Ben and David on My First Million

22:48And then we come together and it's like a thesis defense or something that we do. And the goal is, like between the two of us, to have basically consumed every piece of content on the company. Like every other podcast that's ever been done, all the big books that have been written, all the talks given by the founder, try and find a bunch of weird stuff like talks given at industry conferences that have low view counts on YouTube. Obviously read all the sources of the Wikipedia page for the companies. It's basically like no one should be able to DM us after the episode and be like, oh, did you, did you did you see this?

23:18This is important piece of information on the company. We want to always be like defensively. No, we have consumed everything about this company. And I think like I think the magic is that like if we, if the output of that were a term paper, it would be really boring and nobody would read it. But because the output of that is Ben and I is really good friends, like talking about it, like that kind of makes it magical. The phrase we've been noodling on is conversational audio books. Oh, that's cool to describe what it is. Are there any odd commonalities that you've seen amongst like the savages that you've done stories on?

23:52So for example, Ben Wilson has, you know, historical figures and he's like, you know, it's weird. John Rockefeller, Edison, Napoleon, a bunch of these other people, they ate really lightly. Like they didn't eat a ton of food because they said that when they over ate, they felt brain fog and for a bunch of different reasons. Are there any strange commonalities that you've found amongst like these conquerors of the world? Well, we talk more about companies than we do about people like Ben and David Center over at Founderly or companies. Yeah, or companies. I mean, it's the classic like being contrarian and right and you have to be both contrarian and right.

24:32But the people that were studying and the companies that were studying are such extreme outliers. Like they're such the, they're forced interdivisions from the mean in terms of like how did a company do? And so they're sort of like an end of one. Like there's one TSMC in the world. There's one LVMH who owns all the most valuable luxury brands, except Hermes. And it sort of happens in a unique way every time. And so I guess the biggest takeaway for me is like it usually is the founder doing something that like literally everybody else had left for dead. And when I say that, I mean like Bernard Arnog going and buying Christian Dior from the French government out of bankruptcy in when was that the 80s, David?

25:1680s. Yeah. Or like literally no one else was bidding on this like dead asset. Or the example for starting TSMC is like zero other people thought that you should be starting a foundry when you have no chip IP to make other people's chip designs. Like that was there was zero other people that thought that was a big one. Like there is no there is no formula every story is unique. But a big, big category is like something that has been left for dead. But like sometimes it's inventing something new whole cloth, but like really big category is like, oh, this thing is over in don't know what David Nintendo.

25:53Yeah, Nintendo. Google. Like the video game crash of 1983. Like the market for video games in the United States went from $3 billion to $100 million over the course of two years. Everybody was running screaming from the industry and they thought, oh, video games were a fad and it's over. And then you have Nintendo that comes in launches the NES. And then within five years has 95 % market share and has grown the industry back to a $3 billion industry. It's these like nut job bets. Has that has that like given you guys any confidence to succeed? Do you think like because I talked to all these awesome people and like we'll talk to there are a handful of people and I said this a bunch.

26:32There's a handful of people who we talked to and we say, oh, you're definitely like significantly smarter than we are or you're significant. You have this part that's more significant than us. And then there's other people who will talk to that are worth hundreds of millions or billions of dollars. And it's like, well, you're not like 20 times smarter than us, even though you're 20 times richer. But like you might be a little bit or sometimes a little bit less. And that's given us confidence at least for me for sure because I'm like, oh, you definitely are insecure. You question yourself, you duck yourself, but you still went through with it.

27:03Good question. Like I know how to be contrarian. I'm not sure I know how to be right yet. Like, we're halfway there. We know how to make everyone tells you you should make short podcasts that release every single week and you should have guests on to help build your audience. And we do basically none of those things and everything that has worked for us is doing the exact opposite of those. And so does that mean keep doing the opposite of every piece of advice everyone gives you because that's the path of success? I don't think so. But if we overfit to the data that we've observed so far, that is what it would look like.

27:37And so I'm hesitant to like keep being contrarian for the sense of being contrarian. But I think the important part that comes with this is like having an iterative feedback loop with your customers or in our case with our listeners to understand like, what makes you love this? And how do we lean harder into that? And pay more attention to like the things our customers are expressing. By the way, I've picked up a little poker tell on people who are on contract. How do you tell a real contrarian versus a one be contrarian? This is a tell I picked up over time, which is in the tech world, I think because of Peter Teal, there's a kind of like real sex appeal.

28:18That is the same for being contrarian. If you put it in Twitter bio, you're probably not it. Yeah, exactly. Yeah, Paul Matt's another one of them. As me and Ben as me and Sam have joked about like, or like if you're an engineer being like slightly on the spectrum, it's like, oh, yeah, yeah, that's another indicator of success. It's like, here we go. The one that is, I think a tell when it comes to being contrarian is how excited are you that you have this contrarian idea? Because that shows people who are contrarian for the sake of being contrarian, meaning that they're really excited to tell you how the I think everybody else thinks A, but it's actually B.

28:57Whereas the real people I've seen that are contrarian, they just see A. And they're almost like, I'm confused why people don't think A. A is clearly right. They don't spend time trying to like convince the whole world of it. Like, if they're asked, they tell the truth. And then when people react in a big way, like, oh, man, I can't believe you think that. They're like, I can't believe you don't think that. It just seems like the truth to them. And so that's what I've noticed is like, if you watch old videos of like Peter Teal talking or like, I think Bolognes is somebody who's like this today.

29:25They, they, they're happy to explain their point of view. And they explain it like, this is just what's going to happen. Or this is what I believe to be true. But they don't get high on the idea of, of being contrarian. It's a subtle difference. There's a bunch of people I've met in real life that I kind of have noticed this on. It's hard to explain, but you'll see next time you kind of run into somebody who's over eager and over excited about the fact that they have this contrarian opinion, it's, they're kind of just performing socially versus they actually believe that. It reminds me a lot of, it's like, we all know this guy or girl who likes the idea of a relationship more than they like their current relationship.

30:02And they're, they're very excited to like have this particular lifestyle. And you can sort of tell you're into that new lifestyle. You have more than the person you're actually with. So it's right. Did you want a boyfriend or did you want a bet? Right? Like, who does your ex -man want here? Let me tell you a story. Oh, go ahead. I was just going to tell one of the things Sam, you talked about like, what are the interesting success patterns? It reminded me of an experience I had a while back. I went to China when I was maybe 21 years old and got to go to the Alibaba. Like, Alibaba flew out a bunch of entrepreneurs to go like meet with, it was supposed to be Jack Ma, but we ended up meeting with this guy David Wei who's like their Jack Ma's right hand man.

30:37He was the guy who was running Alibaba at the time. And I didn't even know what Alibaba was. Like, Alibaba was a big deal. Like, now I'm like, now I would have taken that really seriously. I had no idea who they were at the time. And we get there and somebody asked him this question. They raised her hand. They go, what do you think is the most important things for success for the success of a company? Alibaba is a multi -billion dollar company. You know, what made it successful? And he goes, he goes models for success are misleading. They cannot be copied due to the like unique combination of luck, timing, all these other things.

31:08But he goes, but what you can ask me is a better question, which is what are the common keys to failure? And he goes, they're always the same. And he goes, we study the things that lead to failure and just tried to avoid those. So he goes, you know, I leaned in. I was like, well, please blow my mind. Sir, go ahead. And he's like, he goes, there's three things that lead to failure. Money plans a technology. He goes, so our plan was no money, no plans, no tech college. What? And like, this is crazy. Because it's like a tech company worth like 40 billion dollars. Like, what are you talking about?

31:38And he goes, hey, so he goes, all right, here we go. Money, money makes people stupid. And when problems come up, their first thing stick becomes throw money at it, rather than attacking it with creativity. So basically, way back when Google was like dominating with ad words. And so they're the people at Ali Bob were like, we need to make our version of ad words. And he goes, you know, this is no order. It's like, you know, building this type of ad network is not like super simple. He goes, said, Jack Ma, cut a check for $250 ,000 to build this project. And let team like laugh, like, you're missing three zeros on the back of this.

32:10Like, what are you talking about? $250 ,000? And he goes, that's how much money it took me to start Ali Baba. Like, I had less than that starting the whole company. So if you need more than that for a feature, we're doing it wrong. And he's like, they're like, well, how are we supposed to do this? He goes, do exactly what I did with Ali Baba. He's like, so he moved 19 people into his apartment where he had started. I was like, that's your office. You're going to work there. He's like, you need a server to run the ad servers. Cool. Go find something. Like go get some used junk servers and like, re -rig them, get them, refurbish them and make them work.

32:42And they go, but there's no redundancy. He goes, if you're building with where you need redundancy, like, we've done this wrong, right? Like, you know, this is, you need to build this so that it works without redundancy first. And so he did that for, that was the no money. Then he's like, no technology. He's like, everybody wants to call us a tech company. No, we are a service company. We're here to serve our users. If you don't think of yourself like you're in the service industry, you're in the wrong industry. And then his last one was planned. And I said, all right, well, dude, how'd you do this?

33:10Like, why no plans? Why are plans bad? He goes, you know, you guys are 50 young entrepreneurs who got flown out here to do this. I assume in America, you guys have done something good. Otherwise, why would we have picked you? He goes, how many of you are doing what you initially plan to do? And like, nobody's hand went up. And he was like, exactly. And he goes, well, plans are fine, but they always change. That's the only thing we know about plans. The mission never waivers. Sometimes you'll need a plan to get others to believe. But remember, you should not believe that plan. You should follow your gut and adapt constantly to the circumstances.

33:42Don't follow the plan you wrote when you started. Follow your mission. Follow your vision. Follow the why. If you do that, you will be successful. Did you? Did you write all this down? Yeah, I was like, you read notes. Yeah. So many years ago, after that, after that event, I wrote, I tried to write a book in like two weeks, and I wrote half of it. And so this was one of my chapters in that book. And I just found the PDF of my computer. I'm talking about it. That's hilarious. That's amazing that you did that because that was a year ago. What a great story. It's so applicable. I love that that's applicable to Alibaba just as much as like, I'm thinking about you guys and us and like, how we started the conversation.

34:18Like, yeah, we had no money. We had, I guess we had technology in that like, podcasting and the internet is inherent leverage. It wasn't like we're, well, none of us were like, we're building a tech company. Exactly. We're building a product. It was like, no, it's like, exactly. And we have no plan that we want. Yeah. Like, it's funny. Like, we see a lot of I'm sure you guys do too. People come to us like, oh, how do I start a podcast? I was like, successful podcast. We see like big companies come, the like offline celebrities that want to start podcasts. And it's like, they come with money technology and a play on it.

34:51And they're like, it's not how it's going to work. It's going to suck. Like, you guys probably see this with your episodes. Like, how many of them started doing what they're doing? Like, I don't know. I haven't listened to all the recent ones, but like, I don't know. Was Nintendo what we think? Oh, my goodness. Nintendo was making it. Wait, wait, real quick. Do either of you know the origin story of Nintendo or have a guess at how old Nintendo is? I think it's really, I remember reading it once. I don't, I don't remember. I'll talk my head. But it was like, is it like Sony over, they were like selling rice or something?

35:20And then now there's even better. Yeah. It's a 130 -year -old company. Yeah. Started in, like, 1890, 89, I think. Yeah. And their original business was making Hana Fuda cards, which is the Japanese version of US playing cards, but US playing cards were illegal to import. Like, because people from the US could, it was not legal to be in the country. And, David, I think you at this point, they literally would execute you. Yeah. Well, Nintendo started just right after this. But before the Matee restoration, like, Japan went through this multi -hundred -year period of strict isolationism where like, you would be executed if you were a foreigner and you entered the country.

36:03Likewise, if you were a Japanese person and you left the country and came back, you would also be executed. Yeah. Wow. But like, playing cards are this thing that like has product market fits. They're like, how do we gamble? Like playing cards. Universal human need. So it literally started making Hana Fuda cards, and their distribution channel was through the Yakuza to illegal casinos. Yeah. Yakuza being like the mafia. The Japanese mafia. Yeah. Yeah. Yeah. They started making these playing cards and like, a very small part of the market was like, oh, you have a pack of playing cards in your house.

36:32But just like, everywhere else in the world, the market is casinos because you use a fresh deck for each hand so that there's no cheating. Yeah. So Nintendo is like, deeply embedded with the Yakuza. And for like, 60 years, this was their business before they started making toys. And then what? Some like visionary within the company was like, oh, there's this new thing. It's cool. Crazy family, like, really tragedy of like this cycle of death and just like, terrible parenting in the family. This is a pass down to four generations of the same family. And actually not the same family because they had no sons and they needed sons.

37:07So they were marrying their daughters off to people who could take over the business. Yeah. Exactly. And one of these guys was basically just like so pissed off at like the family legacy that this is Roshi Yamuji who started the modern Nintendo. And he was like, I only wanted to first buy the business. I want to get out of this. And he did a partnership with Disney in 1959. Yeah. 1959. He Nintendo brought Disney and Disney IP into Japan post World War II. Check this out. I literally have the cards. Some acquired fans sent them to me. Oh wow. Yeah. And then they brought toys and then they started making their own toys because they had like lock on the retail distributors.

37:47Yeah. So started as cards and they were like, then they went to all these retailers. They were like, oh, you want the Disney products? You're going to take our products too. What was that? Jiminy cricket as the Joker? Jiminy cricket as the Joker and Mickey Mouse golfing on this old school card deck. That's amazing. That's like you got to wear that. You got to wear gloves if you're going to touch that or something. Seriously. Age and artifact. Can I ask you guys a couple rapid fire questions about some of the companies that you've discussed. Number one, which company of everyone that you went over, would you want to own?

38:22Like which one's what's the one that you envy? Well, that way, those are two different questions. Which one would you want to own the stock of and which do you want or which do you want to like be an investor in or actually own the company? Yeah. Yeah. The second actually own and which one do you envy most? Actually own, I think is the NFL. Yeah. I think that has the most like durable franchise and own is always a funny question because what's your entry price? Like do I have to buy stuff at today's prices or but if I think about sort of like durability of the asset and I sort of ignore where things are trading in what market values today.

39:01The NFL is seven layers of entrenched in our society and to be an American at this point means to have the NFL in your life. And they also, David, you pointed this out on our episode. Everyone thinks it's really cute to like stack rank all the media franchises. Marvel's worth this. And you know, all the way at the top of the charts, Pokemons worth this. But like the NFL is worth so much more than any of those. The NFL TV contract alone is $12 billion a year. The most recent set of rights they personaled up was like, no, isn't it? Now it's like 18 or 19 billion a year, I think. Something insane.

39:38But they recently signed a 10 year deal. So it's like a hundred and fifty billion dollar deal. Like I'm just your first business fees. So the NFL has all the franchises. But is there basically like this like top level hold co that owns like the media right communist capital is they all own it all together. But the NFL unlike any of the other leagues out there is this there's starting to be a few little cracks in this. But like they negotiate with the TV contracts and now all the streaming and everything unified as a league. So there's no like you know, like how the Yankees have the yes network like their own TV network.

40:10None of that in the NFL. It's all together and it's all equal revenue sharing. Have you guys done an episode on MLBAM? Yes. We did. We did. We did. That's actually the first investment before the acquisition. Well, these guys can tell you that this the full version, the accurate version. I'll give you the dumb version, which is the major league baseball had created a tech like a tech team based on the tech company inside of major league baseball co owned by like the teams. And the good job was like, hey, like people are trying to listen to this on the radio. We need to like it was a radio because when each year over from Japan, they needed to stream.

40:47Do you remember that guy, Sam? Each year of Suzuki. They played on the mariners. He was like a phenomenon. And so people in Japan wanted to watch or live. Watchers didn't even have an option. I think it was listened to the games. So they needed digital internet streaming audio. And so they built this thing. They started offering it and then each team would use it. So it was like, oh, each team co funded it. So they would like cut a check. And then that developed technology for all of them. But then they ended up spinning it out as a multi billion dollar company because they're the best at video streaming now.

41:15Like they stream. If you want to watch a game of thrones, it's MLBAMs video tech. That streams game of thrones to that win whatever 10 million people click play as soon as the episode drops. But like the thing doesn't crash, which is kind of an, you know, just an amazing thing. And so that like spin out. Like who would have ever thought like one of the big tech company, you know, unicorn tech companies came out of like this baseball co up co funded thing. It's kind of an insane story. And it was in like 2004 or something that they started working on it. They had a five -year head start on having the insight that this infrastructure was going to be important over Netflix.

41:51Like everyone thinks like, oh, Netflix, you know, is in with the ISPs and it's the best in the world that this like BAM tech was doing that five years earlier. Yeah. And it ended up getting acquired by Disney. And like is a huge part of yes, be in streaming like all the yes, be in plus plus Disney plus like it's it's crazy. Is there is there a certain founder CEO leader who you would rank as the the person you'd least want to compete against whether they're whether historical or modern. Oh, here's another way of phrasing that I heard that like there's somebody signed with the NFL draft and there's like four QBs that were competing and they're like, well, guys, guys, good arm.

42:30This guy's good at running. This guy's a great leader. Right up blah blah. And then this guy asked this question. I love to go. Let's say they all went on vacation and they rented a car and they're walking out to the to the Jeep. Who do they throw the keys to to drive this car? Who's the leader? Who's the alpha amongst alphas in amongst these QBs? So who's that? I think we got to say Jensen Jensen along from Nvidia. Like he's such a badass. Like I don't know anything about Nvidia because I just know it's a killer stock. So Nvidia makes the chips that are in computers and and and involves display.

43:00Like you can get like a Nvidia. Yeah. Is that right? Yeah. Yeah. Yeah. So Nvidia is is in their sort of third major app as a company. Yeah. Third app. But loosely defined as like they popularized the idea of a GPU in addition to the CPU. And originally the use case was for video games in the 90s. And you know, I think everyone who ever built PCs remembers like, oh man, I got to get this hot new GPU to slide in the card because it's better than integrated graphics thing from Intel. And so that was sort of their market for a while and it was all about gaming PCs. But then like again, five, six, seven years before the rest of the market.

43:43Jensen basically made this bet where he saw researchers using the GPUs, the gaming graphics. They're like going to Best Buy and buying a bunch of Nvidia graphics cards. To do AI research. And he was like, I think we should lean really heavily into this. And so he spent billions of dollars and thousands of headcount for five years to build up this like whole software stack called CUDA that if AI and ML was going to become a thing, then people were going to use CUDA to develop exclusively on Nvidia's hardware. And so by the time it did become a thing like five years ago, Nvidia had this enormous moat around it as being the platform to develop AI on.

44:26And it just so happened that the technology, this like super heavy parallel processing matrix math technology that makes gaming graphics chips work is the very same math that powers what ML is all based on. But other than so Nvidia for the listener, I just like it up. It's a six or 50 billion dollar company. So one of the I don't know top 20, 30 biggest business in the world. But other than him being correct, what makes this person like a savage or that they're just like there's so many points in history like he is a 19 why let me. He actually like he's a total family man. He's been married to the same person he met in college of two kids like he's but like he's got a giant tattoo of the company's logo on his shoulder.

45:10He wears leather jackets. He drives really fast cars. He's like he's like he's got like Elon except not like like right. And he's like he's on right and like leads with kindness. And but like he I mean there like in each phase of the company, the absolute rational thing to do was like basically shut it down and like you know like talk about being left for dead like this company was left for dead multiple times. And he's built like just single handedly this dude created the AI revolution that we are in today like Nvidia and Kuda is essentially like you can think about it as like the Android plus iOS of AI like no Nvidia and no Kuda no decision by Jensen to do this.

45:57We are not living in the world. We're living in today. Which I'm looking at different answer for the thing you're actually looking for which is like who is the most savage person to compete against that answer is Bernard Arno from LVMH. So rich man in the world today and he got there not by being the founder of a business that happened to have product market fit and appreciated wildly. It's because of his deal prowess and the way that he was able to effectively outsmart the rest of the market to hoover up 70 of the the histories most important and trusted brands into one umbrella and then find leverage in every single thing he does to expand the empire.

46:40Is there anyone who you think is overrated who's on a pedestal and you think I don't think that person's that great. I think it worked out but I think they're overrated. It's a very unequired question. Let's see. They've an iron nice people. We are. We don't. Well, pick a dead person. One that I like to. I like to talk to a damn person. Get it one. But someone was like, no, I think one that I like to talk about here is I don't know the overrated is right but like I think a lot about it investing about there's this great Buffett quote not one of his most well -known ones but it's something like you want to own a business that you know even an idiot could run because someday someone will you know.

47:22And I think to me what that means is like you want to own a business you want to invest in a business that like literally you cannot kill it. There's nothing you can do to stop this juggernaut. And to me that's Airbnb and we talked about this a lot on that episode. We did on Airbnb but like it's just like the most amazing global network effect of all time. And literally like I don't you know this is my opinion but I don't think there's anything that any manager could do to change the like to inflect the trajectory of that ship you know. So I like there's a long story. I don't feel like telling it but I had a job at Airbnb when I was like 22 and I like dropped my school and moved out and then I got denied whatever.

48:06And so I didn't end up working there but I got to interview with the founders and then years later my wife ended up working there and during work from home for COVID, Brian would give these talks every Thursday and we lived in a small apartment so I like and never would hear it. I think that I agree with you. It's a mark once you have a marketplace that's working. It's hard to screw it up. Ebay is doing a good job though but I you know if it works like it's a good it's a great thing. It's a quite durable but I would listen to Brian Chessie give these 30 minute like Thursday talks. That guy is bad to the bone.

48:36I read a little bit. I read the Walsh of the Walt Disney biography and he reminded me exactly of him. He is a you know like I think someone said there's a difference between a missionary and a mercenary. Mercenaries are hired guns who are ruthless but missionaries they really care about what they're doing. I sense that with him. That guy I think is a bit killer. I think that he's people think of him as this nice guy of which I think he is. I think he's way way more of a killer than people can credit for and he's very wise. He's a really good leader but that's cool. I like Airbnb and I think it's cool that I agree that it probably would be hard to kill.

49:11And last question, which person who you covered would you would kick your ass physically and you'd at least want to have a physical confrontation with? I mean actually, Jensen. Yeah, you think you think so? Well, he's getting up here in age but like yeah, no, he like he lifts he's just like such a character. Well, I certainly mean we're coming right off of Nintendo but Hiroshi Yamaguchi back in the day not because he was physically intimidating but like literally like that man was in bed with the Yakuza. I think you know. Oh, I got across him. Oh, Doug Leoni. Yeah, I like to be sat Dave and I walked in to interview Doug Leoni.

49:45It's a great story. And Doug Leoni is the founder of Sequoia. A long time managing partner. Yeah, got it. One of the headhound show at one point of one of the best venture capital firms ever. Through Google and you know, the true heyday of Sequoia, which yeah, or you could argue that was recently but amazing era of Sequoia. And so we a lot of times like with guests, we'll get to like spend some time beforehand and get to know them and go out to dinner afterwards and build real relationship. And we like email or text and you guys know the drill. And so with Doug, we didn't communicate with him at all beforehand.

50:20It was all with some some other lovely people at Sequoia. And we walk in and we set up and someone walks in the room and then they go, okay, are you ready? And we were like, yep. And they were like, great, we'll go get Doug. Doug walks in. He sits down. He says, hello. Are we starting? And we're like, yeah, so we hit record and we feel like so we did a whole episode. We finished, right. We finished recording and boys, guys. Doug just goes, great. Thank you so much. And he walks gets up and leaves the room. So every word that I've ever spoken with Doug Leoni, except for like two or three is on the record in the episode that you can listen to in our podcast feed.

50:58And later his EA did come in and say, hey, Doug wanted to know if you guys had any feedback. He's always looking to get better and sort of like came in and chat it with us. But I was like, wow, that is aggressive. Doug wanted to say thank you.

51:13To you, the assistant just punched in the arm and gave you a rat. That's from Doug. He also had he has I think still to this day, the best quote on acquired that is not uttered by Ben or me quoting somebody else from history. But the best live quote on acquired he was talking about after the dot com crash when Sequoia was like kind of made this vow that no LP would lose money. Like they wouldn't take a Mulligan fund. They would like work the portfolio companies. They don't take salaries. Make sure that they have positive returns. And he said he's like Mike Moritz and I linked arms. All right. I wasn't I think it was linked.

51:46I said Mike Moritz and I decided that like we would stand there and we wouldn't flinch and you could burn cigarettes on our arms. And we would like we wouldn't take a Mulligan on these funds. They're like damn. He also has kind of an accent, right? Like he's got this Italian New York vibe. Are there are there any more of these like tough guys or tough women like that are out there now? I mean, when I hear that, it's I always like, oh, that was a different generation. I mean, like to make them like Doug Leoni nowadays. Yeah, like he got like I didn't know. Yeah. Well, like Travis Frank's. Frank's Lutman is still like this.

52:26Yeah. And he's a giant breed though. Like he's more like, right? Yeah. Frank, my my badge is not working to get into the office. He's still got teeth. Don't you? That's like a when you read that guy's book, you're like, all right. Yeah. This would be a pretty hard core boss to work under. Yeah. It's totally a lost art though. Like, yeah, I don't I don't think they make them like that anymore. Unfortunately. That's crazy. Before we go, do you guys have have any half baked business ideas you wanted to share with the my first million audience because that's what they love. Yeah. Well, I loved this.

53:01So I have one that I was we were actually kicking around together, been in me for a while, but that we're not going to do, which is I think you could actually start a corporate podcast agency. So an agency for companies to make their own podcast internal podcast or external either one. And my thesis on this is that for companies, there is tremendous value to having a podcast, even if nobody listens. If people listen, like upside, but even basically you should just assume no one will listen because we have like, there's so many great options. Why would I listen to a company's podcast? Right. But it is an excuse to have relationship building conversations with customers and prospects.

53:45Right. It's like sales and biz dev basically. Yeah. It's it's sales enablement. Like once you have a conversation, you ever recorded, you publish it publicly, even if there's no organic audience, you can still link to that and you can send it to customers as like a lead nurturing thing of, oh, somebody else was in this position too. And they talked about why our product made their life better. Right. What do they sales force should have its own? It's own some podcast. Yeah. What do they charge for that? What are people charged for that? I know Ben, Ben are Ben, Ben Wilson used to look work at is it mission .org Ben or no, or it's Caspian Caspian studios.

54:18And I think they do that for like snowflake. You kind of did this idea, right? Like how does this idea work? Or not really? What's the verdict on this one? Yes, it works. Yes. The customers are extremely price insensitive. So it's good. The margins are super high. We actually like combining the two things we just talked about. We made snowflakes podcast and Frank Slutner was on it all the time. Oh, perfect. Yeah. So wow. It's a it's a really good business. The one bad thing about it that's coming into effect right now is when recessions hit, it's the first thing to go, right? It's just like the margins are super good when times are good, but then when times are not good, the email you being like, Hey, can you send me the last 38 downloads numbers?

54:57And you're like, don't wait. The whole podcast, they're asking the question. It is exactly like that. Yeah. What else you got? What else interests you at the moment? Are there any interesting deals that you're seeing or categories that you're seeing that you really like that don't start with the word AI? I mean, actually no. I think that's the I think that is correct. I am one of these people that believes that saying AI, we invest in AI is a little bit of a silly thing these days because it's the same thing as 20 years ago saying we invest in software as a VC. It's like, yeah, no shit. I think it's just going to be so quickly ubiquitous that like if companies aren't using AI in some capacity or starting to get a little bit like, okay, I use case for company that you've seen and invested in or run invested in whatever.

55:50Well, I'm by the way, I think Sean met with James Kerrier recently and I think it was James on Twitter or maybe Sean used to hold us. You go, I've been pitched by 200 AI companies in the last quarter and I've invested in none because they're all weak or something like that. So I have an it's interesting. I haven't invested in any either. Lots of companies I've invested and have added AI stuff to their products, but I haven't invested in some like net new AI company in part because I don't think AI is going to be the differentiation and I don't think it's going to be defensible for the vast majority of companies.

56:22I think the value is going to come from and the mode is going to come from the same thing that always creates value and modes, which is like network effects with your customers or like data mode where someone's already fully locked into your thing and so they don't want to migrate because that would suck and they have processes around using your thing. And so I sort of like I believe that an enormous amount of the value from AI will accrue to these foundational models, but you actually do have to be using the foundational models in your thing in order to be like table stakes in in next few years because everybody's going to expect all software to just behave magically.

57:06Do you think and this will be the last question for me, do you think that there's a world where you're going to sell acquired or do one of these Spotify deals or anything like that? Good question. Have you been approached? Yes, but not recently and not in a way that like not since we've become a real business, what could you get for it? You think could we try to give them five million bucks what they said now? Yeah, we would say no that we would for sure say no to that. I would not be interested in having any conversations for less than on the order of like you got to like the hustle or morning brew or you know stuff like that.

57:42Ten's of millions. Yeah, yeah, I mean, I just think like the value of what we've built both as a business and revenue and our audience and our durability is in that category. I think it's very much an open question. It's gotten so much bigger than we ever imagined how much farther can it go? I'm curious how you guys think. Would we trust our own underwriting more than an acquirer's underwriting? Because what has happened for us is it has doubled every single year for eight years basically no matter what we do. Like we can't make it grow faster or slower than that. We've got to be it's running the business here.

58:15It's still dull. That would have been quite a bit more of a quote. Yeah, it's cash generative. Have you guys built any businesses off the back of it? So that's a well, you figured glow, David? No, I'm thinking kindergarten. So I have a fund on Angelist. I managed about 30 million dollars of capital on Angelist between two funds and four or five SPVs and while I used to be a professional VC before going full -time on acquirer and that certainly helps all of that's because of acquired. And you so you did that fund. Anything else that you guys have done that you've launched off the back of it because what we found was that a podcast, like you said, it's very hard to make it grow faster than it's kind of like natural word of mouth, virality, interest, and like kind of the tam of that market.

59:00Like the injury human beings are rare. Normally it's a grind. Yeah, yeah, yeah, totally. And even him, I don't think you can make it grow much faster or slower. Just like good execution is obviously the only thing you control, but like a lot of people can do good execution and their growth rate will be easier. You know, somewhat linear. You know, it's not going to like get much fat. The slope doesn't change that much. But the thing that I think what we found was that you can build businesses off the back of this audience, whether it's a fund or other other products or services that can be more valuable than the ad revenue of the business of the podcast itself.

59:32Do you guys do that or think about that? Like Sean will Sean mentioned a company and they're like, oh, we just did a million in revenue. And he's like, oh, well, all right. Let's I gave a company a plug that I invested in. I was like, hey, I use it for this reason. Well, was I get an ad basically, but it wasn't meant to be an ad. I was just explaining how I use this thing. And they booked a million dollars of ARR off of which was like pretty crazy. So that happens to us all the time, which is why all of our sponsor deals are these like six figure, very meaningful. And long term, we do these six month sponsorships.

1:00:03And most of our sponsors are now, you know, three, four, five seasons and like it works. And so the question is, is it more is the right mode for us to operate in? Keep doing these big, deep sponsorship deals with companies for cash. Or do we try to start companies or find some company that's at an inflection point and say, you know, let's trade equity or I think we're early in the thinking there because we're like, you know, we would have to it would have to be really the right type of company that is a high LTV B2B SaaS business that's reaching founders and and you know, CEOs and technical founders.

1:00:43And that would have to be the audience. Like, I don't think we're going to launch an energy drink brand and have that makes have that kind of pencil. But I don't know. We're open to the possibility. I think this also for us. I'm curious how you guys think about it because you are getting into this game. I at least I don't want to speak for Ben. I don't want to run a company. I want to make tell stories and invest. So I don't really want to build products or manage teams. So I think it's likely that we'll continue going that route. I don't know. Ben has experience actually building things. So you may feel differently.

1:01:16But this lets us benefit from the upside of companies using acquired as channel without us have to be involved in the luck of building that company. And maybe at some point that our desire will change there. But how do you guys have built companies? You guys are building products. How do you think about that? I've thought about it both ways. I'm like you a little bit where I have the most fun when I get to just tell you know, tell stories nerd out about stuff. Go learn new things and then come back with like go. I want to go down rabbit holes and then take the most interesting, you know, 1 % of things that I found and shared on this podcast or on my newsletter.

1:01:48And that's that's what I like to do. That's the sort of highest enjoyment. But I also love money. And so I'm like, okay, cool. And I also like the thing I study is about how people make money and business and create wealth. And so I can't help myself but like apply some of the things that I learned, right? Like it's very hard to resist the urge to apply the things that you know once you know them. But then you got to go recruit a team. You got to like, yeah. So I've basically played with every form you could do. So I invest both as startups as well as like cash flowing businesses like I'll buy you know, 20, 30 % of a cash flowing business that I think I can help through the audience or or just through like, you know, being an entrepreneur for 15 years and like learning about your stuff.

1:02:27The second thing would be starting a business. So I started the milk road off of the podcast. I think the podcast helped us get the ball rolling there. And then you know, I've launched the courses or things like that that just are ways to take the curiosity is like, oh, I learned a bunch of stuff. Could I teach it? And then and also thought about you know, you know, so buying businesses investing in startups, doing building a startup or not doing any of them, not being operational at all. Like I've played with kind of all of them over the past three years in different ways. Like we sold the milk road in part because okay, that business is working and we got a great offer.

1:02:59But the best part of the offer was, oh, I don't have to operate any business anymore. If I do this, that's appealing to me. Whereas Sam just launched Hampton last week or I think was last week. Congratulations. Thank you. I feel like you don't have to do sales for the next year based off of like, you know, the the blitz that you were able to to drum up across the pod, Twitter, everywhere that you tried to do, right? Like I mean, you could talk a little more about that. Yeah. So you crushed your demand side. Yeah. So basically in 2022 and 21, I was inspired by Sean. I was like, all right, Pine, I'll invest a little while.

1:03:33And so I gave it like a six to 12 month try. And I was like, I hate investing. I totally dislike it. I think maybe I could be pretty good at it. But I it's not for me. I don't like taking a minority interest in things that's I personally like owning all of something. And I think of myself a little bit as an artist sometimes with these companies. Like it's like my I like to be creative. And that's kind of how I like to express myself. So I prefer that with. And so that's why I launched Hampton was because it's like this fits my interests. I have competitive advantage here. And so when I announced it on the pod, we now have 5 ,000 people who applied and we're like and it that's it's cost $8 ,500 a year to join in.

1:04:13We're being very meticulous and very slow about who we're adding. But that's very likely going to be a very, very large company, I think we have a CEO, Jordan, who's amazing. But like we're not taking any outside capital. And I prefer Sean likes to do lots of things. And I know a lot of people like to do that. Lots of things. And I know a lot of people who succeed really nicely with that. Me personally, I prefer focus in just doing one thing at a time because I don't just my brain. It's really challenging for me to jump from thing to thing, like an investor needs to. And so I prefer like spending five, 10 years on something.

1:04:46And so I intend to start company, start a company, maybe another one in the handful of years. I'm not sure rather than investing. I actually think that Sean's way of like doing cash flow businesses and owning a portion of them. That's actually the easier way I think to make wealth. I just don't find enjoyment on it. I'm a dopamine fiend and like seeing sales come in and like making decisions. I get like it's it's my alcohol. I like it drunk off that. How do you think about the business of the pod of my first million? So the podcast is owned by HubSpot and we get paid a we get paid strictly of performance fee.

1:05:22And so when it kicks ass, which it has, we get paid good money as if we have had advertisers. And so but HubSpot's been great. Like not one time have they ever censored us or said, Hey, you made a bad joke. Don't say that. And so it's been pretty good. It is there's definitely I wouldn't say complicated, but it's a new relationship that we're definitely trying to figure out of like what to do. Because frankly, HubSpot's an awesome partner. But at the same time, if Sean and I bounce, they they don't have shit. Right. So I think we're both both sides of that of that are trying to understand what we can do and how far we can push things and what are definitely figuring that out there are you have some and they're probably are potentially more monetization options for the pod, right?

1:06:08Like how does that revenue get split like YouTube ads? Today we just don't we turned off YouTube ads. We can't like if somebody wants a sponsor it, we don't write. So like we leave a lot of money on the table in that regard. But you get other benefits, right? So you got to like kind of weigh those out over. So yeah, like the the benefit of the benefits that we have are basically we don't do any of the work. So we record and then it goes on the internet. That's a pro and a con because if we don't like how it's done, then it's like shit. We don't like that. Let's fix it. But as long as it's working well, it's awesome.

1:06:38We get paid without having to have any expenses. But then the flip side is shit. We have all these this advertiser interest and we know it works really well. Let's take more deals. And so I think there's a there's a world where we do come actually come to a compromise and we have more ads. But it's a conversation. Yeah. Is there is there a tension at all with you guys wanting to use the pod to do stuff that generates value for yourself that doesn't accrue back to the MFM pod like you launching businesses off it or is that no. They're they're they're they're great with that. And any revenue outside of the pod is 100 % ours events.

1:07:14Right. Whatever. But like let's say let's say that they're like we're hiring a producer now because Ben's going to go full time on his new thing. Let's say let's yeah congratulations. Ben, let's say that they're moving slow. It's like hey guys, HubSpot hurry the hell up. You know you're going way too slow. I got five friends right now who get higher. And so like there's tension there for things like that. Well, probably all the business active and all the stuff you guys are launching outside of the pod just brings attention back to the pod. Right. So like it's good. It also brings credibility right because how many people do you see on YouTube or TikTok or Twitter wherever that are like you know basically these bit like business gurus or like you know advice guys.

1:07:54And you hear the advice guys and you like click their bio and you're like so what are you doing? What do you do? Oh, your career is giving advice. Okay, but where did you get that firsthand knowledge? Do you have any battle scars? Like oh no, you're you know, you're the bald barber a great like you know, I'm not sure that I want and I'm not sure that I want that right. So I think that's also helpful right because if bald barber by the way chef's kiss. Good job. Yeah, I'm practicing my improv on the fly. I decided to take a few more risks of like just tee up that I'm going to make the joke and see if my brain in that 0 .5 seconds could come up with something and if I fall flat, you know, two out of three times, that's okay.

1:08:33That's the one. Even the blinds where I'll find it not my friend. You're doing great. Exactly. So yeah, basically I think it gets credibility, right? Like during the pod, you know, I built the milk road and sold it during like while the pod was live. So that adds some credibility during the pod. Sam launches Hampton. It's clearly going to be successful or already already off to a successful start. It gives the pod credibility and I think that's why like why does all in work really well? Like obviously the good banter they have good things to say. But I think a big part of it is like they bring a certain gravity to the room.

1:09:06They're participating in the story as it's unfolding. Yeah, like the easiest way I swear to you is all in his billionaires talking about billionaire shit and my first million is millionaires talking about bullshit. And I've heard people like college kids come out and be like we're broke guys talking about broke guys shit. That's like I'm fantastic. You know, like that's that's the way to go. But I think it adds credibility because there's a lot of people out there who will create content tell you about the next big thing. But they don't invest. They don't have skin in the game. They don't know actually what's going on.

1:09:33They'll tell you how to be successful and they're broken to press. So it's like you got to be careful with who you listen to. It's like I'd rather listen to somebody who's done it before than somebody who hasn't. It's just simple as that. Yep. Which that I think is the whole unlock of podcasting that like is a problem with the traditional media industry. Like one of the it wasn't explicitly in my our minds when we started acquired. But like I'd gone to business school. I went Stanford. It might be a there's great experience. But like the classroom experience like the professors not the guests who had come in who had done stuff.

1:10:07But like the professors who were full -time academics. And then the cases that we would do is be like you guys didn't do this shit. Like why are you telling me about this? Like I want to hear from the people who did it. And so the journalist that covered the tech industry. It's like how many people go from being successful founders to entering the journalism industry and writing for a paper. Like you're like Michael Michael Morowitz by the way. Michael Morowitz you know Doug Leoni's partner. Yeah. Merit. Yeah. Sorry. More it's journalist turned billionaire. Yeah. And like those those. The middle there.

1:10:39Yes. Yeah. Yeah. Sorry. Those you know journalists to VC. But the reverse pipeline doesn't exist. So like yeah. I always have to remind myself of this when I'm reading tech coverage. I'm like okay the very best ones of these people have immersed themselves in the operator founder communities to be able to like pick up the genus Aquan read between the lines of what certain things mean like Dan Primack is one of these types of people. But you know a junior journalist coming out of journalism school writing and picking up this beat. It's like it's hard to say that that's a better way to learn what's going on than listening to people who are industry participants talking about what's going on.

1:11:20I remember once I went to a journalist somebody who worked at TechCrunch. I went to their apartment in San Francisco. And I just like walked in and I looked around and I was like this is the same apartment as like everybody I know right out of college has. And I was like and then they have this pen and then they write on TechCrunch and then it looks like very different. But like this is a person who's just a normal they're a normal person who this is kind of like their first gig and they're covering something that they barely like really true. Honestly, they barely understand that doesn't mean they're not smart doesn't mean they don't have good intentions.

1:11:57But like it's that thing where I forget the name of it. But it's like if you read an article about a topic you actually know about in the newspaper you're like oh this is oh okay I see the limitations of how much stock I should put into this. But when you read about a topic you don't know you're like this is the New York Times is an expert. And it's like there is a probably also not an expert. I mean, I have knee share something like what it's called right. Do you guys remember a few years ago when one of the I think her name was Jen or something like that one of the founders of away travel like there's all these headlines saying like this woman it created a toxic workplace that's horrible you gotta get out of like oh this is a juicy story let's dig in where's the fraud I love this.

1:12:36And you read that you read the slack messages that they're publishing and you listen to this. Yeah she's running start up. So someone like packed like she like opened up a package and it was horribly done and she said if this keeps or what did she say she goes I'm just gonna have to pack these boxes myself because whoever's running this must be brain dead. And I was like okay cool let's scroll where's the good stuff. Yeah who's there like that's the thing but she said the word brain dead and I'm like that's the toxic work environment like come on give me a break that that that ain't nice but that's not New York Times headline shit give me a break like I want to see some like I'm like fired for that right something like that she bounced because of that like that it wasn't just a brain dead is the other woman not yeah I forget what her name was but like I read that article I'm like there's no fraud like she didn't you know like there's no alcohol and valve what's going on give me something good I want cocaine and hookers I don't want brain dead yeah you know I'm saying this one there's so much value to like what you guys are doing that your building business is and talking about them that like we're investing benzo full -time VCI used to be like we know what's going on in a way that if you're just a journalist like you can't it's structurally impossible well podcasts actually have more people from the field that come in and do it because a podcast is easier you're talking you're not writing you don't have to like edit and like you know make a cool fancy tiktok thing you don't have to like layer in filters or stuff you just you sit on your talk that's why you like read hot straight up audio podcast yeah just like straight audio or even audio with the webcam like you know now I think that's getting a little bit easier but basically the podcast format I think there's a reason why you see somebody like ex -athletes do this where you know the same thing like you have skip bailess who will just go say how this person is they don't have the clutch gene it's like brother's not a gene yeah they know they they know they you know they'll just like they'll make fun of people and then you have JJ Reddick who's so good oh man they're so good yeah he's phenomenal at content his and his point of view is so much better than than there's and that's why his stock is going like his views are just going up into the right because he's good at this he pulls real guests when he pulls real guests they talk like they don't talk like they're talking to a reporter because they played with JJ or they played against him so they actually open up about stuff but he's also not trying to trap him in these gotcha questions so there's like some mutual trust there yeah and then he'll just share like you know when you're a player on the road like you know this is the situation fans think you're practicing blah blah blah but actually here's what happens when you go and he's just saying what's what's really going on and so to me when you see that and again it's because podcasting is a lot easier if you told him hey I need you to write like beautiful well written blog posts every other day it'd be very hard to do but for him to just oh something happened get on the microphone give my point of view they could do it so like you get more credible experts in podcasting then I think on any other like medium this is probably actually a good use of AI is being able to turn the ramblings of people who are industry participants you run that transcript through and you say write this as if it was a New York Times article with a strong lead and you know this many words like it is amazing how I feel like I've transformed in my use of GPT over the last month where I was using it to try to answer questions which it's fine at but of course that's the first thing you're going to do with a prompt but my use case recently has been take lots of stuff and feed it in as the prompt and then ask it to make it better so like I wrote a LinkedIn post about our most recent acquired episode and I fed it I've just pasted the whole thing into chat GPT I was like can you make this like more exciting and can you make this more likely to go viral and like that literally all you said you so you basically copy and paste it 500 words you said here's a LinkedIn post I wrote make it more exciting let me see exactly what the prompt was so I don't BS on the pod here can you please act as my editor and modify this to make it more likely to go viral as a LinkedIn post that's so funny and it indexed way in the other direction like it went it full of emojis you're like you'll like fuck out open a capital letters discover the secrets like a lot of like and so I had to tone it down but I totally use that to and I and it helped me rephrase a lot of things where I had like awkward phrasing that didn't flow well it's a very good rewriter that's awesome I'm going to start doing that well guys you're awesome and thank you thank you for coming on pre listen to our pod go check out acquired if you're listening on acquired do the as we call it should we teach of the gentleman with the understanding right is that the I feel like the gentleman's agreement and the ladies understanding has become like you know in wrestling when the rock would take a microphone he'd raise the people's eyebrow and you know he's going to hit him with like yeah yeah the expected thing but for some reason you get excited just to hear what you're saying yeah that's how I feel now with your this is your catchphrase leave go ahead this is the gentleman's agreement and so basically the way it works is look you're going to 7 11 you're going to go buy gas whatever you are at the top when you're about to pay you see a little jar and it's for muscle just a tree and there's all that money in there and of course you don't take that money you leave a dollar there no one's going to stop you by the way if you took that money but that's basically what this podcast is this podcast is free us for we just dedicated hours of our of our day to do this but unlike every other podcast this one's not free just like that jar you got to leave a dollar with meaning you got to go and subscribe to acquired podcast on Spotify as well as iTunes to do the same with my first million on our YouTube page and you click you click subscribe it's called the gentleman's agreement because we're not there all right we're just shaking our hands ladies agree what it's called the ladies understanding the gentleman's agreement we're not there to help you guys out it's just honesty so everyone's doing it don't be left out you have to do this that that's our that's our agreement we create the content you click subscribe I love it you guys are innovating and there's real value like to it's not you know for our audience if you go and subscribe to my first million you're going to get smarter you're going to get more ideas like this benefits you so it's not you know you're not just pulling money out of your wallet here you're you're doing something that's gonna make your life more fun and that's the gentleman's agreement and that's the ladies understanding David you want to take us home what we saying oh I was gonna ask I could keep jamming with you guys for another hour I was gonna ask you said Spotify where do you like people to subscribe Spotify YouTube you said that well you said earlier that spotifies your main thing so once we started doing the gentleman's agreement our YouTube channel went through the roof so we went from like 150 ,000 subscribers to close to 200 in like a month or eight weeks or something like that so Sam we should do a every pod giveaway of YouTube premium to someone in the comments so go go to our YouTube go to this episode on YouTube and just and just type in premium and we will pick somebody we will pay for your YouTube premium so that you can listen to this pod ad ad free in the background you can lock your phone and walk around and you can enjoy that sweet sweet 1499 a month that we're gonna be paying for you for the year one year of YouTube premium in every episode call it now oh I love it that is really reminder to go comment because I am a YouTube premium subscriber but I want you guys for the bill yeah well thanks for doing this guys we appreciate you and we'll have you back on and thank you for everything you guys catch guys next time