million or $5 million to have a building named after him. He had one prerequisite. He goes, I want to talk to entrepreneurship students before I give you this money.

I learned more in one hour from that dude than I did in two years on entrepreneurship because he would talk for 20 minutes and he's like, open up your questions. I lit them up with question after question after question. I remember it to this day just like the simple way. He was building his business in a private 80s and 90s. He's like, how did you know where to expand? He's like, we would pull the car registration data from the DMVs, and we would know how many car owners there were in this specific radius.

Let's say we need 40,000 car owners in a three mile radius. Are there any other stores? Put a store right there, and they did that over and over and over and over again. He had ideas like that. Again, you learn through experience. That guy could teach us way more because he actually did this.

David: I think, probably all three of us have an unintended impact on college entrepreneurship programs.

Ben: I have a minor in entrepreneurship.

DS: Really?

Ben: Yeah. From Ohio State. Similarly, I only ever went to public school. I was a little different. I was really into computers. When I was 10, my dad and I found a PC on the side of the road. He was like, do you want to install Linux? I was like, what's Linux? He taught me how to use a terminal. I was really lucky that my dad is an engineer. I went to college for computer science.

DR: Wait, backup. You found a PC on the side of the road?

Ben: Hundred percent. My dad's like, I'm willing to bet, that thing is just old. At that point, you could open the computer. We're looking at it. He pulls it apart, looks and sees all the pieces. This is just an old computer that someone's throwing away.

DR: That's amazing.

DS: You majored in computer science?

Ben: Yeah, but I went in thinking like, I want to do business and tech, but I don't know what that means. I found my way to a club called the Business Builders Club. There's an actual minor that you can take. Through student organizations, I found my way to actually doing something in the College of Business. I go back and forth on whether undergraduate business stuff is useful.

DR: But you've gotten to a point, where you guys have all done amazing things.

Ben: We just came back from my bachelor party, and half the crew is the Business Builders Club, Ohio State friends that I made there.

DS: The content sucks, but relationships are everything.

Ben: The stuff you're learning is actually super important, but you don't have the context for why yet. You're working on a DCF model and you're like, this is useless to me, or you're learning about depreciation and amortization. You're like, this is awful, whereas my thesis classes were awesome. There are labs. I can touch, feel the things, and understand mechanical advantage, how the free body diagram works, but these business concepts are super abstract.

They weren't useful to me then, but I went and took a Coursera class last year or two years ago on accounting because I was just like, okay, I want to actually understand accounting, in part because we talked about it on Acquired all the time.  David understands this stuff more than I do, I repeat it. It's so much more useful when you understand where the rubber meets the road in the real world.

DS: It would just be beneficial to go out and try to sell something. Again, real world experience. Have you guys read the Tao of Charlie Munger?

Ben: No.

DR: I've heard it's good. I can't remember if I looked at that for the episode or not. I might have.

DS: I own the hardcover, the Kindle, and the audiobook. That should tell you that it's worth it.

Ben: By the way, I own the audiobook and the Kindle of almost every book that I own.

DS: Including the hardcover too?

Ben: No. I don't own any physical books.

DS: Okay.

DR: You're not a hardcover person.

DS: Because you can also switch that whisper sync or whatever it's called.

Ben: I actually hate that they sync because my common workflow in doing an Acquired research is I listen to the book, and then I'll take some notes and Apple notes of half quotes, where I'm like, I got to look this up later. Then I go back to the Kindle, I search for the actual quote, and pull out the data to be able to use it in the episodes.

DS: I think listening to the audiobook before reading the book is very helpful. It gives you a basic overview. It's almost like a Wikipedia page before you read the biography. It's like watching a movie for the second or third time, you know how it ends, and you pick up on things you missed the first time.

In the Tao of Charlie Munger, though, Charlie was talking about this, where he's just like, I learned about business at the Buffett grocery store from the cash register. I think there's a quote in the book. It's like, "Money is the lifeblood of all businesses." That's where the money was at this point. He says the importance of showing up on time, how to work with people you don't like, and how to take care of your customers. These are things that are all universally applicable.

It's another form of education. The biggest key of experience and why it's so important. It's the most valuable form of education because it's the education of life. I love to read more than almost anybody else. You guys obviously love to read. There's just so many things you can't learn from books. It's not enough.

Ben: David, what was your college entrepreneurship?

DR: It's funny, it's more thematic than an actual impact. I can’t remember I've talked about this before. Princeton had then just one entrepreneurship class. It was one class in the Department of Electrical Engineering. I was not an electrical engineer, but people knew about this because it's like, oh, this is cool.

Senior year, the recruiting happened in the fall, so I had an investment banking job that I was going to go do, a whole other can of worms. I was like, oh, I'll take this class, it's supposed to be good. I'm going to go work on Wall Street. I should learn about high tech entrepreneurship, it was the name of the class.

It was all deselection. It was a case method. The professor would have guests come in. One of the guests, I think it was the second of the last class, was Tim Ferriss right before he published The 4-Hour Workweek.

Ben: What? No way.

DS: He asked Buffett a question. He says, I'm a guest lecturer at Princeton.

DR: He totally hustled this. He traded on that name for years before he made it as Tim Ferriss.

Ben: Because he just went in for one class.

DR: It was one class. It was one day of one course, and that was this case study class. I think he had taken the class when he was at Princeton. The professor liked him and took a shine to him.

Ben: You and I then are guest lecturers at Columbia.

DR: Yeah, totally. We're guest lecturers everywhere. He was working on the book. It was done but was about to get published. He came in, and the whole class was basically telling his story and then showing the book. I remember in my notes for the class, I titled them. I still have them somewhere on an old computer. The title was Supplement Guy.

Ben: Do what you love. That is the wildest story.

DR: I've been talking about missed opportunities. He's older than me, but he's not that much older. He's only been out for a couple years. The class ended and he was like, hey, guys, anybody want to hang out? I'm going to hang out on the terrace. Princeton has eating clubs. They do have fraternities, but one of them is terrace. Jenny was actually on the terrace. Basically, I'm going to go hang out and have a good time with anybody who wants to come along. I was like, yeah.

Ben: I'll see you on the podcast circuit later.

DS: I love how this just was uncovered in random conversation. It's just computer science, investment banking, and law.

DR: No common denominator.

Ben: I use theater more than I use computer science.

DS: The idea from venture capitals and podcasters. I went, and my daughter asked me to go speak at Career Day. This is last year, so she was in her fourth grade. She's like, daddy, you have a weird job. She's like, will you come in and give a talk? You mentioned earlier, entrepreneurs are like ducks and crazy people. They see rules as like, oh, that's just words down on paper, I'll just do my own thing.

I show up. I said, yeah, I'll do anything for you, whatever you want. I show up. Each class at school has two teachers. They're like, oh, hi, Mr. Senra, we didn't get your email. Did you bring a thumb drive? I'm like, why was I supposed to email and why would I have a thumb drive? They're like, your PowerPoint presentation.

DR: Have you ever made a PowerPoint presentation in your life?

DS: Never. No, but I go, they're nine. Why would I make a PowerPoint presentation? I go there. I was like, listen, I got this. They're like, you're going to wing it. They didn't use the word wing it, but I forgot what it was.

DR: You're like, no, really, I got this.

DS: I show up, and they're all sitting on the floor. There are 39-year-olds. I talked for two minutes. I have a 30-minute slot. I talked for two minutes. I was like, listen, don't listen to your parents, don't listen to your teachers. I just gave them Charlie Munger's message. I go, what are you interested in? Keep following that. Even if it doesn't, there's not always a career path.

I used the word. I go, it's highly likely that the job that you're going to have has not yet been invented. I was like, there was no such thing as a podcaster. I couldn't go to school for podcasters or whatever. That was the two-minutes summary, and I said a little bit more than that. I go, okay, now what questions do you have for me? I spent the next 28 minutes. I told them the importance of reading. I was like, listen, your friends are all going to be in these stupid apps. I was like, you're going to have no attention span, learn how to read, and read whatever you're interested in.

DR: Your daughter's probably like, oh, my God.

DS: I'll tell you the funny thing. Then 28 minutes, and then they're telling me about the books they love. They're like, oh, I like Harry Potter, I like this, I like travel. We had the greatest time. This is 9:00 AM, I leave, and my daughter gets out later in the day. She goes, Daddy, thank you very much. My friends thought your talk was the best. I was like, oh, that's interesting. I'm glad they liked it.

I go, well, let me ask you a question. Who came after me? They're like, oh, it's John's mom or something. I was like, oh, what does John's mom do? First of all, did she do a PowerPoint? She goes, yes, everybody did PowerPoint. I go, what does John's mom do? She goes, oh, she's a corporate attorney. I'm like, they're nine years old.

Ben: Also, that's the alternate future for you.

DR: You would have had a PowerPoint.

Ben: It was like bizarro David going after you.

DS: It'd be interesting. Again, I was living in Florida. You'd have to move to DC. The law there is like insurance. I'm at the San Francisco Airport, which is way nicer than Miami International Airport, by the way.

DR: I've never been to Miami International Airport.

DS: It's like a third world, man. The ceilings are low. They've built this new part, but SFO was way nicer than Miami. I see this billboard. It says, the American’s largest Personal Injury Attorney. That guy was in Orlando. I was going to school in Orlando at the time. His name is John Morgan. He was famous back then.

I'll probably work for him. I'm chasing ambulances or whatever. No disrespect. Whatever you got to do to pay your bills, I have no problem with that. I just thought it was funny. I was like, you also have to think independently. They're nine years old. I don't want to sit through a PowerPoint.

DR: Nobody wants to sit through a PowerPoint.

DS: I would have just bought a video game console or something. Blake Robbins and Mitch Lasky made the point in one of their Gamecraft episodes that I never even thought of. They're like, you know how hard it is or how few pure software companies are that sell over a billion dollars a year in software and how many game companies? They said it on the podcast. There are so many video game companies that make so much money. I think he says the video game industry is bigger than music, movies, and books combined, or whatever.

DR: And it has been since the 90s.

Ben: That was the interesting thing we uncovered on the Nintendo episode. That stat gets bandied around a lot right now. It's very interesting because the video game market has done this. The video game market has basically always been larger than TV and movies combined, but has never gotten attention or been thought of as a legitimate entertainment form.

DR: It's one of the secrets that's been out there for 30 years that people haven't paid attention to.

Ben: Yeah. All right. I'm afraid of these memory cards filling up. This has been wonderful.

DS: Yup. Thanks for having me, guys.

Ben: Listeners, thank you.

DR: We almost never say this, but I think we got to do this again.

Ben: Let's do it again.

DS: I'll be here next week. Thanks, guys.

DR: We'll see you next time.

DS: All right, bye.

Ben: Listeners, thank you for going on the journey with us with David. We would love your feedback on the sessions format as we continue to refine it. It's obviously very different than our LVMH and Nintendo style episodes. Getting your thoughts on how we can continue to improve it would be hugely helpful.

Also, go check out the Founders podcast. Search Founders in any podcast player. Also, if you want to go deeper, you can become an Acquired LP to come closer into the Acquired kitchen. We have bimonthly Zoom calls. We just announced that we will be asking our LPs to help us pick future episodes. You can join at acquired.fm/lp.

You should subscribe to our second show, ACQ2, formerly the LP Show. For expert interviews with founders and investors, just search ACQ2 in any podcast player.

Also, join us in Slack. Discuss this episode and all the others. There's now over 15,000 smart, thoughtful, kind members at acquired.fm/slack. It's pretty cool. I think, David, that represents only like 5%-10% of those of you out there who listen every month.

DR: It's funny. I literally texted Ben yesterday, I was listening to the Nintendo episode that we just released, and I was like, the way we talk about the Acquired Slack, it makes it sound like only 15,000 people listen to Acquired. No, that is 5% of the people that listen to Acquired.

Ben: Yeah. All the rest of you, come join us in the Slack, acquired.fm/slack. I don't know. It's just a great way for us to get a better pulse on all of you, who you are, and what you like, don't like, or want us to improve about the show. That's all we got. Listeners, thank you so much. We'll see you next time.

DR: We'll see you next time.

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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