Ben Gilbert and David Rosenthal of Acquired - Lessons on Early Stage Investing and Getting Acquired

**Patrick O'Shaughnessy** (0:00)
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Hello and welcome everyone. I'm Patrick O'Shaughnessy and this is Invest Like the Best. This show is an open-ended exploration of markets, ideas, methods, stories, and of strategies that will help you better invest both your time and your money. You can learn more and stay up to date at investorfieldguide.com.

**SPEAKER_2** (1:39)
Patrick O'Shaughnessy is the CEO of O'Shaughnessy Asset Management. All opinions expressed by Patrick and podcast guests are solely their own opinions and do not reflect the opinion of O'Shaughnessy Asset Management. This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions.
Clients of O'Shaughnessy Asset Management may maintain positions in the securities discussed in this podcast.

**Patrick O'Shaughnessy** (2:03)
My guests today are Ben Gilbert and David Rosenthal. Ben and David are investors, but also the duo behind the Acquired podcast, which is one of my favorite shows that dives deep into business history and famous acquisitions. I highly recommend you check it out. In this conversation, we review some of the greatest corporate acquisitions of all time and also discuss investing lessons Ben and David have learned across their careers. I hope you enjoy my conversation with Ben and David.
So guys, I have so many different areas that I want to cover with you today. You guys run, I think, the most interesting of all podcasts out there, but you're also both investors in a similar space, but also in different ways.
What are some of the things that you see? I love this idea of this long game that companies have to play, or just the long story that they endure to get where they are and have us all talking about them. What about those later years of a company and how a management team or a team is operating help you filter the potential skill set of a very young team? What are you looking for in a young set of, or a new set, I should say, of founders or a founding team that is impacted by all your exploration of these much longer stories?

**Ben Gilbert** (3:14)
Yeah, this is a fantastic question. And I think one I ask myself a lot, my primary job despite having the podcast is, I'm the co-founder of a thing called Pioneer Square Labs, where a startup studio and an early stage venture fund in the Seattle area.
And the way that I see this manifest is, I often ask myself the first question in the flow chart, which is, is this business in an emerging market or trying to transform a legacy market? And if it's the legacy, there's a whole different set of questions than the new and emerging. And you look at things like TAM and you look at things like, how will they compete against incumbents? And if it's an emerging market, you look so much more at what is the secret that this founder knows, kind of in that Peter Thiel parlance.
The thing that I think is very counterintuitive is if it's an emerging market, you really don't need to pay attention to, is this founder an experienced manager? Are they someone that's gonna do really well organization building? Are they someone that's going to be really polished? Because that's not the scarce commodity in the business when something is sort of brand new in the world is shaping around a company or a movement. The rare commodity is, is this person amazing at understanding the needs of this newly developing thing and building a product such that a movement will form and galvanize around them rather than other players in the industry. And I think that's a completely different thing than someone that's going to try and tackle something, say like title insurance or like account reconciliation or any of these sort of super deep vertical companies that we incubate and spin out of our studio that those are really much more about kind of the business plan and much less about the founder being this kind of thrashy visionary that you can ignore a lot of flaws in because they will figure it out along the way.