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Tren Griffin
@trengriffin
, 5 tweets, 2 min read Read on Twitter
Always my favorite chart in the S-1, in this case from Pinterest. Note the gross margin in a user generated content business where the suppliers have no pricing power. A famous Zen master once said: "Find enlightenment in low COGS via UGC marketplaces."
Spotify is the other side of the pricing power coin from Pinterest:

"Spotify’s cost of revenue, consisting primarily of royalty payments to record companies, amounted to $2.8 billion or roughly 75 percent of the company’s revenue." google.com/amp/s/www.stat…
Spotify must increase its wholesale transfer pricing power in music via: (1) a better deal with labels, (2) becoming a label itself or (3) sell stuff other than music (e.g., podcasts) with better gross margins. The third choice is more within its contol and attractive to a buyer.
"There is a huge difference between companies with high gross margins and those with lower gross margins." Bill Gurley

“In the startup world, low gross margin almost always equals death." Mark Suster

google.com/amp/s/25iq.com…
There are two things in business that matter. You can learn this in two minutes: high gross margins and cash flow. The other financial metrics you can forget. With high gross margins you can grow the company as fast as the market will allow.” Don Valentine
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Tren Griffin
@trengriffin
"Peloton has two businesses: hardware (selling bikes and, recently, treadmills), and subscription content (a monthly $39 fee). If you had to guess which of the two will sport a higher gross margin, which would you pick?" news.crunchbase.com/news/as-peloto…
"Anki said it was left “without significant funding to support a hardware and software business" recode.net/2019/4/29/1852…. Without recurring revenue from software that benefits from telemetry, the life of a business is hard. High gross margins make life better. Hardware is hard.
"Android OEM death watch: Sony, HTC, and LG edition" google.com/amp/s/www.thev… "in the modern smartphone world, it’s not enough to just design and build new gadgets to a high spec; you have to power them with your own tailored software"
Read 5 tweets
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Tren Griffin
@trengriffin
"If you think about airlines, there’s a lot of barriers to entry and there are capital intensive barriers, but ultimately airlines are not massively profitable,” the investor said." reuters.com/article/us-ube… Perhaps in some alternative universe airlines have a lot of barriers.
"The airline industry has very, very, very low incremental cost per seat with enormous fixed costs. The temptation to sell that last seat at a very low price is very high and sometimes it’s very hard to distinguish between that seat and the last seat" CM google.com/amp/s/25iq.com…
He bought anyway: "I now have an 800 number I call every time I think about buying a stock in an airline. I say, 'I am Warren Buffett and I am an air-aholic.' They try to talk me down, 'Keep talking don’t do anything rash.'"
Read 3 tweets
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Tren Griffin
@trengriffin
"Jardiniere’s closure is emblematic of the plight of high-end, a la carte restaurants in San Francisco — operating costs are too grand and profit margins too slim." google.com/amp/s/www.sfch…
"What are the unit economics of a full service restaurant? 25iq.com/2016/11/18/why…

San Francisco:

Cost of food – 24%

Cost of alcohol sold – 5%

Wages and salaries – 32%

Employee benefit – 7%

Lease – 10%

Other – 15%

Pretax profit – 2.5%
"Razor-thin does not even begin to describe just how slender margins are in the restaurant business, and that’s if you’re one of the fortunate few that don’t go under in the 1st year. If you’re lucky, small single digits. Like, the smallest single digits." 25iq.com/2018/04/14/bus…
Read 3 tweets

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Scott Farquhar
@scottfarkas
On the heels of cuts to skilled migration, unworkable privacy laws and cuts to govt funded R&D (totalling $4B cut so far), I didn't think it could get worse for tech jobs in Australia. But it has.
Without any consultation, the government aims to rush through legislation aimed at “abhorrent violent material”. Let me be clear, no-one wants this material on the internet. But the legislation is flawed and will unnecessarily cost jobs and damage our tech industry.
The current legislation means that anyone working for a company that allows user generated content could potentially go to jail for 3 years. As written, that applies to news sites, social media sites, dating sites, job sites - anywhere user content could be created.
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David Carroll 🦅
@profcarroll
Amazon has recently demoted anti-vaxxer documentaries on Prime. Bezos said he bought The Washington Post to help protect democracy. His wealth increases $260,000,000 every day.
Meanwhile…vaccines *still* do not cause autism. But there won’t be books published to override the anti-vax grifters and lunatics in the Amazon reco algo. Toxic waste must be demoted. There is no free market solution to this intrinsic automation problem.
Tech companies need to confront the toxic waste of their business models head-on. Presently, they only face bad PR and a chance of Congressional grilling, also just bad PR. We let these companies get so powerful that we cannot punish them when they become the new polluters.
Read 9 tweets
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DHH
@dhh
You don't have to be a luddite to think that maybe, just maybe, having these vast centralized platforms built on user-generated content and optimized for engagement was the internet taking a dark turn for the worse.
As someone said, the problem isn't the "free speech", it's the "free reach". These how-to-cut-your-wrists-effectively kids videos aren't exactly being found by sharing direct urls. They're dug up by algorithms, served up on a platter to kids following the recommendation trail.
YouTube and Facebook and other platforms built on strip-mining the most "engaging" content from the depths of human depravity may be on the web, but they're not _of_ the web. A future without this pestilence is indeed possible.
Read 7 tweets
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Mikeal Rogers
@mikeal
The more I think about it, these platforms (Facebook, Twitter, YouTube) aren't "social" and they aren't agnostic "publishers" they are something I can only describe as "Network Effect Arbitrage Machines." [Thread]
A cursory reading of these platforms would be that they take user generated content, publish it for free, and sell ads against it.

But this is too simplistic.
These platforms also harness network effects within each platform silo. They take upvotes, views and links in order to cross promote the content and understand it better.

These user generated networks are the value add they provide over publishing on your own webpage.
Read 9 tweets
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dr elmyra
@elmyra
#FSN2018 Day 2. I'm chairing (and therefore only tweeting sporadically) #D2 Fandom, Distinction & Hierarchy
First up in #FSN2018 #D2 From ‘Gore-Object’ to ‘Art-Object’ to... No Object: Exploitation Cinema after DVD
And that's Simon Hobbs from Porthmouth University. #FSN2018 #D2
Read 55 tweets
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Fauzan Emmerling
@femmerling
Banyak banget yang nanya, ngerjain startup tu asik ya? Gw share dikit ya ilmu gw di per-startup-an selama 13 tahun terakhir. Bakal panjang ya jadi sabar-sabar ngikutinnya
Gw yakin banyak banget di sini yang ngebayangin jadi kaya Mark Zuckerberg gara-gara nonton the social network. Bikin startup tidak seindah itu, apalagi jaman sekarang, PENUH PENDERITAAN. Iya lo ga salah baca. PENUH PENDERITAAN. Tapi bukan berarti ga asik kok sob nanti lo liat
Pengalaman startup pertama gw dimulai tahun 2005. Startup pertama gw adalah sebuat software house. Jaman itu masih ngenes lah. Kenapa ngenes? Itu jamannya masih kalo lo di bidang IT harus bisa jadi superman yang bisa segala macem dan dibayar serendah mungkin
Read 175 tweets

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