Season 3, Episode 3: The Sonos IPO

**Ben Gilbert** (0:00)
Re-cord.

**David Rosenthal** (0:02)
All right.

**Ben Gilbert** (0:03)
Where does the word record come from? We go cord again.

**David Rosenthal** (0:07)
Yeah, cord again. That's great.

**Ben Gilbert** (0:23)
Welcome to season three, episode three of Acquired, the show about technology acquisitions and IPOs. I'm Ben Gilbert.

**David Rosenthal** (0:30)
I'm David Rosenthal.

**Ben Gilbert** (0:32)
And we are your hosts. Today we are covering the IPO of a company that has devices littering my home in the most wonderful way, Sonos. So Sonos was founded with a clear mission, and that was to fill every home with music, or so says their S1. And today we will decide, based on their very recent IPO, last month, how to go. And we will forecast what does it look like in the future for this IPO to sort of look like an A plus in retrospect, and what does it look like if it was a failure in retrospect? And what are the things that have to evolve in the landscape of home audio and in the actions of the company in order to play out either of those scenarios?

**David Rosenthal** (1:15)
It is a unusually clear and compelling mission. It may or may not have been the company's original mission. You'll just have to tune in to find out.

**Ben Gilbert** (1:24)
So I want to start with some fun facts because I think they're very interesting about the company. So the first one is Sonos did not sell a speaker until seven years into the company's existence, which is a little shocking based on the company that we know today to think about two years of no product and then five years of non-speaker products, really just bridges, amplifiers, ability to bring non...

**David Rosenthal** (1:46)
To bring digital music to any home in your room.

**Ben Gilbert** (1:49)
Yep. And then here's another just banana stat to tell you how loyal the customer base is and how much Sonos invests in their backwards compatibility. 93% of the speakers that it has sold over the last 13 years are still active today.

**David Rosenthal** (2:03)
Yeah, that is crazy.

**Ben Gilbert** (2:05)
In all this research, that thing jumped out at me. Like, so the iPhone is not yet 13 years old. The iPhone was only 10 years old. How many 10 year old iPhones are still active?
I don't know, 0%. I mean, it rounds to 0%. Yeah.

**David Rosenthal** (2:19)
I believe the actual stat is that 93% of the company's products received and installed an over-the-air update in the last 12 months, which is even more bananas that products from, you know, original products are still being supported with new firmware updates from the company.

**Ben Gilbert** (2:38)
Yeah, totally nuts. Well, if you're new to the show, you can check out our Slack at Acquired.fm. That's where you can find real-time discussion of the biggest tech news and chat with David and I. Tech news like the wild hour-by-hour news and tweets trickling out of Elon Musk and Tesla yesterday, which by the time we release this will have developed two or three more news cycles, and we will actually know what's going on or maybe not. But as of now, what we know is that Elon believes he has secured the funding to take the company private and has felt so confident in that that it should be announced on Twitter publicly to the world.

**David Rosenthal** (3:14)
I actually heard a rumor that Elon, you know, there's all this speculation now, did he violate any securities laws by tweeting about this? He's now considering instead of using Twitter that he's just going to use the Acquired Slack channel for future Tesla-related announcements. Can neither confirm nor deny.

**Ben Gilbert** (3:32)
With the density of concentration of people interested in the news, I would say not on a reach perspective, but on a density of interest perspective, it's probably a pretty good platform for that.

**David Rosenthal** (3:41)
Great platform.

**Ben Gilbert** (3:43)
So join us at Acquired.fm. This is a great time to tell you about one of our very favorite companies, Crusoe.

**David Rosenthal** (3:51)
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** (4:16)
Yes, we talked about that on our ACQ2 episode with Crusoe's CEO, Chase Lockmiller.

**David Rosenthal** (4:22)
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.