Season 2, Episode 1: Zappos (with Alfred Lin)

**Ben Gilbert** (0:00)
Hey, Acquired listeners. Before this episode starts, David and I wanted to give you a heads up that the audio quality is pretty rough in the second half. We had a problem that we didn't catch until afterwards that makes it sound like a conference call with a poor connection. This stuff is important to us, and we even talked about not even releasing the episode. However, the interview content is just awesome, so we thought it'd be a shame not to share it with all of you. We apologize, and we hope you enjoy the interview.

**David Rosenthal** (0:24)
Okay. Is video good for you?

**Ben Gilbert** (0:27)
Is this a good angle? You look great.

**David Rosenthal** (0:29)
This is a good angle. Are you getting my good side?

**Ben Gilbert** (0:33)
Always, David. Welcome to season two, episode one of Acquired, the show about technology, acquisitions and IPOs. I'm Ben Gilbert.

**David Rosenthal** (0:53)
I'm David Rosenthal.

**Ben Gilbert** (0:54)
And we are your hosts.

**Alfred Lin** (0:55)
And I'm Alfred Lin.

**Ben Gilbert** (0:56)
Hey, welcome, Alfred.

**David Rosenthal** (0:59)
We're very excited. He spoiled the surprise.

**Ben Gilbert** (1:00)
I know, I know. Too bad our titles really do those in.

**Alfred Lin** (1:07)
Thank you for having me on the show.

**Ben Gilbert** (1:08)
Yeah, we're super pumped to have you. Listeners, this episode is gonna be about Zappos, and Alfred is one of the few people in the world who can actually do this episode justice and come on to do the show with us. We, in December, I mentioned that we're switching to seasons so we can do themes and miniseries across several episodes. And for our first episode, we wanted to do a really classic Acquired format, reviewing an M&A transaction. And this is one of the ones that has been at the top of our list for a very long time. So, David, you want to introduce, who is Alfred Lin?

**David Rosenthal** (1:43)
Our mystery guest, not so mystery guest. So today, Alfred is a VC at Sequoia Capital, where he's the co-head of their US venture business and represents Sequoia on boards of many great companies, such as Airbnb, Houzz, DoorDash, ZipLine and many others. But today, we're going to talk about his time before Sequoia, when he was the chairman and COO of Zappos, and which was prior to Whole Foods, Amazon's largest acquisition ever. But my favorite part of Alfred's background, which we'll get into, was that long before Zappos, when he was an undergrad at Harvard with Tony Shea, he was known as the, and I'm quoting directly from Tony here, he was known as the human trash compactor of pizza, which also it turns out is pretty relevant to the Zappos story. So, welcome Alfred and thanks for coming on.

**Alfred Lin** (2:36)
Well, thank you for having me. I'm no longer the human trash compactor of pizza. I try not to eat as much, too much.

**David Rosenthal** (2:43)
I was gonna say.

**Alfred Lin** (2:44)
Given that I'm a lot older, I don't have the same metabolism as I used to.

**David Rosenthal** (2:48)
It looks like a few things have changed since those days.

**Ben Gilbert** (2:52)
This is a great time to tell you about one of our very favorite companies, Crusoe.

**David Rosenthal** (2:57)
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 H100s. 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** (3:22)
Yes, we talked about that on our ACQ2 episode with Crusoe's CEO, Chase Lockmiller.

**David Rosenthal** (3:28)
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** (3:46)
Yep. Obviously, it's a huge benefit for the environment and for customers on cost, 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** (4:02)
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.