1/ A source of leverage for some people is the company they join as an employee if they are granted stock options.

Imagine you joined Microsoft in December of 1979. Year-end sales and were $2.5 million and you were the 26th employee. The company sells BASIC, COBOL and FORTRAN.
2/ Bill Gates:​ "When IBM first visited us [in the summer 1980] it was actually a small group from IBM's Boca Raton laboratory. They had spare capacity and the Board had asked them to do something sort of quickly, in a lean sort of way... an experiment." threadreaderapp.com/thread/1193294…
3/ Many people who write about the IBM PC's birth have negative information on what actually happened. They rely on sources like unauthorized biographies. By December 1980 the number of companies having 40 developers who could write software for PCs was exactly one: Microsoft.
4/ If someone claims they are knowledgeable about the history of the IBM PC, ask them how many operating systems were sold by IBM when it first shipped.

"IBM sold the UCSD Pascal P-system for about $450, CP/M-86 for about $175, and MS-DOS for about $60."

Which sold best?
5/ Paul Allen: “IBM paid Microsoft $75k for testing, and consultation; $45k for DOS; and $310k for an array of 16-bit language interpreters and compilers. Bill and I were willing to forgo per-copy royalties if we could freely license the DOS software to other manufacturers."
6/ Bill Gates: “Our goal was not to make money directly from IBM, but to profit from licensing MS-DOS to computer companies that wanted to offer machines compatible with the IBM PC.”

"We knew from the beginning we weren’t the BASIC company. We were a software company."
7/ Some of the fake stories about Microsoft started in 1990 when two big publishers announced that biographies would be written about Bill. I was part of a team which included Bill and Melissa Waggener that thought about the right response. Not cooperating was the easy decision.
8/ The hard decision in 1990 was whether Bill would write an autobiography to preempt the unauthorized books. As part of the analysis I wrote a book proposal which I still have (pic attached). In the end Bill said he had more far important work to do than write an autobiography.

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More from @trengriffin

28 Nov
"Amazon added 427,300 employees between January and October, pushing its work force to more than 1.2 million people globally, up more than 50 percent from a year ago. Its number of workers now approaches the entire population of Dallas." nytimes.com/2020/11/27/tec…
2/ Michael Mauboussin writing about "real options" in 1999:

"Amazon started by selling books. So there was a DCF value for the book business plus out-of-the-money contingent options on other offerings." capatcolumbia.com/Articles/FoFin…
3/ "As the book business proved successful, contingent options on music and video went from out- of-the-money to in-the-money... As time passed Amazon’s real options portfolio has become more valuable. For example, the foray into the auction business [was once] unimaginable...."
Read 8 tweets
25 Nov
1/ Do you know what this is?
2/ Another clue:
3/ One more clue:
Read 4 tweets
24 Nov
1/ What business is this?
2/ Who stole the y-axis?
Is sales and marketing really that low? Is there some CAC hiding in COGS? sec.gov/Archives/edgar…
Read 4 tweets
22 Nov
1/ Warren Buffett: "The pharmaceutical industry’s, obviously, been a terrific industry to invest in. I have trouble distinguishing among companies in terms of seeing which ones ten years from now might be the best ones to be in." 1997 BRK AGM buffett.cnbc.com/video/1997/05/…
2/ Buffett: "If we could buy a group of leading pharmaceutical companies at a below-market multiple, I think we’d do it in a second. We had the opportunity to do that in that 1993 period, as you mentioned. And we didn’t do it. So, we did blow it." 1999 AGM buffett.cnbc.com/video/1999/05/…
3/ Buffett: "I do think it’s very hard to pick out the winner. You know, so if I did buy them, I would buy them — I would buy a group of the leading companies. But I wouldn’t be buying them at these [1999] prices." BRK AGM
Read 9 tweets
19 Nov
How does this impact HBO Max's unit economics? How much are customer acquisition cost (CAC) and cost of goods sold (COGS) impacted? The former is about acquiring new customers.

"Wonder Woman 1984 won’t cost anything beyond the monthly subscription fee." theverge.com/2020/11/18/215…
Mufasa: "Simba, what is CAC for HBO Max without this decision to offer Wonder Woman to subscribers at no extra charge? What's CAC for Disney Plus, and Netflix? What is monthly churn?"

Simba: "Dad do you ever stop thinking about unit economics?"

Mufasa: "This is what kings do."
Simba: "HBO Max has 6M subscribers. Disney Plus, which launched a year ago, has 73M. AppleTV Plus has a reported 34M."

Mufasa: "Content can be effective CAC. Giving up some WW theatrical revenues is sleeves off their vest. No extra charge for WW, isn't." fastcompany.com/90576026/can-w…
Read 13 tweets
18 Nov
1/ “Hey, Tren, hey, how about a little something, you know, more specific about which stocks were bought by Todd and Ted in the Berkshire 13F, you know.”

I replied “Oh, uh, there won’t be any list, but I will give you the questions to ask, which is nice." sec.gov/Archives/edgar…
2/ For example: How big is the purchase or sale? If a sale, what's the holding period? Is it in Buffet/Munger's circle of competence? Margin of safety given the purchase price? Is the business understandable? Does it have a sustainable moat? Is it a franchise Buffett/Munger love?
3/ Determining what is Todd and Ted is a process of elimination. Munger has said Todd and Ted are free to make their own decisions since Buffett would have hated it at their age. Todd and Ted only have so much capital. That's a clue.

Final exam: who made the pharma investments?
Read 8 tweets

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