The Playbook: Lessons from 200+ Company Stories

This special episode — recorded in their hotel rooms at Capital Camp right before going on stage, a first for the show — is the hosts' answer to the question they get constantly: you've analyzed 200 companies over seven years and spent an ungodly number of hours doing it, so what are the takeaways? The idea dates to around 2018, when a major book publisher approached them about doing an Acquired book; they chose to keep doing episodes instead, calling this talk the first draft. The talk distills their favorite playbook themes, with the usual disclaimer that it's not financial advice and an invitation to debate favorite lessons in the Acquired Slack.

Deliberately counter-positioned for May 2022's doom and gloom (though friend of the show Anu Hariharan beat them to the optimism drum earlier that evening), the first lesson is illustrated by Sony's founders, Akio Morita and Masaru Ibuka — whose photo almost nobody in the auditorium could identify. Sony was founded in 1946 in Japan, arguably the worst time and place in recent history to live, let alone start an innovative technology firm: no technology left in the country (the first product was a wooden rice cooker), no market (per-capita GDP of $17 — not $17,000 — and 48% of Tokyo homeless after the war), and every other tech firm had pivoted to military production for a customer that no longer existed. Yet they built one of the most iconic companies in the world — Steve Jobs cited Morita as an inspiration ("no Morita, no Sony, no iPhone"). The takeaway: even at the bleakest moment it's rational to be an optimist, because optimists drive the world forward, and for investors, investing in optimism is the only way to outsized returns.

Everyone knows Moore's Law — transistors double every 18–24 months, which compounds to roughly a 10x every seven years (log-scale charts of the 386, 486, Pentium 4, Core 2 Duo, A7, and M1 make this visible). The crazy thing about exponential curves: they always look flat-then-vertical in log scale, so every generation feels like "nothing happened, then everything happened" — in ten years the M1 will look like nothing. The hosts then aggregate the market cap of all global tech companies since 1975 and argue this chart is the same thing as the processor chart — Moore's Law at work — and the lesson is named for Mike Moritz: when he and Doug Leone took over Sequoia from Don Valentine, staring at the never-before-seen returns of the Cisco/Oracle/Apple funds and wondering how to top them, he realized that as long as Moore's Law holds and computing gets exponentially cheaper, the markets technology can attack keep getting bigger. Numbers: in 1990 a 486 PC cost $2,000 and only ~42% of America used a computer at all; today a smartphone with literally a million times the computing power costs $200, and over 6 billion people have one. That insight led Sequoia to Google, WhatsApp, Airbnb, Meituan, ByteDance, and global markets.