Acquired 10-Year Anniversary Special with Michael Lewis

“Doug Leone told us that after the dot-com crash, every other venture firm 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. Sequoia said, absolutely not. We will never lose money for our investors ever. He said the best line anyone's ever said on Acquired: we looked at each other and you could burn cigarettes on our arms, and we wouldn't flinch.”— Doug Leone

Leadership & Management · Business & Entrepreneurship · Strategy & Decision Making

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Burn cigarettes on our arms metaphor

“End of 2022, FTX happens. Interest rates go up, all the podcast advertising market falls off a cliff. Our revenue dropped 40%. That was the moment when we changed everything. Ben and I looked at each other and it wasn't even really a conversation. We just knew what we had to do. We need to get to work. We need to focus on only what is enduring, make great work, and stop doing everything else.”— David Rosenthal and Ben Gilbert

Strategy & Decision Making · Leadership & Management · Business & Entrepreneurship

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Revenue drop forced quality focus

“In calling out Hermes, I think quality and scarcity have become an important part of Acquired. We used to feel like we were bad at podcasting because we couldn't make very many, because we didn't have a whole production team. At some point, we looked at each other and we're like, maybe if we just admit that we are heavily constrained and then try to just lean into that constraint in the way that Hermes leans into every single Birkin bag must be handmade by one artisan, we're going to build a bus...”— Ben Gilbert

Strategy & Decision Making · Business & Entrepreneurship · Operations & Execution

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Constraint became competitive advantage

“I've been toying with this idea of stored potential energy that great businesses have a stored potential energy that you can't see in the current financials. Great people have that too. They have these reserves that come out when they need them. 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.”— Ben Gilbert and Michael Lewis

Strategy & Decision Making · Business & Entrepreneurship · Philosophy & Reasoning

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Store energy vs. release it for revenue

“Language is a lossy compression of thought. When you and I are communicating, I had a thought. I compressed it into a very narrow bandwidth thing of speech. I told it to you, you uncompressed it into your brain. It might actually mean a pretty different thing to you than it means to me. That insight is at the bottom of my creative process. I assume when I write a book that what goes into people is something different that came out of me.”— Ben Gilbert and Michael Lewis

Philosophy & Reasoning · Creativity & Innovation · Psychology & Behavior

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Communication is lossy compression

“The feeling I get is this person is bringing out a better version of me. Danny Kahneman always felt at risk of being dismissed, thought the lesser partner. There was a status difference between the two of them. Everyone in the world thought Amos was the smartest person they'd ever met. You two didn't have that. Ever have any of that? Not for me. The number of fights we've had or real tension we've had is two or three ever in 10 years.”— Michael Lewis, David Rosenthal, Ben Gilbert

Psychology & Behavior · Leadership & Management

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Absence of status competition enables partnership

“We had an existential crisis. Are we being wussies? We're not doing Hollywood. We're not adding more shows. We're not building an enterprise. We sought advice from one of the best investors ever. He sat there and thought a minute. He said, I've seen so many founders become trapped in prisons of their own making in their own companies. You guys have avoided that fate. Don't go down that road.”— Anonymous investor

Leadership & Management · Strategy & Decision Making · Psychology & Behavior

DUR_ENDURING

Success can create self-made prisons

“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. For the last three years, we've released 12 episodes. Next year we're going to do eight episodes for the whole year. Most of these things actually are confirmation bias. We get some inkling that we should continue to go in this direction.”— David Rosenthal and Ben Gilbert

Strategy & Decision Making · Business & Entrepreneurship · Economics & Markets

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Scarcity engineering drives event perception

“Most podcasts, your dream is to create a habit. We've thrown that out the window and said we need to create events. It needs to be the current thing when we release an episode. Once a year, we have to have a Super Bowl. Doing the Chase Center show, very small amount of people in the audience relative to the number of people who listen to our episodes, it's 0.4% of the audience.”— Ben Gilbert

Business & Entrepreneurship · Strategy & Decision Making · Culture & Society

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Small live event creates massive brand impact

“We want to create a durable business on our side and a great listener experience on the listener side. I always feel, as a listener, so disrespected when there is this content of the podcast that is diamond quality, and then they're running McDonald's ads in the middle. 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?”— Ben Gilbert

Strategy & Decision Making · Business & Entrepreneurship · Psychology & Behavior

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Sponsors strengthen rather than dilute brand

“I am terrified of betraying that trust. Anytime we make an episode, I think of it as a churn opportunity. If we put this in the feed, if we don't live up to the expectations that our listeners have, we will burn them and they will leave us forever. Are we letting people down? Why does Acquired framework, there's a strong element of terror of why it works. We're constantly terrified every time we make an episode.”— Ben Gilbert and David Rosenthal

Psychology & Behavior · Leadership & Management · Business & Entrepreneurship

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Terror maintains quality standards

“In the media business, in podcasting, you can grow your audience, and thus your revenue, and thus your importance in the world. All outputs can scale completely independently of your inputs. David and I effectively do the same thing that we did not 10 years ago, but two years ago to make an episode. The audience has grown so much that every output from the business is dramatically different, even though all the inputs are the same.”— Ben Gilbert

Business & Entrepreneurship · Economics & Markets · Operations & Execution

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Outputs scale independently of inputs

“The internet niches are way bigger than you think they are. If you think you're writing about a niche topic, the internet being a global community of four-ish billion people, means that any little niche, there might be six people in your geography that care about it in your local town, but there are millions of people online. The internet is your way to reach them. No matter how niche you are, it's actually way, way bigger.”— Ben Gilbert

Economics & Markets · Technology & Engineering · Business & Entrepreneurship

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Global reach transforms niche economics

“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. Podcasts are unique in that it does have that true subscriber base. Unlike anything else where you click subscribe, there's not an algorithmic platform that disintermediates you.”— Ben Gilbert

Business & Entrepreneurship · Technology & Engineering · Economics & Markets

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Podcasts avoid algorithmic disintermediation

“You're added risk. You're taking risks when you don't know what's going to happen when you come on. You know how your heart sinks when someone gets up at a podium with a speech and they're going to read their speech? The audience is waiting for you to get through this thing because they know nothing's going to happen. If you get up and you just start talking, the audience also knows, oh, my God, this could be a disaster. They don't know where it's going.”— Michael Lewis

Creativity & Innovation · Psychology & Behavior

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Risk creates audience engagement

“If you were going to ask me how you were going to fail, that's exactly the thing I would say. You'd run out of gas or run out of material that made your socks go up and down. Okay, listeners, now is a great time to thank one of our very favorite partners. The reasons Acquired will eventually fail, I don't think come from platform disruption.”— Michael Lewis and Ben Gilbert

Creativity & Innovation · Psychology & Behavior

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Creative death from curiosity exhaustion

“At what point do you decide that, oh, there's an odd chemistry here? We really just wanted to spend more time together. We like to say that we each have two spouses. We have our actual romantic spouses that we have families with, and then we have each other. David and I shared a bank account before my wife and I shared a bank account.”— Ben Gilbert and David Rosenthal

Leadership & Management · Business & Entrepreneurship · Psychology & Behavior

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Partnership commitment before marriage commitment

“We had to add this thing called a production meeting. About six months ago, one week before recording, we are required to get together and agree on an episode structure but not share any details. We got so into this improvisation thing that some of our episodes would end and you're like, that had no flow to it. You guys had two completely different ideas for the episode.”— Ben Gilbert

Operations & Execution · Creativity & Innovation

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Structure enables better improvisation

“Warren Buffett is tracking who is coming in and out of the A shares and thinking about it. He has that whole thing about don't put your money in an index fund, put your money in a big bundle of stocks. Put it in a few stocks and watch those stocks like a hawk. They watch that thing. In history, has anybody ever done anything like that?”— Michael Lewis

Leadership & Management · Business & Entrepreneurship

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Buffett tracks individual A share transactions

“One of the ways that we aired was trying to exit the integrated circuit market or diversify from that market. The key insight from Morris Chang was you are already in the best business. Integrated circuits are the future and will be for a long time, and you're already the best at them, so stop trying to do other things and just do that really well. Probably to a fault and with a bias, we believe that about Acquired every time we look at anything else.”— Morris Chang via Ben Gilbert

Strategy & Decision Making · Business & Entrepreneurship

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Already in best business, stop diversifying