China Discussion with Kevin O'Leary. Plus Foodpanda, Digital Basics and the Standard Digital Playbook. (94)

This week’s podcast is about how to profit from political involvement in China tech. But really it is about how to think systematically about the role of the State. And about how to benefit from the State as the mother-of-all catalysts.

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Here is the marketing material for OShares OGIGX.

• OGIGX Index Presentation 2021Q2- June 2021 end

Here is the Standard Digital Playbook:

1. Target a 10x or 100x market opportunity.
2. Grow users and revenue.
3. Capture and grow cash gross margin. Not the %. The cash.
4. Flood cash into new revenue streams and innovation to improve the user experience.

That playbook is all about building a digital business on the demand side. It is about identifying a big opportunity and then systematically improving the consumer experience and going after related consumer problems.

However, this also usually results in negative operating profits until sufficient scale is reached. The gross profits are positive but the operating profits are negative. Often for a long time. However, with increasing scale the operating leverage eventually kicks in and the big profits are revealed.

Here is a list for the Digital Basics:

• Growth and Scale
• Digital Core
• Ecosystem, Connectedness and Coordination-Based Business Models
• Leadership and Management
• People, Culture and Talent
• Operating Cash Flow. The Cash Engine.

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Related articles:

• Lessons from Cheah Cheng Hye on China Stocks and Uncertain Terrains (Asia Tech Strategy – Daily Lesson / Update)
• Can Foodpanda / Delivery Hero Get to Profitable Scale in On-Demand Food? (Asia Tech Strategy – Daily Lesson / Update)

From the Concept Library, concepts for this article are:

• Digital Basics
• Digital Playbook (Standard)

From the Company Library, companies for this article are:

• Delivery Hero / Foodpanda

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I write and speak about digital China and Asia’s latest tech trends.

I also run Tech Strategy, a podcast and subscription newsletter on the strategies of China / Asia tech companies.

This content (articles, podcasts, website info) is not investment advice. The information and opinions from me and any guests may be incorrect. The numbers and information may be wrong. The views expressed may no longer be relevant or accurate. Investing is risky. 

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