Vivek Mashrani, CFA Profile picture
Oct 30, 2020 14 tweets 4 min read Read on X
A super awesome thread on megatrend that is shifting the world in drastic way...

What's that??

These are platform businesses....

What is platform business? How is it changing our lives? How does it matter to me as an investor??

READ ON TILL THE END..This is powerful..

(1/n) Image
First of all let's look at industrial age...what was happening with tata motors, bajaj electricals, reliance etc.??

You have PIPELINE model of business.

Raw material >> Components >> Assembly >> Distribution

What was the focus? >> How to make this supply chain efficient
(2/n)
You had all these part of your life...Bajaj, Tata, Aditya Birla, Pidilite, Asian paints, colgate etc.

And they created huge wealth for shareholders...MOST IMPORTANT RIGHT...

And they were able to scale in right way..

(3/n)
Now look around you....you take Uber/Ola cabs, order food from zomato, get shopping done from amazon/flipkart, your kids play games on xbox, you use twitter, FB etc
What are these? These are platform businesses?

These are businesses which do not own any product generally

(4/n) Image
Look at these...unlike traditional businesses which own factories and warehouses...these businesses do not own any of that...still they became NO. 1

Airbnb has no real estate

Uber doesn't own any car

FB doesn't create any content

Alibaba has no inventory

(5/n) Image
What they do...? Very simple...4 Cs

Facilitates core transaction....by enabling CONNECTIONS...

And this is what happens around these core transactions

1. Create
2. Connect
3. Consume
4. Compensate

That's it and they get cut out of it...

(6/n) Image
Imagine business like Naukri....

1. HR creates jobs and posts it
2. Naukri connects it to right pool of candidates
3. Candidates consume that
4. On hire - Naukri gets a cut and both parties are compensated

So platforms are just like brokers?

(7/n)
Kind of in some cases like exchanges but many provide tools and ancillary services and some like android gives entire development platform...

So what's special about it?

(8/n)
Look at this ....some of the top companies in the world are now platforms..

Great thing about these are..

1. They are generally digital

2. Asset light and very few employees

3. SCALES VERY FAST - most important..

4. Has very high entry barriers

(9/n) Image
And best part is that instead of supply side economies of scale like traditional businesses, they have buyer side economies of scale as well

What does that mean.?

Means each incremental user on the platform adds great value to existing users without any cost to platform

(10/n)
Example: One new user on FB or tweeter can add lot more value to entire network...one new user on amazon/airbnb can add lot of value through reviews

And most of the times this creates NETWORK EFFECTS...which is very powerful moat and creates huge barriers to entry

(11/n)
And these are very powerful...and creates WINNER TAKES IT ALL EFFECT

So think about businesses around you & create wealth riding this megatrend...

References: technofunda.co/platforms

To learn more with me, join my upcoming masterclass: technofunda.co/webinar

(n/n)
It's great to see how it has panned out since few months...some of the platform or quasi platform businesses have done great and I believe should do well..

Examples:

- IndiaMART
- CDSL
- MCX
- MSTC
- IEX
- BSE
- Matrimony etc. And many more..

It's all about riding MEGATRENDS
And many more..

- Infoedge
- IGL
- Gujarat Gas
- Affle
- MCX
- Just Dial
....

What else?

• • •

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More from @MashraniVivek

Mar 2
💡💡
There are only 5% of businesses which are worth "BUY and HOLD"

How to know which one?

An excellent framework has been given by Warren Buffett on this in his shareholder's letter..

Unlocking The Secrets of Great, Good, and Gruesome Businesses by Warren Buffett

A thread…Image
Warren Buffett, in his 2007 letter to shareholders, categorizes businesses into three archetypes:

Great, Good, and Gruesome.

Each represents a different spectrum of investment opportunities, from highly desirable to ones best avoided.Image
The Essence of Great Businesses:

Great businesses are the crown jewels of any investment portfolio.

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Ever wondered how to turn the stock market into your playground?

Meet William J. O'Neil – the maestro of investing! 🚀

Let's dive into his game-changing strategies and unveil the secrets to conquering the market.

Here you go...below are the secrets Image
William J. O'Neil was an American entrepreneur, author, and investor who is best known for his work in the field of stock market analysis and investment. He founded Investor's Business Daily,
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Read 29 tweets
Dec 23, 2023
One of the biggest mistake investors make is choosing business with weak balance sheet....

But now no more....

Welcome to the world of Balance Sheet

Let's learn all about different components of Balance Sheet....

Ready for the ride? Let’s get started!...

(1/n)Image
Have you ever wondered how money works its way into a business?

Let's explore the simple yet interesting journey of cash and numbers.

It's like peeking into the financial diary of a company

Let's first understand different components..

(2/n)
Balance Sheet serves as a snapshot, showcasing a company's financial position at a specific point in time

It has 3 main parts:
1. Assets
2. Equity
3. Liabilities

Think of it as a financial health report, with the fundamental equation

Assets = Equity + Liabilities

(3/n)
Read 23 tweets
Nov 29, 2023
Sad to know that one of the greatest investing legend has passed away....

He was 99...

As a tribute to this legend I have compiled thread of 99 powerful lessons...

These lessons will help us become best version of ourselves...

here we go...

1. BE A LEARNING MACHINE

(1/n) Image
2. "The big money is not in the buying or selling, but in the waiting."

This gives us importance of riding winners and staying with compounding machines for long term and not selling them prematurely.

(2/n) Image
3. “Spend each day trying to be a little wise than you were when you wake up.”

Just like money, we can compound our knowledge and be better every single day by becoming LIFE LONG LEARNER...

This trait of learning is very important for every serious investor

(3/n) Image
Read 28 tweets
Oct 8, 2023
🚀 10 Powerful Secrets of Millionaire Investors 🚀

Nobody will tell you this....but it will transform your life....

Don't miss the last one....

A thread... Let's go....

(1/n)
1. Invest - Increase Income

Millionaires prioritize growing their income streams

They don't settle for just saving money; they actively seek ways to expand their earnings,

whether through entrepreneurship, investments, or side projects

Key is to keep exploring new sources
2. Think in Terms of Probability

Successful investors assess risk and reward by thinking in terms of probability

They don't take reckless risks or gamble their wealth away. Instead, they make informed decisions by analyzing the likelihood of success and potential downsides.
Read 14 tweets
May 10, 2023
When we talk about investing, some of the common questions come to our mind like what to buy? What to avoid?

What are the important parameters to look at while researching any company?

These 5 videos will help you to kickstart your investing process step by step

Here you go..
1. How to do the stock analysis? | A step by step process using the screener tool

Learn how to effectively use screener from the very beginning, this will help you understand the financial strength of any business with a ready-made template.



(2/n)
2. How to identify a quality business?

Learn how to identify a good quality business with the help of some fundamental and technical parameters like...

✅ROCE
✅Competitive advantage
✅Capital allocation
✅ Longevity
✅ Technical Indicators etc.



(3/n)
Read 7 tweets

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