Musings #10

Generative AI, Growth vs Value, Adoption Curves of Pandemic Darlings...

It has been the starting point of an explosion of use cases and applications built on top. Read more...

Musings #9

Innovation and Moonshots, Seeing the Present, Substack’s Reader...

It is rare for companies to have “second acts”. Most companies have a hard time organically expanding beyond their initial product area. Read more...

Musings #8

CAC is Not the New Rent, Visualizing Data without Oversimplifying...

Instead, a better principle is to respect the user. Assume some level of capability and you’ll be rewarded with those types of users. Read more...

Musings #7

Design as a Negative Signal, Intensity Delta Addendum, Winning...

If you build an innovative product or MVP and it is ugly and clunky, but people still love it for the core function, you’re probably on to something. Read more...

Musings #6

Step-Change Change, Things not Experiences, Founder Ownership...

It is even more delightful when that something is a mundane or regular occurrence, because that’s when the effect of a step-change is greatest. Read more...

Intensity Delta

There is a common saying in investing that it is not enough to be right; you need to be contrarian and right. Having a consensus opinion, even if it ends up being right, supposedly means that the asset is efficiently priced and excess profits are arbitraged away. Read more...

Musings #5

Simplicity in a World of Overdesign, A Better Search Engine, Visualizing Income Statements...

I don't say that to be pessimistic. In fact, I'm optimistic about the way userflows and modern design aesthetics are trending towards more simplicity. Read more...

BackBlaze's Customer Analytics

Customer cohort charts are becoming more popular. One of the latest is from BackBlaze, a cloud storage company for individuals and enterprises that has 480k customers and generated $53.8M in revenue last year. The company recently filed its S-1 in advance of its upcoming IPO with some interesting customer disclosure. Read more...

Musings #4

COGS of You, Guest Passes, IPO Letters…

I have often wondered why we don't have three statement financial models for individuals. If that is such a great way to account for a business and analyze it, why not for your personal wealth and income? Read more...

Musings #3

Interestingness, Concentration, Silence is a Luxury Good…

But consumer behavior is heterogeneous. There is a reason why people don't pay the airport lounge fee and why 57% of Spotify MAUs are ad-supported. Read more...

Musings #2

Third-Level Thinking, Customers as the Economic Unit of Value, Hairy Charts...

Generally, it is how management of a company should view its business and it is how investors should model and value a company. To paraphrase a professor of mine: customers are the rows on your spreadsheet, not products or business lines. Read more...

Musings #1

Customer Economics, Music Monetization, Membership vs Subscription...

The more a company taps into some sort of identity, community, or status element, the more likely customers are going to stick around. Read more...

Unity's IPO: What are the customer analytics of a game engine?

Unity Software Inc. recently filed its S-1 in advance of going public. Unity is the maker of a real-time 3D game engine that powers many 3D games and other content across numerous sectors. In this post, I focus on an under-discussed part of its IPO disclosure: its customer analytics. Read more...

The Habit Flywheel

How forcing mechanisms propel us up the Long Staircase of Habit Forming on route to the Habit Flywheel. By deconstructing how habits work, we can learn to form better habits and dismantle bad ones. Read more...

Writing More

I've long enjoyed writing, though most of that creative output has been in the form of reports and commentaries during my career as an investor. But I have never really embraced writing and made it a bigger part of my life. I'm attempting to change that now by writing more and - importantly - publishing my work. Read more...

Chewy's IPO: Customer Analytics and Valuation using Probability Models

Chewy, Inc., the pure-play online pet retailer, IPO’d on June 14, 2019 at a $9.3 billion valuation. With its S-1 filing, Chewy provided limited - but just enough - disclosure on its customers to allow for a rich analysis of customer acquisition, retention, and economics. Utilizing probability models and methodology based on Customer-Based Corporate Valuation, this report provides a unique analysis of Chewy’s customer dynamics, economics, and valuation. Read more...