Arena Show Part II: Brooks Running (with CEO Jim Weber)

**Ben Gilbert** (0:00)
So have you gone running yet in your custom acquired Ghost 14s?

**David Rosenthal** (0:04)
Dude, the Ghosts are amazing. They are the best sneaker I have ever known. Bar none, hands down. I used to have Adrenalines. Adrenalines are also great, but I literally wear them all day, every day.

**Ben Gilbert** (0:20)
But David, those shoes are only for active runners. You're misusing the point of the Ghosts.

**David Rosenthal** (0:26)
Well, with a baby, I mean, I'm literally wearing a baby, walking the hills of San Francisco. I'm burning more calories than I did when I was running every day.

**Ben Gilbert** (0:34)
It's true. It's just a slow run at the end of the day. That's all you're doing.

**Jim Weber** (0:42)
Is it you?

**David Rosenthal** (0:46)
Is it you?

**Jim Weber** (0:46)
Is it you? Is it you?

**Ben Gilbert** (0:55)
Welcome to Season 10, Episode 8, the Arena Show presented by PitchBook of acquired, the podcast about great technology companies and the stories and playbooks behind them. I'm Ben Gilbert and I'm the co-founder and managing director of Seattle-based Pioneer Square Labs and our venture fund, PSL Ventures.

**David Rosenthal** (1:14)
I'm David Rosenthal and I'm an angel investor today back home in San Francisco. But man, what a special day that was in Seattle.

**Ben Gilbert** (1:24)
That it was. And we are your hosts. We're going to go right here into the onstage introduction of Jim and the Brooks story. So I don't want to give too much exposition here, except to say that if you've been sort of thinking Brooks is this like shoe brand and what can tech people possibly learn from a hundred-year-old shoe company, prepare to have your mind blown. Jim's one of the most dynamic guests that we've ever had on acquired. And I just got so many comments leaving the arena, just absolutely floored with all the great takeaways and lessons and quotes that people wrote down from Jim. So make sure you enjoy that. This is a great time to tell you about one of our very favorite companies, Crusoe.

**David Rosenthal** (2:08)
So Crusoe, as listeners know by now, is a clean compute cloud provider specifically built for AI workloads. NVIDIA is one of their major partners and literally Crusoe's data centers are nothing but racks and racks of A100s. And because Crusoe's cloud is purpose-built for AI and run on wasted, stranded or clean energy, they can provide significantly better performance per dollar than traditional cloud providers.

**Ben Gilbert** (2:33)
Yes, we talked about that on our ACQ2 episode with Crusoe CEO Chase Lockmiller.

**David Rosenthal** (2:39)
The other element that makes Crusoe special is the environmental angle. Crusoe, of course, locates their data centers at stranded energy sites. So think oil flares, wind farms that can't use all the energy they generate, etc. And uses that power that would otherwise be wasted to run your AI workloads instead.

**Ben Gilbert** (2:58)
Obviously, it's a huge benefit for the environment and for customers on costs since Crusoe doesn't rely on the energy grid. Energy is the second largest cost of running AI after, of course, the price you pay NVIDIA for the chips. And these lower energy costs get passed on to customers.

**David Rosenthal** (3:13)
It's super cool that they can put their data centers out there in these remote locations where quote-unquote energy happens, as opposed to the other hyperscalers such as AWS and Google and Azure who need to build their data centers close to major traffic hubs where the internet happens because they are doing everything in their clouds.

**Ben Gilbert** (3:30)
Yep. If you, your company, or your portfolio companies would like to use the lower cost and more performant infrastructure for your AI workloads, go to crusoecloud.com/acquired. That's C-R-U-S-O-E cloud.com/acquired or click the link in the show notes. All right, listeners, please note that this is not investment advice. It definitely wasn't investment advice last episode. And without further ado, on to our conversation with Jim Weber, the CEO of Brooks Running. All right. Now, for our final act of the evening, we have a very fun local story that we've been dying to tell.
Brooks Running.

**SPEAKER_4** (4:17)
I mean...

**Ben Gilbert** (4:22)
So, I think a lot of people are probably familiar with this brand, especially in Seattle, especially if you are a runner. But the story of this business is absolutely unbelievable and extremely under told until now. So, when the CEO, Jim Weber, took the helm in 2002, the company was losing $5 million a year. It was $30 million in debt. It was a week away from missing payroll, and the board was having weekly meetings to figure out how to make payroll. It was a business of pretty modest size. It was a $60 million revenue business. And when we talk about this revenue number, it's not SaaS numbers. There's extremely real costs in making shoes. So, you can imagine not making a ton of money. Well, actually losing $5 million a year. So, that business had been around for, like, 90 years. And it sold all sorts of products at every price point to, frankly, a pretty random set of consumers in every category, not just running. So, enter Jim. Jim came in and bet the company exclusively on serving active runners as a segment. And he cut all other business lines. Over the last 20 years, he's grown the business to over a billion dollars in revenue. Billion with a B. And well over a billion. And is thriving and thrived even through the pandemic. So, along the way, Brooks was acquired by berkshire Hathaway and Warren Buffett personally elevated Brooks and Jim to make the company a direct report to him. Jim is a leader, a visionary, and a fighter, not only growing the business over the last 20 years, but personally fighting and beating cancer. Please welcome Jim Weber.