From the stage at Climate Pledge Arena in Seattle, Acquired podcast hosts Ben Gilbert and David Rosenthal discussed with a series of guests the gears of culture and commerce most likely to drive stocks higher and higher over the long term.
They also pondered with a Y Combinator executive the qualities venture capitalists should look for in a startup founder. And they discussed with Brooks Running CEO Jim Weber the tough decisions and ambitious gambles necessary to rescue a company from mediocrity and ruin.
The Acquired podcast, among the top 10 tech podcasts distributed by Apple and Spotify, is known for these kinds of detailed and multifaceted deep dives into what makes a company successful.
Previous episodes — including some with more than 130,000 downloads and that reach three hours in length — include founders and CEOs from the likes of Twitter, Electronic Arts, Superhuman, Venmo and Mozilla. Others feature comprehensive histories of companies such as SpaceX and Berkshire Hathaway. Gilbert said nearly 40% of the show’s listeners are current or former company founders.
Gilbert and Rosenthal brought their podcast, which they typically record remotely, to a live audience of about 1,000 tech workers, founders and CEOs at the Seattle arena thanks to an offer from Seattle’s PitchBook, which sponsored the event Wednesday evening.
Rosenthal called Wednesday’s podcast recording a sort of homecoming for Acquired, which began recording in 2015 in Seattle and did its first live broadcast at the GeekWire Summit in 2016.
“It’s so fun to get to hang out with so many folks that we mostly know from the internet and now get to spend time with in person,” said Rosenthal, a venture capitalist and former principal at Seattle’s Madrona Venture Group.
Gilbert, who lives in Seattle and is also the managing director of Pioneer Square Labs, said the city’s tech scene is uniquely suited to the kind of intricate stories he and Rosenthal like to tell about the enterprises they cover.
“I think there’s a quiet intellectualism to Seattle,” Gilbert said. “Seattle is the most under-told story over and over again, and I think we kind of like it that way.”
Remarkable running recovery
The Brooks story is one of remarkable recovery. The brand bounced between multiple owners, chewed through several CEOs and even for a time faced the possibility of missing payroll before Weber took the helm just more than two decades ago.
As the company’s new CEO, Weber, who had previously served on the company’s board and was familiar with the chaos, slashed Brooks’ product offerings to target primarily performance runners.
The company slowly clawed its way back to profitability and gained substantial market share among runners. During the pandemic, as retailers shut their doors, Brooks was able to bolster its digital sales channels and grow by 27% in 2020 and then by another 31% last year, posting $1.1 billion in revenue.
Weber tells the story in a new book called “Running With Purpose,” which includes a foreword by Warren Buffet, CEO of Berkshire Hathaway, which owns Brooks.
The company’s recent gains were possible partly because, as the pandemic took hold, Brooks posted marketing representatives in parks and counted the runners passing by. Each day, Weber said, the number increased, an indication that people were taking up running as a safe, outdoor activity during quarantine. The company took a gamble and increased its inventory — and the gamble paid off.
A next logical step in protecting Brooks’ position, Weber said, is developing tech services for runners. That, he said, will provide the Seattle company with an abundance of data illustrating everything from how often, when and over what distance runners use its shoes, even which muscle groups are being strained during those runs.
Weber said he has been so driven to acquire this kind of technology that he once tried to convince Buffet to buy up just about all of the digital running apps on the market. But Buffet was having none of it.
“How fast do they shift? How fast do they iterate?”
The reason, Weber said, is that Under Armour, which owns the Map My Run app and ASICS, which owns another app called Runkeeper, “have spent hundreds of millions of dollars on digital apps, and I think they’ve really struggled … the digital space, there’s a lot of carcasses there.”
Weber said he admires Nike’s personal training apps, and he called the Apple Watch a “damned great product.”
“Those tools are really powerful for data,” he said. “But how do you monetize it?”
“So we haven’t gone there yet, but we’re building a Brooks Running Club. Finally, we want to sell that program,” Weber said.
Digital services that provide data on runners’ activity can be a means of keeping the loyalty of hardcore runners – Weber called them “true believers” – who want to track their performance and progress.
“The data piece of that is going to be key,” he said.
During a separate conversation, Anu Hariharan, managing director of Y Combinator’s Continuity Fund, told Gilbert and Rosenthal that when deciding which companies to back, the fund focuses more on the “qualitative qualities of a founder” than hard numbers.
“Many people can package the metrics in the fundraising deck,” Hariharan said with a laugh. “I mean, we teach you to do it. We are experts art it.”
“What we look for (instead) is, how fast does the founder move?” she continued. “How fast do they shift? How fast do they iterate?”
The Continuity Fund wants to see founders who are “learning fast and making changes,” she said. “If those qualities show, the metrics will follow.”
