"If you've got the power to raise prices without losing business to a competitor, you've got a very good business. And if you have to have a prayer session before raising the price by a tenth of a cent, then you've got a terrible business."

Warren Buffett variety.com/2020/digital/n…
2/ Charlie Munger: “There are actually businesses you will find a few times in a lifetime where any manager could raise return enormously just by raising prices—and yet they haven’t done it. They have huge untapped pricing power they’re not using. That's the ultimate no-brainer."
3/ Charlie Munger: "Disney found that it could raise prices a lot and the attendance stayed right up. A lot of the great record of Eisner and Wells came from just raising prices at Disneyland and Disneyworld and through video cassette sales of classic animated movies."
4/ Buffett: "We like buying businesses with some untapped pricing power. When we bought See's for $25 million, I asked myself, 'If we raised prices by 10 cents per pound, would sales fall off a cliff?' The answer was obviously no."

Does a price rise cause management agony?
5/ Buffett: "Sears Roebuck voted [our textile business] supplier of the year. They were wild about us. The thing was they wouldn't give us another half a cent a yard because nobody had ever gone into a men's clothing store and asked for a pin-striped suit with a Hathaway lining."
6/ "When you get down on your knees, call in all the priests and rabbis and ask: "Just another half cent a yard'. And they say 'We won't pay it'. It's just night and day. The ability to differentiate yourself by charging a different price is what makes a great business." Buffett
7/ "The struggle of a vendor is to establish special product qualities. This works with candy bars, but doesn’t work with sugar. In many industries, differentiation simply can’t be made meaningful."

"You can't say Apple has no price sensitivity, but it’s very limited." Buffett

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More from @trengriffin

1 Jan
1/ Simba: "I'm raising a VC fund."

Mufasa: "Et tu Simba?"

Simba: "Investing in public companies is too hard. Doing what the top VCs do is easy. Even hedge fund managers are raising VC funds."

Mufasa: "VC returns aren't evenly distributed. VC fund returns are a power law." Image
2/ Simba: “Everyone knows you need to invest in a portfolio of businesses due to the power law distribution.”

Mufasa: “The returns of VC firm themselves reflect a power law outcome - power law outcomes don’t just happen inside the portfolio.

Simba: “I’ve seen data from…”
3/ Mufasa: “VCs like Benchmark and Sequoia don’t reveal performance data to sellers of these reports that otherwise just scrape public filings.“

Simba: “I have a proprietary strategy to attract deal flow.”

Mufasa: “Which is?

Simba: “Social media. Tik Tok mostly.”
Read 5 tweets
31 Dec 20
1/ "I’ve been in the top 5% of my age cohort all my adult life in understanding the power of incentives and yet I’ve always underestimated that power.” Charlie Munger

Are incentives properly structured to create what he calls "incentive superpower"?

bloomberg.com/news/articles/…
2/ "Federal Express had one hell of a time getting the [central package shifting system to work]. Finally somebody got the happy thought that maybe if they paid them by the shift, the system would work better. And lo and behold, that solution worked." jamesclear.com/great-speeches…
3/ What incentives would be created if people were given $50 vouchers for a Covid vaccine as some people have suggested?

"If the incentives are wrong, the behavior will be wrong. I guarantee it." Charlie Munger
fs.blog/2016/02/charli…
Read 5 tweets
30 Dec 20
1/ What business is this?
You want another clue?
3/ More data you want?
Read 4 tweets
29 Dec 20
1/ Newsletter owned by Advance Publications (Condé Nast) publishes a meandering slam of businesses like Substack that enable writers to create their own newsletters.

Writers owning their business and controlling their own lives = bad for democracy? Nope! newyorker.com/magazine/2021/…
2/ News (e.g., the mayor took bribes) is non rival and non excludable. Selling news if not to Bloomberg terminals is near impossible.

"few newsletters publish original reporting; the majority offer personal writing, opinion pieces, research, and analysis"

Like the New Yorker!
3/ WTF is this from the post in the New Yorker newsletter:

"Substack obviously wants to call it a democratizing gesture, which I find a little bit specious. It’s the democracy of neoliberal self-empowerment."

Is it investigative journalism? Is it news? You can't sell news.
Read 5 tweets
25 Dec 20
1/ Quick thread before my turkey goes in the oven.

You are Ben Ronson and you publish a newsletter called "Stradeckery" about strategy. Thousands of people pay you $10 month to subscribe.

Bundler says: "Publish through us Ben since X, Y and Z."

What is X let alone Y and Z?
2/ Does the bundler have all the elements needed to be a successful multi-sided market?

Does the bundler solve a hard coordination problem that Ben can't solve on his own? 25iq.com/2016/10/22/a-d…
3/ What does Ben give up if he lets the bundler own the direct relationship with the customer and the data from that relationship? 25iq.com/2018/06/02/pro…

Remember: You are Ben (the creator) not a consumer whining about paying for so many subscriptions or the bundler.
Read 4 tweets
25 Dec 20
1/ 1994 was a miracle year of my life I said in a podcast recently. McCaw Cellular was sold in 1993. The Information Highway plan was about to die an unexpected death replaced by an Internet that had commercial value. The shift to the Internet was obvious only after the fact.
2/ “The decision to put money into the Internet in 1994 was considered by many of my colleagues to be borderline insane. Most people said things like, The Internet is free; you can’t make money on that!" Marc Andreessen
3/ The sale of McCaw Cellular to AT&T in 1993 meant Jim Barksdale and Peter Currie went to Netscape. Craig McCaw was talking to Jim Clark who said: “What I recognized after talking to Marc Andreessen was that the Web was to networks in 1994 what the PC was to computing in 1982.”
Read 6 tweets

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