Special drop: David on Levels' Podcast!

David Rosenthal (0:00)

Hello, Acquired LPs.

David, coming at you here with a very special surprise, little bonus feed drop. So I had the chance recently to go on Levels' Podcast, one of our very favorite companies here in the Acquired community, called A Whole New Level, their podcast, hosted by none other than Ben Grynol himself, Acquired Super LP, and it was just a blast. We talked about all sorts of fun stuff, Acquired stuff, lots of riffing on theories about company building and strategy, and it was just a blast. So we thought it would be fun to, especially since it's such a fun part of the Acquired community, to drop it here in our feed as well. So without further ado, we will cut over to our fun discussion. And if you like what you hear and you want more levels and more Ben Grynol, go over and subscribe to a whole new level in any podcast player of your choice.

Thanks so much to Ben for having me on and other Ben, Acquired Ben, and I will be back here in the LP feed soon. We've got two really, really cool episodes in the works with our editors now that we can't wait to drop. We'll see you soon.

Ben Grynol (1:31)

I think there's a main starting point. It's something that you and Ben have riffed on quite a bit. You and I have riffed on it loosely, and it's something that we've been thinking more about as a team with Levels, which is an ecosystem versus a single threaded company. And this is somewhat like Amazon and Apple, very much an ecosystem, versus a company like 23andMe. And I think back, I guess it must have been like the winter.

You and I were jamming on this a little bit, where it's like, it might have been right when you first tried Levels. And the thought was, 23andMe is doing great things in the world, not to dunk on 23andMe, but don't become 23andMe.

It was kind of the takeaway.

David Rosenthal (2:14)

I remember writing that in a little note in my notion of my, like all my thoughts as I was going through doing Levels for the first time, and that was like the big one. I was like, yes, don't become 23andMe.

Ben Grynol (2:25)

Yeah, and there's this conversation around ecosystems, right? Like Amazon and how it didn't start out as AWS, and now that is such a significant portion of its revenue streams.

How do you think about when you're not just vetting portfolio companies, and I know early stage is much different, but when you start to think about some of the diligence that you're doing and you see these great companies and you think, man, that is a giant platform or a giant ecosystem that is so hard to disrupt.

David Rosenthal (2:58)

Oh, well, let's see. Good question. Where should we start? I mean, let's start with early stage because that's the easy part.

No freaking clue.

Ben Grynol (3:09)

Not quite roulette. Not quite roulette.

We'll call it blackjack, but it's still gambling.

David Rosenthal (3:15)

Perfect timing for this because I'm actually in the middle of doing research and prep work for our next special episode that we're going to record in a couple days with the guys from NZS Capital which stands for Non-Zero-Sum Capital, which is a public market fund based in Denver. These guys are great. I just love their philosophy. We met them at a capital camp a couple of weeks ago, and other people have done this, but I think they've done it, really embraced this more than anyone.

This idea of applying complexity theory to investing, complexity theory for folks who aren't familiar with it is pioneered or really championed now by this place called the Santa Fe Institute in Santa Fe, New Mexico. Are you familiar with it?

Ben Grynol (4:02)

No, I haven't heard of either.

David Rosenthal (4:04)

It's so cool.

Basically, the Santa Fe Institute is this nonprofit educational institution dedicated to bringing together leading academics and theorists from a wide disparate array of fields and bringing them together to collaborate, and specifically to collaborate around this idea of complexity theory, which is the idea that the world and lots of systems, the universe, the world, and lots of systems within it are complex. Let's see if I can get this definition right.

Complex systems, specifically complex adaptive systems are dynamic. It's like evolution. You can't just model out the stock market and be like, these are the rules and this is how it works. It evolves and it adapts and it's complex. A couple of the big takeaways out of this concept are, one, you can't predict the future, so you just can't and you can't see coronavirus coming. Thus, this idea of rather than being right, you want to be resilient.