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1/ 25iQuiz: Why does this writer use the phrase "make money"? Because it isn't clear what markets want? Free cash flow? Earnings?

Airbnb's "first half losses may complicate its ability to portray itself to investors as a tech company that makes money." theinformation.com/articles/airbn…
2/ "Airbnb sales and marketing investments rose 58% year over year to $367M in the first quarter and marketing spend is expected to come in above the $1.1B spent in 2018. Revenue reportedly grew 31% year over year to $839M, while expenses climbed 47%." google.com/amp/s/www.cnbc…
3/ "Working from The Information’s excellent report,

Q1 2018 revenue: $0.64 billion

Q1 2018 cost of revenue: $0.20 billion.

Q1 2018 implied gross margin: 68.75 percent."

news.crunchbase.com/news/tracking-…
4/ "Airbnb surpassed $1B in revenue in the second quarter of 2019 and in the third quarter of 2018, but we’re guessing the business did not top $1B in Q4 of 2018 or Q1 of 2019 because it if had, that information would probably have been 'leaked.'" techcrunch.com/2019/10/17/air…
5/ "Airbnb presents itself as having a competitive advantage over online travel agency rivals Booking Holdings and Expedia Group, which collectively spend some $10B annually in marketing, much of it with Google." skift.com/2019/10/17/did…
6/ "One can guess from the $367 million in sales and marketing spend in the first quarter that Airbnb is on a path toward shelling out at least $2 billion in sales and marketing in 2019. That’s still not in the same conversation with what Expedia and Booking Holdings will spend."
7/ "ad spend/transaction speaks to Amazon's ability to drive repeat/direct traffic…as its estimated $0.75 ad spend/transaction is a fraction of what Booking/Expedia spend.
Nowak said travel represents an annual market of $480B in the U.S. alone." google.com/amp/s/www.cnbc…
8/ "The cost of search engine marketing (SEM) has been increasing. Booking alone spent over $4.4B in 2018 on performance marketing. Booking’s expense represents about 3% of Google’s advertising revenue." forbes.com/sites/oliverwy…
9/ 25iQuiz: This thread provided you with most of the available public data and some guesses, but some data is missing. Can you estimate enough to determine ~ unit economics for Airbnb?

Gross margin?
ARPU?
CAC?
Churn?

Which variable is most challenging for an OTA right now?
10/ What is needed for an IPO right now that is more specific than "make money"?

1. Free cash flow?
2. GAAP Profit?
3. EBITDA positive?
4. Positive unit economics?
5. A combination of the above?
6. Favorable opinion from the Tooth Fairy?
7. Other?
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Tren Griffin
@trengriffin
Fred Wilson: "I read a piece on Alan Shugart, the founder of Seagate, one of the most successful disk drive companies. Alan was quoted as saying that 'cash is more important than your mother.' That got my attention because mothers are really important." avc.com/2019/11/cash-m…
"Cash is everything in a startup. It is the fuel that keeps the car running. Startups fail largely because they run out of cash. Forecasting cash is more art than science, particularly in a growing company. You have to engage in cash forecasting [and] engage in it regularly..."
There have been a lot of breathless articles lately about the need for startups to "get profitable." What's really happening is business are being forced to focus on cash and cash management. Shit happens. Having cash gives you optionality. Not having cash when needed is deadly.
Read 4 tweets
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Tren Griffin
@trengriffin
1/ Seattle has 484 pinball machines out for public play. That’s a pinball-to-person ratio of 1:1,835, making Seattle the No. 2 pinball city in the US. Portland is in first place with 1:1,141. Chicago, 1:14,524; New Orleans, 1:20,700; New York, 1:28,743. seattletimes.com/pacific-nw-mag…
2/ The first time I saw a dead body was the victim of a mob hit:

"Ben Cichy, who controlled Seattle pinball licenses — and was a close friend of King County Prosecutor Charles O. Carroll. On May 31, 1969, Cichy was found dead in 5 feet of water near his yacht on Yarrow Point."
3/ I wrote a 25iQ blog post about Seattle's "tolerance policy."

"Before his death Mr. Cichy contributed to my childhood education when, together with some friends, I found a chest buried near his home filled with Playboy magazines from the early 1960s." google.com/amp/s/25iq.com…
Read 3 tweets
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Tren Griffin
@trengriffin
"We’re starting to see a period where valuation is going to be the driver for future returns"

As opposed to all the other times when the tooth fairy drives future returns? reuters.com/article/us-usa…
A P/E ratio is only a shortcut for valuation.

"The forward P/E ratio for Stoxx 600 is 15.4 beow the 19.3 forward P/E of tS&P 500"

Contra: "Expected long-term cash flows, discounted by the cost of capital—not reported earnings—determine stock prices." expectationsinvesting.com/pdf/earnings.p…
"Earnings offer a shortcut, freeing investors from the subjective and time-consuming need to assess long-term cash-flow prospects."

...Earnings are useful in valuing stocks only if they help forecast a company’s future cash flows." Rappaport and Mauboussin
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Dave Irwin - Graphic Design & Photography
@_daveirwin
Okay, before I got to bed, I am going to throw out some words garnered from the book I am reading at the moment... and no not Hugh Johnson's Pocket Book of Wine 2019. The one that is about making #money via a #sidehustle by @chrisguillebeau
1. Everyone should have a #sidehustle. It is a way to make some extra money and can be useful as insurance in case you lose that ever important day job. Your side hustle doesn't have to be a main gig and should be started with a specific goal in mind.
For instance, perhaps you have a vacation coming up and you want to make some extra money to pay for it. Maybe you want to pay off those #studentloans and you can use a side hustle to do it. or maybe you are bored out of your mind and want something to occupy your time.
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Yorick de Mombynes
@ydemombynes
My 140 favorite quotes from The Ethics of Money Production (2008), by Jörg Guido Hülsmann
1. “#Money is omnipresent in modern life, yet the production of money does not seem to warrant any moral assessment”. J.G.Hülsmann
2. “To be sure, central bank representatives are lecturing the public on the importance of business #ethics; but their concerns do not seem to apply to themselves”. J.G.Hülsmann
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Ryan Caldbeck
@ryan_caldbeck
1/ For most of recorded history consumer PE have printed money. OK that’s not true- but according to Cambridge Associates they have *averaged* a 22% IRR over the last 15+ yrs. Life is changing rapidly for those PE firms.

Life is about to get tougher. Here is why.
2/ First lets talk about what drove the strong performance of consumer PE. Historically it actually wasn’t the Personalization of the Consumer (which is driving the innovation and disruption in the space today).
3/ Candidly the great PE performance from 2000-2016 had nothing to do with these things talked about in this TweetStorm:
Read 22 tweets
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FT
@financethoughts
I’ve been in the markets for over 10yrs, and made many early mistakes. But I see so much rubbish ramped on Twitter, without justification for why it’ll reach the moon, so here’s my method to quickly evaluate and spot profitable, quality, fair-valued companies.
It starts with Revenue (also turnover or sales) – I’m looking for stable and ideally growing Revenue. It’s an important start, but tells you little in isolation. I could set up a shop selling £10 notes for a fiver and have lots of sales, but no profit…
Market Cap – the number of shares x share price. But MCap takes no account of debt, or cash in bank, which can be significant, so I look at Enterprise Value (MCap + debt – cash), and want to see EV lower than Mcap suggesting cash outsizes debt.
Read 15 tweets
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Turner Novak
@TurnerNovak
$SNAP Q4 earnings today. Bad DAU numbers will tank the stock, but Snapchat has a core, sticky userbase and is being under-monetized.

Here's a thread on the Facebook Power Law and a look at how Snap could do up to $10 billion in revenue in the US alone in its current form.
Lots of going on at Snap (see link), but as someone who appreciates product and design, I've learned a lot following their product strategy (ie: creative new revenue generation in consumer social). Lots of lessons from what Snap has done right.

marketwatch.com/story/snap-ear…
To summarize my prior Snap earnings threads (below):

Snaps per Day is Snap's key metric, the US and EU are what matters for monetization, its ad prices are insanely low, and the market is not appreciating Bitmoji, Snap's AR platform, or the Snap Map.

Read 54 tweets
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Abhishek Murarka 🐂💹
@abhymurarka
💪A thread on amazing Twitter threads 😍👇
In the process of revamping my #Twitter profile (dormant earlier), I have come to appreciate the wonderful underutilized platform it is!
Some threads contain crisp knowledge capsules that can help many. Starting 1 on such curated content
1. I largely rely on this: threadreaderapp.com to find content
2. What I wish to share is what coincides largely with my interests- #Learning, #Investing, #Behavioralpsychology (#mentalmodels, #bias, etc), #Businessbooks, Industry insights/case studies, Life experiences, etc
3/n
 While it will be difficult to structure the order of content here, I will try to block threads by category (as noted above & more). Feel free to comment with any good thread that you would have come across. Cumulative learning always helps.
#vicariouslearning
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