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11 Sep, 16 tweets, 7 min read
1/ Highlights and takeaways from Spotify, $SPOT, presentation's at the Bank of America Conference, 9/10/2010, below

The Company is led by founder, Daniel Ek, whose interview on @InvestLikeBest provides background on his vision

open.spotify.com/episode/3eGF6p…
2/ Paul Vogel was promoted to CFO in late 2019, succeeding Barry McCarthy, who joined SPOT from Netflix, $NFLX, and spearheaded The Company's direct listing

During its first two years as a public company, SPOT developed credibility from their investors

3/ SPOTs revenue per user (ARPU) has decreased as they experiment with Family and Student plans as well as with different bundles

Vogel claims that subscriber lifetime value / acquisition costs (sAC) has remained constant between 2.5x - 3x through the various promotion efforts
4/ Spotify launched in Russia and 12 other Eastern European markets in July 2020 with great success

investors.spotify.com/financials/pre…
5/ The Company credits product improvements and their podcast efforts for increasing growth in North America in the first half of 2020 compared to the first half of 2019
6/ SPOT followed their acquisitions of podcast creation tool, Anchor, and podcast studio, Gimlet, by signing Joe Rogan, Bill Simmons / The Ringer and Michelle Obama to exclusive content deals in 2020, suggesting their podcast strategy is bearing fruit

investors.spotify.com/financials/pre…
7/ The Company evaluates podcast investments by the expected return on advertising dollars as well as increased user engagement and growth

As Spotify continues to execute and launch exclusive content, the better they will be able to forecast returns on podcasts investments
8/ Similar to Netflix expanding their content's reach by offering subtitles on a popular regional show, SPOT is dubbing popular podcasts to broaden their audiences
9/ The Company is using Joe Rogan's show to experiment with live video podcasting, which they think has huge potential
10/ Spotify is applying the same discovery algorithms from their music service to their podcasting platform, enhancing users experiences, increasing engagement and potential advertising revenues
11/ Omnicom agreed to buy $20mm worth of podcast advertisement on Spotify's platform in the second half of 2020, the largest podcast advertisement deal ever

The Company may offer their podcast advertising technology to third parties in the future

mediapost.com/publications/a…
12/ @ZettaVentures introduced me to the concept of data as a competitive advantage

SPOT exudes data as a competitive advantage as they have amassed the largest data set of music preferences globally, which attracts advertising dollars
13/ The top decile of artists, based on earnings generated through Spotify, expanded 43% y/y in 2020 Q2, demonstrating their growth in content and increasingly powerful discovery algorithms (if you like this you'll like that) and playlists
14/ The Company's two-sided marketplace allows labels to increase their audience by leveraging SPOT's discovery tools

UMG signed on an as anchor two-sided marketplace customer in 07/2020, as they renewed their royalty deal with Spotify

investors.spotify.com/financials/pre…
15/ The Company is sanguine about their competition from Amazon, Apple and Google

They acknowledge that the tech giants can bundle their music services with other offerings without having to make a profit

But also cite their singular focus on audio as a competitive advantage
16/ Spotify's slow start over their first 18 months in India demonstrate the long time horizon and attention to each markets unique dynamics necessary for long term success

newsroom.spotify.com/2020-02-27/3-m…

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Andy Profile picture
3 Sep
1/ Dr. Matthew Walker claims, “…evidence that makes clear all of the dangers…when sleep becomes short have not been telegraphed to the public. It is the most glaring omission in the contemporary health conversation” in his 2017 book, Why We Sleep

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3/ Resmed sells continuous positive airway pressure, “CPAP”, mask systems used to treat OSA and as well as ventilators and portable oxygen concentrators used to treat Chronic Obstructive Pulmonary Disease and other respiratory diseases
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Andy Profile picture
17 Aug
1/ In their 2019 paper, Complexity Investing, NZS suggests that, “products, services…can be optimized for RESILIENCE…cash generative businesses that...fund a series of OPTIONAL investments…”

Thermo Fisher, $TMO, epitomizes this strategy

static1.squarespace.com/static/5ca38f3…

@bradsling
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Andy Profile picture
15 Aug
1/ Cadence creates applications used to design semiconductors and other electronic systems, referred to as Electronic Design Automation, EDA

EDA acts like a tax on the semiconductor industry’s R&D spend

Needham Conference, 8/13/2020, highlights:

Image
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Together, they represent ~60% of EDA revenues globally

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Andy Profile picture
28 Jul
1/ Mark Leonard introduced me to vertical market software (VMS) in his yearly letters to Constellation Software’s shareholders. In his 2017 letter, he references an apex predator, Roper, $ROP, whose lineage @walshgb unpacks below

csisoftware.com/category/pres-…

2/ Roper reports across four segments, two that provide VMS and contribute ~65% of earnings power and the other two offering industrial and medical devices. Over the next four tweets, I pair a thumbnail of each segment’s financial profile, with its description from ROP’s 2019 10K
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Andy Profile picture
27 Jul
1/ Software swami @ericvishria offered, “There are a lot of really interesting SaaS and marketplace crossovers where you can…take elements of both business models to reinforce each other..." on ILTB #183, a great description of SPS Commerce,

Image
2/ SPSC is a cloud-hosted EDI software used by retailers, their suppliers and logistics providers. EDI, Electronic Data Interchange, is a set of common syntax that allow regular business transaction to be processed automatically, see details below

truecommerce.com/sites/default/… Image
3/ SPSC describes and demonstrates how their model benefits from network dynamics below. When a new supplier is on-boarded, they encourage their customers to join, who then invite more suppliers, leading to extremely low cost and high percentage of sales wins Image
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Andy Profile picture
21 Jul
1/ Revisiting my Lockheed Martin, $LMT, long thesis after they reported 2020 Q2 earnings this morning. I was introduced to the U.S. defense industry and LMT through Ben Rich's memoir, Skunkworks, one of my favorites 'business biographies'

amazon.com/Skunk-Works-Pe…
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3/ 'The DoD Put' combined with positive correlation to geopolitical tensions are both unique characteristics only found within the largest U.S. defense contractors; LMT, GD LHX, NOC and RTX. LMT is my favorite of the group for a variety of reasons;
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