Season 3, Episode 9: Netflix (Part 2)

**Ben Gilbert** (0:00)
Oh my god, David, look at that podcast room you are in. That foam padding! welcome to season three, episode nine of Acquired, the show about technology acquisitions and IPOs. I'm Ben Gilbert.

**David Rosenthal** (0:24)
I'm David Rosenthal.

**Ben Gilbert** (0:25)
And we are your hosts. Today, we are back with the Acquired version of Terminator 2, the second part of our Netflix episode. You like that, David? It's just for you.

**David Rosenthal** (0:37)
Oh, man, that's great. That's great. I love it.

**Ben Gilbert** (0:40)
Listeners, now, if you remember the last episode we did covered the DVD saga of Netflix, and where we left our heroes in 2009, shortly before the epic launch of Qwikster. So today, we're going to dive in on the era of streaming and later original content. So, David, I wanted to have a fun fact to start us off on Netflix. So as you remember, they were once a plucky startup mailing DVDs to customers, and a remnant of the pre-dot-com bubble starting in 97 And they were doing this even before most people had DVD players. They were waiting for the DVD wave to crest. This company now accounts for 15% of all internet traffic.

**David Rosenthal** (1:20)
I know. That's in my show notes.

**Ben Gilbert** (1:25)
Well, sorry to blow your cover early, but streaming movies and TV as a category actually now makes up 58% of downstream internet traffic and no single service accounts for more of that bandwidth than Netflix does. At peak times, it can even account for 40% of the US's concurrent internet traffic. So you could imagine maybe like 8 p.m. Eastern or something like that.

**David Rosenthal** (1:49)
Absolutely incredible.

**Ben Gilbert** (1:51)
Yeah. This is with some of the best compression and optimization technology that humans as a species have figured out how to do. The last episode was about a company fighting to get its first 500,000 customers. This episode is very much about global domination. All right. Listeners, we announced on the last episode that we had formally launched the Acquired Limited Partner Program. We've been just totally floored by how many of you have joined our LP community and are listening to the bonus show and are sending us really great questions for doing Q&A on the show. David, last week's episode was very fun. So I'm pumped I got to meet Dan and thanks for bringing him on.

**David Rosenthal** (2:28)
Yeah, it was super fun. We had Dan Hill, who in addition to being the CEO of Wave's first portfolio company, Alma, co-founder and CEO. He was Airbnb's head of growth for a long time and had just great stories about growing Airbnb from Series B days to $30 billion plus, and just so much to learn from him. So really fun to have him on the LP show.

**Ben Gilbert** (2:54)
Anyway, listeners, if you want to hear Dan talk about why Airbnb was successful, sort of in this space and how they chose their metrics and a bunch of other great stuff, you can click the link in the show notes to support the show for $5 a month or go to kimberlite.fm slash acquired. That's K-I-M-B-E-R-L-I-T-E dot F-M slash acquired.

**David Rosenthal** (3:12)
I feel like we really need a jingle for that. Do do do.

**Ben Gilbert** (3:16)
We could just play that every time.

**David Rosenthal** (3:18)
Yeah.

**Ben Gilbert** (3:19)
Acquired needs better jingles period. That might be one of my holiday projects.

**David Rosenthal** (3:23)
Yeah. Back to the show.

**Ben Gilbert** (3:29)
This is a great time to tell you about one of our very favorite companies, Acquired. It's Crusoe.

**David Rosenthal** (3:34)
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** (3:59)
Yes, we talked about that on our ACQ2 episode with Crusoe's CEO, Chase Lockmiller.

**David Rosenthal** (4:05)
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** (4:23)
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.