Bill Gurley wrote an article in 20O3 which describes one of Airware's biggest problems: distribution. abovethecrowd.com/2003/02/10/sof… Assuming OEM's will adopt your platform is a very low probability bet.
"More venture funded businesses die of indigestion than they do starvation" applies to Airware. The best founder's know how to focus. It's what you don't m do as much as what you do that matters. Ty Webb: "Be the ball Danny." Don't get distracted. Focus. google.com/amp/s/techcrun…
People have seen the "OEM adopts someone's platform" movie as often as people have seen The Jerk or Caddyshack. People know how those movies end. The scarce factor in business today is increasingly distribution. Airware didn't have distribution and that was one fatal mistake.
@bgurley and I talked a lot about the "software in a box" business model starting as early as 1999. One reason for the high cash burn during the Internet bubble was that people did not have cost effective product distribution. That and a lot of stupid spending (eg Launch parties)
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1/ Being on a board of directors with @wolfejosh has been an amazingly enjoyable and educational experience. He's always prepared, informed, contributes and has fun.
Josh believes: "edge can derive from informational, analytical or behavioral sources." 25iq.com/2018/07/07/les…
2/ If you work on a team that runs a business you can acquire an edge versus people who only invest and don't have your source of edge.
"To make money, you must find something that nobody else knows, or do something that others won’t do."
3/ One of my sources of edge is the ability to value certain businesses by using DCF analysis. That's what anyone running a business learns to do. If you do this for decades you get better at it.
Is it easy? No. Can I do every company? No. Do I have an edge in doing it? Yes.
1/ Charlie Munger: "We invested money in China. I feel about Russia the way Gundlach feels about China. I don’t invest in Russia so I can’t criticize Gundlach’s point of view. I reached a different conclusion. If he’s nervous, he doesn’t have to join us." junto.investments/daily-journal-…
2/ "On balance, we prefer the risks we have to those we’re avoiding and we don’t mind a tiny little bit of margin debt. When you buy Alibaba, you do get sort of a derivative. But assuming there’s a reasonable honor among civilized nations, that risk doesn’t seem that big to me."
3/ Charlie Munger: "We’ve gotten an absence of world wars for a long time because we had these nuclear weapons. But it does make you nervous every once in a while and it’s quite irresponsible when the leaders in the modern age get tensions over border incidents and so forth."
3/ A recent example of how stories work as a teaching tool is Morgan Housel's book The Psychology of Money. The huge sales of Morgan's book are an example of a power law at work. He wrote a grand slam. If you want more readers or viewers, tell more stories.infiniteloops.libsyn.com/tren-griffin-w…
"Starlink Premium users can expect download speeds of 150-500 Mbps and latency of 20-40ms, enabling high throughput connectivity for small offices, storefronts, and super users across the globe" starlink.com/premium
This is a new Starlink service apparently aimed at non-residential customers.
Mobile capacity management is harder.
"The first premium deliveries will begin second quarter. Unlike the standard product, which only guarantees service at a specific service address, SpaceX says Starlink Premium is capable of connecting from anywhere." cnbc.com/amp/2022/02/02…
Do food delivery companies that spend this much on customer acquisition have issues around product/market fit? Or are they trying to acquire scale economies and benefit from a positive feedback loop?
Subsidized goods or services aren't COGS, but instead are in-kind CAC.
Andy Rachleff: “You know you have product/market fit if your product grows exponentially with no marketing. That is only possible if you have huge word of mouth. Word of mouth is only possible if you have delighted your customer.”
Until a delivery business establishes superior liquidity, it is vulnerable. Part of liquidity is more delivery people available which is a function of more transaction volume. Density of transactions can generate positive feedback. You're at the mercy of your stupidest competitor
1/ Brian Arthur: "Complexity economics sees the economy as not necessarily in equilibrium, its decision makers (or agents) as not super-rational, the problems they face as not necessarily well-defined and the economy not as a perfectly humming machine." nature.com/articles/s4225…
2/ "Complexity economics assumes that agents differ and that they have imperfect information about other agents. The resulting outcome may not be in equilibrium and may display patterns and emergent phenomena not visible to equilibrium analysis." nature.com/articles/s4225…
3/ "Because assumptions are a widening of the neoclassical ones, complexity economics is neither a special case of equilibrium economics nor an addition to it. Complexity economics sees the economy not as mechanistic, static, timeless and perfect but as organically."