Acquired's David Rosenthal: 3 Secrets of the World's Most Successful Businesses

Welcome to Simplify. I'm Caitlin Schiller.

And I'm Ben Schumann-Soler.

Hi.

Let's do it.

Let's do it. Good morning.

What do we got?

What do we got? So if you listened last week, I said, welcome back to 2024. We've got some

different kinds of conversations for you in the can. And today's one of those. It is not

with a book author, but it is with somebody who has a tremendous body of work, nine years

of work. This guest's name is David Rosenthal. He was once upon a time a venture capitalist,

but what's really special about what he does now is that he has been studying successful

businesses for years and pouring everything he learns about them into this really great

podcast that's called Acquired. Maybe you've heard of it. It has been the number one tech

podcast in the world for years. It is right now anyway.

It's huge. It's like this massive long form business podcast or tech podcast, like three

plus hours long.

Yeah. I mean, Acquired is something I've followed for years. They do deep dives into specific

companies. So like he tells you in the interview, it started as a way to just analyze acquisitions,

like tech acquisition, niche. But in so doing, when you really dive deep into any company

story and founders and whatever, of course, you have to talk about society, culture, strategy,

you know, a million topics. It opens up.

So these like really long, really well-researched, really also like good listening where there's just

a really solid conversations. And I'd love to ask you in the book and also as a host and expert

interviewer yourself, some of your big takeaways. But for me, you know, Acquired was always one of

those podcasts where somebody would share an episode or a clip from Acquired before like a

strategy meeting. Yeah. Hey, let's let this case inform this conversation or maybe take this back

to your team and use it in your one-on-ones or, you know, and then. Yeah.

Yeah.

Yeah.

I think we're just able to find those amazing, amazing, inspiring or teachable moments from like

business history, specifically tech business history.

Right. Yeah. I just talked about David Rosenthal because he is the one person I got to speak with,

but there are two hosts of this podcast, his co-host Ben. So David and Ben have been working

together for years now and they make this podcast together and they together do all of this research.

So what we focus on, which I think is really cool because as we said, there are nine years of these

podcasts.

And so much to learn. I decided that we'd focus in on three big lessons because they know a lot of

patterns from these successful businesses, right? Yeah.

So we focused on one that has to do with customers, one on product and one that extends out to

collaborations. So listen for that. It's a really fun conversation. I hope you also go check out

Acquired. It's such a great podcast and yeah, let's dive in.

Sweet.

Hi, David. Thanks so much for being here today.

Thank you for having me, Caitlin. This is great.

It is great. So this is a different kind of episode and I'm really excited about it. We

don't have a specific book or an author today. Instead, we have you. You're a guest who is an

expert in your own right. You're an expert on the ins and outs of building a successful business.

And I'd say you're an expert because you've done kind of all the research and you,

along with your co-host, pour all of that research into this great long form podcast.

I'd call it a long form podcast.

Oh, yes.

I don't know if you would.

Yes.

Maybe the longest form podcast. There's one or two that are longer form, but not many.

I mean, Humor and Lab kind of pushes it sometimes, but yeah.

Yes.

And that podcast is called Acquired and it tells the stories and strategies of great companies.

So, David Rosenthal, welcome. I've done a tiny intro for you, but I always like to ask guests

to introduce themselves the way that they like to be introduced and you can weave in any part

of your background you'd like there. So yeah, here we go.

Yeah.

Well, thank you so much.

Thank you so much again for having me. This is super fun. Blinkist and your new parent company,

Go1, have been great partners of ours on Acquired. We've loved working with you all this season and

it's fun to turn the tables and be on your podcast now. Mainly what I do and have been doing for the

past set of years is this show, Acquired, that my partner Ben and I do. We create about an episode

every month or so, and we were joking about long form. Our episodes tend to be,

they're almost always three plus hours long. Sometimes they're four plus hours long.

And we pick a company and we aim to tell the whole story of that company in the most sort of

in-depth, fully researched, as close to the truth and whole truth of the whole history of the company

as possible. And that involves reading many, many books, hence the great partnership with you all.

You've created research, library research shelves for each of our episodes.

Like we just did, we just covered Visa, the history of the company Visa. And there probably

are five or six books that we read for that episode in addition to lots and lots of other

research and talking to folks. And so Blinkist has created little bookshelves for each of our

episodes with blinks of all those books, which has been super fun. Before starting Acquired,

we started it almost 10 years ago. My partner Ben and I were venture capitalists here in the US.

I'm in San Francisco. He's in Seattle. We've been working with companies in our day jobs,

investing in early stage startups. Each of us have built several companies. And so this started

as just sort of a hobby, fun project, way for us to learn. And it just slowly grew and grew and grew

over the years. And now it's become the main thing. This year, for the first time, we became

the number one technology show in the world on both Apple and Spotify, which we're not the number

one show every week, but many weeks we are, which is great. So it's created this whole unexpected

life for us.

That is so cool. And it's so beautiful to be able to start something with your friend.

Oh, that is the best part. Ben is literally my best friend. And we joke that we spend more time

with each other than we do with our wives. But our wives are probably happy that way. We don't

talk their ears off about all this business history nerd stuff that they don't really care

about. So we found our soulmates. Exactly. Different partnerships for

different things. It's on a much smaller scale. We started Simplify,

my co-host Ben and I, because we just really wanted to be able to work together more. We were

within the same company, but different teams. And we were like, you know, Blinkist should really

have a podcast. So I'm glad that we've discovered we have that in common. But let's talk about some

of your expertise. I think what's really special about Acquired, what you already mentioned,

and what makes kind of the exact opposite of what Blinkist and Simplify do, is the depth and the

length. So your podcaster, you said sometimes four hours long, and they're so comprehensive

and exhaustively reported.

And you really take the time to study what makes each of these businesses you cover special,

and what makes them succeed. So what I wanted to tease out today was a handful of core lessons

that you've seen in your nearly nine years of researching for and creating this podcast

across, what, 200 plus stories. And I thought that the best way to do this is through examples.

That's what you specialize in. And I wanted to focus on three lessons. One that has to do with

customers. One that has to do with the business. And the other one that has to do with the

product. And one that extends out to collaborations. I thought that that would

nicely cover sort of the aspects of business that you talk about. So you have case studies for each

of these. And I've kind of teed it up for you. But I would love if we could start with a core

lesson you've learned about customers from Amazon. Yeah. Well, there are many, many lessons about

customers from Amazon, including some really funny ones. We talk about every company being

unique and cool. And I think that's a really good lesson. And I think that's a really good lesson.

And Amazon is definitely that. Right. Well, you pick your favorite.

Yes. Well, the one that really resonated the most with us and that we see not only time and time

again in companies we cover, but actually also in sponsors that we work with and our business

partners. And I think it's absolutely true for Go1 and Blinkist too. And this lesson, listeners of

the show will be very familiar with because we talk about it all the time. It's summarized in

the aphorism, don't worry about it. Don't worry about it. Don't worry about it. Don't worry about it.

Don't do what doesn't make your beer taste better or put more succinctly, focus on what

makes your beer taste better. Now, there's a story behind this, of course. Yes. People,

listeners are probably like, well, what does that mean? Me too. Let's do it. I want to hear it.

So when Amazon was first launching AWS, Amazon Web Services, which is now, you know,

the cloud juggernaut that we all know it as today, but it was odd that a e-commerce,

retail company would be launching a cloud back in the day. They, of course, focused on startups

as their first customers. And Jeff Bezos actually went to Y Combinator. This is in the very early

days of Y Combinator. I think this is 2008. And this is online. This is on YouTube. You can go

find this talk that he gave Startup School, which is the kind of big annual kind of content event

that Y Combinator put on at the time. And he gives this speech where he uses,

this analogy, and he's pitching all these startups in the room, these baby startups about why

they should use AWS instead of building their own computing infrastructure for their apps.

And he tells the story of German, which is funny, given your location in Germany, of German beer

distilleries around the turn of the 20th century when electricity was invented. And these beer

distilleries were built in Germany, obviously using electricity to power the process, the

physical factory manufacturing process of making beer was a great advantage. And the first generation

of beer distilleries to use electricity built their own power plants on site at the factory,

like their own generators. They used coal or whatever was prevalent at the time. And that

was great. And they had a great advantage over their competitors. And they were able to make beer

in Germany. And they were able to make beer in Germany. And they were able to make beer in Germany.

And they were able to make beer in Germany. And they were able to make beer in Germany. And they

were able to make beer in Germany. And they were able to make beer in Germany. And they were able to

quantities and more efficiently and at a cheaper price and they won. And that was all well and

good. But then the second generation of distilleries of beer brewers to use electricity came along.

And rather than building their own power generation on site, they just used the public

utility grid. They rented power from the public utilities like we all do today. Nobody at their

home or business generates their own electricity. And those second generation of beer breweries,

put everybody in the first generation of electric beer breweries out of business,

because it was just so much more capital efficient to rent your electricity infrastructure than it

was to build it on site yourself. And so the analogy that Jeff uses that the argument he makes

to all these startups is computing infrastructure is going through the exact same transformation.

The first generation of internet startups, they all built, you know, effectively built their

electricity generation on site themselves. And so they built their own electricity generation on site

themselves. And now this new public utility grid is out there available for your computing

infrastructure for, you know, web apps and infrastructure. And you should just use that

you should not bake your own infrastructure. And his argument is like for these beer breweries,

they should just focus on making their beer taste better. Like getting good at producing electricity

had nothing to do with whether customers would like the beer that they made or not.

The electricity was just a commodity. This is obviously, you know, funny and really cool

quirk of history. Actually, at this very event in this auditorium, the three Airbnb founders were

there listening to Jeff say this, they hadn't even joined Y Combinator yet, they were like applying

at the time. And obviously, this made an impression on them. And they built on AWS,

as did this whole generation of startups. But it's applicable so much more broadly beyond that

there's so many things in building a company that you need so many resources you need,

and it can be tempting to Oh, I'm going to control everything. I'm going to build it in house,

I'm going to build my own infrastructure. And it's like, no, the only thing that matters,

especially in a young company, is your product and making effectively making your beer,

whatever your beer is taste better. And you should not generate your own electricity or

any analogy thereof. So we just love, love, love, love that, you know, like,

Blinkist is a great example, like what you are serving for your users for your customers,

is not the same thing as like, you know, building your own computing infrastructure,

delivering the audio and text yourself, like I'm sure you use a cloud service provider.

It's not the same thing as books. It's a different value proposition. Books are great,

too. They're just a separate thing. You don't write your own paper, you know,

produce your own paper, you don't do all this stuff. You know, you focus on what makes your

beer taste better. Indeed, you know, producing our own paper, it sounds fun, but I'm sure I

wouldn't want to do it more than once. So no, yes.

Yeah, I think that that's a really, really great, strong lesson. I think there's so much

temptation, especially when if we get too precious about our ideas, there's so much

temptation to control the process from beginning to end. And it's freeing to hear, no, focus on

the thing that matters, on the unique value. And it makes me think about when I used to try to do

too much in my role, I was coached by someone to focus on only the unique value that I can bring

with my skills and let someone else take care of it.

Yeah.

Yeah.

That's such a good point. This isn't just applicable to companies. It's applicable to

careers and people too. I think never more so than today. I mean, with the internet and global

connectivity of business and especially post pandemic, like there is so much reward to

best in the world specialization and just focusing on, like you said, what you can do better than

anybody else. And there are other people who are doing it better than you. And I think that's

something that's really important. And I think that's something that's really important. And I think

there are other people who do everything else better than you. And that is something you should

embrace.

Absolutely. And also, I think it's an interesting place to fold in not just post COVID, but post AI.

Like, maybe it's not post AI now, but that's an even more urgent invitation, I think, to figure

out what is it that you as a human can offer and do that is different from anything else that not

only another human can offer and do, but also AI or how can you use AI to augment that special skill?

Oh, my gosh, such a great point. You know, Ben and I,

my Ben and I think about this a lot.

My brain just went, what?

What we do. Given what we do, I'm sure, you know, you all do too. You know, we're content creators

and like, well, already, you know, AI can create content. So like, what do we do here? And you

know, it's funny, you know, you would come back to the, the, the quip we like to use of focus on

what makes your beer taste better. You know, where we've kind of landed our hypothesis is that

actually,

what our value is going to be going forward, we obviously need to do the work, do the research,

make great episodes and stuff, but is taste, you know, at least right now, AI doesn't have

taste to know what to what stories to tell and how to tell them. You know, that's something that

only we can do right now. But so many other things AI can do. Yeah, I think that's a really good

point. I don't even know if there's a connection here. But I'm thinking about that really,

really important. Yeah, absolutely. And I think that we're kind of the last bastion of humanness is

taste and understanding. And I think that's a really important thing. And I think that's a really

I was listening to an episode of the Ezra Klein show a while ago, in which he talks about AI. And

he said, you know, the one thing that AI can't do, the way that humans can is exercise understanding,

it doesn't have human understanding. And I hope that continues to be true.

Yeah. Well, it's a brave new world.

Indeed. So on that note, why don't we move on to the second lesson, the one that I said,

focuses on the product, this one focuses on Brooks. And I love this one. I think this is my,

one of my favorite ones that I've heard from you guys. And this lesson is scale up or niche down.

Can you tell me about that? Yes, absolutely. So Brooks Running Shoes,

Brooks the shoe company for folks who might be wondering, Brooks, what is Caitlin talking about?

Brooks is a fascinating company that we've gotten to know. It is based in Seattle where my co-host

Ben is. And almost nobody knows this. Brooks is owned by Berkshire Hathaway. And it is a

great success, an unlikely success within the Berkshire Hathaway portfolio. It's not as large

as the railroads they own or Geico insurance or companies like that. But it's fairly large and

it's incredibly profitable, especially for a shoe company. And we've gotten to know them.

We've gotten to know the CEO, Jim Weber, who really built, it's a very old company, but he's

built the current business as it is today. And for folks who are runners, they of course know

Brooks.

And they know that Brooks is all about running. Most shoe companies out there, even companies that

you would think of as relatively niche, aren't really niche. They make lots of products that

serve lots of use cases. And it makes sense. People wear different shoes for different

activities. You have shoes for wearing around the house. You have shoes for going out to a nice

dinner. You have shoes for running. You have shoes for basketball. You have all these different

shoes.

And you look at a company like Nike, which we've also covered, and they're one of the biggest

companies in the world. They're incredibly successful and they make shoes for every occasion.

So 20 years ago when this happened, Jim and Brooks were sitting on this legacy brand. And Brooks at

the time, as he puts it, made barbecue shoes, like shoes that you would wear in your backyard.

And yeah, they made some running shoes. They made like football cleats and all sorts of stuff.

Basically, they were like a cut rate Nike wannabe. Not even a Nike wannabe.

Ouch.

They were just like bargain basement, the stuff you would buy at like a TJ Maxx or something like

that. Nothing wrong with the TJ Maxx, but like it was not the Brooks that we know and many people

love today. So he came up with the strategy, like what are we going to do here? And what he decided

was running. We are going to make the very best shoes for people who

consider themselves runners. And our shoes, you know, they're going to be good enough that the

best runners in the world could wear them. But folks who really know running know that

most of the really elite Olympic athletes in the world don't wear Brooks. They wear Nike or

Adidas, as you would say in Germany.

Oh, it drives me crazy.

Now, Adidas, that is a great story too. Behind that, that's for another day.

Yeah.

But, you know, they don't.

So that's not the strategy. The strategy is great running shoes for the everyday runner,

the people who are running marathons. You know, Jim observed and Brooks observed

that marathon running, half marathon running, 5K running, 10K running was really gaining in

popularity around the kind of early 2000s and becoming much more mainstream, or if not mainstream,

you know, a more widely participated in activity around the world. And what he realized was for

those people who were running marathons, they were not going to be the same people who were

running marathons. And so he decided to make the shoes for the everyday runner. And so he decided to

to make the shoes for the everyday runner. And so he decided to make the shoes for the everyday runner. And so

to make the shoes for the everyday runner. And so the people who were running those shoes,

they're not even running those races to win them. You know, you think about Nike. And Nike is the

especially in America, around the world, but in America too, the, you know, the gorilla in the

space that Dominic gorilla. Well, what does Nike mean? Nike means victory. What does Nike stand for,

it stands for winning. It stands for being the best, it stands for being elite. But there's this

H rivals and there's things beingyt to get w

bated sister. I can't give a shit, man. I can't to get owned. I can't. I can't. I can't at everything.

you know, as a form of exercise.

They're running as a form of enjoyment.

They're running as a social activity.

And that group wasn't really being served.

It was kind of hidden behind this sort of previous assumption

that competing in running was about winning.

And so Jim and Brooks really embraced that and said,

we're going to focus this entire company on serving that niche.

People who run not to win.

And they've built a, you know, multi-billion dollar company

in the process from something that was literally worth like less than nothing.

It was a piece, a small piece of a bankrupt underwear company.

And today, again, for anybody who, you know, identifies with that group,

which, you know, I certainly identify in that group.

I love running.

I occasionally compete in races.

I'm under no pretenses that I am going to win anything.

You know, I'm a middle-aged dad here.

But I wear Brooks because Brooks speaks to me

and they make great music.

They make great products for what I do.

You know, the elite Nike shoes, the Vaporfly Maxes or whatever,

you know, the latest, you know, stuff is, you know,

those are shoes that are designed to be worn once,

maybe twice for peak performance and then thrown away.

Well, I run several times a week.

I don't want to be buying shoes every week, you know,

and I want to run a marathon in the same shoes that I train in.

And I want to have a good experience with that.

That's what Brooks does.

Lovely.

So they found their niche with everyday runners

who want to run.

Exactly.

And, you know, it's a great story that I just love about Brooks,

but it's, you know, true for everything.

And Ben and I find this immensely true for us at Acquired.

You know, I mentioned we hit the number one technology podcast

in the world this year, which is amazing.

We started out making a show.

The reason the show is called Acquired is because

the original premise of the show was to analyze

tech acquisitions that went well.

You know, a niche of a niche of a niche.

And we were making, because we were venture capitalists at the time.

And we were like, well, most of the companies we invest in

are going to get acquired.

So we should study, you know, what good acquisitions look like

so that we can work towards that.

And yeah, we'll make the show for us primarily,

but like maybe venture capitalists or like startup founders would listen.

And that is still our core audience.

But like, it turned out that that niche was actually way bigger than we thought.

And we've broadened the show.

You know, we don't just cover acquisitions.

In fact, we don't really cover acquisitions at all anymore.

But if you were to look at Acquired and, you know, say you didn't know at all about it,

but you were to take this premise of like, oh, a three to four hour long podcast

that's super nerdy and super deep, you know, about business history of companies.

How big could that be?

How big could that audience for that be?

Well, it turns out on the Internet, the niches can actually be quite, quite, quite large

because you're addressing the entire world, you know, our audience.

This spans the entire world.

And if we were just thinking of, you know, sitting there in Seattle being like,

oh, how many people in Seattle want to hear us tell stories about this?

I don't know, maybe a few thousand.

But like when you aggregate everybody within a subculture niche in the world,

you know, just like Brooks Running can build a several billion dollar company

focusing on this niche of runners.

You can do this in just about anything.

Absolutely.

I find that really nice.

I love thinking about.

I love thinking about niche communities on the Internet.

I had a live journal way back in the day.

Oh, sweet.

I found out the other day.

It's still out there.

It's kind of terrifying.

But that was such a beautiful little niche community.

I don't know how I would describe those specific people.

But, you know, the Internet's great for that.

And it's I love that you have found your niche of people who want four hour kind of business podcast.

But there's so much more than that.

It's history.

There's so many cultural lessons in there.

I guess that because you braid in all of those aspects,

it really has a much bigger niche than you might have thought.

That's what we thought.

And yet still, you know, just like Brooks,

I would say probably 90 plus percent of the world are never going to wear Brooks

and don't care for the value proposition that they offer.

Certainly 90 plus percent of the world doesn't care for acquired

and has no interest in the value proposition that we offer.

That's OK, because 10 percent of the entire world is still a very large market.

Yes, I love that.

So moving right along,

we come to now the lesson that extends out to collaborations.

You and I, I feel like we talked about collaborations in a sense at the beginning of this podcast,

talking about our co-collaborators.

But there is yet another lesson from Jeff Bezos and Amazon.

And that one is you'll get the partners you ask for.

What does that mean?

Yeah, we adapted this language a little bit.

I believe his original line about this was you get the shareholders you ask for.

And he stole this from.

I don't know if again, it was the exact language,

but this very much is in the realm of, you know, Warren Buffett, Berkshire Hathaway, too,

and many other great companies over the years.

You know, I think probably Warren and maybe Charlie had some influence on this, too.

You know, like so many of these concepts, particularly in company building and business,

he just has such a folksy way of telling everything.

But specifically, I believe it was around the Amazon IPO.

It may have been in the original shareholder.

Yeah.

It was in the original shareholder letter that was included in the IPO prospectus for Amazon.

I don't know if it was in that document or kind of around it where Jeff said it.

But at the time, I believe it was 1997, if I have my history right, when Amazon went public.

They were founded in 94.

I believe it was 96 or 97, maybe when they went public.

We'll go with that.

And sometime, sometime kind of mid to late 90s.

Okay.

Let's put it that way.

That's fine.

And the way, you know, today, obviously, everybody knows Amazon and the way they run their business and, you know, et cetera, et cetera.

But back then, it was very different.

And particularly what was different was Jeff at the time was very focused on we are going to reinvest every incremental dollar that comes in.

Yeah.

Yeah.

And every dollar of capital that we raise into improving the customer experience writ large of Amazon.

And obviously, he defined that writ extremely large, you know, with AWS that they launched and, you know, all the things that Amazon does and has today.

But back then in the mid 90s, this was crazy.

But both concepts were crazy.

Crazy that what started as a bookseller online would do such variation.

And I think that's what made Amazon so successful.

I think that was the first thing that Amazon did that was like, you know, they were like, okay, we're going to do this.

We're going to do this.

We're going to do this.

We're going to do this.

We're going to do this.

We're going to do this.

And then they started doing these more serious and disparate things as like, you know, starting with, okay, selling like DVDs.

I think that was the next thing they went into after books.

Like, maybe you could do that, but that they would be an everything store and sell like vacuum cleaners online.

That's insane.

But then that they would launch, you know, AWS that they would launch, you know, all the devices that they've launched everything that they've done.

You know, they're doing healthcare now, completely and utterly contrary to popular wisdom, shall we say.

The other bigger thing was that they would take all of the what otherwise would have been profits coming in that would have been, you know, distributed to shareholders that they would have been showing Wall Street that, you know, we're a profitable company.

And they were selling the products in the new range.

You know, we're, you know, we're an all around, you know, a marketing company.

And they were selling.

Yeah.

we're generating these profits, we're generating these cash flows,

what made the stock price go up?

Instead, they're going to take all of that and reinvest it into those new initiatives.

And there's this great line, I believe in an equity research report

in the early days of Amazon as a public company,

or maybe it was even in the middle years of Amazon as a public company,

where the analyst wrote something like,

Amazon is a charity being run for the benefit of American consumers.

And it just did not compute, especially with the Wall Street and investor crowd,

that this company would seemingly have no interest in generating profits

and returning profits to their shareholders.

Now, again, today, this is not as radical an idea,

in large part because of Amazon has kind of normalized it.

You know, lots of startup founders these days speak in similar language,

trying to sound like Bezos.

But back then it was super radical.

And so Amazon had so many near-death experiences,

especially as a public company.

I mean, the stock traded down to like nothing.

You know, people, A, the dot-com crash happened,

so the macro environment changed around them.

But Jeff kept right on talking all this crazy talk.

And so, you know, the investor community was like,

what, this is ridiculous.

I mean, Amazon's market cap got down to, you know, tiny.

We're talking like well less than a billion dollars.

Well, well, well less than a billion dollars in the early 2000s.

You know, this company is obviously worth well over a trillion dollars today.

Anyway, Jeff's point at the time, and that he kept harping on,

people were asking people around the company,

like, Jeff, why are you talking this way?

Like, you may believe this, you may do,

but like, can you at least not talk this way?

And what he said was, you get the shareholders you ask for,

you get the partners you ask for.

He was being very intentional by explicitly saying

what he was going to do and do this sort of crazy thing.

He's like, I only want people,

I only want people to own my stock that believe in this,

that agree with this.

Because if I sort of say the things you're supposed to say

and show the things you're supposed to show,

that's not how I actually want to build this company.

And that's going to create a massive conflict

and misalignment over time.

Once I start doing what I actually plan to do here,

those people who might drive up my stock price,

you know, buy the stock right now

and drive up the price right now,

they're going to get really pissed.

They're going to sell the stock.

The stock's going to crash.

You know, I mean, all this happened anyway.

But his point was, I only want people here who are true believers.

Now this, this converge into cult-like behavior

and Amazon has been accused of that

as of many other companies over the years.

But there is a strong element of truth here.

And let's, you know, let's take it away

from the stock market and investors.

I think it is very, very important and applicable

just in sort of the partners broadly that you work with.

Like let's, let's again,

take it away from the stock market.

Let's take it away from an investment context.

But if you're doing any kind of partnership with somebody,

you know, it could be partnering with another company,

you know, whatever,

but the most deepest, most important partnerships

are like your partnerships in life, you know?

Obviously your, your personal, you know,

your relationships, your spouse, your partners,

your friends, but in, you know, business,

your co-founders, your podcast co-hosts,

you know, they're like, it can be very tempting.

And many people do, you know,

sort of project or pretend that they are going to behave

in ways that they don't actually intend to.

You know, we've all experienced this again,

whether in personal relationships or business relationships,

and it's not necessarily pernicious.

It's like when you're in the, the dating phase,

the get to know you phase, you want to put your best foot forward.

You want to impress, you know, people you want to be liked,

you want to build partnerships.

And so it's like very naturally hard.

You want to, you want to soften your rough edges.

What Jeff did and what he's espousing is the opposite of that.

Highlight your rough edges, say,

maybe it's not the rough edges,

but like what you actually intend to do.

And if you do that, again,

back to the previous conversation about, about being niche,

you know, you will probably turn off 90 plus percent of the people out there,

but that's okay because the 10% or the 5% or the 1% of people out there

who really, you know, dig what you're selling,

in whatever context,

they're going to really like you and they're going to stick with you

because you're going to be aligned.

Right.

Yeah.

I have the sense that this whole conversation has actually been about uniqueness and integrity.

Yes.

Yes.

From the very beginning, from like, you know, uniqueness, every, everybody is unique.

Everything is unique.

If you, if you look right straight down at those, you know, micro, micro braids of things that make up a hole.

And,

Yeah.

You know, protecting integrity, not in the sort of moral sense, because, you know, let's be honest,

there's plenty of amoral stuff that goes on in business,

but integrity in the sense of wholeness of undividedness,

that's what really matters because it'll show the right people who you are and it'll make them stick around.

Yeah.

And, you know, to, to bring it back to business, you know, I, I sort of, I, I don't make any moral, you know, judgments on it.

Right. Right. Right. Right.

You know, sort of our,

Pardon. No, that was me.

No, no, no, no, no.

I, I, I think it's, I, I think it's great to, you know, aspirational, but like there, there actually is a self-interested reason to do this.

And this gets back to, you know, what Bezos was intending with this and, you know, where he got the inspiration from with, you know, Warren Buffett and others.

You know, Buffett is a master of this.

The way, the way that Buffett and Berkshire Hathaway talk about what they're doing, again, think back, especially to the 60s, you know, 70s when they were 80s, when they were doing this.

It was similarly crazy, but it's very intentional because,

if you look at those companies over the long run, they've built way larger, way more durable, you know, way better investor bases than any of their peers at the time.

And again, this is why Jeff was so inspired by Warren here with this, because he had this example of Berkshire Hathaway.

I mean, Warren was the real innovator in doing something crazy.

You know, nobody had really done something like this before him and Berkshire.

You know, by, by willing, being willing to spend.

And in both cases of those companies, multiple decades kind of being unloved and overlooked and thought of as crazy.

In the long run, they got the shareholders that they asked for, you know, and they got the, the partners they, they asked for.

And that allowed them to build these just like enormous durable, you know, franchises that are larger than anything.

Yeah.

All right.

Well, that kind of wraps up our three core lessons.

But I also wanted to ask you, David, from the position of, from somebody who's done so much research on this stuff and seen a lot, I'd imagine.

What is the lesson that you have taken away from what you've extrapolated from what successful businesses do well?

Is there something that you sort of remind yourself of or you, you see it in your own life or you see it often in the wild?

And think, yep.

Ooh, yeah.

Well, I mean, many of these lessons, I think the one thing that, um, for Ben and me was relating to our business and acquired.

Mm-hmm.

That's kind of become our mantra.

Uh, we actually joke about this, that it is, you know, we were, we were chatting on another podcast recently and, um, you know, Ben framed it as like, this actually is like our mantra in an almost religious sense for him and me.

You know, back to kind of businesses, uh, sometimes being cult-like.

Yeah.

Yeah.

Like, uh, for us, it's focus on quality.

I guess it's a, this is maybe a slight twist on the focus on what makes your beer taste better.

But, but I think it's a different thing.

There are a million, especially today, and especially in the line of work that, you know, we're in, um, that we're all collectively in here, uh, you know, you and us, there are a million temptation, not just even temptations, pressures to do things that compromise quality.

Like some very specific examples.

Yeah.

Yeah.

There are a million examples, uh, in our corner of, uh, the podcasting world.

The canonical wisdom in podcasting is you should release an episode at least once a week.

Episodes should be no longer than 60 minutes, 90 minutes at the max.

Oh, yup.

I'm familiar with these two.

Yup, yup, yup.

Those, those are the big ones.

Um, there's all sorts of other things.

You should be aggressively doing clips and, uh, promoting elsewhere, especially like YouTube.

Uh.

these days. YouTube for podcasting and video podcasting is like very canonical wisdom. You

should be doing this. You should be leveraging YouTube in all sorts of ways. Ben and I do none

of those things. We are on YouTube. We do have a presence on YouTube, but we don't do it in the

standard way. And most of our episodes, we post audio only on YouTube. We only do video when

there's like a special reason to add video where it really adds to the kind of richness and quality

of the experience. So typically when we're interviewing somebody and those pressures are

immense. Not only is it that like most of our peers are out there doing it, you know, we actually,

we have relationships. Well, I would say Spotify and Apple, we don't really have a relationship

at Apple because they don't care about podcasting, but we have deep relationships at Spotify and

folks at Spotify tell us we should be doing those things. And as we think about it, we're

like, gosh, if we did any one of those things, it would make the quality of the core show,

the core thing that we're doing, the value prop we're offering our listeners,

it would compromise it a little bit. It would make it worse. If we released weekly instead of

monthly. Yeah, we would be building habit with our audience more so, you know, but we just wouldn't

be able to make the deep shows that we do. We couldn't do that every week. We'd die.

You know, we wouldn't die. We just wouldn't make it as good, you know.

You know, that's the most obvious one. You know, the YouTube thing, like as we've experimented

with YouTube, we're like, gosh, the audience, I don't even know that so much the audience,

the culture of consumption and interaction and community on YouTube is very different than

traditional audio podcast land. And we're like, gosh, I don't know that that's really what we

want, you know, the quality of our community to be like, you know, you look at the comments on

some of our YouTube videos and we're like, oh, that's not what we want.

And you're like, wow, even then you compare that to we have a Slack community around the show

and like the quality and respectfulness of the discussion in the Slack community versus

the YouTube comments. It's like, you know, it's like two different species of humans.

Yeah, you know, not to say there are really respectfully great comments on YouTube too,

but they're the minority, you know, in our Slack community, it's everything is respectful and great.

So, you know, we're just like, gosh, we've,

it's really for us driven, like, and I think, you know, we see it in a lot of

companies too, certainly not everyone, but all companies kind of all the great ones have

some obsession. And it tends to be around some form of quality. Quality takes many different

forms. Like quality for Costco is a certain threshold of quality of goods, but at the

absolute lowest price possible, you know, you know, quality for LVMH and Louis Vuitton

means a very different.

thing, obviously, but whatever that quality is for that business, for that product, like that being

kind of the North Star, that for us, that's what we've taken as sort of our cult-like religious

chant. Oh, David, I feel so, I feel so seen and so akin to that. I'm on board the quality train

too. That's, that's really important to me and to Ben and to all the people who've been involved in

making Simplify.

Over the years. And, uh, yeah.

Oh, that's great.

That's what makes things special.

And, you know, and more than I should say too, you know, for, you know, obviously, you know, in your case, like it's, what the quality is, is different for every product, for every show, right? Like, you know, our version of quality is very different than your version of quality, than Huberman Lab's version of quality, than, uh, whatever other, you know, show out there is, the Daily's version of quality. These are all different value props. Maybe this is just a version of focus on what makes your beer taste better, I guess.

Maybe it is.

I'm thinking, I don't know, I don't know who said this. It came from, I want to say a podcasting conference I attended a million years ago. It's not a Caitlin Schiller original, but this person said that in audio, you can always tell insincerity. It just, it comes through whether or not you like it. And I think that's one of the reasons quality and audio matters so much. You can always tell when the host doesn't care. You can always tell when something's been done slapdash, or at least I like to think that you can.

Yeah.

Yeah.

Yeah.

Yeah.

Yeah.

Yeah.

Yeah.

Yeah.

Yeah.

Yeah.

Yeah.

Yeah.

Yeah.

Yeah.

Yeah.

Yeah.

Yeah.

Yeah.

Yeah.

Yeah.

Yeah.

Yeah.

Yeah.

Yeah.

Yeah.

Yeah.

Yeah.

Yeah.

Yeah.

Yeah.

Yeah.

And that really, really matters. And I, for this reason, I try never to do interviews that I know that I'm not going to be able to find some enjoyment in and which is a very privileged position to be in. And I'm grateful to Blinkist for allowing that to happen for so many years. But it's a quality matters. I think that people can tell when something is made with love and attention and we gravitate toward that.

Yeah.

I mean, at the risk of boring the audience here with rat holing.

too much on podcasting, but it is our work for all of us. I totally agree with you. You're so

spot on. And it's something that is really unique to podcasting because it's so stripped down and so

pure. It's just, you can't do that much with just voices. Whereas in the video medium,

it's different. And this is, I think, one of the reasons too why we haven't decided not to

embrace YouTube as much. You could take a, and people lots of times do, say an interview that

just like on the surface experience of that interview, clearly the host isn't interested.

It's not a good interview. It's not a good conversation. You could do things to make that

a very compelling YouTube video. And lots of people do that. And that is a known art.

You can't do that in audio. It really just comes down to, like you said, I really think I totally

agree.

The emotional valence of the people's voices. It's not even so much about the words you say.

It's about how they are said.

Right. You can feel focus and care in a voice and that really matters.

Well, on that lovely note, I felt this was a very nice, warm, emotional valence. Thank you for

hanging out on that level with me. And thank you so much for sharing your wisdom. I hope that

everybody listening goes and checks out Acquired. I have so much respect for what you and Ben are

doing. And thank you for your time.

Thank you for your time today.

Likewise.

Welcome to the bookend, where we end with books.

Indeed we do.

Yeah. Where do we start? That was a lot of amazing, like I love the specifics of the cases he pulled

out. I also just loved hearing two expert podcast interviewers talk a little bit of podcast inside

baseball.

There is some inside baseball in there.

Yeah, I obviously like that. But there is something funny about these very long,

in-depth interviews and work that they've done. What I was thinking, in the end,

these great takeaways are really simple.

Yeah, exactly.

Nine years of four-hour interviews, crazy amount of research and work. And it's kind of like,

pay attention to your customers.

Right.

Right.

That's something that we've learned at Simplify.

Yeah.

And that's why I'm so curious, you know, you've engaged with all these complicated concepts.

Also, I'm so curious to hear, A, what you took out of this for sure. And B,

if you had to look back at six years of Simplify, what would be your like three things?

Oh, my God. You totally just sprung this on me. Great questions. I don't know if I have it in me

to extemporize this, but what did I take away from this? Well, I think if we're talking about

just the content that he and I discussed, I really, really liked this Brooks story.

Yeah.

This scale up or niche down. Choose. You got to make a choice because, again,

a lesson that I think I've learned many, many times in business, also just with people,

if you're for everybody, you're not for anybody, including yourself. You have no integrity.

Mm-hmm.

You're not interesting and crunchy. Just go ahead, make a choice. You can change direction

at some point if you need to, but decide who you're for and who you're not for and go for it.

I thought that was a really good, applicable takeaway for just, you know, life,

not necessarily just for entrepreneurship. Yeah.

How about you? What did you take away from this?

I find it like inspiring to see their work hit number one on the charts.

Yeah.

It's just, it's always nice to see a podcast, put in the work, think about quality,

whatever quality means, right? Like as you two discuss.

Mm-hmm.

And just stick at it for so long and then they hit number one. And like to see that,

to hear from somebody who's gone through that is always amazing.

Yeah.

And like, you know, chapeau to them.

Indeed.

You know, you get the partners you asked for is what stuck with me.

Mm-hmm.

I think that's really brave. And like I said before, I think it's funny that

you can boil down complicated histories to kind of simple points.

Mm-hmm.

And those should inform how we live and how we work and the decisions we make.

And we shouldn't overcomplicate it. I mean, that's kind of why we started,

this Simplify also.

Right. Like really at the bottom of the bottom, at the base of all of this, what is there?

And what's helpful.

Yeah.

Right.

That's kind of always what we're looking for.

So you don't want to tell me what you think off the top of your head,

like what sticks out from all the whatever 60, 70 interviews you've done for Simplify?

Well, you know, there's one thing that he and I actually talked about in this interview,

which is this idea that's really been coming to the fore recently, which is

normal is not really a thing.

Or average is not.

Really a thing. Like it can be, but you need to pay attention to the fact that

everybody is different. Every case is different. And if you really want to make something special,

you can't always shoot toward the average and the normal because you'll end up boxing out a lot of

really important, fascinating, meaningful, and actually impactful stuff if you're just looking

for whatever is massively scalable or average.

Mm-hmm.

And that's come through in...

Yeah.

...the Daniel Maté interview. It's come through with

Katherine Morgan Schaffler to some extent, and it's just been a message that I keep

finding in things I'm listening to and engaging with outside of Simplify and within it.

Nice.

Another thing, like a big lesson, is that connection is everything.

Yeah.

So normal isn't anything and connection is everything. And I do feel like they're

related because if you're really taking the time to connect with a person and with yourself,

what you realize is the unique specialness.

I'm so curious of it. It's so funny. There's this like layer of there's unique specialness to

everybody. And then underneath, we're all kind of the same basic drives and needs. And one of those

extremely important needs is connection.

Right.

So focus on connection because it's the most important thing. Forget about average and normal

because that's not actually that useful for anything outside of manufacturing and industrial

type stuff. And then I guess like the third thing, you're going to hate this so much.

Uh-oh.

But I'm going to get maudlin now.

And this sort of like relates to you get the partners you ask for. Who you do it with is

everything.

Why would I hate that?

So do you know how, so I have a cat. I don't know if you're aware.

This is a running joke between me and Ben because he thinks like a lot of my personality is that I

have a cat. But I have a cat and cats, unlike dogs, they don't really like everybody. They have

what is referred to as preferred associates, which maybe I've mentioned in this podcast before,

but they kind of just like choose people they vibe with and they're like, oh, this works.

Or other cats they vibe with.

And that is how they choose to live their lives. Even in the wild. They have like specific

individual entities that work for them and have their particular vibe and cats kind of get the

partners that they ask for. They know who works for them and why it works. And I think that is true

in any kind of creative endeavor in making a podcast like David and Ben, they are best friends.

They just made this thing out of a passion for it. And it made me think of us and starting this

podcast. And like, I think a big reason why it works is that they're not just like a cat. They're

like, oh, this is a cat. I'm going to have to find a cat. And they're like, oh, this is a cat.

And I'm like, oh, this is a cat. And I'm like, oh, this is a cat. And they're like, oh, this is a cat.

Like, I think a big reason why it works and why it's been fun is because we enjoy showing up here

together. We enjoy doing this together. And we have each of us bring something to the table that

the other person might not necessarily have developed to the fullest extent. Although I do

think that we have refined and honed those things in each other over the years.

Yeah.

Yeah.

I mean, there's a part of you get the partners you ask for that also makes it easier to stick

with whatever you're doing. Right. I mean, there was like the specific case of Bezos and his

shareholders.

Yeah.

But that also allowed.

That allowed a long-term vision, which is like a pillar of his philosophy in general is to think

long-term.

So there's something like, I don't know, short-termist about, yeah, just hang out with

people you want to hang out with. But there's a deeper point there, I think, that you're saying.

Yeah.

So not, you know, you stick to who you are, you stick to your beliefs or approaches,

and then you end up working with those people that make sense to do that with.

And then you can do that forever. You can do that for a long time.

Find somebody whose integrity and approach to work inspires and

dovetails with yours. And you'll never work a day in your life, kid.

It's funny because, right, it's like another one of these go deep into business

and then end up not really talking about business.

Right. You talk about the connection.

Right. Awesome. Should we do books?

Yeah. I mean, I could have asked you what you've learned in, you know,

six to seven years of Simplify, but we can save that, I guess.

Unless you had anything you wanted to contribute.

Right. So do you remember there was like a series of interviews that you did where

we talked about sort of a new age of productivity?

We talked to Eric Fisher and then even, you know,

Natalie Liu and those folks, like they all recommended you,

you have to be aware of what you're doing and what's at play in your daily life

and in your brain and in your feelings in order to then go and make a difference

and go and do stuff.

So I do think there's an awareness part of like the Simplify insights.

There's this connection point.

And I think generally I would make the point that things can be much simpler

than you think.

That there's a reason why it's called Simplify that you ask almost everybody,

what is one thing you think?

Yeah.

People can do.

Boil it all down.

Yeah. And usually people have a pretty good answer for that.

And I think every individual has a pretty good answer for that.

And I think we can all be guided a little bit more by the simple things

and less by the crushing, overwhelming nature of the complicated things

that we can also engage with, but don't help all the time.

Nice. All right.

Yeah.

Yeah. Good. Thanks.

So book racks.

Books.

I've got one.

Go ahead.

Should I do it? All right.

We've kind of already covered a lot of this.

But if you enjoyed my segue into connection,

getting the partners you ask for and getting really maudlin and sentimental

about me and Ben making a thing together, there's a book.

I think I've recommended it before.

It really made an impression on me when I read it.

I don't know.

God, maybe almost a decade ago, but it's called Powers of Two.

It's by Joshua Wolf Schenck.

And it inspects some really lucrative business and creative partnerships.

And it examines this idea of a creative pair.

You know, also looks at the relationship of creativity in the brain,

really for anybody who wants to understand creative collaboration.

This is a great book.

And to understand, like, why does it work with this person?

What can I bring to the table and how can we complement each other?

I really, really liked this quote.

And it's the best creative partnerships balance the similarities and differences of two people.

You must be present, have confidence and trust and faith in your partner,

which is true for any kind of partnership you're trying to have,

whether it's making a podcast

or.

Or it's raising a dog or anything else.

So Powers of Two, Joshua Wolf Schenck, really, really great book.

I highly recommend it.

It made me realize that, oh, maybe working with another person would actually be better for me than trying to do everything alone.

Yeah.

Nice.

I got a book.

The book is called The Everything Store by Brad Stone.

Ah, yes.

This is old now.

It's from 2013.

But I wanted to bring up old Amazon a little bit because Amazon's changed a lot in the last 10 years.

I mean, it changed in its first 10 years also.

Mm-hmm.

And David Briggs.

David brought up Amazon and Bezos a lot in the interview.

It was nice going back to the 2013 book about Amazon,

which was this book was also like named one of the best books of the year in 2013.

Yeah.

But these kinds of pillars and these sort of myths of Amazon at that time,

it's interesting to revisit them.

Mm-hmm.

Remember like the two pizza team?

Mm-hmm.

That was like a Bezos idea.

You shouldn't have a team like too big that two pizzas can't feed it.

Yes.

I do remember this.

Or like the famous six-page memo that Bezos demanded people bring and write out.

Some of these like classic tools,

but also these pillars of Amazon,

this frugality, this efficiency, this insane customer focus,

of course, out of the ordinary meetings,

and then like just the weirdness of the product offering.

So, you know, now we like forget that Kindle's weird.

You know, they made an e-reader to a certain extent.

And of course, like AWS, like that happens all the time.

And then now, you know, spaceships or something.

So it was nice to just kind of revisit what is Amazon

in the myth-making of this company and idea.

Mm-hmm.

Mm-hmm.

Especially because, you know,

if someone like David is still really looking at Bezos,

then I think we should revisit that every once in a while.

So I can recommend that, the Everything Store by Brad Stone.

And remember these kind of goofy things that made Amazon big.

Yeah.

Cool.

Great rec.

All right.

Then that's it for this episode.

Let's wrap it up.

Simplify is produced by me, Caitlin Schiller,

you, Benjamin Stoller, Maria Levitschek,

and Stefano Badia in Berlin, Germany at Blinkist HQ.

If you would like to listen to the Blinks of the books that we recommended,

or you want to check out the bookshelves that correspond with the Acquired episodes,

very cool thing to do.

Highly recommend it.

You can try out Blinkist for free for 14 days.

Just go to Blinkist.com slash friends and enter the code acquired.

All right.

Check it out till next time.

See ya.

Bye-bye.