Tailwinds > Moats.

A thread.

Worth noting that when Softbank acquired ARM in ‘16, both NVidia and ARM had similar market cap - in the early $30bns. Now Nvidia is at $300b and ARM is being acquired for $40b!


Nvidia has perhaps been amongst the biggest beneficiaries of rise of ML, self-driving cars, gaming where their GPUs have come in handy. As the need for compute power grew Nvidia found itself on the right side of ML tailwinds.

Whereas ARM, a virtual monopoly has languished.
Sure, there have been perhaps management issues at ARM etc. And the comparison isn't exactly like to like. But if there is a takeaway here, it is that riding tailwinds is perhaps far more important than having moats.
Every pitchdeck and VC asks for moats, but no one talks abt tailwinds and riding them. Buffett thought of moats because the brands he invested in were growing at a measly 3-4%. Moats mattered there for pricing power. For venture and startups, moats matter zilch.
What matters instead is being on the right side of tailwinds. And if you can - picking the tailwinds to ride on.

For Milkbasket and Dunzo the moat hasn't been as important as COVID’s immense tailwinds.

Edtech has no real moat* - it has fierce tailwinds at its back though.
* brand and customer data are decent moats if you grow to scale, i will confess.
So, let us not obsess unduly over moats. Being on the right side of trends or tailwinds is often more important than having moats or being a monopoly.

Tailwinds > Moats.

7/7 Fin.

• • •

Missing some Tweet in this thread? You can try to force a refresh

Keep Current with Sajith Pai

Sajith Pai Profile picture

Stay in touch and get notified when new unrolls are available from this author!

Read all threads

This Thread may be Removed Anytime!


Twitter may remove this content at anytime! Save it as PDF for later use!

Try unrolling a thread yourself!

how to unroll video
  1. Follow @ThreadReaderApp to mention us!

  2. From a Twitter thread mention us with a keyword "unroll"
@threadreaderapp unroll

Practice here first or read more on our help page!

More from @sajithpai

19 Aug
New (and a tad long) post on elite colleges in India,, national economic mobility, privilege and what it says about us.


It is common to use IIT/IIM as a shorthand to refer to elite colleges in India. Sometimes IIT/IIM/BITS or IIT/NIT/IIMs and so on.

We lack a moniker like the U.S.'s Ivy or France's Grande Ecoles.

So I created one.
We can look at any top tier college in India, from the IITs to Xaviers / Ashoka, and you will see that they tick these 4 boxes – selectivity in intake, all India (national) intake, presence in a metro or residential nature, and English-fluency.
Read 17 tweets
14 Jul
Enjoyed this podcast where @deepakshenoy chats w the ever interesting @kunalb11

Brief thread of what I found interesting.
(there is also a transcript if you prefer that)

Why Indians don't value time!

I dont know if this is true but this is a fascinating hypothesis.
Finance skills ≠ Financial literacy.
Read 8 tweets
5 Jun
Thread. Thoughts on hiring / recruitment tech in India.

Spurred by an interesting discussion on desi startup twitter led @banglani & @arnav_kumar on why hiring is broken in India.

In turn spurred by a response to a tweet by @avlesh

From all of that discussion + data from our blue collar thesis research that my colleague @SanchitaBamnot1 is driving, here is what I make out.

The resume is the basic unit of hiring, thus far. All business model innovation happens around that or reinventing that.
However the resume is largely useful only for organised sector white collar jobs which btw only number ~35m or so in India.
Read 13 tweets
4 Jun

On the NYT controversy over Sen. Cotton's piece, the NYT's changing business model, and what it tells us about the news business.
It is fascinating to sit 12,600 kms away from the US and read all of the angst over the NYT's opinion ('editorial') section, featuring Senator Tom Cotton's piece on dealing harshly with looters and rioters by calling in the Army.
2/ 19
What I want is not to talk abt the politics of the piece, or anything around that. I am too far removed from it. What interests me is to interpret the ferocity of the reaction in light of the underlying business transformation of the NYT.
Read 19 tweets
15 May
A thread for venture nerds, esp if you dig VC history.

On the 3 broad investment styles in VC - backing people, tech, markets & the personalities who embodied those styles

Arthur Rock: people
Tom Perkins / @kleinerperkins: tech / product
Don Valentine / @sequoia : markets
Interesting to note these different investment styles were a point of debate in the 70s-80s as Don Valentine tell us
Why does Valentine not care as much about people / team as other investors do? Well, his belief is that great people are hard to find or select. And a great and growing market can always make up for the seemingly ‘non-great’ but effective people.
Read 10 tweets
28 Mar
Brief Thread.

2nd order effects of the lockdown and (scary) consequences emerging from it.

Complex systems - like the economy - break at their weakest link. The lockdown is exposing some of those weak links and the risks that the system is facing as a whole.

Food shortages due to shortage of packing material (because packing material is not essential)

Story by @Samyak_01 in the @ThePrintIndia
Truck drivers not available to transport essentials because sudden lockdown means drivers (transporting 'non-essentials') stuck with their trucks in other states.

Story by @rachelchitra in the @timesofindia
Read 5 tweets

Did Thread Reader help you today?

Support us! We are indie developers!

This site is made by just two indie developers on a laptop doing marketing, support and development! Read more about the story.

Become a Premium Member ($3/month or $30/year) and get exclusive features!

Become Premium

Too expensive? Make a small donation by buying us coffee ($5) or help with server cost ($10)

Donate via Paypal Become our Patreon

Thank you for your support!

Follow Us on Twitter!