Ben Gilbert, co-host of mega-popular podcast Acquired, this week gave a rare interview to Australian podcast The Contrarians, outlining his thoughts on business strategy, where entrepreneurs should take their lessons, and the power of trust.
Acquired, which delves into the backstories of major corporate acquisitions, commands one million listeners per episode and has featured commentary from founders like Mark Zuckerberg and Jensen Huang.
Here are five of the key takeaways from the hour-long appearance, emphasis SmartCompany’s own.
For entrepreneurs hoping to emulate the biggest names in business — think Jeff Bezos, Jensen Huang, or Mark Zuckerberg — there’s only so much to be gained from today’s headlines. Instead, Gilbert says founders can glean more from their early days:
I will say I think the most important thing to study about them is how they reacted in the early days of their companies. Because now mostly what each of them are doing is running a big company. And sometimes they run it in a remarkable way where it doesn’t feel like a big company. But especially for any entrepreneurs trying to apply any sort of lessons to their business, there’s almost nothing to be learned from how Jeff ran Amazon in 2019 for your business. The interesting thing is how Jeff ran Amazon in 2001 or in 1997. And these are weirdly lost to history. Like it’s very hard to go find a news article from 1997 about Amazon unless you — I do this professionally, like David and I do — whenever you search for news about a company, you’re going to get the last two weeks of news about the company. So I think the thing to study about any of these people is not who they are today, but what they were in the inflection points.
When asked why Acquired does not simply condense all of its key insights into one go-to business strategy book, Gilbert said the lessons are in the differences, not necessarily the similarities:
I think that’s actually the key insight of Acquired is each of these massive, massive successes are such extreme outliers that their success is idiosyncratic. The bigger take away is actually there’s not that much to learn from them [as opposed to] the take away being ‘Here’s what you can learn from them and apply to their own business’. And that is not very gratifying. If you are listening to the show and you, you’re sort of saying, ‘I want to absorb this wisdom and use it for my business’… And maybe I’m being too tongue in cheek. Maybe there is a lot there, but I think it’s important to remember every the more extreme the success, the more idiosyncratic the conditions were.
The Contrarian co-hosts Adir Shiffman, Adam Schwab, and Gilbert are all admirers of business strategist Hamilton Helmer, who formulated a simple table for businesses seeking their ‘second act’. It is split into two axes: one stretches from your business’ current skillset to the skills it needs to build, and the other spans your customer’s current needs to your customer’s new needs. The trick, Gilbert said, is landing in the ‘current business skills, new customer needs’ quadrant:
You don’t have to hire a bunch of new different things, but you serve a new set of customer needs. And AWS is a great example of this. They had the engineering talent, they had the internal culture of building APIs. They don’t want teams talking to each other. They sort of famously treat other teams within the company as if they are external companies. And they build an API in order for that team to consume the technology they’ve created. What they did need to do was figure out enterprise sales and figure out how to sell their wares to startups instead of consumers. But they did. And that is sort of the perfect encapsulation of this. You’re using your current skills, but serving a new customer. And that’s [Helmer’s] advice, at least, on where organisations should look for their second act.
Not every podcast can secure Mark Zuckerberg for a live interview in front of 6,000 fans. Acquired can do so due to the massive trust it has built among listeners, Gilbert said, reflecting on the importance of establishing a strong reputation in any kind of business:
The way in which brand really shows up for acquired is trust. There are sponsors that will work with us. That is our our primary revenue stream where they would not work with other people. And the reason is because they’re listeners themselves and they are aware of the incredible trust that we’ve built with the audience. And David and I take it, I mean, everything starts and ends with listener trust. And so I think our every time we get too wrapped up in a conversation, ‘Should we do this, should we do that?’ A strategic decision, we keep coming back to the thing that matters is to make the next great episode for listeners as amazing as it possibly can be. And everything else is downstream of that.
Based on the fees Acquired can charge for advertising slots, The Contrarians co-hosts calculated the podcast commands a revenue run rate of $10 million. Using the rough formula applied to SaaS valuations, that would give Acquired a potential valuation of $150 million. In a world where Joe Rogan and Call Her Daddy‘s Alex Cooper can broker massive exclusivity deals, why not sell out?
Gilbert said a mega-dollar deal might not benefit the Acquired duo, any more than their current partnership already does:
… We’ve talked to, we regularly get outreach from the type of people that do the big podcast deals, and we really like being independent. And I think the there are so many wonderful things to being a partnership of two people that own a business 50/50, and are fully the principal and fully the agent, where you just you can make better stuff and put it out in the world than than people where there’s a little conflict of interest between the principal and the agent. And we just feel like that’s a sustainable competitive advantage that we own it together. We own all the upside and all the downside. We, the business itself, as you mentioned, is a great current business. Our lives do not require the type of capital that we could sell this business for. And if we did sell it, what would we do? We probably would want to go make a podcast like this one together. So it ends up kind of coming down to ‘what is the optimization function of a business?’ If you’re a publicly traded company, the optimization function is gross share price. But if you’re a 50/50 private partnership, the optimization function is whatever best enables the two of us to enjoy our time here on Earth. It’s sort of a different goal than we have than if we were something that had shareholders.
Speaking to SmartCompany, The Contrarians co-host Shiffman described Gilbert’s appearance as a significant moment for the local business media landscape, with vital lessons for founders.
“He’s right about Joe Rogan,” Shiffman said.
Selling out “is not going to help him. He’s just going to end up being richer than he needs to be and starting to do things that, I think, will be degrading to his happiness well versus happiness”.
“Wealth versus happiness follows a normal distribution curve, and you don’t want to go over the top of it,” he added.
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Senior Business Journalist
Focused on the small business sector, David’s work covers the political, regulatory, and economic issues facing Australian entrepreneurs. Prior to joining SmartCompany, he was a reporter for Business Insider Australia. You can follow him on LinkedIn.
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