Acquired
01:13:58 · Ben Gilbert, David Rosenthal
[01:13:58] S0: Yep. Few exceptions being like James Bond, but god, have they tried to do all sorts of crazy stuff in order to let that IP keep living. I mean, like, there's been six, seven James Bonds. You know? And they have to keep rebooting the story over [01:14:10] S1: and over. Exactly. Okay. So that's step one. Genuinely great IP that audiences fall in love with has to be at the core. Step two, you need to maximize the distribution for that IP as wide and as far as possible. [01:14:27] S0: In its primary delivery vehicle. Yes. So, like, Mickey in those films get those films into as many theaters as possible to just completely saturate the world. It's sort of a scale economies thing. If you're gonna invest a whole bunch in making it the very best you can, then you need to distribute it everywhere in order to maximize the impact from that huge upfront investment. [01:14:49] S1: Which, of course, applies to any film and any IP. But for Disney and the flywheel business model, they're willing to make every sacrifice possible to maximize distribution because they know that they're gonna monetize through the flywheel in a way that nobody else can. [01:15:06] S0: If they saturate all of America or all of the English speaking world with a character, then that character, that movie can become a shared cultural memory.
01:15:06 · Ben Gilbert, David Rosenthal
[01:15:06] S0: If they saturate all of America or all of the English speaking world with a character, then that character, that movie can become a shared cultural memory. [01:15:16] S1: So then that leads right into the third thing, which is the ancillary nodes of the flywheel itself. Once you've got the great IP, once you've distributed it as widely as possible, then you wanna get that IP into as many other arenas as possible, and this is exactly what Disney was doing. [01:15:36] S0: Right. Other mediums. [01:15:37] S1: Merch, clubs, comics, books, magazines. The beauty here and the discovery that Disney makes is that when you put the IP into these other ancillary nodes, it doesn't cannibalize the core IP. Like, you're not gonna oversaturate Mickey by having a Mickey comic strip and daily exposure in the way that if you released a new Mickey film every single day, people would get tired of Mickeys. If you structure the nodes of the flywheel right, the additional exposure reinforces the core IP. [01:16:14] S0: That's really interesting. So you do need some scarcity of the character in its main medium where you need, like, a really high quality bar and not oversaturate there. Exactly. Your secondary mediums, then you can cover the earth and be, like, everywhere all the time.
01:16:14 · Ben Gilbert, David Rosenthal
[01:16:14] S0: That's really interesting. So you do need some scarcity of the character in its main medium where you need, like, a really high quality bar and not oversaturate there. Exactly. Your secondary mediums, then you can cover the earth and be, like, everywhere all the time. [01:16:31] S1: Exactly. And so then if you flash forward to today and, like, the problems that Hollywood and most other studios have, and Disney too, especially with Marvel, if you come out with sequels all the time at this, like, ever increasing cadence of the core IP and the core delivery vehicle, people get tired of it. That's super interesting. But the flywheel lets you get that constant exposure without oversaturating the core IP. It's, like, absolutely brilliant. [01:17:00] S0: Not to mention, releasing films is actually not and never has been a great business model. Yes. It's just not that high margin. It's not that repeatable or predictable in its success. So you kind [01:17:12] S1: of You have to invest years ahead in production before you get any payout. [01:17:16] S0: Right. Right. The and any studio that is purely a studio is in for a rough go. But if you're you're trying to basically create this, like, durable platform of profit with all of these ancillary businesses, then you can focus on scarcity, quality, innovation in the kinda primary medium. [01:17:36] S1: Yep. Because you know you're gonna drive revenue basically in perpetuity out of it through the flywheel.
01:17:36 · David Rosenthal, Ben Gilbert
[01:17:36] S1: Yep. Because you know you're gonna drive revenue basically in perpetuity out of it through the flywheel. [01:17:42] S0: Do you think I'm thinking about this as it pertains to acquired. We're so obsessed with quality and just being in one medium. Do you think that it is okay to lower the quality bar outside the primary medium? Like, can Disney throw Mickey Mouse on all sorts of crap without diminishing the brand of Mickey Mouse as long as the primary medium of film stays really high quality? [01:18:09] S1: Basically, I think the answer to that is yes. At least for Disney. I don't know about acquired. Yeah. [01:18:15] S0: I don't I don't know if it applies to premium brands or luxury brands. But [01:18:19] S1: You gotta be really careful about what the mediums are. This is why comics is so perfect for the flywheel because people are used to consuming a daily bit of content in a comic strip, and they don't have expectations that it's gonna be, you know, a great masterpiece like Snow White or Steamboat Willie each time. [01:18:40] S0: Right. And when you read the non canon Star Wars books Yes. [01:18:45] S1: It doesn't detract from the canon. That's exactly right. [01:18:48] S0: It does deepen your fandom.
01:18:48 · Ben Gilbert, David Rosenthal
[01:18:48] S0: It does deepen your fandom. [01:18:50] S1: Yes. Exactly. Exactly. So all of this, as Walt starts to understand the business model power of what they've created, leads him right to the natural conclusion that Disney should basically always invest as much time and money as possible in the creation of new core IP. And Walt is starting to get a crazy idea of how he might be able to do that, which is to create Hollywood's first full length animated feature film, Snow White. [01:19:31] S0: Yeah. And, David, you put it in such a capitalist way there that it's it's to maximize the amount of of dollars that you sink into making the quality so that it federates onto this flywheel. I'm sure there was an element of that. There also is an artist with Walt where he's been creating these cartoons. He's starting to, like, really identify with the artistic community, with the fine artists of the time, build a lot of those relationships. And he wants to create something that is sort of seen as not only a technology breakthrough, but like an art breakthrough. Can can he create a masterpiece in this new medium? And can he play with your emotions? I mean, we we know that cartoon characters in a slapstick way can make you laugh, but there is this, like, total open question in the world of can you create animation so realistic and characters so compelling that you can make audiences cry? [01:20:32] S1: Yeah. [01:20:32] S0: That's the other side of the ludicrously capitalist big investment into Snow White.
01:20:32 · Ben Gilbert, David Rosenthal
[01:20:32] S0: That's the other side of the ludicrously capitalist big investment into Snow White. [01:20:37] S1: You're totally right. I'm looking at it through, like, a business model capitalist lens, and, I I don't think Walt was thinking about it that way specifically. [01:20:47] S0: He did wanna build the most successful company that he possibly could that could take bigger and bigger swings. Yes. So, listeners, before we tell you the story of Snow White and how it came to be, now is a great time to tell you about one of our favorite companies, Vercel. So building software in the agentic AI era demands a completely different kind of infrastructure. So that's exactly what Vercel has been building. Their tools in their agent stack have been huge for companies like Notion, Brex, and Neon for shipping agents to production. And they just made some really big announcements on stage at their annual conference called Ship, which, David and I actually spoke at last year. Yes. One of the biggest announcements is Eve, Vercel's open source agent framework. [01:21:34] S1: Yep. Eve is the glue that ties their agent stack together. Building an enterprise grade agent used to take weeks. With Eve, it now just takes minutes. Think of it as, like, the Next. Js for agents. Opinionated, open source, and it runs everywhere.