Business Breakdowns

This is Matt Reustle. Today, we are breaking down Mineral Resources. Even if you've had some bad experiences investing in commodities, I would not skip over this one so quickly. 

Fraser Christie, investor at TDM Growth Partners, joined me to talk about how MinRes has taken a different approach to the historically cyclical boom-bust industry. We walk through the increasingly vertical integration of Mineral Resources' business and we get into some of the thoughtful capital allocation that has taken place through this history. It's a very fun business with a very fun founder who still remains a key player. Please enjoy this breakdown of Mineral Resources.

Register for the Business Breakdowns x Founders Conference.

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 Public: Invest in stocks, bonds, options, crypto, and more in one place. A High-Yield Cash Account is a secondary brokerage account with Public Investing, member FINRA/SIPC. Funds from this account are automatically deposited into partner banks where they earn a variable interest and are eligible for FDIC insurance. Neither Public Investing nor any of its affiliates is a bank. US only. Learn more at public.com/disclosures/high-yield-account.

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

Follow us on Twitter: @JoinColossus | @ReustleMatt | @domcooke | @zbfuss 

Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com).

Show Notes

(00:00:00) Welcome to Business Breakdowns

(00:05:58) Deep Dive into Mineral Resources' Business Segments

(00:07:26) Founder Chris Ellison's Entrepreneurial Journey

(00:10:22) Overview of the Mining Market and Its Competitive Landscape

(00:16:43) Mineral Resources' Financial Model and Capital Allocation Strategy

(00:27:59) Intercompany Innovations and Employee Welfare

(00:36:03) The Time Line for Recouping An Investment in Mining

(00:40:11) Mineral Resources as a M&A Target

(00:43:56) Main Risks and Challenges

(00:49:38) Lessons From Breaking Down Mineral Resources 

Today, we are breaking down Motorola Solutions. This breakdown is a fascinating story of brand versus business, as Motorola was a mainstay on Interbrands' Top 100 Brand list for most of the 2000s. 

I'm joined by Portfolio Manager, Joseph Shaposhnik. We discuss how Motorola achieved stealth success over the past 15 years while Apple overtook its iconic flip phone. We also cover how CEO Greg Brown worked with two, and arguably three, activist investors to focus on mission-critical communications, a very specific customer segment, and a more blended hardware-software model. It's a truly great example of a business finding a niche and executing to a T. Please enjoy this Breakdown on Motorola.

Register for the Business Breakdowns x Founders Conference.

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 Public: Invest in stocks, bonds, options, crypto, and more in one place. A High-Yield Cash Account is a secondary brokerage account with Public Investing, member FINRA/SIPC. Funds from this account are automatically deposited into partner banks where they earn a variable interest and are eligible for FDIC insurance. Neither Public Investing nor any of its affiliates is a bank. US only. Learn more at public.com/disclosures/high-yield-account.

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

Follow us on Twitter: @JoinColossus | @ReustleMatt | @domcooke | @zbfuss 

Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com).

Show Notes

(00:00:00) Welcome to Business Breakdowns

(00:05:35) The Fall and Rise of Motorola Solutions

(00:07:05) Greg Brown's Strategic Leadership

(00:12:26) Motorola's Business Model and Market Position

(00:16:27) Land Mobile Radio Networks Explained

(00:23:26) Video Security and Command Centers

(00:28:53) Financial Performance and Growth Strategy

(00:33:12) Motorola’s Strong Pricing Power

(00:37:27) Saturating The Customer Through Acquisitions

(00:41:38) Competitive Landscape and Future Prospects

(00:45:03) The Threat of Competition In Software

(00:50:23) Motorola as an Acquisition Target

(00:52:39) Lessons from Motorola Solutions

This is Zack Fuss. Today, we are breaking down the U.S. Marina Industry. In the U.S. there are more than 11,000 marinas, grossing over $6 billion in sales. 

Today, there is a 12 to 1 ratio of registered boats versus the supply of rentable wet slips and dry storage spaces. Zoning regulations lead to limited supply growth, which has led to a sustained backdrop of strong, profitable growth for the industry. 

To break down the industry, I am joined by David Chesner, co-CEO of Grove Point Marinas, and Josh Koplewicz, managing partner of Thayer Street Partners. We discuss how Marinas are currently evolving from a largely local and independent model to one that is institutionalizing as an asset class and lowering the industry's cost of capital, helping to finance growth. And, to illustrate the unit economics, we cover the largest players in the space, including publicly traded Sun Communities’ Safe Harbor Marina business. Please enjoy this breakdown of the Marina Industry. 

Register for the Business Breakdowns x Founders Conference.

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 Public: Invest in stocks, bonds, options, crypto, and more in one place. A High-Yield Cash Account is a secondary brokerage account with Public Investing, member FINRA/SIPC. Funds from this account are automatically deposited into partner banks where they earn a variable interest and are eligible for FDIC insurance. Neither Public Investing nor any of its affiliates is a bank. US only. Learn more at public.com/disclosures/high-yield-account.

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

Follow us on Twitter: @JoinColossus | @ReustleMatt | @domcooke | @zbfuss 

Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com).

Show Notes

(00:00:00) Welcome to Business Breakdowns

(00:05:21) Overview of the Marina Industry

(00:08:00) Revenue and Margins in the Marina Business

(00:10:36) Operational Improvements and Best Practices

(00:12:54) Challenges in Marina Development

(00:14:10) Competitive Landscape and Market Players

(00:27:02) Growth Strategies and Financial Insights

(00:34:28) Risks and Resilience in the Marina Industry

(00:39:08) Lessons Learned from the Marina Industry

Today, we are breaking down the South Korean e-commerce giant Coupang. If we ran through the taxonomy of investor interests, this Coupang conversation checks many boxes on that list. It is a founder-owned and operated business, a business that went through a massive pivot years into existence, a business that's replicating the Amazon model to success, and a business with healthy debates on the TAM & financial trajectory going forward.

Our guest today is Drew Cohen from Speedwell Research. We want Business Breakdowns to be the most efficient way for you to learn about a company, so we pack that information as densely as possible into about an hour of each episode, but if you are itching for more on Coupang, check out Drew's full report at speedwellresearch.com. Please enjoy this Breakdown of Coupang.

Register for the Business Breakdowns x Founders Conference.

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 Public: Invest in stocks, bonds, options, crypto, and more in one place. A High-Yield Cash Account is a secondary brokerage account with Public Investing, member FINRA/SIPC. Funds from this account are automatically deposited into partner banks where they earn a variable interest and are eligible for FDIC insurance. Neither Public Investing nor any of its affiliates is a bank. US only. Learn more at public.com/disclosures/high-yield-account.

-----

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

Follow us on Twitter: @JoinColossus | @ReustleMatt | @domcooke | @zbfuss 

Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com).

Show Notes

(00:00:00) Welcome to Business Breakdowns

(00:04:52) An Overview of Coupang

(00:07:49) Coupang's Founder Story

(00:10:46) The Pivot to Amazon Model

(00:13:49) Coupang's Logistics and Delivery Innovations

(00:17:32) Coupang's Market Position and Competition

(00:25:24) Consumer Behavior and Market Dynamics

(00:34:15) Understanding Gross Margins and GMV

(00:36:48) Operating Leverage and Logistics Infrastructure

(00:38:06) Future Growth and Market Expansion

(00:41:30) Advertising and Brand Dynamics

(00:48:59) Competitive Landscape and Risks

(00:56:12) Valuation and Market Perception

(00:59:15) Key Lessons from Coupang's Success

This is Zack Fuss. Today we are breaking down Lifco, a Swedish conglomerate recognized amongst a group of notable Scandinavian serial acquirers. Lifco’s business focus is to acquire and develop market-leading niche companies that run independently and are largely self-funded business units. Carl Bennet, the current chairman, is the architect behind Lifco and was the former CEO of the famed Electrolux in the 1980s.

After acquiring a business out of Electrolux with a friend, Carl formed the group that is now today's Lifco. The roots of the business are in the medical sector, specifically dental, but have since grown into a diversified conglomerate as an acquirer of dental instruments, demolition equipment, and a wide array of specialized industrial businesses. 

I'm joined by Adnan Hadziefendic, a portfolio manager at REQ Capital. We discuss the company’s clear philosophy centered on constant long-term growth, a focus on profitability, and an intentionally decentralized organization. Please enjoy this breakdown of Lifco. 

Register for the Business Breakdowns x Founders Conference.

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 Public: Invest in stocks, bonds, options, crypto, and more in one place. A High-Yield Cash Account is a secondary brokerage account with Public Investing, member FINRA/SIPC. Funds from this account are automatically deposited into partner banks where they earn a variable interest and are eligible for FDIC insurance. Neither Public Investing nor any of its affiliates is a bank. US only. Learn more at public.com/disclosures/high-yield-account.

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

Follow us on Twitter: @JoinColossus | @ReustleMatt | @domcooke | @zbfuss 

Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com).

Show Notes

(00:00:00) Welcome to Business Breakdowns 

(00:05:27) Lifco's Business Model and History

(00:06:29) Core Segments of Lifco’s Business and Acquisition Strategy

(00:07:14) Carl Bennett's Role and Lifco's Evolution

(00:09:53) Lifco's Turnaround and Expanding Outside of Dental

(00:13:47) M&A Strategy and Integration

(00:16:53) Lifco Playbook for Post-Acquisition

(00:22:41) Decentralization as Paramount to the Lifco Culture 

(00:28:02) Aligning Incentives Across Acquisitions

(00:34:31) The Recent Leadership Transition

(00:38:56) Lifco’s Capital Allocation Strategy

(00:41:10) System Solutions and Future Growth

(00:47:37) Lessons from Breaking Down Lifco's

We have a special episode today, breaking down the CHIPS Act. We've covered the semiconductor space in depth on Business Breakdowns, but in this conversation, we go broader. We discuss the CHIPS Act, enacted by Congress in 2022, which aimed at boosting the US's semiconductor manufacturing capabilities to better compete with East Asia.

America had been dependent on that foreign manufacturing which created massive shortages, having implications across some of our most important resources and defense systems. The CHIPS Act itself provides just under $53 billion in subsidies for US companies and the goal is to build out these capabilities with leading edge logic and memory fabrication, advanced packaging facilities, and advanced capacity for current generation semiconductors. 

My guest today is Todd Fisher, CIO of the CHIPS Act office. We discuss some of the broader questions any investor might have about subsidized industry programs and how that will shift to the natural free market supply & demand dynamics that you would typically see in industries like semiconductors. It's truly a wide range of conversation and particularly timely with the recent funding announcements from the team. Please enjoy this breakdown of the CHIPS Act.

Register for the Business Breakdowns x Founders Conference.

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 Public: Invest in stocks, bonds, options, crypto, and more in one place. A High-Yield Cash Account is a secondary brokerage account with Public Investing, member FINRA/SIPC. Funds from this account are automatically deposited into partner banks where they earn a variable interest and are eligible for FDIC insurance. Neither Public Investing nor any of its affiliates is a bank. US only. Learn more at public.com/disclosures/high-yield-account.

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

Follow us on Twitter: @JoinColossus | @ReustleMatt | @domcooke | @zbfuss 

Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com).

Show Notes

(00:00:00) Welcome to Business Breakdowns

(00:05:23) Current State of the Semiconductor Supply Chain

(00:08:50) Funding and Incentives Breakdown

(00:11:23) Sustainability and Long-term Viability of Projects

(00:15:54) Building Economic and National Security

(00:18:25) Massive Undertakings in Fab Construction

(00:20:49) Vision for Success and Leading Edge Fabrication

(00:29:54) Workforce Development and Environmental Considerations

(00:36:55) Future Milestones and Program Success Metrics

(00:44:00) TSMC Moving Capacity Into the USA

(00:48:43) The Effect of the Upcoming Election on the CHIPS Act 

Today we are breaking down InterDigital, a really interesting business that sits completely under the radar for most investors.

InterDigital has the foundational patented technology that makes mobile phone communication and device-to-device communication possible. Everything revolving around 2G, 3G, 4G, 5G, the Internet of Things, and all of these devices in the world that communicate with one another is underpinned by InterDigital technology.

My guest is Jenny Wallace, co-founder and CIO of Summit Street Capital Management. We discuss InterDigital's five decades of history, what it takes to maintain its patent portfolio of 30,000 patents, and much more. Please enjoy this Breakdown on InterDigital. 

Register for the Business Breakdowns x Founders Conference.

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 Public: Invest in stocks, bonds, options, crypto, and more in one place. A High-Yield Cash Account is a secondary brokerage account with Public Investing, member FINRA/SIPC. Funds from this account are automatically deposited into partner banks where they earn a variable interest and are eligible for FDIC insurance. Neither Public Investing nor any of its affiliates is a bank. US only. Learn more at public.com/disclosures/high-yield-account.

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

Follow us on Twitter: @JoinColossus | @ReustleMatt | @domcooke | @zbfuss

Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com).

Show Notes

(00:00:00) Introduction to Business Breakdowns

(00:04:40) The History and Evolution of InterDigital

(00:05:49) InterDigital's Impact on Wireless Communication

(00:10:12) Exploring the Patent Portfolio and Business Model

(00:16:13) Technology as the DNA of the Company

(00:20:45) An Evolving Business Model and Maintaining 30,000 Patents

(00:25:00) InterDigital's Legal Battles and Financial Health

(00:31:12) Volatility in InterDigital’s Revenue Stream 

(00:37:21) R&D Spend as a Key Focus

(00:41:13) The Future of InterDigital: Opportunities and Challenges

(00:48:57) Investment Perspectives and Valuation Insights

(00:53:46) Lessons Learned From InterDigital

Today, we break down India's largest non-banking financial company, Bajaj Finance. Bajaj has a market cap of over $50 billion, which can largely be attributed to the significant growth over the past two decades. One of the headline numbers that immediately caught my attention from Bajaj is that the loan book compounded 40% from 2009 to 2022.

To break down Bajaj I'm joined by Saurabh Mukherjea, the founder and CIO of Marcellus Investment Managers. Saurabh previously joined us for a breakdown on Titan and returned to dive into this specialized lender.

Please note: Marcellus also holds shares in Microsoft and Amazon.

Register for the Business Breakdowns x Founders Conference.

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, where we're changing the game in investment research. Step away from outdated, inefficient methods and into the future with our platform, proudly hosting over 100,000 transcripts – with over 25,000 transcripts added just this year alone. Our platform grows eight times faster and adds twice as much monthly content as our competitors, putting us at the forefront of the industry. Plus, with 75% of private market transcripts available exclusively on Tegus, we offer insights you simply can't find elsewhere. See the difference a vast, quality-driven transcript library makes. Unlock your free trial at tegus.com/patrick.

This episode is brought to you by Public: Invest in stocks, bonds, options, crypto, and more in one place. A High-Yield Cash Account is a secondary brokerage account with Public Investing, member FINRA/SIPC. Funds from this account are automatically deposited into partner banks where they earn a variable interest and are eligible for FDIC insurance. Neither Public Investing nor any of its affiliates is a bank. US only. Learn more at public.com/disclosures/high-yield-account.

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

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

Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com).

Show Notes

(00:00:00) Welcome to Business Breakdowns

(00:06:00) The Innovative Lending Model of Bajaj Finance

(00:10:18) Origins and Evolution of Bajaj Finance

(00:19:33) The Competitive Edge: Technology and Culture at Bajaj

(00:27:01) Underwriting and Risk Management Strategies

(00:29:26) Exploring Bajaj Mall's Competitive Edge

(00:32:24) Geographical Expansion and Market Adaptation

(00:33:23) Leveraging Mobile Data for Digital Transformation

(00:38:12) Financial Model and Profitability Analysis

(00:40:27) Customer Retention and Business Segmentation

(00:43:23) Strategic Capital Allocation and Growth Plans

(00:48:10) Navigating Regulatory Challenges and Future Risks

(00:56:14) Key Lessons from Bajaj Finance

Welcome back for part two of this business breakdown on the private credit markets. I am now joined by Josh Clarkson, managing director at Prosek Partners. 

Our discussion with Armen was really focused on the supply & demand dynamics of private credit, where the public markets & regulatory markets have played a role, that certainty and speed of getting deals done, and how that has proved to be an advantage for private credit versus traditional solutions.

In our conversation with Josh, we transition into some broader takeaways, the history of the private credit markets, and some of the wrappers and what they have meant to the private credit markets. You will often hear about business development companies (BDCs), and we get into exactly how they are differentiated from traditional solutions. We also cover differentiation within that own subsegment, the public BDCs versus the private BDCs, what has happened in times of stress, what the fundraising environment has been like, and the future market outlook. Please enjoy part two of our breakdown on private credit.

Register for the Business Breakdowns x Founders Conference.

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 Public: Invest in stocks, bonds, options, crypto, and more in one place. A High-Yield Cash Account is a secondary brokerage account with Public Investing, member FINRA/SIPC. Funds from this account are automatically deposited into partner banks where they earn a variable interest and are eligible for FDIC insurance. Neither Public Investing nor any of its affiliates is a bank. US only. Learn more at public.com/disclosures/high-yield-account.

This episode is brought to you by Tegus, where we're changing the game in investment research. Step away from outdated, inefficient methods and into the future with our platform, proudly hosting over 100,000 transcripts – with over 25,000 transcripts added just this year alone. Our platform grows eight times faster and adds twice as much monthly content as our competitors, putting us at the forefront of the industry. Plus, with 75% of private market transcripts available exclusively on Tegus, we offer insights you simply can't find elsewhere. See the difference a vast, quality-driven transcript library makes. Unlock your free trial at tegus.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 | @zbfuss | @ReustleMatt | @domcooke

Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com).

Show Notes

(00:00:00) Welcome to Business Breakdowns

(00:05:32) Deep Dive into Private Credit Markets: Part Two

(00:06:57) Exploring the Competitive and Collaborative Dynamics of Banks and Private Credit Funds

(00:10:41) The Mechanics of Leverage in Private Credit Funds

(00:12:10) The Evolution of Business Development Companies (BDCs)

(00:19:34) Sector-Specific Strategies in Private Credit

(00:24:48) Historical Context: Life Insurance Companies as Original Credit Providers

(00:26:19) The Financial Crisis: A Turning Point for Private Credit

(00:28:39) The Role of BDCs in Today's Private Credit Landscape

(00:31:08) Differentiating Private Credit Strategies and Structures

(00:34:39) Navigating the Complex World of BDC Metrics and Valuations

(00:41:47) Adapting to Rising Rates: Strategies and Opportunities

(00:46:27) Looking Forward: Innovation and Growth in Private Credit

Today, we have a special two-part episode on private credit. In 2023, the global private credit market topped $2.1 trillion in assets and committed capital. Rather than making blanket statements like private credit is an emerging bubble, we wanted to explore the various segments of private credit and ask simple questions like “Where is this growth coming from?”, take a closer look at supply and demand, and capture some of the nuance that is so important to any analysis of these emerging markets. 

To start, we use the lens of a successful fund manager in the space, Armen Panossian, the co-CEO of Oaktree. Beyond Howard Mark's famous memos, Oaktree is a $192 billion asset manager known for its long history in credit. We hope these conversations give you a better sense of what's happening in the private credit ecosystem, the difference between strategies and wrappers, the demand for private credit solutions, how regulations have impacted this market, and much more. Please enjoy this breakdown on private credit. 

Register for the Business Breakdowns x Founders Conference.

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 Public: Invest in stocks, bonds, options, crypto, and more in one place. A High-Yield Cash Account is a secondary brokerage account with Public Investing, member FINRA/SIPC. Funds from this account are automatically deposited into partner banks where they earn a variable interest and are eligible for FDIC insurance. Neither Public Investing nor any of its affiliates is a bank. US only. Learn more at public.com/disclosures/high-yield-account.

This episode is brought to you by Tegus, where we're changing the game in investment research. Step away from outdated, inefficient methods and into the future with our platform, proudly hosting over 100,000 transcripts – with over 25,000 transcripts added just this year alone. Our platform grows eight times faster and adds twice as much monthly content as our competitors, putting us at the forefront of the industry. Plus, with 75% of private market transcripts available exclusively on Tegus, we offer insights you simply can't find elsewhere. See the difference a vast, quality-driven transcript library makes. Unlock your free trial at tegus.com/patrick.

-----

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

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

Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com).

Show Notes

(00:00:00) - Welcome to Business Breakdowns

(00:06:32) - Deep Dive into Private Credit: A Growing Market

(00:08:47) - Exploring the Dynamics of Supply and Demand in Private Credit

(00:11:38) - The Evolution of Private Credit Since the Global Financial Crisis

(00:15:58) - The Role of Private Equity and Banks in Private Credit

(00:19:33) - Building a Sustainable Advantage in Private Credit Strategies

(00:24:02) - Innovative Financing: The Case of Life Sciences Lending

(00:27:53) - Identifying New Opportunities: Infrastructure Lending and Rescue Financing

(00:30:40) - The Importance of Fund Size in Private Credit Strategies

(00:33:02) - Oaktree's Approach to Private Credit Products

(00:36:55) - Investment Strategy and Allocation Across Funds

(00:39:42) - Risk Management and Restructuring Expertise in Private Credit

(00:42:19) - Navigating the Secondary Market for Private Loans

(00:44:06) - Evolving Landscape of the Distressed Debt Market

(00:47:43) - Impact of COVID on Private Credit Valuations

(00:51:46) - Oaktree and Brookfield: A Strategic Partnership

(00:53:33) - Future Considerations: Rates, Elections, and Economic Implications

Today, we are breaking down British American Tobacco. Regardless of your views on tobacco as a product, the market is one of the oldest in the world. My guest for today is Evan Tindall, co-founder and CIO of Bireme Capital, and he helps us cover how the tobacco market has evolved.

We go way back in time, discussing how the product itself has evolved from smoking pipes to cigarettes to what we're seeing today - the nicotine pouch market and all the craze around it. We also cover how you evaluate a company where the market outlook is so uncertain. Please enjoy this breakdown of British American tobacco.

Register for the Business Breakdowns x Founders Conference.

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 Public: invest in stocks, bonds, options, crypto, and more in one place. A High-Yield Cash Account is a secondary brokerage account with Public Investing, member FINRA/SIPC. Funds from this account are automatically deposited into partner banks where they earn a variable interest and are eligible for FDIC insurance. Neither Public Investing nor any of its affiliates is a bank. US only. Learn more at public.com/disclosures/high-yield-account.

This episode is brought to you by Tegus, the only investment research platform built for the investor. With traditional research vendors, the diligence process is slow, fragmented, and expensive. That leaves investors competing on how well they can aggregate data — not on their unique ability to analyze insights and make great investment decisions. Tegus offers an end-to-end platform with all the data you need to get up to speed on a company or market: up-to-the-minute financials, customizable models, management and culture checks, and, of course, our vast and growing library of expert call transcripts. Tegus is changing the world of expert research. Learn more and get your free trial at tegus.com/patrick.

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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 | @zbfuss | @ReustleMatt | @domcooke

Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com).

Show Notes

(00:00:00) Welcome to Business Breakdowns

(00:05:18) The Rich History of Tobacco and British American Tobacco

(00:10:25) The Evolution of Tobacco Products and Market Dynamics

(00:13:46) Regulatory Landscape and Its Impact on Tobacco Industry

(00:16:04) The Rise of Next-Generation Tobacco Products

(00:18:44) Market Trends and the Future of Tobacco Consumption

(00:28:57) Challenges and Opportunities in the Tobacco Industry

(00:31:34) Investment Perspectives and the Future of British American Tobacco

(00:36:07) Investors Shying Away From Owning Tobacco Companies

(00:42:32) Effects of The Vaping Phenomenon

(00:44:29) Lessons Learned From British American Tobacco

Today, we cover the industrial conglomerate AMETEK. This is one of eight companies that Mark Leonard and his team at Constellation Software studied as they built their own empire. And it's one well worthy of a discussion as you'll hear. 

To break down AMETEK, I'm joined by Nael Fakhry, Co-CIO of the Osterweis Capital Management Growth and Income Strategy. Nael has spent a significant amount of time around AMETEK from the early 2000s until today. Please enjoy this breakdown on AMETEK.

Listen to Mitch Rales talk about Danaher on Art of Investing.

Interested in hiring from the Colossus Community? Click here.

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 Public: Invest in stocks, bonds, options, crypto, and more in one place. A High-Yield Cash Account is a secondary brokerage account with Public Investing, member FINRA/SIPC. Funds from this account are automatically deposited into partner banks where they earn a variable interest and are eligible for FDIC insurance. Neither Public Investing nor any of its affiliates is a bank. US only. Learn more at public.com/disclosures/high-yield-account.

This episode is brought to you by Tegus, the only investment research platform built for the investor. With traditional research vendors, the diligence process is slow, fragmented, and expensive. That leaves investors competing on how well they can aggregate data — not on their unique ability to analyze insights and make great investment decisions. Tegus offers an end-to-end platform with all the data you need to get up to speed on a company or market: up-to-the-minute financials, customizable models, management and culture checks, and, of course, our vast and growing library of expert call transcripts. Tegus is changing the world of expert research. Learn more and get your free trial at tegus.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 | @zbfuss | @ReustleMatt | @domcooke

Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com).

Show Notes

(00:00:00) Partners

(00:01:40) Welcome to Business Breakdowns

(00:03:52) An Overview of Ametek

(00:05:17) Ametek's Diverse Product Range 

(00:12:09) Ametek’s history: From Bankruptcy to Industrial Dominance

(00:21:22) Ametek's Growth Model: Innovation, Acquisitions, and Global Expansion

(00:26:23) Understanding Ametek's Finances

(00:30:37) Exploring Revenue Growth and Margin Expansion

(00:31:10) Incremental Margins and Cyclical Nature of the Business

(00:32:07) Operational Excellence

(00:34:35) Decentralized Approach

(00:36:21) The Role of Acquisitions

(00:37:33) Challenges and Risks

(00:39:45) Capital Allocation

(00:46:55) Evaluating Cyclical Business Performance and Resilience

(00:49:27) Dividend Policy

(00:50:44) Valuation and Growth Sustainability

(00:54:41) Key Lessons

Today, we're covering a behemoth in the research market, Gartner. Executives are willing to pay up to $30,000 for reports and $50,000+ for full subscriptions so they can access insights and data to help them make business decisions, purchasing decisions, and pivoting decisions. 

Our guest is Alvise Peggion, portfolio manager at Fairlight Asset Management. He helps us cover how Gartner grew into this at-scale player, how the research and sales model has been fine-tuned over time, and where the opportunity for growth is in the future. Please enjoy this Breakdown of Gartner. 

Interested in hiring from the Colossus Community? Click here.

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 Public: Invest in stocks, bonds, options, crypto, and more in one place. A High-Yield Cash Account is a secondary brokerage account with Public Investing, member FINRA/SIPC. Funds from this account are automatically deposited into partner banks where they earn a variable interest and are eligible for FDIC insurance. Neither Public Investing nor any of its affiliates is a bank. US only. Learn more at public.com/disclosures/high-yield-account.

This episode is brought to you by Tegus, the only investment research platform built for the investor. With traditional research vendors, the diligence process is slow, fragmented, and expensive. That leaves investors competing on how well they can aggregate data — not on their unique ability to analyze insights and make great investment decisions. Tegus offers an end-to-end platform with all the data you need to get up to speed on a company or market: up-to-the-minute financials, customizable models, management and culture checks, and, of course, our vast and growing library of expert call transcripts. Tegus is changing the world of expert research. Learn more and get your free trial at tegus.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 | @zbfuss | @ReustleMatt | @domcooke

Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com).

Show Notes

(00:00:00) Welcome to Business Breakdowns

(00:03:52) Deep Dive into Gartner's Business Model

(00:05:13) Understanding Gartner's Value Proposition

(00:08:40) Gartner's Competitive Landscape and Growth Strategy

(00:18:19) The Evolution of Gartner

(00:25:23) Gartner's Financial Model and Shareholder Value

(00:26:55) Understanding Gartner's Revenue and Pricing Strategy

(00:28:59) The Impact of the Pandemic on Gartner's Business Model

(00:30:52) Gartner's Resilience Through Economic Cycles

(00:34:38) The Value Proposition of Gartner to Executives

(00:36:33) Gartner's Competitive Edge and Market Position

(00:40:48) Sales Force Dynamics and Compensation Strategies

(00:42:35) Future Growth Strategies and M&A Considerations

(00:44:58) Future Growth and Strategic Focus

(00:47:09) Key Lessons from Gartner's Success

This is Matt Reustle. Today, we break down Winmark, a major player in the reseller economy. You're likely familiar with some of Winmark’s brands, like Plato's Closet or Play It Again Sports. Altogether, Winmark operates five brands through a franchising model. 

Our guest to break down Winmark is the current CEO, Brett Heffes. During our conversation, we discuss the broader reseller economy, the dynamics of managing those brands and different franchise brands, and how Winmark thinks about growth. In the back half of the conversation, I also made sure to talk to Brett about his thoughts on capital allocation, focusing the business, and yes, on investor communication. Please enjoy this breakdown of Winmark.

Interested in hiring from the Colossus Community? Click here.

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 Public. A High-Yield Cash Account is a secondary brokerage account with Public Investing, member FINRA/SIPC. Funds from this account are automatically deposited into partner banks where they earn a variable interest and are eligible for FDIC insurance. Neither Public Investing nor any of its affiliates is a bank. US only. Learn more at public.com/disclosures/high-yield-account.

This episode is brought to you by Tegus, the only investment research platform built for the investor. With traditional research vendors, the diligence process is slow, fragmented, and expensive. That leaves investors competing on how well they can aggregate data — not on their unique ability to analyze insights and make great investment decisions. Tegus offers an end-to-end platform with all the data you need to get up to speed on a company or market: up-to-the-minute financials, customizable models, management and culture checks, and, of course, our vast and growing library of expert call transcripts. Tegus is changing the world of expert research. Learn more and get your free trial at tegus.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 | @zbfuss | @ReustleMatt | @domcooke

Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com).

Show Notes

(00:00:00) Welcome to Business Breakdowns

(00:04:25) Exploring the Resale Market with Windmark's CEO

(00:06:34) The Mechanics of Winmark's Franchise Model

(00:07:10) Winmark's Unique Position In The Resale Economy

(00:12:21) Franchisee Support and Business Model Insights

(00:20:44) Growth Strategies and Franchisee Expansion Philosophy

(00:24:12) A Look At The Franchisee Agreement

(00:26:57) Traits of Successful Franchisees and Common Mistakes

(00:28:42) Effective Marketing Strategies for Franchisees

(00:30:45) The Importance of Viewing Stores as Legacy Assets

(00:32:33) Renewal Rates and Franchisee Health as Key Metrics

(00:35:27) Shifting Focus From Leasing Business to Core Resale Operations

(00:41:19) Capital Allocation and Shareholder Value

(00:45:51) A Unique Approach to Investor Relations

(00:47:31) Lessons Learned From Breaking Down Winmark

This is Matt Reustle. We are back in the world of aviation today, breaking down Embraer. Embraer has carved out an interesting niche, manufacturing regional jets, business jets, and military aircrafts.

Our guest is Richard Aboulafia, Managing Director at AeroDynamic Advisory and long-time aviation analyst and consultant. We break down how this aviation success story grew out of Brazil, the evolution of the regional jet market, the business jet market, & tap into military aircrafts, and, of course, we cover the opportunity presented by Boeing today. Please enjoy this breakdown of Embraer.

Interested in hiring from the Colossus Community? Click here.

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 Public. A High-Yield Cash Account is a secondary brokerage account with Public Investing, member FINRA/SIPC. Funds from this account are automatically deposited into partner banks where they earn a variable interest and are eligible for FDIC insurance. Neither Public Investing nor any of its affiliates is a bank. US only. Learn more at public.com/disclosures/high-yield-account.

This episode is brought to you by Tegus, the go-to destination for bold investing. The investment research platform trusted by 95% of the top 20 global private equity firms just got even better. Building on their solid reputation for expert insights, Tegus has expanded to become the first true all-in-one research platform. The new Tegus makes diligence faster, easier, and more convenient than ever before. Your Tegus license gives you access to over 70,000 expert transcripts, more than 4,000 fully drivable financial models, and exclusive datasets like company management checks, industry KPIs, hard-to-find non-GAAP data, and more. Tegus is the fastest way to learn about a public or private company and the most cost-effective way to conduct investment research — now all under one roof. Learn more and get your free trial at tegus.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 | @zbfuss | @ReustleMatt | @domcooke

Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com).

Show Notes

(00:00:00) Welcome to Business Breakdowns

(00:04:49) Embraer's Strategic Positioning in the Aerospace Market

(00:05:54) The Fascinating Origin Story of Embraer

(00:08:27) Key Figures Behind Embraer's Rise

(00:09:33) Embraer's Breakthrough in the U.S. Market

(00:10:25) The Evolution of Embraer's Business Model

(00:11:07) Comparing Embraer with Boeing and Airbus

(00:12:00) Dynamics of the Regional Jet Market

(00:15:44) The Future of Regional Aviation and Embraer's Role

(00:19:24) Exploring Embraer's Defense and Military Segment

(00:24:03) Embraer's Potential Amidst Boeing's Challenges

(00:28:48) The Intricacies of Jet Manufacturing and Sales

(00:30:15) Embraer's Competitive Landscape and Challenges

(00:31:03) Navigating Currency Volatility and Hedging Strategies

(00:32:01) Defense Sector Dynamics and Geopolitical Influences

(00:33:33) Aftermarket Revenue and Replacement Cycles

(00:37:05) Embraer's Strategic Aspirations and Boeing Partnership Dynamics

(00:43:58) Bombardier's Shift and Market Dynamics

(00:46:56) Assessing Risks and Opportunities for Embraer

(00:49:05) Key Lessons from Embraer

Today we’re replaying our Breakdown on Boeing, hosted by Zack Fuss. We recorded the episode in September before the mid-air blowout on a Boeing 737 operated by Alaska Airlines and the subsequent management changes, but it serves as a useful overview of the commercial airline industry writ large, how we got here, and what the future might look like. It also pairs well with the breakdown we’re releasing next about Brazilian-based airplane manufacturer Embraer. So look out for that, and in the meantime, enjoy this episode on Boeing.

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

-----

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 | @domcooke

Show Notes

(00:03:08) - (First question) - An introduction to the aerospace industry and Boeing's role in it

(00:06:11) - Boeing's business model today

(00:10:22) - How the aerospace industry settled into a duopoly

(00:13:00) - Costs associated with airplane manufacturing

(00:14:32) - The life expectancy of an aircraft

(00:15:16) - Dealing with the supply coordination problem

(00:18:09) - The Boeing and McDonnell Douglas merger

(00:21:21) - Problems Boeing has faced over the past five years

(00:21:14) - How leadership turnover has permeated through Boeing

(00:28:33) - Competitive headwinds Boeing can face

(00:33:40) - How Boeing will grow in the aerospace industry

(00:38:09) - Boeing's eVTOL strategy

(00:42:12) - What is impacting the profitability of the business

(00:44:08) - The biggest challenge facing the aerospace industry

(00:45:27) - Lessons learned from studying Boeing

This is Matt Reustle. Today we are breaking down Duolingo, the learning app built on language learning that is increasingly expanding into other territories like math and music. Founder Luis von Ahn is constantly looking for ways to make this accessible and free to use for people all around the world while simultaneously finding reasonable ways to monetize and create a profitable, longer-term business. Duolingo has adjusted its business model over time to ensure that this can happen.

My guest is Thaiha Nguyen from Baillie Gifford. You should assume that most of our guests own the businesses that they are covering on business breakdowns, but it's important to mention here that Thaiha works for Baillie Gifford's Positive Change Strategy. They invest not only for returns but also for the impact on society. 

Thaiha and I cover the fascinating founder story behind Duolingo, how Duolingo has succeeded in a largely offline market, how they've approached monetization, and how they plan to expand from here. Please enjoy this breakdown of Duolingo.

Interested in hiring from the Colossus Community? Click here.

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 Public. A High-Yield Cash Account is a secondary brokerage account with Public Investing, member FINRA/SIPC. Funds from this account are automatically deposited into partner banks where they earn a variable interest and are eligible for FDIC insurance. Neither Public Investing nor any of its affiliates is a bank. US only. Learn more at public.com/disclosures/high-yield-account.

This episode is brought to you by Tegus, the only investment research platform built for fundamental investors. Whether you’re trying to get up to speed on a new market or keep tabs on a portfolio company, Tegus is the end-to-end investment research platform you need. With Tegus, you can quickly understand a company's business model, drivers, benchmarks, and management quality. To monitor an entire market, download our pre-built financial models — or update your own with the latest data using Tegus’ new Excel Add-In. Tegus gives you all of this and more, all bundled into a single software license. Find out why 95% of the top 20 global private equity firms are Tegus customers. Learn more and get your free trial at tegus.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 | @zbfuss | @ReustleMatt | @domcooke

Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com).

Show Notes

(00:00:00) Welcome to Business Breakdowns

(00:05:09) The Fascinating Founder Story of Duolingo

(00:11:42) Exploring the Language Learning Market and Duolingo's Impact

(00:25:26) The Evolution From Translation Service to EdTech Leader

(00:28:04) How Duolingo Became a Freemium Giant

(00:32:17) Understanding Duolingo's Diverse User Base

(00:34:03) Why People Choose Paid Subscriptions Over Free Options

(00:36:54) Duolingo's Certification and Assessment Business

(00:39:57) Leveraging AI for Personalized Learning Experiences

(00:43:06) Exploring Duolingo's Financial Health and Growth Strategy

(00:46:37) The Future of Educational Offerings Beyond Language Learning

(00:48:20) Duolingo in the Classroom

(00:54:50) Navigating the Risks and Opportunities in EdTech

(00:57:58) Key Lessons from Duolingo

This is Zack Fuss. Today we are breaking down the Mitsubishi Corporation. In Japan, the business model of a trading company is prominent. The big five trading companies caught the attention of global investors in 2020, when Berkshire Hathaway disclosed a major stake in all of them: Mitsubishi, Mitsui, Itochu, Marubeni, and Sumitomo. Today's Berkshire stake is nearly 10%.  

I'm joined by Krishna Mohanraj, a Portfolio Manager at Diamond Hill Capital Management. In this episode, we discuss how the rich history of trading houses is steeped in Japanese culture and how each differs from one another. Krishna helps unravel the evolution of stakeholder priorities and how capital allocation policies have changed in the Japanese capital markets. Please enjoy this Breakdown of Mitsubishi Corporation. 

Interested in hiring from the Colossus Community? Click here.

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, the only investment research platform built for the investor. With traditional research vendors, the diligence process is slow, fragmented, and expensive. That leaves investors competing on how well they can aggregate data — not on their unique ability to analyze insights and make great investment decisions. Tegus offers an end-to-end platform with all the data you need to get up to speed on a company or market: up-to-the-minute financials, customizable models, management and culture checks, and, of course, our vast and growing library of expert call transcripts. Tegus is changing the world of expert research. Learn more and get your free trial at tegus.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 | @zbfuss | @ReustleMatt | @domcooke

Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com).

Show Notes

(00:00:00) Welcome to Business Breakdowns

(00:03:12) First Question - Understanding Mitsubishi's Global Impact and Business Model

(00:07:12) The Evolution of Mitsubishi and Japanese Trading Houses

(00:12:12) Mitsubishi's Investment Case and Market Position

(00:15:02) Comparing Mitsubishi with Other Japanese Trading Houses

(00:18:22) The Secret to Mitsubishi's Success and Global Network

(00:21:16) The Relevance of Berkshire’s Investment in the Japanese Trading Houses

(00:26:45) A Cultural Shift in the Orientation of Japanese Businesses Towards Their Shareholders 

(00:28:35) Valuing Mitsubishi

(00:31:05) Reinvesting in The Business And Reallocating Capital

(00:33:02) Mitsubishi’s Unique Management Dynamic

(00:38:54) Advantages of the Mitsubishi Group

(00:42:44) Lessons Learned from Mitsubishi

Today, we are breaking down a giant in the medical device space, Intuitive Surgical. Intuitive creates robotic products to assist minimally invasive surgeries. Its Da Vinci system is a pioneer in this area as it increases the efficiency & accuracy of surgery and reduces the burden on the surgeons themselves.

To break down Intuitive, I'm joined by Joseph Thomas, equity analyst at the global asset manager, Ninety One. Joe walks us through the history of surgical procedures, the emergence of robotics & surgery, and how Intuitive has emerged as the winner in this space. Please enjoy this breakdown on Intuitive Surgical.

Interested in hiring from the Colossus Community? Click here.

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, the only investment research platform built for the investor. With traditional research vendors, the diligence process is slow, fragmented, and expensive. That leaves investors competing on how well they can aggregate data — not on their unique ability to analyze insights and make great investment decisions. Tegus offers an end-to-end platform with all the data you need to get up to speed on a company or market: up-to-the-minute financials, customizable models, management and culture checks, and, of course, our vast and growing library of expert call transcripts. Tegus is changing the world of expert research. Learn more and get your free trial at tegus.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 | @zbfuss | @ReustleMatt | @domcooke

Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com).

Show Notes

(00:00:00) Welcome to Business Breakdowns

(00:02:55) First Question - The Evolution of Surgery: From Ancient Practices to Robot-Assisted

(00:08:14) Revolutionizing Surgery With the Da Vinci System

(00:11:23) Early Challenges and Regulatory Hurdles for Robotic Surgery

(00:14:59) The Future of Robotic Surgery

(00:22:40) Exploring the Business Model of Intuitive Surgical

(00:29:26) The Fifth Generation of the Da Vinci System

(00:37:26) Intuitive Surgical's Financial Overview

(00:41:16) Depreciation, Secondary Markets, and Economic Factors

(00:45:52) R&D Investments and Digital Innovations

(00:49:04) Navigating the Competitive Landscape

(00:55:04) Global Expansion and Market Opportunities

(00:57:27) Identifying Risks and Disruptions

(01:01:37) Key Lessons from Intuitive Surgical

This is Matt Reustle. Today, we are breaking down D.R. Horton, America’s largest homebuilder. Our guest is Ed Wachenheim, Founder of Greenhaven Associates. Ed takes us through an incredible discussion of D.R. Horton and homebuilders broadly, including how much has changed with this business model over the years.

Ed shares countless entertaining stories with the management teams and backs it all up with the numbers behind this business. It's an excellent conversation and an excellent glimpse at how someone like Ed approaches investments. Please enjoy this breakdown of D.R. Horton.

Ed’s Book: Common Stocks and Common Sense

Interested in hiring from the Colossus Community? Click here.

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, the go-to destination for bold investing. The investment research platform trusted by 95% of the top 20 global private equity firms just got even better. Building on their solid reputation for expert insights, Tegus has expanded to become the first true all-in-one research platform. The new Tegus makes diligence faster, easier, and more convenient than ever before. Your Tegus license gives you access to over 70,000 expert transcripts, more than 4,000 fully drivable financial models, and exclusive datasets like company management checks, industry KPIs, hard-to-find non-GAAP data, and more. Tegus is the fastest way to learn about a public or private company and the most cost-effective way to conduct investment research — now all under one roof. Learn more and get your free trial at tegus.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 | @zbfuss | @ReustleMatt | @domcooke

Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com).

Show Notes

(00:00:00) Welcome to Business Breakdowns

(00:04:33) First Question - Understanding the Home Building Business Model

(00:06:56) Evolution of the Home Building Industry

(00:09:41) The Impact of Land Ownership on Home Builders

(00:14:29) A Transformation of the Home Building Business Model

(00:17:35) Unique Characteristics of D.R. Horton

(00:24:16) The Geographic Concentration of Home Builders

(00:25:59) Current State and Future of the Home Building Industry

(00:33:44) The Resilience of the Home Building Industry

(00:34:56) Efficiencies and Margins in Home Building

(00:37:02) Forecasting Revenue Growth in the Home Building Industry

(00:40:04) Comparing D.R. Horton vs. NVR

(00:41:23) The Valuation Gap in the Home Building Industry

(00:57:05) The Shift Towards Institutional Ownership in Home Building

(00:58:13) Impact of Interest Rates on Home Building

(01:02:09) Lessons from Evaluating D.R. Horton

This is Matt Reustle. Today we are releasing a bonus episode of Breakdowns. While we typically love to cover businesses, this was an interesting opportunity to cover a special situation around a business. And in this case, the FTX bankruptcy. 

I was joined by Erin Broderick, Head of U.S. Cross-Border Restructuring & Insolvency at Eversheds Sutherland. Erin represents the Ad Hoc Committee of Non-U.S. customers for FTX, giving her a front-row and hands-on seat to everything that's unfolded at FTX since they entered Chapter 11 in November of 2022. We cover the basics around bankruptcy proceedings, using FTX as a lens in comparison to other restructurings. Please enjoy this bankruptcy breakdown on FTX. 

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, the go-to destination for bold investing. The investment research platform trusted by 95% of the top 20 global private equity firms just got even better. Building on their solid reputation for expert insights, Tegus has expanded to become the first true all-in-one research platform. The new Tegus makes diligence faster, easier, and more convenient than ever before. Your Tegus license gives you access to over 70,000 expert transcripts, more than 4,000 fully drivable financial models, and exclusive datasets like company management checks, industry KPIs, hard-to-find non-GAAP data, and more. Tegus is the fastest way to learn about a public or private company and the most cost-effective way to conduct investment research — now all under one roof. Learn more and get your free trial at tegus.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 | @zbfuss | @ReustleMatt | @domcooke

Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com).

Show Notes

(00:00:00) Welcome to Business Breakdowns

(00:03:31) First Question - Understanding Bankruptcy Proceedings

(00:04:15) The FTX Bankruptcy Case

(00:05:19) The Role of Chapter 11 and Chapter 7 in Bankruptcy

(00:05:52) The Challenges of Restructuring FTX

(00:08:18) The Role of Customers in the FTX Case

(00:12:16) Complexities of Tracing and Identifying Assets

(00:22:10) The Role of Secondary Hedge Funds

(00:27:05) The Issue of Dollarization of Claims

(00:32:35) The Process of Uncovering Assets

(00:36:39) Proposed Recovery Plan for FTX

(00:45:21) Upcoming Timeline For FTX To Exit Bankruptcy

This is Matt Reustle. Today, we are going into the land of oil and gas to break down CNX. The history of CNX dates back over 150 years. When it comes to energy production, the company's evolution has been very comparable to that of the United States. 

Our guest today is James Wilson, manager of The Huginn Fund at Phoenix Asset Management. We discuss the CNX backstory and how it took its coal roots to build this massive natural gas business. We also cover what differentiates CNX's management team and operational strategy relative to Exploration & Production (E&P) peers. Please enjoy this breakdown of CNX.

Colossus Recruiting - Find your next role or hire.

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, the only investment research platform built for fundamental investors. How hard do you work to get the insights you need to make a great investment decision? How many hours do you spend digging through public records and expert transcripts, or manually updating complex models? Investors should compete on their ability to analyze investments, not how well they aggregate data. That’s why Tegus offers a unified, end-to-end research platform that combines robust qualitative content sets, up-to-date financial data, management and culture checks, and more — all in the same easy-to-use, streamlined user experience. 95% of the top 20 global private equity firms use Tegus. Shouldn’t you? Learn more and get your free trial at tegus.com/patrick.

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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 | @zbfuss | @ReustleMatt | @domcooke

Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com).

Show Notes

(00:00:00) Welcome to Business Breakdowns

(00:02:32) First Question - The History and Evolution of CNX

(00:03:17) Understanding the Business Model 

(00:10:33) The Transition from Coal to Natural Gas in the US

(00:16:44) Gathering and Compressing Assets to Leverage Fixed Costs 

(00:21:45) Understanding the Unit Economics of CNX

(00:28:27) The Competitive Landscape in Drilling

(00:30:05) The Engineering Excellence and Leadership at CNX

(00:30:46) Exploring the Potential of the Utica Shale

(00:32:27) The Economics of Drilling

(00:34:27) Managing the Volatility of Natural Gas Prices

(00:41:37) The Impact of Regulation on the Drilling Industry

(00:44:59) The Role of Acquisitions in Expanding Reserves

(00:51:14) Lessons Learned From CNX

This is Matt Reustle. Today, we are breaking down Vulcan Materials. Vulcan is America's largest producer of construction aggregates. This includes all of the crushed rock, sand, and gravel, which gets used for the foundation of nearly everything around us. Think of all of the buildings, the roads, and the infrastructure that define the physical footprint of America.

To break down Vulcan, I am joined by Rob Hansen, Senior Analyst at Vontobel Asset Management. Rob shares what makes this relatively simple business so successful. We get into the dynamics of operating quarries, the logistics of moving rocks, and what is cyclical versus what is not. Please enjoy this breakdown of Vulcan Materials.

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 10 East. 10 East is a platform where qualified investors can co-invest on a deal-by-deal basis across private equity, private credit, real estate ventures, and other one-off opportunities typically unavailable through traditional channels. It's no surprise that founders, executives, and portfolio managers from leading investment firms are using 10 East to diversify their personal portfolios. Their level of sourcing and diligence is institutional grade. To learn more, check out 10east.com.

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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 | @zbfuss | @ReustleMatt | @domcooke

Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com).

Show Notes

(00:00:00) Welcome to Business Breakdowns

(00:03:15) First Question - Introduction to Vulcan Materials and the Construction Aggregates Market

(00:07:35) Exploring the History & Evolution of Vulcan Materials

(00:09:10) Geographical Distribution and Impact on the Quarry Market

(00:12:31) The Role of Logistics and Transportation in the Aggregates Industry

(00:17:42) The Impact of Vertical Integration and Technology on Vulcan's Operations

(00:19:26) Analyzing the Volume and Pricing Trends in The Aggregates Industry

(00:23:49) The Role of Technology in Enhancing Customer Experience and Operational Efficiency

(00:29:31) Vulcan’s Pricing Strategy

(00:32:31) The Capital Intensive Nature of The Business

(00:36:21) Optimizing Logistics Through M&A

(00:43:09) Trends in Earnings Growth and Future Expectations Among Commercial Construction 

(00:47:51) Understanding the Risks and Challenges In This Industry 

(00:50:17) Key Lessons from Vulcan's Business Model

Important Information:

Information provided represents the views of a company of the Vontobel Group (“Vontobel”) and should not be considered investment advice and/or legal, tax, financial or other advice. Further, not a recommendation to purchase, hold or sell any investment and no representation is given that the securities discussed are suitable for any particular investor.

Although Vontobel believes that the information provided in this document is based on reliable sources, it cannot assume responsibility for the quality, correctness, timeliness or completeness of the information contained in this document.

This is Matt Reustle. Today we are breaking down HEICO. HEICO is an aerospace business, most notably operating in the aircraft parts and repairs market. This is another case study of a very successful business in a nonobvious niche market.

To break down HEICO, I am joined by Eric Ruden, an analyst at Ironvine Capital. We cover the fascinating story of the Mendelson family and how they've built HEICO into what it is today. And if you haven't listened to the 50X Podcast on TransDigm, it makes for an excellent pairing with this HEICO breakdown. So please enjoy this breakdown on HEICO.

Pair with TransDigm on 50X.

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 10 East. 10 East is a platform where qualified investors can co-invest on a deal-by-deal basis across private equity, private credit, real estate ventures, and other one-off opportunities typically unavailable through traditional channels. It's no surprise that founders, executives, and portfolio managers from leading investment firms are using 10 East to diversify their personal portfolios. Their level of sourcing and diligence is institutional grade. To learn more, check out 10east.com.

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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 | @zbfuss | @ReustleMatt | @domcooke

Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com).

Show Notes

(00:00:00) Welcome to Business Breakdowns 

(00:02:53) First Question - Understanding the Aerospace Market

(00:06:58) The Role of HEICO in the Aerospace Market

(00:15:03) The History and Evolution of HEICO

(00:20:23) Introduction to Mendelson Brothers and their Business Operations

(00:22:58) The PMA Business and its Growth Drivers

(00:28:49) The Role of HEICO’s Go-to-Market Strategy Against OEMs

(00:40:05) The Role of M&A in HEICO’s Growth Strategy

(00:43:46) Comparing HEICO and TransDigm

(00:48:35) HEICO’s Financial Model

(00:50:06) Potential Risks and Challenges for Heico

(00:57:55) Key Lessons from Heico’s Business Model

This is Matt Reustle. Today, we are breaking down Intel. In the late 80s, a newly appointed CEO, Andy Grove, pivoted to exit memory chips and focus on logic chips. They were the leading edge chip designer, but Intel missed out on the mobile market and EUV technology as technology shifted. Now they're left playing catch up and falling from their iconic status.

To cover Intel, I am joined by Todd Ahlsten, CIO of Parnassus Investments. Todd started covering semiconductors in the mid-nineties and has since lived through eight cycles in the sector. We look at what separates secular changes from cyclical ones, and Todd helps outline what went wrong, what is changing today, and what we can monitor as this progresses. Please enjoy this breakdown of Intel.

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 10 East. 10 East is a platform where qualified investors can co-invest on a deal-by-deal basis across private equity, private credit, real estate ventures, and other one-off opportunities typically unavailable through traditional channels. It's no surprise that founders, executives, and portfolio managers from leading investment firms are using 10 East to diversify their personal portfolios. Their level of sourcing and diligence is institutional grade. To learn more, check out 10east.com.

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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 | @zbfuss | @ReustleMatt | @domcooke

Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com).

Show Notes:

(00:00:00) Welcome to Business Breakdowns

(00:04:32) Introduction to Intel's History and Current Challenges

(00:10:45) Intel's Missed Opportunities and Current State

(00:12:02) Intel's Strategy for Recovery

(00:18:30) Tracking Intel's Progress

(00:21:43) Understanding Intel's Profit Pools and Future Potential

(00:29:21) The Future of GPU and CPU Markets

(00:34:34) The Future of Intel's GPU Space

(00:35:49) Recovering Intel's CPU Business

(00:44:21) The Geopolitical Dynamics Impacting Intel

(00:48:25) Competition Landscape: NVIDIA and AMD

(00:52:28) Intel's Diverse Portfolio: Mobileye, Altera, and More

(00:56:09) Risks and Challenges for Intel

(00:59:17) Intel's Role in the Semiconductor Cycle

(01:05:47) Lessons from Intel's Business Model

I'm Zack Fuss. Today we're breaking down Arthur J. Gallagher, a global insurance brokerage. AJG was established in 1927 by Arthur James Gallagher and is now one of the largest insurance brokerages by revenue, exceeding $10 billion. AJG competes with the likes of Marsh McLennan, Aon, and Willis Towers Watson. 

To break down Gallagher, I am joined by Mike Hayward, a portfolio manager at WCM Asset Management. During this conversation, we discussed the company's successful acquisition strategy, the strength of the insurance brokerage industry, and how the shifting industry dynamics will impact the durability of its competitive advantage. Please enjoy this breakdown of A. J. Gallagher.

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 10 East. 10 East is a platform where qualified investors can co-invest on a deal-by-deal basis across private equity, private credit, real estate ventures, and other one-off opportunities typically unavailable through traditional channels. It's no surprise that founders, executives, and portfolio managers from leading investment firms are using 10 East to diversify their personal portfolios. Their level of sourcing and diligence is institutional grade. To learn more, check out 10east.com.

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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 | @zbfuss | @ReustleMatt | @domcooke

Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com).

Show Notes:

[00:00:00] First question - What AJG is and what they do 

[00:03:28] Value chain and key components of the insurance industry 

[00:06:03] Gallagher’s business segments and specialty 

[00:08:58] Their defensibility and competitive edge

[00:13:22] Stickiness and noteworthy retention rates

[00:17:06] Why the market undervalues their stickiness 

[00:19:19] Their acquisition strategy and its role in ongoing, consistent growth  

[00:25:20] What ‘The Gallagher Way’ really means and company history 

[00:29:52] Overview of the financial model and structure

[00:34:09] Potential risks to Gallagher’s continued success 

[00:39:21] Industry regulation and how they can affect the business 

[00:42:46] Lessons for investors and operators

This is Matt Reustle. Today, we are breaking down the technology conglomerate Samsung. Only Apple, Microsoft, Google, and Amazon ranked higher than Samsung in Interbrand's latest brand value rankings, with Samsung being the fifth most valuable brand in the world. It's everywhere around us: our phones, our TVs, our refrigerators, our washing machines. But, it's not those finished products that drive the majority of Samsung's profits.

To break down Samsung, I'm joined by David Samra, Managing Director and Founding Partner of the Artisan Partners International Value Team. We go inside this vertically integrated technology giant and talk about the history of the business, the manufacturing DNA and what it means to create hardware components, and how those hardware components unlock significant opportunities in the smartphone market for Samsung.

Please enjoy this breakdown on Samsung.

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 10 East. 10 East is a platform where qualified investors can co-invest on a deal-by-deal basis across private equity, private credit, real estate ventures, and other one-off opportunities typically unavailable through traditional channels. It's no surprise that founders, executives, and portfolio managers from leading investment firms are using 10 East to diversify their personal portfolios. Their level of sourcing and diligence is institutional grade. To learn more, check out 10east.com.

CSIMA, Columbia Student Investment Management Association, is hosting its 27th annual conference in New York on Friday, February 9th. Keynote speakers include John Griffin from Blue Ridge, Ian McKinnon from Sandia, Jan Hummel from Paradigm, and Sally Krawcheck from Ellevest. Get your tickets at csima.info/conference.

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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 | @zbfuss | @ReustleMatt | @domcooke

Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com).

Show Notes

(00:00) Welcome to Business Breakdowns

(04:28) First Question - How he defines Samsung compared to other brands

(09:13) Samsung's history and what led them to their capabilities today

(13:59) Unique growth and shared gains in the semiconductor industry  

(18:08) Where Samsung compares to other chips in the semiconductor space 

(22:08) Risks moving into other chip production areas 

(25:53) The disparity in margin profile between divisions 

(31:29) Potential for local competitors to bring chips into the market 

(32:48) How he thinks about growing the barriers to entry for the separate businesses   

(35:15) Leaving the handset business 

(36:31) How he thinks about the business on a consolidated basis 

(41:19) Risks associated with the business

(44:09) The regulatory climate in South Korea 

(48:33) Things he learned from studying Samsung

You never own a Patek Philippe, you merely watch over it for the next generation. I'll say it's the best marketing campaign in history, a campaign appropriate for the world's premier watchmaker and a watchmaker worthy of a Business Breakdown.

Our guest today is John Reardon from Collectability. John has worked at Sotheby's, the auction house, and spent a decade at Patek Philippe in the early 2000s. He continues to write for Patek Philippe Magazine while he has launched Collectability, a brand dedicated to vintage and preowned Patek Philippe.

We cover what makes Patek such a special brand. There is an almost 200-year history in craftsmanship and countless patents (like that self-winding mechanism that powers all automatic watches today.) What Philippe Stern did in 1989 could be worthy of a 10-episode series, so there is much to learn from this episode. Please enjoy this breakdown of Patek Philippe.

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 10 East. 10 East is a platform where qualified investors can co-invest on a deal-by-deal basis across private equity, private credit, real estate ventures, and other one-off opportunities typically unavailable through traditional channels. It's no surprise that founders, executives, and portfolio managers from leading investment firms are using 10 East to diversify their personal portfolios. Their level of sourcing and diligence is institutional grade. To learn more, check out 10east.com.

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CSIMA, Columbia Student Investment Management Association, is hosting its 27th annual conference in New York on Friday, February 9th. Keynote speakers include John Griffin from Blue Ridge, Ian McKinnon from Sandia, Jan Hummel from Paradigm, and Sally Krawcheck from Ellevest. Get your tickets at csima.info/conference.

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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 | @zbfuss | @ReustleMatt | @domcooke

Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com).

Show Notes

(00:00:00) Welcome to Business Breakdowns

(00:04:21) First Question, The main differences between Patek Philippe and Rolex  

(00:08:12) An introduction to Patek Philippe’s brand 

(00:10:27) The founding story of the business

(00:12:54) Henry Graves and the watches that he made for the brand 

(00:18:26) The production process for making a Patek Philippe watch

(00:21:36) A look at the 1989 and its importance to the business

(00:23:48) The types of people who were interested in the brand and purchasing at auction in 1989

(00:26:21) An overview of the successful marketing campaigns of the 1990s 

(00:29:06) Patek’s strategy at auctions, embracing both consignment and buying

(00:32:18) The general size and scope of the Patek Philippe secondary market

(00:34:00) The brand’s perspective of the secondary market and whether it affects the way they market new items

(00:38:27) John’s personal experience working at Patek Philippe 

(00:42:16) The company’s distribution strategy  

(00:45:22) Breaking down the points of sale, branded dealers versus authorized dealers

(00:46:09) The mindset behind consolidating dealers and the exclusivity it created as a byproduct 

(00:48:02) How the LVMH acquisition of Tiffany has affected Patek Philippe

(00:50:58) The potential of Patek Philippe being acquired by another company

(00:55:28) Lessons learned from Patek Philippe

Today, we're running our Business Breakdown on Rolex. This episode of Rolex is one of our most popular breakdowns of all time, so it's always worth revisiting. But, it's also a timely revisit…Later this week, we'll be releasing a Business Breakdown on Patek Philippe and this episode of Rolex is the perfect appetizer for that discussion. 

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

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 | @zbfuss | @ReustleMatt | @domcooke

Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com).

Show Notes

(00:00:00) Welcome to Business Breakdowns

(00:03:01) First question - His favorite Rolex watch ever

(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 the Rolex 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) Negative lessons gleaned from Rolex

This is Zack Fuss. Today we are breaking down the largest privately-owned software business in Europe, Visma. Visma is a software company with over 15,000 employees offering accounting, payroll, and HR software products for customers across the Nordic, Benelux, and Baltic regions. Founded in Oslo in 1996, Visma grew organically and via acquisition of 178 companies.

We're joined by Nic Humphries, the Senior Partner and Executive Chairman of Hg Capital, which is one of the leading software investors in Europe. Nic is intimately familiar with Visma, given Hg owns over 50% of the business and has been invested for over 17 years. Hg initially invested as part of a take-private transaction in 2006 at just a $450 million valuation and based upon the latest recap completed in December, today, the business is valued at over $21 billion.

As part of this conversation, we discussed the business history, growth, and recent leadership transition. Please enjoy this breakdown of Visma.

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, the modern research platform for leading investors. Tired of running your own expert calls to get up to speed on a company? Tegus lets you ramp faster and find answers to critical questions more efficiently than any alternative method. The gold standard for research, the Tegus platform delivers unmatched access to timely, qualitative insights through the largest and most differentiated expert call transcript database. With over 60,000 transcripts spanning 22,000 public and private companies, investors can accelerate their fundamental research process by discovering highly-differentiated and reliable insights that can’t be found anywhere else in the market. As a listener, drive your next investment thesis forward with Tegus for free at tegus.co/patrick.

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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 | @ReustleMatt | @domcooke

Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com).

Show Notes

(00:00:00) Welcome to Business Breakdowns

(00:02:44) First question - Introducing Visma and its operations

(00:10:51) Identifying Visma's unique attributes in the payroll sector

(00:13:32) Assessing Visma's current scale and potential for growth

(00:17:45) Considering the shift to a cloud-native approach

(00:20:49) Reflecting on key lessons from past errors

(00:23:19) Strategies for scaling the business effectively

(00:28:15) Weighing cash reinvestment against shareholder distributions

(00:31:39) Øystein Moan's influence within the company

(00:33:06) Deciding the right time for an IPO

(00:39:23) Analyzing the risks facing Visma

(00:41:22) Exploring Visma's competitive advantages

This is Matt Reustle. Today we venture into the world of HVAC to break down Trane Technologies. Now, it's not often that I come across an industrial company with a $50 billion market cap that I just hadn't heard of. So when our guest today, Brett Larson, investor at NZS Capital, suggested Trane, it was as easy of a 'yes' as they come.

Brett and I cover the long corporate history of Trane, the dynamics that separate residential HVAC from commercial HVAC, and how Trane has helped create this unique consolidated industry. You may never look at your thermostat the same after this episode. Please enjoy this breakdown of Trane Technologies.

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This episode is brought to you by Tegus, the modern research platform for leading investors. Stretch your research budget with flexible expert calls you can trust. At a fraction of the cost of traditional expert networks, Tegus customers pay only what an expert charges – with zero markups and no confusing call credits – netting an average 70% savings. Don’t want to conduct a full hour call? Tegus offers the ability to schedule 30-minutes, an offer you won’t find anywhere else. And they don’t stop there. With white-glove custom sourcing for every project and robust compliance measures, including a dedicated 50+ analyst team that vets every call transcript, Tegus ensures your privacy and protection. As the industry innovator for qualitative insights, Tegus helps you find the right experts you need at a quality and speed that can’t be matched. For a limited time, as a listener, you can trial Tegus for free by visiting tegus.co/patrick.

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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 | @zbfuss | @ReustleMatt | @domcooke

Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com).

Show Notes:

(00:00:00) Welcome to Business Breakdowns

(00:01:59) Brett tells us what Trane is 

(00:02:34) The companies corporate history and how it became Trane

(00:04:05) Overall size of the commercial market 

(00:05:18) He explains the go to market sales strategy 

(00:09:20) An additional breakdown of business cost

(00:10:55) Revenue received from Trane software

(00:14:53) Trane’s market share in the residential space

(00:15:52) Differentiated products available on the commercial side

(00:17:17) Included commercial software components

(00:19:15) Average life cycle for commercial units  

(00:21:19) Demand on commercial and residential sides of the market

(00:25:31) The cyclicality of the business and how revenue has trended over time   

(00:27:35) A look at share gains and industry consolidation over recent years

(00:31:09) How the management team is viewed by the industry

(00:34:46) Key contributions from MNA and future consolidation    

(00:37:02) Data center demand for HVAC units

(00:39:40) Transport refrigerators key role in the industry market  

(00:41:02) Risks associated with the business

(00:43:30) What he’s learned from studying Trane

This is Matt Reustle. Today we are breaking down Live Oak Bank. Our guest is Stephen Vafier, the Founder of Storri Labs Capital Partners. Live Oak is a bank that received a charter right before the financial crisis. It does not have the a 100+ year histories of many of the banks that we know so well today, JP Morgan, Goldman Sachs, and the other too-big-to-fail banks. 

This is a new story with very interesting DNA in terms of how they built up this bank. They targeted specific industries and the SBA loan program and they had technology in their inception. Live Oak has done some unique things to build assets on the balance sheet to build equity in this bank and really build a name within a sector that is incredibly difficult to break into. This is an interesting case study on how you can think about out-dated industries, which seemingly have massive barriers to entry. Please enjoy this breakdown of Live Oak Bank.

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 modern research platform for leading investors, and provider of Canalyst. Tired of calculating fully-diluted shares outstanding? Access every publicly-reported datapoint and industry-specific KPI through their database of over 4,000 driveable global models handbuilt by a team of sector-focused analysts, 35+ industry comp sheets, and Excel add-ins that let you use their industry-leading data in your own spreadsheets. Tegus’ models automatically update each quarter, including hard to calculate KPIs like stock-based compensation and organic growth rates, empowering investors to bypass the friction of sourcing, building and updating models. Make efficiency your competitive advantage and take back your time today. As a listener, you can trial Canalyst by Tegus for free by visiting tegus.co/patrick.

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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 | @ReustleMatt | @domcooke

Show Notes

(00:02:16) - (First question) - The unique market opportunity that the founders saw when starting this business

(00:04:39) - How Live Oak differentiated its approach to make a more successful business model

(00:06:03) - How they approached the SBA loan program differently

(00:09:04) - The Live Oak sales strategy 

(00:10:06) - Their strategy for trading partially guaranteed government-backed loans 

(00:12:12) - Overcoming challenges to attract clients to specialized loans

(00:15:44) - A brief history of Chip Mahan’s career

(00:20:23) - Chip’s technology-centric approach without relying on physical locations

(00:22:49) - Traditional banking security with high-upside ventures, contrasting with neo banks 

(00:27:51) - The balance between the traditional lending business and technology-focused ventures

(00:31:48) - How Live Oak intends to scale the business 

(00:36:52) - How the surge in SBA programs during COVID impacted Live Oak

(00:40:02) - Handling the effects of the Silicon Valley Bank collapse

(00:42:32) - The strategy for deposit growth and how pivotal is it for the bank's competitiveness

(00:46:13) - How Live Oak navigates threats from entities employing similar strategies 

(00:53:36) - The significance of Chip Mahan's role and his influence on the organization's future 

(00:56:43) - Potential risks that Live Oak faces

(00:59:44) - Lessons learned from researching Live Oak

This is Zack Fuss. Today we are breaking down Moody's Corporation. Moody's was founded by John Moody in 1909 with the idea of broadening access to credit information and codifying how people viewed credit statistics by producing manuals of stats related to bonds. In 2000, Moody's was spun off from Dun & Bradstreet as a separately traded public company. Today, it is nearly a $75 billion enterprise business, producing approximately $6 billion in revenue at 45 percent margins. 

To break down Moody's, I'm joined by Brian Yacktman, the Founder and President of YCG Investments. During this conversation we explore the business's origin story, how the financial crisis impacted the trajectory of the business, and the role that credit ratings play in the broader investment ecosystem. Please enjoy this breakdown on Moody's.

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, the modern research platform for leading investors. Tired of running your own expert calls to get up to speed on a company? Tegus lets you ramp faster and find answers to critical questions more efficiently than any alternative method. The gold standard for research, the Tegus platform delivers unmatched access to timely, qualitative insights through the largest and most differentiated expert call transcript database. With over 60,000 transcripts spanning 22,000 public and private companies, investors can accelerate their fundamental research process by discovering highly-differentiated and reliable insights that can’t be found anywhere else in the market. As a listener, drive your next investment thesis forward with Tegus for free at tegus.co/patrick.

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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 | @ReustleMatt | @domcooke

Show Notes

(00:02:30) - (First question) - Introducing Moody's and its operations

(00:05:13) - Analyzing Moody’s revenue structure

(00:06:13) - Highlighting Moody's business strengths

(00:07:40) - Discussing Moody’s business model transformation

(00:12:29) - Evaluating entry barriers in Moody’s field

(00:17:06) - Exploring the network effects within the company

(00:23:01) - Examining Moody’s profit margins

(00:26:26) - Comparing Moody’s to S&P Global

(00:28:08) - The impact of the financial crisis on Moody's

(00:29:46) - Assessing economic sensitivities affecting Moody's

(00:35:25) - Key takeaways from Moody’s business strategies

This is Zack Fuss. Today, we are breaking down Pernod Ricard, a business whose history dates back to 1797. Today, the business is the second-largest global producer of wine and spirits with a portfolio of 17 of the top 100 spirits brands, including Absolut Vodka, Beefeater Gin, Jameson Irish Whiskey, and Malibu rum. The portfolio produces north of EUR 12 billion in sales and generates an impressive 60% gross margin and high 20% operating margin.

To break down Pernod Ricard, I am joined by Swetha Ramachandran, a fund manager at Artemis Investment Management. During this conversation, we explore the interplay between luxury goods and spirits, the post-COVID normalization, and consumption trends. We hope you enjoy this breakdown of Pernod Ricard.

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, the modern research platform for leading investors. Stretch your research budget with flexible expert calls you can trust. At a fraction of the cost of traditional expert networks, Tegus customers pay only what an expert charges – with zero markups and no confusing call credits – netting an average 70% savings. Don’t want to conduct a full hour call? Tegus offers the ability to schedule 30-minutes, an offer you won’t find anywhere else. And they don’t stop there. With white-glove custom sourcing for every project and robust compliance measures, including a dedicated 50+ analyst team that vets every call transcript, Tegus ensures your privacy and protection. As the industry innovator for qualitative insights, Tegus helps you find the right experts you need at a quality and speed that can’t be matched. For a limited time, as a listener, you can trial Tegus for free by visiting tegus.co/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 | @ReustleMatt | @domcooke

Show Notes

[00:03:00] - Introduction to Pernod Ricard and the Spirits Industry

[00:04:11] - Pernod Ricard's Brand Portfolio and Acquisition History

[00:09:36] - The Strengths of the Spirits Business

[00:14:37] - The Shift in Consumption Patterns

[00:20:21] - The Appeal of the Spirits Conglomerate Business Model

[00:24:04] - Understanding the Current Challenges in the Spirits Industry

[00:26:41] - The Role of Emerging Markets in the Spirits Industry

[00:31:45] - The Influence of the Ricard Family on Pernod Ricard

[00:35:46] - Innovation and Distribution in the Spirits Industry

[00:34:17] - The Impact of Market Trends and Consumer Preferences

[00:40:15] - The Future of Spirits in the Chinese Market

[00:42:26] - What Makes Pernod Ricard Special

[00:44:01] - Lessons from Pernod Ricard's Business Model

This is Dom Cooke. Today we are breaking down Ferrari. Ferrari was founded in 1929 as a race team by Italian driver, Enzo Ferrari, but it wasn’t until 1947 when Enzo was 50 that Ferrari sold its first car. Today, the car company is one of the most recognizable brands in the world, in large part because of its history in Formula 1, where it is both the oldest and most successful team ever.

To break down Ferrari, I’m joined by Brian Lum, an Investment Manager at Baillie Gifford. We discuss how Ferrari went from racing team to a $70 billion business, the various ways it looks more like a luxury goods company than a car maker, and how its business model both nurtures and monetizes its famous red brand. There aren’t many things money can’t buy, but in many instances, a Ferrari is one of them. The ways in which the company manufactures scarcity are fascinating, and this conversation dives into all the aspects that make Ferrari so successful and unique. Please enjoy this Business Breakdown of Ferrari.

Interested in hiring from the Colossus Community? Click here.

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 modern research platform for leading investors, and provider of Canalyst. Tired of calculating fully-diluted shares outstanding? Access every publicly-reported datapoint and industry-specific KPI through their database of over 4,000 driveable global models handbuilt by a team of sector-focused analysts, 35+ industry comp sheets, and Excel add-ins that let you use their industry-leading data in your own spreadsheets. Tegus’ models automatically update each quarter, including hard to calculate KPIs like stock-based compensation and organic growth rates, empowering investors to bypass the friction of sourcing, building and updating models. Make efficiency your competitive advantage and take back your time today. As a listener, you can trial Canalyst by Tegus for free by visiting tegus.co/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 | @ReustleMatt | @domcooke

Show Notes

(00:02:31) - (First question) - An introduction to the numbers behind the Ferrari brand

(00:04:26) - Exploring Ferrari's roots to understand the impact on the brand's present-day business landscape

(00:07:06) - Enzo Ferrari’s dedication to the company extended to the location of his house

(00:07:50) - A look at the brand’s racing heritage over the last 75 years

(00:13:04) - A unique way of structuring a marketing budget, wholly focused on F1

(00:17:51) - Ferrari's restraint in capitalizing on the SUV market to uphold their brand identity

(00:21:40) - A look at the product portfolio and how they cultivate exclusivity for their “collectors”

(00:23:51) - A unique buying experience, how existing Ferrari owners become frequent buyers

(00:26:50) - How Ferrari sets itself apart from its competitors

(00:29:20) - An overview of Ferrari’s financials

(00:35:21) - Alternative strategies beyond volume growth to uphold scarcity without compromising the brand's prestige

(00:36:40) - A look at other segments of the business like fashion

(00:38:44) - The business’ cost profile and its significant investment in R&D

(00:41:27) - Ferrari’s approach to electrification and hybrid cars

(00:48:31) - Comparing electrification and luxury watchmakers during the quartz crisis

(00:52:39) - Looking at Ferrari’s future and incremental evolution

(00:54:47) - Lessons learned from studying Ferrari

This is Matt Reustle. Today we are breaking down the cable giant Charter Communications. Tony Coniaris and John Sitarz of Harris Associates join us for this deep dive on the cable market and Charter's business. We've spent a big portion of the first half of the conversation outlining the history of cable, the asset itself, what it does differently versus some of the alternatives, and then we flash forward to how the industry is operating today.

The idea of cord cutting has become very consensus, but it's not very obvious in terms of how that actually impacts a business like Charter and its flagship product Spectrum. We go into some of the case studies that have recently occurred and then tie it all back in terms of the business model.

There's so many different lessons that you can take out here thanks to Tony and John. Please enjoy this Business Breakdown on Charter

Listen to Invest Like the Best: A Conversation with Charlie Munger & John Collison

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, the modern research platform for leading investors. Tired of running your own expert calls to get up to speed on a company? Tegus lets you ramp faster and find answers to critical questions more efficiently than any alternative method. The gold standard for research, the Tegus platform delivers unmatched access to timely, qualitative insights through the largest and most differentiated expert call transcript database. With over 60,000 transcripts spanning 22,000 public and private companies, investors can accelerate their fundamental research process by discovering highly-differentiated and reliable insights that can’t be found anywhere else in the market. As a listener, drive your next investment thesis forward with Tegus for free at tegus.co/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| @zbfuss | @ReustleMatt | @domcooke

Show Notes

(00:04:07) - (First question) - The role of Charter Communications in daily life

(00:07:28) - Charter Communications as an infrastructure entity

(00:08:15) - Mapping the cable market landscape

(00:12:51) - Evolution of competition within the cable industry

(00:14:01) - Tracing the origins of Charter Communications

(00:19:18) - Initiating business restructuring

(00:20:20) - Exploring the capabilities of cable assets

(00:23:40) - Emerging challengers in the cable arena

(00:29:58) - Examining mobile data trends

(00:30:54) - Exploring the potential of fixed wireless access

(00:33:48) - Conducting business analysis

(00:36:10) - Assessing the impact of consumers 'cutting the cord'

(00:42:16) - Comparing internet-only customers to full cable bundle subscribers

(00:47:53) - The value of comprehensive service packages

(00:49:08) - Identifying major cost factors in the industry

(00:52:35) - Outlining the market structure for cable businesses

(00:57:16) - Anticipating potential industry risks

(00:58:03) - Understanding compute capacity and its implications

(01:01:21) - Reflecting on insights gained from Charter Communications

This is Zack Fuss. Today we are breaking down Vistra Corp. Vistra is an integrated retail electricity and power generation company. The company, through its subsidiaries, is involved in electricity generation and wholesale and retail energy sales to commercial, municipal and residential customers across the U.S. The company serves 4 million Americans across 20 states producing 37,000 megawatts of capacity, enough to power 20 million homes.

To break down Vistra, I'm joined by John DeGulis, Partner and Portfolio Manager at Sound Shore Management. We go through the dramatic evolution of the industry, the acquisition track record of Vistra, and zoom out on the broader electricity production & distribution business and history in the United States. Please enjoy this conversation on Vistra Corp.

Interested in hiring from the Colossus Community? Click here.

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, the modern research platform for leading investors. Stretch your research budget with flexible expert calls you can trust. At a fraction of the cost of traditional expert networks, Tegus customers pay only what an expert charges – with zero markups and no confusing call credits – netting an average 70% savings. Don’t want to conduct a full hour call? Tegus offers the ability to schedule 30-minutes, an offer you won’t find anywhere else. And they don’t stop there. With white-glove custom sourcing for every project and robust compliance measures, including a dedicated 50+ analyst team that vets every call transcript, Tegus ensures your privacy and protection. As the industry innovator for qualitative insights, Tegus helps you find the right experts you need at a quality and speed that can’t be matched. For a limited time, as a listener, you can trial Tegus for free by visiting tegus.co/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 | @ReustleMatt | @domcooke

Show Notes

(00:02:52) - (First question) - A brief history of Vistra

(00:10:57) - An overview of Vistra’s business model 

(00:14:11) - Navigating the value chain of merchant power from generation to retail and how Vistra positions itself within the industry

(00:27:28) - The contrast between financial analysis and consumer perspectives and Vistra’s strategic cash flow allocation toward renewables and shareholder returns

(00:32:49) - The limitations when charging for electricity utilities 

(00:35:23) - A breakdown of Vistra Vision, the allocation of profits from traditional energy generation for growth in renewable energy

(00:39:29) - Vistra’s management team and the key players 

(00:42:58) - Vistra’s potential expansion plans into solar, wind and nuclear 

(00:46:30) - How Vistra could be an integral part of the nation's energy transition to low or no-carbon electricity

(00:49:28) - The lessons learned from studying Vistra

This is Matt Reustle. Today we are breaking down Entegris, a supplier of advanced materials and process solutions for semiconductors. Small interferences with the different materials that exist within the semiconductor will slow it down and make it inoperable, and that's where Entegris comes into play. 

We get into that discussion with our guest, Daniel Pilling from Sands Capital. He joins us to talk through the history of semiconductors in his own terms, what makes it such a fascinating industry to cover, and what makes Entegris unique operating as a small player in an overall huge universe, dominated by major players. Please enjoy this breakdown of Entegris.

Interested in hiring from the Colossus Community? Click here.

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 modern research platform for leading investors, and provider of Canalyst. Tired of calculating fully-diluted shares outstanding? Access every publicly-reported datapoint and industry-specific KPI through their database of over 4,000 driveable global models handbuilt by a team of sector-focused analysts, 35+ industry comp sheets, and Excel add-ins that let you use their industry-leading data in your own spreadsheets. Tegus’ models automatically update each quarter, including hard to calculate KPIs like stock-based compensation and organic growth rates, empowering investors to bypass the friction of sourcing, building and updating models. Make efficiency your competitive advantage and take back your time today. As a listener, you can trial Canalyst by Tegus for free by visiting tegus.co/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 | @ReustleMatt | @domcooke

Show Notes

(00:03:00) - (First question) - Why semiconductors is an interesting industry for Daniel

(00:05:45) - An introduction to Entegris and its business

(00:07:19) - A look at the chemicals produced for computer chip manufacturing

(00:09:39) - A historical look at the importance of chemicals in chipmaking

(00:11:45) - The cost of chemicals within a chip

(00:13:55) - The backstory as to how Entegris started operating and their competitors 

(00:17:03) - How the business has been able to remain so independent

(00:21:57) - The stickiness of the business and how they aim to be the partner of choice

(00:23:22) - A look at previous execution and any issues that have occurred in the past

(00:23:56) - The cyclicality of the semiconductor industry historically

(00:25:45) - An overview Entegris’ pricing power and maintaining margin profile

(00:28:32) - Operating leverage within the business and how the margin profiles differ between the different segments

(00:30:03) - A look at the business’ research and development spend

(00:32:01) - How the business has approached mergers and acquisitions over the years

(00:34:04) - Whether the business has ever been a target acquisition for a larger player 

(00:34:48) - The outlook for Entegris’ revenue growth, expected margin expansion due to operating leverage

(00:37:05) - Possible threats to the business from new technology

(00:39:04) - A look at other potential risks to Entegris

(00:41:18) - Should the industry’s growth slow or even decline how it could affect Entegris 

(00:42:46) - How Daniel values the business comparing it to its peer group

(00:45:04) - Other risks to the business not mentioned

(00:46:00) - The lessons learned from Entegris

This is Zack Fuss. Today we are breaking down The Coca-Cola Company. On May 8th, 1886, Dr. John Pemberton brought this perfected syrup to Jacobs Pharmacy in downtown Atlanta, where the first glass of Coca-Cola was poured for five cents a glass. Today, more than 1. 9 billion servings per day of Coke are served worldwide. 

To break down Coca-Cola, I'm joined by Freddie Lait, Founder and Managing Partner at Latitude Investment Management. We cover the business of Coca-Cola and how its bottling network is imperative to its capital light business model. We discuss recent acquisitions like Costa Coffee & Body Armor and the Coca-Cola Company's expansion beyond its flagship brands and products with legacy Coke representing just 50% of their offering. Please enjoy this breakdown of the Coca-Cola Company. 

Interested in hiring from the Colossus Community? Click here.

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, the modern research platform for leading investors. Tired of running your own expert calls to get up to speed on a company? Tegus lets you ramp faster and find answers to critical questions more efficiently than any alternative method. The gold standard for research, the Tegus platform delivers unmatched access to timely, qualitative insights through the largest and most differentiated expert call transcript database. With over 60,000 transcripts spanning 22,000 public and private companies, investors can accelerate their fundamental research process by discovering highly-differentiated and reliable insights that can’t be found anywhere else in the market. As a listener, drive your next investment thesis forward with Tegus for free at tegus.co/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 | @ReustleMatt | @domcooke

Show Notes

(00:03:33) - (First question) - Exploring Coca-Cola's unique business model

(00:05:57) - Comparing Coca-Cola's size to its competitors

(00:07:30) - Delving into the history of the company

(00:12:28) - Contrasting a bottling business with brand building and distribution

(00:18:53) - Examining how Coca-Cola has maintained consistent growth and driven revenue

(00:23:49) - Discussing Coca-Cola's 20% ownership of Monster Energy 

(00:27:11) - Assessing Coca-Cola's approach to capital allocation for value creation

(00:30:33) - Highlighting the most dynamic growth segment in Coca-Cola's portfolio

(00:33:43) - Breaking down Coca-Cola's business by region

(00:37:39) - Adjusting to emerging risks in the marketplace

(00:41:11) - Lessons learned from studying Coca Cola

Today we are breaking down FedEx. FedEx has a more direct impact on the U.S. economy than 99.9% of U.S. businesses - an actual statistic from Dun & Bradstreet. It was a business started in 1973 by the famous Fred Smith, as his planes delivered 186 packages to 25 cities. Today, FedEx moves about 15 million packages a day, all over the world.

To break down the business, I'm joined by Staley Cates, Vice Chairman of Southeastern Asset Management. We cover the business of FedEx, how this network operates, the integration of Express and Ground services, and its history and valuation relative to UPS. Please enjoy this breakdown of FedEx.

Founders Podcast: #151 Frederick Smith (FedEx)

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, the modern research platform for leading investors. Stretch your research budget with flexible expert calls you can trust. At a fraction of the cost of traditional expert networks, Tegus customers pay only what an expert charges – with zero markups and no confusing call credits – netting an average 70% savings. Don’t want to conduct a full hour call? Tegus offers the ability to schedule 30-minutes, an offer you won’t find anywhere else. And they don’t stop there. With white-glove custom sourcing for every project and robust compliance measures, including a dedicated 50+ analyst team that vets every call transcript, Tegus ensures your privacy and protection. As the industry innovator for qualitative insights, Tegus helps you find the right experts you need at a quality and speed that can’t be matched. For a limited time, as a listener, you can trial Tegus for free by visiting tegus.co/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 | @ReustleMatt | @domcooke

Show Notes:

(00:04:27) - First question - An overview of Staley’s relationship with FedEx

(00:05:06) - How FedEx is doing as a business in general

(00:06:46) - A look at the different segments of FedEx’s business

(00:08:08) - The differences between FedEx’s express and ground services

(00:09:51) - A brief history of Fred Smith, the founder of FedEx and the opportunity he saw in the market

(00:14:03) - How eCommerce and other trends have affected FedEx over the years

(00:18:36) - FedEx’s position on whether to battle UPS for Amazon’s shipping alternative option

(00:20:25) - A look at the United States Postal Service and its role in the overall eCommerce system

(00:21:39) - The reasons behind the upside in FedEx Ground margins 

(00:26:07) - A look at LTL margins when it comes to FedEx Express services

(00:28:20) - Potential opportunities for FedEx moving forward

(00:31:24) - The re-fleeting of FedEx planes and other potential areas in FedEx’s business that may require capital expenditures

(00:33:19) - The challenges FedEx faced when integrating the acquisition of TNT

(00:36:04) - Bringing together FedEx’s different businesses to get an overview of the entire organization

(00:38:34) - Wage inflation and how that will affect FedEx’s margin profile overall

(00:42:56) - The potential for FedEx to compete with Amazon more directly

(00:45:42) - FedEx’s current stock price and its potential 

(00:50:29) - FedEx’s use of railroads and its expansion over the past two decades

(00:52:54) - An overview of the risks FedEx could face in the future

(00:54:19) - The lessons learned from studying FedEx

This is Zack Fuss. Today I am joined by Yanev Suissa, Managing Partner at SineWave Ventures, to break down the private company Databricks. Born out of a UC Berkeley research lab in 2013, Databricks has grown rapidly, and after 50% growth this summer, it was rumored to have last raised at a $43 billion valuation.

In the most simple terms, Databricks provides tools for ingesting, transforming, and analyzing large sets of data from multiple sources in multiple formats in order to inform business and engineering decisions. Databricks is on a crash course with Snowflake to amass market share. In this conversation, we explore the nuances of structured and unstructured data, discuss data lakes, and what it entails to get "Hadooped." Please enjoy this breakdown of Databricks. 

Interested in hiring from the Colossus Community? Click here.

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 modern research platform for leading investors, and provider of Canalyst. Tired of calculating fully-diluted shares outstanding? Access every publicly-reported datapoint and industry-specific KPI through their database of over 4,000 driveable global models handbuilt by a team of sector-focused analysts, 35+ industry comp sheets, and Excel add-ins that let you use their industry-leading data in your own spreadsheets. Tegus’ models automatically update each quarter, including hard to calculate KPIs like stock-based compensation and organic growth rates, empowering investors to bypass the friction of sourcing, building and updating models. Make efficiency your competitive advantage and take back your time today. As a listener, you can trial Canalyst by Tegus for free by visiting tegus.co/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 | @ReustleMatt | @domcooke

Show Notes:

(00:02:32) - (First Question) - What Databricks is and why it is so successful 

(00:04:38) - Real world examples of how customers use Databricks 

(00:07:23) - How issues were handled historically before Databricks was available 

(00:08:39) - Key examples of what helped accelerate Databricks’ success 

(00:10:52) - Databricks revenue model and how it converts into bottomline  

(00:12:13) - How Databricks competes with competitors like Snowflake 

(00:14:11) - Competition versus symbiosis when compared to large organizations 

(00:14:11) - The overall size of Databricks as a business

(00:18:09) - Costs incurred when using a database service like Databricks

(00:19:47) - The founding story of Databricks 

(00:22:53) - When SineWave recognized the database's potential 

(00:24:29) - The importance of partnerships and how they help grow the business 

(00:27:07) - Legacy solutions that they are disintermediating or replacing in their growth  

(00:27:57) - What being Hadoop’d means 

(00:21:50) - A breakdown of the complexity behind switching to different database providers 

(00:32:07) - The success of these businesses breaking into legacy regulated industries 

(00:34:47) - Why AI is so impactful to the database 

(00:37:40) - How AI is helping these businesses go to market with their software 

(00:39:50) - Democratization of data access and businesses taking the opposite approach 

(00:43:00) - Key reasons for investing in Databricks and potential risks to be considered  

(00:46:12) - Lessons learned from studying Databricks 

This is Matt Reustle and today we are breaking down the giant of online dating. Even if you found love the old-fashioned way, you're likely familiar with the Match brands like Tinder and Hinge, amongst many others.

To break down Match, I'm joined by George Hadjia, founder of Bristlemoon Capital. George goes through a background on this industry, what made Match who it is today, and all of the key debates that are driving this stock and all the commentary around it. Please enjoy this breakdown of Match Group.

Read the Bristlemoon Capital MTCH Report.

Interested in hiring from the Colossus Community? Click here.

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 Converge — the first virtual event centered on the world of investor research. When twin brothers Tom and Mike Elnick realized that the research process for investors was broken, they founded Tegus to fix it. Now the people behind the most trusted research platform are bringing institutional investors together to investigate the state — and the future — of fundamental research. On November 8th, join industry luminaries like IGSB Founder Reece Duca and Daniel Gross, AI Expert, Entrepreneur and Investor, to dig into the latest research trends and breakthrough technologies shaping the investment landscape. Register today at tegus.com/register.

-----

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 | @domcooke

Show Notes

(00:03:10) - (First question) - George’s response since releasing his recent report on Match

(00:04:55) - A general overview of the online dating market

(00:10:55) - Comparing the different brands within the dating app industry  

(00:14:10) - The reason for the existence of so many niche brands in the market

(00:18:55) - The different avenues for these brands when it comes to monetization 

(00:21:25) - The breakdown of revenue per customer and the different tiers dating apps offer 

(00:24:10) - Customer turnover due to the nature of dating and how the retention rate differs between the different apps

(00:28:40) - A snapshot of how the industry has been growing over recent years

(00:29:50) - Determining normalized earning profiles and margins when taking into account the lack of marketing spend historically

(00:32:40) - The historical percentage of revenue that goes into marketing expenses

(00:35:10) - How Bumble’s advertising expenditure differs from Match Group brands

(00:36:40) - Price competition between different brands and a look at Tinder’s introduction of premium monetization tiers

(00:39:20) - Dissecting top-line growth and the percentage due to recent price increases 

(00:40:10) - An overview of the business’ capital allocation and how they intend to invest in the growth of the business

(00:42:50) - The new management team’s strategy and how it differs from the previous regimes

(00:46:25) - Potential changes to Apple app store fees and how it could affect the business 

(00:51:10) - A forward outlook at where George expects the business to go in the coming years

(00:54:40) - The key risks to the business moving forward

(00:57:20) - The threat that Facebook poses in terms of its entry into the market 

(01:02:20) - The lessons learned from researching Match

This is Matt Reustle and today we are breaking down Olin Corporation. Olin is a key player in industrial chemicals but many of those chemicals are used in products that we encounter on a day-to-day basis. To break down Olin, I'm joined by Yinan Zhao from Pzena Investment Management. Together we cover the chlor-alkali market, what it means to be the lowest-cost producer of a given commodity, and how Olin has shifted its business model and its operational model to help sustain earnings through cycles. Please enjoy this breakdown of Olin Corp.

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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 modern research platform for leading investors, and provider of Canalyst. Tired of calculating fully-diluted shares outstanding? Access every publicly-reported datapoint and industry-specific KPI through their database of over 4,000 driveable global models handbuilt by a team of sector-focused analysts, 35+ industry comp sheets, and Excel add-ins that let you use their industry-leading data in your own spreadsheets. Tegus’ models automatically update each quarter, including hard to calculate KPIs like stock-based compensation and organic growth rates, empowering investors to bypass the friction of sourcing, building and updating models. Make efficiency your competitive advantage and take back your time today. As a listener, you can trial Canalyst by Tegus for free by visiting tegus.co/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 | @ReustleMatt | @domcooke

Show Notes

(00:01:33) - (First question) - An elevator pitch for Olin

(00:02:56) - Investors looking at DuPont also look at Olin from a subsector perspective 

(00:03:55) - A brief history of Olin’s business

(00:07:40) - The process of creating Chloralkali and its uses

(00:11:25) - The similarities and differences when comparing the crude oil refining process and the creation of Chloralkali

(00:12:21) - The use of Olin’s chlorine in residential public pools 

(00:12:48) - The breakdown of manufacturing operations of Olin, control versus outsourcing

(00:18:14) - A snapshot of the revenue percentages of Olin’s businesses

(00:19:13) - The percentage range of Olin’s cyclical commodities 

(00:20:06) - The end markets that Olin integrates itself in

(00:22:47) - A background on CEO Scott Sutton and the shift in operating philosophy

(00:29:09) - Olin’s confidence in its new optimization strategies

(00:33:49) - The downside risk to Olin’s new business model

(00:35:53) - A breakdown of Olin’s CapEx spending 

(00:37:17) - The margin profile and EBITDA growth, historically and how it looks now

(00:38:20) - The difficulties in forecasting and similarities with oil refinery volatility

(00:40:02) - Market futures activity and hedging

(00:41:49) - The Winchester business and its position within the overall Olin pie

(00:43:49) - The announcement to the departure of Scott Sutton and the risks posed

(00:48:11) - Other potential risks to Olin’s business moving forward

(00:49:11) - A look at Olin’s ESG ranking 

(00:51:35) - Valuing the business and what investors might think about Olin

(00:53:12) - Lessons learned from researching Olin

This is Matt Reustle and today we are breaking down WEX, a big fish in a less known pond. WEX is a leader in the fleet card market - they offer trucking businesses special credit cards which help secure advantaged rates on fuel among many other things. This is a business with a long history as WEX is headquartered in Maine, and really came to life in the 1980s. 

To break down WEX, I'm joined by Mark Tomasovic from Energize Capital, a multiple-time guest on Business Breakdowns. We get into the history of this industry and how WEX found a very creative way to accelerate adoption within this market. Please enjoy this breakdown of WEX.

Subscribe to Colossus's New Show: Art of Investing

Buy a ticket to Patrick and David Senra's live show.

Interested in hiring from the Colossus Community? Click here.

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 Converge — the first virtual event centered on the world of investor research. When twin brothers Tom and Mike Elnick realized that the research process for investors was broken, they founded Tegus to fix it. Now the people behind the most trusted research platform are bringing institutional investors together to investigate the state — and the future — of fundamental research. On November 8th, join industry luminaries like IGSB Founder Reece Duca and Daniel Gross, AI Expert, Entrepreneur and Investor, to dig into the latest research trends and breakthrough technologies shaping the investment landscape. Register today at tegus.com/register.

-----

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 | @domcooke

Show Notes

(00:02:57) - (First question) - An overview of what WEX is and what they do

(00:03:50) - A summary of the market that WEX operates in

(00:05:59) - The history of the company’s creation

(00:08:53) - The importance of signing up large gas companies rather than retail locations

(00:11:33) - Value propositions behind providing fleet cards 

(00:12:53) - How the economic model works for the cards  

(00:13:48) - The percentage of spend equivalent to Visa or Mastercard

(00:14:31) - The difficulty behind switching from one fleet card provider to another 

(00:17:05) - The role fuel prices play in the total revenue of the business

(00:20:09) - Threats to consider on the supply end of the business  

(00:21:57) - Recharging at home and the process of receiving a credit

(00:23:06) - Other businesses WEX is involved in

(00:24:27) - A comparison between all of WEX’s businesses and where they direct focus

(00:25:13) - A look into their health and employee benefits line 

(00:26:39) - The overall financial profile from a revenue and margins standpoint

(00:28:43) - How big players like Amazon or Walmart play a part in potential business

(00:30:02) - The threat of Visa or Mastercard entering the same space

(00:31:17) - Total amount of revenue generated from electric vehicle fleets  

(00:33:27) - Electric charging locations and the process of building these facilities

(00:35:13) - Technology invested into creating faster charging stations

(00:35:50) - An overall look at risks for the business

(00:37:54) - Other parts of WEX that stand out

(00:40:10) - Lessons learned from studying WEX

This is Matt Reustle and today we are breaking down the data services giant, Equifax. Experian, TransUnion, and Equifax have built this fascinating oligopoly worth studying, but the business has extended well beyond the credit checks on mortgages. Their employee verification tool, The Work Number, may be their most valuable asset today.

To break down Equifax, I'm joined by Mo Spolan, analyst at Weitz Investments. We dive into both sides of the business, the unique industry structures that they sit in, the history around competition, and Equifax's future outlook.

The newest podcast from Colossus, Art of Investing is dropping next week! This is going to be a series of discussions with the world's best investors, company builders, academics, athletes, artists, and any human beings devoted to exploring the joys of compounding in all its forms. The first two episodes will be released on Monday, October 9.

Art of Investing: Trailer

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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, the modern research platform for leading investors. Tired of running your own expert calls to get up to speed on a company? Tegus lets you ramp faster and find answers to critical questions more efficiently than any alternative method. The gold standard for research, the Tegus platform delivers unmatched access to timely, qualitative insights through the largest and most differentiated expert call transcript database. With over 60,000 transcripts spanning 22,000 public and private companies, investors can accelerate their fundamental research process by discovering highly-differentiated and reliable insights that can’t be found anywhere else in the market. As a listener, drive your next investment thesis forward with Tegus for free at tegus.co/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 | @ReustleMatt | @domcooke

Show Notes

(00:00:58) - (First question) - How Equifax extends beyond credit checks

(00:05:02) - Evolution from the Wild West of credit to a tech-driven, regulated oligopoly

(00:10:21) - Give-to-get model builds network; compiles detailed credit history

(00:12:16) - How credit bureaus grow with GDP and loan volumes

(00:15:19) - The shift from three to two credit checks for mortgages

(00:23:16) - Facing cyclical shifts, credit bureaus' margins decline with IT investments

(00:25:29) - How The Work Number, acquired by Equifax, has evolved into a critical income verification service

(00:28:50) - Ingesting exclusive data, Equifax dominates income verification via a large network

(00:32:51) - How Work Number stays atop the verification market despite competition

(00:43:36) - Increasing Work Number margins lift Equifax; HR paperwork still strategically important

(00:44:57) - Work Number poised for solid double-digit growth; boosts overall business outlook

(00:51:15) - The 2017 Equifax breach led to executive shakeup and strategic focus shift

(00:55:57) - Increasing competitive intensity, aggressive pricing, and potential regulation are key risks for Equifax

(00:59:46) - Lessons learned from studying Equifax

This is Zack Fuss, an investor at Irenic Capital, and today we’re breaking down Boeing. Founded in Seattle in 1916 by William Boeing, the company has produced thousands of commercial and military aircraft over the past century. It is an important national and global asset and one-half of arguably the most famous duopoly in business, alongside Airbus.

To break down Boeing, I’m joined by Jon Ostrower, founder and editor-in-chief of The Air Current. You can split Boeing’s business into three segments: commercial, defense, and services. For this discussion, we focus mostly on Boeing’s commercial business, which accounted for nearly 40% of its revenues last year. We talk about the cost and complexity of building new airplanes, how the 737 MAX disaster changed the business, and why the future of commercial planes may look radically different. Please enjoy this business breakdown of Boeing.

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 modern research platform for leading investors, and provider of Canalyst. Tired of calculating fully-diluted shares outstanding? Access every publicly-reported datapoint and industry-specific KPI through their database of over 4,000 driveable global models handbuilt by a team of sector-focused analysts, 35+ industry comp sheets, and Excel add-ins that let you use their industry-leading data in your own spreadsheets. Tegus’ models automatically update each quarter, including hard to calculate KPIs like stock-based compensation and organic growth rates, empowering investors to bypass the friction of sourcing, building and updating models. Make efficiency your competitive advantage and take back your time today. As a listener, you can trial Canalyst by Tegus for free by visiting tegus.co/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 | @ReustleMatt | @domcooke

Show Notes

(00:02:38) - (First question) - An introduction to the aerospace industry and Boeing's role in it

(00:05:41) - Boeing's business model today

(00:09:52) - How the aerospace industry settled into a duopoly

(00:12:30) - Costs associated with airplane manufacturing

(00:14:02) - The life expectancy of an aircraft

(00:14:46) - Dealing with the supply coordination problem

(00:17:39) - The Boeing and McDonnell Douglas merger

(00:20:51) - Problems Boeing has faced over the past five years

(00:25:44) - How leadership turnover has permeated through Boeing

(00:28:03) - Competitive headwinds Boeing can face

(00:33:10) - How Boeing will grow in the aerospace industry

(00:37:39) - Boeing's eVTOL strategy

(00:41:42) - What is impacting the profitability of the business

(00:43:38) - The biggest challenge facing the aerospace industry

(00:44:57) - Lessons learned from studying Boeing

This is Dom Cooke and today we’re breaking down an Irish business that has become the global leader in insulation products for buildings. Founded in 1965, the business is called Kingspan and today it has a market cap of nearly 13 billion euros. The bulk of their business comes from insulating big, commercial new builds – Tesla Factories, Apple’s Headquarters, the Emirates Stadium in London – all places where you’ll find Kingspan’s products.

To break down this business, I’m joined by Nick Griffin, the Founding Partner and CIO of Munro Partners. We talk about the ESG tailwinds behind this business, how they’ve grown through acquisitions, and their interesting go-to-market motion. Please enjoy this Business Breakdown of Kingspan.

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, the modern research platform for leading investors. Stretch your research budget with flexible expert calls you can trust. At a fraction of the cost of traditional expert networks, Tegus customers pay only what an expert charges – with zero markups and no confusing call credits – netting an average 70% savings. Don’t want to conduct a full hour call? Tegus offers the ability to schedule 30-minutes, an offer you won’t find anywhere else. And they don’t stop there. With white-glove custom sourcing for every project and robust compliance measures, including a dedicated 50+ analyst team that vets every call transcript, Tegus ensures your privacy and protection. As the industry innovator for qualitative insights, Tegus helps you find the right experts you need at a quality and speed that can’t be matched. For a limited time, as a listener, you can trial Tegus for free by visiting tegus.co/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 | @ReustleMatt | @domcooke

Show Notes

(00:02:35) - (First question) - He gives us a detailed description of Kingspan

(00:03:28) - Investing in a company based on the other side of the world

(00:05:14) - Whether Kingspan is more commercial or residential driven 

(00:05:55) - Kingspan’s origins

(00:08:35) - Description of an insulated panel and how it is used

(00:12:38) - What makes their panels the best in the world

(00:15:25) - The benefits of doing both commercial and residential panels

(00:16:08) - Industry characteristics and its overall market share

(00:17:54) - The pricing mechanism and pricing power behind the product

(00:21:26) - Kingspan’s expansion into the world market 

(00:22:53) - The secret sauce behind the success of Kingspan 

(00:25:01) - Kingspan’s economy to scale

(00:27:42) - What he finds interesting about Kingspan’s financial profile 

(00:29:15) - Splitting revenue growth between organic and inorganic growth

(00:32:35) - The visibility of Kingspan’s products and their measurable efficiency      

(00:34:50) - His expectations for Kingspan’s growth over the next 10 to 15 years

(00:34:05) - The margin structure of the acquired businesses

(00:37:12) - The life expectancy of the insulation product

(00:38:35) - Risks behind insulated panels and the industry

(00:42:22) - His evaluation of business modeling for acquisitions 

(00:43:23) - Which competitors does he watch most closely   

(00:44:49) - The lessons learned from studying Kingspan for 10 years 

This is Dom Cooke and today’s breakdown is a little different. Last week we looked at the most popular sport in the world in Football. Today, we break down the business behind a sport in its relative infancy - Padel. This racket sport started in the late 60s in Mexico and became big in many Spanish speaking countries. It then got a significant COVID bump and momentum has remained strong since.

To break down this burgeoning sport, I’m joined by Alan Flatt, CEO and President of EEP Capital. We look at the dynamics of the sport that are making it popular, the investment characteristics of Padel Clubs, and how sustainable its recent growth is. We also cover the differences to a sport that has become big in the US, Pickleball. Please enjoy this business breakdown of Padel.

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, the modern research platform for leading investors. Tired of running your own expert calls to get up to speed on a company? Tegus lets you ramp faster and find answers to critical questions more efficiently than any alternative method. The gold standard for research, the Tegus platform delivers unmatched access to timely, qualitative insights through the largest and most differentiated expert call transcript database. With over 60,000 transcripts spanning 22,000 public and private companies, investors can accelerate their fundamental research process by discovering highly-differentiated and reliable insights that can’t be found anywhere else in the market. As a listener, drive your next investment thesis forward with Tegus for free at tegus.co/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 | @ReustleMatt | @domcooke

Show Notes

(00:02:41) - (First question) - A background on the sport of Padel

(00:03:38) - The size and scope of Padel today

(00:05:35) - The origins of the sport and its growth around the world up until now

(00:06:31) - Covid and Pickleball’s impact on the growth of Padel over the last 5 years

(00:07:08) - The main differences between Padel and Pickleball

(00:09:12) - Padel’s universal attraction being its ease of entry for beginners

(00:10:41) - Alan’s story of how he became involved with Padel as an investment

(00:12:16) - Investing in Padel clubs and looking at Padel’s previous growth in other territories 

(00:15:53) - What makes an attractive location for a Padel club

(00:18:14) - The costs involved with starting a Padel club

(00:21:53) - A look at the Padel Brooklyn location’s business model

(00:25:12) - The margin profile of a Padel club

(00:26:51) - Other sports and businesses with comparative models

(00:28:55) - How the current supply issue can be resolved

(00:33:06) - The current state of the US Pro League and how it might change

(00:37:50) - A breakdown of the teams and schedule of the US Pro League

(00:39:32) - The makeup of a Padel Pro League team

(00:40:49) - The strategic priority list for the Pro League in order to meet its growth goals

(00:44:28) - As a whole, how the sport of Padel can grow and the target markets for adoption

(00:46:07) - How close the sport is to becoming an Olympic sport

(00:48:20) - The risks that Padel faces

(00:51:46) - The lessons Alan has learned and can share with operators and investors

This is Dom Cooke and today we’re breaking down the business behind the most popular sport in the world, Football or Soccer. It’s a vast market. 3 billion people around the world watch the sport and more than €30 billion euros are spent within the football ecosystem in Europe alone each year. But aside from a huge addressable market and reasonable revenue, is it actually a good business?

Why do investors keep buying Football clubs? Is there any economic rationale behind that? Is there a link between sporting and financial success? Has middle-eastern money distorted the transfer market for good?

These are some of the questions I asked our guest, Dr Rob Wilson, who is a football finance expert and Head of the finance, accounting, and business systems department at Sheffield Hallam University. I hope you enjoy us breakdown the business of football.

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 modern research platform for leading investors, and provider of Canalyst. Tired of calculating fully-diluted shares outstanding? Access every publicly-reported datapoint and industry-specific KPI through their database of over 4,000 drivable global models hand-built by a team of sector-focused analysts, 35+ industry comp sheets, and Excel add-ins that let you use their industry-leading data in your own spreadsheets. Tegus’ models automatically update each quarter, including hard to calculate KPIs like stock-based compensation and organic growth rates, empowering investors to bypass the friction of sourcing, building and updating models. Make efficiency your competitive advantage and take back your time today. As a listener, you can trial Canalyst by Tegus for free by visiting tegus.co/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 | @ReustleMatt | @domcooke

Show Notes

(00:03:16) - (First question) - Defining the European football market

(00:05:12) - How the Premier League defined itself as the world’s best league

(00:08:16) - The delegation of funds based on a team’s final position in the league

(00:11:19) - A brief introduction to the breakaway European Super League

(00:12:53) - The sale of Manchester United and how it affects the scope of the footballing world

(00:18:34) - The role emotion plays when it comes to buying and selling of football clubs

(00:20:47) - The makeup of a well run football club

(00:23:54) - The four-pillar model and exploring new revenue streams in football

(00:25:59) - The utilization of ‘access all areas’ type documentaries as a source of revenue

(00:28:40) - Breaking down the return on investment for football clubs building new stadiums 

(00:33:51) - Financial regulations in football and a brief history of UEFA’s Financial Fair Play

(00:40:41) - The correlation between sporting and financial performance

(00:42:23) - The different types of football club ownership profiles   

(00:44:51) - Reasons why investors choose to enter the football market

(00:48:12) - Changes to the football landscape since sovereign wealth funds have entered the market

(00:51:36) - The importance of the transfer market to football clubs

(00:53:03) - How the fans fit into the sport moving forward

(00:55:52) - Potential opportunities for TV revenue streams by entering new market places 

(00:56:55) - The relationship between the clubs and the leagues

(00:58:20) - The lessons learned from researching the football industry

Today we are going into the land of convenience stores to break down Casey's General Stores. Casey's currently operates in 16 states in the Midwest and Southern US. As of this recording, they have close to a $10 billion market cap and are the number three player in their market.

To break down Casey's, Matt Reustle is joined by Markus Hansen, portfolio manager and senior analyst at Vontobel Asset Management. We cover the industry of convenience stores, including the competition that exists in this market and the unique geographical considerations. We also discuss the financial model, drivers of gasoline performance versus in-store purchases, and margin profiles across the different segments of this business. This is another fascinating story hidden in plain sight. Please enjoy this breakdown of Casey's.

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, the modern research platform for leading investors. Stretch your research budget with flexible expert calls you can trust. At a fraction of the cost of traditional expert networks, Tegus customers pay only what an expert charges – with zero markups and no confusing call credits – netting an average 70% savings. Don’t want to conduct a full hour call? Tegus offers the ability to schedule 30-minutes, an offer you won’t find anywhere else. And they don’t stop there. With white-glove custom sourcing for every project and robust compliance measures, including a dedicated 50+ analyst team that vets every call transcript, Tegus ensures your privacy and protection. As the industry innovator for qualitative insights, Tegus helps you find the right experts you need at a quality and speed that can’t be matched. For a limited time, as a listener, you can trial Tegus for free by visiting tegus.co/patrick.

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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 | @ReustleMatt | @domcooke

Show Notes

(00:02:42) - (First question) - The concept of Casey’s General Stores 

(00:06:04) - Casey’s competitors and the market share in different regions

(00:10:52) - The main differences between Casey’s and a regular gas station  

(00:14:09) - A brief history on Casey’s beginnings and its founder

(00:17:25) - A breakdown of the business’ revenue

(00:19:14) - Casey's growth despite the changing environment standards raising operational costs

(00:23:52) - The business’ margin profile

(00:26:53) - How Casey’s General competes with its peers and fuel pricing

(00:29:33) - The focus for Casey’s with regards to expansion opportunities 

(00:33:06) - The hurdles involved with building new gas stations versus acquiring existing stores

(00:35:08) - Casey’s stance on franchising

(00:38:02) - The company’s attractiveness to buyers

(00:40:52) - Casey’s General’s average stock performance

(00:44:26) - Key risks of Casey’s

(00:47:30) - The main lessons learned from Casey’s General Stores

Important Information:

Information provided represents the views of a company of the Vontobel Group (“Vontobel”) and should not be considered investment advice and/or legal, tax, financial or other advice. Further, not a recommendation to purchase, hold or sell any investment and no representation is given that the securities discussed are suitable for any particular investor.

Although Vontobel believes that the information provided in this document is based on reliable sources, it cannot assume responsibility for the quality, correctness, timeliness or completeness of the information contained in this document.

This is Matt Reustle and today we are breaking down Take-Two Interactive Software. If you listened to our Business Breakdown on Electronic Arts, Take Two is another giant in the video game publishing space. They are best known for their Grand Theft Auto and 2K franchise.

To break down Take-Two I'm joined by Eric Kress, principal at Gossamer Consulting Group. Eric spent multiple decades inside the video game market, both as an investor and as an operator, and we tap into his perspective from both sides of the table. We drill into historic IP, the strategy behind new releases and what mobile means for the market, and specifically for Take Two. Please enjoy this breakdown of Take-Two.

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, the modern research platform for leading investors. Tired of running your own expert calls to get up to speed on a company? Tegus lets you ramp faster and find answers to critical questions more efficiently than any alternative method. The gold standard for research, the Tegus platform delivers unmatched access to timely, qualitative insights through the largest and most differentiated expert call transcript database. With over 60,000 transcripts spanning 22,000 public and private companies, investors can accelerate their fundamental research process by discovering highly-differentiated and reliable insights that can’t be found anywhere else in the market. As a listener, drive your next investment thesis forward with Tegus for free at tegus.co/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 | @ReustleMatt | @domcooke

Show Notes

(00:02:35) - (First question) - Brief overview of Take-Two

(00:03:32) - Take-Two's acquisition of Zynga represents a significant push into mobile gaming

(00:05:05) - Mobile gaming faces challenges from Apple's IDFA removal and Google's changes

(00:06:37) - Apple's privacy changes benefit them but hurt mobile publishers

(00:07:50) - How Take-Two evolved from PC and console to mobile

(00:10:48) - Console and PC target AAA games; mobile reaches a broader, less premium market

(00:12:53) - Creating new iconic AAA gaming IP is nearly impossible due to high costs

(00:15:08) - Big IP success in gaming historically depended on retail relationships and distribution

(00:17:39) - Sports games have almost 100% revenue visibility; others like GTA fluctuate

(00:19:31) - GTA's next release is anticipated and guaranteed to sell millions, but post-launch is uncertain

(00:25:24) - Risk of new console alignment affects expectations for next GTA game release

(00:27:57) - Updating titles for different consoles has become less complicated with PC architecture

(00:29:44) - Pricing at $60-$70; new tech may boost in-game spending

(00:31:30) - GTA's mature nature makes in-game advertising tough

(00:32:59) - NBA license with 2K is a partnership, not exclusive

(00:35:28) - Take-Two lacks profitable titles beyond GTA and 2K

(00:37:57) - EA smartly bought Respawn and built studios; Take-Two lacks similar capability

(00:39:29) - Gaming industry consolidated to fewer franchises; similar to film industry's trend

(00:44:07) - Zynga's acquisition was ill-timed; it's a declining asset with no value

(00:47:32) - Microsoft's deal may lead to Amazon or Comcast buying Take-Two

(00:50:11) - Valuing these businesses often relies on traditional PE methods

(00:52:06) - Key risks for Take-Two are overhyped GTA expectations and service burnout

(00:53:37) - Lessons learned from studying Take-Two

This is Zack Fuss, an investor at Irenic Capital, and today we’re breaking down Nubank. The Brazilian-based neobank has gone from nothing to extraordinary scale in a short period of time. 10 years after its founding, the company counts 46% of Brazil’s adult population as customers, is the largest Fintech in Latin America, and has a market capitalization of $37 billion. The fact that it’s achieved this in an environment that heavily favored the large incumbent banks makes its story all the more impressive.

To break down the business, I am joined by Daniel Bakalarz, Managing Partner at Unison Asset Management. Dan has a long history with this business and it shows in our discussion. We discuss the confluence of factors that made this business possible, the economics of a typical Nubank customer, and the competitive dynamics of banking in South America. Please enjoy this business breakdown of Nubank.

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 modern research platform for leading investors, and provider of Canalyst. Tired of calculating fully-diluted shares outstanding? Access every publicly-reported datapoint and industry-specific KPI through their database of over 4,000 drivable global models hand-built by a team of sector-focused analysts, 35+ industry comp sheets, and Excel add-ins that let you use their industry-leading data in your own spreadsheets. Tegus’ models automatically update each quarter, including hard to calculate KPIs like stock-based compensation and organic growth rates, empowering investors to bypass the friction of sourcing, building and updating models. Make efficiency your competitive advantage and take back your time today. As a listener, you can trial Canalyst by Tegus for free by visiting tegus.co/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 | @ReustleMatt | @domcooke

Show Notes

(00:02:44) - (First question) - A background on neobanks and how Nubank is unique

(00:04:17) - The company’s origin story and how it moved up the value chain over time

(00:09:43) - Nubank’s rise to a becoming a market leader in just a decade since its formation in 2013

(00:17:04) - The backdrop in Brazil that led to the opportunity for Nubank to enter the market

(00:23:34) - A breakdown of Nubank’s revenue

(00:29:06) - The makeup of a mature Nubank customer and the company’s average revenue from that customer

(00:33:33) - Reasons for the business pricing its annual percentage rates so aggressively 

(00:34:18) - The comparison between the business and traditional bank holding companies in the US and South America

(00:43:40) - Potential opportunities for Nubank in the future

(00:52:12) - The biggest risks to the company moving forward

(00:57:30) - Brazilian regulator's opinion on Nubank’s rise in the market in context of its large established peers

(00:59:54) - Lessons learned from studying the business

(01:05:06) - Dan’s parting wisdom on Nubank and what he wants people to take away from this breakdown

This is Zack Fuss, an investor at Irenic Capital. Today, we're breaking down Argenx, an immunology company founded in 2008 by its three founding partners. Today, it's a $30 billion company set to produce over a billion dollars in sales. They're known for their skill in developing antibodies for complex disease targets and owe a large part of their medical breakthroughs to llamas, which have similar antibodies in their immune system to those found in humans. 

To break down Argenx, I'm joined by Julia Angeles, an investment manager at Baillie Gifford. Throughout this conversation, we'll discuss how Argenx navigates the complex world of drug development, clinical trials, regulatory approvals, and the ultimate commercialization of autoimmune therapies. We'll also learn more about their transition from a venture capital backed business to its 2017 IPO, and today, a meaningful revenue generating business. We hope you enjoy this business breakdown.

Note: This conversation was recorded on 19 July 2023.

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, the modern research platform for leading investors. Stretch your research budget with flexible expert calls you can trust. At a fraction of the cost of traditional expert networks, Tegus customers pay only what an expert charges – with zero markups and no confusing call credits – netting an average 70% savings. Don’t want to conduct a full hour call? Tegus offers the ability to schedule 30-minutes, an offer you won’t find anywhere else. And they don’t stop there. With white-glove custom sourcing for every project and robust compliance measures, including a dedicated 50+ analyst team that vets every call transcript, Tegus ensures your privacy and protection. As the industry innovator for qualitative insights, Tegus helps you find the right experts you need at a quality and speed that can’t be matched. For a limited time, as a listener, you can trial Tegus for free by visiting tegus.co/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 | @ReustleMatt | @domcooke

Shownotes

(00:03:49) - (First question) - Ways the immune system protects us and fails us

(00:06:00) - Current patient treatments and evolving solutions to existing problems 

(00:07:52) - The key difference between how the biotech community is addressing big diseases versus autoimmune disorders

(00:09:55) - What sparked Julia’s interest in Argenx

(00:14:01) - Explanation how we use animal antibodies to help research progression

(00:15:25) - The foundations of the business

(00:17:57) - The evolution of the business and its commercial success thus far

(00:20:22) - Transitioning from lab antibodies to a commercial product ready for consumers

(00:23:42) - The infrastructure needed to maintain and grow Argenx

(00:26:43) - Indicators of commercial success

(00:29:27) - The basic revenue model for this business type

(00:30:49) - Go to market strategies for developed drugs 

(00:34:39) - Pricing and patient protection of these newly developed drugs 

(00:37:46) - Cures versus creating treatments with recurring revenue streams

(00:39:38) - The importance of the current team composition 

(00:41:44) - Julia’s perspective on what they are willing to invest to grow the company

(00:43:49) - Normalized profitability for biotech companies such as this

(00:45:59) - Potential risks to the current business model

(00:49:22) - Lessons learned from studying Argenx

This is Matt Reustle and today we are breaking down the vehicle auction giant, Copart. You may be unfamiliar with Copart but, at the time of this recording, the company has a $40 billion market cap. They operate in over 200 locations across the globe and they sell north of 3 million cars per year on behalf of their unique customer base.

Copart is a unique story in a very concentrated industry where they likely have 50% market share. It's a story defined by evolution. Its founder, Willis Johnson, didn't merely adopt a junkyard mentality. He was born into it, molded by it. To break down Copart, I'm joined by Adam Mead, CEO and Chief Investment Officer of Mead Capital Management. We cover all the angles of this unique industry giant. Please enjoy this breakdown of Copart.

Access Adam's Copart writeup for free here. Choose the October 2022 Copart issue and use the code "Breakdowns" for 100% off. 

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, the modern research platform for leading investors. Tired of running your own expert calls to get up to speed on a company? Tegus lets you ramp faster and find answers to critical questions more efficiently than any alternative method. The gold standard for research, the Tegus platform delivers unmatched access to timely, qualitative insights through the largest and most differentiated expert call transcript database. With over 60,000 transcripts spanning 22,000 public and private companies, investors can accelerate their fundamental research process by discovering highly-differentiated and reliable insights that can’t be found anywhere else in the market. As a listener, drive your next investment thesis forward with Tegus for free at tegus.co/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 | @ReustleMatt | @domcooke

Show Notes

(00:02:32) - (First question) - An overview of Copart

(00:04:16) - The size and scope of the market 

(00:04:52) - The process of a vehicle entering into Copart’s system 

(00:06:36) - The other side of the marketplace, who buys from Copart

(00:08:16) - Selling cars whole or dismantling and how this has changed from the early days of the business

(00:09:55) - An overview of Willis Johnson’s career, forming Copart and his involvement today 

(00:13:26) - The financial structure of the business in the early days

(00:14:59) - Copart’s differences from the competition 

(00:18:42) - Biggest drivers of supply. Accidents, natural disasters, wear and tear  

(00:22:12) - Cashflow flow through, the economics for Copart

(00:24:08) - Associated costs with regards to the sale and movement of vehicles 

(00:26:12) - Average inventory numbers throughout the year

(00:27:32) - The margin profile of the business on a normalized basis

(00:29:29) - A breakdown of the CapEx budget on a yearly basis

(00:33:42) - The major drivers of growth for Copart 

(00:37:16) - The buyback history, stated goal and philosophy on dividends

(00:38:38) - Historical and potential future risks to the business  

(00:42:00) - The insurance companies’ opinion of the business, net positive or net negative

(00:43:37) - The framework investors use when valuing this business

(00:47:17) - Lessons learned from the research and analysis of Copart 

This is Zack Fuss, an investor at Irenic Capital, and today we’re breaking down Lululemon Athletica. The Canadian company, founded by Chip Wilson in 1998, has grown from a pop-up store in a yoga class to a $45 billion apparel business. Along the way, it pioneered the trend of athleisure and forever changed what women and men wear to work out in.

To break down the business, I am joined by John Zolidis, president and founder of Quo Vadis Capital. We explore the origins of Lululemon’s direct to consumer growth strategy, how it has remained relevant in an industry known for fleeting success, and how its business model compares to apparel giants like Nike. Please enjoy this business breakdown of Lululemon. 

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 modern research platform for leading investors, and provider of Canalyst. Tired of calculating fully-diluted shares outstanding? Access every publicly-reported datapoint and industry-specific KPI through their database of over 4,000 driveable global models handbuilt by a team of sector-focused analysts, 35+ industry comp sheets, and Excel add-ins that let you use their industry-leading data in your own spreadsheets. Tegus’ models automatically update each quarter, including hard to calculate KPIs like stock-based compensation and organic growth rates, empowering investors to bypass the friction of sourcing, building and updating models. Make efficiency your competitive advantage and take back your time today. As a listener, you can trial Canalyst by Tegus for free by visiting tegus.co/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 | @ReustleMatt | @domcooke

Show Notes

(00:02:30) - (First question) - An overview of Lululemon

(00:03:27) - Lululemon's success lies in branding, innovation, and community involvement

(00:05:53) - Evaluating their growth story and investment potential

(00:09:57) - Chip Wilson’s history and influence

(00:16:53) - Management transitions, operational issues, and turnaround under new leadership

(00:20:01) - Lululemon's success lies in its functional product and strong brand message

(00:23:13) - Fending off competition through unique branding and customer engagement

(00:26:31) - Lulu aims to grow men's business to complement women's dominance and reach

(00:28:46) - China offers significant growth potential for Lululemon

(00:32:35) - Focusing on vertical integration and limited wholesale channels

(00:34:21) - Lulu's higher gross margins stem from product mix and DTC focus

(00:37:08) - Increased capital expenditure is primarily allocated to store openings

(00:40:18) - Mirror acquisition didn't meet expectations, unlikely to repeat such deals

(00:42:30) - Significant risks for Lululemon's future

(00:44:48) - Lessons learned from studying Lululemon

This is Zack Fuss, an investor at Irenic Capital, and today we’re breaking down the vertical market software business, Toast. Toast is a software platform built specifically for restaurants. Their operating system gives restauranteurs all the tools they need to serve customers, from taking orders to allocating shifts. It was founded in 2011 and went public a decade later. Today, it’s used by nearly 80,000 restaurants across the US.

To breakdown Toast, I’m joined by Will Schreiber, the co-founder and CEO of Bottle – an ecommerce platform built for subscription businesses. We cover the different ways that Toast minimises the complexities of operating a restaurant, how their deep vertical focus has helped them outcompete Square, and how much room there is for potential growth. Please enjoy this breakdown of Toast.  

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, the modern research platform for leading investors. Stretch your research budget with flexible expert calls you can trust. At a fraction of the cost of traditional expert networks, Tegus customers pay only what an expert charges – with zero markups and no confusing call credits – netting an average 70% savings. Don’t want to conduct a full hour call? Tegus offers the ability to schedule 30-minutes, an offer you won’t find anywhere else. And they don’t stop there. With white-glove custom sourcing for every project and robust compliance measures, including a dedicated 50+ analyst team that vets every call transcript, Tegus ensures your privacy and protection. As the industry innovator for qualitative insights, Tegus helps you find the right experts you need at a quality and speed that can’t be matched. For a limited time, as a listener, you can trial Tegus for free by visiting tegus.co/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 | @ReustleMatt | @domcooke

Show Notes

(00:01:42) - (First question) - An overview of Toast

(00:04:16) - Toast's origins and pivot to Point-of-Sale (POS) solutions

(00:07:35) - Convincing restaurants to switch from antiquated systems to modern POS solutions

(00:09:48) - The complexity of restaurant operations requires efficient POS systems

(00:13:04) - An overview of the POS revenue model

(00:17:16) - Addressable market and limiting it intentionally with pricing 

(00:20:04) - How their tech expertise enabled them to build a hardware and software ecosystem

(00:23:23) - The Toast network effect and their potential margin profile at full scale 

(00:26:19) - Their revenue mix impacts its margin profile, with transaction revenue dominating

(00:27:37) - How they aim to dominate the restaurant industry with comprehensive services

(00:29:59) - APIs enable integration, yet in-house features may risk partner relationships

(00:33:45) - The key risks for Toast moving forward

(00:38:40) - Why expanding beyond restaurants could challenge Toast

(00:41:02) - Third-party integrations may erode Toast's point-of-sale dominance

(00:44:36) - Lessons learned from studying Toast

This is Zack Fuss, an investor at Irenic Capital, and today we’re breaking down the biggest manufacturer of chip making equipment in the world, Applied Materials. Last week, we looked at the other leading equipment maker in the semi-industry, ASML, and while that business currently has a higher market cap, Applied Materials generated more revenue and profit last year.

It earned $26 billion, spent $3 billion on R&D and currently has 17,300 patents. To explore the business behind those numbers, I’m joined by Dylan Patel, Chief Analyst at SemiAnalysis. Dylan takes us through the industry’s evolution, how Applied’s business differs to ASML, and how geopolitics is a double-edged sword. Please enjoy this breakdown of Applied Materials.

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, the modern research platform for leading investors. Tired of running your own expert calls to get up to speed on a company? Tegus lets you ramp faster and find answers to critical questions more efficiently than any alternative method. The gold standard for research, the Tegus platform delivers unmatched access to timely, qualitative insights through the largest and most differentiated expert call transcript database. With over 60,000 transcripts spanning 22,000 public and private companies, investors can accelerate their fundamental research process by discovering highly-differentiated and reliable insights that can’t be found anywhere else in the market. As a listener, drive your next investment thesis forward with Tegus for free at tegus.co/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 | @ReustleMatt | @domcooke

Show Notes

(00:02:33) - (First question) - An overview of the vital and diverse semiconductor industry

(00:05:11) - The shift to specialization in semiconductors

(00:09:04) - Geopolitical factors that impact the sector

(00:12:16) - The dynamic evolution of Applied Materials

(00:15:22) - What differentiates Applied Materials from their competitors

(00:18:52) - Strong margins, growth, and efficient capital allocation drive their financials 

(00:22:00) - The cyclical nature of the semiconductor industry

(00:24:36) - Optimizing equipment for next-gen chips through collaboration with manufacturers

(00:29:09) - How Applied Materials' specialization limits equipment changes for manufacturers

(00:32:54) - Contributing factors to Applied Materials' continued growth

(00:36:05) - Market share varies by equipment and processes

(00:39:13) - Biggest risks for Applied

(00:41:23) - AI's growing demand for semiconductors

(00:43:20) - Lessons learned from studying Applied Materials

This is Matt Reustle and today we are back covering the semiconductor value chain. ASML was once a forgotten subsidiary of Philips. Today, it's one of the most important technology companies in the world. To break down ASML, I'm joined by Tom Walsh, a portfolio manager at Baillie Gifford. Tom helps explain what's happening inside an extreme ultraviolet lithography machine, and how ASML came to pioneer this technology from the Netherlands. It was a non-traditional path to say the least. This breakdown pairs very well with our breakdowns on AMD, Qualcomm and Cadence. And I'd also highlight the Founders Podcast episode #8 on the Intel Trinity. Please enjoy this breakdown of ASML.

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 modern research platform for leading investors, and provider of Canalyst. Tired of calculating fully-diluted shares outstanding? Access every publicly-reported datapoint and industry-specific KPI through their database of over 4,000 driveable global models handbuilt by a team of sector-focused analysts, 35+ industry comp sheets, and Excel add-ins that let you use their industry-leading data in your own spreadsheets. Tegus’ models automatically update each quarter, including hard to calculate KPIs like stock-based compensation and organic growth rates, empowering investors to bypass the friction of sourcing, building and updating models. Make efficiency your competitive advantage and take back your time today. As a listener, you can trial Canalyst by Tegus for free by visiting tegus.co/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 | @ReustleMatt | @domcooke

Show Notes

(00:02:44) - (First question) - The ASML back story

(00:06:14) - A deep dive into what semiconductors and Lithography are  

(00:08:04) - Alternate business directions ASML could have pursued 

(00:19:39) - How large ASML is in the industry today

(00:10:37) - A look into the management team over time

(00:14:03) - Moore’s Law and the key components of chip production

(00:15:09) - Overall size of the machines manufactured

(00:16:14) - The evolution of UV light and its important role in the advancement of Lithography 

(00:20:29) - Other competing companies within the field 

(00:23:10) - A detailed look into the cost of production industry wide

(00:24:04) - Unlocked innovations associated with the development technology 

(00:25:32) - The life cycle of a lithography machine

(00:27:04) - Revenue gained from new versus refurbished machines

(00:27:27) - The cyclicality of the ASML machine revenue

(00:29:32) - Potential production limitations due to capacity

(00:31:00) - Margin profile and how ASML sets prices

(00:32:33) - What the concentration of customers looks like

(00:37:00) - Reasons why an acquisition has not taken place to date

(00:38:42) - He explains where investor cash flow is directed

(00:40:01) - An investors perspective on ASML opportunities 

(00:42:24) - How milestones in new technology are regulated and measured

(00:45:40) - Potential business risks

(00:49:21) - Lessons he’s learned from studying ASML

This is Jesse Pujji and today we are breaking down Roku. With all the hype about social media and smartphones, it’s easy to forget that the average American still spends over 5 hours a day watching TV. And while the streaming wars get most headline attention, the battle for the user interface of smart TVs also has billions of dollars at stake. Here, Roku has emerged as an unlikely frontrunner, ahead of Samsung, Google, Amazon and other giants.

To breakdown Roku, I am joined by Joe Frankenfield, Portfolio Manager at Saga Partners. We cover Roku’s history, dive into its income statement, unpack why it is the leading Smart TV platform in the US, and what the future holds for it. Please enjoy this breakdown of Roku.

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, the modern research platform for leading investors. Tired of running your own expert calls to get up to speed on a company? Tegus lets you ramp faster and find answers to critical questions more efficiently than any alternative method. The gold standard for research, the Tegus platform delivers unmatched access to timely, qualitative insights through the largest and most differentiated expert call transcript database. With over 60,000 transcripts spanning 22,000 public and private companies, investors can accelerate their fundamental research process by discovering highly-differentiated and reliable insights that can’t be found anywhere else in the market. As a listener, drive your next investment thesis forward with Tegus for free at tegus.co/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 | @ReustleMatt | @domcooke

Show notes

(00:02:35) - (First question) - What is Roku: its scale and business model

(00:04:37) - The history of Roku, major milestones, and the evolution of streaming

(00:09:04) - The evolution of the content landscape after the inception of Roku’s device 

(00:10:59) - The steps Roku is taking to become the choice provider for consumers

(00:14:10) - A breakdown of Roku’s revenue streams

(00:18:04) - Advertising versus subscription models

(00:18:37) - Mental models for determining the size and scope of the company 

(00:19:48) - How Roku acquires new customers, how marketing differs from old-school cable acquisition methods

(00:21:20) - Reasons why Roku has won the majority market share

(00:28:00) - Roku’s founder Anthony Wood’s importance to the business nowadays

(00:29:04) - How Roku distributes its profits

(00:31:14) - Roku’s acquisitions to date and the reason why the company has not yet been acquired by a bigger player

(00:32:38) - Internal and external factors that could make or break Roku’s  growth expectations over the next 5 years

(00:39:09) - The lessons that can be taken from the Roku story for platform builders and investors

(00:41:37) - Learn more about Roku: Media in the Digital Age | We Now Disrupt this Broadcast | The Business of Media Distribution

This is Matt Reustle and today we are breaking down the mobile gaming industry. It was several months ago that I was reading an industry report for our Business Breakdown on Electronic Arts. I was shocked to see that mobile gaming was now 50% of the overall gaming market. What really stood out to me was just how different the business model is. You have smaller game developers operating with a completely different monetization model. It's the same industry but with drastically different strategies.

To break down the industry, I'm joined by Eric Seufert. Eric spent his early career in the heart of mobile gaming, notably as a Vice President at Rovio, which developed Angry Birds. Today, Eric is the creator of Mobile Dev Memo, a publication focused on mobile monetization. For this conversation, Eric details the history and inflection points for mobile gaming, what the market structure looks like today, and how regulation and privacy have impacted the business model and strategies. 

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 modern research platform for leading investors, and provider of Canalyst. Tired of calculating fully-diluted shares outstanding? Access every publicly-reported datapoint and industry-specific KPI through their database of over 4,000 driveable global models handbuilt by a team of sector-focused analysts, 35+ industry comp sheets, and Excel add-ins that let you use their industry-leading data in your own spreadsheets. Tegus’ models automatically update each quarter, including hard to calculate KPIs like stock-based compensation and organic growth rates, empowering investors to bypass the friction of sourcing, building and updating models. Make efficiency your competitive advantage and take back your time today. As a listener, you can trial Canalyst by Tegus for free by visiting tegus.co/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 | @ReustleMatt | @domcooke

Show Notes

(00:02:24) - (First question) The year mobile gaming took off and the leaders in game development at that time

(00:04:34) - The evolution of mobile game publishers since 2012  

(00:08:50) - Mobile gaming business models; why “freemium” has thrived  

(00:14:04) - The 95% rule for freemium; revenue per user is not as important when working truly within a freemium model   

(00:21:18) - The ratio of average user retention vs great user retention; and measuring retention using DX values 

(00:24:19) - Comparing game revenue before and after the decline curve of user base at the 30 day mark

(00:29:23) - How much in-game advertising revenue makes up in the total revenue for a game

(00:34:22) - The current business model for mobile gaming; 25 good games vs 1 viral hit game

(00:37:32) - Balancing in-game advertising between outside revenue and a developer’s gaming portfolio; determining high-potential players based on their immediate in-game behavior 

(00:43:17) - Eco-system development or consolidation; The enduring theme that Eric expects to stick around for the next 3-5 years

(00:47:18) - The overall health of the mobile gaming market; how the Digital Markets Act in Europe may lead to the fracturing of app stores and the benefits to the industry of that

This is Matt Reustle and today we are breaking down First Citizens Bank. I'm joined by investors with plenty of experience investing in banks - Bill Nygren and Alex Fitch of Oakmark. First Citizens is a bank with 125 years of history but they don't operate like the bulge bracket Wall Street Banks. They don't even host quarterly conference calls. They have a playbook and they execute it, and their recent acquisition of Silicon Valley Bank fell into that playbook. In this conversation, Bill and Alex offer a really unique macro and micro view on bank investing and what stands out about First Citizens. Please enjoy this breakdown of First Citizens Bank.

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, the modern research platform for leading investors. Stretch your research budget with flexible expert calls you can trust. At a fraction of the cost of traditional expert networks, Tegus customers pay only what an expert charges – with zero markups and no confusing call credits – netting an average 70% savings. Don’t want to conduct a full hour call? Tegus offers the ability to schedule 30-minutes, an offer you won’t find anywhere else. And they don’t stop there. With white-glove custom sourcing for every project and robust compliance measures, including a dedicated 50+ analyst team that vets every call transcript, Tegus ensures your privacy and protection. As the industry innovator for qualitative insights, Tegus helps you find the right experts you need at a quality and speed that can’t be matched. For a limited time, as a listener, you can trial Tegus for free by visiting tegus.co/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 | @ReustleMatt | @domcooke

Show Notes

(00:02:47) - (First question) - A primer on investing in banks

(00:09:27) - The appeal of First Citizens Bank

(00:15:18) - How they leverage acquisitions, including FDIC auctions, for a competitive edge

(00:21:42) - How their risk management and protective measures foster resilience and growth

(00:26:22) - The significant impact of prioritizing relationship-based and specialized lending

(00:28:51) - Why they adjust risk parameters during the integration with other banks

(00:30:38) - How they leverage loyal customers and low costs to achieve strong profitability 

(00:33:21) - Rapid fund movement during the SVB event raises market change concerns

(00:36:58) - Overview of bank investment opportunities

(00:42:48) - The key drivers of their business model

(00:47:43) - Rebuilding relationships with former depositors to retain SVB deposits

(00:51:23) - Their emphasis on relationships and strategic acquisitions

(00:53:30) - How the regulatory framework plays a key role in de-risking the banking system

(00:57:00) - The key risks for First Citizens moving forward

(00:58:39) - Why volatile interest rate changes impacted banks

(01:00:08) - Lessons learned from studying First Citizens

This is Dom Cooke and today we’re breaking down PayPal. PayPal has been at the forefront of digital payments since the early days of the internet. Founded by Peter Thiel, Elon Musk and others, who have since become household names, PayPal is a payments marketplace that facilitates transactions between merchants and consumers. It found product market fit as the trusted way to send money over the internet, was quickly acquired by eBay, and had its second founding moment in 2015 when it was spun off into a public company again. The platform serves 435 million consumers and merchants and processed $1.4 trillion of payments last year.

To break down the business, I’m joined by Elliot Turner, managing partner and CIO at RGA Investment Advisors. We discuss the acquisitive history behind this business, how their portfolio of brands like Braintree, Venmo, and Honey operate within the ecosystem, and why VISA threatened to go nuclear on PayPal. Please enjoy this business breakdown of PayPal.

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, the modern research platform for leading investors. Tired of running your own expert calls to get up to speed on a company? Tegus lets you ramp faster and find answers to critical questions more efficiently than any alternative method. The gold standard for research, the Tegus platform delivers unmatched access to timely, qualitative insights through the largest and most differentiated expert call transcript database. With over 55,000 transcripts spanning 22,000 public and private companies, investors can accelerate their fundamental research process by discovering highly-differentiated and reliable insights that can’t be found anywhere else in the market. As a listener, drive your next investment thesis forward with Tegus for free at tegus.co/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 | @ReustleMatt | @domcooke

Show Notes

(00:02:40) - (First question) Important milestones leading to the genesis of PayPal

(00:08:18) - eBay's acquisition of PayPal and the subsequent separation

(00:12:13) - The size and scope of PayPal today

(00:15:08) - Where PayPal fits within the overall payments ecosystem

(00:18:33) - The various transaction types involved in their business economics

(00:22:03) - How PayPal protects its users against fraudulent behavior

(00:24:37) - PayPal’s business strategy of getting people comfortable with using digital money

(00:27:31) - The value that driving customer engagement has on the bottom line

(00:31:41) - How PayPal utilizes cash within its ecosystem

(00:33:15) - Why Braintree has been such a success, and who they compete with

(00:38:50) - How PayPal revenue is split into cash flow and profits

(00:42:40) - What enables PayPal to maintain such a large advantage over its competitors 

(00:46:03) - Identifying PayPal’s main competitors and partners

(00:48:30) - The dynamics of PayPal's relationship with Apple

(00:50:44) - How acquisition and R&D fosters their growth and innovation  

(00:55:12) - Strategic changes adopted by PayPal to recover from the COVID period

(00:56:42) - Speculation on who could replace Dan Schulman as PayPal’s CEO

(00:58:52) - His thoughts on potential growth opportunities for PayPal’s next CEO

(01:01:40) - Potential risks that PayPal may encounter in the future

(01:04:10) - Lessons learned from studying PayPal

This is Matt Reustle and today we are breaking down Restoration Hardware. The average person would call RH a furniture company but RH is a company where the CEO feels as important as the business, and CEO Gary Friedman has aspirations well beyond selling furniture.

To break down RH, I'm joined by Drew Cohen of Speedwell Research. You may remember Drew from our breakdown of Floor & Decor. We cover how Gary Friedman took Restoration Hardware from the brink of bankruptcy and has built it into a brand with luxury aspirations. We go deep on the business model, why has RH been leaning into this in person experience despite a massive e-commerce boom, the reality of interior designers, inventory management, and orchestrating a supply chain when you sell monstrous couches. There's a lot to talk about here. It's a fascinating business with a fascinating person sitting at the middle of it. Please enjoy this breakdown of RH.

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, the modern research platform for leading investors. Stretch your research budget with flexible expert calls you can trust. At a fraction of the cost of traditional expert networks, Tegus customers pay only what an expert charges – with zero markups and no confusing call credits – netting an average 70% savings. Don’t want to conduct a full hour call? Tegus offers the ability to schedule 30-minutes, an offer you won’t find anywhere else. And they don’t stop there. With white-glove custom sourcing for every project and robust compliance measures, including a dedicated 50+ analyst team that vets every call transcript, Tegus ensures your privacy and protection. As the industry innovator for qualitative insights, Tegus helps you find the right experts you need at a quality and speed that can’t be matched. For a limited time, as a listener, you can trial Tegus for free by visiting tegus.co/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 | @ReustleMatt | @domcooke

Show Notes

(00:02:27) - (First question) - Restoration Hardware’s relevance in the market

(00:04:37) - The origin story of Restoration Hardware

(00:07:58) - Insight into Gary Friedman’s backstory and his entry into RH

(00:09:52) - The current RH business model and how Gary has shaped that over time 

(00:17:14) - Their unique marketing funnels 

(00:19:47) - Their move into the luxury brand market

(00:21:24) - Explaining how the product collections are made up

(00:22:32) - Updated supplier relations model 

(00:25:25) - Insight into the RH sales model

(00:28:04) - Overview of the membership model and how it impacts the business

(00:31:42) - Peers within the industry that are using similar business models

(00:32:49) - Cyclical macro exposure sales growth over time

(00:34:09) - Their operations and logistics model

(00:39:03) - The impact of COVID-19

(00:40:15) - Expected working capital for RH and other furniture peers

(00:42:36) - Peer group average margin growth

(00:45:56) - Key decisions and investments that need to go right

(00:48:41) - European housing sizes and issues with American furniture

(00:49:52) - Capital allocation history within RH

(00:51:15) - How RH stays in style as decor tastes change over time

(00:54:02) - His overall insight towards Gary’s ideas and risky business experiments

(00:55:37) - His capital structure perspective for the future 

(00:58:09) - How RH is moving into the luxury market as other brands move out 

(00:59:09) - Lessons learned from studying Restoration Hardware

This is Zack Fuss, an investor at Irenic Capital, and today we’re breaking down Fair Isaac Corporation, commonly known as FICO. FICO is best known for its consumer credit scores product, which has become a common language across the world of consumer loans and banking. Less well known, but a major piece of the business, is FICO’s software offering that helps financial businesses with fraud detection, CRM, and loan origination. Between these two offerings – scores and software – FICO earned $1.3 billion last year.

To break down the business, I’m joined by Dev Kantesaria, managing partner at Valley Forge Capital Management. In going through its history and business units, Dev explains why it would be tough to design a better business model than FICO. Please enjoy this breakdown of FICO.

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, the modern research platform for leading investors. Tired of running your own expert calls to get up to speed on a company? Tegus lets you ramp faster and find answers to critical questions more efficiently than any alternative method. The gold standard for research, the Tegus platform delivers unmatched access to timely, qualitative insights through the largest and most differentiated expert call transcript database. With over 55,000 transcripts spanning 22,000 public and private companies, investors can accelerate their fundamental research process by discovering highly-differentiated and reliable insights that can’t be found anywhere else in the market. As a listener, drive your next investment thesis forward with Tegus for free at tegus.co/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 | @ReustleMatt | @domcooke

Show Notes

(00:02:40) - (First question) - What attracted him to FICO as a business

(00:03:31) - An overview of their key products and the value they provide

(00:06:01) - How FICO collaborates and competes with credit bureaus

(00:11:23) - Their ability to sustain steady growth in a cyclical environment

(00:12:48) - How FICO's software offerings complement their credit score business

(00:14:13) - Who their competitors are

(00:23:16) - The potential competitive risks of emerging A.I. technology

(00:25:57) - Why the push for VantageScore in the mortgage industry created more competition for credit bureaus 

(00:27:58) - The differences between their B2C and scores businesses 

(00:30:38) - A breakdown of the software side of the business and its significance

(00:34:26) - All about FICO’s Falcon Fraud Manager and Triad Customer Manager 

(00:39:20) - FICO’s capital-light business model in detail

(00:41:59) - The aspects of the business that investors often overlook or underestimate

(00:45:18) - Lessons learned from studying FICO 

This is Dom Cooke and today we’re breaking down Bayern Munich. Bayern is Germany’s most successful football club and one of the world’s biggest. Most importantly, it makes a great case for being the best-run club in football. It has an enterprise value close to €3 billion, no debt, has been profitable for 3 decades, and is majority owned by fans. Plus, it has a trophy cabinet to rival any club worldwide. Bayern has won a record 32 national Bundesliga titles, including the last ten in a row, and has won the prestigious Champions League, six times.

To break down the business behind the club, I’m joined by Marie Schulte-Bockum, a football journalist and Munich resident. Please enjoy this Business Breakdown of FC Bayern Munich.

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 modern research platform for leading investors, and provider of Canalyst. Tired of calculating fully-diluted shares outstanding? Access every publicly-reported datapoint and industry-specific KPI through their database of over 4,000 driveable global models handbuilt by a team of sector-focused analysts, 25+ industry comp sheets, and Excel add-ins that let you use their industry-leading data in your own spreadsheets. Tegus’ models automatically update each quarter, including hard to calculate KPIs like stock-based compensation and organic growth rates, empowering investors to bypass the friction of sourcing, building and updating models. Make efficiency your competitive advantage and take back your time today. As a listener, you can trial Canalyst by Tegus for free by visiting tegus.co/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 | @ReustleMatt | @domcooke

Show Notes

(00:02:38) - (First question) - Overview of Bayern Munich

(00:05:37) - How Bayern’s been able to maintain such consistent success writ large

(00:12:39) - What the 50+1 rule is and its implications for German football clubs

(00:17:24) - Major differences between the Bundesliga and other European leagues

(00:22:30) - What it takes to run a high performance team like Bayern Munich

(00:28:39) - Driving profits and the three major revenue buckets for Bayern Munich

(00:35:48) - Germany’s influence being the biggest economy in the European Union

(00:38:40) - How important European football is to every major club and broadcasting revenue

(00:43:20) - Whether Bayern are buyers, builders, or borrowers in regards to their team 

(00:51:15) - Overview of their expenses and the size of their wage bill 

(00:53:43) - What financial fair play is and how it protects football clubs

(00:57:27) - How they’ve managed to cultivate one of the biggest fanbases in the world

(01:02:14) - Potential risks for Bayern Munich’s continued success

(01:04:18) - League-level discussions around sharing revenue equitably 

(01:05:34) - Lessons for builders and investors when studying Bayern Munich’s story 

This is Zack Fuss, an investor at Irenic Capital, and today we’re breaking down MTN Group. MTN is the largest mobile network operator in Africa and one of the 10 largest in the world. It has over 270 million subscribers, operates in 20 different markets, and is also one of the largest FinTech’s in the continent.

To break down MTN, I’m joined by Benjamin Isaac, founder and Chief Investment Officer at Brizo Capital. We unpack their mobile money business in some detail, contrast the development of Telcos in Africa with what we’ve experienced in the US, and explore the competitive dynamics of operating in Africa. Please enjoy this breakdown of MTN.

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 modern research platform for leading investors. Stretch your research budget with flexible expert calls you can trust. At a fraction of the cost of traditional expert networks, Tegus customers pay only what an expert charges – with zero markups and no confusing call credits – netting an average 70% savings. Don’t want to conduct a full hour call? Tegus offers the ability to schedule 30-minutes, an offer you won’t find anywhere else. And they don’t stop there. With white-glove custom sourcing for every project and robust compliance measures, including a dedicated 50+ analyst team that vets every call transcript, Tegus ensures your privacy and protection. As the industry innovator for qualitative insights, Tegus helps you find the right experts you need at a quality and speed that can’t be matched. For a limited time, as a listener, you can trial Tegus for free by visiting tegus.co/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 | @ReustleMatt | @domcooke

Show Notes

(00:02:24) - An overview of MTN Group today

(00:04:13) - Contextualizing the scale and trajectory of the business vis-à-vis

 its strong African demographic

(00:05:52) - MTN Group’s unique position in the value chain

(00:10:37) - The origin and the evolution of MTN Group

(00:13:19) - The business’ current and future revenue models and how they differ domestically and internationally

(00:15:52) - Comparing ARPU in North America and Africa

(00:18:03) - His take on why the international fintech market is developing as rapidly as it is

(00:22:48) - Understanding use cases for MTN Group’s mobile money products

(00:27:57) - The low market share held by credit card companies in Africa, and the opportunity it represents for MTN Group

(00:29:07) - Regional differences, local competition, and the overall market structure

(00:30:42) - The architects, visionaries, and capital allocators behind MTN Group

(00:34:33) - What structural separation means for a business like MTN Group

(00:36:31) - Measuring the size and scale of the business

(00:38:53) - Investing in emerging markets

(00:42:59) - The importance of location in a mobile fintech company listing

(00:45:09) - Risks and challenges facing MTN Group

(00:49:53) - How African mobile and fintech markets fared during COVID

(00:51:23) - Framing the business’ current and future picture of profitability

(00:56:23) - Lessons learned in studying the story of MTN Group

This is Zack Fuss, an investor at Irenic Capital, and today we’re breaking down Roper Technologies. Roper is a fascinating case study in how an old industrial business can pivot into a new world focused on software and technology. Roper was founded in 1890 as a manufacturer of industrial equipment and home appliances but, today, it is one of the most profitable software businesses in the world. Much of the pivot and subsequent value creation can be credited to Brian Jellison, who took over in 2001.

To break down Roper, I’m joined by Joseph Shaposhnik, portfolio manager of the TCW New America Premier Equities Fund. We discuss the business’s roots, Jellison’s acquisition strategy, and how Roper compares to other niche software acquirers like Constellation Software. Please enjoy this business breakdown of Roper Technologies.

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 modern research platform for leading investors, and provider of Canalyst. Tired of calculating fully-diluted shares outstanding? Access every publicly-reported datapoint and industry-specific KPI through their database of over 4,000 driveable global models handbuilt by a team of sector-focused analysts, 25+ industry comp sheets, and Excel add-ins that let you use their industry-leading data in your own spreadsheets. Tegus’ models automatically update each quarter, including hard to calculate KPIs like stock-based compensation and organic growth rates, empowering investors to bypass the friction of sourcing, building and updating models. Make efficiency your competitive advantage and take back your time today. As a listener, you can trial Canalyst by Tegus for free by visiting tegus.co/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 | @ReustleMatt | @domcooke

Show Notes

(00:02:38) - (First question) - Basic overview of Roper

(00:05:24) - The businesses history and its pivot away from its roots

(00:08:53) - Brian Jellison’s background and his appreciation for software businesses

(00:14:23) - The way Brian Jellison would distinguish himself from others in his space

(00:20:35) - His focus on acquiring new businesses vs building them himself

(00:26:08) - The 3 dials he used to assess capital allocation decisions and the performance of companies

(00:29:12) - How they are able to grow and expand margin after acquisitions

(00:30:58) - Difference between other vertically integrated businesses like Constellation

(00:34:19) - The succession plan at Roper

(00:38:00) - Risks to that people should think about when it comes to Roper

(00:41:44) - Lessons learned from Roper

This is Matt Reustle and today we are breaking down Dolby Labs. Our favorite Breakdowns are those businesses, which are widely known but barely understood. Dolby fits the bill. You see the logo everywhere but what does Dolby technology do and how does the business work? To answer those questions and break down Dolby, I was joined by Paul Vincent and William Nott from investment manager, Ninety One. We cover the backstory of Ray Dolby, what Dolby's actually building and selling, and how the business model works. Please enjoy this breakdown of Dolby.

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

(for me - https://joincolossus.com/episodes/69279744/vincent-dolby-the-sound-standard) 

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This episode is brought to you by Tegus. Tegus is the modern research platform for leading investors. I’m a longtime user and advocate of Tegus, a company that I’ve been so consistently impressed with that last fall my firm, Positive Sum, invested $20M to support Tegus’ mission to expand its product ecosystem. Whether it’s quantitative analysis, company disclosures, management presentations, earnings calls - Tegus has tools for every step of your investment research. They even have over 4000 fully driveable financial models. Tegus’ maniacal focus on quality, as well as its depth, breadth and recency of content makes it the one-stop, end-to-end research platform for investors. Move faster, gather deep research to build conviction and surface high-quality, alpha-driving insights to find your differentiated edge with Tegus. As a listener, you can take the Tegus platform for a free test drive by visiting tegus.co/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 | @ReustleMatt | @domcooke

Show Notes

(00:02:50) - (First question) - The problem that Dolby initially set out to solve

(00:05:02) - Some of the well-known products Dolby offers today 

(00:08:41) - The path from noise reduction to enhancing the listener experience 

(00:13:23) - Invisalign: Patents, Patients, Profits; How their codec technology is actually implemented 

(00:16:40) - Whether or not how we record and what we record on can inhibit our ability to use Dolby’s products

(00:18:32) - What the end markets for Dolby look like today  

(00:21:04) - Whether or not they can offset against the consolidation of consumer technology 

(00:22:54) - Targeting manufacturers as customers

(00:26:55) - The trouble in defining Dolby’s total addressable market 

(00:28:15) - Metrics used for measuring the size and relevance of the business 

(00:31:23) - Outlining their royalty pricing model, its evolution, and the model’s dynamics  

(00:34:54) - Whether or not the decline of movie theaters will impact their growth 

(00:38:01) - Thoughts about Dolby’s cyclicality and potential trend impacts  

(00:42:38) - The margin profile and how capital intensive the business is 

(00:46:03) - His views on the potential risks to Dolby’s future 

(00:50:30) - What stops Amazon or Apple from producing Dolby adjacent products in house

(00:53:18) - How risky it is for Dolby to start pushing into the visual side of entertainment 

(01:00:53) - Lessons for investors and builders when studying Dolby’s story 

This is Matt Reustle and today we are breaking down the iconic video game publisher, Electronic Arts. EA’s corporate history dates back to the 1980s and the business has evolved with all of the industry shifts in the decades since. To break down EA, I am joined by the author of The10thMan blog. We cover the role of a publisher in the video game ecosystem, the history and dynamics behind crown jewels like FIFA and Madden, and what the growth in mobile and new forms of monetization mean to a business like EA. Please enjoy this breakdown of EA.

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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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 | @domcooke

Show Notes

(00:02:18) - (First Question) - EA’s role as a video game publisher within the broader industry

(00:05:06) - EA’s size and scale today compared to its competitors 

(00:08:15) - The founding story and the company’s background

(00:16:12) - The impact of licensing agreements with sports games like Madden and FIFA

(00:28:31) - The proportion of their games made for mobile, console, and PC

(00:32:29) - Economics of a typical new game development and launch

(00:34:38) - Expected lifespan of a game or its peak popularity

(00:35:57) - How the industry is shifting from up-front sales to in-game sales

(00:38:19) - The cost of keeping games up to date and working properly

(00:40:00) - Working with third-party game engines versus developing a proprietary engine

(00:44:45) - In-game purchases like loot boxes and the legal risks of being deemed gambling

(00:48:26) - The video game M&A landscape and a discussion of Microsoft and Activision

(00:50:19) - How EA uses a subscription model to unlock value from their back catalog

(00:51:43) - Hypothetical top-line growth in the future and the bull case for EA

(00:55:48) - Lessons for builders and investors when studying EA’s story

Today we’re breaking down India’s largest jewelry business, Titan. Titan began life as a watchmaker in 1984 through a joint venture between India’s biggest conglomerate, Tata Group, and the Tamilnadu state government. Today, the vast majority of its $4 billion in revenue come from its collection of jewelry brands, and Tanishq in particular.

To break down the business, I’m joined by Saurabh Mukherjea, the founder and Chief Investment Officer of Marcellus Investment Managers. We cover the importance of jewelry to Indian consumers, the intricacies of retailing across India, and how Titan stands head and shoulders above its competitors in terms of profitability. Please enjoy this breakdown of Titan.

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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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

(00:02:45) - (First question) - What Titan is, where it operates, and its size and scale

(00:06:50) - The bulk of the demand when it comes to Indians buying gold 

(00:08:24) - Getting their start in watches in the 80s and evolving into what Titan is today 

(00:14:52) - What a typical Tanishq store looks like and overview of store economics

(00:18:58) - How their return profile is changing and what types of stores they want to open

(00:23:51) - What gold on lease is and the implications of it for their business model 

(00:25:33) - Why make jewelry when they could just be selling gold for savings purposes

(00:27:36) - Managing inventory and keeping costs under control at the store level

(00:31:54) - Whether or not they have artisans spread out across the country and difficulties of shipping and freight at their current scale in India 

(00:33:38) - How they’re attracting customers to stores and store-level marketing strategies

(00:37:57) - Splitting their business into middle class, premium, and wedding jewelry 

(00:39:22) - Where e-commerce figures into the scope of their business

(00:42:47) - Thoughts and philosophy on allocating surplus capital and acquisitions 

(00:45:38) - Additional competitive advantages Titan has

(00:48:42) - Building brand trust in a low trust economy in such a short time period 

(00:50:22) - Where future growth will come from and if they can sustain their current growth rate

(00:54:04) - The bull case for their business and what a Saree is

(00:57:03) - Risks the business faces as they look out at the future 

(01:00:12) - What he’s learned as an investor studying Titan’s business

This is Matt Reustle and today we are breaking down the National Basketball Association. The NBA topped $10bn in revenue last season, in line with MLB and behind only the NFL in terms of major sports leagues. The initial headlines for the next media rights deal, which is coming in 2025 suggest a 200% to 300% increase versus the previous contract. But what's particularly interesting about these data points is that they stand in sharp contrast to declining viewership numbers. 

To break down the NBA, I'm joined by Ethan Strauss. Ethan has been intimately involved with the league for the past decade and often writes about why the NBA, like other sports leagues, is not a traditional business. We cover who and what made the NBA into the giant it is today and whether that's getting stronger or less strong. Please enjoy this breakdown of the NBA. 

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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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 | @domcooke

Show Notes

(00:03:11) - (First Question) - His background and his entry into the basketball business

(00:09:24) - Key turning points that enabled the league to mature to what it is today

(00:12:53) - An overview of the league’s economics and scale

(00:16:01) - The dynamics of negotiating national and regional TV deals

(00:18:57) - How viewership is faring with an increasingly fractured TV audience

(00:22:40) - The counter-intuitive notion that lower TV viewership can help extract more media rights profits

(00:25:47) - The international market for the NBA

(00:31:06) - The unique role of the NBA commissioner and how it compares to other sports

(00:34:12) - How individual teams and their owners influence league dynamics

(00:37:27) - Rough splits between the NBA’s various revenue streams

(00:39:32) - Astronomical franchise purchase prices and owner dynamics

(00:41:34) - The possibility of expansion and the creation of new franchises

(00:44:41) - How the NBA’s star players draw in fans but also wield power over the league

(00:50:07) - The extent to which players’ popularity depends on nationality

(00:54:03) - How much players make in salary versus endorsement deals

(00:58:11) - Variables that could threaten the success of the league as a whole

(01:00:26) - Probable drivers for future success and growth of the NBA

(01:02:14) - The role of marketing in the NBA’s continued success

(01:04:15) - Cues the NBA could take from other leagues in terms of its media presence

(01:07:15) - Lessons for builders and investors when studying the NBA’s story

Compound248 is back to host another episode of Business Breakdowns. His most recent podcasts have focused on digital infrastructure and today we continue with that theme, but with a twist. Our guest is Wall Street Legend Jim Chanos, famed for bringing a skeptical eye to a credulous world. Together, we walked through his short thesis on the US Data Center REITs, his bear case for commercial real estate, and some broader wisdom on how management can thoughtfully respond to short sellers. Let's get started.

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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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 | @domcooke

Show Notes

(00:03:30) - (First question) - His counter-narrative thesis of shorting traditional data centers

(00:09:34) - How data center hyperscalers have been shifting the industry since 2016

(00:12:14) - The size, margins, and depreciation profile of the data center industry

(00:16:14) - The cash burn problem with digital REITs

(00:18:30) - How he thinks about interest rates, liquidity, and leverage in the space

(00:20:25) - More on why the value of these data centers is so elusive

(00:21:57) - The extent to which macro tech slowdowns intersect with his thesis

(00:23:13) - What investors see in these businesses that he discounts

(00:26:59) - Risks for the short and the bull case for data centers

(00:29:04) - Big concerns about the broader commercial real estate market

(00:36:34) - The best way for operators to handle a short thesis about their company

(00:39:49) - Critical mistakes he recommends managers avoid

Today, we’re breaking down Markel. Markel is an insurance and investing business. It shares the same operating structure as Berkshire Hathaway in that it uses insurance underwriting profits to fund an investing portfolio that includes both minority and controlling interests in public and private businesses. It was founded in 1930 by Sam Markel to insure Jitney buses and today it is a Fortune 500 company with a market value of $17 billion.

To break down Markel, I’m joined by Peter Keefe and Saurabh Madaan. Peter is an investor at Avenir and longtime Markel shareholder, while Saurabh was the Deputy CIO at Markel and is now the founder and managing member of Manveen Asset Management. We discuss why the Berkshire comparison is unfair, how a specific set of values is so deeply embedded in the business, and we use Markel as a lens to talk about capital allocation and the psychology of investing more broadly. Please enjoy this breakdown of Markel.

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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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 | @domcooke

Show Notes

(00:02:34) - (First question) - How they would explain Markel’s unique business model to a friend

(00:04:24) - The values and systems that make Markel stand out

(00:08:57) - Subtleties that differentiate Markel from Berkshire

(00:11:22) - Markel’s stance and perspective in the larger insurance industry

(00:15:31) - The structural factors that enable Markel’s excellence across many different classes of insurance

(00:18:55) - Why this specialized business model is still not widely replicated

(00:20:18) - The disproportionate amount of legacy companies in the insurance industry

(00:22:58) - The evolution of Markel’s investment portfolio and investing style

(00:29:22) - Key differences between Markel Ventures and the public equity portfolio

(00:32:25) - How their decision-making and allocation process differs from traditional funds

(00:36:42) - How their small team is able to outperform the bigger competitors

(00:39:50) - Summoning patience to reap the benefits of holding positions long-term

(00:42:37) - The famous American Tower investment story 

(00:46:10) - How they would evaluate Markel from an outside investor perspective 

(00:53:43) - Key-man risk in Markel’s agile leadership

(00:55:33) - Other risks and challenges they think about with Markel

(00:57:05) - How experience with Markel has informed their perspective on the insurance industry

(01:00:50) - Lessons for builders and investors when studying Markel’s story

This is Jesse Pujji and today we’re breaking down The Walt Disney Company. Disney needs no introduction. We have all interacted with the entertainment empire in some capacity. It was founded 100 years ago as the Disney Brothers Cartoon Studio and over the ensuing century, the business has grown into a conglomerate of entertainment properties that includes the likes of Pixar, Marvel, Disneyland, ESPN, National Geographic, and Disney+.

To explain how the business fits together, I’m joined once again by Ben Weiss, the Chief Investment Officer of 8th & Jackson. We talk about Disney’s famous flywheel, its push into streaming, and why it's such a difficult business to manage. Please enjoy this business breakdown of Disney.

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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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 | @domcooke

Show Notes

(00:02:23) - (First question) - Overview of Disney and their size and scale today 

(00:05:15) - Major milestones across Disney’s one hundred year history 

(00:07:17) - What lead to their decision to buy ABC and subsequently ESPN 

(00:08:00) - Disney’s Original Flywheel; How Disney’s flywheel compounds on top of itself

(00:10:11) - Characterizing their competitors and the markets they play in  

(00:12:58) - Overview of Disney’s theme park business 

(00:15:07) - Fixed costs, growth, and thoughts about volume for their theme parks

(00:17:40) - Their cable business and the drivers of growth and success for it 

(00:21:33) - Netflix: The Original; What’s different about Disney+ compared to Netflix and why they’re losing money 

(00:23:14) - Disney+ verses Netflix in the competitive landscape 

(00:24:45) - How far Disney can extend their content offering without degrading their brand

(00:27:42) - Overview of Disney’s movie business and its growth levers 

(00:29:04) - Creativity, Inc.; A revenue case study of the Cars franchise

(00:33:08) - Company culture in running an effective enterprise as big as Disney 

(00:35:43) - The recent leadership transition and his thoughts on it as an investor

(00:37:24) - Reasons behind the Marvel acquisition in 2009

(00:40:05) - What will have to go right if Disney became the next trillion dollar company

(00:43:32) - Possible reasons why Disney could fail over the coming decade  

(00:45:56) - Lessons for builders and investors when studying Disney’s story

(00:48:54) - Learn more about Disney; Creativity, Inc., The Ride of a Lifetime 

Today we are breaking down the world’s fastest-growing sports league, The Indian Premier League. The Indian Premier League, often shortened to IPL, is a cricket competition that takes place in India every year between the end of March and end of May. There are 10 teams, 74 matches, and the competition starts and ends within 2 months. 

The biggest sports leagues tend to come with long histories. You can trace the NFL back to 1920, the NBA to 1946, and Formula 1 to 1950. In stark contrast, the IPL and its teams were founded in 2008. But despite its relative youth, the IPL is already a sporting giant. It has revolutionized the game of cricket and is the second biggest sports league in the world if you measure it on a per-game basis.

To break down the story and business, I’m joined by Ed Cowan. Ed played professional cricket for Australia in the early 2010s and is now an investor at TDM Growth Partners. Please enjoy this breakdown of the Indian Premier League.

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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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 | @domcooke

Show Notes

(00:03:05) - [First question] - An overview of the Indian Premier League (IPL) today

(00:07:41) - How cricket fits in the context of Indian culture and markets

(00:11:06) - The mechanics of T20 cricket and its history

(00:19:33) - The genesis of the IPL

(00:21:42) - How the original eight teams were sold by the league and seeded by investors

(00:24:44) - The IPL’s conception and the rockier aspects of its startup phase

(00:30:13) - The revenue structure and business model broken down into their many streams

(00:33:44) - How Indian culture influences media deals in cricket

(00:41:55) - How operators have structured the IPL to optimize for media rights 

(00:44:53) - More on league-level economics, costs, and IP monetization 

(00:47:22) - Dynamics of individual franchises within the league

(00:55:19) - The infrastructure model and overhead costs for individual franchises

(00:59:03) - A deep dive into the player auction and how it works

(01:07:48) - Fanbase demographics and the importance of female representation in the IPL

(01:12:38) - How IPL creates and leverages scarcity value

(01:17:26) - The increasing international reach of the IPL draft

(01:19:32) - How the BBL in Australia stacks up against the IPL

(01:25:18) - Premortem case for the IPL

(01:28:22) - Why he thinks cricket and the IPL won’t be disrupted any time soon

(01:31:59) - Lessons for operators and investors when studying the IPL story

This is Zack Fuss, an investor at Irenic Capital, and today we’re breaking down Wise. Wise helps individuals and small businesses move money across borders. It offers significantly faster and cheaper international transfers than traditional banking routes because of its innovative closed-loop system. Twelve years after its founding, Wise serves six million customers and earned close to £1 billion in income last year. Investors currently value the business, which is listed in London, at £6 billion.

To break down Wise, I’m joined by former payments exec and now investor at Sydney-based TDM Growth Partners, James Revell. We cover the broken system of correspondent banking, which has led to slow, opaque, and expensive transfers and then explore how Wise has counter-positioned itself to take advantage of this large market. Please enjoy our breakdown of Wise.

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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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 | @domcooke

Show Notes 

[00:02:27] - [First question] - Overview of Wise, their key product, and core competency 

[00:04:17] - The founding story of Wise and the road leading to today

[00:09:18] - Wise’s size and scale today compared to 2011

[00:11:07] - Their competitive advantages and how it informs their goals 

[00:19:24] - Exploring Wise’s closed loop system and why their model can’t be copied

[00:21:28] - Unique characteristics of their business model that allows them to capture such robust margins

[00:25:32] - Overview of Wise’s unit economics and their revenue model

[00:34:49] - Interchange fees and how Project Zero guides the business

[00:36:44] - Why their lower take rate doesn’t destroy the industry 

[00:38:24] - Ways Wise’s business model can’t simply be copied and replicated 

[00:44:35] - Thoughts on who their true competitors are

[00:48:10] - Their customer acquisition flywheel 

[00:49:49] - Float, increasing net margin, and how they contribute to durability

[00:53:55] - Key risks associated with Wise when evaluating the business

[00:58:35] - Reasons behind the decision to raise money as a direct listing in the UK

[01:01:03] - How people looking at Wise should think about margins over time

[01:03:32] - Lessons for builders and investors when studying Wise’s story