Acquired 十周年（与 Michael Lewis）

Happy 10 years.

Happy 10-year anniversary, Ben.

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

I know. Here we are. I brought you down here to Silicon Valley to record our 10-year anniversary holiday special. I wanted a special place.

Yeah. What are we doing? You keep teeing it up like, “Oh, just come down. We'll just record it here.” Clearly, we're not at your house.

I was actually thinking we should try and find the Silicon Valley house—the Erlich Bachman Aviato.

This is Aviato.

Aviato. Now, the reason I brought you down here is I booked us a very special place to record. It's actually right over here.

It's a house.

Is this the Google house?

It's the house.

The one where they had their first office in the garage?

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

We can do our holiday special in it.

Today we're going to do something very different from our holiday specials of years past. We've received a bunch of requests over the years to do an Acquired episode on Acquired itself and to unpack why Acquired worked when 99% of podcasts do not. But it's always felt a little strange to me, and we've always shied away from analyzing our own company.

Yep. But then this year we turned 10 years old and thought, well, maybe it's time for something—at least a sort of pause and reflection—on our journey to this point and why Acquired has worked.

And so we thought, if we're going to do something, we should bring someone in to do it with us. We'd want someone who is great at dissecting the mechanics behind teams or companies; someone who distills complexity into simplicity; someone who himself knows how to tell a great story.

There was really only one choice: Michael Lewis, author of Liar's Poker, Moneyball, The Blind Side, The Undoing Project, Going Infinite, and on and on and on, and of course host of his own podcast, Against the Rules. Ben, you and I have looked up to Michael forever, so this was really special.

Yes. And then, of course, there's the venue. We thought it would be a fitting way to cap off the year of our three-part Google series to record in the literal garage where that nearly $4 trillion company got started.

Well, Michael, thank you for joining us.

Total pleasure.

We have a little something, since this is our 10-year anniversary, that we need to do before we start.

Okay.

You went to Princeton. I went to Princeton.

Yep.

My senior thesis would become impactful for Acquired. I was a French literature major. I wrote my thesis on the history of Dom Pérignon and the marketing history of Moët & Chandon.

Very serious college student. A little different than yours.

They let you do that?

They somehow did. I conned the French department into letting me do this. Then, probably 12 or 13 years later, we made our LVMH episode, and it was a big moment for Acquired.

Moët & Chandon had just released the 2015 vintage—

Of Dom Pérignon. 2015 is the year we started.

So I thought you were going to say that the effect the Princeton thesis had on Acquired was more specific than that. But I feel like, when I'm listening to your episodes, I'm listening to someone who's worked up to a thesis. It is thesis-like immersion in a subject.

I can tell you our episodes are much better than my actual thesis was, but that is exactly how it feels.

That is the process we go through.

Yeah. And cramming for finals the night before. There's a lot of academic feeling that happens as we get close to recording day.

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

We should talk about where we are now, too.

We are sitting in the Google garage where—

I mean, I don't know exactly what happened in the Google garage. This was the garage?

Like, literally, Susan Wojcicki lived here. I think this was her house. She had just bought the house and was looking to sublet part of it, just to make some extra money from other people using the house. She posted a bulletin notice on the Stanford campus that there was space available here.

And so Larry and Sergey’s first desks, when they got kicked out of Stanford's offices, were right there.

Right here.

I actually think this actual door is the one they were using, because Google pulled it out of storage for us.

So I'm at this camp with a lot of well-known people, and a prominent CEO says to me, “You ought to listen. Have you listened to Acquired?” I didn't know what he was talking about. I went and listened. I can't remember what I listened to first. I think it might have been the Morris Chang episode, but I had about 8 different reactions, all positive. I thought, “This is kind of amazing, what you all are doing.”

From July until now, I've listened to maybe 10 of the episodes, which is a lot of hours of listening to this. The first thing that struck me was that I could not believe you were getting away with a 4-hour podcast. I couldn't believe that, even after 4 hours, I was still looking for more.

You created an environment with the podcast that I tried to create with the book. You grab the listener, like I try to grab a reader, and get them to the state of mind where they'll let you take them anywhere and teach them about stuff that they don't even know they want to learn about.

I think if we're going to do this as a 10th-anniversary celebration—

I'm honored, and I feel like I'm going to be a lot out of my depth here because I'm just a new listener. I haven't listened to all of it. I'm hardly the world's authority on your podcast, and I didn't prepare at all except to listen to it.

I did one thing, and that was I went back and listened to your very first episode.

Oh, wow.

Oh, wow.

Just to compare. Be kind, please.

It is shocking how different it is from where you started to where you are now—where you probably haven't ended up, but where you are now. So I'm going to start with this 10-year journey. I think I can see some things you've learned.

Oh, but I want to know what you think you've learned. Give me the 10 lessons from the 10-year journey.

Do you have yours crystallized? I don't want to taint you.

No, no, no. I do have one big thing. If you say it, I'll acknowledge that you sunk my battleship and I have nothing to add.

But I'm curious what you think. There's no way that first thing you did was ever going to become a hit.

Well, I'm curious if you think I've always believed something that's always been there from the beginning: the magic between me and Ben.

That's interesting to me. You all met at a Passover seder.

Yes.

And you were colleagues—you have been colleagues at a VC firm.

Yep.

I'll come back to that. I want to talk a little bit about you as investors, but we'll come back to that and how that's different from being a podcaster.

At what point do you decide that there's a kind of odd chemistry here?

Well, we really just wanted to spend more time together.

You're both straight.

Yeah. Okay. This is married.

It's not a romantic relationship.

We like to say that we each have 2 spouses. We have our actual romantic spouses that we have families with, and then we have each other.

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

So, are either of your spouses threatened by the relationship?

No. From a sheer time perspective, a little bit. My spouse loves it because she doesn't actually want to spend that much time with me. She likes that I used to talk at her about all the stuff we do on Acquired, and she wasn't interested.

That is true.

Although she gets the rough draft. My wife won't listen to episodes because she's like, “I've already heard 4 versions of the episode.” Unfortunately, she heard 4 worse versions, because I endure that and give you feedback. The listener actually gets the better version.

Right. So you meet, and there's a chemistry. Explain that chemistry. What is it that makes you excited to see each other?

David knew all the Apple rumors in real time, just like I did.

You had read all the latest Stratechery posts. We bonded over Ben Thompson originally.

I think you can tell me if this is mutual, but I looked up to you because you were doing a thing that was mysterious to me, which was venture capital. I was a software engineer, and I got hired to work at a venture firm to do some incubation work, but I didn't know anything about the real job of venture capital. And here's David, someone who's just a few years older than me, doing that thing, but kind of in my peer age group. I could lean over and be like, “What are they talking about?”

I kind of felt like a fraud in a lot of ways. I repressed this deep down, but if I'm honest with myself, I think I felt like a fraud as a VC. I went to Princeton. I was a French literature major. I worked on Wall Street, worked briefly at The Wall Street Journal, and then became a venture capitalist. I had no qualification to—

Have you ever coded or done anything?

I took some computer science classes in college, but I'd never built anything. And so I was like, “Ben built all these things. You built the this-for-that website. You built so many products. You had products that millions of people use.” And I was like—

I'm just masquerading here.

That Ben knew stuff that was exciting for you to know about.

Yes.

Did you feel that David knew stuff?

Absolutely.

What kind of stuff?

Business.

Really?

No, no, no. I only found out years into doing Acquired that he was a French lit major.

Huh.

But that's important. That French background ended up becoming a kind of broad curiosity about things other than business and technology. I hear it in your program. I hear it in your podcast. So what I'm thinking of in my head is Daniel Kahneman and Amos Tversky. I wrote a book called The Undoing Project, and you could see 2 people—and it got me thinking about collaboration. I've had exciting collaborations with people, and the feeling I get is, “This person is bringing out a better version of me,” which is why I asked if your spouses were threatened. For Kahneman and Tversky, “threatened” is too strong a word, but their spouses were very aware that the relationship that was the most important in their lives was not with their spouse, but with each other.

I got the sense from The Undoing Project that Kahneman and Tversky's relationship was very intense.

Mm-hmm.

I don't know that I would describe our relationship—

And competitive.

Competitive was not the issue with Daniel Kahneman. He always felt at risk of being dismissed and thought he was the lesser partner. There was a status difference between the 2 of them going into it. Everyone in the world thought Amos Tversky was the smartest person they'd ever met. You 2 didn't ever have any of that?

Not for me.

But you said you felt like a fraud.

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

Funny. You've become more the keeper of the analysis on Acquired—

And I'm more the keeper of the story. It's different, though, than a difference in status. I don't feel that you or I have ever felt we had a difference in status. The number of fights or real tensions we've had is, like, 2 or 3 ever in 10 years. It's weirdly—

Let's come back to those and get to the lessons.

We started thinking about what we'd learned from the companies we'd covered that we'd then applied—

Yep.

—to Acquired.

All right. In particular, Acquired has clearly worked. Why? And does that “why” have something to do with the fact that you study the world's best companies? Is there some osmosis that happens from the subject matter bleeding into the property itself? So that's our frame. Okay, let's go with that frame.

Yes. The one I was going to start with is the NFL. The product is scarce. You know, 162 baseball games a year. It's called America's pastime. You pass a lot of time with it. But with the NFL, because the product is scarce, and then they have very smartly cultivated that and engineered it to be more scarce, more of an event-driven sport, that's made all the difference.

To me, what we do is insane for the podcasting industry. It's completely insane. For the last 3 years, we've released 12 episodes, and next year we're going to do 8 episodes for the whole year.

No. As a hobbyist podcaster, what I get told is, “You have to be on all the time.”

Yep.

Podcasting is your second or third thing that you do, right? And you make more episodes, I think, per year than we do.

That's correct. But they're—except for the scripted ones, which I do throw myself into—it really is. I do no preparation, and it's a conversation. I don't do very many of those. The scripted ones, I do put time into, but it's a different sort of thing from what you're doing. It tends to be a very narrow little story that I'm telling.

You didn't start out, though.

We used to make 26 episodes a year. They were 40 minutes to 1 hour 20 minutes long.

So how do you go from that to realizing it? Did you really learn it from the NFL, or did you just do it and then—

We were starting to do it, and then we covered the NFL and thought, “Aha, this is what we're doing.”

Most of these things are actually, I think, confirmation bias. We get some inkling that we should continue to go in this direction. My insistence on calling out Hermès is because I think quality and scarcity have become an important part of Acquired. In some ways, we learned that from Hermès, but we covered Hermès last year.

I think we found our way to that probably 4 years ago, maybe 5 years ago. We used to feel like we were bad at podcasting because we couldn't make very many episodes, because we didn't have a whole production team, because we didn't have professional ad-sales people, and because we weren't full-time for a long time.

Yeah.

At some point, we looked at each other and said, “Maybe if we just admit that we are heavily constrained and try to lean into that constraint in the way that Hermès leans into every single Birkin bag being handmade by 1 artisan, we're going to build a business model around that.” It turns out to be a great business.

We thought every episode was going to be entirely handcrafted by us: all the research and all the recording. We work with this amazing audio engineer, Stephen, who does the literal waveform editing, but we go into a transcript and highlight 1,000 cuts per episode. It's this made-with-love product. It turned out we could actually build a big platform and a good business out of something heavily constrained.

But that's not where you start.

No, no, no.

So, for people who don't know, where you start is: you're 2 guys who've met each other and got a crush on each other. You love being with each other, and you get this idea that it would be really cool to do a podcast on corporate acquisitions that worked.

Yeah.

That worked. And a bad idea—well, it is an idea. You could easily have started “Corporate Acquisitions That Didn't,” and you'd have had much more material. That was what most of the press at the time was: “Let's talk about how crappy this acquisition is.” It's interesting to me that your first step, right from the start, is positive. It's “What worked,” not “What didn't work.” It's “What worked.”

That's because we were VCs and I was trying to build companies. The goal was to create things that had enough value to get bought or go public. When people buy things, it's because they're working. So let's try to reverse-engineer and understand why things worked.

Right? So that's a different starting spot from almost all journalism.

Yeah. In fact, if most journalists started there, they’d be accused of hagiography. But because of where you’re coming from, and because you’re thinking of this in very practical terms—why did this work?—you do get away with it. It’s just that, in the first episode, you’re almost like different people.

But I’m going to hold back on what I think you learned because I want to see if you get to it. So we’ve got 2. What’s the third episode that you learned a lesson from?

I think Berkshire is one where we learned so many things. We did this 3-part Berkshire Hathaway series.

I have not listened to it, and I’m a big investor in Berkshire Hathaway.

Good for you.

Since when?

I bought it right in the middle of the financial crisis because I thought—I mean, I had done a take on Warren Buffett. It’s a little put too strongly, but oddly, I had written a takedown of Warren Buffett on the cover of The New Republic magazine called “The Temptation of St. Warren.” You can probably dig it out of the Wayback Machine.

What was the thesis?

The thesis was that he may have started out being who he says he is, but that he had become this very different thing in the marketplace. His money is not like other people’s money. There are a couple of things Warren Buffett has: his money is valued differently. But, secondly, he was willing to do deals that, at the time, bothered the hell out of me.

The Goldman deal—it was a Salomon Brothers deal—that bothered the hell out of me. He kept a CEO in place who I thought should not have been.

Were you there?

I was there.

Yeah, you lived through it.

No, I was there through part of your Berkshire series. It turned me briefly—only briefly, actually—cynical about Warren Buffett, and then I came out of it and fell in love with him all over again.

I had written this thing and pissed him off entirely. It clearly upset him. Then I started watching him for longer, and I thought, “You know, I just like him.” You couldn’t help but like him. So I started to soften.

When we got to the financial crisis, I thought, well, his money is going to be so valuable here that what is needed is credit. I think, if he stays alive long enough, it might happen again soon.

So you invested in Berkshire before the legendary deals coming out of the financial crisis.

Yeah. I bought a chunk of the A shares and I’ve just sat on them. And let me tell you—can I tell you a Warren Buffett story?

Yeah.

I’ve never met him. I know he was really irritated with me, and then I looked back at that. It’s the only time I’ve ever looked back at a piece I wrote and thought I overdid it. I went right back to The New Republic and wrote another 5,000-word thing about Warren Buffett in which I basically apologized for the first piece.

I bought these shares in 2008 when I was working on Going Infinite. I was working on the Sam Bankman-Fried book, and I was talking to a publicist completely unrelated to Warren Buffett. She said, “You know, I also represent Warren.” She said, “I told Warren that I’ve been talking to you, and he said, ‘He has a question for you.’”

I said, “What?”

She said, “Is he the Michael Lewis who bought shares back in 2008?” I swear to God. This tells you more about Warren Buffett than it does about me. He said I bought it at, like, the book-value-to-price ratio—you know, that ratio. He bought it as cheap as it’s ever been, and he said, “But you made the best trade.”

Then he said, “So he’s the Michael Lewis who sold some Berkshire Hathaway 2 years ago and 4 years ago?” He was like, “Why did he sell?”

I can’t imagine Warren tracking you.

No, no. I actually just gave them to charity. That’s what I’d done: I’d given the money away. When he heard, she said, “He’ll be relieved to hear that.”

Can you imagine that Warren Buffett is taking the time to watch who is buying and selling the A shares and thinking about it? I just thought—he and Munger had that whole thing about, don’t put your money in an index fund; put your money in a big bundle of stocks. Put it in a few stocks and watch those stocks like a hawk.

They watch that thing in a way that I just—has anybody in history ever done anything like that?

I mean, all these people are maniacs. You don’t build something like this if you’re not.

That’s exactly right. So anyway, sorry, I just digressed.

What did you learn from your 3 episodes on Berkshire Hathaway?

Well, as it applies to Acquired, we got really obsessed with the circle of competence: that it’s okay to have a giant too-hard pile. There are a bunch of things that I’m not intelligently saying no to; they’re just in the too-hard pile.

Every phone call we’d have, we’d say, “Pile”—the expression. Warren and Charlie had this thing: there was the yes pile, the no pile, and then the too-hard pile.

The too-hard pile. I see. Okay. Right.

And all the technology was in the too-hard pile.

Yeah. There might be something in here, but it’s just too hard.

It’s basically admitting that our opportunity cost is so high—the things that we say yes to are so awesome—that it’s okay to say “too hard” to a giant amount of things. That was really freeing once we started doing it.

So what’s an example of something that you—I’m surprised you say this—what’s too hard?

The reason that, besides just wanting to meet you because you’ve been an inspiration to us forever, I wanted to meet you a few months ago was Hollywood. We’ve had lots of opportunities to work with Hollywood. To this point, they have always, invariably, ended up in the too-hard pile.

Are you talking about creating TV shows, documentaries, or adapting these stories into films?

They all sound good until we start digging in, and then we’re like, the time it would take us to think through all the implications of this—we should just make another episode.

The answer almost always is, “We should just make another episode.” That’s a really intelligent place to land, because what they will do is woo you with their enthusiasm and then take you down a rabbit hole where you’ll spend years of your life and have nothing to show.

Well, this is one of the reasons I wanted to talk to you. You’re a very smart guy, and you’ve been very successful.

I’ve gone down the rabbit hole knowing I didn’t have a whole lot else better to do at the time. It’s like, between books, it’s a palate cleanser. You don’t have a between-books period. You don’t have that. You don’t have the machine you have. You’ve got an assembly line going.

And it’s a compounding asset. I mean, this is the craziest thing about podcasting, and a giant amount of why this has worked for us: we do a lot of work that looks a lot like the research and writing of a book. But when we make our book and release it to the world, people click Subscribe, and when we release the next one, those same people go listen. It’s almost guaranteed.

We’re always growing our base. Podcasting and being an author have loose compounding elements to them, but there’s not a literal—

Not when I got into the business of writing books. I thought about this a little bit, and I thought there was going to be compounding.

You’re right. But you’ve probably done it better than anyone. You’re one of the few people who probably does have a brand.

I thought, I’m going to move around America to the various arenas of ambition: Wall Street, Silicon Valley, Washington, the movie business, sports, the various things. I’ll naturally attract the audience that’s interested in that arena, and then I’ll drag them along to the others.

And it hasn’t really happened that way, even for you.

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

The Moneyball audience is not necessarily The Fifth Risk.

Exactly. The audiences end up just being different. So it’s just the way it is.

But that’s not true. That’s not true. So every time, if you were to take time off to go do something in Hollywood, you’d be abandoning this glorious network. The opportunity cost is so high of spending a month not making an Acquired episode, because when we publish an episode of Acquired, the base does come with us—not all of it, but we make epic episodes about healthcare, and all the people who listen to LVMH are now learning how a doctor’s office works.

Podcasts are unique in that they do have that true subscriber base. But unlike anything else where you click Subscribe, there’s not an algorithmic platform that disintermediates you. I mean, you think YouTube or Twitter or any of these: when someone clicks Follow or Subscribe, it’s a signal in the algorithm, but it’s not guaranteed.

But you subscribe in Apple Podcasts or Spotify, and those people are actually subscribed and they’re going to get the next episode.

Right. And they learn to trust you.

Yeah. They learn to trust you—that if you’re interested, they’ll be interested. What they’re buying into, in fact, is not the subject but your interest in the subject.

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

In the “Why Does Acquired Work?” framework, there’s a strong element of terror in why it works. We are constantly terrified every time we make an episode.

Every minute is a churn opportunity.

Are we letting people down?

Are you more terrified than you were 2 years ago?

Yes.

So, you’re growing. The terror is growing.

The terror is growing.

At some point, it’s not going to be a good thing. I mean, it’s good to be a little on edge—

But you don’t want to get yourself in a situation where you feel like you do the same thing over and over again, because eventually it will get old. We’ll come back to this—we’re going to get to the bull and the bear case at the end.

Okay.

But this is so back to your lesson that you gleaned from Munger and Buffett. It’s okay to have a too-hard pile, and you said the too-hard pile is doing things in Hollywood. But I wanted to ask: Have you ever had a subject where you thought, “This is just too hard to do”?

Yeah.

Oh, yeah.

What would be an example of that?

We got pretty far down the line on doing an episode on the Fed.

Yeah, and walked away from it.

Yep.

So you walked away from it.

Yeah. We might come back.

There’ll be a moment to come back to it.

Yeah. Yeah. Yeah. I’m glad we didn’t do it, although it’s going to violate your rule about doing newsy things.

We always try and find things where timelessness is a must. Everything we do must be timeless.

Nothing’s timeless. So what do you mean by that?

It must be that if you listen to an episode that we make 5 years after we made it, it’s 80% as relevant. It will still be an important institution in the world.

Right?

But a CNBC article is worth 2% of its original value within a month.

Right?

And we want to be worth 80% of our original value 5 years from now on a piece of content.

So does that mean you’re picking institutions that you think will survive?

Yes.

Yes. But, okay, so that’s like the baseline. So much of your stuff is tech and finance, where there’s so much churn.

Well, yes. This didn’t used to be true. You look at anything pre-2018—we had not yet discovered this principle.

But our real bangers are timeless and timely. Doing Google this year was timeless and timely.

Right?

Having that—however you do it, getting to something that I try to get to when I’m picking subjects—

What gets my socks to go up and down about a subject is when I’m really interested in it and nobody else is. I’ve found with basically all my books—maybe a couple of exceptions—but a lot of the books, if I’m at a dinner party and someone asks me what I’m working on, after about 60 seconds I can see their eyes glaze over: Why is he interested in that? It’s just not registering with them in any way.

I’ve learned just not even to talk about it, because it kills my interest to watch it kill their interest. But I know why I’m interested and why it’s important, and I’m not relying on the world telling me it’s important. That’s a really good sign.

This is a difference between what you do and what we do, because I feel like when I think through all your books, they’re almost always a story of obscurity. Once it becomes a Michael Lewis book, then it becomes a well-known phenomenon—Moneyball. You’re discovering these things that kind of nobody’s talking about.

Yeah. Yeah. Yeah.

So that is a difference. Your subjects are not obscure.

Right. They’re the most famous corporations, right?

People love them, but they don’t really understand the secret hiding in plain sight. People didn’t understand Trader Joe’s, or people didn’t understand Google.

There are 3 things that make a great Acquired episode. One, there’s a compelling hero protagonist that takes a hero’s journey, where we’re going from obscurity to ubiquity. How it starts is this thing that nobody cares about, and then it becomes the most important thing in the world.

Two, there’s a secret hiding in plain sight. When the ordinary consumer sees Costco, they’re like, “Oh, I love Costco.” But when someone who’s listened to the Acquired episode on Costco thinks about Costco, they see all the gears turning in the machine. There has to be some way that we can expose something.

Our 3rd criterion is that it has to be important in the world. I think that’s something we picked up later. We used to do these little $10 million acquisitions, and now when we’re going to spend 2 months of our life researching and making that the Acquired episode, it has to be something worthy of the Acquired stage.

When did that happen? I’m a little unclear, again getting back to this 1st episode you did and where you are now and the difference between them. What compelled or propelled you into the current form of Acquired? The decision to make it a business and the decision to actually live off of what you earned from your podcast. It had to work commercially, so then you started to make these adjustments. Is that—

Yes and no. You’re on the right track. I like the Berkshire partnership. I thought you were going to say partnership as a lesson from it. We did a series on Sequoia Capital, the right venture firm.

Yep.

I went full-time on Acquired in 2020.

Mhm. 5 years in, Ben didn’t go full-time until January 2024, right?

Correct. End of 2023, beginning of 2024, when I went.

You remained equal partners.

Yes. It wasn’t a business when we started. It was just—I mean, we didn’t make money until our 3rd year.

But those 3 years, while you were full-time and he was part-time, it was an equal—

Equal.

Yes. David never once raised the issue: “I’m depending on this for my livelihood, and it’s my only thing, so I should own more or get a greater share.” That never once came up.

That’s great. It never crossed my mind.

There we go. That’s an important point.

I guess I’m glossing over it because it wouldn’t even—it didn’t even cross my mind. It’s just always been the 2 of us.

Right?

Equally. That’s it. It would be profane for it to be anything else. It would actually break it if we ever started trying to figure out little carve-outs or pieces of the pie: “Well, I did this, therefore I should get—”

It’s true collaboration. You don’t recognize that there’s no boundary to where you start and where you end. This is where I’m going with the story.

It's funny you bring up Sequoia because it's actually benchmark-y in that way.

Well, it's the quote. It's Leone's quote.

Okay.

So, at the end of 2022, FTX happens. Interest rates go up, and the podcast advertising market falls off a cliff. Our revenue dropped 40%. So, we went from, “This wasn't a business. I went full-time,” to making it a business. It worked amazingly well from 2020 to 2022.

From 2020 to 2021 into 2022.

Right?

And then our revenue dropped 40%.

Right. Overnight. [laughter]

And that was the moment when we changed everything.

Oh. So, how many episodes were you making in 2021?

A lot.

Oh, I see. Okay. But it's no longer just corporate acquisitions?

We started broadening with the Tesla episode in maybe 2018 or 2019.

And why did you broaden?

It was David's idea. He said, “I have this thesis that the audience doesn't listen to us because they want to hear whether a tech acquisition worked or not. They want to hear the story and strategy of the most important technology companies.”

There you go. So, you kind of foul-hooked your audience.

Yes.

They were listening.

What's a foul hook?

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

Yes.

Yeah.

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

So, can I, at that moment, interject what I noticed? Because in that first episode, you were so unsure of yourselves. You were both so choked, and you have a background in theater. You were a kid. You did not come across as people who had been on stage.

It was kind of an affectless performance. It was flat. There's a flatness to it. You were afraid to, whether you knew it or not, exhibit a lot of emotion. You didn't realize that one of your secret sauces is emotion. It's the way you respond to each other when you're presenting material. It's teaching the audience how they should feel about it.

You're giving them sometimes very dry facts, like, “Their revenues doubled every year for 10 years straight,” and the audience may not know that that's an incredible thing. The way you respond—even sophisticated listeners are helped: “Oh, pay attention now. This is an important thing. I should get excited about that.”

We used to share our research. In the early days, I think we only had a single Google Doc that we were dumping everything into.

We were on this. By the time we would actually go to record the episode, there was no surprise.

There's no disagreement. You can't pretend to be surprised.

We can't, or you would be pretending to be surprised. Neither of us are good actors.

This is really important. So, you added an improvisational component.

Yes.

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

I 100% agree. Every episode now, going into recording day, feels like a high-wire act because we haven't fully scripted it out. I'm like, “I think this is going to come together.”

But we had to add this thing called a production meeting about 6 months ago. One week before recording, we're required to get together and agree on an episode structure, but not share any details, because we got so into this improvisation thing that some of our episodes would sort of end and you're like, “That had no flow to it. You guys had two different ideas.”

You're not taking a risk if it doesn't work sometimes. But it's the difference between—I mean, do you know how your heart sinks when someone gets up at a podium with a script, with a speech, and they're going to read their speech?

The audience is waiting for you to get through this thing because they know nothing's going to happen. Whatever's on that page, that's what's going to happen.

Pre-announcing the score of the Super Bowl.

It's exactly right. If you get up and just start talking, the audience also knows, “Oh my God, this could be a disaster. They don't know where it's going.” Just having some of that has a huge effect on the way the audience responds to the performance. And so, that is not in the beginning.

Do you remember when we started doing that?

Well, I think in the first 5 or 10 episodes, we got feedback saying, “You guys need to disagree more.” But I don't think we quite realized that we should reveal surprises for each other until 4 or 5 years ago.

At some point, we made it an unwritten rule that we have separate documents and prepare separately.

That was 5 years ago, you say. So, you start with the corporate acquisitions in 2015, and the two of you know everything that you're going to say when you get on, basically. It's short, and it's 40 minutes.

Yeah. We're not confident. What you're hearing, too, is that I'm supposed to be doing financial analysis as someone who's never been taught how to read a financial statement. You're also hearing a little bit of—

Impostor syndrome.

I'm trying. I can't get overenthusiastic because I'm afraid David's going to catch me and be like, “You don't know what you're talking about.”

Okay. So, plus, there's an uncertainty about your own abilities.

All right. So, the first thing that happens is you move off the corporate acquisitions.

We went from acquisitions to IPOs.

Right?

Which was unbelievable timing in 2017 and 2018, when Uber, Pinterest, Slack—the 8 IPOs in a row of tech companies that everyone had been following. Then it went on for 2 years and kind of culminated at the end of 2020 with DoorDash and Airbnb, which we recorded and released 1 day apart because we wanted to do that on IPO day.

Yeah. But once again, you're constraining yourself unnecessarily.

Yeah, exactly.

Eventually, you get to, “We're just going to do stories, big success stories,” basically.

So, it was acquisitions, IPOs, then broad histories and strategies of tech companies, and then broad histories and strategies of companies, period.

And people.

And people, with Taylor Swift. [laughter] We frame them as companies in a funny way.

You're still constraining yourself. You feel like you need this frame, and you're actually not really living in a frame anymore.

Yeah, but constraints are good. Format—forcing yourself—

Sure, but at some point you're going to wake up and say, “We should be doing more biography. We should be doing more people.” If that person is not naturally a huge corporation, you may still—I have a feeling there's more evolution to come. You haven't reached the end point of this.

So, at what point do you start to feel confident, like, “We know what we're doing”?

Well, when the crash—when the reset happened in 2022 and 2023.

So, pretty recently.

The crypto bubble, tech stocks plummeting, podcasting advertising budgets drying up—the end of 2022. Ben and I looked at each other, and it wasn't even really a conversation. We just knew what we had to do.

We watched a lot of other people go for easy, secure money now, try to keep the music playing, and we were just like, “Party's over. We need to get to work. We need to focus on only what is enduring, make great, great, great work, and stop doing everything else.”

Up to that point, we used to do these things called specials. We would just do—not totally random, but essentially random—kind of undifferentiated topics. We said, “We need to start making stuff that only we can do, that will only be great. We need to stop doing everything else.”

We did it on the commercial side, too. We said, “Let's go cut deals with our favorite partners, most of our sponsors.”

Yeah.

And try to figure out, when we come out the other side of this, how we have the best companies to work with commercially, as well as the most durable stories and brands associated with us because of the editorial side of the house.

The JPMorgans of the world—did they join before you proved that this new way of doing things worked?

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

And what were those episodes?

That was LVMH. That was the NFL.

Okay.

That was Porsche. That was the beginning of what we really—

Yeah. I think that's when we started to build the confidence of, “Oh, we can do something that—”

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

Yes.

And so then JPMorgan came in in January 2024. So we had a year of kind of building this out.

You're right. It was only after we had leaned into Acquired as a brand—about durability, about compounding over decades and centuries—and I don't think I appreciated that as a person in the early days of Acquired. It certainly wasn't what the show was about.

Yeah.

Anyway, I got us a little off track. Your lesson number 3 was Berkshire Hathaway: don't be afraid to have a too-hard pile. Pick another.

Okay. Then my frame for all this story was Sequoia. This story is very different from Sequoia, but we interviewed Doug Leone, who was, I guess, one of the 2 stars of Sequoia. He told us that after the dot-com crash, for the Sequoia fund—that was the dot-com bubble fund—every other venture firm out there, after the bubble popped, was taking mulligan funds. They went to their LPs and said, “There's nothing we can do on this one. We're going to be more disciplined next time.”

We said, “Absolutely not. We will never lose money for our investors, ever. We will do everything we can possibly do to make this fund in the black.” He said the best line—I think the best line anyone's ever said on Acquired—was, “We looked at each other, and you could burn cigarettes on our arms and we wouldn't flinch.” [Laughter]

They spent the next 5 years—they didn't raise another fund. They just went to work with the portfolio.

They stopped taking fees for a while.

Stopped taking fees, yeah, and got it back. It ended up being a positive-returning fund.

This is how you get a reputation.

Exactly.

And that was that moment for us.

And it's easy to lose one, too. They were really sensitive to reputation.

Yeah, yeah. We had studied enough businesses by that point that we saw what led to durability, and I think we were already awake to the idea that all that matters is the late years of compounding. In any given year, you look at a Magnificent 7 company, and its profits from the last year are greater than the first 20 years combined, or whatever. I think realizing that being around and being respected on the other side of this economic chasm is the key to everything. Who cares about making money this year? It's about 5, 10, 20 years from now, and we have to have the brand that people want to be a part of then.

Right, but you don't know that you are a Magnificent 7 podcast. [Laughter] It's kind of ridiculous to compare when you make this decision. You don't know that there's going to be great riches 10 years out, 5 years out, or 3 years out.

Yeah. But really, I think we just both so believed that that was the right thing to do. It was like the burn-cigarettes-on-our-arms thing.

Something had happened before that. You had figured out how to do this. You'd figured out how to study a business in a way that was really interesting. The first episode's not that interesting. There's just not that much I didn't know or hadn't thought of. It's 30 minutes or whatever it is, and I think there are more ads than there are you all speaking on YouTube. [Laughter]

And now we pride ourselves on having the lowest ad load in the entire industry. Let's pause here before we get to number 4. How do you study a business? What have you learned about how to study a business that's different from when you started out? Explain to the audience what you do to prepare and what you do to learn about a business.

Great. I read everything ever about them.

So, yep. You do what I do.

Yeah.

Yeah. You go to whatever's out there.

Right?

Right? AI. That's just the AI part of it. Who started with the canonical sources? Who's done great canonical work in the past, and what ideas do you have from reading the previous canonical work?

And you then say, “I wonder if I can find this old YouTube video.” Those YouTube videos mention something else, and the spiderweb always starts with the preexisting canonical sources.

At what point do you pick up the phone and start calling people who may have information that isn't on the World Wide Web?

Zero times, ever, until about 2023. Now that is probably the most important way that we do it. For me, at least, probably about 50% of the way through, you start to get your arms around it, then start calling.

Right. You don't call uninformed. You call knowing as much as there is to know, and then you start picking the brains of people who might know more and have not said it publicly.

There's the obvious people to talk to. For Google, we talked to Sundar Pichai—obvious. Then there's the slightly less obvious.

You just say that so casually: who gets to pick up the phone and talk to the CEO of Google about Google? I mean, nobody.

We're in a scale economy.

We're in a compounding business, right? So when do you first realize that you can pick up the phone and call Tim, who you know, and that you're on a first-name basis with all these people? When does that happen?

That's a good question. I think it was our Microsoft series, when we talked to Steve Ballmer.

Steve. Here we go. Steve.

[Laughter] Acquired guest.

Acquired guest. Steve, I love name-dropping in your world. It's so different from name-dropping in Hollywood. None of your names mean anything at all, but they mean everything here. [Laughter] The arenas are so funny, because most of these people aren't famous, and they're 1,000 to 10,000 times wealthier than these Hollywood stars. It's a different yardstick.

Well, what's funny with Microsoft is that we had some access because Ben used to work at Microsoft.

Which got us zero access.

Well, no, but you knew some people. Here's, in my mind, what sort of happened with this, as I'm trying to think about how to answer Michael's question. We had started in Seattle, you still live in Seattle, and you had worked at Microsoft when we started our Microsoft journey.

We knew some people.

Yeah.

And that's true. We thought, “Well, let's see if we can talk to Steve.” So then we talked to Steve and got his perspective on things, and it completely changed the story.

Was that a cold email?

I think it was.

Is that the first time you did that?

The first time we reached that high.

Okay.

Yeah. And you know what? This is where reputation matters. Steve didn't get back to us for a day, and then we heard back. He said, “I don't listen to podcasts. I haven't listened to your podcasts, but I talked to some people that I trust, and they say you're great. So let's hop on a call.” We wouldn't have gotten the response back if—

And he gave us probably 3 or 4 hours in research for—

He did, yeah.

Yeah, and you learned a lot.

Yeah. This was before we even interviewed him. That was later, but we learned a lot just in research.

I see.

Did you all have a moment where you thought, “Oh, my God, let's keep doing that. That works”?

Yes. Well, yeah. Then we were like, “That worked great.” It kind of worked with Jensen, too. Originally, when we had the idea in 2021 to do NVIDIA, we thought we were an interview show. We thought the interviews would be better than our core storytelling episodes because we hadn't discovered that the Ben-and-David storytelling is our N=1 product. It is the thing that we uniquely can do that no one else can do.

We thought getting these big guests would be the key to success, which is funny because usually they underperform our standard format. So, in 2021, we emailed NVIDIA through the warmest connection we could find and said, “We're planning to cover the company. Can we interview Jensen?”

We got a nice party line back: “He's very busy.” [Laughter]

In 2022, we did our NVIDIA Part 1. We did our standard research process, and then we did Part 2. We got a note from NVIDIA saying, “Jensen has listened and wants to know who your inside sources are, because it's the most correct telling of NVIDIA's story ever.”

We were like, “Oh, this was all just public information.” If you're good at spidering the internet, digesting it, and thinking about why he would have said something at this point in time to this audience in these various random university talks and so on, you can piece together the story.

Yeah, this was still flying below the radar a bit.

Oh, yeah. We were totally flying below the radar. But that landed us— that started the relationship. Eventually, they were like, “All right, Jensen wants to meet you.” Then they asked, “Do you want to do an interview and follow up on your episodes?”

But you did an interview episode with him, and it doesn't do as well as your own NVIDIA episode.

That one may have been at some particular peak of NVIDIA buzziness. It was probably our then-largest episode.

Well, here's what happens with interviews.

It makes them spike faster.

Yeah, and then they go, and those listeners don't retain the way that our regular listeners do. Whereas if you look at our Costco episode, which is now 2.5 years old, or LVMH or Rolex, they just keep going. I'm sure your books are like this—they just keep going.

Every time I bring out a new book, it has the same effect on the old books that a new podcast has on old podcasts. It sells all the backlist. So, yes.

All right. So I was asking you how you studied a business, and you told me you read everything there is. You must find—you’re very polite and generous about citing your sources and all that—but you must find [yourself surprised]. My wife is an academic; she has a PhD and was trained as an academic, and she was like, “You guys have to cite your sources. What are you doing?” But are you ever surprised by the weakness of the source material?

Yes. In fact, literally today, we got an email from a company that we recently covered saying, “You said a factually incorrect story in the episode, and we know the book that you got it from because it was factually incorrect in that book. We told the author that it was factually incorrect, and it went out anyway, right? And now you’re repeating the incorrect story.”

And now you’re repeating the incorrect story. We now have an errata section where we publish corrections in our email list. I bet you’re mainly correcting other people’s errors that you just repeated.

I mean, sometimes there are errors.

Yeah.

Sometimes we make a financial calculation error or something like that.

Right. So we read all the source material, and then we start to make phone calls. In 2023 and now, the phone calls have become extremely important. You’re making—

At least 25 of them.

The Google episode is 40, probably, across the whole thing. Do you find that when you’re reaching out by phone to all these people, they always want to talk to you, or no? Sometimes it makes—

Yeah, but usually, when you approach it with a spirit of, “I’m just trying to understand the whole background”—

Yes. We’re going to tell a narrative here. Our biggest question to you is, “What is most misunderstood, and what incorrect stories are out there where we can set the record straight?”

And you get lots of great information after that.

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

But it’s not a trick—this isn’t “here’s one cool trick to get people to talk to you.” What I think you mean is, you mean it earnestly, and we mean it earnestly: I want to make something that’s good.

That’s good.

Everybody has different beliefs about the truth, but I want to make the story that most correctly approximates the average truth that exists from all these different truthy sources.

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

Yeah. I’ve got to imagine for your subjects—and I think a big part of it is true for us too—there’s the truthy aspect, which is very, very important, but there’s also, “This is going to be great. This is going to be really fun. This is going to be entertaining to read, and people are going to consume it.” That’s, I think, a huge motivation for your sources.

So, when you’re working on one of these episodes, are you aware of how much fun you’re having learning? Have you ever shut something down just because, “Oh, this isn’t that much fun”? The Fed, maybe?

That’s kind of why we killed the Fed. We’ve definitely killed other episodes.

If you can find fun in the Fed, man, you are doing—you can find fun.

You were doing—yeah. We can generate all that enthusiasm for each other’s insights about the Fed. We killed Bell Labs because we couldn’t find a throughline. There were so many different stories, so many different characters.

I know. We might come back to it.

Bell Labs—that would be one that, if I saw it, I’d say, “Yes, I want to listen to that.”

It feels like a Michael Lewis book there. You could kind of do it as the history of the transistor, but then you miss all these other things, like radar.

Yeah, there’s so much stuff that came out of—

Did you do Xerox PARC?

No.

No. No. But yeah, it’s another one, right?

Yeah. I guess Google still has this spirit where they’re doing lots of stuff that maybe you can’t identify instantly. The payoff is right around the corner. This kind of, “Let’s just fiddle around and see what we find” stuff. Corporate America, I think, just generally does less of that than it used to. But big tech—no, I’m trying to think. That’s interesting.

So, I’m stealing this idea from our friend Hamilton Helmer, but he brought up this idea in conversation with us that there is a positive benefit to monopolies because they create the cash flows that fund these sorts of boondoggle basic research. A lot of the most important—

Yeah.

Technologies that move society forward—you need some waste. They come out of these—you need fat.

Yes. And boy, does Google have that. Their last quarter was their first $100 billion quarter ever.

Astonishing.

I know.

And that’s how they fund the next Gemini.

Right. Right. And Waymo, and—

Yeah.

So, actually, you just brought up your friend Hamilton Helmer, who I had never heard of until I listened to your podcast. You do that thing of the seven powers. Let’s just briefly, since we’re here: How you study a business—that has been a useful analytical framework for you, whatever these seven powers are? I’ll never remember any of them, but that’s why we say “network effects” and all that. What is it about Hamilton? Where did you find him, and why are you making him so famous?

There are a lot of good frameworks out there for analyzing business strategy, and this one just clicked. I read it and thought, “That is actually the complete list.”

When did you read it?

You found him, I think, in 2020.

He was like, “Read that list.” I read the list, and it was all gobbledygook to me. The words didn’t mean anything, but you have to know what they mean.

If I asked you in plain English, can you brainstorm all the ways in which an industry-leading company gets away with being more profitable than its competitors and gets to keep being more profitable?

That’s the list you would come up with. You might find what creates the moat.

Yes.

Yeah. Right.

Right. But why did you decide you even needed that framework?

It goes hand in hand with durability. If you’re trying to study why a business is durable, the cause is the power. We’d always been searching for a way to land the plane on the episodes. We tell this story and finish the story, but there’s that unsatisfying feeling of, “What’s the takeaway?”

Buy or sell or hold, right?

Yeah. We did bull and bear and grading and blah blah blah. Once we shifted to, “Hey, we’re studying these great companies, these durable businesses,” power felt like a really good part of that—like, so what? Why?

For me, a critical part of the process—it goes back to writing a senior thesis at Princeton—is that everything needs to pass through multiple cycles: source material through my brain, through my fingers onto a keyboard, and recycled back through about 3 times. I don’t use AI note-taking. I write physical notes in hard-copy books. If I’m not doing that, I feel like it’s not going to work.

And what do you do?

I have exactly the same issue. I discovered I wanted to be a writer while writing my senior thesis. I had no ambition to do it before then, and then all of a sudden I thought, “Oh my God, I love this.” What I loved was the constant recycling of the thought.

I don’t want to get too far away from your podcast, but I’m sitting with my notepad. This is a filter. If I’m talking to you, it takes effort to put it down on the page. I don’t record anything; I’ve filtered it. It’s interesting enough to me that it belongs on the page. Then I go home and write the notes up quickly. That’s another filter. If what’s on the page interests me enough to put it in a Word document, then it’s been filtered again.

I keep those notes while I’m working on a book, and the file will be 500 pages long by the time—maybe longer. It’s just stuff. Then I start thinking about how to frame the story. What is this story? But that’s usually months down the road.

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

It had been sitting there for a year, waiting? Do you think you would not have published the book if it hadn’t blown up?

Oh no, I wouldn’t.

Wow, you would have killed the book.

Well, I might have found a way to do it. I might have found a way to do it, but I hadn't found a way to do it. It was always the same conversation with my editor: “I just don't know where this is going. I don't know what the end is.” When I don't know what the end is, I don't know what the beginning is. It's that simple.

It wasn't that I smelled fraud or anything like that. It just didn't have shape to it. It was picaresque experience after picaresque experience. It was like Groundhog Day, but the first chapter over and over and over and over. There was material there, which is why I kept coming back. It was fun, and there were endless scenes, but it was just like, “I don't know.”

Yeah, but scenes don't make a play.

They're necessary but insufficient.

Yeah.

But the bigger point—I hate to be talking about me. We should be talking about you. But this process you're doing, I smell this from your work.

You're doing something that rhymes with what I do. You are gathering before you make judgments. You're open to learning things. You're trying to be the world's best student. You want people to want to teach you. If people want to teach you, they will teach you. Then you can take what you learn and present it in the best way you can.

I basically take a note in 2 scenarios. One is, “Oh, I just figured out how that works, and that is so cool.” Like when I learned how a mechanical watch works, I was like, “This is such a cool thing.” I got excited.

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

Those are the greatest moments. Yeah, it is.

Or the Costco ballet.

Yeah.

Then there's, “I just made a connection.” I'll be on a run, listening to an audiobook. It'll be the 3rd audiobook that I've listened to about a certain subject, and I'll hear something and think, “Oh, that's why.” I'll stop and write my little Apple note: “This timestamp in this book—I just realized why.” I can't think of an example right now, but this happened.

Later, I go and look it up in the Kindle book, and I figure out how I want to explain the connection that I just learned on air. But it has to come from remembering and bottling up my excitement about learning it in that moment to share that enthusiasm with the listener.

Yeah. Yep. That's all very familiar to me.

So give me a 4th example of a lesson learned from an episode.

I feel like I learned this from Ben Thompson.

Tell the audience who Ben Thompson is.

Ben Thompson is the author of Stratechery—

Proprietor and founder of Stratechery.

We did an episode on him and with him a few years ago, but his writing is sort of the thing that we bonded over when we met. He's a great strategy and technology writer.

Internet niches are way bigger than you think they are. If you think you're writing about a niche topic, the internet being a global community of 4-ish billion people means that, while there might be 6 people in your geography or your local town who care about it, there are millions of people online. The internet is your way to reach them.

No matter how niche you are, it's actually way, way bigger. The corollary to that is that in the media business—in podcasting—you can grow your audience, and thus your revenue, and thus your importance in the world. All outputs can scale completely independently of your inputs.

David and I effectively do the same thing that we did 2 years ago to make an episode, but the audience has grown so much that every output from the business is dramatically different even though all the inputs are the same. We really took to heart that the niche of smart people who care about how these businesses work and why the world is arranged in this way is large. We don't have to scale our operation to reach them. We just have to keep making the highest-quality stuff and giving people a reason to share it.

What is your operation? I mean, we're in here with a large group of large men.

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

I built a studio in my backyard. That's the YouTube.

You mentioned that you send your stuff to an editor without naming the editor.

His name is Steven.

Steven is part of what you do?

He is. I'm not sure he'd want us to share that on air.

So, Steven—the mysterious Steven.

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

And he works only for you?

He's the best.

He's the best. So he's clearly good at his job.

Steven is as maniacal about creating the best audio product, and video when we do it.

We have no assistance. No, we do everything.

You don't sell. You don't have ad sales. You do all the—

We love doing the business.

You do, right?

We love doing the business equally as much as we love making the show.

And I love the alignment. The business and the content are equally important, and they're married.

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

So I want to stop here for a moment because I want to talk about this before we move on from Steven. Steven is in this rare position of basically being the only person who helps you create this thing.

Yeah. Yeah.

How different is the—

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

Right. So how different is what comes out of Steven from what you give him?

8 or 9 hours of raw audio with dozens of retakes, sometimes hundreds of retakes.

We produce each other as we go.

Hundreds of retakes?

Yeah. David will say a paragraph, and I'll be like, “Wait, wait. I want to do that in an Acquired tone.”

Wow, that's amazing. Hundreds of—hundreds of retakes. You do hundreds? That's incredible. Well, I would have guessed, if you just asked me, 5.

You sound like a millennial.

I just want to be appropriately amazed.

You can't do hundreds of retakes?

We cut literally all the time.

Literally. Totally. But the retakes are a different thing. The retakes are—

We didn't say that clearly enough. We didn't land the point. I made a point where I wasn't paying enough attention to what David was saying because I was looking over at my notes, and then I made the same point and he's like, “Oh, I think you missed it.”

I just said that. Can you just say the last thing as an aside, and then we’ll move on.

Oh, I see.

Or I explain something in twice the amount of time, and David’s getting bored. He’s like, “That was a real monologue. I think we’ve got to keep the story moving.” And I’m like, “I agree.” When I wrote it in my notes, I was really excited about it, but now that we’re in the moment, I can feel that it’s slowing down the energy.

So let me take 2 minutes, retype some stuff, and figure out if there’s a condensed way to say it so that it can flow seamlessly with the energy of the story. But that is all in the 8–9 hours.

Right.

So he’s cutting it in half.

Yeah.

And when it comes back to you from him, he turns 8–9 hours of that into something intelligible—

Into, like, 5. It’s probably appropriate to call it Release Candidate 1, to use a software analogy, right?

And then we make 500 to 800 additional cuts to cut another hour off of it.

Are you doing it on the page? You’re doing it on the page?

We use a tool called Descript. We sort of use it—

You’re not listening to it. You’re reading.

We are listening to it and watching it. Yeah, watching it.

And how long does that take?

Days. Three days to edit.

Yeah, because we usually do 2 cycles of that.

And then do you send it back to him after you’ve done that?

Yeah.

And then we do it again.

I listen at 1×, and you have to feel where you get bored or where you’re just like, “I don’t care.” You have to get so sick of the material that you’re just cutting bone.

You’re the hero on this. I can’t bring myself to do it. I listen at 2.5×. You are the hero for doing—

You don’t actually listen to it at normal speed. Ben really jumps on the grenade for this.

Almost always. You can cut the beginning of almost everything. There’s always throat-clearing and windup. You don’t need it; you just go right to it.

Once I start to feel it get taut, I just love it. I love it. The hardest thing is getting the stuff out in the first place. Once it’s out on the page, you can start cutting, and each time it gets better. I find there’s no despair associated with it.

There’s stuff in the original draft that’s a remnant of the point you thought you were going to make. By the time you get to the end, you’re like, “That’s actually not the important thing here.” I no longer need that whole setup.

Or it’s in there in all kinds of other ways.

Yes.

Yeah, but it’s important that you had the idea. It’s buried in the story some way.

Yeah.

David will often highlight something and go at Ben, “Okay to cut belaboring?”

So the minute you’re there, you know it’s got to be cut.

Yeah. Mostly, right? Our default is always cut. Always cut. And so you get 5 hours down to whatever it is—3½ or 4.

3½ is the sweet spot.

And how do you know when you’re done?

Yeah.

So, deadlines. You’re never really done. I would love one more edit.

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

No, no, no. I owe a book on June 1 that will come out September 29. I’ll start writing it on January 5, and I’ll write it in 5 chunks. Each chunk will be delivered at the end of the month, and I won’t be able to go back.

Okay. Wait, wait, wait, wait. What happens if you get to June and you’re like, “I’m not—”

Can’t. Can’t.

Okay, so it’s a hard deadline. It’s a drop-dead deadline.

Yeah. But I always find that once I establish that deadline—which is a reasonable deadline, because I’ve spent a year doing the work and I have the material—my mind just finishes when it needs to finish.

By the way, it’s very polite of you to ask me questions about myself. [laughter] No, but somehow, if you take your deadlines seriously, that’s the key. You take the deadlines deadly seriously and just refuse to violate them. Then you’re serious when you establish them, and your mind just finishes when it needs to finish. I’m always a couple of days ahead of it.

I would talk a little bit about the business side, because this is something that I certainly don’t know anything about in your lives. You’ve turned this into a very lucrative franchise, and unlike most podcasts, you’re not subcontracting the sale of ads to some other company. You’re also not promiscuous about who you have as advertisers, so you have 2 or 3 or 4—whatever it is—major advertisers every season and some stability there.

When you walk me through it, pretend Michael Lewis, Inc., is your target, and you want me to be the anchor tenant in your building. You’re coming in to tell me why I should do this. Give me a sense of it that way.

I’ll let David give you the sales pitch.

The philosophy of the whole thing comes from wanting to create a durable business on our side and a great listener experience on the listener side. I always feel, as a listener, so disrespected when there’s content on the podcast that is diamond quality—

And then they’re running crappy McDonald’s ads in the middle—

Usually not read by the host, usually with a jingle playing underneath.

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

The very first ad we ever sold, we said, “What sponsor could we get that would make people perceive Acquired to be a higher-quality brand?” So we could have our cake and eat it too.

I tried this. I had a thought about this on my podcast, and no one ever took me up on it. Just find the things I actually use, and it’ll be fun to talk about them. I want to tell the whole world about ExOfficio underpants, and I can’t get ExOfficio to return my calls. I mean, that kind of thing. Foolish.

Wait, so literally, you’re telling me that Michael Lewis called?

I didn’t. I just gave my podcast a list of things that I really love. Just love.

Oh, wait. You’ve got to call them. That’s the problem.

That probably is the problem. My podcast company doesn’t actually sell the ads. Another company sells the ads. I thought that was the way to make it seamless: the things that are actually integral to my life would be the things we’re talking about.

So that is a structural blocker to creating the best experience, right?

Right.

And everything has a trade-off. The trade-off for us is that we spend an enormous amount of time engaging with our sponsors. We write a custom read for every single sponsor, every single episode. We try to write it as if we’re almost talking about what we think is interesting about the business.

We’re doing this mini, 2-minute analysis, and there’s some horse trading there: We have to make these points. But for the most part, the best sponsor relationships are the ones where they say, “Yeah, your listeners are going to respond the best to what you have to say.”

So if you’re Michael Lewis, we want you to be a sponsor. I would say we’re not coming to pitch you. We’re deciding 1 year in advance—now, 2 years in advance—what we want our slate of partners to look like, right?

We say, “Michael Lewis, Inc. is going to be super strategic for us in 2027 and 2028.” We start planning: How are we going to make this happen? How are we going to make sure that Michael Lewis, Inc. is as good as we think it could be? How are we going to make sure that we’re going to work really well together, and that you’re going to see massive ROI from us?

At any point, do you sit there worrying that you’re compromising the shows because of the relationship you’re about to have with an advertiser?

No. There have been companies that don’t feel Switzerland enough that come to us, and we just like the idea of not picking a venture capital firm to say, “We think this is the best venture capital firm.” It’s too much like picking a team.

I’ve never heard anybody say that: “They don’t feel Switzerland enough.” Is this a cliché in the VC business?

No, I think that’s a lovely line. So you’re looking for Switzerland.

Yes. And what do you mean by that?

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

Coca-Cola.

We don’t really deal with—

You don’t? Okay, number 1—

Okay, here we go: B2B companies with very high LTV products. Basically, we want companies that are doing a significant number of multimillion-dollar annual deals with customers, because we want to feel like we can deliver a couple of those incremental deals for you, directly through us.

Yeah. And then it’s just a no-brainer. Many of our sponsors have been ROI-positive on signing 1 large customer who heard about them on Acquired. That is awesome. Often, it’s not even just hearing about Acquired; events are a big part of this. We do events with almost all of our sponsors.

So, I’m thinking about hiring you. What kind of event will you do for me?

We’re happy to join for a customer dinner. We’re happy to speak at your big annual customer conference. We’re happy to go to a sporting event with you and your top clients.

And at that sporting event, will you do, like, some fireside chat?

Some fireside chat. Yeah.

Interview your CEO.

Interview a legend from the sport. How many hours of your time am I going to get?

A couple days. A couple days. We’re there for the whole thing, and while we’re there with you, it’s like, how can you maximize using us?

You promised to be my friend.

Yeah, of course.

You’ll be my friend, too, in the bargain.

We’re great friends with a whole bunch of people. Okay, so then it gets even better. Let me tell you more.

Tell me more. [laughter] I’m getting interested. I’m on the edge of my seat here.

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

Founders are executive decision-makers, right?

But really, I mean, take a step back. I think the whole business side, and a lot of the content too, but the whole business side of Acquired starts with the fact that we were venture capitalists. We’re not media people. We’ve always taken the approach that we’re aspiring to be a great partner to them. You’re going to help recruit employees, you’re going to help with whatever. That’s how we approach our partners.

Why do you think—maybe you’ve just answered the question—why do you think no other podcast has approached its business in the way you approach your business?

I think we just came at it from this—

You think it’s coming from a kind of media space, and the media space was kind of bad business.

Okay, here’s a take. The media business model of splitting the commercial activity from the editorial is a societal benefit that we all benefit from, from publications like The New York Times. Journalism. It is really good for journalism that that exists. The rest seems to have adopted it, and everyone doesn’t need to.

Right. If you’re the host of Acquired, it’s kind of great if you’re going and learning about your sponsor’s business, working with them, and trying to build partnerships with them. It was almost like we had the luxury of getting to rethink what our operational model looks like. So then the thing that brought it full circle a couple of years ago is that we added an investment fund. Not our public-company sponsors, but we invested in almost all of our private-company sponsors. So it came full circle.

You created an investment fund. You 2 are the ones making the investments?

Yes.

How’s it doing?

It’s quite full circle. We’re only a year in, but we’ve invested in 5 of our sponsors, and several of them are more valuable than when we invested.

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

Invest in all of your sponsors.

No, but a lot of the time we’ll just get a call that says, “Hey, we’re raising an up round. We want to talk about it in the next ad read.” And we say, “Oh, that’s cool. Can we invest a couple million dollars?” And they’re like, “The round’s 300 million, so no one on the cap table is going to care, and we love that you’re more aligned with us now, so we’ll make room.” So you’re only really accepting as sponsors companies that you would like to invest in.

That’s essentially the frame we put on the whole thing. It’s not a perfect model.

JPMorgan is not an example.

Right, right. We like having a couple of public companies: JPMorgan, Shopify, ServiceNow.

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

Oh, I think a lot. The question that I’m always wondering is, why aren’t there more Acquireds out there?

I’m asking that question now.

The format. Here are the ingredients: 2 hosts that independently go do research and, through narrative storytelling and analysis, create a conversational audiobook. It could be about businesses, it could be about sports teams, it could be about movies, political parties—it could be about any arena of ambition, as you would say.

There should be Acquireds in all these other verticals. In fact, the business vertical—there’s a lot more money in business.

Yes, in tech and finance.

I think there’s a bit of a cold start if you were to propose going and creating an Acquired for sports. The sort of risk, I guess, we took—we didn’t think about it as risk at the time because it was just a hobby—was that you’re looking at years of no or little monetization. It’s going to take a long time to build up the audience.

Versus, “Oh, I could go join a network. I could make a show on The Ringer. I could do whatever.”

Acquired was path-dependent on us having day jobs, for sure.

And day jobs in the industry that you’re going to cover, right?

Yeah, right. We built half the relationships and all the know-how and all the shorthand from being in the industry before.

So I asked you how many Acquireds could be created in just your space. What percentage of the advertising revenues do you think you’re hoovering up in the way you’re hoovering them up, in the B2B space—the kinds of people you’ll accept as sponsors?

Well, fortunately, there are a lot more people who want to sponsor Acquired than—

That’s what I mean. How many more are there?

A lot.

We’re probably 3 or 4× oversubscribed with people who really could convert into sponsors if we said, “Sure, we’ll take you.”

How come you don’t spawn an extra Acquired or 2? How come?

Well, I think that—why don’t you create the next one?

Then we’re not Acquired.

Then we’re not—do less. Then we become CEOs, right? We do not want to build.

Yeah. So now you’ve decided—no, it’s funny. There’s a line that you don’t have bosses.

Yeah.

You have incentives, but you don’t have bosses.

And we’re not other people’s bosses.

That’s like my life, too. I have a lot of incentives. I have no bosses. When you’re in any kind of creative thing, there is this benefit to not just following the financial incentives and not trying to milk every last penny out of it, and to creating scarcity—not just for the sake of the scarcity, but for the sake of the quality.

Yeah.

And only do it if it’s great. If you only do it, it’s a long-term strategy. I mean, it’s not that I think all my books are great. I don’t write them, though, unless I think they’re going to be great. Yeah, I just don’t.

Well, why would you allocate—let’s say you have a portfolio of however many more years you think you’re going to write, 20 or 30. Why would you allocate, I don’t know, a year and a half? Why would you blow a slot on a bad book?

That’s a gaping hole. I’ll give you a reason why some people might. A publisher offers me a gazillion dollars to write a book about X.

And how much?

I know the book’s going to suck because it’s not actually a good idea for a book, and it’s not going to be fun to do, because all the fun is in whether it may be great.

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

Zero. So this is the thing people miss: What is Lane Kiffin going to get out of an extra couple of million dollars going to LSU from Ole Miss? The average athlete is taking a few million dollars more to move his wife and kids from one family, one city that loves him and that he loves, to some strange place where everybody’s going to be unhappy.

People do this all the time.

All dollars do not have equivalent value. No, the marginal dollars have way smaller value than the early dollars. Sometimes they end up having kind of negative value, and you become a person for whom that’s what you’re about. It’s like you’re saying, “I’m going to be the person who just follows the financial incentives,” rather than, “I’m going to control them.” They could be useful. They get you out of bed in the morning for a while, but you have to control them.

So, I love that you’re not milking the market.

I think there are 2 different things that we’re talking about here. One is milking the market, yes or no. The other one is: do you want to build an enterprise, or do you want to stay a boutique?

To your question, for us, why don’t we create more of Acquired? We don’t want to manage other shows or podcast hosts. People often tell us, “Oh, you’re building this business. You guys are sort of foolish because there’s all this key-man risk. You’re building this great business, but if either of you leave, unfortunately, your business has low enterprise value.”

And we’re like, “Okay, but if we sold this business, then we would just go start Acquired. We’re already doing the dream.”

Yeah, the dream is what we’re doing.

All right, so I took us off on a sidetrack. We’ve only gotten through 4.

I want to hear the fifth. What’s the fifth lesson you learned?

We’ve gotten through, like, 5 or 6. We’ve got a bunch.

Founder control was a huge one.

Is this from Google?

I think we, again, learned this early, but then got reinforced through episodes.

Meta, Rolex—

Trader Joe’s—

IKEA.

Yeah. Stay private, be family-owned.

You don’t even have to take Meta as a public company, but, yeah, founder control. I mean, Google, too. Google’s founder-controlled, too.

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

I think there’s an argument to be made that, in any industry where there are both private and public companies, the private companies end up being much better run. Mostly bad things happen when companies go public, and certainly they’re less pleasant. So, public or private, your point is founder control.

But there’s also just a personal-choice element. Last year, we had an existential crisis—is way too dramatic—but I think something that was on our minds was, “Are we being wussies? We’re not doing Hollywood. We’re not adding more shows. We’re not building an enterprise.”

What triggered this? Are we being wussies?

We were currently researching Bell Labs, and I think I felt like we were chasing this esotericness. So, we sought some advice and went to one of the best investors ever, whom we’ve gotten to know, who’s a fan of the show—somebody everybody would know.

We asked him to dinner and just said, “Hey, we’ve got this. We could do all these things. We’re not like Hollywood, et cetera.” We sort of expected his comment to be, “Dream bigger. Go for it. You guys are being wussies.”

And he sat there and thought for a minute, and he said, “I have seen so many founders become trapped in prisons of their own making, in their own companies.”

And they’re successful prisons.

Yeah. Yeah. You guys have avoided that fate. Don’t go down that road.

But what is—I’m missing the connection, actually. Why, if you were less wussy-ish, would you have created—

Hire people, take on business, start a second show.

Yeah, business wussies. I thought maybe you were saying you were avoiding the content.

Yeah, that’s a whole separate kind of wussiness. But, no, no, we asked ourselves, “Are we being business wussies?”

But they sort of go hand in hand. Cheap growth is covering the current thing.

It will. I’ve been toying with this idea of stored potential energy: great businesses have a stored potential energy that you can’t see in the current financials.

Great people have that, too.

Great people have that, too. They have these reserves that just come out when they need them. They aren’t presented—obviously, they aren’t sparkling there in front of your eyes, anyway.

I think we’re trying to store up as much potential energy in Acquired as we can, rather than, anytime there’s a way to make it show up on the financial statements, letting out the pressure and being like, “Yep, second show. Yep, more ads. Yep, dynamic ads from an ad network.”

You can say yes to all these things and sugar-high the current profits, or you can try to figure out how to store up as much potential energy as you can.

Right.

And I think once you hit the point in life where money won’t make you any happier, there’s actually no point to letting any of that potential energy out. It just creates goodwill for everyone—most principally, selfishly, yourself—to keep it bottled.

Right. All right, so how did we get on that? I don’t know how we got that from founder control.

So, that was number 5. Number 6—

Okay, I’ve got one. This is a nonobvious one.

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

Sometimes we hire a production crew.

Yeah. Sometimes last year we added a 4th ad slot. We always had 3. Last year we looked at ourselves and said, “There are 4 podcast episodes. We’re currently at, like, 2% or 3% ad load. Everyone else is at 15%. God forbid we go to 4.5% of time.”

So, we indulge occasionally.

Okay, so sometimes we make episodes that either we think are going to be great or we’re just really interested in, and, numbers-wise, they don’t perform.

They don’t. The great thing about podcasting is it’s always within, like, a 20% to 30% range, so it’s not like it’s a total flop.

But give me an example of the podcast—the extreme version of the one you were most excited about that didn’t resonate with your audience in the same way.

Okay. Well, the lesson here is going to be—yeah, Nintendo. We thought Nintendo was going to be such a great episode. It’s an incredible history, an incredible story, an incredible company. It’s an N-of-1 company, durable for over 100 years. It’s been through so many iterations. People love it.

It underperformed our benchmark at the time by 20%. We were like, “Oh, man.”

And then we did a Part 2 to really dig ourselves—

Yeah. You know what people don’t love? Part 2s.

Yeah, they really don’t love Part 2 when they don’t love Part 1.

Let me tell that joke again. It’s so funny that you might do better the second time.

Exactly. Exactly. Exactly.

It’s a necessary subset. You never tune in to something called Part 2 without Part 1. The dumbest thing you can do if you’re focused on growth is have an underperforming Part 1 followed by a Part 2.

Right. Yeah. Yeah. But we did it, and you liked it. We had a great time.

Nintendo—it’s one of the most interesting companies. It started as a Yakuza company. It’s crazy.

How did it start?

It was playing cards. Gambling was illegal in Japan after the Meiji Restoration.

Okay.

And so they made Hanafuda cards, which are cards in Japan, and the Yakuza was the main customer.

And then they got into toys.

The Japanese mafia was the main customer. That’s funny.

Yeah. This is an amazing story, and they have this philosophy called “lateral thinking with withered technology.” If you look at Nintendo systems, you can go way, way, way back: it’s not bleeding-edge technology. It’s a couple of generations back. How can we take withered technology and think outside the box with it?

The Wii is the best example of this. The Game Boy was the original example of this. The Game Boy was basically a calculator. It didn’t have a color screen; it had 2 buttons, but it was this incredible success.

You can see the passion.

I feel like I’m about to get you into part 3.

Yeah, exactly. We’re going to do part 3.

Okay, okay, okay. But here’s the lesson: another episode that was totally like this—Indian Premier League cricket.

Love that show.

Incredible story. Incredible story.

You either really loved it or didn’t listen at all.

Yeah. This is the lesson. It’s the first of your shows I listened to.

That started with IPL. You’re making the point.

This is why we did IPL. It’s all worth it if we just got Michael. I’m a partial owner of the Rajasthan Royals.

You are not.

I have a Royals jersey.

You and Manoj—Manoj is the majority owner. He’s the majority owner. So, it’s a very tiny slice.

I still can’t explain the game.

Okay. How did you become a minority owner?

Two friends—I’ll leave their names out of it, but you know who they both were—called and said, “There’s this guy who’s got this cricket team. He wants to make it the Moneyball of cricket.”

Oh, they’re the Oakland A’s of the IPL. Exactly. I got it.

And he’d be open to having you invest. They were both good filters. If they were interested, it was already smart.

I also thought it was small enough that if it went wrong, it would be an amazing story.

And even if it goes right, even if it goes right.

Have you met Lalit Modi?

No. No. I haven’t met anybody but Manoj. And it’s—oh boy, oh boy, oh boy.

Have we got a subject for you.

I don’t want to redo your podcast. It’s just that there may be something down the road.

Anyway, that was the first one I listened to.

That was an unbelievable story.

Oh, it’s unbelievable.

Everybody in the world should listen to this thing.

And it underperformed.

And yet it underperformed.

Okay, but here’s the lesson: both Nintendo and IPL were the first listening experiences for some incredibly influential people who have changed the direction of things. I think we can share the whole story.

Nintendo was specifically listened to by one person on the Meta executive team, who found it and thought it was amazing and sent it to the entire Meta executive team.

Right. We built—

We built a relationship with them, and then when JPMorgan called us and said, “We’ve got Chase Center—”

Yeah.

And they were like, “What would you do?” We asked this person, “Hey, do you think Mark would want to do it?”

And he said, “I don’t know, but I’m going to ask him right now.”

Right. And so without the Nintendo episode, Mark Zuckerberg doesn’t do the 6,000-person event.

No, a 6,000-person event.

And we have some similar stories with IPL. The point is that doing episodes that 1 or both of us is just insanely passionate about—

Where did you learn this from? From doing these episodes and having them underperform?

No, we learned it from LVMH. I pitched that like 3 times, and you were like—

“No, no, but LVMH was a banger. It performed great.”

Which is why we learned the lesson that if 1 of us feels passionate about something, go for it.

Oh, no. But I’m making a different point, which is that if 1 of us feels passionate about something, even if the episode is a relative dud, it’s still worth doing because somebody latches on to that.

That’s exactly right. If you don’t feel anything, there’s a chance nobody’s going to feel anything. If you feel a lot, someone’s going to feel—

Someone’s going to feel something.

That’s right. Yeah.

That’s right. So go. Trust that feeling.

Yeah.

Yeah. It’s about the magnitude of the way a small number of people feel about episodes, often more than the—

Yeah, the spread.

I think that’s right.

Yeah.

No, sometimes we’re passionate about something and it becomes a banger. That’s the ideal. Renaissance Technologies. That was amazing. That was incredible.

That’s 1 of the episodes I’ve listened to. I loved it, too.

So great. It’s 1 of the 2 great mysteries on Wall Street: how they do what they do—

—and who is Satoshi.

Those are the 2.

I kind of like the take that they invented machine learning a decade or 2 before everyone else and kept it secret. It resembles LLMs, and they were able to find signal that existed only in really weak ways in a predictable, alpha-generating—

—but nobody else found it, too. So it all went away because they hid it at the same time as they found it.

Yes.

That’s mind-blowing if true.

That that could still be going on—I mean, you can see why it worked through the ’90s.

Yeah.

Yeah. Yeah. It’s really hard with Jane Street and Citadel and all these other places looking for every bit of signal in the marketplace. It is an amazing story, and it’s 1 of the books I didn’t write that I wished I’d written.

Did you consider doing it?

Jim Simons’s son had a kid in my oldest child’s class in high school, and I approached him and said, “Look, I can’t do it unless you want me to do it. There’s no point.” And he said, “No, no, no. This whole business of doing it by radar completely from the outside—you’re going to get so many things wrong and embarrass yourself. You need to be so inside that the person you’re writing about doesn’t say, ‘That’s just completely wrong.’”

I could have done that book, but why? That didn’t appeal to me. What appealed to me was that he was at the end of his career. I didn’t need all the secrets, but I needed some of the secrets, and I would need him. But that’s 1 that got away.

Yeah. If a butterfly had flapped its wings differently and he had collaborated, it would have been a fabulous book.

It would have been a fabulous book.

It would have been a fabulous book. All right, number 7.

It’s a different twist on the NFL, but we definitely learned it from the NFL: create spectacle.

All right, we now have a live-event strategy.

Yeah, there are 2 parts. 1, we’ve stopped thinking about Acquired as a habit for people. Most podcasts—your dream is to create a habit.

Yeah.

And ours, we’ve thrown that out the window and said—

You don’t do enough of them.

Right, right. So we need to create events. It needs to be the current thing when we release an episode, for whatever your group of friends or acquaintances is. It has to be the watercooler conversation. It has to be Monday Night Football, and then once a year we have to have a Super Bowl.

Yeah.

And doing the Chase Center show and then the Radio City show—there’s a very small number of people in the audience. I mean—

6,000.

6,000. It’s the world’s largest indoor theater. It’s 6,000 people in this incredible venue in New York City. Relative to the number of people who listen, it’s 0.4% of the audience.

Tiny percentage.

But the amount of heat and light created from the idea that you did that show is more impactful to building the franchise of Acquired than any given episode, maybe even than a whole season of episodes.

What’s the first spectacle you created?

Chase Center was the first. We had done a show in Climate Pledge Arena in Seattle, but it was 1 section. By being able to say we had done an arena show—even though we talked about it on air as the Acquired arena show—we were able to say to JPMorgan, to Chase Center, to the Warriors, “We have done this before.”

I’m going to ask a couple of rude questions. Your Radio City Music Hall event is with Jamie Dimon, 6,000 people, Meredith Kopit Levien, the New York Times CEO, and Barry Diller. So, how many people are there for them, and how many people are there for you?

We did not announce the guests.

Oh.

So they were all there for Acquired, mostly because I wanted to give this answer. We knew Michael, at the end of the year, was going to ask this question. So all they knew was that it was going to be Acquired with a guest.

Was it sold out before you announced the guest?

We didn't announce the guest. The guest on stage is a surprise.

Yeah.

Oh, it hurt in my soul when we did Chase Center afterward, reflecting on it. There was this little thing of, “Did all those people show up because it said Mark Zuckerberg on the poster?”

Yeah. Well, now you know. So now we know. So now you know. So that's your form of spectacle: these big public shows. Any other forms of spectacle on the horizon?

Well, we are doing the actual Super Bowl, so this is coming. We basically manifested this.

Are you the halftime show?

I wish. Us and Bad Bunny.

I would love the reaction of the NFL fan base. It's not going to be music.

Ben and David are going to do an Acquired episode.

Yes.

Yes. With Peyton and Eli Manning.

The NFL—that would be so good. ManningCast is the only way I watch Monday Night Football now.

We're doing the Innovation Summit. The NFL is launching an innovation summit the Friday before the Super Bowl because the Super Bowl is here in San Francisco this year. So they're launching an innovation summit the Friday before the Super Bowl with all the big partners in the NFL, with Roger Goodell. It'll be in the city, in San Francisco, and we're going to emcee it.

Okay. So do you know who your guests are going to be?

We do. They haven't been announced yet, but it'll be on par with our past events.

Where are you doing this?

At SFMOMA.

Oh, yeah. Okay.

It's not going to be open to the public. It'll be streamed.

So it'll be a different style of event—VIP for the NFL's partners, right?

But, yeah, it's going to be incredible.

All right, let's go to—I think we're on number 9.

All right, we're home. So we made Costco in the back half of 2023, but it was 1 or 2 episodes after we made Nike. Nike, I think, ended up being a fine episode, but I tried way too hard—way too much pressure on myself. I won't speak for you on the Nike episode, but it came out flat.

We read 9 books between us, right, to prepare.

I think it was 11. So it was just too much for all sorts of reasons. We were burnt out. We weren't happy. We decided to do Costco, and I said, “I just got to take a different approach here. I got to play loose on this one. I can't play tight,” to use the sports analogy. I said, “Let's find the 1 book—the right book.”

Right. It helped that there was only really 1 book. Read that book.

Sol Price's autobiography, right?

Read that.

Right. Use that as the main source. You got maybe 1 of the best primary-source interviews ever: the CFO of Costco gave you a 1-on-1 presentation.

“Come over to the office and I'll sit you down and give you the entire whiteboard and PowerPoint on how the Costco business model works.” We spent the whole afternoon together, and it was—

Between those 2 things—the book and that time you spent with Richard—we didn't need to do more than that.

When you went into it, did you know anything?

Yes.

What did you know?

When we went into starting work on Costco, we knew nothing.

Correct. But I knew a lot going into that meeting. I wanted to be able to hear the things he was saying that were different from common wisdom. There are a lot of think pieces out there about Costco. The Wall Street Journal loves to write about it, and investors love to write about the stock, so you can kind of—

Charlie Munger's favorite company. You know, there's lots of stuff out there.

And I wanted to hear—this was actually one of the last pieces of research because I wanted to be really prepped. You're talking about when you're working on an episode and you're going for a run, and you make some connection or some insight occurs to you, and you stop and write it down.

What? Give me a few of the ones about Costco.

Low SKU count drives everything.

Oh, all right.

That's the—

Do you want the Charlie Munger talk? This is the—

The number of things they have on the shelf. So unlike Walmart, which has hundreds of thousands of things—

Walmart has 100,000 to 200,000 SKUs.

You get what you get. You don't pitch a fit. Whatever's there is there.

4,000 things.

Walmart is 100,000 to 200,000.

Yeah. And here's all the knock-on effects of that. If you only sell 4,000 things, it doesn't take a lot of volume before, very quickly, you are a meaningful seller to every single one of those products and vendors.

Suddenly you become really important to that vendor. Your merchandisers, since you only have 4,000—

So your incentives start to align.

Yes. The merchandisers have a very small portfolio. You're not dealing—

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

You're dealing with 7. You would know the absolute crap out of their product line. If you sell chocolate, you monitor the price in cocoa commodity markets, right? If it takes someone who's managing a very small portfolio to stay that attuned to each one of the things, the small SKU count means that any given thing on the shelf flies off the shelf pretty quickly.

So there's—yeah. So the turn—there's more flow.

They're getting, in some cases, multiple turns of cash flow before they pay the first time. On average, it takes them 27 days to sell through their entire inventory, which means that, on net-30 terms, they have 3 days of grace where the inventory is actually financed by the vendors, and then some.

And I think, on average, it's 27 days. So some SKUs are selling in 2 days. They're turning at 10 times a month.

There's no working capital in this business other than building more Costcos, right? Low SKU count for Costco is like low episode volume for you, right?

Right.

100%. We—yes. Right.

And with a low number of partners, we can put all of our being into it. It's not normal. It's not really natural for a business to sell fewer things when you could sell more things. But actually doing that—when you walk into Costco, the odd experience is the absence of choice.

Yeah. In fact, consumers kind of like not having too much choice.

There's all this research showing that if you sell 30 different kinds of jam in the supermarket, you will sell less jam than if you sell 3 kinds of jam because people are paralyzed by the choice.

Yes.

And you feel like, at Costco, someone has made all these decisions for me.

And they're good decisions.

Yes. It's curated.

Yeah. You can't just run this strategy willy-nilly. If you're only going to sell very few things, you're only going to make very few episodes. It puts a lot of onus on making exceptional choices on the things that you do choose to carry, right? So it's a very highly leveraged strategy.

But you didn't know anything about any of this when you went into the episode.

No. The only reason we did the episode was that it was Charlie Munger's favorite company.

All right. Give me another lesson.

How are we doing?

Is this the last?

This is Acquired, Michael.

Okay, I know. I know. I know.

You said you didn't have any plans tonight. We were sitting down with Morris Chang, and he was talking about TSMC. He told us that one of the ways they erred was by trying to exit the integrated-circuit market, or diversify from that market, and go into solar, memory, and there was one other thing too. None of those were as good of a business. The key insight was: you're already in the best business. Integrated circuits are the future and will be for a long time, and you're already the best at them. So stop trying to do other things and just do that really well.

Probably to a fault and with a bias, we believe that about Acquired every time we look at anything else: we're already doing the thing we should be doing. Don't go do something that we're less good at, or that will be less fun or right. We should always just make another episode.

You have decided to become venture capitalists—

Again.

So here's a question I'm curious about: What's the difference between what you do and what a normal Silicon Valley venture capitalist does before they put money in a company? Do you think you know?

Well, I think there's just a top-level misconception about what the venture capital industry is.

All right.

I think a lot of people think it is an analytical industry. You're learning all about the company. You're doing diligence. It's not that you're not—you are doing that. But that's the commodity. It's an access business, especially at the growth stage.

Yeah. Early stage, there's more picking involved.

But that picking is like a super art. Early-stage picking is not understanding a company—

Right. Early stage is a whole different thing.

So the entire bet that we've made in this chapter of our venture-capital careers is a bet that getting into the best companies is just an access thing.

The growth-stage private companies—you can tell what the good ones are. Most people can't get in. If you can, you should.

Or, with us, we do the work of choosing our sponsors, and then you're like, “Okay, great, that box is checked.” Our sponsors are not nonobvious companies that all growth-stage investors don't want to get into.

For the kind of work that you do to produce a podcast episode about a company, does it bear any resemblance to the kind of work a VC does about a company before investing in it?

I don't think so. I wrote a lot of investment memos in my early-stage career. They're all about how big this thing could be if it goes right. But you're almost always investing—at least I was—at the napkin stage, and so you're mostly making stuff up. You're dreaming about what this market could look like when it materializes, but you don't know. You're really just making a founder bet, and then you're trying to support it with all this structural information that is very imprecise.

Right. You're acting like you know the third or fourth decimal place when in reality you barely know the first one. You answer my question—which was, are these two things similar?—and you're saying, basically, not so much.

Well, I think it prepared us to create the business that we created, for sure.

But what have you learned? Put another way, what have you learned about telling a story that you didn't know how to do?

For me, reading your books and being a liberal-arts major at Princeton helped. Studying the businesses that we studied for Acquired helps me make Acquired far more than any investment memo I ever wrote. In fact, I remember that in one of my last few years as a venture capitalist, one of my partners asked me how I learned so much so quickly about different industry dynamics. I said, “It's not because I'm talking to all these early-stage companies, none of which know what the future looks like. It's studying these mature businesses and understanding what markets can look like at maturity.” Acquired helped me be an investor much better than the other way around.

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

I think we think about narrative structure and acts and what a story is. When we're reading books, sometimes a lot of books—especially corporate history books—are, “This happened, and then this happened, and then this happened, and then this happened.”

Yeah.

That's fine for cataloging history.

It's not a story.

That is not a story. At a certain point, we realized you can't do “and this happened.” It's the why of it. It's the story flow. The queen died, and then the king died is not a story. The queen died, and then the king died of heartbreak is a story.

Yeah. If someone had told you 10 years ago that two guys without any previous literary or podcasting experience were going to create this 4-hour conversation about an individual company, and people were going to be mesmerized by it, listen to the whole thing, and want even more, you would have said, “That doesn't sound very promising.” I would not have put money into that.

Yeah. You wouldn't, if you were an early-stage investor. Why it works is a really good question, because it's not obvious. It's counter to much of what's going on in the culture—attention spans supposedly getting shorter, blah blah blah—but it does work. It clearly works. It works as a business, but it also works as a creative thing. The why of it—you must think about this all the time. The why of it.

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

While you're talking to your mother.

Yes. So our brains all got 2 input channels. We used to focus on 1 thing at a time. Everyone now focuses on 2 things at a time. You can't do the same thing—you can't read and listen at the same time—but you can drive and listen. You can run and listen. You can do the dishes and listen. We have this massive tailwind of people having a large number of minutes throughout the day when they're doing stuff that they can also listen.

Right. That's true for all podcasts.

There are a couple of things that are true for all podcasts. 1 is AirPods. Basically, all the platform stuff that happened over the last 10 years—we started at the right time to take advantage of it. AirPods, Spotify—Spotify didn't enter podcasting until 2018 and now is, I think, over half of the market. It brought hundreds of millions of people into podcasting.

Apple Podcasts not becoming YouTube was actually great for us. It's a place where, when you get a listener, you really get a listener, and it's a durable, incredibly valuable place to accumulate listeners. Spotify is too, but YouTube is, in its own way, too.

But there were zillions of podcasts, and not many are doing what you're doing. So they all have the—

Yeah, we're dodging the question.

Corporate America becomes ever more important.

Yeah, that's completely right. What is going on in the economy is mysterious to people. A lot of your episodes have been about these companies—Tesla and NVIDIA and Microsoft and Google—and people don't really get them explained to them. That's a big part of it. If I had pitched you on Acquired in 2015, there's no way I would have said, “Acquired helps you understand why the world is arranged the way it is.”

But now I think that is absolutely the promise that we come through on.

Right.

I think the biggest reason Acquired works is kind of how you started off the conversation: it's our partnership. If just 1 of us were making Acquired, it would be a shadow of itself. The magic exists between us, and there are a million times over the last 10 years where, if we hadn't just been—you know, “burn cigarettes on our arms” aligned—it wasn't even a conversation. If our partnership had been slightly different, it would have fractured.

That's why we're still here. I know I want to conclude this conversation because we don't want to go 3 hours, but I want to do it by doing the 7 Powers and applying it. I want you to apply it to Acquired.

One of our most requested 7 Powers for Acquired: apply it to Acquired.

Great. Then I can learn what these 7 Powers are.

All right. We are definitely a scale-economies business. The fact that there's a large number of listeners to amortize all the inputs across means that we can do an unreasonable number of things for each episode. If you were going to try to compete with Acquired today, you couldn't do all the stuff that we do with 1 million listeners.

Yeah. Or the access, or the—

You could do it for 1, 2, or 3 episodes, but if it didn't grow quickly, at some point you'd be like, “It's not even about the money. Why am I doing all this work when no one is listening to it?” It would feel like that. There was this path-dependent thing where we always had the right product for the current amount of value that it created in the world, which you can use the listener base as a proxy for. Now, because the listener base is large, we can afford to do things other people can't, which is sort of the definition of scale.

Put this even more simply: let's say we and another podcast made the exact same episode. We've got 1.5 million subscribers; they have 0. Our episode is a lot more valuable, even if we said the exact same words in the exact same way.

Yep.

Okay. Scale economies. Yes.

Counterpositioning everywhere.

Counterpositioning. Counterposition. Okay. Do a little meta thing and also explain these powers.

Okay. Explain these powers. Counterpositioning is when you do something that your competitors just cannot respond to.

Give me an example outside of podcasting.

What's a great example of this? Southwest Airlines launches, and they only use 737s. Everyone else who already has fleets of other planes can't do all the streamlined operations that Southwest is going to do because they have all these other sunk costs in this diversified fleet.

Right?

Or counterpositioning that we're not volume, generally. Most podcasts sell their ads on a CPM basis, and they're incentivized to make as many episodes as possible with as many ad slots as possible. Our business is entirely structurally different.

Yes. We also, to your benefit, don't have shareholders. So we can do all these non-economic things because the thing we're solving for—the quotient—is actually our lives.

Right. 4 episodes as opposed to 6 or 8 or 1. It'd be cool if it ended up being just 1 episode a season.

This is David.

No, no, no. That's my nightmare—that if we end up at 1 episode a year, or 1 episode a season, it's time to hang it up. Time to hang it up.

Here's a rule: We don't work with agencies. If an agency reaches out and says, “We want to place ads on your podcast,” we write them a very nice note, if we're able to get to the email, saying, “We don't work with agencies, but thank you so much for your interest.”

Can you imagine working at a podcast network where there's a revenue opportunity and you're saying, “Sorry, we just don't—you're a middleman in a transaction, and therefore we won't take your dollars”?

Right. Yeah. So you're—

Counter-positioning. Yeah. All counter-positioning is in the number of shows you do. So the kind of shows—that's how it expresses itself.

But because our business is structurally different from most others, others can't do what we're doing.

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

If you like Acquired, more people liking Acquired is valuable because you get to talk about it with more people, right? No switching costs. Switching cost is a power, but it's super easy to explain switching costs.

Salesforce.

Yes. You've got CRM on Salesforce.

Okay.

And to switch to another CRM is just a huge amount of cost associated with that, even though, let's say, on a day-to-day basis it's the same price or cheaper. It's just such a pain and an economic tax to do a new implementation of something.

Right.

There's none of that. People can switch—another podcast is 1 click away.

Listeners can switch.

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

Yep. You don't have that.

Can I just also say this is so weird and uncomfortable for me? While I think we've created this beautiful gem, and I love thinking about it and talking about it with you, it is terrifying to talk about it with everyone and also feel so self-aggrandizing to talk about a little thing.

What a great painting I have made.

No, no, no. But it's very useful to think about this in this way.

You've got a framework. Let's think about your framework. What's the next power?

Branding.

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

Right?

Yep.

And that's just growing.

Yeah. Yeah. Cornered resource.

The business owns us.

Explain cornered resource. Give me an example.

Ben Gilbert and David Rosenthal.

Intellectual property.

Okay. Patents.

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

Now, we're assuming it's hard to value Ben and David. We're assuming that you're a cornered resource, that the reasons people are tuning in are your lovely voices and the way you enthuse over this stuff. It could be that you've just actually found a thing that everybody wants, and that if 2 other people came in, they would do it even better.

There are people who create things that resemble Acquired a lot. The Step Change podcast by our friend Ben Eidelson is one of them. It's doing really well for a podcast that has 3 episodes because there's magic in the format, even if it's not you.

Yeah, if there is a cornered resource, it's you or your editor.

Whose name you won't divulge. So perhaps that is a resource.

Yeah, yeah, yeah. It could be a resource.

And then the last one is process power, which almost all businesses don't have.

We have it in spades.

We totally do.

It's the same thing you have.

We kind of failed to articulate how an episode comes together. We tried on this conversation, and we didn't really explain to you exactly, mechanically, how an episode comes together.

Except I can understand the iterations. You vomit out 8 hours, your editor decides what's the best 5, it comes back to you, and you cut.

What do I show up with on recording day?

Oh, I see. So we should maybe do this a little bit here—process. Can I guess?

Sure.

Because I actually don't know what you show up with to the recording. You both, I assume, each take a kind of part of the story, like either the history or current analysis of the business, and you're responsible for that. You go learn about it, but there's got to be some improvisation here so that you don't tell each other exactly what you've learned.

More or less, I'm responsible for the story. We carve out 1 or multiple chunks that Ben will take, and then Ben is responsible for the analysis.

Right. And then you probably have some lines you want to say that you know you want to say, but you want to say them naturally. You have them stored in the back of your head, and you wait for the moment where you can drop them so they sound casual.

If that doesn't happen, you set it up, like Ben's point that SKU is everything in Costco. That kind of insight—the kind of thing you can reduce to something you want to get across in a line or 2.

What's hard about improv is disposing of all the things you imagined were going to happen in a conversation before they happen. Nobody does it perfectly. There's this tension between the script and what's happening organically between the 2 of you.

The truth is, it's both.

It's both.

I write a script. I write 10,000 to 20,000 words.

You do?

In sentence form, word for word.

Do you read it?

No. Well, I mean, I read it. It doesn't come out of my mouth. It comes out as a natural conversation.

So you write it, but then you put it to one side.

I have 3 screens in front of me.

You're kind of reading it.

I'm kind of reading it. Yeah. But Ben interjects, and it doesn't come out exactly as I wrote it.

It doesn't sound like a script.

But part of my process is I need to write a script—

To know what you think.

Yeah.

Yeah, it makes complete sense.

Well, but also to have it as a crutch there when we're performing. We can't keep all this in our heads.

But the real crutch you have is that you can go—you're going to do it for 9 hours and it's only going to be 4. So you can make any kind of mistake. You don't have to be perfect. You can screw it up every which way.

And you have a real-time feedback agent where I'm like, “This is dragging. I don't care about any of this prehistory. Cut, cut.”

Yeah, yeah, yeah. And yet all the audience hears is, “That's amazing. Oh, that's so interesting. It's incredible. I never thought of it that way. You're the best. I love you.”

We don't see any of the other stuff.

No, no, no. Yeah, it's in there somewhere.

All right. So take me further into the process. You have a script, and you don't, Ben, have a script.

I have a giant TextEdit document with a whole bunch of mechanical points I want to get across. I have some story points in there that I know I want to interject in David's story, but I know the things that I'm going to bring to the episode that I really care deeply about, or explaining how something works. So I have them written out bullet point by bullet point by bullet point.

And we've usually identified where that's going to enter in.

Right. Yeah.

But this only works because it doesn't sound like you're reading anything.

It sounds like—

But the reality is, it's a hybrid.

Okay. The reality is, it's a hybrid. Yeah. There's all sorts of stuff in there that we're sort of looking at about 6 hours into recording, and we're like, “That's not going to make it in.” And that's okay. It turned out it was not a salient point, right?

But the point of process power there is that we can describe all this. You could probably—I'm sure you have described in painstaking detail—

How you do.

How you do. But that doesn't mean anybody else can write a Michael Lewis book.

The process. But your point is, you have the process power that—

But the point of process power is you can tell them it's—

I see. Oh, I see. Yeah, that's interesting: that you have a process that can't be replicated even if you explain—

Even if we explain in excruciating detail exactly what it is.

What pops to my mind is that the magic, the pixie dust in a process, is trust. It's something that you get when you trust a process.

Trust the process. Yeah, Daryl Morey goes to Sam Hinkie, but the ownership of the Philadelphia 76ers—they didn't trust the process.

They wanted the process. They wanted to replicate what they’d been doing in Houston, but they didn’t trust it.

Where does trust show up?

I was just about to say that I think I trust my process. It’s self-trust, but that’s a form of trust. I know if I just told it to someone and they went and tried to do it, they’d be thinking, “I’ve got to record the things. I’ve got to do this. I’ve got—” It would make them wig out. And so, in fact, doing it my way would be a kind of weird handicap for them.

That’s the process. If you were to copy-paste the process, it wouldn’t have the same results, and it might, in fact, be a handicap, right? But there’s something emotional going on there—the difficulty in replicating it.

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

This is an MP3 codec or a JPEG. A JPEG doesn’t actually contain all the RGB values from the original photo, but a human can’t tell most of the time, and so it’s fine, right? Explaining a process is a lossy compression of the actual process.

That’s true. You’re actually not giving them everything.

And you’re not doing it intentionally.

No, it’s just impossible.

Language is a lossy compression of thought.

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

Well, uncompressing information is so funny. When you and I are communicating, I had a thought. I compressed it into a very narrow-bandwidth thing of speech. I told it to you, and you uncompressed it into your brain. It might actually mean something pretty different to you than it means to me.

That insight is at the bottom of my creative process. I assume when I write a book that what goes into people is something different from what came out of me, that they’re going to take it and reassemble it in a different way. And so I have to construct it in a way that there’s a hole for the reader to go in and just do what they need to do with it.

The more I just let the story retell itself, the less I tried to influence the way he thought about the story, the more the story landed. And then, of course, when you do that, you’re giving people lots of options in how they see the story and how they understand the story.

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

This is always one of our key goals with every episode: no matter what you think about the company, right?

You’re going to enjoy this episode, and you’re going to learn something from it. You may come away thinking, “It’s about understanding.”

“This company is terrible.” You may come away thinking, “This company is righteous.”

Yep.

But sometimes we don’t nail it.

Sometimes we don’t nail it, but that’s the goal.

Yeah. No, I think it’s a creatively fun goal. That’s the challenge, rather than just imposing your editorial view on the world. Present it in as elegant a way as possible and let the reader make what they make of it. Once you realize that’s the thing to do, it’s so much more fun than trying to muscle people around. All of a sudden, you’re dancing with a reader instead of hurling them all over the dance floor.

It also requires you to learn something new while you’re making the creative work. I was so afraid when we were making Trader Joe’s that we were going to remake the Costco episode, and I was like, “This episode’s going to suck because we’re not going to have the original enthusiasm, but not as good,” or, “It’s Costco, but it’s for furniture.” And we’re like, “Oh, this is totally different from Costco.” You have to have new insights that delight you as you’re researching it so that you can make something great.

I think the reasons Acquired will eventually fail don’t come from platform disruption. Maybe TikTok will make it so people want short-form instead of Acquired, but the more likely reason that we eventually fail is that we stop being delighted by new things we discover. Then we have nothing new to deliver to listeners.

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

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

Carveouts.

Carveouts. Yeah, we’ve got to do carveouts.

Carveouts. What does this even mean?

Okay, you’ll appreciate this. It was my wife’s idea back toward the beginning of the show. She used to listen to Slate’s Culture Gabfest, and they do cocktail chatter at the end of episodes. It’s just, “Hey, something unrelated.” She was like, “You guys should do that. That’s fun.”

Well, I understand the idea of it. Why is it called a carveout?

Well, okay. We were in a phase of Acquired where we wanted to brand everything around something, and we thought, “What could we call this? We’re not going to call it cocktail chatter.” We came up with the idea of a carveout. In an M&A transaction, a carveout is, you know, this piece of the purchase price goes to this set of shareholders for special reasons—their employees or whatever.

Okay.

So these are the things we’re carving out as things that delight us that have nothing to do with the rest of the episode.

Yes. But the name is just residual. It’s just a residue of your former incarnation.

Yeah. We used to brand everything.

We used to have a thing called the LP Show. We had all these little brandings.

Playbook is sort of a remnant of the older version.

Yeah.

So, what are we going to do? What are the carveouts? What are the specific things?

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

All right. We usually start with books.

That’s kind of funny, having you here.

I mean, so many of your books have been carveouts over the years.

Really?

Absolutely. Yeah, yeah.

So, it’s books that I’ve read in the last year?

Books this year.

So, I’ve got to confess I’ve had a very weak reading year because I’ve been really deep in 2 projects where I’ve been working, and when I’m working, often all I’m reading is for work. But I can think of a couple: 1 at the beginning of the year and 1 that I just put down.

The 1st one I read because my son was in high school at the time. He had read it, and he was enthusing about this 800-page novel. I thought that just didn’t happen very often. And it’s been out a long time.

It’s called The Name of the Wind by Patrick Rothfuss, and it’s a fantasy trilogy. He never got to the third book, and I don’t know what’s happened to him. He’s blocked, but I haven’t found a situation. I’m hoping he’s an Acquired listener, and I would tell him, “I can come help get you unblocked.” I know how to unblock writers. I have a secret power here.

Do you have a secret life as a fiction ghostwriter?

I do not.

But you have a secret life as a coach to writers and other writers.

This thing was so compelling. I couldn’t believe how good it was, and I couldn’t believe that he had just gotten stalled.

The Name of the Wind was what I read at the very beginning of the year. The other is the thing I just finished. It’s not like it’s a great book, but I think it’s so short, and it speaks to our moment and to how we govern ourselves. It’s—I always mispronounce his name—Vannevar Bush.

Vannevar Bush essentially created the American science project. It’s a little, basic book. I think he started it as a memo to FDR, then FDR died, and it ended up being a memo to Harry Truman about what America could do if the government, in the right way, got behind science.

He was saying, “Look what we did with the Manhattan Project. We can do it with biology. We could do it with the other hard sciences.” He was describing not a top-down approach—not like the government is going to just decide, “We’re going to fund it,” and let the scientists figure out what they need to work on. That was the big insight. So those are 2 books. How about you all?

Similar to you, it’s been a research-heavy year.

Yeah, we have young kids.

Right. One great book I read for research was Last Man Standing: The Ascent of Jamie Dimon and JPMorgan Chase, to prepare for the Jamie Dimon interview.

That was really good.

Total page-turner. It’s about the ascendancy of Jamie Dimon.

Jamie. Yeah.

And, 2, I just love reading Morgan Housel. His new book, The Art of Spending Money, is really fun. It’s where I get most of my latent ideas of, “Hey, hey, dummy, money is not going to make you any happier.”

He’s a great explainer.

Oh, great explainer. So good.

My 2 are—first, one is a reach back to December of last year with the Mars episode: Emperors of Chocolate by Joël Glenn Brenner.

You know, so good. Once I had a chocolate-related story, I flipped through it, and I never had time to read the whole thing. But yes, I know the book.

It’s the dual history of Hershey and Mars together. It’s, I believe, the only big book she ever wrote.

The other one is Morris Chang’s autobiography that we got to read. It’s currently only in Chinese, but we got to read an English version of it to prepare.

How did you do that? Who translated it for you?

This woman, Karina Bao, did a translation for us.

Just for you?

Yeah. She was working on it as a pet project anyway and accelerated it for us.

Okay, books. Podcasts, number 2.

Well, this is a layup. The only thing—the Acquired podcast is the big addition to my rotation. I started in July, and I’ve listened to—I don’t know—10 of them or something.

Well, thank you. But what’s in your rotation besides Acquired?

I’ll listen—

Against the Rules, of course.

Well, I don’t listen to my own thing. I listen to Malcolm Gladwell’s Revisionist History. I’ll listen to the SmartLess guys because I like them.

Your interview on that was great, too.

It was fun to do it. What else? I’ll listen to The Daily some. Every now and then I’ll dip into a right-wing thing just to hear it.

Any recommendations?

No, not really. Random stuff, like every now and then Bill Simmons will have something I want to hear. I love Bill Simmons. I just don’t have time. He’s prolific.

You’ve eaten my podcast hours.

No, no. I can tell you where I was—on a treadmill in Denmark—when I listened to the Indian cricket thing. Isn’t that the most fun thing about listening?

Yeah, you remember a place.

You do remember a place. They’re very place-specific. The Acquired podcast is the new thing I’ve been listening to. How about you all?

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

Oh, yeah, that was really good.

That was originally—didn’t Patrick do that as a private podcast and then—

Yeah.

And then he did a shorter version. I haven’t listened to the shorter version. I only listened to the super-long one. But one of my biggest takeaways from that is about having the correct grip: you don’t want to have too tight of a grip on your work, but you don’t want to have too loose of a grip. You need to play with an appropriate grip for whatever the task is that you’re trying to do.

If you’re gripping too tight, you’re going to pull it, or it’s going to feel too mechanical, too unnatural. And if it’s too loose, you’re not minding the shop enough. You’ve got to get your head back in the game.

Yeah, there’s—

I’ve been amazed in my career by just how useful sports analogies are to writing. I’m sure they’re useful to everything, but these physical memories translate pretty neatly to what the mind is doing, too.

When I write a book, I’m on a pitcher’s mound. It takes me back to pitching in high school, and I’m thinking of the reader as the hitter. Getting meaning across to a reader is tricky in the way that fooling a hitter is tricky. I can feel that connection. These physical analogies are really useful, even if they’re sometimes a stretch.

Speaking of sports, mine is the Glue Guys podcast, which I think we both went on this year.

Yeah.

It was actually the origin of us meeting.

Those guys are great.

They are great.

I think we told them on the episode—I tell them all the time—“You guys got it. You’ve got some magic here. You’ve got to keep doing this.”

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

Well, I thought they just—they’ve got magic. They’re taking it seriously and keeping doing it. I think they have the really rare dynamic of just the 3 of them together. Regardless of whether they have a guest, don’t have a guest, they’re equally good.

They’re very different personalities, too. That helps.

Can I just—I’m so—something inside me feels so crunchy. I don’t think we’ve figured out a better way to do it. I don’t think we figured out the way to do it and everybody else should just snap to our way. It’s like we have an enormous amount of privilege that we can run a business in this way, and most people have constraints that prevent them from doing this.

It’s not that we’re right and everybody else is wrong. It’s that we’ve set up a particular system that works for us.

But it is like you’re right and I’m wrong—that this really is a way of running a business that we could have done with Against the Rules. I’m going to go think about it. Anyway, what’s our next card?

Okay, next category is video, movies, and TV shows.

I just saw a movie 2 nights ago. We went to the theater—the whole family went to the theater—and watched Jay Kelly. It’s Noah Baumbach’s new movie, and it stars George Clooney. I guess you’d say he’s playing George Clooney with a midlife crisis. He’s playing a famous actor who’s trying to sort out the meaning of his life.

It’s magical. It’s a beautiful, ambitious movie, and I’ve been thinking about it since I saw it—what exactly it was getting across. I think it was getting across that being famous, being a movie star, puts you at a certain distance from the world around you, and that distance has a price. It was sort of taking the measure of that price.

What makes that more general is that I think everybody has to make some decisions about the distance that they keep the world at. This was a way of having that conversation—an entertaining one—about what that distance should be.

Wow. Got to see it.

I have so many recommendations, but there’s one that’s just—

You’re a TV guy.

I love movies, and I love television. I have no video games to recommend, but I have lots of these. The one that’s just head and shoulders above everything else, and is the greatest performance art I’ve ever seen in my entire life, is The Rehearsal, season 2.

Nathan Fielder and Eric Notarnicola, who we actually got to work with. Eric and A24 Films shot the sort of concert-film part of our Radio City show, and collaborating with Eric was unbelievable.

But he was so great. Before any of that, I saw The Rehearsal, season 2, and my jaw was just on the floor with the level—

You were talking about this for months.

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

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

It is—I was shaking.

Okay.

All right. I'm a lighter-video guy. I'm a YouTube guy, mostly. My YouTube pick for the year is one I've recommended before, a past collab: Doug DeMuro is still killing it. I think Doug is probably my favorite YouTuber. He's just—

What does he do? Because I don't—

He's the biggest car reviewer. I'm not really that into cars, but he first got everybody interested in cars who wasn't interested in cars.

Yeah. And Doug does these delightful reviews. I love watching mid-range SUV reviews that I'm never going to buy. I just love them.

So listeners will like this: David falls asleep to this.

Yeah. You watch Doug in other things, too, but he'll release a new review and I'll watch it and fall asleep over about 5 minutes.

What do you watch before you go to bed?

Totally.

So how does it affect your dreams?

That's a good question.

Do you dream? Do you have Lightning McQueen dreams? What do you dream about?

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

Seriously, I thought you would spend half your dreams on automobiles.

No, he's not.

I want to list a bunch. I'm not going to give commentary on them, just because a lot of people are watching stuff over the holidays, and here's a bunch of things I've loved in the last year. Tires, the TV show—so funny. F1: The Movie, I thought, was very entertaining. I got to watch it.

Beautiful production quality.

My favorite trivia: Expensify paid a rumored $40 million for the sponsorship of the fake team in the movie.

Rumored.

Rumored $40 million for the sponsorship of the fake team in the movie.

That's right.

So great. Andor is some of the best, if not the best, modern Star Wars available on Disney+. The show Fallout is so good, and season 2 is about to come back. I think that's Jonah Nolan and Lisa Joy again—artists, like I was saying about Nathan Fielder. Severance was amazing. Silo has a new season coming out that I can't wait for.

The books are really good.

Yes, I like the books. Those are my TV recommendations.

Nice. Next category, which might just be me, is video games.

Just you.

Just me. One of the greatest moments in my parenting journey thus far—my older daughter is 4—is that I got her into video games. We play video games together now every night. It's the best. This is what I've been waiting for.

I need to give another shout-out to Sea of Stars, which is an indie throwback RPG that I bought just for me on my Steam Deck. We were on vacation in Santa Barbara, and she was like, “Dad, what are you doing?” That was it. I wasn't trying; she came up to me while I was playing this indie RPG, and she started playing it. I never would have guessed that this was my daughter's entry into video games.

And Kirby and the Forgotten Land on the Switch is perfect. We can play it together; it's co-op. It's great for me, it's great for her, and it's awesome.

So your daughter is at an age where she'll do anything you want to do.

No, because she wants to be with you.

No, no, no. You don't know my daughter.

She is extremely independent.

It's anomalous and awesome that she has.

This is a rare occurrence. She runs the house. This is so much joy for me.

Great products. What are some products that you have come to own in the last year that you thought were awesome or improved your life?

I found a new pen. I got it here. I needed a pen that had just the right fine point, that was generous with ink, but didn't explode on an airplane and didn't smear. I'm looking at it now: the RSVP rollerball pen, 0.7 fine. I just ordered a whole case of them because I finally found a pen I love.

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

This is an example of explaining someone's process. So that pen is a thing.

What else? Other products this year?

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

Nice. I'm just looking at what I have on camera. Ex Officio. That's—

No. We're not going to talk about those. That wasn't this year. We're only talking about products from this year—not until they sponsor me.

But this year, actually, on my feet, these are things. I ran out of white socks in London, so I went over to Uniqlo. They didn't have any; I was just looking for athletic socks. They had these other things instead, and they've turned out to be so much better than the athletic socks. They come in different colors—you can get light gray—and you can wear them as dress socks or athletic socks.

Whenever I find something I love, what's about to happen is that it's about to be discontinued.

You need to buy all of them.

You need to buy all of them. I didn't get quite all of them because I was flying and had to fly back with them, but I bought basically what was in the store at the moment.

And these shoes—these are On. Oddly, I spent a couple of days with Roger Federer this summer, and I had just discovered them. We had the On conversation, and that made them kind of acceptable to him. I was a Hoka guy.

Oh, also great. Also great.

Nike basically blew it, right? They let these companies roll in. They got rid of their stores; they thought it was all going to be online, and On and Hoka rolled in. I'm a little torn, but not that torn. These ones are just unbelievable, especially the white ones. I'm getting criticized for it because I started wearing them instead of even dress shoes. I went on Colbert with these, and I got 8 calls saying, “You can't do that again.”

Really?

Yeah, it looks—I keep wearing Ons all the time.

They just don't look good on TV or whatever.

I've been overwearing both the Uniqlo socks and the Ons, but that's a sign of enthusiasm.

That's right. And isn't the Federer-On deal one of the best endorsement deals by an athlete ever, measured by how much money he gets paid? Didn't he do an equity deal early with them?

Yeah, I think that might be right. He only aligns with companies whose products he really likes.

Rolex. It's an amazing—

It's amazing how easy it is, right?

He's also Roger Federer.

He's also Roger Federer.

I bought a Rimowa suitcase this year, and I love it. It's just a suitcase, but I love it. LVMH bought this German suitcase company a couple of years ago. They make the aluminum-shell suitcase. You see them every time you show up.

Yeah. Well, and I got the—

It's exciting to find new luggage.

Totally. I don't know why it's so exciting, but it's hard to find new luggage. My whole life I've just been a minimal-packing, backpack-only person—maximum efficiency.

You assume you're going to be washing your clothes wherever you go.

Yeah. But this is the first time I've just been like, “You know what? I'm going to get a nice piece of luggage.” It's not the most efficient way to travel, but I just like it. It makes me happy.

It's great. Parenting.

Parenting. Yeah, let's go to parenting. Feel free to decline on this. We have, for the young—

2 and 4, and 18 months.

Yeah.

The first is discovering Guided Access on the iPad.

It’s an accessibility setting where you can make it so none of the buttons do anything and it doesn’t respond to taps.

So, on an airplane, they can’t mess with it. That’ll last about 6 minutes for you.

And then he’s going to be like, “Fuck you, Dad. Make it work.” So, these are products for parenting.

These are products for parenting. If you are a parent of kids our kids’ age, the last one is the movie Toy Story. It’s the first movie we introduced him to. It was my favorite movie growing up, and it’s been really fun.

He took to it.

He took to it. He loves Mr. Potato Head. He calls it Tapo Head. So, he always runs into the room and says, “Tapo Head TV.” And that means, “I want to watch Toy Story.”

So, as I alluded to, my older daughter is an independent woman, shall we say? We bought this when she was younger, and she completely rejected it: the SlumberPod. Do you have one of these? Oh, yeah.

Yeah. So, this is a blackout tent.

We have 2 of these over a portable crib. So, when you’re traveling, you basically just put your baby in a sensory-deprivation chamber.

Oh, you set up the noise machine right next to it, too. You really—

Isolate. And for most kids, I remember hearing from people that it’s a miracle. I tried it with our older daughter, and she was just absolutely nuclear—no way was this going to work. And so I shied away from it. And then we went on a trip recently, and I brought it back for my younger daughter because I was like, “All right, well, we’ll give it a shot.” And it worked like a charm.

Can I just interrupt here for a moment?

Yeah.

Is it a kind of end-zone dance you’re doing for your business model, that you’re just, at the end of this, offering free endorsements of consumer products without anybody actually having to pay you for anything? You just do it.

No, we just started because it was fun. These are things we like.

It’s good.

Yeah, yeah.

That’s good.

And then my last one—this is fun because it’s a tie-in with our Radio City show. I brought the whole family to New York for Radio City. Bluey—we’ve got to do a Bluey episode someday. Is this incredible phenomenon? I don’t know if it’s crossed your radar.

No. What is it?

Bluey is the greatest kid show ever made, bar none. It is—

That’s a big claim.

It’s this guy in Australia, in Brisbane, and he made it. He was, I think, an animator for Peppa Pig and then made this Bluey, and it’s like—

But the claim isn’t that I love Bluey. It’s just so—

Disney agrees with David.

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

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

I think news just came out today that Bluey is coming to Animal Kingdom in Disney World in 2026. It’s basically like Pixar. Think of it as the Pixar of this generation.

Is Bluey owned by its creator?

Yeah. Yeah. Joe Brumm, this guy.

It’s like the Muppets.

Yeah, it is. It’s like Jim Henson and the Muppets. So, in New York City, you can buy tickets and get a 45-minute window. You can take your family, take your kids to Bluey’s house—a recreation of Bluey’s house inside a building in Union Square. That’s great. If you’ve got kids into Bluey, go to New York and take them to Bluey Camp.

My kids would find that a little strange, but okay.

It’s true. We keep saying kids—kids of 8 and under, they know. Yeah, 8 and under.

That’s all we got for carveouts.

That’s all we got, too.

Michael, anything else? Pleasure.

Thank you so much. What a joy. Thank you for giving us your evening.

This is the longest I’ve spoken to anyone in the last 4 years.

Thank you for doing this with us.

My pleasure. Anytime. See you at your 20th.

Great. We’ll see you in 10 years.