How To Grow & Monetize A $10,000,000+ Podcast Business (#440)

Sam Parr

What could you get for it you think

David Rosenthal

I would not be interested in having any conversations for, you know, less than... yeah, on the order of like what you got. Like **The Hustle** or **Morning Brew**, or you know, stuff like that.

Sam Parr

tens of 1,000,000

David Rosenthal

Yeah, I mean, I just think the value of what we've built - both as a business and revenue, and our audience and our durability - is... you know, it's in that category.

Shaan Puri

Alright, what's up? We got a crossover episode. Call me Tim Hardaway. We got the guys from Acquired. Yeah, you like that? Do you like that?

Sam Parr

oh no that's good good I'm gonna

Shaan Puri

Fly, baby! Yeah, that's for the 5% of listeners who know about basketball. Oh, so we got the guys from Acquired here. We're doing kind of a joint episode, the old Alabama wedding, as I like to call it. You know, we're just getting cousins together here because you guys have a podcast that is pretty awesome. I remember when I was working at a previous startup, a guy came to me and said, "There's a podcast you're gonna love. It's called Acquired." I asked, "What is it?" He replied, "It's like the backstories of all great tech acquisitions—how it all went down. They go into all the nerdy details." I binged you guys for like six days straight, and that's how I first got into it a couple of years ago. So, welcome to the show, David and Ben!

David Rosenthal

Thank you! We did a super fun crossover with you a couple of years ago now, but it was just with Sean Sam. You were off traveling the world, doing amazing things.

Sam Parr

Well, that's what he said. He was like, "You're probably doing something amazing." I was like, "Probably just like a doctor's appointment or something too big." It's probably, yeah.

David Rosenthal

you guys have totally come up since then the I mean you were big back then but

Sam Parr

that was like within the 1st

David Rosenthal

A couple of months ago, I think of you starting this, and it's just been awesome to watch how far you've come. That was...

Ben Gilbert

Kind of an hour, even though it was year 4 or 5 for us, that was kind of our early days too. Because, Sean, you're right that we were mostly about acquisitions at that time. We talked about the Bebo acquisition, right, as part of the episode. Now we do these 3 to 4-hour deep dives into the entire history and strategy of a company, regardless of whether there was a transaction. But yeah, that feels like... I don't know, the funny thing about exponential growth is it feels like a lifetime ago all the time.

Shaan Puri

I always think about that. When you pick a niche, you kind of run out of content, but the niche can get you somewhere. For example, I was thinking about this with Coffeezilla, the YouTube guy who exposes people's scams. He did one the other day where he DM'd a celebrity to promote some NFT thing. He said, "Hey, we'll pay you to promote this NFT thing," and the white paper said, "This shit's a scam" or whatever. But he didn't read it, obviously; he just promoted it and then called the celebrity a scammer. I'm like, "But that's kind of entrapment." You're running out of people to cover here, so you have to now create scammers. I don't think that’s right.

David Rosenthal

like ali g back in the day

Shaan Puri

Yeah, exactly. But that wasn't his original stick. I was like, "Yeah, you're not gonna..." You're trying to be on this YouTube once-a-week treadmill, and there's not going to be a giant Logan Paul-like celebrity name that did this bad thing, and I'm gonna be the exposer. It's like, "What are you gonna do next Tuesday?" Because this isn't that current. But you guys did a good job of switching it up.

Sam Parr

People said that to us, Sean. They go, "You're gonna run out of ideas." I was like, "Yeah, we might." But then it just kind of morphed into us saying a lot of... like, it's like people are... when I... someone yesterday was like, "What's your podcast about?" I was like, "Well, the name's pretty bad. It's definitely a lot about business, but we also make a lot of horrible jokes too." So people kind of like it for that reason.

Ben Gilbert

I've been thinking about this a lot. Your niche earns you the right to exist, but it's in media. It's your demeanor and the way that you look at the world that then gives you the license to expand from there.

Sam Parr

so like if david flavor my friend it's your fault we go

Ben Gilbert

I just think if David and I had started with, "We're a podcast that talks about businesses," it's like, cool, next. But if you pitch people on really specifically what their job is to be done for your show and their life, then you can sort of expand and explore from there.

Shaan Puri

Right, like Ben... Ben should've... Producer Ben should've been like, "You know, Mormons taking over the world started with the Mormon community then expanded from there." I remember talking to the guys from "Wait But Why," that great blog. Yeah, and this guy...

David Rosenthal

wait guys is there a team it's not just tim

Shaan Puri

It's Tim and then it's his childhood friend Andrew who does like the back-end, all the business stuff. They have a really interesting business. They acquire companies that are completely unrelated to Waipa Y - like that's how they make their money. And then they just...

David Rosenthal

do waipa y fun

Shaan Puri

Like that, that's kind of the model. But I was asking him about content because I was like, "You know, I admire Waipa." So, I asked him to tell me about this. I was trying to figure this out. I kind of like to talk about this and I kind of like to talk about that. He's like, "You need your flagship franchise. You do your franchise, and then people will love that franchise. But they'll also love you, and you'll earn the right to talk to them about, 'Oh, you want to talk about mindset stuff? Cool.' But unless you think mindset is the right place to start, wait. Earn the trust on the business side, and then say, 'By the way, here's my mindset stuff,' and then you'll get some percentage."

Ben Gilbert

of people to cross over and then

Shaan Puri

a new audience there too you just keep launching new franchises after that

David Rosenthal

Love it! It's so... it's also like, we even... you guys, you know, you started several years after us, but like, I think you still...

Ben Gilbert

were true when did you guys start 3 years ago

Shaan Puri

something like 9

Sam Parr

september of 2019 I think or oh wow I think it

Ben Gilbert

was earlier than

Sam Parr

than I thought

David Rosenthal

Yeah, we were in 2015, but even in 2019, it was still kind of the earliest days in podcasting. The medium was still early enough that people were looking for new stuff. I think that has changed now in a pretty big way.

Sam Parr

The way that it started was basically like this: I was in Austin or somewhere - I was living in San Francisco at the time - and Sean texted me. He was like, "Hey, I have an idea for a podcast. Here's the pilot. Do you guys want... does Hustle want to be the publisher?" I listened to it, and I... I just listened to the intro, and I was like, "Yep, we're in. Let's just air this exact one next week and we'll start."

Shaan Puri

And by the way, that was a little bit of a fib. I basically told you, "Hey, you know, why don't you do podcasts?" Sam was like, "I gotta hire somebody to do it. I don't know. We just focus on this email thing." I was like, "Well, I got a podcast. I'm gonna do a podcast. Will you be the publisher?" He was like... and I was like, "I already knew that to seal the deal, I needed to send him a file, but I hadn't recorded yet." So I go, "I already did the first episode. You want to take a listen to it?" Then I just ghosted him on Messenger for 24 hours so I could go record the episode. Then I came back and was like, "Oh, my bad. Here's the file." So there really wasn't an episode when I first messaged you, but I got the vibe that if this is good, if I get a good first 35 seconds, this is done. And so that's what I went and did.

Sam Parr

Yeah, and we were like, "We're in!" Then he did it his way. It was called "My First Million" because it was about the first million users, revenue, whatever. It was great as it was, but there was one time, like three months in, where a guest didn't show up. He was like, "I booked the space. Do you just want to come and talk?" I was like, "I guess." We did that, and it kind of did well. The first episode he did by himself got 65,000 downloads, and we were like, "Dude, podcasting is easy! This is going to be awesome!" However, over the next 12 months, it basically went down to as low as maybe 10,000 or 15,000. Since then, it's just been a slow grind. Now we're anywhere from 100,000 to 200,000 per episode. If you include YouTube, our YouTube is pretty weak; it's like 20,000 to 50,000, maybe up to 100,000. The RSS feed, which is like iTunes and all that stuff, is maybe around 100,000 or something like that. Where are you guys at? Because no one talks about this stuff. Whenever you Google, I remember we were googling, "How do we get to 100,000 downloads?" But everyone out there was like, "Here's how you get your first 1,000, first 10,000." I was like, "Okay, but how do we get bigger?"

David Rosenthal

We're almost the exact same scale with a very different journey. I mean, every journey is unique in this stuff. Our episodes get about 200,000 downloads, listens, whatever you want to call it. This is interesting because Spotify has become so much more of the market now per episode. But unlike you guys, we do like 1 episode a month, you know, 1 to 2 episodes a month, and they're really, really long. So we have, with a few exceptions that we can talk about, never had any kind of big spike, viral, you know, breakout moments. It's been an 8-year journey from like 0 up to that.

Sam Parr

We don't really have spikes. Like, there's spiky stuff, but it's not like a true "virality moment."

David Rosenthal

and interesting

Shaan Puri

You guys, one thing that's interesting about content and media is that everybody measures the number, but nobody measures the quality. The quality is way harder to understand. Yeah, but clearly there's a difference between 200,000 people listening to an episode of "Acquired" versus 200,000 views on a TikTok. We get that because it's kind of short versus long. But even if it was a podcast about sports versus a podcast about business acquisitions, the type of people that are going to listen to your thing are just inherently more valuable. Have you guys thought about that? Seen that? Do you guys feel that?

David Rosenthal

I mean, that's the whole business. Not that we started or do this for the business side, although it's become a great business. That is the whole business side. And also on the content side too. We started doing this for us to learn, and then we thought, "Well, who would also want to learn?" For video people like us, and that's kind of who we make it for. We struggle with YouTube, TikTok, and Twitter. We're not good on any of those other platforms, even though we do atomize content and do it now. It's just not kind of how we designed the show.

Ben Gilbert

And to ground it, **40%** of acquired listeners are C-level or VP-level executives. **23%** are currently founders, and **12%** were previously founders. If you break it down by job, **17%** are engineers, **15%** are actively CEOs today, and **12%** are product managers. So, like, the whole business for us—and to David's point—it didn't start as a business. But where we are today is that I don't really want millions of listeners. I want Acquire to kind of slow its growth but saturate the niche that we're in because I think it's the most valuable audience in the world.

Shaan Puri

right

Ben Gilbert

And I don't know exactly what that leads to, but all the conversations David and I get to have with our listeners, because of who they are, are super fascinating.

Sam Parr

Well, what will it lead to? So, like... you know, you can probably make a great living off of just the advertising, but I'm looking at your site. You don't sell anything. What's it going to lead to?

David Rosenthal

well we do have merch

Shaan Puri

well that that hoodie you're wearing right now is pretty dope is that merch all

David Rosenthal

of it

Shaan Puri

I I just

David Rosenthal

This is Marquez's hoodie. Yeah, which David Immel, who's on Marquez's team, has become a good friend and is an acquired listener. He hooked me up with this. This hoodie rocks!

Shaan Puri

Yeah, I sent the picture to our merch person. I screenshotted it and I had that moment where I was like, you know that thing where you're on a Zoom call? I don't know if you guys do this, but you screenshot and it makes the really loud sound of a screenshot being taken. Then you have to address it like it was a fart during the call. I was really worried that when I started...

Ben Gilbert

to get through the doing that thing on every slide of my day

David Rosenthal

this is a total digression and we'll come back to it

Shaan Puri

but

David Rosenthal

The 4th Wall makes the... So, Marquez is an investor in 4th Wall. Walker Williams, the founder, he was the founder of Teespring. Awesome guy! We've gotten to know him.

Sam Parr

we're we're talking to them now I think about our merch

David Rosenthal

Yeah, they are great. They made this fully custom for Marquez, and it's the best.

Sam Parr

Marquez, being... what's his name? Brownlee? Is that his name? K.B.H.D.? Yeah, the... the U, I mean.

Shaan Puri

I... you said it's his first name, like he's Oprah. You know, I was like, "Who did he think he's talking about?" Oh, it's that guy.

Sam Parr

Well, he has like 20,000,000 YouTube subscribers. I mean, I just know him as the guy who interviews tech, but he also has interviewed Tesla's Elon Musk and all these great guys. I mean, he's cool.

Shaan Puri

Unless they've come on this podcast, I don't know them. This podcast may be able to run to you in my mind.

Ben Gilbert

He's also... the craziest thing is, as if it wasn't enough to operate this pretty large-scale TV production studio as a YouTuber, he's also one of the best ultimate frisbee players in the world.

Shaan Puri

oh really

David Rosenthal

yeah he's a professional ultimate frisbee player as well

Sam Parr

I can see that's a very obvious crossover. So, like... when we'll just talk real insider baseball for a second and then we'll move on, but with podcasting, a lot of people ask us how to start it and stuff like that. I'm like, "I don't know how to grow it. It's quite challenging." But what I've really enjoyed getting to know is like Andrew Huberman. I'm, you know, acquaintances but not *friends* friends with him really, but like we'll chat every once in a while and he's like, "I looked on Spot..."

Shaan Puri

We've seen each other with our shirts off, but I wouldn't call us friends. However, we've saunad together.

David Rosenthal

This is what Sam, you're like, "Oh, I was probably at a doctor's appointment." For like, your life is just like... I listen to you guys, and I'm like, "Wow, that's a..."

Sam Parr

Bro, I like... he was on our podcast, so I know him from like an hour and five text messages exchanged. So that's the extent that I know him. But I think they're... if you look at Spotify, when he releases an episode, it's typically the most popular on the charts. I think they're in the million mark—million per episode—which is how we like to measure it. Is there anyone else in the business category that's in the 200,000 range? I mean, "All In" is probably 400,000 maybe 500,000. Do you know how big you have to be to be some of the biggest? Of course, there's Dave Ramsey; he's in a whole different category.

Ben Gilbert

Yeah, it's funny. It depends because business kind of gets lumped in with all these other personal finance type categories. But I think in our ilk, they should make a separate budgeting category.

Shaan Puri

and move dave ramsey's ass over there

Sam Parr

yeah yeah out of there you know and it's it's

David Rosenthal

All In has been an amazing breakout. They've become more of a mainstream news and political show too. I mean, they still talk tech and business, but I think that is a lot of their audience, and they're huge now. Our category, I would say, like "Invest Like the Best," is probably most directly comparable in terms of size and audience makeup. Also, Founders and David Senra, who is part of the Colossus Network with Patrick. Who else? Jason's other show, "This Week in Startups," that we go on all the time.

Ben Gilbert

But Logan Bartlett has a much smaller audience because he's much newer. However, as a guest, I mean, he's got the most valuable niche of niche in terms of the people who listen to his show.

Shaan Puri

why because of vcs

David Rosenthal

it's like

Ben Gilbert

Silicon Valley insiders, for lack of a better term, I mean it's VCs and founders. But I think in his interviews, I always feel like he pulls out...

Shaan Puri

Most valuable... jeez, small boy stuff right there. Let me... yes, Sam, let me ask you a different question that I've actually never asked. So, David said something a second ago which is kind of like the paraphrase would be, "We made the podcast for people like us," or "We made the podcast that we would want to listen to." Is that fair to kind of summarize your position, David?

David Rosenthal

100%

Shaan Puri

And I feel like that with this podcast, I started The Milk Road that way. But it quickly transformed into crypto news, which is actually not what I intended. People know this; I've said it before: I don't read or consume the news. So it's really funny that we made a news-based thing, got it big, and then sold it. But, truthfully, it didn't end up becoming the thing that I made this for—me and people like me out there. Sam, do you subscribe to that? I guess, in theory, you could say the best thing to do is to scratch your own itch, to build the product you want, to make it for people like you. Then you're not guessing. But then, in practice, sometimes the mass market is not where you're at, and you go for that. So, Sam, what's your take on that?

Sam Parr

I think we... it started. MFM started that way, and it's mostly that way. Every once in a while, you know, Sean will be like, "We need more views. Let's get this guest." Sometimes we give into it, sometimes we don't. The hustle started out because I liked the news, and then about two years in, I was like, "I don't care about the news anymore." But this is my job, so I'm going to keep doing it. I don't listen to any business podcasts now. I basically only listen to crime and fiction and things like that. So, I don't listen to business podcasts anymore, but I think this podcast has mostly stayed about just like, "What do I want to do? What does Sean want?"

Shaan Puri

to do what do we wanna talk about yeah

Sam Parr

It's mostly stayed that way, but we do have to fight it. I was messaging Sean last night and I said, "Dude, we need to be stricter about our guests." We've had a bunch of people who asked to come on, and we're like, "Yeah, they're huge." Then I think, "Wait, I don't give a shit about this person." I wouldn't want to have a dinner invitation from them; I wouldn't be excited. So, we definitely have to fight that.

David Rosenthal

I would assume you know this. We're realizing that it's the case for us, although it's different because we tell stories. But for you guys, I would like to point out that the reason your audience is here is for you, right? It's not for your guests, right?

Shaan Puri

Yeah, I think sometimes though, the guests... you know, I basically told Sam, I said there's 3 to 4 types of guests. Here are the 4 that I think exist: 1. There are the people that are like us, and they're just bringing a different flavor, new fresh ideas. For example, when you guys first came on, you had the shtick. You knew what we do on this podcast. I remember you came with a bunch of business ideas. You were like, "Oh, this Airbnb Wi-Fi network..." that's like, you know...

Ben Gilbert

oh my god you remember even the the idea yeah

Shaan Puri

As soon as I saw your face, that idea came back to me. Right? I got like... some people have a photographic memory; I have an idea memory. I can remember any idea. So that was like... you guys got the shtick. You came on, you brought ideas, which is great because the audience loves that. Steph Smith is a great example of this. She comes on, she brings ideas. People like her, even though she's not the big name, you know, famous "CEO of X." She does an amazing job. So that's like number one. Number two is basically like... they are the big name. So, somebody who a bunch of people are going to click on and might bring a new audience. It's like you're legit famous in some way.

David Rosenthal

you had pop on recently

Shaan Puri

Yeah, well, how he would be 3, which is internet famous. Oh, it was like legit famous. It's like, you know, they're kind of like outside.

Sam Parr

like paris hilton or something

Shaan Puri

Yeah, like they don't have a podcast or a newsletter. They don't have an internet community. They're just like... right, famous. Famous. Then there's your internet famous, and the last one is personal. Like, we want to nerd out with them. And so that would be like...

Sam Parr

like ariel helani

Shaan Puri

Yeah, we had Ariel Helwani on. I don't know how much of our audience cared about that, but I cared. I wanted to have that conversation. We've had, you know, Sam was like, "Oh, this guy Ken Rideout is awesome." He's like this 50-year-old marathon record breaker, a tough guy. I just want to talk to him, and it's like, great, let's do that. So it's kind of like we are going to be so into the conversation, and we are sure that this person is interesting to us. It'll be interesting to some portion of the audience. To us, those are the four. I think the one you get tripped up on the most is just the legit famous person because they may not actually listen to podcasts. They may not bring the juice, and it's almost like the expectations are high. You almost disappoint because it's like, "Oh, alright, well that was kind of a lame conversation with that person."

Ben Gilbert

And they don't have any of their own distribution. The nice thing about being internet famous is that at least they can help distribute the content. But real, regular famous people, it's like unless they're getting put in People magazine or cast in the latest movie, they actually have no way to reach an audience directly. Yeah.

Sam Parr

You know who does that for us? It's Dharmesh, the founder of HubSpot. Every time he comes on, his episodes get really popular. He's always doing great content, and he also does some internet marketing stuff where he kills it. He kills it for us every time.

David Rosenthal

that's that's the best kind of guest that'll come on and promote

Shaan Puri

Right, and he pays the bills too. So, he's the sponsor. He's the guest. He drives the growth. Oh yeah.

David Rosenthal

he pays it all damesh come on acquired

Ben Gilbert

The crazy thing we noticed about guests recently, just looking at our analytics, is that two things are true 100% of the time, without fail. 1. Every single time we set a new episode record, it is an episode that is just David and I doing Nintendo, LVMH, Berkshire Hathaway—like our canonical 3-hour format. 2. Every single time we have a guest on, it is less listened to than our previous episode.

Sam Parr

Yeah, right. Just last question: how do you guys prepare for that? Do you both read the same book and take notes, and then just tell a story?

David Rosenthal

We mostly read different stuff, but we've kind of architected... I mean, this is our differentiation as a show, which is so anti all the rules of podcasting. But I think what makes us special is that we have carved out the ability to take a month in our lives and do, you know, it's kind of like if you were writing a term paper in college. We can do the research independently, each of us on a company or a topic, and then we come together. It's like, I don't know, it's like a thesis defense or something that we do.

Ben Gilbert

The goal is, between the two of us, to have basically consumed every piece of content on the company. This includes every other podcast that's ever been done, all the big books that have been written, and all the talks given by the founder. We also try to find a bunch of weird stuff, like talks given at industry conferences that have low view counts on YouTube. Obviously, we 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 say, "Oh, did you see this important piece of information on the company?" We want to always be able to defensively say, "No, we have consumed everything about this company."

David Rosenthal

I think the magic is that 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, as really good friends, talking about it, that kind of makes it magical.

Sam Parr

yeah the

Ben Gilbert

the phrase we've been noodling on is conversational audiobooks

Sam Parr

oh that's cool

Ben Gilbert

to describe what it is

Sam Parr

Are there any odd commonalities that you've seen among the savages that you've done stories on? For example, Ben Wilson has, you know, he does "How to Think Over the World" and it's about historical figures. He's like, "You know, it's weird. John Rockefeller, Edison, and Napoleon, along with a bunch of these other people, they ate really lightly. They didn't eat a ton of food because they said that when they overate, they felt brain fog." But for a bunch of different reasons, are there any strange commonalities that you've found among these conquerors of the world?

David Rosenthal

Well, we talk more about companies than we do about people, like Ben and David Center over at Founders.

Sam Parr

take over the company yeah or or companies

Ben Gilbert

I mean, it's the classic idea of being both contrarian and right. You have to be both. The people and companies we're studying are such extreme outliers. They're four standard deviations from the mean in terms of how a company performs. They are sort of like an "n of 1." For example, there's one TSMC in the world, and there's one LVMH, which owns all the most valuable luxury brands except Hermès. It sort of happens in a unique way every time. I guess the biggest takeaway for me is that it usually is the founder doing something that literally everybody else had left for dead. When I say that, I mean like Bernard Arnault going and buying Christian Dior from the French government out of bankruptcy in, when was that, the eighties, David?

David Rosenthal

eighties

Ben Gilbert

Yep, or like literally no one else was bidding on this dead asset. 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, there were zero others.

Shaan Puri

people that thought

Sam Parr

that was gonna be successful

David Rosenthal

There is no formula; every story is unique. But a big category is something that has been left for dead. Sometimes it's inventing something new whole cloth, but a really big category is like, "Oh, this thing is over."

Ben Gilbert

done with david nintendo

Shaan Puri

yeah

David Rosenthal

nintendo Google like game

Ben Gilbert

The crash of 1983... The market for video games in the United States went from $3,000,000,000 to $100,000,000 over the course of 2 years. Everybody was running, screaming from the industry, and they thought, "Oh, video games were a fad and it's over." Then you have Nintendo that comes in, launches the NES, and within 5 years has 95% market share. They have grown the industry back to a $3,000,000,000 industry. It seems like nut job bets.

Sam Parr

Has that given you guys any confidence to succeed? Do you think? Sean and I talked to all these awesome people, and there are a handful of people who we talk to. I saw this a bunch. There are a handful of people who we say, "Oh, you're definitely significantly smarter than we are," or "You have this part that's more significant than us." Then there are other people we talk to who are worth $100 million or $1 billion, and it's like, "Well, you're not 20 times smarter than us even though you're 20 times richer." You might be a little bit smarter, or sometimes a little bit less. That's given us confidence, at least for me for sure, because I'm like, "Oh, you definitely are insecure. You question yourself, you doubt yourself, but you still went through with it."

Ben Gilbert

it's good question like I know how to be contrarian I'm not sure I know how to be right yet like

Shaan Puri

we're halfway there baby

Sam Parr

yeah yeah yeah exactly like

Ben Gilbert

I, you know, we know how to make podcasts. Everyone tells you that you should make short podcasts that release every single week and you should have guests on to help build your audience. We do basically none of those things, and everything that has worked for us is doing the exact opposite of that. So, does that mean we should keep doing the opposite of every piece of advice everyone gives you because that's the path to 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. I'm hesitant to keep being contrarian just for the sake of being contrarian. However, I think the important part that comes with this is having an iterative feedback loop with your customers—or in our case, with our listeners—to understand what makes them love this. How do we lean harder into that and sort of shut out general advice, paying more attention to the things our customers are expressing?

Shaan Puri

By the way, I picked up a little poker tell on people who are contrarians. How do you tell a real contrarian versus a wannabe contrarian? This is a little tell I picked up over time, which is... yeah, in the tech world, I think because of Peter Thiel, there's this kind of real sex appeal to it.

David Rosenthal

fetishization to

Shaan Puri

be contrarian and if you put it

Sam Parr

in your twitter bio you're probably not it

Shaan Puri

yeah exactly

Ben Gilbert

same with polymaths

Shaan Puri

yeah polymaths is another one of them as being

Sam Parr

or visionary

Shaan Puri

As Sam and I have joked about, if you're an engineer and slightly on the spectrum, it's like, "Oh yeah, that's another indicator of success." The one tell when it comes to being contrarian is how excited you are about your contrarian idea. This excitement shows whether someone is being contrarian for the sake of it. They might be really eager to tell you how they think everybody else believes A, but it's actually B. In contrast, the real contrarians I've seen simply see A and are almost confused as to why people don't think A is clearly right. They don't spend time trying to convince the whole world of it. If they're asked, they tell the truth, and when people react strongly, like, "Oh man, I can't believe you think that," they respond with, "I can't believe you don't think that." It just seems like the truth to them. That's what I've noticed. If you watch old videos of people like Peter Thiel talking, or someone like Balaji today, they are happy to explain their perspective.

Shaan Puri

Of view, and they explain it like this: "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 being a contrarian. There's a subtle difference. There are a bunch of people I've met in real life that I've kind of noticed this about. It's hard to explain, but you'll see next time you run into somebody who's overeager and overexcited about the fact that they have this contrarian opinion. They're kind of just performing socially versus actually believing that.

Ben Gilbert

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. They're very excited to have this particular lifestyle, and you can sort of tell you're into that new lifestyle more than the person you're actually with. Right? Right.

Shaan Puri

Did you want a boyfriend, or did you want Ben? Right? Like, dude, who did you actually want here? Yeah, let me tell a story.

David Rosenthal

it's interesting though like oh hey go ahead I was

Shaan Puri

just gonna tell one on 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 supposed to be jack ma but we ended up meeting with this guy david way who's like their jack ma's right hand man he was the guy who was running alibaba at the time and I I didn't even know what alibaba was like alibaba was a big deal like now now I'm like now I would have taken that really seriously I I had no idea who they were at the time and we get there and somebody asked him this question they raise their hand they go what do you think is the most important things for success for the success of a company alibaba is a multi $1,000,000,000 company you know what 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 but 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 try to avoid those so he goes so you know I leaned in I was like please blow my mind sir go ahead and he's like he goes there's 3 things that lead to failure money plans and technology he goes so our plan was no money no plans no technology and I go what and and like this is crazy because it's like a tech company worth like $40,000,000,000 like what are you talking about and he goes hey so I get he goes alright here we go money money makes people stupid and when problems come up their first instinct becomes throw money at it rather than attacking it with creativity so basically way back when Google was Google was like dominating with adwords and so there the people at alibaba were like we need to make our version of adwords 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 so jack ma cut a check for $250,000 to build this project and latim like laughed like you're you're missing 3 zeros on the back of this like what are you talking about 250 k and he goes that's how much money it took me to start alibaba like I I I had less than that starting the whole company so if you need more than that for a feature we're doing it wrong he's like they're like well how are we supposed to do this he goes do exactly what I did with alibaba he's like so he moved 19 people into his apartment where he had started he's like that's your office you're gonna work there he's like you need servers to run the ad servers cool go find some like go get some used junk servers and like re rig them get them refurbish them and make them work and they go but there's no redundancy he goes if you're building where you need redundancy like we've we've done this wrong right like you know this is you need to build build this so that it works without redundancy first and and so he he did that that was 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 plan and he's like alright well dude how'd you do this like why no plans why are plans bad he goes he goes well 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 planned to do and like nobody's hand went up and he was like exactly and he goes plan is 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 don'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 and I was like damn dude

Sam Parr

did you did you write all this down yeah you were like you reading notes

Shaan Puri

So, many years ago, after that event, I tried to write a book in like two weeks. I wrote half of it, and this was one of my chapters in that book. I just found the PDF on my computer when you were talking about this. Oh, that's awesome!

Sam Parr

that's hilarious that's amazing that you did that because that was years ago

David Rosenthal

What a great story! It's so applicable. I love that it's applicable to Alibaba just as much as I'm thinking about you guys and us. Like how we started the conversation. Yeah, we had no money. I guess we had technology in that podcasting and the internet is inherent.

Shaan Puri

And leverage it. It wasn't like we were building a tech company or we were building a product. It was like, "No, it's like exactly."

David Rosenthal

Something like that, and we have no plan. Yeah, like it's funny. We see a lot—I'm sure you guys do too—people come to us and say, "Oh, how do I start a podcast? How do I start a successful podcast?" We see big companies come, like offline celebrities that want to start podcasts. They come with money, technology, and a plan, and we're like, "That's not how it's going to work. It's going to suck."

Shaan Puri

You guys probably see this with your episodes. Like, how many of them started doing what they're doing? I don't know, I haven't listened to all the recent ones, but like, I don't know, was Nintendo... what were we thinking of Nintendo today, or did it stop?

David Rosenthal

you dying was making wait

Ben Gilbert

Wait, real quick. Do either of you know the origin story of Nintendo, or have a guess at how old Nintendo is?

Shaan Puri

I think it's really... I remember reading it once. I don't remember off the top of my head, but was it like Sony over there selling rice or something? And then now they're who they are.

David Rosenthal

it's even better yeah

Ben Gilbert

it's a 130 year old company

David Rosenthal

yeah started in what 18/90 89 I think

Ben Gilbert

Yeah, and their original business was making **Hanafuda** cards, which is the Japanese version of playing cards. But U.S. playing cards were illegal to import because it was not legal for people from the U.S. to have them in the country. And David, I think you know this. They literally would execute you.

Sam Parr

yeah you came

David Rosenthal

Nintendo started straight after this, but before the Meiji Restoration. Japan went through this multi-hundred-year period of strict isolationism where you would be executed if you were a foreigner and entered the country. Likewise, if you were a Japanese person and you left the country and then came back, you would also be executed.

Sam Parr

like wow that's

Ben Gilbert

But, like, playing cards are this thing that has product-market fit. They're like, "How do we do something like playing cards?"

David Rosenthal

universal human need

Ben Gilbert

So, it literally started making Hanafuda cards, and their distribution channel was through the Yakuza to illegal casinos.

Sam Parr

yeah yakuza being like the mafia

David Rosenthal

The Japanese mafia, yeah. They started making these playing cards, and like a very small part of the market was, "Oh, you have a pack of playing cards in your house." But 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. And yeah, so Nintendo is like deeply embedded with the Yakuza.

Ben Gilbert

and for like 60 years this was their business before they started making toys wow

Sam Parr

and then what some like visionary within the company was like hey this new

David Rosenthal

This new thing is cool. It's a crazy family with a real tragedy, like this cycle of death and just terrible parenting that has been passed down.

Ben Gilbert

To four generations of the same family, but actually not the same family because they had no sons. They needed sons, so they were marrying their daughters off to people who could take over the business.

David Rosenthal

Yeah, exactly. One of these guys was basically just so pissed off at the family legacy. This is Hiroshi Yamauchi, who started the modern Nintendo. He was like, "I only want to diversify the business. I want to get out of this." He did a partnership with Disney in 1959. Yeah, in 1959, Nintendo brought Disney and Disney IP into Japan post-World War II.

Ben Gilbert

turns out I literally have the cards

Shaan Puri

as toys

David Rosenthal

cards some of those cards

Ben Gilbert

fans sent them to me oh wow

Sam Parr

started with cards

David Rosenthal

Yeah, and then they brought toys. They started making their own toys because they had a lock on the retail distributors. Oh wow! So it started as cards, and then they went to all these retailers. They were like, "Oh, you want the Disney products? You're going to take our products too."

Shaan Puri

was that jiminy cricket as the joker

Ben Gilbert

Jiminy Cricket as the Joker and Mickey Mouse golfing on this old school card deck? That's amazing!

Shaan Puri

that's like you gotta wear that with you gotta wear gloves if you're gonna touch

Ben Gilbert

that or something that's like a a seriously an ancient artifact

Hubspot

this data is wrong every freaking time

Hubspot

Have you heard of HubSpot? HubSpot is a CRM platform where everything is fully integrated.

Hubspot

Woah! I can see the client's whole history: calls, support tickets, emails. And here's a task from three days ago that I totally missed.

Ben Gilbert

hubspot grow better

Sam Parr

Can I ask you guys a couple of rapid-fire questions? Yeah, about some of the companies that you've discussed. Number 1: Which company, of everyone that you went over, would you want to own? Like, which one? What's the one that you envy?

David Rosenthal

Well, those are two different questions. Which one would you want to own the stock of, and which do you want to be an investor in, or actually own the company?

Sam Parr

yeah yeah the second actually own and which one do you envy most

Ben Gilbert

Actually, I think the NFL has the most durable franchise. "Own" is always a funny question because what's your entry price? Do I have to buy stuff at today's prices? But if I think about the durability of the asset and sort of ignore where things are trading and what market values are today, the NFL is entrenched in our society. To be an American at this point means to have the NFL in your life. Also, David, you pointed this out on our episode: everyone thinks it's really cute to stack rank all the media franchises. Marvel's worth this, and you know, all the way at the top of the charts, Pokémon's worth this. But the NFL is worth so much more than any of those. The NFL's TV contract alone is **$12 billion** a year. The most recent set of rights they parceled up was like...

David Rosenthal

a 100 isn't it now it's like 18 or 19,000,000,000 a year I think

Ben Gilbert

Something insane, but they recently signed a 10-year deal. It's like a $150 billion deal.

David Rosenthal

just for the tv rights

Shaan Puri

Is there basically a top-level holding company that owns the media rights and the franchise fees for the NFL, which has all the franchises?

David Rosenthal

Communist capitalism, they all own it altogether. But the NFL, unlike any of the other leagues out there, is starting to show a few little cracks in this. They negotiate with the TV contracts and now all the streaming and everything is unified as a league. So there's no, you know, like how the Yankees have the YES Network, like their own TV network. It's none of that in the NFL. It's all together and it's all equal revenue share.

Shaan Puri

have you guys done an episode on mlb am

Ben Gilbert

yes way back when disney what's that actually the first investment before the acquisition

Shaan Puri

These guys can tell you the full version, the accurate version. I'll give you the dumb version, which is that Major League Baseball created a tech team, basically a tech company inside of Major League Baseball, co-owned by the teams. The good job was like, "Hey, people are trying to listen to this on the radio. We need to do digital streaming audio." It was...

David Rosenthal

like ichiro because when ichiro came over from japan they needed to stream it

Shaan Puri

Remember that guy, Sam Ichiro Suzuki? The guy who played on the Mariners? Yeah, he was like a phenomenon. So, people in Japan wanted to watch—or rather, listen to—the games. They needed digital internet streaming audio, and so they built this thing. They started offering it, and then each team would use it. It was like, oh, each team co-funded it. They would cut a check, and then that developed technology for all of them. But then they ended up spinning it out as a multibillion-dollar company because they're the best at video streaming now. Like, they stream if you want to watch *Game of Thrones*, it's MLBAM's video tech.

David Rosenthal

oh wow

Shaan Puri

That streams *Game of Thrones* so that when, yep, whatever, 10,000,000 people click play as soon as the episode drops, the thing doesn't crash. Which is kind of an amazing thing. So that like spins out... who would have ever thought that one of the big tech companies, you know, unicorn tech companies, came out of like this baseball co-op, co-funded thing? It's like kind of an insane story.

Ben Gilbert

And it was in like 2004 or something that they started working on it. They had a 5-year head start on having the insight that this infrastructure was going to be important over Netflix. Like, everyone thinks, "Oh, Netflix, you know, is in with the ISPs and is the best in the world at this." Bam Tech was doing that 5 years earlier.

David Rosenthal

Yeah, and it ended up getting acquired by Disney. It's a huge part of ESPN streaming, like all the ESPN+ and Disney+. It's crazy, the history.

Sam Parr

Is there a certain founder, CEO, or leader who you would rank as the person you'd least want to compete against, whether they're historical or modern?

Shaan Puri

Here’s another way of phrasing that I heard and I like. There was somebody who signed with the NFL draft, and there were like four quarterbacks competing. They were like, "Wow, this guy's got a good arm, this guy's good at running, this guy's a great leader," blah, blah, blah. Then this guy asked a question that I loved. He goes, "Let's say they all went on vacation and they rented a car. As they're walking out to the Jeep, who do they throw the keys to drive this car?" It's like, who's the leader? Who's the alpha amongst alphas among these quarterbacks? So, who's that in the CEO world?

David Rosenthal

I think we gotta say Jensen. Jensen Huang from Nvidia, like he's such a badass.

Sam Parr

So, like, I don't know anything about Nvidia. I just know it's a killer stock. Nvidia makes the chips that are in computers, and does it involve display? Like, you can get an Nvidia GPU, yeah? Is that right?

Ben Gilbert

Yeah, so NVIDIA is in their sort of third major act as a company. Their third act, loosely defined, is that they popularized the idea of a GPU in addition to the CPU. Originally, the use case was for video games in the nineties. I think everyone who ever built PCs remembers thinking, "Oh man, I gotta get this hot new GPU to slide in the card because it's better than the integrated graphics from Intel." So that was sort of their market for a while, and it was all about gaming PCs. But then, about 5, 6, or 7 years before the rest of the market, Jensen basically made this bet. He saw researchers using the GPUs, the gaming graphics...

David Rosenthal

they're really going to best buy and buying a bunch of nvidia graphics cards

Ben Gilbert

To do AI research, he was like, "I think we should lean really heavily into this." So, he spent **$1,000,000,000** and **1,000** headcount over **5 years** to build up this whole software stack called **CUDA**. If AI and machine learning (ML) were going to become a thing, then people were going to use CUDA to develop exclusively on NVIDIA's hardware. By the time it did become a thing, about **5 years ago**, NVIDIA had this enormous moat around it as being the platform to develop AI on. It just so happened that the technology—this 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.

Sam Parr

But other than that, NVIDIA, for listeners, I just looked it up. It's a $650 billion company, so one of the, I don't know, top 20 or 30 biggest businesses in the world. But other than him being correct, what makes this person like a savage? There are just so many points in history. Like, he has 19 wives.

David Rosenthal

Let me clarify. He actually is a total family man. He's been married to the same person he met in college, and he has two kids. But, like, he's got a giant tattoo of the company's logo on his shoulder. He wears leather jackets and drives really fast cars. He's like a guy like Elon, except not quite... right? He's Elon, except he leads with kindness. In each phase of the company, the absolute rational thing to do was basically to shut it down. You know, talk about being left for dead; this company was left for dead multiple times. And he's built—just single-handedly—this dude created the AI revolution that we are in today. NVIDIA and CUDA are essentially like the Android and iOS of this revolution.

Sam Parr

of ai

David Rosenthal

Like, no NVIDIA and no CUDA. No decision by Jensen to do this. We are not living in the world we're living in today.

Ben Gilbert

Which, Sam, I'll give you a different answer for the thing you're actually looking for, which is: who is the most savage person to compete against? That answer is Bernard Arnault from LVMH. He's the richest 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 history's most important and trusted brands into one umbrella. Then, he finds leverage in every single thing he does to expand the empire.

Sam Parr

Is there anyone who you think is overrated? Someone who is 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.

Ben Gilbert

It's a very unacquired question. Dave and I are nice people.

Sam Parr

we are we don't well one pick a pick a dead person one that I like to

Shaan Puri

I I

David Rosenthal

like to talk about dead person

Sam Parr

or you could pick anyone but somebody was like no

David Rosenthal

I think one that I like to talk about here is, I don't know if they overrated this, right? But I think a lot about investing. There's this great Buffett quote—it's not one of his most well-known ones—but it's something like, "You want to own a business that even an idiot could run because someday someone will." To me, what that means is you want to own a business, you want to invest in a business that literally you cannot kill. There's nothing you can do to stop this juggernaut. And to me, that's Airbnb. We talked about this a lot in the episode we did on Airbnb, but it's just like the most amazing global network effect of all time. Literally, I don't... you know, this is my opinion, but I don't think there's anything that any manager could do to change or inflect the trajectory of that ship, you know?

Sam Parr

So, my... 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 dropped...

Shaan Puri

out of

Sam Parr

School and moved out, and then I got denied, whatever. So I didn't end up working there, but I got the interview with the founders. Then, years later, my wife ended up working there. During work from home for COVID, Brian would give these talks every Thursday, and we lived in a small apartment, so I inevitably 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. If it works, it's a great thing; it's quite durable. But I would listen to Brian Chesky give these 30-minute Thursday talks. That guy is bad to the bone. I read a little bit; I read the Walt Disney biography, and he reminded me exactly of him. You know, I think someone said there's a difference between a missionary and a mercenary. Mercenaries are hired guns who are ruthless, but missionaries really care about what they're doing. I sense that with him. That guy, I think, is a bit of a killer. People think of him as this nice guy, which I think he is, but I think he's way, way more of a killer than people give him credit for. 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. Last question: which person who you covered would you least want to have a physical confrontation with?

Ben Gilbert

I mean actually jensen

Sam Parr

yeah you think you you think you think so

David Rosenthal

Well, he's getting hot there in age, but like, yeah, no, he lifts. He's just such a character. Oh!

Sam Parr

well I certainly I

David Rosenthal

Mean, we're coming right off of Nintendo. But like Hiroshi Yamauchi back in the day, not because he was physically intimidating, but like literally, the man was in bed with the Yakuza. You know, oh, I got it. You did not cross him.

Sam Parr

oh doug leone yeah for sure

Ben Gilbert

like we sat david and I walked in to interview doug leone it's a great story and

Sam Parr

doug doug leone is the founder of sequoia yeah

Ben Gilbert

not the founder of sequoia yeah

Sam Parr

Got it. I'm a bit of a head honcho at one of the best venture capital firms ever.

Ben Gilbert

Through Google, you know, the true heyday of Sequoia—which you could argue was recently—was an amazing era for Sequoia. A lot of times, with guests, we get to spend some time beforehand, get to know them, and go out to dinner afterwards to build a real relationship. We like to email or text, and you guys know the drill. With Doug, however, we didn't communicate with him at all beforehand. It was all with some other lovely people at Sequoia. We walk in, set up, and then someone walks into the room and says, "Okay, are you ready?" We were like, "Yep." They replied, "Great, we'll go get Doug." Doug walks in, sits down, and says, "Hello, are we starting?" We were like, "Yeah," so we hit record and finished. We did a whole episode.

Sam Parr

make me laugh

Ben Gilbert

We finished, right? We finished recording, and Doug just goes, "Great, thank you so much," and he gets up and leaves the room. So, every word that I've ever spoken with Doug Leoni, except...

Shaan Puri

for like 2 or 3

Ben Gilbert

It's on the record in the episode that you can listen to in our podcast feed. Later, his EA [Executive Assistant] 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 chatted with us. But I was like, "Wow, that is... that's aggressive."

Shaan Puri

Doug wanted to say thank you, but he doesn't waste breath. So, I'll take it.

Sam Parr

The assistant just punched you in the arm and gave you a rat bracelet. That's from Doug.

David Rosenthal

He also had, I think still to this day, the best quote on Acquired. Yes, 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 dotcom crash when Sequoia was like... kinda made this vow that no LP would lose money. Like they wouldn't take a mulligan fund, they would work the portfolio fees.

Ben Gilbert

they didn't take salaries make sure that they have positive returns and he said he's like mike moritz and I linked arms

David Rosenthal

And returns, he said, "He's like Mike Moritz." I linked arms—or it wasn't linked arms. He said Mike Moritz, and I decided that we would stand there and we wouldn't flinch. You could burn cigarettes on our arms, and we wouldn't take a mulligan on these funds. Like, damn.

Shaan Puri

he also has kind of an accent right like he's doesn't he have like kind of

Ben Gilbert

a he's got this italian new york vibe yeah that's cool

Sam Parr

Well, are there any more of these tough guys or tough women out there now? I mean, when I hear that, I always think, "Oh, that was a different generation."

Shaan Puri

do they do they make them like doug leone nowadays

Sam Parr

yeah like they elon's like tough

David Rosenthal

now yeah

Ben Gilbert

well elon's tough

Sam Parr

he ain't he ain't like tough tough like travis kalanick I think we've

Ben Gilbert

seen lukeman is still like this

Shaan Puri

yeah yeah

Ben Gilbert

and he sees a

David Rosenthal

lot of breed though like we we need more place

Ben Gilbert

yeah

Shaan Puri

Frank, my badge is not working to get into the office. You still got teeth, don't you? He's like, you know, that's like a... when you read that guy's book, you're like, "Alright, yeah, this would be a pretty hardcore boss to work under."

David Rosenthal

Yeah, it's totally a lost art, though. I don't think they make them like that anymore, unfortunately.

Shaan Puri

Yeah, that's crazy! Before we go, do you guys have any half-baked business ideas you wanted to share with the "My First Million" audience? Because that's what they love.

David Rosenthal

Yeah, I would love to do this. So, I have one that we were actually kicking around together, Ben and me, for a while, but we're not going to do it. I think you could actually start a corporate podcast agency—an agency for companies to make their own podcasts.

Shaan Puri

podcast or external

David Rosenthal

Either one. My thesis on this is that for companies, there is tremendous value in having a podcast, even if nobody listens. If people listen, there's an upside.

Ben Gilbert

But even if nobody listens, you should just assume no one will. We have so many great options. Why would I listen to a company's podcast?

David Rosenthal

Right, but it is an excuse to have relationship-building conversations with customers and prospects.

Shaan Puri

sales and biz dev basically yeah

Sam Parr

yeah exactly

Ben Gilbert

It's sales enablement. Once you have a conversation, you have it recorded. You publish it publicly. Even if there's no organic audience, you can still link to that and send it to customers as a lead nurturing tool. For example, "Oh, somebody else was in this position too, and they talked about why our product made their life better."

Shaan Puri

right yeah like what salesforce should have its own its own some podcast

Sam Parr

Yep, yeah. What do they charge for that? What do people charge for that? I know Ben, our Ben, Ben Wilson used to work at... is it Mission.org, Ben? Or no, it was Caspian Studios. Yeah, and I think they do that.

Shaan Puri

For this idea, how does it work? What's the verdict on this one?

Sam Parr

Yes, it works. 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 Snowflake's podcast, and Frank Slootman was on it all the time.

David Rosenthal

oh perfect so it's

Sam Parr

A really good business... The one bad thing about it that's coming into effect right now is that 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...

Shaan Puri

You being like, "Hey, could you send me the last 30-day download numbers?" and you're like, "Delete... delete the whole podcast!" Give her a minute. They're asking the question exactly like that, yes.

Sam Parr

yep what else you got what else interests you at the moment

David Rosenthal

ben you got any

Sam Parr

Or at least, what deals are you seeing? Because you guys are investing, are there any interesting deals or categories that you really like that don't start with the word "AI"?

Ben Gilbert

I mean, actually, no. I think that is correct. I am one of those people who believes that saying "we invest in AI" is a little bit silly these days. It's the same thing as 20 years ago when people said "we invest in software" as a VC. It's like, "Yeah, no shit." I think it's just going to become so quickly ubiquitous that if companies aren't using AI in some capacity, they're starting to get a little bit...

Shaan Puri

What's a cool AI use case or company that you've seen, invested in, or want to invest in? Whatever.

Sam Parr

Well, by the way, I think Sean met with James Currier recently. I think it was James on Twitter, or maybe Sean, you just told us, "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.

Shaan Puri

like that

Sam Parr

I I

Ben Gilbert

Didn't tell you, it's interesting. I haven't invested in any either. A lot of companies I've invested in have added AI features to their products, but I haven't invested in any brand new AI company. In part, that's 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. I think the value and the moat are going to come from the same things that always create value and moats, which are network effects with your customers or a data moat. A data moat means that someone is already fully locked into your product, and they don't want to migrate because that would be difficult. They have processes built around using your product. So, I sort of feel like I believe that an enormous amount of the value from AI will accrue to these foundational models. However, you actually do have to be using the foundational models in your product to be considered table stakes in the next few years. Everybody's going to expect all software to just behave magically.

David Rosenthal

do you

Sam Parr

Do you think that there's a world where you're going to sell, acquire, or do one of these Spotify deals or anything like that? Have you been approached?

David Rosenthal

Good question. Yes, but not recently and not in a way that we've become a real business.

Shaan Puri

what

Sam Parr

could you get for it you think like could we try to give him

Shaan Puri

$5,000,000 what they said now

David Rosenthal

god quibi oh wow we

Shaan Puri

we we

Ben Gilbert

we would say no

David Rosenthal

To that, we would for sure say no. I don't... if we could talk about... I don't... I would not be interested in having any conversations for, you know, less than...

Shaan Puri

you

David Rosenthal

I know, on the order of like what you got, like *The Hustle* or *Morning Brew* or, you know, stuff like that.

Sam Parr

tens of 1,000,000

David Rosenthal

Yeah, yeah, yeah. I mean, I just think the value of what we've built—both as a business and in terms of revenue, 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, right?

Ben Gilbert

I'm curious how you guys think about

Shaan Puri

this too would would

Ben Gilbert

We trust our own underwriting more than an acquirer's underwriting. What has happened for us is that it has doubled every single year for 8 years. Basically, no matter what we do, we can't make it grow faster or slower than that.

Shaan Puri

it's

David Rosenthal

we've got idiots running the business here and it's still double before

Ben Gilbert

right yeah it's it's cash generative

Shaan Puri

well have you guys built any businesses off the back of it

Ben Gilbert

so that's yes

Sam Parr

we oh well oh

Ben Gilbert

you're thinking glow david

David Rosenthal

No, I'm thinking kindergarten. I have a fund on AngelList. I manage about $30,000,000 of capital on AngelList between two funds and four or five SPVs. While I used to be a professional VC before going full-time on Acquired, and that certainly helps, all of that's because of Acquired.

Shaan Puri

And do you... so you did that? 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 its kind of like natural word-of-mouth, virality, interest, and like kind of the TAM [Total Addressable Market] of that market.

Sam Parr

like the andrew huberman's are rare normally it's a grind yeah

Shaan Puri

Yeah, and even he... I don't think he could make it grow much faster or slower. Just like good execution is obviously the only thing you control. But a lot of people can do good execution, and their growth rate will be somewhat linear. It's not going to get much faster; the slope doesn't change that much. But the thing that I think we found was that you could build businesses off the back of this audience, whether it's a fund or other products or services that can be more valuable than the ad revenue of the podcast itself. Do you guys do that or think about that?

Sam Parr

like sean well sean mentioned a company and they're like oh we just did a 1,000,000 in revenue so and he's like oh well

Shaan Puri

I gave a company a plug that I invested in. I was like, "Hey, I use it for this reason, blah blah." It was like an ad, basically, but it wasn't meant to be an ad. I was just explaining how I use this thing. They booked $1,000,000 of ARR off of that, which was pretty crazy.

Ben Gilbert

Yep, so that happens to us all the time, which is why all of our sponsor deals are these **six-figure**, very meaningful, and long-term. We do these **six-month** sponsorships.

David Rosenthal

Most of our sponsors are now, you know, three, four, or five seasons in. Like, it works.

Ben Gilbert

And so the question is: is it more appropriate for us to 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? We would have to consider that it would have to be really the right type of company—specifically, a high LTV B2B SaaS business that's reaching founders, CEOs, and technical founders. That would have to be the audience. I don't think we're going to launch an energy drink brand and have that make sense, but I don't know. We're open to the possibility. I think there's also... for us, I'm...

David Rosenthal

I'm curious how you guys think about it because you are getting into this game. I, at least, don't want to speak for Ben. I don't want to run a company; I want to tell stories and invest. So, I don't really want to build products or manage teams. I think it's likely that we'll continue going that route. I don't know, Ben has experience actually building things, so...

Sam Parr

he may feel differently but this

Ben Gilbert

This lets us benefit from the upside of companies using acquisition as a channel without us having to be involved in the muck of building that company. Yeah, and maybe at some point our desire will change there, but...

David Rosenthal

how do you I mean you guys have built companies you guys are building products like how do you think about this

Shaan Puri

I've talked about it both ways. I'm like you a little bit, where I have the most fun when I get to just tell stories, nerd out about stuff, go learn new things, and then come back with... I want to go down rabbit holes and take that most interesting, you know, 1% of things that I found and share it on this podcast or in my newsletter. That's what I like to do. That's the sort of highest enjoyment for me. But I also love money. So I'm like, "Okay, cool." The thing I study is about how people make money, do business, and create wealth. I can't help myself but apply some of the things that I learn, right? It's very hard to resist the urge to apply the things that you know once you know them. Yep.

David Rosenthal

but then you gotta go recruit a team yes so I basically

Shaan Puri

I have played with every form you could do. I invest both in startups as well as in cash-flowing businesses. For example, I'll buy 20-30% of a cash-flowing business that I think I can help through the audience or just through being an entrepreneur for 15 years and learning a bunch of stuff. The second thing would be starting a business. I started The Milk Road off of the podcast. I think the podcast helped us get the ball rolling there. Then, you know, I've launched courses and things like that, which are ways to take the curiosity and say, "Oh, I learned a bunch of stuff. Could I teach it?" I also thought about buying businesses, investing in startups, building a startup of my own, or not doing any of them—not being operational at all. I've played with kind of all of them over the past three years in different ways. We sold The Milk Road in part because that business was working and we got a great offer. But 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 well, I think it was last week we came...

Ben Gilbert

I saw it congratulations pod and

Sam Parr

thank you

Shaan Puri

I feel like you don't have to do sales for the next year based on the blitz that you were able to drum up across Pod Twitter and everywhere else that you tried to do, right? I mean, you could talk a little more about that, but it seems like... yeah.

Sam Parr

so you

Shaan Puri

crushed your demand side

Sam Parr

Yeah, so basically in 2020 and 2021, I was inspired by Sean. I was like, "Alright, fine, I'll invest a little while." So I gave it a 6 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 it's not for me. I don't like taking a minority interest in things. I personally like owning all of something. I think of myself a little bit as an artist sometimes with these companies. It's like my way to be creative, and that's kind of how I like to express myself. So I prefer that. That's why I launched Hampton. I was like, "This fits my interest. I have a competitive advantage here." When I announced it on the podcast, we now have 5,000 people who applied. It costs $85,100 a year to join, and we'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. We're not taking any outside capital. I know Sean likes to do lots of things, and I know a lot of people who succeed really nicely with that. Me personally, I prefer focus and just doing one thing at a time because my brain finds it really challenging to jump from thing to thing like an investor needs to. I prefer spending 5 to 10 years on something. I intend to start a company, maybe another one in a handful of years. I'm not sure. Rather than investing, I actually think that Sean's way of doing cash flow businesses and owning a portion of them is actually the easier way to make wealth. I just don't find enjoyment in it. I'm a dopamine fiend, and I like seeing sales come in and making decisions. It's like my alcohol; I like it drunk.

David Rosenthal

off that how how do you think about the business of the pod of my first million

Sam Parr

So, the podcast is owned by HubSpot, and we get paid strictly a performance fee. When it kicks ass, which it has, we get paid good money as if we have had advertisers. HubSpot's been great; not one time have they ever censored us or said, "Hey, you made a bad joke, don't say that." It's been pretty good. There’s definitely... I wouldn’t say complicated, but it’s a new relationship that we’re definitely trying to figure out. Frankly, HubSpot's an awesome partner, but at the same time, if Sean and I bounce, they don’t have anything.

Shaan Puri

and

Sam Parr

So, I think we're both sides of that are trying to understand what we can do and how far we can push things. We're definitely still figuring that out.

David Rosenthal

There are some monetization options for the podcast, and there are probably more potential options as well. How does that revenue get split up? Like YouTube ads?

Shaan Puri

We just don't... We turned off YouTube ads. We can't be like, "If somebody wants to sponsor it, we don't." Right? So, like, we leave a lot of money on the table in that regard. But you get other benefits, right? So you gotta kind of weigh those out over time and be like, "Right."

Sam Parr

So, yeah, the benefits that we have are basically that we don't do any of the work. 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. We get paid without having to have any expenses. Then the flip side is, "Shit, we have all this advertiser interest, and we know it works really well. Let's take more deals." So, I think there's a world where we do actually come to a compromise and have more ads, but that's like a... it's a conversation.

Ben Gilbert

Yeah, is there a tension at all with you guys wanting to use the pod to do stuff that generates value for yourself, but doesn't accrue back to the MFM pod? Like you launching businesses off it, or is that...?

Shaan Puri

all great

Sam Parr

They're great with that, and any revenue outside of the pod is 100% ours—events, merch, whatever. But let's say they're like, "We're hiring a producer now because Ben's going to go full-time on his new thing." Whoa! Let's say that they're moving slow. It's like, "Hey guys, HubSpot, hurry the hell up! You're going way too slow." I've got five friends right now who will get hired, so there's tension there for things like that.

David Rosenthal

Yep, well, probably all the business activity and all the stuff you guys are launching outside of the pod just brings attention back to the pod, right? So, like, it also brings credibility, right?

Shaan Puri

because how many

Sam Parr

yeah

Shaan Puri

People you see on YouTube, TikTok, or Twitter—wherever—are basically these business gurus or "get advice" guys, right? If you hear the advice guys, then you click their bio and you're like, "So what have you done? 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 the bald barber." Uh-oh, great! I'm not sure that I want that, right? So, I think that's also helpful, right? Because if...

Sam Parr

bald barber by the way chef's kiss

Shaan Puri

oh thank you

Sam Parr

good job yeah

Shaan Puri

I've practiced my my improv on the fly I decided to take a few more risks of like

Sam Parr

oh man

Shaan Puri

I'm going to tee up a joke and see if my brain can come up with something in that 5 seconds. If I fall flat, you know, 2 out of 3 times, that's okay. That's the one that I got right.

Sam Parr

even a blind squirrel finds a not high friend

Shaan Puri

You're doing great! Exactly. So, yeah, basically, I think it gives credibility, right? Like during the pod, you know, I built The Milk Road and sold it while the pod was live, so that adds some credibility. During the pod, Sam launches Hampton. It's clearly going to be successful; we're already off to a successful start. It gives the pod credibility. I think that's why "All In" works really well. Obviously, they have good banter and good things to say, but I think a big part of it is that they bring a certain gravity to the room.

Ben Gilbert

they're participating in the story as it's unfolding

Shaan Puri

Yeah, like the easiest way I explained it was: "All in" is billionaires talking about billionaire stuff, and my first million is millionaires talking about millionaire stuff. I've heard of people, like college kids, come out and say, "We're broke guys talking about broke guy stuff." That's like, "Alright, I bet that." You know, like that's the way to go. But I think it adds credibility because there are a lot of people out there who will create content and tell you about the next big thing, but they don't invest. They don't have skin in the game. They don't actually know what's going on. Or they'll tell you how to be successful, and they're broke and depressed. So it's like, you gotta be careful with who you listen to. I'd rather listen to somebody who's done it before than somebody who hasn't. It's just as simple as that.

Sam Parr

yep yep what's that I think is the

David Rosenthal

The whole unlock of podcasting is that it addresses a problem with the traditional media industry. One of the things that wasn't explicitly in our minds when we started Acquired was my background. I went to business school; I attended Stanford and did my MBA there. It was a great experience, but the classroom experience—specifically the professors, not the guests who had come in and done things—was lacking. The professors were full-time academics, and the cases we would study often felt disconnected. I would think, "You guys didn't do this stuff. Why are you telling me about it?" I want to hear from the people who actually did it.

Ben Gilbert

And so, journalists that cover the tech industry... it's like, how many people are going from being successful founders to entering the journalism industry and writing for a paper?

Shaan Puri

like some of

Sam Parr

them michael michael morowitz by the way michael morowitz you know doug leone's partner

Ben Gilbert

yeah moritz yeah

Sam Parr

Sorry, Moritz, the journalist turned billionaire. Yeah, and like those VCs in the middle there. Yes, yeah, yeah. Sorry, those... you know, I remember journalists turned VCs.

Ben Gilbert

Once I win, 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 pick up the *je ne sais quoi* and read between the lines of what certain things mean. 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 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.

Shaan Puri

I remember once I went to a journalist, somebody who worked at TechCrunch. I went to their apartment in San Francisco, and I just walked in. I looked around and thought, "This is the same apartment that everybody I know right out of college has." Then I noticed they had this pen, and they write for TechCrunch. It looks very different, but this is a person who's just a normal person. This is kind of like their first gig, and they're covering something that they barely understand. That doesn't mean they're not smart or that they don't have good intentions. But it's that thing where, I forgot the name of it, but if you read an article about a topic you actually know about in the newspaper, you're like, "Oh, okay, I see the limitations of how much stock I should put into this." However, when you read about a topic you don't know, you're like, "This is the truth."

David Rosenthal

oh the new york times is an expert and it's like

Sam Parr

there's a they're probably also not an expert

Shaan Puri

or something like what what it's called

Sam Parr

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? There were all these headlines saying, "This woman created a toxic workplace. That's horrible, you gotta get it." I was like, "Oh, this is a juicy story. Let's dig in. Where's the fraud? I love this shit." You read the Slack.

Ben Gilbert

messages that they're publishing and you're like

Sam Parr

look at this

Ben Gilbert

yeah she's a startup

Sam Parr

So, someone like packed... like she opened up a package and it was horribly done. She said, "If this keeps up..." 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." I was like, "Okay, cool. Let's scroll. Where's the good stuff?"

Shaan Puri

where's the

Sam Parr

And they're like, that's the thing. When she said the word "brain dead," I'm like, that's the toxic work environment. Like, come on, give me a break. That ain't nice, but that's not New York Times headline stuff. Give me a break.

David Rosenthal

like I wanna see some fired

Sam Parr

for that right something like that she bounced because of that like that's

Ben Gilbert

it wasn't jen it was the other woman

Sam Parr

Not... yeah, I forget what her name was, but I read that article and I'm like, "There's no fraud." Like, she didn't... you know, like there's no alcohol involved. What's going on? Give me something good! I want cocaine and hookers; I don't want it brain dead.

Shaan Puri

yeah

Sam Parr

you know what I'm saying

Shaan Puri

at least I

David Rosenthal

This is why there's so much value in what you guys are doing. You're building businesses and talking about them. We're investing; Ben's a full-time VC, and I used to be one. We know what's going on in a way that, if you're just a journalist, you can't. It's structurally impossible.

Shaan Puri

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.

David Rosenthal

there's no barrier

Shaan Puri

You don't have to edit and make a cool, fancy TikTok thing. You don't have to layer in filters and stuff. It's just how you talk. That's why you see like Reid Hoffman... oh, the...

Ben Gilbert

will do

Shaan Puri

a podcast

Ben Gilbert

audio medium

Shaan Puri

Yeah, just like straight audio or even audio with the webcam. You know, I think that's getting a little bit easier. But basically, the podcast format... I think there's a reason why you see so many ex-athletes do this. It's like, you know, the same thing with Skip Bayless, who will just go and say how this person doesn't have the clutch gene. It's like, "Bro, that's not a gene." You know, they'll make fun of people, and then you have J.J. Redick, who's an ex-player.

David Rosenthal

so good old man of the 3 so good

Shaan Puri

He's phenomenal at content. His point of view is so much better than others, and that's why his stock is going up. His views are just going up and to the right because he's good at this. He pulls real guests, and when he pulls real guests, they talk like they’re not talking to a reporter. They’ve played with J.J. or against him, so they actually open up about stuff. But he's also not trying to trap them in these gotcha questions, so there's some mutual trust there. Then he'll just share, like, "You know, when you're a player on the road, fans think you're practicing and blah, blah, blah, but actually, here's what happens when you go in." He's just saying what's really going on. To me, when you see that, it's because podcasting is a lot easier. If you told him, "Hey, I need you to write beautiful, well-written blog posts every other day," it’d be very hard to do. But for him to just say, "Oh, something happened," and get on the mic, that's his strength.

Shaan Puri

Of view, they could do it. So, like, you get more credible experts in podcasting than I think on any other medium.

Ben Gilbert

This is probably actually a good use of AI: being able to turn the ramblings of people who are industry participants into something more coherent. You run that transcript through and you say, "Write this as if it was a New York Times article with a strong lead and this many words." It is amazing how I feel like I've transformed in my use of GPT over the last month. Initially, 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. My use case recently has been to take lots of stuff and feed it in as the prompt, then ask it to make it better. For example, I wrote a LinkedIn post about our most recent acquired episode. I just pasted the whole thing into ChatGPT and asked, "Can you make this more exciting and more likely to go viral?"

Sam Parr

And like, is that literally all you said? You basically copy and pasted 500 words. You said, "Here's a LinkedIn post I wrote. Make it more exciting."

Ben Gilbert

Let me see exactly what the prompt was so I don't BS on the pod here.

Shaan Puri

okay no one can check say hi

Ben Gilbert

Can you please act as my editor and modify this to make it more likely to go viral as a LinkedIn post?

Sam Parr

that's so funny

Ben Gilbert

and it indexed way in the other direction like it went it full of emojis

Sam Parr

and you're like chill the fuck out open it up

Ben Gilbert

In capital letters, "Discover the Secrets!" I had to tone it down, but I totally used that, and it helped me rephrase a lot of things where I had awkward phrasing that didn't flow well. It's a very good rewriter. Yeah, that's awesome! Totally agree.

Sam Parr

I'm gonna start doing that. Well, guys, you're awesome! Man, you're so blessed. Thank you, thank you for coming on.

Shaan Puri

If you're listening to Arpod, go check out Acquired. If you're listening on Acquired, do as we call it. Should we teach them the gentleman's agreement, Sam? Yeah, yeah, yeah, go ahead.

David Rosenthal

with the ladies understanding right

Shaan Puri

I feel like the gentleman's agreement and the ladies' understanding has become, like, you know in wrestling when The Rock would take the microphone, he'd raise the people's eyebrow, and you know he's gonna hit him with the expected thing. But for some reason, you get excited just to hear him say it.

Ben Gilbert

stand by 1 hear it again

Shaan Puri

that's how you feel now with your this is your catchphrase go ahead

Sam Parr

This is the **gentleman's agreement**. Basically, the way it works is: look, you're going to 7-Eleven, you're going to buy gas, and at the top, when you're about to pay, you see a little jar for **muscular dystrophy**. 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 for us. We just dedicated hours of our day to do this. However, unlike every other podcast, this one's not free. Just like that jar, you gotta leave a dollar. Meaning, you have to go and subscribe to **Acquired's podcast** on Spotify as well as **iTunes**, and do the same with **My First Million** on our YouTube page. You click subscribe. It's called the **gentleman's agreement** because we're not there. Alright? We're just shaking our hands. Ladies, what is it 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's our agreement: we create the content, you click subscribe.

David Rosenthal

I love it you guys are innovators

Ben Gilbert

And there's real value. 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. This benefits you. So it's not, you know, you're not just pulling money out of your wallet here. You're doing something that's going to make your life more fun.

Sam Parr

and that's the gentleman's agreement and that's the ladies' understanding

David Rosenthal

david do you wanna

Sam Parr

you wanna take us home what were you saying

David Rosenthal

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? We've used it all over the place.

Shaan Puri

internet with

Sam Parr

Well, you said earlier that Spotify is your main thing. So, once we started doing the gentleman's agreement, our YouTube channel went through the roof. Oh, so we went from about 150,000 subscribers to close to 200,000 in like a month or 8 weeks or something like that.

Shaan Puri

We should do an every-pod giveaway of YouTube Premium to someone in the comments. So, go to our YouTube channel, find this episode, and just type in "premium." We will pick somebody, and we will pay for your YouTube Premium so that you can listen to this podcast ad-free in the background. You can lock your phone, walk around, and enjoy that sweet, sweet $14.99 a month that we're going to be paying for you for the year. So, one year of YouTube Premium in every episode. Call it a now!

David Rosenthal

oh I love it

Ben Gilbert

That is a brilliant reminder to go comment because I am a YouTube Premium subscriber. But I want you guys for the build. Yep.

Sam Parr

Well, thanks for doing this, guys. We appreciate you, and we'll have you back on. Thank you for everything. Likewise, see you guys. Catch you next time.