This is Matt Reustle and today we are breaking down the Swedish industrial giant, Atlas Copco. With a market cap hovering around $50 billion US dollars, Atlas Copco is a dominant player in the air compressor and vacuum pump markets. It has returned 40x over the past 20 years for its shareholders and to break down the business I?m joined by Stephen Paice, Head of European equities at Baillie Gifford. Baillie Gifford has owned this business for 4 decades and Stephen still has the handwritten research notes from the mid-80s so we thought it was a proper fit. 

We cover the rich corporate history, including how one family - the Wallenbergs (also referred to as the Swedish Rockefellers) - have played such a major role in the history, we get an overview of pneumatic energy and the importance of the air compressor market, and we explore what makes this corporate culture so noteworthy to both insiders and outsiders. Please enjoy this breakdown of Atlas Copco.

For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.

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This episode is presented by Visible Alpha. The team at Visible Alpha built a platform to analyze consensus data and financial metrics on over 6,000 public traded companies. Rather than having to dig through models one by one, Visible Alpha extracts data from every line item across sell-side models so you can better understand expectations on metrics beyond just revenue and earnings. Listeners are invited to try Visible Alpha for free by visiting visiblealpha.com/breakdowns.

?--

Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.

Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.

Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss | @ReustleMatt

Show Notes

[00:02:12] - [First question] - What makes Atlas Copco such an interesting business 

[00:03:52] - What they?re selling and who they?re typically selling to 

[00:06:02] - Whether or not there are alternatives to air compressors

[00:07:03] - What a vacuum pump is and how their industrial vacuum business works

[00:08:55] - Metrics used to measure how Atlas Copco is a market leader 

[00:10:25] - Some of the key milestones of their corporate history leading up to today

[00:17:51] - How much the Wallenberg family owns of Atlas Copco today

[00:18:48] - Walking through the income statement

[00:21:47] - Service regularity and overview of revenue generated through service 

[00:25:35] - Cost profile of the business and how their supply chain works

[00:30:19] - Anything unique that contributes to their 6-7% revenue growth

[00:31:55] - What the consolidated business margin works out to

[00:33:23] - TransDigm; Being able to allocate 30-40% of free cash flow towards acquisitions in a fragmented market

[00:35:16] - What the bull case for Atlas Copco is

[00:39:46] - A metric he typically uses when thinking about these types of businesses 

[00:40:47] - The most interesting and surprising takeaways from Atlas Copco

This is Jesse Pujji and today we?re breaking down ChargePoint. ChargePoint is the clear market leader in the United States for electric vehicle chargers. Founded in 2007 by five technical founders, the business has ridden the wave of EV growth and has manufactured some 40% of charging points in the US. 

To break down ChargePoint, I?m joined by Mark Tomasovic, a principal at Energize Ventures and a previous guest on our show. We discuss the challenges of a commoditized business, how ChargePoint is leading the EV land grab, and why the US is at a particularly interesting point for EV adoption. Please enjoy this business breakdown of ChargePoint.

For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.

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This episode is brought to you by Tegus. Tegus is the new digital hub for market intelligence. The Tegus platform empowers Investors and Corporate Development teams to invest smarter by pairing best-in-class technology with the highest quality user-generated content and data. Find out why a majority of the top firms are using Tegus on a daily basis. If you're ready to go deeper on any company and you appreciate the value of primary research, head to tegus.co/breakdowns for a free trial.

?--

Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.

Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.

Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss | @ReustleMatt

Show Notes

[00:02:16] - [First question] - What ChargePoint is

[00:03:26] - Their size, scale and revenue today

[00:04:21] - The history of ChargePoint and the EV charging sector 

[00:06:25] - How the industry has evolved and important metrics to understand 

[00:08:18] - Who the main players are in the EV charging infrastructure layer

[00:10:46] - The role auto manufactures play and their relationship with this world

[00:12:05] - Tesla?s closed wall network and ChargePoint?s open network

[00:13:05] - Competitive advantages in the EV charging landscape

[00:15:45] - Whether or not sales and marketing is unique to ChargePoint 

[00:16:47] - Other unique arrangements that will unlock the pace of their land grab

[00:18:37] - The various lines of P&L and how to think about them

[00:19:34] - The three levels of chargers and costs associated with them 

[00:21:52] - What goes into their gross profit margins and cost of revenue 

[00:22:50] - How their gross margin compares to their competitors

[00:23:41] - What they?re trying to accomplish with their high R&D spend

[00:24:49] - What they?re investing in and betting on for the future by spending cash

[00:25:38] - Expectations of future growth for the next couple of years

[00:26:46] - Growth over the long-term trajectory and the car to charger ratio

[00:29:14] - Their main flywheels that give them a competitive advantage 

[00:30:53] - The big buckets of customer segments and end point leverage

[00:32:09] - What the life expectancy of a charger is

[00:33:13] - The regulatory environment writ large 

[00:34:39] - Bull case for ChargePoint over the next five to ten years 

[00:37:36] - Reasons why ChargePoint might not succeed over the next five to ten years 

[00:38:58] - Lessons for builders and investors when studying ChargePoint 

[00:39:51] - Learn more about ChargePoint; energize.vc

This is Dom Cooke and today we are breaking down the freight railroad business, Union Pacific. Union Pacific is interesting for a number of reasons. Its first tracks were laid in a time of horsepower, over 150 years ago. It operates a duopoly in the West of the US with Burlington Northern Santa Fe, a rail owned by Berkshire Hathaway. And despite being capital intensive, it earns higher operating margins than Microsoft. But above all, it is a crucial link in the global supply chain, moving much of what the US economy is built on. 

To break down this $140 billion railroad operator, I?m joined by Matt Reustle, the CEO of Colossus and a former transport analyst. Please enjoy this Business Breakdown of Union Pacific Railroad Company.

For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.

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This episode is brought to you by Tegus. Tegus is the new digital hub for market intelligence. The Tegus platform empowers Investors and Corporate Development teams to invest smarter by pairing best-in-class technology with the highest quality user-generated content and data. Find out why a majority of the top firms are using Tegus on a daily basis. If you're ready to go deeper on any company and you appreciate the value of primary research, head to tegus.co/breakdowns for a free trial.

-----

This episode is brought to you by Scribe. Scribe is the trusted transcription provider for the business and investing community. Scribe is designed to accurately transcribe messy, real-world audio and is unique in that it?s optimized for the complexities of enterprise audio, such as company and product names, currencies, accents and numbers. Visit kensho.com/breakdowns to learn more and unlock your free trial.

?--

Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.

Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.

Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss | @ReustleMatt

Show Notes

[00:03:01] - [First question] - A general overview of the transportation sector

[00:05:38] - What a Class 1 railway is and what the railway industry looks like

[00:07:40] - Is there cartel-like behavior and collusion between railway companies?

[00:12:24] - What a rail network consists of at the unit and asset level

[00:17:48] - Whether or not consumer railroads are independent from freight railroads 

[00:18:57] - Interchange when goods are transferred from the east coast to the west coast 

[00:20:17] - Who Union Pacific?s customers are, what they move, and their business writ large 

[00:22:51] - Defining intermodal and its implications for railways  

[00:25:35] - The Box; Whether or not all transport volume in 50 years will be intermodal

[00:26:37] - How they determine the rate they charge customers  

[00:28:41] - Ways that geography impacts what is being transported 

[00:31:28] - The income statement and economics of rails through the lens of UNP

[00:36:11] - Improving efficiency and ROI while not having to submit to customers 

[00:40:12] - How different policies affect railway margin profiles 

[00:41:56] - Operating ratios and why they?re the metric most referenced for performance

[00:44:38] - The nature of cyclicality and its driving forces 

[00:48:15] - Thoughts about capital allocation given being high CapEx and their free cash flow

[00:52:27] - How inflation and current events lately positively and negatively affect UNP

[00:54:16] - What would make him nervous as an analyst looking at UNP in the years ahead

[00:56:33] - Talk or plans to electrify and migrate away from fossil fuels 

[00:58:22] - Lessons learned from UNP that could be applied to other industries and investing

This is Zack Fuss, an investor at Irenic Capital Management. Today we?re breaking down the world?s largest luxury business, LVMH. The LVMH story is deeply reflective of the vision of its 73 year-old founder and architect, Bernard Arnault. Today, the business generates ?75 billion in sales across its 75 brands and 3 sector focuses. With a market cap of ?350 billion, LVMH is not only the largest luxury business in the world but one of the largest businesses in the entire world. 

To break down LVMH, I?m joined by Christian Billinger, the chairman of Billinger Förvaltnings. We discuss the paradox between scarcity and scale in the luxury industry, analyze some of the company?s high profile acquisitions, and delve into the history of this conglomerate?s famous founder. Please enjoy this breakdown of LVMH.  

For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.

-----

This episode is brought to you by Tegus. Tegus is the new digital hub for market intelligence. The Tegus platform empowers Investors and Corporate Development teams to invest smarter by pairing best-in-class technology with the highest quality user-generated content and data. Find out why a majority of the top firms are using Tegus on a daily basis. If you're ready to go deeper on any company and you appreciate the value of primary research, head to tegus.co/breakdowns for a free trial.

-----

This episode is brought to you by Scribe. Scribe is the trusted transcription provider for the business and investing community. Scribe is designed to accurately transcribe messy, real-world audio and is unique in that it?s optimized for the complexities of enterprise audio, such as company and product names, currencies, accents and numbers. Visit kensho.com/breakdowns to learn more and unlock your free trial.

?--

Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.

Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.

Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss | @ReustleMatt

Show Notes

[00:03:30] - [First question] - How LVMH came to be and Bernard Arnault?s history

[00:08:56] - Spread of revenue and margins across their various brands

[00:13:38] - What it is about their business that has allowed them to achieve such tremendous scale given the scarcity of luxury goods

[00:16:06] - Examples of Arnault reinvesting in the business for the long-term

[00:17:04] - Ways all of their brands and different verticals work together to create value

[00:18:56] - What the general view on success is after Arnault steps down 

[00:21:19] - Key factors that allow luxury houses to enjoy handsome returns on capital historically

[00:23:17] - What he?s noticed about luxury brands and their ability to redeploy capital 

[00:26:25] - How their capital allocation strategy manifests in their financial profile

[00:28:24] - The Arnault family?s control over LVMH

[00:31:48] - The evolution of the industry in Europe and the strong getting stronger 

[00:33:58] - Cultural differences internationally that allow some countries to thrive in luxury brands compared to others like the US

[00:36:17] - Thoughts on the influence of the Chinese consumer on European luxury houses

[00:40:30] - What has characterized their M&A strategy historically

[00:44:08] - Overview of their recent acquisitions and what it means for LVMH going forward

[00:47:46] - Their go-to-market strategy to acquire customers and build the brand

[00:48:11] - Some of LVMH?s vulnerabilities and risks 

[00:50:44] - Key takeaways for investors and operators when studying LVMH?s story 

This is Matt Reustle and today we are breaking down DuPont. We admire leaders that are in the trenches with their team members; never above any task and willing to share in risks. But, wow, did the Dupont family set a standard in that category. Whether it was Pierre Samuel Du Pont's 1818 death fighting a fire at their powder mill, Alexis Du Pont?s 1857 death in an explosion at a powder yard, or Lammot Du Pont?s famous 1884 death in an explosion while experimenting with nitroglycerines. The Du Pont family pushed the limits.

In the 1900s the company evolved away from their roots in gunpowder and dynamite and it's hard to find an industry they haven?t touched since then. To break down DuPont, we are joined by Seth Goldstein from Morningstar. Seth covers what separates commodity chemicals from specialty chemicals, we get some quick chemistry lessons on what's happening to create these well-known products like Nylon and Tyvek, and why after all of the years as a behemoth in the industry, DuPont has "unbundled" into several independent companies. Please enjoy our Breakdown of DuPont. 

For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.

-----

This episode is brought to you by Tegus. Tegus is the new digital hub for market intelligence. The Tegus platform empowers Investors and Corporate Development teams to invest smarter by pairing best-in-class technology with the highest quality user-generated content and data. Find out why a majority of the top firms are using Tegus on a daily basis. If you're ready to go deeper on any company and you appreciate the value of primary research, head to tegus.co/breakdowns for a free trial.

-----

This episode is brought to you by Scribe. Scribe is the trusted transcription provider for the business and investing community. Scribe is designed to accurately transcribe messy, real-world audio and is unique in that it?s optimized for the complexities of enterprise audio, such as company and product names, currencies, accents and numbers. Visit kensho.com/breakdowns to learn more and unlock your free trial.

?--

Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.

Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.

Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss | @ReustleMatt

Show Notes

[00:03:38] - [First question] - Key products that define Dupont?s history and where their products show up in our everyday lives

[00:06:23] - The science that goes into developing their products and what being a speciality chemicals business looks like

[00:08:22] - Where they?re sourcing commodity chemicals from 

[00:10:30] - The thought process that went into their merger with Dow in December 2015

[00:13:21] - Commodity chemicals versus speciality chemicals

[00:16:01] - The importance of patents and early products that first had them

[00:17:38] - How much effort is put into research and development today

[00:19:47] - Their economic model and profile and current businesses

[00:23:56] - How their EBITDA margins today compare to the business historically

[00:25:27] - Overview and duration of their merger supply agreements

[00:26:23] - The seasonality and customer base for a business like this

[00:27:52] - Producing on a per-order basis or on market speculation

[00:30:04] - How many of their chemicals are produced in their own manufacturing facilities

[00:31:00] - Stability and internal investment of their cash flow cycle

[00:32:28] - History of the Dupont family and key leadership changes

[00:34:24] - Thoughts on the bull case for Dupont that will put them back on the pedestal 

[00:36:28] - The percentage of the market they represent today and their current competitors

[00:37:56] - Metrics used when valuing commodity and speciality chemical businesses

[00:40:03] - Prior regulatory fines and potential risks going forward

[00:46:44] - Key lessons for operators and investors from Dupont?s story

This is Matt Reustle and today we are breaking down the financial institution known as Charles Schwab. Schwab is a financial behemoth. They report over $8 trillion in assets under custody and a market cap scratching $120 billion but I think the most fascinating part about this breakdown is the strategic pivot taken by Schwab. While the online brokerage market has been decimated in recent years from fee compression, Schwab has been pivoting their business model to that of a traditional bank. Now what does that mean? Today, Schwab makes the majority of their money earning interest on customer cash deposits. 

To break down Schwab, I am joined by Holland Advisors? Founder and Portfolio Manager, Andrew Hollingworth. Andrew has written extensively on Schwab, which we link to in our show notes. We cover what it means to operate as a bank vs online broker, how Charles Schwab himself grew this business out of a newsletter, and what?s on the horizon for Schwab in the future. We hope you enjoy this breakdown of Charles Schwab.

For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.

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This episode is brought to you by Tegus. Tegus is the new digital hub for market intelligence. The Tegus platform empowers Investors and Corporate Development teams to invest smarter by pairing best-in-class technology with the highest quality user-generated content and data. Find out why a majority of the top firms are using Tegus on a daily basis. If you're ready to go deeper on any company and you appreciate the value of primary research, head to tegus.co/breakdowns for a free trial.

-----

This episode is brought to you by Scribe. Scribe is the trusted transcription provider for the business and investing community. Scribe is designed to accurately transcribe messy, real-world audio and is unique in that it?s optimized for the complexities of enterprise audio, such as company and product names, currencies, accents and numbers. Visit kensho.com/breakdowns to learn more and unlock your free trial.

?--

Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.

Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.

Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss | @ReustleMatt

Show Notes

[00:03:30] - [First question] - Why Schwab isn?t well understood by the market 

[00:05:18] - The story of Charles Schwab and how active he is in the company 

[00:08:13] - The business model of Schwab itself; Holland Advisors Research

[00:12:51] - Can it be compared to a franchise model; Another Flywheel

[00:15:46] - What did they see in the space that convinced them to shift their business model

[00:18:19] - How Schwab benefits from their customers keeping money in cash

[00:20:18] - What stops competitors from copying the Schwab model

[00:23:12] - Where Schwab stands out with cash on the balance sheet

[00:24:17] - The reasoning behind the TD Ameritrade acquisition

[00:30:38] - The Schwab customer base 

[00:33:28] - Convincing new customers to transfer their accounts to Schwab

[00:37:14] - How their market share has changed over the years

[00:38:50] - Building their balance sheet 

[00:46:34] - How their acquisition of TD Ameritrade helps their balance sheet

[00:49:50] - Valuing a complex business like Schwab

[00:56:43] - Key drivers of their earnings growth 

[00:58:31] - How they use their net interest margin 

[01:00:43] - What the market pullback this year has meant for Schwab

[01:03:43] - Major lessons learned from analyzing Schwab

Today, we?re breaking down one of the strongest brands in the world - Rolex. Founded in the UK in 1905 under the name Wilsdorf & Davis, Rolex has become the leading name in luxury watches. But, while the company?s products are iconic, the business itself is highly secretive. Owned by a Foundation and run as a non-profit entity, little is known about Rolex.

To unlock the secrets, we are delighted to be joined by Ben Clymer, founder of HODINKEE, and an expert on all things luxury watches. Ben has had rare access to Rolex and the people behind the manufacturer, making him the perfect person to dissect this business with us. Please enjoy this excellent Breakdown of Rolex.

For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.

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This episode is brought to you by Tegus. Tegus is the new digital hub for market intelligence. The Tegus platform empowers Investors and Corporate Development teams to invest smarter by pairing best-in-class technology with the highest quality user-generated content and data. Find out why a majority of the top firms are using Tegus on a daily basis. If you're ready to go deeper on any company and you appreciate the value of primary research, head to tegus.co/breakdowns for a free trial.

-----

This episode is brought to you by Scribe. Scribe is the trusted transcription provider for the business and investing community. Scribe is designed to accurately transcribe messy, real-world audio and is unique in that it?s optimized for the complexities of enterprise audio, such as company and product names, currencies, accents and numbers. Visit kensho.com/breakdowns to learn more and unlock your free trial.

?--

Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.

Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.

Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss

Show Notes

[00:03:01] - [First question] - Ben's favorite Rolex watch ever; Ben's Inside Rolex piece

[00:04:24] - What makes the Rolex Daytona such a special watch 

[00:07:19] - The job-to-be-done for high-end watches beyond just telling them the time

[00:12:18] - The strategy behind marketing luxury products; The Luxury Strategy

[00:14:34] - An overview of Rolex's business

[00:19:38] - The history of Rolex 

[00:38:45] - Their genius in marketing and distribution 

[00:41:55] - How they make decisions and what others can learn from them

[00:47:14] - The financials of Rolex and other luxury watch brands

[00:49:02} - Most important business lessons others can learn from Rolex

[00:52:54] - Other luxury brands worth studying 

[00:57:26] - What Rolex hasn't gotten right

This is Matt Reustle and today we are breaking down Polish grocer, Dino Polska. This wasn't a name on our radar at Colossus but the more we dug into the story, the more intrigued we became. It starts at the macro level in Poland, a country that transitioned away from communism in 1990 so the oldest private businesses are just north of 30 years old. And on a micro level, Dino operates a rigid playbook where they target small towns and replicate the same format store, which drives better efficiency and allows them to reinvest into new locations.

To break down Dino I am joined by Jon Cukierwar of Sohra Peak Capital Partners. Jon wrote an extensive presentation of Dino which can be found on our website. We break down the unique dynamics of the Polish consumer, how Dino differentiates from its competitors, and Dino's founder of mystery Tomasz Biernacki. Please enjoy this breakdown of Dino Polska.

For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.

-----

This episode is brought to you by Tegus. Tegus is the new digital hub for market intelligence. The Tegus platform empowers Investors and Corporate Development teams to invest smarter by pairing best-in-class technology with the highest quality user-generated content and data. Find out why a majority of the top firms are using Tegus on a daily basis. If you're ready to go deeper on any company and you appreciate the value of primary research, head to tegus.co/breakdowns for a free trial.

-----

This episode is brought to you by Scribe. Scribe is the trusted transcription provider for the business and investing community. Scribe is designed to accurately transcribe messy, real-world audio and is unique in that it?s optimized for the complexities of enterprise audio, such as company and product names, currencies, accents and numbers. Visit kensho.com/breakdowns to learn more and unlock your free trial.

?--

Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.

Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.

Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss

Show Notes

[00:03:21] - [First question] - The fall of communism in the 1990s and how it shaped the business landscape of Poland today 

[00:05:43] - Dino?s unique and differentiating characteristics as a grocery store 

[00:08:55] - The current market landscape of superstores, proximity, and mom and pop grocers in Poland 

[00:12:36] - The size and scale of Dino as a business today  

[00:14:01] - Key players and main events in Dino?s history

[00:20:03] - Where Dino?s margins fall relative to their competitors

[00:22:47] - Their relationship to the construction side of their business

[00:26:34] - The payback period of a new Dino store and how long until they reach maturity

[00:29:09] - Owned land and other factors in their real estate strategy

[00:31:10] - How much of their accessible market opportunity has been seized and their potential growth rate over the coming years

[00:34:20] - What their growth rate would have to be to ensure they reach their projected scale

[00:36:23] - How he values grocers as an investor in both Poland and the US

[00:38:12] - Cyclicality in revenue streams and what impacts them

[00:40:26] - Ways Dino finances their growth and if any capital has been given back to shareholders in dividends

[00:42:13] - Potential risks and threats to their business

[00:45:10] - How he grew and built conviction with risks in an emerging market

[00:47:48] - The main lessons he?s learned from studying Dino Polska

Today?s business needs little introduction. Berkshire Hathaway is one of the largest businesses in the world and run by arguably the most famous investors of our time, Warren Buffett and Charlie Munger. 

To break down the business, I?m joined by Chris Bloomstran. Chris is the President and CIO of Semper Augustus and has gone as deep on Berkshire as anyone I?ve ever encountered, making him the perfect person to do this with. Given the reams of excellent content already out there about Buffett and Berkshire, we focused our conversation on the specific elements that make this business so special. Please enjoy this breakdown of Berkshire Hathaway.

For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.

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This episode is presented by Visible Alpha. The team at Visible Alpha built a platform to analyze consensus data and financial metrics on over 6,000 publicly traded companies. Rather than having to dig through models one by one, Visible Alpha extracts data from every line item across sell-side models so you can better understand expectations on metrics beyond just revenue and earnings. Listeners are invited to try Visible Alpha for free by visiting visiblealpha.com/breakdowns

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This episode is brought to you by Daloopa. Daloopa streamlines a major pain point for investors. By capturing all of a company's KPIs and adjusted financials into their database - Daloopa makes it easy to quickly update your models for what matters. Daloopa uses AI to find every KPI disclosed - from charts, to text, and even from footnotes of investor presentations. Daloopa updates these KPIs and data points in your existing Excel models in one click, regardless of your source or format. Test Daloopa for free at daloopa.com/Patrick.

?--

Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.

Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.

Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss

Show Notes

[00:02:26] - [First question] - What Berkshire has taught the world about float

[00:14:00] - How much of Berkshire's success was predicated on insurance 

[00:23:17] - Whether or not Berkshire?s capital source has been more important than stock selection 

[00:30:04] - Why there?s such a disparity between good stock pickers and holding companies

[00:36:24] - What the major signposts of durability are when evaluating companies

[00:38:29] - Acquiring Alleghany and using that as a case study that reflects their values

[00:47:22] - The role that energy has played in Berkshire?s growth 

[00:59:54] - Thoughts about the major pieces of Berkshire and the future of the company 

[01:05:46] - Important lessons learned about investing and business from Berkshire?s story

Today we are running a special episode in our Business Breakdowns feed. My guest is Alex Danco from Shopify - who you may remember from our Business Breakdown on Shopify in 2021. Our conversation focuses on a new concept, tokengated commerce, and how Shopify is building around this theme. Given the market turmoil in crypto assets, we talk about true use cases of tokengated commerce and why blockchain technology is unlocking something that was not possible otherwise. This episode originally ran in our Web3 Breakdowns feed and represents an interesting case study of corporations embracing blockchain technology. Please enjoy my conversation with Alex Danco.

For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.

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This episode is brought to you by Coinbase Prime. Coinbase Prime combines advanced trading, battle-tested custody, financing, and prime services in a single solution. Clients have used our comprehensive investing platform to execute some of the largest trades in the industry because they are the only publicly-traded company with experience trading and custodying crypto assets at scale. Get started with Coinbase Prime today at coinbase.com/prime.

-----

Web3 Breakdowns is a property of Colossus, LLC. For more episodes of Web3 Breakdowns, visit joincolossus.com/episodes.

Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.

Follow us on Twitter: @Web3Breakdowns | @ericgoldenx | @patrick_oshag 

Show Notes

[00:02:16] - [First question] - What Shopify itself is as an ecosystem and service

[00:05:14] - An example of interoperability and the power of platforms outside of Shopify 

[00:07:02] - How interoperability and platforms come together

[00:12:08] - Where a a constraint-standard resulted in failure 

[00:14:26] - Why Shopify is so heavily invested in tokengated commerce

[00:17:10] - Lessons learned about the scarcity function of tokens and how they?ll work

[00:20:34] - Whether or not Shopify will be building their own crypto wallet  

[00:24:48] - The important role blockchains play in tokengated economics

[00:28:16] - Overview of the mechanics and offering Shopify is building 

[00:32:16] - Tokens help establish protocol adoption

[00:34:27] - Which blockchains and protocols will be mostly used in Shopify?s endeavor  

[00:36:33] - Why can?t it be key-gated instead of tokengated

[00:39:00] - Conjuring demand and how Shopify will create demand for their new system

[00:45:46] - The differences between someone's identity and a token holder

[00:47:55] - Signals that suggest tokengated commerce will be a big thing 

[00:51:02] - Why this concept hasn?t been more widely adopted already

[00:54:39] - When there will be a solution to easily create and distribute tokens

[00:56:39] - Where things will go from here 

[00:59:35] - Reasons why this might not have taken off in five years

I am @Compound248 and this is the next installment in our Business Breakdowns mini-series focused on Digital Infrastructure, where we are breaking down a handful of companies that are key players in the digital infrastructure asset class. 

In this episode, we will talk about a company that delivers that airbourne experience, Gogo. Known for its eponymous inflight WiFi service, Gogo is frequently misunderstood, having undergone a transformation to focus purely on the business, or private, aviation industry. It sells equipment that gets installed on a private aviation airplane, and then, in infrastructure like fashion, monetizes that equipment with high margin service revenue for decades. We?re fortunate to be joined by Oak Thorne, who has led Gogo for 20 years into the success it is today.

For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.

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This episode is presented by Visible Alpha. The team at Visible Alpha built a platform to analyze consensus data and financial metrics on over 6,000 publicly traded companies. Rather than having to dig through models one by one, Visible Alpha extracts data from every line item across sell-side models so you can better understand expectations on metrics beyond just revenue and earnings. Listeners are invited to try Visible Alpha for free by visiting visiblealpha.com/breakdowns

-----

This episode is brought to you by Daloopa. Daloopa streamlines a major pain point for investors. By capturing all of a company's KPIs and adjusted financials into their database - Daloopa makes it easy to quickly update your models for what matters. Daloopa uses AI to find every KPI disclosed - from charts, to text, and even from footnotes of investor presentations. Daloopa updates these KPIs and data points in your existing Excel models in one click, regardless of your source or format. Test Daloopa for free at daloopa.com/Patrick.

?--

This episode is brought to you in partnership with Roundhill Investments, the advisor to the Roundhill IO Digital Infrastructure ETF ? BYTE - which trades on the New York Stock Exchange under the ticker symbol BYTE. The fund tracks the BYTE Index, which measures the performance of 40 leading global digital infrastructure businesses, such as towers and mobile communications, fiber and fixed line connectivity, and data centers. For a prospectus and more information, please visit roundhillinvestments.com/etf/byte.

-----

Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.

Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.

Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss

Show Notes

[00:04:02] - [First question] - Gogo?s history and how his history intersects with it

[00:08:03] - His background and what lead him to joining Gogo 

[00:10:01] - A primary focus on US airlines and high-end air travel specifically

[00:11:37] - 30% market penetration of potential WiFi signal outfitted aircraft

[00:12:33] - What the competitive landscape looks like today and how many planes they have

[00:14:15] - Whether the formerly unaddressable planes will make their way into their fleet 

[00:16:04] - Their product offerings today and the differences between them 

[00:19:26] - Overview of their business economics and their digital infrastructure 

[00:21:31] - Unit economics and labor and install costs

[00:23:44] - How much more traffic their existing network could handle  

[00:24:17] - CapEx, service revenue, and a projected 20% system growth 

[00:25:55] - Cost structure margin on their recurring service revenue 

[00:26:36] - Where they are in building out their 5G network

[00:27:25] - Momentum of business growth year-over-year

[00:28:29] - How the ATG network actually works and how the 5G connection improves it 

[00:30:44] - What portion of their business comes from aftermarket installations

[00:32:18] - Competitive nature of this sector and if someone could come after Gogo

[00:35:23] - Speed differentials between their varying network offerings  

[00:36:48] - Price differences with competitors and the strength of their dealer network 

[00:38:19] - Expensive alternatives and the customer experience of GeoSatellite services 

[00:40:42] - Describing the differences between GeoSatellite and Elon?s Starlink

[00:46:19] - Reasons why Starlink might become a competitor

[00:48:56] - How Gogo?s 5G and global broadband product are offensive and defensive 

[00:51:24] - Portion of new US delivery aviation planes built with in-flight WiFi solutions

[00:53:39] - Plans to become a free cash flow generating machine 

[00:55:01] - How long he anticipates this growth runway to continue 

[00:56:27] - Potential risks to Gogo from a legal and regulatory perspective 

[00:57:33] - Legal allegations from SmartSky and using the unlicensed spectrum

[00:59:50] - Cyclicality of their clients and suspended business periods  

[01:02:18] - Their channels and customer concentration 

[01:03:17] - Minority shareholders and their long term vision 

[01:04:57] - Two key lessons for others attempting to build and lead a company 

This is Matt Reustle and today we?re breaking down Diploma. Diploma is a specialist distributor of medical equipment and industrial components listed in the UK. It?s a business you?re unlikely to be familiar with and, at first glance, may appear mundane. But dig a little deeper and you?ll find a high-quality operator generating significant free cash flow through a mix of organic and inorganic growth channels. 

To break down Diploma, I?m joined by Charlie Huggins, an investor in the business and Head of Equities at WealthClub.

For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.

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This episode is presented by Visible Alpha. The team at Visible Alpha built a platform to analyze consensus data and financial metrics on over 6,000 publicly traded companies. Rather than having to dig through models one by one, Visible Alpha extracts data from every line item across sell-side models so you can better understand expectations on metrics beyond just revenue and earnings. Listeners are invited to try Visible Alpha for free by visiting visiblealpha.com/breakdowns

-----

This episode is brought to you by Daloopa. Daloopa streamlines a major pain point for investors. By capturing all of a company's KPIs and adjusted financials into their database - Daloopa makes it easy to quickly update your models for what matters. Daloopa uses AI to find every KPI disclosed - from charts, to text, and even from footnotes of investor presentations. Daloopa updates these KPIs and data points in your existing Excel models in one click, regardless of your source or format. Test Daloopa for free at daloopa.com/Patrick.

-----

Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.

Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.

Follow us on Twitter: @bizbreakdowns | @JoinColossus 

Show Notes

[00:02:23] - [First question] - The history of Diploma, what they do, and what?s attractive about their business model

[00:04:39] - Size and scale of the business and their market capitalization

[00:07:03] - Overview of what their life sciences business vertical looks like

[00:10:00] - The cyclicality of the seals and controls business verticals 

[00:13:45] - Returns on invested capital and thoughts on the capital intensity of seals

[00:15:06] - What allows their businesses to keep growing and what characterizes a strong acquisition target for Diploma

[00:19:14] - An example of how Diploma fits into the value chain

[00:21:24] - How Diploma acquires for low multiples when making acquisitions 

[00:23:41] - How they drive quantitative and qualitative returns in their acquisitions

[00:27:35] - What management is like at Diploma and their longevity in the business

[00:33:19] - Overview of their competitive landscape 

[00:35:27] - What the business does with extra cash flow in the absence of M&A activity

[00:38:01] - What Charlie finds special about Diploma and what has him excited for the future

[00:41:22] - The key risks in each vertical and what worries him about them 

[00:48:07] - Lessons for investors, business executives and operators from the Diploma story

This is Dom Cooke and today we are breaking down the PGA Tour. Alongside the four standalone majors, the PGA Tour is the pinnacle of professional golf. It?s where the best players in the world earn their living and tee it up for their place in golfing history. To break down the business behind the stars and action you see on the PGA Tour, I?m joined by Neil Schuster, co-founder of golf media business No Laying Up.

Editor?s note: this conversation was recorded before the field for this week?s inaugural LIV golf invitational event was announced.

For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.

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This episode is presented by Visible Alpha. The team at Visible Alpha built a platform to analyze consensus data and financial metrics on over 6,000 publicly traded companies. Rather than having to dig through models one by one, Visible Alpha extracts data from every line item across sell-side models so you can better understand expectations on metrics beyond just revenue and earnings. Listeners are invited to try Visible Alpha for free by visiting visiblealpha.com/breakdowns

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This episode is brought to you by Scribe. Scribe is the trusted transcription provider for the business and investing community. Scribe is designed to accurately transcribe messy, real-world audio and is unique in that it?s optimized for the complexities of enterprise audio, such as company and product names, currencies, accents and numbers. Visit kensho.com/breakdowns to learn more and unlock your free trial.

-----

Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.

Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.

Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss

Show Notes

[00:02:27] - [First question] - What the PGA Tour is, it?s size today, and how it generates revenue

[00:06:04] - Defining what the Tiger Tax is and its implications 

[00:08:04] - When the PGA Tour was founded and the key moments leading up to today

[00:15:40] - Deane Beman: Golf?s Driving Force; Changing the format of the Tour into a non-profit 

[00:17:24] - Being a member run organization and player influence over the board

[00:18:23] - Overview of the business structure and model of the PGA Tour 

[00:22:27] - Reasons for the 72 hole stroke-play format  

[00:24:43] - The distribution of over a billion dollars of revenue

[00:27:59] - Why their capital allocation is unique and their incentive programs

[00:31:37] - Unique pension structures of their deferred compensation plan

[00:34:30] - The Champions Tour as a secondary way to make a living after the PGA tour

[00:36:07] - Rival SGL and PGL tours and how they are trying to disrupt the PGA tour

[00:44:42] - Having a legacy name advantage to bring players and capital in 

[00:47:47] - Relying on growing viewership, ratings, and new sponsors over time

[00:52:48] - Paths to becoming a more successful tour amidst the new startup tours

[00:55:07] - Netflix?s partnership with the PGA Tour to try and bring in new viewers

[00:56:54] - The most surprising lessons about the PGA Tour he?s learned   

Today, we are breaking down Anduril. Anduril builds high tech defense systems for the US Department of Defense and its allies. Crucially, it does so with speed that emanates from Silicon Valley. Founded in 2017 by Palmer Luckey, who previously built and sold Oculus to Facebook, Anduril has achieved the rare feat of challenging the established order in the defense industry.

To break down Anduril, I?m joined by the company?s CEO and co-founder, Brian Schimpf. We discuss the history of the defense industry, how Anduril?s business is counter positioned against the legacy cost-plus model, and what Brian has learned about selling to the DoD. Please enjoy this breakdown of Anduril.

For the full show notes, transcript, and links to mentioned content, check out the episode page here.

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This episode is brought to you by Tegus. Tegus is the new digital hub for market intelligence. The Tegus platform empowers Investors and Corporate Development teams to invest smarter by pairing best-in-class technology with the highest quality user-generated content and data. Find out why a majority of the top firms are using Tegus on a daily basis. If you're ready to go deeper on any company and you appreciate the value of primary research, head to tegus.co/breakdowns for a free trial.

-----

This episode is brought to you by Daloopa. Daloopa streamlines a major pain point for investors. By capturing all of a company's KPIs and adjusted financials into their database - Daloopa makes it easy to quickly update your models for what matters. Daloopa uses AI to find every KPI disclosed - from charts, to text, and even from footnotes of investor presentations. Daloopa updates these KPIs and data points in your existing Excel models in one click, regardless of your source or format. Test Daloopa for free at daloopa.com/Patrick.

-----

Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.

Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.

Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss

Show Notes

[00:02:52] - [First question] - The history of defense technology and the technological and competitive landscape when he set out to build Anduril

[00:08:22] - What the early experience was like when approaching the government and finding an early adopter

[00:12:44] - Necessity being the mother of invention when it came to developing drones

[00:16:37] - What it?s like to develop hardware and software products at the same time 

[00:20:26] - How the defense business complex works economically and overview of the detailed cost plus model

[00:24:44] - The state of military technology and military conflict today writ large

[00:31:10] - Are we heading to a future where warfare is mostly machine against machine? 

[00:33:34] - Comparing the ghost drone system to predator drones

[00:38:40] - Guiding principles as a firm and deciding on their product roadmap

[00:43:25] - An overview of their product lineup and what they?ve built so far 

[00:48:13] - Having an open innovation policy to promote competition

[00:49:37] - The nuance of politics when it comes to building and running their business

[00:51:56] - Most difficult decisions he?s had to make through Anduril?s history 

[00:53:51] - How he overcame Anduril?s lowest points and biggest challenges 

[00:58:38] - Thoughts on effectively compounding hardware innovation 

[01:02:23] - A moment he?s most proud of and regrets most in Anduril?s history

[01:04:20] - Lessons learned from observing Palantir and SpaceX 

[01:08:37] - The kindest thing anyone has ever done for him

This is Matt Reustle and today we are breaking down the 150 year-old investment bank ? Goldman Sachs. From the outside, investment banks like Goldman are black boxes of profits and the embodiment of ?Wall Street?. But as with most things, the reality sits somewhere between the polarizing designations. Goldman is neither a vampire squid nor are they doing God?s work.

To break down Goldman, I am joined by longtime financials analyst Marc Rubinstein. For loyal listeners, you will remember Marc from our popular episode on Blackstone. For those who haven?t listened, I think you?ll enjoy that one in tandem with this. 

Having personally worked at Goldman for a decade it was great to go through the inner workings of a bank with Marc. We cover what it means to sit at the center of the capital system ? and the various ways a bank facilitates risk management and risk transfer. We cover the DNA of bank profitability as we go through the core segments of a bank: asset management, sales & trading, and investment banking. And we talk about culture ? the mystery and the prestige that has followed Goldman since its days as a private partnership. I learned a ton through this conversation, and I think you will too. Please enjoy this breakdown of Goldman Sachs.

For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.

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This episode is brought to you by Tegus. Tegus is the new digital hub for market intelligence. The Tegus platform empowers Investors and Corporate Development teams to invest smarter by pairing best-in-class technology with the highest quality user-generated content and data. Find out why a majority of the top firms are using Tegus on a daily basis. If you're ready to go deeper on any company and you appreciate the value of primary research, head to tegus.co/breakdowns for a free trial.

-----

This episode is brought to you by Daloopa. Daloopa streamlines a major pain point for investors. By capturing all of a company's KPIs and adjusted financials into their database - Daloopa makes it easy to quickly update your models for what matters. Daloopa uses AI to find every KPI disclosed - from charts, to text, and even from footnotes of investor presentations. Daloopa updates these KPIs and data points in your existing Excel models in one click, regardless of your source or format. Test Daloopa for free at daloopa.com/Patrick.

-----

Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.

Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.

Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss

Show Notes

[00:03:24] - [First question] - Blackstone: Beyond Buyouts; What an investment bank is, what they do, and how they make their money

[00:06:48] - Matt Taibbi?s Rolling Stone article; Why Goldman is perceived as the industry villain

[00:10:34] - The scale of Goldman today and how it looked fifteen years ago in light of the financial crisis

[00:13:55] - Industry size that Goldman operates in and their growth factors 

[00:14:58] - How investment banking deals result in profits for Goldman and their ties to macro environments 

[00:17:38] - Generating revenue and bottom line dollars in sales and trading as a market maker

[00:21:01] - Margin differences between investment banking and trading 

[00:23:52] - Asset management and profits generated from supervising over a trillion dollars in assets

[00:26:30] - How investors value banks as a whole and the metrics and multiples used

[00:29:35] - The differences between varying levels of assets and how a bank?s balance sheet looks like today compared to the past

[00:34:40] - Whether or not there?s a way to quantify the differences of leverage and stepping into the consumer space

[00:39:02] - The leadership at Goldman over the years and what David Solomon brings to the table

[00:44:31] - Goldman?s outlook, the bull case and key drivers for success in the future

[00:49:34] - Build versus Buy versus Partner; other potential competitors and risks to Goldman 

[00:51:32] - Thoughts on the strength of their core business and classifying them

[00:54:53] - Lessons for investors when studying Goldman?s story and what he?s changed his mind to as he?s worked in this industry for so long

This is Matt Reustle and today we?re breaking down Baytex Energy. With oil prices hovering over $100 a barrel, we thought it was a particularly good time to revisit this sector. 

Why Baytex Energy? The 80,000 barrel a day producer certainly isn?t a household name. And with a market cap just north of $3 billion, it?s far from a mega-cap. But Baytex has production in five different operating areas spanning across the US and Canada. Some of those fields are mature, some are emerging. The company has been allocating cash flow between unconventional wells, conventional wells, and debt reduction in recent years. When you take Baytex and everything that?s happening within that business, it offers a perfect lens to view the historically boom and bust industry of oil production. 

To help break down Baytex, I?m joined by oil and gas investor, Josh Young, of Bison Interests. We cover how producers fit into the broader energy ecosystem, the differences between unconventional shale wells versus conventional wells, and how management teams think about capital allocation. Please enjoy this conversation on Baytex Energy. 

For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.

-----

This episode is brought to you by Tegus. Tegus is the new digital hub for market intelligence. The Tegus platform empowers Investors and Corporate Development teams to invest smarter by pairing best-in-class technology with the highest quality user-generated content and data. Find out why a majority of the top firms are using Tegus on a daily basis. If you're ready to go deeper on any company and you appreciate the value of primary research, head to tegus.co/breakdowns for a free trial.

-----

This episode is brought to you by Daloopa. Daloopa streamlines a major pain point for investors. By capturing all of a company's KPIs and adjusted financials into their database - Daloopa makes it easy to quickly update your models for what matters. Daloopa uses AI to find every KPI disclosed - from charts, to text, and even from footnotes of investor presentations. Daloopa updates these KPIs and data points in your existing Excel models in one click, regardless of your source or format. Try Daloopa for free at daloopa.com/Patrick.

-----

Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.

Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.

Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss

Show Notes

[00:03:19] - [First question] - The journey of producing a barrel of oil and how Baytex fits into the oil production ecosystem

[00:05:29] - How $100 is dispersed amongst the value chain when a barrel of oil is purchased

[00:08:03] - A broad overview of Baytex today and its history

[00:13:05] - The production of a barrel of shale oil and unique characteristics of shale

[00:16:25] - The main drivers of increased productivity and optimization in oil production

[00:19:11] - What breaking even looks like today on a barrel of oil

[00:23:20] - Describing the decline rate of a shale well compared to conventional plays 

[00:25:22] - Overview of the differences of oil blends and quality coming out of Texas versus Canada

[00:29:14] - Where the US still imports oil outside of Canada 

[00:30:51] - A snapshot of what Baytex?s Canadian operations look like

[00:35:38] - The other major Canadian assets Baytex has 

[00:38:28] - The heavy oil decline rate of Canadian oil wells compared to US shale wells

[00:39:59] - What makes Clearwater such an exciting and interesting opportunity for Baytex

[00:43:30] - Identifying where oil might be and what that process looks like

[00:47:02] - His process as an investor in evaluating new projects like Clearwater

[00:56:00] - How to ascribe value to a project like Duvernay compared to Clearwater

[01:00:05] - Baytex?s approach to hedging and how it differs from the rest of the industry

[01:02:15] - How the management team at Baytex manages capital allocation

[01:05:33] - Why return capital to shareholders 

[01:07:41] - Metrics he uses to value an oil production company or adjacent business

[01:11:19] - Rules of thumb to consider when it comes to evaluating the asset base

[01:14:05] - Main risks that could drive stock underperformance

[01:16:38] - Lessons and takeaways from his time investing and working with Baytex

I am Compound248 and today we are pleased to announce and kick-off a Business Breakdowns mini-series focused on Digital Infrastructure. Over the coming months, we will breakdown a handful of companies that are key players in the digital infrastructure asset class. An asset class that undergirds and powers all modern digitally connected experiences. Everything from streaming video to business collaboration tools, to crypto mining, to your everyday internet experience.

Our hope with this mini series is to give you an understanding of the businesses that underpin our modern lives, giving us an almost magical, ubiquitous connected existence. How is it, for example, that Netflix, based in Seattle, is able to deliver a perfect streaming experience to your phone in the back seat of a New York City taxi cab? Digital Infrastructure powers that experience. 

This inaugural episode of the Digital Infrastructure Business Breakdowns mini series will begin with one of the broadest, most important companies in the industry, DigitalBridge. A company that is part private equity firm, part asset owner, and part infrastructure operator of assets across the digital infrastructure spectrum.

For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.

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This episode is brought to you by Tegus. Tegus is the new digital hub for market intelligence. The Tegus platform empowers Investors and Corporate Development teams to invest smarter by pairing best-in-class technology with the highest quality user-generated content and data. Find out why a majority of the top firms are using Tegus on a daily basis. If you're ready to go deeper on any company and you appreciate the value of primary research, head to tegus.co/breakdowns for a free trial.

-----

This episode is brought to you by Daloopa. Daloopa streamlines a major pain point for investors. By capturing all of a company's KPIs and adjusted financials into their database, Daloopa makes it easy to quickly update your models for what matters. Daloopa uses AI to find every KPI disclosed - from charts, to text, and even from footnotes of investor presentations. Daloopa updates these KPIs and data points in your existing Excel models in one click, regardless of your source or format. Try Daloopa for free at daloopa.com/Patrick.

-----

This episode is brought to you in partnership with Roundhill Investments, the advisor to the Roundhill IO Digital Infrastructure ETF ? BYTE - which trades on the New York Stock Exchange under the ticker symbol BYTE. The fund tracks the BYTE Index, which measures the performance of 40 leading global digital infrastructure businesses, such as towers and mobile communications, fiber and fixed line connectivity, and data centers. For a prospectus and more information, please visit roundhillinvestments.com/etf/byte.

-----

Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.

Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.

Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss

Show Notes

[00:04:22] - [First question] - What digital infrastructure means and how it came to be

[00:09:58] - The nuance of digital infrastructure and how big the addressable opportunity set is

[00:12:47] - How DigitalBridge became the company it is today 

[00:19:06] - How he thinks about portioning the fee and value creation economics between shareholders and employees

[00:23:15] - The differences between their earlier funds and current funds from how the economics split within the team and owners

[00:25:53] - A look into their balance sheet today between funds and operating assets

[00:28:39] - How big the digital infrastructure space could be in the future from an IM standpoint 

[00:30:41] - Their US and non-US opportunity set and how towers and mobile infrastructure compare and contrast across their verticals

[00:34:03] - How DigitalBridge professionals operate with portfolio companies and how they add value to them

[00:38:47] - Changes in standard growth and the slow downs in the Hyperscale or Telco side of the business

[00:40:37] - If Edge competes with their core assets and how it works across all of their portfolio companies

[00:42:21] - Where we are on the 5G rollout and how it touches their businesses

[00:43:39] - His view on building out Edge and data center capacity from a DigitalBridge standpoint

[00:45:35] - How the competitive environment and risk and return profiles have shifted 

[00:46:33] - How inflation affects the business and how he manages lease renewal

[00:50:19] - If Elon Musk building Starlink is a threat or an opportunity 

[00:52:12] - How DigitalBridge thinks about consumer facing digital infrastructure 

[00:54:48] - What could happen to lead to their success and business evolution in the future 

[00:56:28] - Two key lessons he?d give as advice to someone looking to build and lead a company

Today we?re breaking down AppLovin. It?s a business you may not recognize but have likely interacted with. Founded in 2012, AppLovin provides a platform for developers to market and monetize their mobile apps. The business also owns some of the most popular mobile games in the world, which they use to feed richer data into their software platform.

To help breakdown the business, I?m joined by its CEO and co-founder, Adam Foroughi. Please enjoy this breakdown of AppLovin.

For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.

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This episode is brought to you by Tegus. Tegus is the new digital hub for market intelligence. The Tegus platform empowers Investors and Corporate Development teams to invest smarter by pairing best-in-class technology with the highest quality user-generated content and data. Find out why a majority of the top firms are using Tegus on a daily basis. If you're ready to go deeper on any company and you appreciate the value of primary research, head to  tegus.co/breakdowns for a free trial.

-----

This episode is brought to you by Daloopa. Daloopa streamlines a major pain point for investors. By capturing all of a company's KPIs and adjusted financials into their database, Daloopa makes it easy to quickly update your models for what matters. Daloopa uses AI to find every KPI disclosed - from charts, to text, and even from footnotes of investor presentations. Daloopa updates these KPIs and data points in your existing Excel models in one click, regardless of your source or format. Test Daloopa for free at daloopa.com/Patrick.

-----

Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.

Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.

Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss

Show Notes

[00:02:41] - [First question] - The first risk taken when creating AppLovin and how it all began

[00:05:05] - Why was there pushback against games and adtech back in 2012

[00:07:12] - What it was like in the early days to get the app in front of a customer 

[00:08:54] - Building a platform and software product versus becoming an advertising agency

[00:10:47] - The major components of AppLovin and how it works 

[00:15:21] - The space or areas where most people interact with them and see their work 

[00:16:26] - What he considers to be the next key chapters after AppLovin?s early days 

[00:18:25] - How they determine strategy between the app developer side of the business and app ownership

[00:25:50] - How AppLovin interacts with Apple, Android, and the relationship between products

[00:27:11] - What he?s learned about the importance of scale in advertising 

[00:28:58] - The major breakout points in the business that led to where he is today 

[00:30:22] - Their revenue model and it how it breaks between software and apps

[00:33:55] - The margins of gaming, its business proposition, and the future value of this side of the franchise

[00:35:18] - The taxonomy of apps today and how it has changed over time 

[00:38:53] - His perspective on what defines great digital marketing today 

[00:40:31] - Walking through the shifts in privacy, targeting, and data as technology changes

[00:43:13] - His thoughts on emerging platforms as competitive threats and/or opportunities 

[00:44:58] - How they?ve kept the business nimble and very product-focused on a corporate level

[00:46:53] - Their concept of meetings and how they?ve learned to run them effectively

[00:48:37] - The big lessons learned over the years becoming a big capital allocator

[00:50:24] - The missing pieces in his strategic mission that he still wants to do in five years time

[00:51:42] - What he?s learned from Facebook, Google, and game studios he?s worked with

[00:54:32] - How he thinks about defensibility and power in the business as they evolve and grow

[00:57:19] - His philosophy on the maturity of the business and if they?d pay dividends in the future

[00:59:32] - How he has most improved in his career during his time with AppLovin 

[01:02:03] - Questions that the world?s largest bear would ask him today

[01:03:18] - The most interesting trends happening around him in the digital space

[01:04:38] - What he has learned about treating software developers well as a customer

[01:06:04] - His thoughts on the eventual impact of Facebook and Google becoming competitors rather than the collaborators they are today 

This is Jesse Pujji and today?s episode is a follow up of last weeks? Block episode, covering Afterpay the buy-now-pay-later giant. Founded in Sydney Australia in 2015, Afterpay was a rapid success in the buy-now-pay-later market before being acquired by Block for $29bn in 2021. 

To breakdown Afterpay, I am joined by investor Joe Magyer. We cover how buy-now-pay-later compares to traditional credit cards, what differentiates Afterpay from direct peers, and how each player of its ecosystem benefits from its offering. Please enjoy this business breakdown of Afterpay.

For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.

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This episode is brought to you by Tegus. Tegus is the new digital hub for market intelligence. The Tegus platform empowers Investors and Corporate Development teams to invest smarter by pairing best-in-class technology with the highest quality user-generated content and data. Find out why a majority of the top firms are using Tegus on a daily basis. If you're ready to go deeper on any company and you appreciate the value of primary research, head to tegus.co/breakdowns for a free trial.

-----

This episode is brought to you by Daloopa. Daloopa streamlines a major pain point for investors. By capturing all of a company's KPIs and adjusted financials into their database, Daloopa makes it easy to quickly update your models for what matters. Daloopa uses AI to find every KPI disclosed - from charts, to text, and even from footnotes of investor presentations. Daloopa updates these KPIs and data points in your existing Excel models in one click, regardless of your source or format. Test Daloopa for free at daloopa.com/Patrick.

-----

Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.

Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.

Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss

Show Notes

[00:02:52] - [First question] - What is Afterpay and what it does

[00:07:07] - Size and scope of Afterpay today

[00:08:27] - The founding story and their growth being such a young company

[00:12:11] - History of the buy now pay later industry

[00:13:34] - How their payment models tend to work and how these companies make money

[00:16:35] - Unit economics, transaction structure and how money is made

[00:21:44] - How Afterpay drives leads to people via their app and merchant aggregation

[00:23:39] - An early focus on fashion and expanding beyond their core clientele

[00:27:13] - Cost of sales and thoughts on taking more credit risk

[00:31:54] - Losses as a part of cost of sales and interest

[00:33:48] - Unique things that Afterpay can do given their business model that others can?t

[00:35:21] - Growth levers for this business 

[00:38:29] - Other major things they?re spending money on and their acquisition by Block

[00:44:28] - The competitive landscape in the BNPL industry

[00:47:54] - Afterpay?s flywheel and how they?ve built it better than others

[00:49:34] - Whether or not regulation plays a role in this space

[00:52:21] - What will have gone right in the next five years to ensure Afterpay?s growth curve

[00:55:01] - What will have happened if Afterpay?s growth doesn?t work out in the future

[00:56:31] - Whether or not interest rate risk could turn south for them

[00:57:30] - Lessons for investors, builders, and where to learn more about Afterpay?s story; Buy Now, Pay Later 

This is Jesse Pujji and today we?re breaking down Block ? formerly known as Square. This software and financial services business was founded by Jack Dorsey and Jim McKelvey in 2009. It has since expanded from its first product ? a payments card reader ? into a $75 billion market cap with six businesses that build on the firm?s mission of economic access and empowerment. Those are: Square, Cash App, Afterpay, Tidal, Spiral, and TBD.

To break down Block, I?m joined by payments expert and investor at TDM Growth Partners, Hamish Corlett. We cover the common threads that have enabled Block to organically build two major ecosystems in Square and Cash App, how the recent Afterpay acquisition can strengthen the connective tissue between those businesses, and the competitive frontiers Block faces. Please enjoy this business breakdown of Block.

For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.

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This episode is brought to you by Visible Alpha. The team at Visible Alpha built a platform to analyze consensus data and financial metrics on over 6,000 publicly traded companies. Rather than having to dig through models one by one, Visible Alpha extracts data from every line item across sell-side models so you can better understand expectations on metrics beyond just revenue and earnings. Try Visible Alpha for free by visiting visiblealpha.com/breakdowns

-----

This episode is brought to you by Scribe. Scribe is the trusted transcription provider for the business and investing community. Scribe is designed to accurately transcribe messy, real-world audio and is unique in that it?s optimized for the complexities of enterprise audio, such as company and product names, currencies, accents and numbers. Visit kensho.com/breakdowns to learn more and unlock your free trial.

-----

Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.

Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.

Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss

Show Notes

[00:02:52] - [First question] - What is Block and what it does as a business

[00:04:58] - How is Block organized, their scale, and how many merchants they serve

[00:08:03] - Their founding story and the insight that lead to creating Block

[00:10:49] - Major milestones in the last decade after releasing their card reader

[00:13:47] - The story behind their Cash App and what it is

[00:18:59] - What Afterpay is and how it creates connections for merchants

[00:21:23] - Overview of the payment ecosystem and where Block fits into it

[00:25:03] - The P&L of Square, its blended gross margin, and customer acquisition strategy

[00:30:42] - How Cash App makes money and its P&L

[00:35:54] - The balance sheet of Block and how they?ve stood out in a competitive space

[00:38:31] - The ways their product organization allows them to move at a rapid pace

[00:40:30] - How they avoid fraud that?s seemingly everywhere in financial service businesses

[00:42:01] - His thoughts on the competitive environment and how they?re succeeding

[00:47:56] - Highlights of M&A and how they reconcile them with their overall strategy

[00:54:44] - Their view on Bitcoin and crypto and how it plays into Block?s business

[00:59:09] - Things that could happen in a macro environment to aid their future growth

[01:01:30] - What could go wrong in the future and the macro environment?s impact

[01:03:49] - Lessons for builders and investors when studying Block?s story

[01:06:20] - Places to go to learn more about Block

This is Jesse Pujji and today we?re breaking down McKinsey & Company, the world?s pre-eminent management consulting firm. Founded in the thick of the Industrial Revolution, McKinsey set about professionalizing the way businesses were managed. An accountant by trade, James McKinsey, took inspiration from a range of well-established professions like engineers, doctors, and lawyers to create a new category. 

Today, some 100 years later, management consultants are entrenched in every part of the global economy and McKinsey continues to lead the field. To break down the business, I?m joined by Romeen Sheth, a McKinsey alum and the current President of Metasys Technologies. Please enjoy this business breakdown of McKinsey & Company.

For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.

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This episode is brought to you by Visible Alpha. The team at Visible Alpha built a platform to analyze consensus data and financial metrics on over 6,000 publicly traded companies. Rather than having to dig through models one by one, Visible Alpha extracts data from every line item across sell-side models so you can better understand expectations on metrics beyond just revenue and earnings. Try Visible Alpha for free by visiting visiblealpha.com/breakdowns

-----

This episode is brought to you by Scribe. Scribe is the trusted transcription provider for the business and investing community. Scribe is designed to accurately transcribe messy, real-world audio and is unique in that it?s optimized for the complexities of enterprise audio, such as company and product names, currencies, accents and numbers. Visit kensho.com/breakdowns to learn more and unlock your free trial.

-----

Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.

Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.

Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss

Show Notes

[00:02:35] - [First question] - What is McKinsey & Company and what management consulting looks like

[00:04:52] - Their project-based model and what?s being bought and sold when McKinsey makes a sale

[00:07:36] - The scale of the business and how profitable it is

[00:08:58] - How many projects McKinsey is running and how big of an opportunity management consulting is

[00:10:37] - McKinsey?s famous ownership model and how it works

[00:12:49] - The history of McKinsey, who started it, and how it has evolved in modern times

[00:19:01] - How the firm has changed in the post-Bower era

[00:22:12] - McKinsey?s biggest competitors, their dynamics of practice groups, and vertical projects

[00:25:46] - How a CEO or top level manager decides which management consulting firm to do business with

[00:27:38] - The overview of a normal project for McKinsey, what they sell, and costs associated with it

[00:33:07] - The process of marketing and sales and their talent flywheel

[00:36:07] - The traditional side of their sales and marketing and the McKinsey Quarterly

[00:37:44] - How someone can pitch business to McKinsey and their sales process

[00:39:47] - What makes the organization special and unique from a team or work perspective

[00:41:01] - Their talent model and how they find and develop their talent 

[00:45:14] - How their staffing model is unique and how they tie feedback into staffing

[00:51:06] - Examples of the scandals that have happened and why

[00:55:24] - The biggest growth levers of the business looking forward

[01:02:03] - Things that could happen in a macro environment to aid McKinsey?s future

[01:03:52] - What could happen to make McKinsey a shell of its former self 

[01:05:38] - Where Romeen would direct people to go for further study; The Firm

[01:06:31] - Lessons for builders and investors when studying McKinsey?s story

This is Jesse Pujji, and today we are breaking down Fanatics. If you?ve recently bought sports apparel online, you interacted with Fanatics. They power the entire digital commerce experience for the NFL, MLB, NBA, NHL, and hundreds of other sports leagues around the world. 

To break down Fanatics, I am joined by an early investor, Deven Parekh, from Insight Partners. Deven has been an investor in Fanatics since 2011. We cover Fanatics' unique vertically integrated commerce model, how they redefined their TAM, and how the company is aggressively entering NFTs, real money betting, and other expansion areas. Please enjoy this business breakdown of Fanatics.

For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.

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This episode is brought to you by Visible Alpha. The team at Visible Alpha built a platform to analyze consensus data and financial metrics on over 6,000 publicly traded companies. Rather than having to dig through models one by one, Visible Alpha extracts data from every line item across sell-side models so you can better understand expectations on metrics beyond just revenue and earnings. Try Visible Alpha for free by visiting visiblealpha.com/breakdowns

-----

This episode is brought to you by Scribe. Scribe is the trusted transcription provider for the business and investing community. Scribe is designed to accurately transcribe messy, real-world audio and is unique in that it?s optimized for the complexities of enterprise audio, such as company and product names, currencies, accents and numbers. Visit kensho.com/breakdowns to learn more and unlock your free trial.

-----

Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.

Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.

Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss

Show Notes

[00:02:40] - [First question] - What is Fanatics and the scale of the business today

[00:04:26] - What the core business of Fanatics does

[00:05:41] - The history of Fanatics and what led to its success

[00:10:59] - Michael Rubin?s story and the role that GSI played in Fanatics? growth

[00:13:58] - How the licensing business works and how Fanatics? relationship with the leagues differs from their competitors 

[00:15:34] - The landscape of this industry before Fanatics

[00:16:36] - Why the change from the best commerce experience to a broad digital sports platform

[00:19:02] - Differences of Fanatics? P&L compared to others in the industry

[00:21:05] - How the real-time advantage helps drive growth in the business

[00:23:12] - Whether or not the leagues participate in gross margins and how much of a focus they place on cost optimization 

[00:25:25] - Distinctive things about Fanatics from an investor?s perspective  

[00:26:22] - Why hasn?t Amazon stepped into this space yet

[00:27:30] - Which leagues have opted out of working with Fanatics and interesting team and player dynamics

[00:28:59] - Reasons behind getting involved with NFTs, trading cards, betting, and how it might evolve in the future

[00:32:22] - Ways they?re taking the core business and augmenting other branches

[00:34:36] - What will have gone right over the next five years for Fanatics to continue growing at the pace they are today

[00:37:59] - What will have gone wrong over the next five years that will hurt Fanatics? growth

[00:39:59] - Lessons for builders and investors when studying Fanatics? story 

Today's episode was originally featured in our Web3 Breakdowns feed. For listeners unfamiliar with Web3 Breakdowns, the concept was inspired by Business Breakdowns but intended to be a place fully dedicated to the emerging ecosystem around blockchains, crypto assets, and everything that makes up Web3. This Breakdown of Anchorage Digital has a foot in both camps, by diving into a business that?s enabling traditional institutions to participate in and profit from digital assets. If you enjoy this episode, be sure to subscribe to Web3 Breakdowns and enjoy our growing catalog of episodes.

My guest today is Diogo Monica, co-founder and President of Anchorage Digital. Diogo started Anchorage in 2017 to meet the growing institutional need to custody and use crypto assets. The business has since grown into a full-service financial platform for institutions, allowing them to securely participate in web3. Our discussion breaks down Anchorage?s business, explores what great digital security looks like, and reveals what new behaviors web3 is unlocking for traditional institutions. Please enjoy this breakdown of Anchorage Digital.

For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.

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This episode is brought to you by Coinbase Prime. Coinbase Prime combines advanced trading, battle-tested custody, financing, and prime services in a single solution. Clients have used our comprehensive investing platform to execute some of the largest trades in the industry because we are the only publicly-traded company with experience trading and custodying crypto assets at scale. Get started with Coinbase Prime today at coinbase.com/prime.

-----

Web3 Breakdowns is a property of Colossus, LLC. For more episodes of Web3 Breakdowns, visit joincolossus.com/episodes.

Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.

Follow us on Twitter: @Web3Breakdowns | @ericgoldenx | @patrick_oshag 

Show Notes

[00:02:40] - [First question] - Why he got into the crypto space and what set him down the path that would to founding Anchorage 

[00:05:53] - An overview of digital security, state of it today, and where people should spend their time learning about it

[00:09:16] - A future of perfect authentication and data protection being so core to this space

[00:13:29] - How custody should be considered in the modern world and with digital assets

[00:18:59] - What it means to be a great qualified institutional custodian

[00:25:17] - The business and unit economics of Anchorage

[00:28:07] - What it was like working with their first big institutional client

[00:30:52] - Speed as a component of digital security and its implications writ large  

[00:35:51] - How they?re differentiated from their competitors by expanding beyond custody

[00:39:46] - Different challenges between securing NFTs versus currencies and tokens

[00:42:43] - New behaviors he finds most interesting about institutions due to Anchorage

[00:48:46] - Breakdown of what players and services contribute to and create Anchorage?s clients today

[00:51:24] - The best case scenario for the future of the business

[00:53:37] - What would worry him about Anchorage?s development if it swayed from their original mission

[00:55:55] - Opportunities he finds most interesting that haven't materialized yet 

[00:57:46] - Will we need a public blockchain to create the infrastructure needed to bring the world to a more crypto-fluid place

[01:00:07] - The kindest thing anyone has ever done for him 

This is Zack Fuss and today we?re breaking down European-based payment business, Adyen. Adyen was founded in Amsterdam in 2006 by a group of payments entrepreneurs who had already built and sold a business in this space. Adyen was their chance to start afresh and build a modern solution to displace the patchwork legacy system that merchants were being forced to use.

To break down the business, I?m joined by Michael Willar, a portfolio manager at Stenham Asset Management. Our discussion covers Adyen?s single platform solution in detail, the driving force behind their track record of profitable growth, and why payments isn?t a winner take all market.  Please enjoy this breakdown of Adyen.

For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.

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This episode is brought to you by Visible Alpha. The team at Visible Alpha built a platform to analyze consensus data and financial metrics on over 6,000 public traded companies. Rather than having to dig through models one by one, Visible Alpha extracts data from every line item across sell-side models so you can better understand expectations on metrics beyond just revenue and earnings. Try Visible Alpha for free by visiting visiblealpha.com/breakdowns

-----

This episode is brought to you by Scribe. Scribe is the trusted transcription provider for the business and investing community. Scribe is designed to accurately transcribe messy, real-world audio and is unique in that it?s optimized for the complexities of enterprise audio, such as company and product names, currencies, accents and numbers. Visit kensho.com/breakdowns to learn more and unlock your free trial.

-----

Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.

Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.

Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss

Show Notes

[00:02:55] - [First question] What Adyen is and what they do 

[00:05:54] - General overview of how payment processing works

[00:07:29] - Flow of a transaction and how they manifest

[00:09:52] - How the business generates revenue and their revenue model

[00:11:25] - Where Adyen sits in the industry and the size of it today

[00:13:37] - The reality of processing 50-60% of their addressable market 

[00:16:19] - What about their culture and founding story makes them so nimble 

[00:21:18] - The competitive strengths of the business and their innovative solutions 

[00:24:07] - Key revenue drivers for Adyen 

[00:26:01] - What is it about Adyen?s business structure that enables them to grow so rapidly while still being profitable

[00:29:34] - Key growth drivers 

[00:32:44] - What gives Adyen its competitive advantage over other payment providers

[00:35:56] - Having one platform is beneficial but why isn?t it a more popular approach? 

[00:37:42] - The secret sauce behind their successful growth trajectory

[00:39:25] - The essence of Adyen?s culture and how it manifests in their day-to-day work

[00:42:04] - What Adyen plans to do with all of the cash they produce

[00:43:35] - What keeps him up at night and potential threats to the business

[00:47:54] - Is there a chance anyone could build a platform comparable to Adyen?

[00:50:06] - Key differences between Stripe and Adyen

[00:56:23] - Lessons learned from studying Adyen and what payment service builders can learn from them

This is Matt Reustle and today we are breaking down Cadence Design Systems. Cadence operates in the semiconductor ecosystem where they offer electronic design automation software - also known as EDA software - which is used for chip design. Putting that in much simpler terms - our phones now carry an entire 1980s Radio Shack inside them, and Cadence makes that possible with software to design smaller and more powerful chips. 

To break down Cadence, I'm joined by two well-known tech investors and experts in the semiconductor space, Brinton Johns and Jon Bathgate of NZS Capital. We cover the value chain of semiconductors, the evolution of Cadence and the EDA market, and how Cadence reduced it's cyclical exposure over the last decade. I think some of the most interesting lessons come from businesses that face adversity and truly re-invent themselves with a micro-strategic change. Cadence is a prime example. Please enjoy this breakdown of Cadence.

For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.

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This episode is brought to you by Visible Alpha. The team at Visible Alpha built a platform to analyze consensus data and financial metrics on over 6,000 publicly traded companies. Rather than having to dig through models one by one, Visible Alpha extracts data from every line item across sell-side models so you can better understand expectations on metrics beyond just revenue and earnings. Try Visible Alpha for free by visiting visiblealpha.com/breakdowns

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This episode is brought to you by MITIMCo. As the endowment office of MIT, MITIMCo searches for investment firms that are focused on achieving exceptional long-term investment returns. MITIMCo's goal is to create long-term relationships. They will partner with firms as early as Day 1 and do not ask for general partner economics in return. Visit MITIMCo?s website to learn more about their unconventional emerging manager approach, including examples of managers they have backed. While they only partner with a handful of new firms each year, they have also created and published resources for the broader universe of emerging managers to benefit from, making them even more unusual in the LP world. Visit www.mitimco.org to learn more.

-----

Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.

Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.

Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss

Show Notes

[00:03:15] - [First question] - Everyday products that Cadence helps bring to life

[00:07:28] - The rise of Cadence and the origins of the semiconductor industry 

[00:10:26] - Major players in the semiconductor space back in the 80s 

[00:12:13] - Going from plan, to chip, to production

[00:16:58] - The life cycle of a chip and the cost to design one 

[00:19:19] - Differences between software design and embedded software 

[00:21:25] - The history of Cadence and the size and scope of their business today 

[00:28:05] - Existing customer base and how diversified they are

[00:30:55] - What a contract actually looks like between Cadence and a customer

[00:35:05] - Protection, off-the-shelf IP blocks and custom IP 

[00:35:53] - Cadence?s revenue growth, important metrics, and their KPIs

[00:37:03] - How correlated their revenue is to semiconductor cycles

[00:39:30] - Unit economics and the margin profile of the business

[00:42:13] - Contributing factors to growth and thoughts on pricing

[00:45:46] - Benefits of scale and what they like to see as investors from their R&D spend

[00:48:12] - Risks and competitors that may threaten Cadence?s success

[00:50:22] - Potential scenarios where the ecosystem becomes more vertically integrated

[00:52:56] - What would drive a 10x growth for Cadence in next five years

[00:54:58] - Things that would affect their growth in the next five years 

[00:57:38] - Lessons for investors when studying Cadence

[00:59:15] - How they navigated the pandemic and how it impacted their business

This is Jesse Pujji and today we?re breaking down The New York Times. Since its founding in 1851, The New York Times has become known as the national ?newspaper of record? through its focus on truth seeking and quality journalism. To underline that status, it has won 132 Pulitzer Prizes, almost double its nearest competitor. However, the business behind the Times hasn?t always been easy and it has faced several existential threats over its history, most recent of which has come from the internet and digital mediums.

To break down The New York Times, I?m joined by Morning Brew co-founder and host of Founder?s Journal and Imposters podcasts, Alex Lieberman. It?s particularly interesting to hear a new media operator dissect the heritage and evolution of one of the most storied brands in his industry. Please enjoy this breakdown of The New York Times.

For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.

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This episode is brought to you by Visible Alpha. The team at Visible Alpha built a platform to analyze consensus data and financial metrics on over 6,000 publicly traded companies. Rather than having to dig through models one by one, Visible Alpha extracts data from every line item across sell-side models so you can better understand expectations on metrics beyond just revenue and earnings. Try Visible Alpha for free by visiting visiblealpha.com/breakdowns

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This episode is brought to you by Quartr. With Quartr, you can access conference calls, investor presentations, transcripts, and earnings reports ? straight from your pocket. Quartr is 100% free and includes companies from 12 markets including the US, the UK, Canada, India, and all the Scandanavian countries. Quartr is available for both iOS and Android, so check out the app today.

-----

Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.

Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.

Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss

Show Notes

[00:02:55] - [First question] - What The New York Times is as a business

[00:04:35] - Snapshot of the scale of The New York Times and it?s readership

[00:08:06] - The origin story of The New York Times and becoming a national news source

[00:11:40] - How the business is distinctive being family-run for five generations

[00:15:00] - Unpacking the shift from physical to digital and how it impacted their numbers

[00:20:00] - Course correcting after the first few years of their digital strategy not succeeding as anticipated

[00:23:43] - The cost of sales and the margins of the business and growth levers

[00:27:47] - Revenue differences between advertising and subscriptions 

[00:29:37] - What does their non-digital advertising business look like

[00:31:43] - The biggest levers for growing the topline and bottomline of the business

[00:35:18] - Acquiring Wirecutter & historical M&A performance

[00:37:57] - Other categories and businesses that help build a bigger audience

[00:42:00] - Differences between the Netflix and New York Times subscription models

[00:44:37] - Leaning into world events and politics

[00:48:22] - Macro factors and specific things that would lead to reaching their subscriber goal in the future

[00:51:10] - Mistakes and threats that could negatively impact their goals

[00:55:43] - Biggest lessons for builders, entrepreneurs, executives and investors

[00:58:30] - Learn more about the New York Times; Peter Kafka, Rich Greenfield, Lightshed Partners

This is Matt Reustle, and today we?re breaking down Europe?s leading low-cost gym operator, Basic-Fit. Netherlands based Basic-Fit is a story of rapid expansion. Today, they operate over a 1000 clubs across 5 countries, and have 2 million combined members in their system.

To break down the business, I?m joined by Jonathan Abenaim from Arlen House Capital, who is an investor in Basic-Fit. We cover a history of fitness clubs dating back to the late 70?s and early 80?s, how low-cost gym models have emerged as winners and created a large addressable market, and we talk about how Basic-Fit is putting its own spin on a successful playbook from the US. Please enjoy this breakdown of Basic-Fit.

For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.

-----

This episode is brought to you by Visible Alpha. The team at Visible Alpha built a platform to analyze consensus data and financial metrics on over 6,000 public traded companies. Rather than having to dig through models one by one, Visible Alpha extracts data from every line item across sell-side models so you can better understand expectations on metrics beyond just revenue and earnings. Try Visible Alpha for free by visiting visiblealpha.com/breakdowns

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This episode is brought to you by Quartr. With Quartr, you can access conference calls, investor presentations, transcripts, and earnings reports ? straight from your pocket. Quartr is 100% free and includes companies from 12 markets including the US, the UK, Canada, India, and all the Scandanavian countries. Quartr is available for both iOS and Android, so check out the app today.

-----

Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.

Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.

Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss

Show Notes

[00:02:47] - [First question] - What it?s like to walk into a Basic-Fit gym

[00:03:50] - Their footprint today in terms of geography, members and locations 

[00:04:41] - The history of gyms in the US and differences between them and European ones

[00:08:33] - Why US gym models lack influence and penetration in Europe

[00:10:58] - The key insight that led to founding Basic-Fit 

[00:13:40] - Economics of building and operating a gym in general and for Basic-Fit

[00:16:47] - Typical churn for more established locations and their member demographic

[00:20:33] - When Basic-Fit breaks even on a membership and how they battle churn

[00:23:28] - Their cancellation policy and why they don?t leave for typical reasons

[00:25:10] - Basic-Fit?s fortressing strategy and clustering philosophy

[00:28:51] - Whether or not there?s data to support members using multiple gyms 

[00:33:11] - The competitive landscape and whether other gyms adopt Basic-Fit?s strategy

[00:35:21] - What drives country localizations for a particular gym chain

[00:38:22] - Basic-Fit?s digital offering and at-home disruption from US brands 

[00:42:31] - How they navigated the pandemic and if there?s any lasting changes

[00:44:31] - The biggest threats to Basic-Fit over the next five years

[00:46:23] - Major takeaways from studying Basic-Fit?s story

I'm Zack Fuss and today we are breaking down UPS. With over 100 years of history, it's a business we all know as consumers and one many of us interact with on a daily basis. But in investing circles, UPS carries far less relevance and attention share despite its large market cap. To break down UPS and its rich history, I am joined by former Transport Analyst Matt Reustle. Please enjoy this breakdown of UPS.

For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.

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This episode is brought to you by Visible Alpha. The team at Visible Alpha built a platform to analyze consensus data and financial metrics on over 6,000 public traded companies. Rather than having to dig through models one by one, Visible Alpha extracts data from every line item across sell-side models so you can better understand expectations on metrics beyond just revenue and earnings. Try Visible Alpha for free by visiting visiblealpha.com/breakdowns

-----

This episode is brought to you by Quartr. With Quartr, you can access conference calls, investor presentations, transcripts, and earnings reports ? straight from your pocket. Quartr is 100% free and includes companies from 12 markets including the US, the UK, Canada, India, and all the Scandanavian countries. Quartr is available for both iOS and Android, so check out the app today.

-----

Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.

Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.

Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss

Show Notes

[00:02:37] - [First question] - The footprint of UPS in the US economy

[00:04:11] - What relevant metrics analysts use to understand UPS? value

[00:06:57] - How logistics networks work and operating leverage on their fixed assets

[00:10:43] - UPS? origin story and key differences between it, Amazon, and FedEx

[00:18:24] - Whether or not Amazon is consuming the market or if the market is growing

[00:22:20] - Decreased return on capital and the roadmap to increase returns going forward

[00:25:14] - Making a decision to lean into their network and what it meant for their customers

[00:27:33] - The importance of management and needing outsider management

[00:31:40] - Capital investment programs and what Amazon?s growth means for UPS

[00:34:41] - Secular changes versus historical cyclicality of fulfillment businesses

[00:36:35] - Competitive impacts Amazon and USPS could have on UPS? future success

[00:42:26] - Why cross-border delivery is such a lucrative aspect of this market

[00:42:51] - Lessons for investors and builders when studying UPS? story

I?m Zack Fuss, and today we are breaking down Twitter, a business that needs little introduction. Founded by Jack Dorsey in 2006, Twitter has become one of the most visited and influential platforms in the world. Yet, despite its rising social status, investors and users have been left frustrated by the company?s pace of innovation and shareholder returns. To help me break down Twitter?s business, I?m joined by anonymous professional investor, @Compound248. Please enjoy this breakdown of Twitter.

For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.

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This episode is brought to you by Visible Alpha. The team at Visible Alpha built a platform to analyze consensus data and financial metrics on over 6,000 public traded companies. Rather than having to dig through models one by one, Visible Alpha extracts data from every line item across sell-side models so you can better understand expectations on metrics beyond just revenue and earnings. Try Visible Alpha for free by visiting visiblealpha.com/breakdowns

-----

This episode is brought to you by Quartr. With Quartr, you can access conference calls, investor presentations, transcripts, and earnings reports ? straight from your pocket. Quartr is 100% free and includes companies from 12 markets including the US, the UK, Canada, India, and all the Scandanavian countries. Quartr is available for both iOS and Android, so check out the app today.

-----

Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.

Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.

Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss

Show Notes

[00:02:40] - [First question] - The history of Twitter and where we are today

[00:10:44] - The size and scope of Twitter and what drives their business and unit economics

[00:18:54] - Reconciling differences between Twitter and competitive social media platforms

[00:24:36] - Bridging the gap between Twitter and their competitors

[00:29:38] - What about their legacy system had to be rebuilt in order to grow again

[00:34:35] - Unique shareholder dynamics, activists in the boardroom, and leadership change; Compound's open letter to Management

[00:43:35] - Capital allocation and how investment analysts look at and measure their ROI

[00:49:00] - Efforts to innovate around new use cases and Twitter?s opportunity set

[00:55:30] - What builders and investors can learn from studying Twitter?s story 

This is Jesse Pujji and today we are breaking down ViacomCBS. This episode has a different format - you'll hear from both an investor and from company management.

Chris Marangi from Gabelli Asset Management starts us off with a history of ViacomCBS. He goes deep into the dynamics of content creation, curation, and distribution, hitting home the value of IP. Then he helps break down how ViacomCBS is transitioning from a shrinking linear business to a growing streaming business.

Next, I sit down with the CFO of ViacomCBS, Naveen Chopra. He shares his views on the business today, how he thinks about capital allocation, and how streaming will evolve for ViacomCBS. Please enjoy this Business Breakdown.

For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.

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This episode is brought to you by Tegus. We created Business Breakdowns to uncover the lessons and frameworks behind every business, and that's what makes Tegus our perfect launch partner. Much of the foundational prep for these episodes starts with research on the Tegus platform.

With Tegus, you can learn everything you?d want to know about a company in an on-demand digital platform. Investors share their expert calls, allowing others to instantly access more than 20,000 calls on Coinbase, Hinge Health, Farfetch, or almost any company of interest. All you have to do is log in. If you're ready to go deeper on any company and you appreciate the value of primary research, head to tegus.co/breakdowns for a free trial.

-----

This episode is brought to you by Quartr. With Quartr, you can access conference calls, investor presentations, transcripts, and earnings reports ? straight from your pocket. Quartr is 100% free and includes companies from 12 markets including the US, the UK, Canada, India, and all the Scandanavian countries. Quartr is available for both iOS and Android, so check out the app today.

-----

Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.

Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.

Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss

Show Notes - Pt 1 with Chris Marangi

[00:03:31] - [First question] - What is ViacomCBS

[00:04:10] - What a typical media conglomerate looks like

[00:06:45] - The scale and size of ViacomCBS today 

[00:09:03] - Starting as a radio business and becoming a diversified conglomerate

[00:11:25] - What the competitive landscape looked like fifteen years ago 

[00:14:07] - Economics of a typical cable network channel like ESPN or MTV

[00:16:23] - Key differentiators between a good and a bad channel revenue-wise

[00:17:22] - The important roles movies play and how the film industry works writ large

[00:18:12] - Durable competitive advantages in producing strong content 

[00:19:26] - How much of their market cap is their catalog

[00:20:04] - Adopting a streaming model and the impact of this inflection point

[00:24:33] - Thoughts on customer acquisition in movies and streaming services

[00:25:33] - What has to go right for their market cap to double in the next decade

[00:27:55] - What will have gone wrong if they don?t grow over the next decade

[00:28:26] - Lessons for entrepreneurs and investors when studying ViacomCBS?s story

[00:29:33] - Learn more about ViacomCBS and the cable industry; Cable Cowboy

Pt 2 with Naveen Chopra

[00:30:27] - [First question] - Overview of the different businesses within ViacomCBS

[00:34:07] - Size of the broadcast arm of ViacomCBS?s business and the costs of running it

[00:37:23] - How wide the range of content expenses can be 

[00:39:35] - Thoughts on making movies and the business model pre-pandemic

[00:42:47] - Is the box office opening night really that important?

[00:44:40] - How much box office attendance is down post-pandemic

[00:46:19] - Same day releases for streaming and box office can help acquire subscribers

[00:51:45] - Leveraging intellectual property to generate revenue

[00:53:23] - How much Netflix invests in content compared to ViacomCBS and competitors

[00:54:11] - Thoughts on the business model for streaming service revenue

[00:58:01] - Scaling Paramount+ to compete and compensate for pandemic impacts

[01:02:16] - What he?s most excited about for ViacomCBS and Paramount+ looking forward

[01:05:07] - Why speed is important and what keeps him up at night

[01:06:00] - Things in the macro-environment that could be good and bad for ViacomCBS

[01:07:54] - Lessons for entrepreneurs and investors when studying ViacomCBS?s story

This is Jesse Pujji, and today we?re breaking down Peloton. Peloton was founded over ten years ago with the idea of making the best in-person gym classes available at home. By delivering eye-catching hardware and compelling content, it has since become the largest interactive fitness platform in the world with over 6 million members. Peloton?s rise has not been without challenges, however, and the business?s economic model is under debate as we speak.

To break down Peloton, I?m joined by my brother Vinny Pujji, partner at Left Lane Capital, a growth-stage investment firm focused on consumer businesses. We discuss Peloton?s success in creating a new fitness category, the impact of the pandemic on its financials, and why it may make sense for Peloton to build its own music label. Please enjoy this breakdown of Peloton.

For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.

-----

This episode is brought to you by Tegus. Much of the foundational prep for these episodes starts with research on the Tegus platform. With Tegus, you can learn everything you?d want to know about a company in an on-demand digital platform. Investors share their expert calls, allowing others to instantly access more than 20,000 calls on Coinbase, Hinge Health, Farfetch, or almost any company of interest. All you have to do is log in. If you're ready to go deeper on any company and you appreciate the value of primary research, head to tegus.co/breakdowns for a free trial.

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This episode is brought to you by Quartr. With Quartr, you can access conference calls, investor presentations, transcripts, and earnings reports ? straight from your pocket. Quartr is 100% free and includes companies from 12 markets including the US, the UK, Canada, India, and all the Scandanavian countries. Quartr is available for both iOS and Android, so check out the app today.

-----

Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.

Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.

Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss

Show Notes

[00:03:37] - [First question] - What Peloton is and what they do

[00:04:59] - How most consumers experience their brand

[00:05:40] - Their customer base and the size of their business today

[00:06:22] - The founding story and what lead to Peloton 

[00:10:10] - What business they started with and how they?ve expanded their offerings

[00:12:03] - Complexities of direct to consumer hardware distribution

[00:13:01] - Scope of the global fitness and wellness market writ large

[00:14:42] - Unit economics of Peloton?s business

[00:19:03] - Contributing factors that draw on their cash and working capital 

[00:22:46] - What would solve their current liquidity problem

[00:25:11] - Their latest treadmill product and their subscription product

[00:26:22] - Thoughts on why management has struggled with their forecasts

[00:29:44] - The competitive landscape as it exists today and how they compete

[00:33:16] - Whether or not Peloton will experience a boom and bust cycle

[00:35:18] - What Peloton does very well that separates them from their competitors

[00:36:52] - Gamifying fitness and incorporating a live feature

[00:38:59] - How music plays into their business and its role in their future 

[00:41:45] - Whether they are a subscription or hardware business

[00:43:59] - What has to go right in order to scale their market cap in the next decade

[00:45:08] - Their approach to marketing and what drives their engine

[00:47:17] - What will have gone wrong if Peloton doesn?t survive the coming decade

[00:50:28] - What can we learn from Peloton

This is Jesse Pujji and today we are breaking down the emerging industry of cannabis. After spending decades as an illegal drug, US states have begun to make regulatory changes and build legalized marijuana marketplaces. To help me break down this market, I am joined by Jeff Hoffman of Marathon Partners Equity Management. Jeff is co-portfolio manager of a fund, which invests in US public cannabis companies. We discuss exactly what those regulatory changes look like, the difference between federal and state laws, and companies across the value chain that are showing up in public markets. I hope you enjoy this breakdown.

For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.

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This episode is brought to you by Tegus. With Tegus, you can learn everything you?d want to know about a company in an on-demand digital platform. Investors share their expert calls, allowing others to instantly access more than 20,000 calls on Coinbase, Hinge Health, Farfetch, or almost any company of interest. All you have to do is log in. If you're ready to go deeper on any company and you appreciate the value of primary research, head to tegus.co/breakdowns for a free trial.

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This episode is brought to you by MITIMCo. As the endowment office of MIT, MITIMCo searches for investment firms that are focused on achieving exceptional long-term investment returns. MITIMCo's goal is to create long-term relationships. They will partner with firms as early as Day 1 and do not ask for general partner economics in return. Visit MITIMCo?s website to learn more about their unconventional emerging manager approach, including examples of managers they have backed. While they only partner with a handful of new firms each year, they have also created and published resources for the broader universe of emerging managers to benefit from, making them even more unusual in the LP world. Visit www.mitimco.org to learn more.

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Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.

Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.

Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss

Show Notes

[00:03:40] - [First question] - What is cannabis and the current size of the industry today

[00:05:44] - Differentiating between THC and CBD 

[00:06:46] - Whether or not the whole market is growing writ large

[00:08:08] - The history of cannabis, the changing legal landscape, and key players today

[00:10:51] - What the argument was for making cannabis a schedule 1 narcotic

[00:11:48] - Is cannabis addictive, objectively speaking?

[00:13:27] - The differing levels of when cannabis is or isn?t legal 

[00:14:05] - Overview of the value chain involved in getting cannabis to a dispensary

[00:15:18] - What an MSO is, how their operations work, and the marketplace today

[00:20:31] - Regulatory catalysts that would allow this market to thrive

[00:23:19] - The income statement of an MSO, their expenses, and how they differ from traditional businesses

[00:26:44] - Different business models for MSOs depending on their geography 

[00:29:31] - How the economics of MSOs compare to mom and pop shops 

[00:31:30] - Normalizing margins and incentives to compete on price or participate in discount wars

[00:33:48] - D2C, mobile-first, and delivery trends influencing distribution

[00:35:53] - Whether or not cannabis is considered perishable 

[00:36:43] - How the finance industry is evolving around cannabis 

[00:38:44] - The role COVID played in helping the cannabis industry grow

[00:41:03] - Will cannabis see a pullback in public interest as the world returns to normal

[00:42:25] - Form factors to consider as the industry shifts from medical to mature markets

[00:44:20] - What will have to happen for the cannabis market to excel in the coming decade

[00:47:07] - How M&A might play out as the market continues to evolve

[00:49:06] - Lessons for builders when it comes to the cannabis industry

[00:51:54] - Learn more about the cannabis industry; marijuanamoment.net

Today?s episode is part business breakdown and part biology breakdown as we explore Finch Therapeutics and their novel work on the microbiome, which plays a crucial role in regulating our immune system.

To help break down these topics, I?m joined by Mark Smith, co-founder and CEO of Finch Therapeutics. Mark is a leader in the microbiome field and the perfect person to cross the bridge between business and science.

As Mark outlines, we?ve made a lot of progress in living longer, but we are yet to make significant steps to living better. In our discussion, we explore what the microbiome is, why it?s so important, and the role that Finch plays in helping patients transform their lives. We then turn to the business side of developing therapeutics drugs and what Mark has learned there.

Please enjoy this breakdown of Finch Therapeutics.

For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.

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This episode is brought to you by Brex. Brex began as the first corporate card for startups and now offers a full financial stack built for scale. Get 10-20x higher credit limits, uncapped rewards, easy deposits and payments, and expense management all in one. Grow your business faster with Brex.

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Scribe is the trusted transcription provider for the business and investing community. Scribe is designed to accurately transcribe messy, real-world audio and is unique in that it?s optimized for the complexities of enterprise audio, such as company and product names, currencies, accents and numbers. Visit kensho.com/breakdowns to learn more and unlock your free trial.

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Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.

Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.

Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss

Show Notes

[00:02:55] - [First question] - What is the microbiome?

[00:04:56] - Where the microbiome is inside the body

[00:06:42] - Overview of what bacteria is in general terms and what they do for us

[00:10:44] - What would happen to a human that didn?t have any bacteria

[00:13:29] - Inflammatory auto-immune diseases and widespread antibiotics

[00:14:32] - How seasonal allergies and gut bacteria are related

[00:16:32] - Key contributors that have led to our current understanding of the microbiome

[00:18:48] - Whether an absence or dominance of bacteria is more concerning

[00:20:47] - The state of stool sample diagnostics today

[00:22:52] - Tools available today for widespread microbial treatment and repair

[00:24:48] - The science behind probiotics and whether or not they?re worth it

[00:27:00] - Fecal transplants and supporting empirical evidence of their efficacy

[00:31:39] - Addressable conditions that Finch Therapeutics seeks to solve

[00:35:27] - What the end game looks like and the timeline to achieve it

[00:40:05] - Is there a future where we use these therapeutics preventatively?

[00:41:22] - Key risks that could threaten the growth of Finch in the coming decade

[00:43:10] - What it?s been like running a company that is so different than its competitors

[00:45:51] - Whether or not the regulatory and iterative pace of therapeutics will increase

[00:48:19] - How much his lifestyle has changed given what he knows now in this field

[00:50:50] - Other innovations taking place in the microbiome and related therapeutics

[00:52:28] - What most has his attention outside of his field in health science today

[00:53:24] - Learn more about the microbiome; I Contain Multitudes (book)

[00:53:42] - The kindest thing anyone has ever done for him

Today, we?ll be breaking down the London Stock Exchange, now referred to as LSEG. LSEG is a nearly £40 billion market cap business that plays an integral role in the infrastructure of the world?s financial markets. Since 2000, there have been at least 11 attempts at mergers and takeovers of the business by other exchanges and banks. The company itself made a notable acquisition when it closed on its M&A of Refinitiv from Blackstone in January of this year. The company offers a wide range of services, financial markets, and data exchanges, which make it an essential player in the world?s markets.

To break down the business, Zack Fuss is joined by Nick Shenton of Artemis, a UK-based fund manager.

For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.

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This episode is brought to you by Brex. Brex began as the first corporate card for startups and now offers a full financial stack built for scale. Get 10-20x higher credit limits, uncapped rewards, easy deposits and payments, and expense management all in one. Grow your business faster with Brex.

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This episode is brought to you by Scribe. Scribe is the trusted transcription provider for the business and investing community. Scribe is designed to accurately transcribe messy, real-world audio and is unique in that it?s optimized for the complexities of enterprise audio, such as company and product names, currencies, accents and numbers. Visit kensho.com/breakdowns to learn more and unlock your free trial.

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Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.

Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.

Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss

Show Notes

[00:02:47] - [First question] - The industry LSEG operates in and its role within it

[00:05:37] - How to think about LSEG as a business and what drives their growth

[00:07:33] - The model that allows for such high profit and how its pieces work together

[00:14:21] - Overview of the data analytics side of their business 

[00:18:29] - Trading & banking as a key component of their data analytics revenue

[00:22:09] - Its 300-year history and what has led them to become such a dominant player

[00:29:25] - Thoughts on the Refinitive asset they?ve acquired and its role in future success

[00:33:04] - Key factors that allow LSEG to sell in adjacent markets and their competitive advantage

[00:38:57] - Drivers behind the growth of the digital financial market industry

[00:41:26] - Structural risks that could impede LSEG?s growth over the coming years

[00:45:29] - Simplifying their story to help investors better understand their underlying growth

[00:47:35] - Lessons for builders and investors when studying LSEG?s story

Today, we are breaking down The National Football League or, as most know it, The NFL. It?s a sport that dominates American Sundays from late summer into early winter. Behind what happens on the field is a $15 billion dollar business with a unique operating and ownership structure and many stakeholders. 

To help break down the NFL, Jesse Pujji is joined by Jay Kapoor. Jay is currently General Partner of venture fund VSC Ventures, and prior to his career as an investor, Jay worked in the League Strategy office at the NFL. During the conversation, we break down some of the fascinating dynamics of the NFL, including how it dominates linear TV, the unique revenue considerations for the league and its teams, and what makes the NFL stand out relative to other sports. I hope you enjoy this breakdown of the NFL.

For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.

-----

This episode is brought to you by Brex. Brex began as the first corporate card for startups and now offers a full financial stack built for scale. Get 10-20x higher credit limits, uncapped rewards, easy deposits and payments, and expense management all in one. Grow your business faster with Brex.

-----

Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.

Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.

Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss

Show Notes

[00:02:18] - [First question] - What is the NFL?

[00:03:26] - The size and scale of the NFL as a business

[00:04:55] - Points of growth on the league side and the team side

[00:06:42] - The growth rate of the NFL over the past five years

[00:07:24] - How many people are watching the NFL and the size of their audience

[00:09:53] - The structure of the NFL compared to other major sports leagues

[00:14:08] - Distribution of the revenue generated by media rights

[00:15:53] - Other factors that make the NFL?s model unique 

[00:18:11] - How the NFL came to dominate the landscape of American sports

[00:21:26] - When the NFL became bigger than the MLB and why

[00:23:00] - How viewership and media rights have changed over the years

[00:24:52] - Complexity of scheduling games and creating scarcity

[00:26:14] - How the NFL Schedule is Created

[00:27:43] - Additional sources of revenue at the league level

[00:30:54] - Major costs to operate the NFL at the national level

[00:31:50] - Contributing factors that make annual operating costs $1.5 billion

[00:32:29] - How much it costs to run an NFL game

[00:33:35] - Major drivers and ways to increase the topline of the business

[00:36:09] - How much of the league revenue share is distributed to team owners and players

[00:39:06] - Seat sales, boxes, and sponsorship revenue

[00:40:40] - Who owns stadiums and an overview from a management and cost perspective

[00:42:43] - Non-player related operating costs

[00:45:46] - Operating leverage as an owner in this business

[00:47:08] - What a commissioner is and the governance model of the NFL

[00:51:31] - Overview of an executive team beneath the owners

[00:53:01] - Collective Bargaining Agreements 

[00:57:15] - How enterprise value is created and why it?s growing so fast for the teams

[00:59:11] - His perspective on comparing teams to assets generating revenue multiples

[01:00:51] - Defining relevance in regards to the NFL and what it means for the future

[01:04:39] - Plans to embrace a D2C model and the impact streaming might have on them

[01:06:56] - How the Superbowl became such a pivotal sporting event and why they made it

[01:11:35] - What will have to go right in order to grow exponentially over the coming decade 

[01:17:34] - Potential risks and concerns that could negatively impact the NFL?s growth

[01:22:21] - A big lesson we can learn from the NFL for entrepreneurs

[01:23:29] - Lessons for investors when studying the NFL

[01:24:48] - Learn more about professional sports and the NFL; The Game Plan; Tailgating, Sacks, and Salary Caps (book)

I?m Zack Fuss and today we?re breaking down NextEra Energy. NextEra is America?s most valuable energy firm and consists primarily of two businesses; a high-quality regulated utility and a renewables business that is the world?s largest generator of wind and solar energy.

To help break down the business, I?m joined by Mark Tomasovic, an investor at Energize VC. In our conversation, we discuss the structure of the energy market, what?s changed in the renewables space over the past twenty years, and how NextEra takes advantage of its cost of capital advantage. Please enjoy this breakdown of NextEra Energy.

For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.

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This episode is brought to you by Brex. Brex began as the first corporate card for startups and now offers a full financial stack built for scale. Get 10-20x higher credit limits, uncapped rewards, easy deposits and payments, and expense management all in one. Grow your business faster with Brex.

-----

This episode is brought to you by MITIMCo. As the endowment office of MIT, MITIMCo searches for investment firms that are focused on achieving exceptional long-term investment returns. MITIMCo's goal is to create long-term relationships. They will partner with firms as early as Day 1 and do not ask for general partner economics in return. Visit MITIMCo?s website to learn more about their unconventional emerging manager approach, including examples of managers they have backed. While they only partner with a handful of new firms each year, they have also created and published resources for the broader universe of emerging managers to benefit from, making them even more unusual in the LP world. Visit www.mitimco.org to learn more.

-----

Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.

Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.

Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss

Show Notes

[00:03:16] - [First question] - Mark?s background and how he thinks about the energy markets 

[00:03:46] - A broad overview of the electricity market and how it?s structured

[00:05:22] - The value chain and production line of energy from facility to customer

[00:06:59] - What informs how much an energy company is allowed to earn

[00:09:16] - Unregulated versus regulated markets and the risks and benefits of both

[00:11:29] - How the retail electric market looks today and alternative production methods

[00:12:40] - NextEra?s business fundamentals and their current scope and scale

[00:14:45] - The two business arms of NextEra

[00:16:00] - Inputs and costs of the low cost regulated utility side of NextEra

[00:18:33] - NEER being the world?s largest generator of wind and solar

[00:19:43] - How they?re able to get contracts and how they work 

[00:20:03] - Comparison of revenue generated between their different branches

[00:21:26] - How the regulated and unregulated arms work together for NextEra vs its competitors

[00:22:30] - What their most important benchmark is and thoughts on gross margin and profits 

[00:24:33] - Natural cost of capital advantage given the growing focus on ESG 

[00:25:33] - How COVID impacted the energy space, specifically in electricity 

[00:28:20] - Conventional energy production becoming more expensive in the near future 

[00:30:10] - How reliant NextEra is on government subsidies  

[00:31:20] - Where they spend all their revenue, the price of projects, and ROI

[00:33:01] - How they evaluate projects 

[00:34:19] - Structural differences in renewable energy business models today

[00:36:18] - What could happen that could negatively impact NextEra?s growth

[00:38:22] - Considering risks when underwriting turbines 

[00:39:15] - Is nuclear power a potential tail risk?

[00:40:05] - Being forward-leaning when adopting digital technology and innovation

[00:41:23] - Lessons that can be learned from NextEra for builders and investors

Today, we?re breaking down Novocure, a global oncology company that has pioneered a new approach to cancer treatment. For over 100 years, the tools used to fight cancer have largely remained unchanged, but there are promising signs of a renaissance and Novocure is at the vanguard of that charge.

To explain the state of cancer research and how the business has developed over the past twenty years, I?m joined by Bill Doyle ? Novocure?s Executive Chairman. Please enjoy this breakdown of Novocure.

For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.

-----

This episode is brought to you by Brex. Brex began as the first corporate card for startups and now offers a full financial stack built for scale. Get 10-20x higher credit limits, uncapped rewards, easy deposits and payments, and expense management all in one. Grow your business faster with Brex.

-----

This episode is brought to you by the MIT Investment Management Company, known as MITIMCo. As the endowment office of MIT, MITIMCo searches for investment firms that are focused on achieving exceptional long-term investment returns. MITIMCo's goal is to create long-term relationships. They will partner with firms as early as Day 1 and do not ask for general partner economics in return.

Visit MITIMCo?s website to learn more about their unconventional emerging manager approach, including examples of managers they have backed. While they only partner with a handful of new firms each year, they have also created and published resources for the broader universe of emerging managers to benefit from, making them even more unusual in the LP world. Visit www.mitimco.org to learn more.

-----

Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.

Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.

Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss

Show Notes

[00:03:05] - [First question] - The current state of cancer treatment today writ large

[00:05:43] - What cancer is and how it becomes life threatening

[00:06:38] - Why uncontrolled cell growth is so bad

[00:07:27] - The main three ways we currently treat cancer 

[00:11:29] - Whether or not there are targeted ways we can treat cancer like mRNA

[00:14:08] - How we?ve historically detected cancer and what future detection could look like

[00:17:12] - Death rates of cancer in the US annually and the business side as it stands today

[00:18:20] - Key players in the cancer treatment space that serve patients

[00:19:13] - The pioneering technology that Novocure created to treat cancer

[00:22:38] - The mechanism that allows their tech to target the right cells

[00:25:35] - Overview of the actual procedure that takes place with their therapy

[00:28:36] - The impact and results of their new treatment method

[00:33:37] - A future where we can take this in a prophylactic and preventive sense

[00:34:44] - Why this approach to cancer treatment isn?t more widely known and accepted

[00:38:09] - Financials of Novocure and the opportunities it presents for their business

[00:43:10] - How they spend their R&D dollars and horizontal and vertical growth

[00:48:01] - Unique ways how they spend their revenue to scale their business

[00:51:05] - Biggest criticisms of the size and scope of Novocure

[00:52:18] - Broader business lessons learned while building a cancer treatment company

[00:55:23] - The future of healthcare more generally and what has him most excited

I?m Zack Fuss, and today we?re breaking down AutoZone, the leading retailer and distributor of auto parts in the Americas. From the outside, AutoZone might look like a dull business in a mature industry, but once you dive into the details, you quickly realize it?s a hidden gem that echoes the best of Walmart and Costco, earns some of the highest returns on capital in retail, and has a long history of outsized shareholder returns.

To help break down the business, I?m joined by Freddie Lait, founder and CIO at London-based Latitude Investment Management. Please enjoy this fascinating breakdown of AutoZone.

For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.

-----

This episode is brought to you by Tegus. We created Business Breakdowns to uncover the lessons and frameworks behind every business, and that's what makes Tegus our perfect launch partner. Much of the foundational prep for these episodes starts with research on the Tegus platform.

With Tegus, you can learn everything you?d want to know about a company in an on-demand digital platform. Investors share their expert calls, allowing others to instantly access more than 20,000 calls on Coinbase, Hinge Health, Farfetch, or almost any company of interest. All you have to do is log in. If you're ready to go deeper on any company and you appreciate the value of primary research, head to tegus.co/breakdowns for a free trial.

-----

This episode is brought to you by Eight Sleep. Eight Sleep's new Pod Pro Cover is the easiest and fastest way to sleep at your perfect temperature. Simply add the Pod Pro Cover to your current mattress and start sleeping as cool as 55°F or as hot as 110°F. This holiday season Eight Sleep will be running their biggest sale of the year. To capture the savings be sure to visit eightsleep.com/patrick or use code "Patrick" this Black Friday or Cyber Monday.

-----

Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.

Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.

Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss

Show Notes

[00:02:58] - [First question] - The general state of the auto part industry and its key players

[00:06:14] - Similar and differing characteristics of AutoZone, O'Reilly, and Advanced Autoparts  

[00:08:04] - The history of AutoZone and how they got to where they are today

[00:12:11] - ESLs involvement with AutoZone and notable moments from that partnership

[00:13:29] - Unit economics, sales per store, how much a store costs, and general features

[00:16:32] - Other retail businesses that rank close to the unit economics of AutoZone

[00:17:43] - How a customer interacts with their business

[00:19:40] - What is being sold that allows them to earn such high gross profits

[00:20:57] - Ways AutoZone has kept their competitors at bay

[00:23:05] - Additional opportunities in their systems that offer competitive advantages

[00:24:18] - Low inventory turnover working in specialty retail merchandise

[00:26:14] - How they manage their stock locally and regionally to ensure a reliable supply

[00:27:36] - Supplier finance mechanics overview for retailers

[00:29:12] - Some of the private label programs they?ve had success with

[00:31:40] - Failure oriented parts and what products inhabit this category

[00:32:58] - How management and integrated culture find opportunities in DIFM

[00:36:08] - Moving up and down the call list and gaining favor as a retailer

[00:38:45] - The threat electric vehicles might pose to Autozone

[00:37:48] - Whether or not an eCommerce giant may penetrate and disrupt this sector

[00:44:58] - Paths AutoZone has taken to return capital to its shareholders

[00:49:21] - COVID?s impacts and detriments to the business

[00:53:04] - What we can learn as builders and investors from studying AutoZone?s story

I?m Jesse Pujji and this is Business Breakdowns. Today we are doing a different kind of breakdown.  We are covering an entire category, Amazon Aggregators. These are the companies that are buying up hundreds of Amazon?s third-party sellers. The concept of Amazon Aggregators is relatively new, tracing back to 2018 with the founding of Thrasio, but the ecosystem is already huge and growing. Most recent numbers peg it at around $300bn dollars in revenue and growing faster than Amazon itself. These aggregators have unique moats and high-quality entrepreneurs.

To help break down the marketplace and business of acquiring Amazon storefronts, I?m joined by Ali Hamed, a partner of CoVenture, who is also a popular guest on Invest Like the Best. In our conversation, we discuss the three superpowers Amazon sellers have, why there?s only $8bn in funding for a market doing $50bn in EBITDA, and we go into detail on how Amazon Aggregators are structured and operate. Please enjoy this unique breakdown on Amazon Aggregators.

For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.

-----

This episode is brought to you by Tegus. We created Business Breakdowns to uncover the lessons and frameworks behind every business, and that's what makes Tegus our perfect launch partner. Much of the foundational prep for these episodes starts with research on the Tegus platform.

With Tegus, you can learn everything you?d want to know about a company in an on-demand digital platform. Investors share their expert calls, allowing others to instantly access more than 20,000 calls on Coinbase, Hinge Health, Farfetch, or almost any company of interest. All you have to do is log in. If you're ready to go deeper on any company and you appreciate the value of primary research, head to tegus.co/breakdowns for a free trial.

-----

This episode is brought to you by Eight Sleep. Eight Sleep's new Pod Pro Cover is the easiest and fastest way to sleep at your perfect temperature. Simply add the Pod Pro Cover to your current mattress and start sleeping as cool as 55°F or as hot as 110°F. This holiday season Eight Sleep will be running their biggest sale of the year. To capture the savings be sure to visit eightsleep.com/patrick or use code "Patrick" this Black Friday or Cyber Monday.

-----

Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.

Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.

Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss

Show Notes

[00:03:23] - [First question] - What is an Amazon aggregator, and who sells through Amazon?

[00:05:26] - The scale and size of the aggregator market in general

[00:06:43] - The history of third-party sellers and the utility they offer Amazon

[00:08:20] - When they started inviting third parties to join their network and their market share

[00:09:47] - Amazon?s 40% take-rate and overview of the economic structure

[00:10:24] - How many individual storefronts exist and what they look like 

[00:13:19] - Who is starting Amazon stores and an overview of a seller writ large

[00:14:43] - The initial insight that led to incorporating third-party aggregators

[00:21:17] - How many aggregators exist in the space today

[00:24:41] - Why vertical integration isn?t such a primary focus for aggregators

[00:26:53] - Ways aggregators find businesses and how they tend to acquire them

[00:31:29] - What the top 10 aggregators look like and their acquisition frequency

[00:32:25] - The common value add aggregators deliver post-acquisition

[00:34:30] - One of the weirdest things that?s enhanced optimization and improved revenue

[00:35:54] - What the org chart of an aggregator typically looks like

[00:36:47] - Deal pipelines and other sales and marketing functions

[00:40:22] - Interesting things in the space given how unique of a marketplace it is

[00:43:57] - New innovations and secondary ecosystems emerging as a result of aggregators

[00:45:13] - How an aggregator should think about Amazon and risks to their business

[00:48:29] - Why Amazon won?t use their data and customer ownership to own the market

[00:50:10] - Macro and system risks that would threaten the success of this business model

[00:52:35] - What keeps Amazon up at night and potential worries about aggregators

[00:53:54] - Reasons why they would pass on an acquisition opportunity

[00:55:32] - Contributing factors to explosive growth that exceeded expectations

[00:58:10] - Biggest takeaways for builders and investors from 3rd party aggregators

[01:01:04] - Where to learn more about Amazon?s third-party aggregators

Today, we?re breaking down HelloFresh. HelloFresh delivers weekly meal kits to people?s homes. With eight million active customers, the Berlin-based business is the most popular company of its kind in the world.

To break down HelloFresh, I?m joined by its CEO and co-founder, Dominik Richter. We discuss the challenges of scaling an operationally intensive business, why HelloFresh is more like CPG companies than grocery stores, and what he?s learned about brand building.

Meal-kits are a notoriously difficult business model to get right and this is a great example of process power; a competitive advantage you don?t come across often. Please enjoy this great breakdown of HelloFresh.

For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.

-----

This episode is brought to you by Tegus. We created Business Breakdowns to uncover the lessons and frameworks behind every business, and that's what makes Tegus our perfect launch partner. Much of the foundational prep for these episodes starts with research on the Tegus platform.

With Tegus, you can learn everything you?d want to know about a company in an on-demand digital platform. Investors share their expert calls, allowing others to instantly access more than 20,000 calls on Coinbase, Hinge Health, Farfetch, or almost any company of interest. All you have to do is log in. If you're ready to go deeper on any company and you appreciate the value of primary research, head to tegus.co/breakdowns for a free trial.

-----

This episode is brought to you by MIT Investment Management Company (MITIMCo), the endowment office of MIT. MITIMCo seeks to find people who are focused on achieving exceptional long-term investment returns, partner with these firms early, and stick around for the very long term. Visit mitimco.org and their new emerging managers page to learn more.

-----

Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.

Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.

Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss

Show Notes

[00:04:07] - [First question] - What HelloFresh does for its customers

[00:05:53] - How many meals are delivered a year and the scale of the business today

[00:07:08] - The full customer experience of ordering a meal kit for the week

[00:08:03] - What the original service was and the original version of their product

[00:10:26] - Overview of the business from a P&L standpoint

[00:14:09] - Their centralized and widespread manufacturing plants 

[00:16:35] - Attributes of a good recipe that benefits both the customers and the business

[00:18:32] - Thoughts on the cost of ingredients and how they impact everything

[00:20:43] - How the HelloFresh supply chain differs from traditional ones

[00:23:58] - The magnitude of waste and its impact on gross margins

[00:27:38] - Identifying customers, acquiring them, and retaining them

[00:30:52] - Why other meal kit companies have seemingly done poorly

[00:35:53] - Differences in the customer experience of HelloFresh subscribers that allowed them to thrive

[00:38:38] - Managing a business that?s dependent on process power and balancing which levers to pull and when

[00:41:24] - An example of a decision made to improve tiny percentages of performance

[00:44:17] - How a world returning to normal might impact their pandemic propelled growth

[00:47:22] - Thoughts on potentially expanding to private supply and distribution

[00:50:23] - Lessons learned about successful advertising, branding, and marketing

[00:52:41] - Key variables in HelloFresh?s growth for the coming years

[00:57:10] - What drives the decision to acquire and build a portfolio of brands

[01:00:01] - The biggest risks that the business might face in the future

[01:02:27] - What his favorite meal is from their menu and why

I?m Jesse Pujji and today we?re breaking down MongoDB. The MongoDB story traces back to 2007 when the founding team was running DoubleClick, a large adtech business now owned by Google. They could not find an existing database software with the agility and scalability that the internet requires. Today, MongoDB has over 25,000 customers across 100 countries. 

To help break down Mongo, I'm joined by Ro Nagpal, an investor at Holocene Advisors. Listeners will recognize Ro from our breakdown of Twilio earlier this year. During our conversation, we get a 101 on database software, talk through Mongo?s creative approach to R&D, learn about how database product advantages compound, and look at what protects Mongo from larger players like Microsoft and Amazon. Please enjoy this business breakdown of MongoDB. 

For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.

-----

This episode is brought to you by Tegus. With Tegus, you can learn everything you?d want to know about a company in an on-demand digital platform. Investors share their expert calls, allowing others to instantly access more than 20,000 calls on Coinbase, Hinge Health, Farfetch, or almost any company of interest. All you have to do is log in. If you're ready to go deeper on any company and you appreciate the value of primary research, head to tegus.co/breakdowns for a free trial.

-----

This episode is brought to you by the MIT Investment Management Company, known as MITIMCo. As the endowment office of MIT, MITIMCo searches for investment firms that are focused on achieving exceptional long-term investment returns. MITIMCo's goal is to create long-term relationships. They will partner with firms as early as Day 1 and do not ask for general partner economics in return. Visit www.mitimco.org to learn more about their unconventional emerging manager approach, including examples of managers they have backed.

-----

Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.

Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.

Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss

Show Notes

[00:03:51] - [First question] - What MongoDB is, what they do, and their scale today

[00:05:03] - The functions of a database and why they?re important

[00:07:37] - The unmet market need that led to founding MongoDB and the history of the space leading up to today

[00:11:13] - What big data means and how it applies to MongoDB

[00:12:42] - Things that would lead customers of Oracle to leave them for MongoDB

[00:13:42] - The technology stack behind a company like weather.com

[00:14:52] - Types of companies and services that couldn?t exist without MongoDB

[00:16:40] - State of the database marketplace today and where they fit into it

[00:17:51] - How big the new market of big data is and current competitors

[00:19:22] - What makes MongoDB so distinct and why they?re winning

[00:21:34] - The most important metrics and numbers for the business

[00:23:28] - Gross margins and why they spend so much on sales and marketing

[00:24:55] - How investors can justify a company spending so much on marketing

[00:26:19] - The P&L and unit economics of the business

[00:26:47] - How a customer grows after they?ve been acquired

[00:27:21] - Clever ways that MongoDB spends and uses their resources

[00:29:26] - Different types of open source models and how they use it to their advantage

[00:31:22] - One thing MongoDB does exceptionally well and something they could improve

[00:34:19] - What MongoDB has managed to get so right compared to their competitors

[00:36:04] - Their unique go-to-market strategy and why it worked

[00:37:15] - The things that would have to go right for MongoDB to compound over a decade

[00:39:00] - Market factors that may impact their future growth and potential M&A opportunities

[00:40:27] - Biggest risks that may affect MongoDB?s growth trajectory over the next few years

[00:41:01] - What allows them to exist in a world dominated by Google and Microsoft

[00:42:34] - Lessons for builders and investors when studying MongoDB?s story

[00:44:17] - Why changing their CEO was necessary and helped the company recover and thrive

Today we?re breaking down Universal Music Group. As one of the largest music businesses in the world, UMG is home to many of the world?s greatest artists, including Taylor Swift, U2, and The Beatles catalog. A discussion on UMG requires a deep dive into the history of music itself, how it was historically monetized, the shift from physical to digital, and what streaming has meant for the various pieces of the ecosystem.

Our guest, Arman Gokgol-Kline, a partner and investor at Ruane, Cunniff & Goldfarb, walks us through that evolution of the music industry before we dive in on UMG.

In our discussion, we first break down the industry pre and post Napster, looking at the ways music was sold historically, and how that led to both record profits and a consumer revolution. We then assess streaming?s impact on the industry and how, contrary to what you might think, labels may be more important in a marketplace where it?s easier than ever for creators to record and release music. Finally, we finish with UMG?s place in the ecosystem. The primary drivers of the business, how they?re able to attract the world?s superstars, and how they think about deploying dollars to acquire new artists and timeless catalogs.

Please enjoy this fantastic breakdown of Universal Music Group.

For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.

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This episode is brought to you by Quartr. With Quartr, you can access conference calls, investor presentations, transcripts, and earnings reports ? straight from your pocket. Quartr is 100% free and includes companies from 12 markets including the US, the UK, Canada, India, and all the Scandinavian countries. Quartr is available for both iOS and Android, so check out the app today.

-----

This episode is brought to you by Brex. Brex began as the first corporate card for startups and now offers a full financial stack built for scale. Get 10-20x higher credit limits, uncapped rewards, easy deposits and payments, and expense management all in one. Grow your business faster with Brex.

-----

Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.

Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.

Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss

Show Notes

[00:03:28] - [First question] - How technology disrupted the music business and it?s evolving history

[00:12:11] - What the industry of music labels looks like from the 90s to today

[00:20:46] - How it feels as a high-tier artist to engage with a label directly today

[00:27:47] - The revenue and business model of an artist akin to Taylor Swift

[00:30:11] - The differences between UMG's main sources of revenue; music publishing and recording

[00:34:35] - General margins and trends for music publishing

[00:35:49] - Ownership and mechanics of monetizing an artist?s Intellectual Property 

[00:40:24] - How streaming revenues are divided among stakeholders

[00:45:50] - History of the bargaining power of labels and streaming platforms

[00:50:52] - Capital allocation, ROI, and acquiring IP and catalogs

[00:57:06] - Thoughts on the growth profile of the industry as an investor

[01:01:50] - Potential risks to UMG from emerging technology and new creator trends 

[01:08:17] - Reasons why an artist would pick UMG over other major labels

[01:12:09] - Diversity and how artists are sometimes treated by labels

[01:13:31] - A growing increase in music consumption across the world

Today, we?re breaking down Uber. Despite a corporate history that spans just over a decade, the ink spilled on Uber could have its own wing in a library. So rather than record with our typical Breakdown format, we decided to host two portfolio managers and familiar guests on the podcast, Mario Cibelli, and Ram Parameswaran, to walk through their bull cases on Uber stock.

Uber is the case study for network effects in two-sided marketplaces but a controversial corporate culture, ongoing regulatory battles, and a debate over unit economics has made it a battleground stock since going public in 2019. During our wide-ranging conversation, we cover the opportunity for Uber?s business segments, what deteriorating service means for the product, and what COVID may have revealed regarding Ubers? financials.

While Mario and Ram are clearly Uber bulls, it?s particularly fun to hear where their views align and differ. It?s a great reminder that we can all take very different paths to arrive at the same conclusion. Please enjoy this great breakdown of Uber.

For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.

-----

This episode is brought to you by Quartr. With Quartr, you can access conference calls, investor presentations, transcripts, and earnings reports ? straight from your pocket. Quartr is 100% free and includes companies from 12 markets including the US, the UK, Canada, India, and all the Scandinavian countries. Quartr is available for both iOS and Android, so check out the app today.

-----

This episode is brought to you by Brex. Brex began as the first corporate card for startups and now offers a full financial stack built for scale. Get 10-20x higher credit limits, uncapped rewards, easy deposits and payments, and expense management all in one. Grow your business faster with Brex.

-----

Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.

Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.

Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss

Show Notes

[00:03:16] - [First question] - What they find most interesting about Uber

[00:04:40] - Major aspects of the business today in regards to bookings and revenue

[00:07:47] - The importance of multiple use cases and what happens by exploring verticals

[00:10:47] - History of getting drivers to join the company and what matters on the supply side

[00:15:01] - Impact of higher wait times and ride prices and emerging trends in a post-covid era

[00:17:48] - Thinking about Uber as a busted but booming model

[00:22:31] - The unit economics and journey of $100 flowing into Uber

[00:29:32] - Possible concerns and needs for capital Uber may have in the future

[00:37:13] - The role that DoorDash plays in this ecosystem and where it?s a potential threat

[00:39:01] - Is Lift an equally worthy competitor compared to DoorDash

[00:41:59] - What we can learn about labor and regulation when studying Uber

[00:43:44] - Thoughts on current management and capital allocation

[00:49:56] - Parallels between Amazon Prime and Uber?s membership program 

[00:52:25] - Using the accumulated data to integrate an advertising model into their app

[00:56:33] - The biggest potential threats to Uber?s growing success 

Today, we are breaking down John Deere. With a history dating back almost two centuries, Deere has been a mainstay in the agriculture industry for generations. And despite its rich history as an incumbent, Deere is also on the leading edge of technology and innovation in ag-tech. To help break down John Deere, Zack Fuss is joined by Matt Coutts. Matt comes from a multi-generation family of farmers, and brings a unique ability to connect finance and farming. During our conversation, we discuss what the ag ecosystem looks like today, what drives farming economics, and why Deere holds such a strong competitive advantage that seems to only be growing. Please enjoy this breakdown of John Deere.

For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.

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This episode is brought to you by Quartr. With Quartr, you can access conference calls, investor presentations, transcripts, and earnings reports ? straight from your pocket. Quartr is 100% free and includes companies from 12 markets including the US, the UK, Canada, India, and all the Scandanavian countries. Quartr is available for both iOS and Android, so check out the app today.

-----

This episode is brought to you by Brex. Brex began as the first corporate card for startups and now offers a full financial stack built for scale. Get 10-20x higher credit limits, uncapped rewards, easy deposits and payments, and expense management all in one. Grow your business faster with Brex.

-----

Business Breakdowns is a property of Colossus, Inc. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.

Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.

Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss

Show Notes

[00:03:04] - [First question] - What Matt does as a farmer and where he spends his time

[00:03:54] - How big the global crop production and agriculture industry is 

[00:05:48] - Key considerations in production efficiency with such a large market

[00:08:15] - John Deere?s role in the global agriculture industry

[00:08:58] - Deere?s business model and how they generate revenue

[00:10:14] - What farmers tend to buy and how distribution works

[00:12:06] - How a farmer traditionally thinks about their business

[00:13:18] - Some of the large machine purchases that a farmer needs

[00:14:11] - What a combine does and its role in crop production

[00:14:53] - The landscape and types of family farms 

[00:15:57] - Whether or not farmers can earn above industry returns through any cycle

[00:18:18] - The role Deere plays in controlling variable costs to improve returns

[00:20:38] - The things Matt?s most focused on as a farmer and how Deere optimize outcomes

[00:22:48] - Brand loyalty and mixing and matching machines from different brands

[00:24:55] - What precision agriculture actually means

[00:27:55] - Overview of a harvest and how Deere equipment interacts with it

[00:31:16] - Unit economics and how their recurring relationship generates profit

[00:34:01] - Interpreting data, who owns the data, and digital agriculture analytics

[00:35:55] - What enables Deere to generate such large margins as an industrial manufacturer

[00:40:35] - Is Deere a higher-priced product than its competitors?

[00:41:16] - Recent acquisitions and what it says about their growth

[00:43:17] - The John Deere API and potential third party integration 

[00:44:28] - Will farmers even be physically operating machinery in the future?

[00:46:35] - Lessons learned as a builder and an investor from John Deere?s story 

Today, we are breaking down the cloud and SaaS trailblazer, Salesforce. Founded by Marc Benioff in 1999, Salesforce has grown rapidly to become the global leader in the $100 billion CRM market. The business has 150,000 customers, including 90% of the Fortune 500, and is currently valued north of $270 billion.

To break down Salesforce, Patrick O?Shaughnessy is joined by Matt Garratt, general partner at VC firm CRV and former head of Salesforce Ventures, where he led investments in companies like Snowflake, Twilio, and Zoom.

In our conversation, we discuss the attributes that make Marc Benioff special, how he pushed against convention to usher in a new era of cloud-based businesses, and ways in which he has built a world around Salesforce?s product lines. We also cover decision-making in the company, why its culture derives from the beaches of Hawaii, and how it?s transitioning from builder to buyer. Please enjoy this breakdown of Salesforce.

For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.

-----

This episode is brought to you by Quartr. With Quartr, you can access conference calls, investor presentations, transcripts, and earnings reports ? straight from your pocket. Quartr is 100% free and includes companies from 12 markets including the US, the UK, Canada, India, and all the Scandanavian countries. Quartr is available for both iOS and Android, so check out the app today.

-----

This episode is brought to you by Brex. Brex began as the first corporate card for startups and now offers a full financial stack built for scale. Get 10-20x higher credit limits, uncapped rewards, easy deposits and payments, and expense management all in one. Grow your business faster with Brex.

-----

Business Breakdowns is a property of Colossus, Inc. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.

Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.

Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss

Show Notes

[00:03:14] - [First question] - What Salesforce is and what it does

[00:04:55] - The scale and revenue scope of the business today

[00:06:13] - Driving variables of revenue growth and their current model

[00:09:10] - The unique founding story and becoming the first SaaS company

[00:11:06] - What about Marc Benioff made him so compelling and successful

[00:14:20] - An experience in his time at Salesforce that changed and moved him

[00:15:16] - The first buyer and what they were served as a product

[00:17:07] - Overview of Salesforce as a software platform

[00:19:58] - The core database that powers their infrastructure and user experience

[00:21:26] - Transitioning from being mostly a builder to largely a buyer and acquirer

[00:23:46] - Why building trust early on is so crucial when doing something new

[00:25:45] - What is Dreamforce, and how it?s evolved over time

[00:27:24] - The connection between Hawaiian culture and Salesforce

[00:29:14] - How they continue to market and acquire customers and spend so much on marketing

[00:30:44] - Their current addressable market and plans to expand into those areas

[00:35:05] - How priorities are set, picked, and followed through on 

[00:35:58] - What is V2MOM and the role it plays with the executive team 

[00:38:08] - The philosophy behind Salesforce Ventures and the function it serves

[00:40:27] - Potential risks the business faces going forward

[00:44:24] - Key characteristics that separate Salesforce from other businesses out there

[00:46:47] - Lessons for investors and builders when studying Salesforce?s story

Today, we are breaking down Solana. Founded in 2017 by an ex-wireless engineer from Qualcomm, Solana is a layer one blockchain like Bitcoin and Ethereum that has been built to process transactions as quickly and cheaply as possible. Where Bitcoin can process about ten transactions per second and Ethereum around 30, Solana can handle over 60,000 transactions per second, and it can do so at a fraction of the cost. Unsurprisingly, Solana?s network has attracted huge interest from developers, users, and investors alike over the last year.

In this breakdown, we cover the killer app for decentralized ledgers, the history of on-chain transaction speeds, and the fundamental difference between software and blockchain technology. We then delve into the architecture that has enabled Solana?s speed unlock and look at the platform?s potential to become a huge piece of the world?s financial infrastructure.

To help me break down Solana, I?m joined by Kyle Samani, co-founder and managing partner at Multicoin Capital.

For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.

-----

This episode is brought to you by Tegus. We created Business Breakdowns to uncover the lessons and frameworks behind every business, and that's what makes Tegus our perfect launch partner. Much of the foundational prep for these episodes starts with research on the Tegus platform.

With Tegus, you can learn everything you?d want to know about a company in an on-demand digital platform. Investors share their expert calls, allowing others to instantly access more than 20,000 calls on Coinbase, Hinge Health, Farfetch, or almost any company of interest. All you have to do is log in. If you're ready to go deeper on any company and you appreciate the value of primary research, head to tegus.co/breakdowns for a free trial.

-----

Business Breakdowns is a property of Colossus, Inc. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.

Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.

Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss

Show Notes

[00:02:49] - [First question] - How he views the opportunity set of blockchain technology  

[00:06:37] - The evolution of transactions-per-second from Bitcoin to new cryptocurrencies

[00:13:43] - Why does decentralized finance matter versus centralized finance

[00:18:34] - What is Solana and the scope and scale of it today

[00:20:31] - Reintroducing costs with DeFi software compared to prior zero marginal costs

[00:24:13] - How to go from 30 transactions a second to 30,000 and make the system work

[00:31:03] - What about Solana?s design code that allows it to  take advantage of parallelism

[00:33:05] - Differences between proof of history and proof of work

[00:39:05] - The tokenomics of Solana, their distribution setup, and what owning SOL offers

[00:46:24] - What Solana?s blockchain will enable for application development

[00:55:15] - The emerging adoption and creation of social tokens  

[00:57:40] - Thoughts on regulation and security in regards to Solana

[00:59:41] - Competition that Solana may face and layer one blockchains in general

[01:04:54] - What has him most excited about Solana and the landscape writ large

[01:08:11] - Lessons for builders and investors when studying the Solana story

[01:11:23] - Leaning into your differences and the team behind the project 

Today, we are breaking down Taboola, a company you may not know but one you?ve definitely seen. When you read articles on CNBC, Bloomberg, or the Independent, Taboola powers the sidebar and banner recommendations for what you should read next.

The company works with publishers and advertisers to help readers discover what?s new and interesting. Founded in 2007, Taboola recently went public and is now the leading recommendation engine for the open web, serving over 500 million users a day.

To break down the business, host Jesse Pujji is joined by Taboola?s founder and CEO, Adam Singolda. During our conversation, we cover the ways in which Taboola?s value prop differs from Facebook and Google, unpack the advertising concepts of Yield and ex-TAC, and dive into Adam?s vision for Taboola to recommend anything, anywhere.

Please enjoy this breakdown of Taboola.

For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.

-----

This episode is brought to you by Tegus. We created Business Breakdowns to uncover the lessons and frameworks behind every business, and that's what makes Tegus our perfect launch partner. Much of the foundational prep for these episodes starts with research on the Tegus platform.

With Tegus, you can learn everything you?d want to know about a company in an on-demand digital platform. Investors share their expert calls, allowing others to instantly access more than 20,000 calls on Coinbase, Hinge Health, Farfetch, or almost any company of interest. All you have to do is log in. If you're ready to go deeper on any company and you appreciate the value of primary research, head to tegus.co/breakdowns for a free trial.

-----

Business Breakdowns is a property of Colossus, Inc. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.

Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.

Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss

Show Notes

[00:02:48] - [First question] - What is Taboola? 

[00:03:35] - The scale of the business, revenue, impressions, and payouts to date

[00:05:18] - What problem Taboola solves for advertisers and their user experience

[00:07:22] - Comparing the advertising differences between Taboola and Facebook

[00:09:15] - Why a publisher would choose Taboola and what they solve for them

[00:11:06] - Reasons why advertising through Taboola is desirable

[00:14:41] - The founding insight and early struggles of building Taboola

[00:18:42] - Important metrics when evaluating their business and what generates revenue

[00:20:32] - What they offer to both sides of the marketplace to grow their business

[00:22:26] - Defining yield and how they position their rates

[00:25:38] - Things they do to improve the value proposition for clients

[00:29:29] - What allows Taboola to grow and remain competitive 

[00:30:37] - Prioritizing sales and marketing spend to ensure their long term success

[00:32:24] - Positive and negative factors in relation to scaling a business like this

[00:34:11] - Reasons why they wanted to merge with Outbrain

[00:35:16] - Their latest deal with Connexity and his thoughts on M&A for the future

[00:37:50] - The top things that would maximize their success over the next decade

[00:40:05] - Cookies, privacy, and the role they might play in years to come

[00:42:09] - The biggest threats and risks for the future of Taboola

[00:44:14] - The competitive landscape of advertising and content placement

[00:46:09] - Lessons for builders and investors when studying Taboola?s story  

[00:47:47] - Where to go if you want to learn more about Taboola

Today, we are breaking down Sky Mavis, the company behind the NFT-based game, Axie Infinity. Built by a team with a long history in gaming, Axie Infinity was launched in 2018 with the idea that a blockchain-based ?play-to-earn? model could create more aligned incentives between game creators and game players long-term.

Axie is one of the most incredible examples of speed-to-scale I?ve seen, with the game reporting $100,000 of revenue in January, over $190,000,000 of revenue in July, and over $360,000,000 in August.

In this breakdown, we cover the basics of Axie and how gameplay is similar to classics such as Pokemon. We dive into the economic model, how Sky Mavis generates revenue, how players earn money, and how this is all enabled by the blockchain. We discuss the importance of gameplay vs. the economic ecosystem and examine the sustainability of Axie from various angles.

To help break down Sky Mavis, Patrick O?Shaughnessy is joined by Aleksander Larsen, co-founder of Sky Mavis, and Stephen McKeon, Partner at Collab+Currency, an early investor in Sky Mavis.

For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.

-----

This episode is brought to you by Tegus. We created Business Breakdowns to uncover the lessons and frameworks behind every business, and that's what makes Tegus our perfect launch partner. Much of the foundational prep for these episodes starts with research on the Tegus platform.

With Tegus, you can learn everything you?d want to know about a company in an on-demand digital platform. Investors share their expert calls, allowing others to instantly access more than 20,000 calls on Coinbase, Hinge Health, Farfetch, or almost any company of interest. All you have to do is log in. If you're ready to go deeper on any company and you appreciate the value of primary research, head to tegus.co/breakdowns for a free trial.

-----

Business Breakdowns is a property of Colossus, Inc. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.

Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.

Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss

Show Notes

[00:03:00] - [First question] - How many people are playing Axie and how quickly it?s grown

[00:04:03] - What play-to-earn means and how money flows through a digital ecosystem

[00:05:03] - A basic overview of the user experience of playing Axie Infinity 

[00:07:23] - What an Axie is, its features, how they?re generated, and how many exist

[00:09:32] - Monster NFTs and the fungible SLP in-game currency

[00:15:00] - Converting the SLP to fiat currency and how low-friction the process is

[00:16:40] - Are people actually playing the game or just speculating on the game?s assets

[00:23:14] - The AXS governance token, how to earn it, and what it enables for token holders

[00:27:08] - What the opportunity set looks like for Axie from an investor standpoint

[00:29:39] - Finding a balance between offering digital work and creating a player incentive 

[00:33:29] - Mystic Axie and what they are generally worth today

[00:34:42] - How much the community will have to expand and build on top of the game

[00:38:48] - Overview of the plots of land in the Axie metaverse and what they might unlock 

[00:41:57] - What a sidechain is and how the Ronin wallet works 

[00:46:41] - Why what?s good for Ronin is also good for Ethereum

[00:48:53] - Defining a bridge and how it differs from an exchange

[00:50:24] - Lessons learned about good tokenomics and token design 

[00:55:04] - The biggest potential risks to the future of Axie Infinity and its growing popularity 

[00:57:13] - What an ideal future looks like for the metaverse and Axie infinity

[01:01:09] - How the world is changing and why that unlocks value for play-to-earn games

[01:04:03] - Asset ownership inversion and how big this could become in the future

[01:05:24] - The most surprising things that have happened since joining Axie Infinity

[01:06:55] - How he thinks about assessing new opportunities in crypto and the metaverse

[01:09:19] - Where you can go to learn more about Axie and dabble in the game

Today, we will be breaking down Datadog. If you've ever used Control-Alt-Delete to force quit a frozen application - you've experienced the Activity Monitor on your own computer. Datadog is that Activity Monitor for all of a business?s systems across its apps, tools, databases, and servers. It is a SaaS-based monitoring platform that gives enterprise IT teams real-time visibility into the performance of their entire software stack. Datadog was founded in 2010 and has repeatedly out-developed competitors to build a comprehensive IT monitoring platform. Today, Datadog?s market cap is over $40 billion dollars.

To break down Datadog, host Jesse Pujji is joined by Peter Offringa, the author of Software Stack Investing. During our conversation, we discuss Datadog?s unique product development cadence, how they?re able to grow their top line at 60% a year while staying profitable, and why Web3 might be their biggest competitive threat.

I hope you enjoy this breakdown of Datadog.

For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.

-----

This episode is brought to you by Tegus. We created Business Breakdowns to uncover the lessons and frameworks behind every business, and that's what makes Tegus our perfect launch partner. Much of the foundational prep for these episodes starts with research on the Tegus platform.

With Tegus, you can learn everything you?d want to know about a company in an on-demand digital platform. Investors share their expert calls, allowing others to instantly access more than 15,000 calls on Coinbase, Hinge Health, Farfetch, or almost any company of interest. All you have to do is log in. If you're ready to go deeper on any company and you appreciate the value of primary research, head to tegus.co/breakdowns for a free trial.

-----

Business Breakdowns is a property of Colossus, Inc. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.

Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.

Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss

Show Notes

[00:02:54] - [First question] - What Datadog does and their current scale

[00:03:58] - Their customer base today and noteworthy growth metrics 

[00:05:21] - The basics of a tech stack business and Datadog?s approach to it

[00:07:31] - What problem Datadog solves and how they came across it 

[00:08:26] - An overview of a typical backend infrastructure and how Datadog improves it

[00:11:52] - Who Datadog?s actual customer is

[00:13:21] - The founding story and what fuelled their rapid growth

[00:15:58] - What the market looks like today and who their competitors are 

[00:18:35] - Scaling the business so quickly and how they measure it

[00:21:07] - Their unique and highly successful marketing approach

[00:24:06] - Parallels between the user experiences of Datadog and Twilio

[00:26:00] - The gross margin profile and how it?s trending

[00:26:58] - Dollar revenue retention and how pricing unlocks sales and marketing spend

[00:29:18] - How Datadog?s pricing stacks up against their competitors

[00:30:41] - The advantages of using Datadog versus AWS and pre-provided solutions

[00:33:49] - Their M&A strategy and what makes it unique

[00:36:46] - What would have to go right for their market cap to double over the next decade

[00:39:12] - Potential risks or threats to Datadog?s potential success

[00:41:28] - Lessons for builders when studying Datadog?s story

[00:42:52] - Lessons for investors to take away from Datadog?s success 

[00:43:57] - Where to learn more about Datadog 

Today, we will break down Wyndham Hotels, the world?s largest and most diverse hotel franchisor with more than 9,000 hotels across 20 brands in over 80 countries.

Wyndham is a brilliant example of a ubiquitous business that often goes unnoticed. In this breakdown, we?ll start by looking at just how vast Wyndham?s portfolio of hotels and brands is, how the Highway Act of 1956 played an important role in developing that scale, and explore the economics of hotel ownership, both from the franchisee and franchisor?s perspective.

Then we?ll dive into Wyndham?s growth algorithm, the factors that make the business resilient to external shocks, and the ways in which green programs are helping to drive higher cash-on-cash returns for franchisees.

To help break down Wyndham Hotels, host Patrick O?Shaughnessy is joined by Lauren Taylor Wolfe, co-founder and Managing Partner of Impactive Capital and a Wyndham shareholder.

For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.

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Show Notes

[00:02:48] - [First question] - What Wyndham is and the scope of their hotel franchise

[00:04:17] - Defining what select-service hotels are compared to traditional ones 

[00:04:49] - An overview of what the hotel business is and their important levers 

[00:06:44] - Why Wyndham?s business model is so advantageous

[00:09:22] - Franchisee expectations and the pros of franchising the brand 

[00:12:22] - Whether or not Wyndham participates in loan and debt generation

[00:13:36] - Overview of their award-winning loyalty program

[00:17:36] - Customer acquisition for their loyalty program and how it drives spending

[00:19:16] - Wyndham?s corporate history and how it affects them today

[00:22:17] - Driving growth beyond their current real-estate footprint

[00:24:30] - Possible positive or negative nonlinear events that could affect them

[00:26:09] - Overview of the sales functions inside of their business

[00:28:05] - Changes in hotel use trends as of late

[00:30:05] - What hotel management means as a business

[00:33:05] - Capital allocation and abundant free cash flow without much need for it

[00:35:48] - Considering the ESG implications when evaluating the hotel industry

[00:38:17] - Aspects of the business that make it both resilient and competitive

[00:42:14] - Big variables that could cause Wyndham to fail

[00:44:10] - What it is about Wyndham?s economic opportunity that is favorable for franchisees

[00:46:19] - Unit economics and expenses at the individual hotel level

[00:47:40] - Lessons learned about brand, investing in a brand, and identifying new brands to acquire

[00:50:22] - What she?s learned most as an investor working with Wyndham

[00:52:19] - Attractive opportunities Hilton could offer that Wyndham couldn?t

[00:53:46] - What she?s learned about being a strong operator while working at Wyndham