0/ Some good thoughts on the potential for internet scale from @_ram_ and why we're at the beginning of the S Curve 30 years in due to:
(i) Ubiquitous High-Speed Connectivity on Mobile
(ii) Cloud Infrastructure / Tools enable all GDP to become part of the mobile internet
1/ He provided context about how early we still are:
-Total earnings of Internet companies as a % of global earnings is between 5-7%.
-"Volume" sent through the Internet is still mid-single-digits
-Market cap as a % of total global market cap is ~10%
2/ He breaks the Internet down into the front-end which includes marketplaces, eCommerce, On-Demand businesses, Advertising Content Solutions & back-end payments + software.
3/ In '19 ~$60T was spent on products / services at a 3-4% CAGR over the next 20 years by '40 it will be closer to $120-$125T globally; if online penetration is ~30-35% you end up with $40-$45T in eCommerce / services
4/ Interesting philosophy regarding investing in companies that "have a product that is not sold, that is pulled off the shelf applicable to software, payment & Internet companies. While also looking for companies that reduce friction for consumers & businesses
5/ In talking about the investment he & @altcap made in ByteDance, "the company at its core has the best machine learning & the best personalization algorithms in the world, period. One of the best" It wasn't an application / consumer company when they made the initial investment
6/ Second, "people don't understand the infrastructure and the depth of hardware and software being built inside the organization. This company is one of the biggest buyers of Nvidia GPUs in the world. "
7/ He mentions the potential different applications they can build on this infrastructure while predicting a focus on (i) Education & (ii) Gaming.
8/ What matters for advertising businesses?
(i) Scale of users / Time Spent
(ii) Quality of tools to onboard advertisers
9/ What matters for direct content subscription businesses?
-Depth & quality of content.
10/ eCommerce / Marketplaces?
-eCommerce needs to have (i) (+) contribution margins on product sold (ii) strong logistics
-Marketplaces need to have products that "delight" the customer, strong unit economics, & convenience. They need to offer a full-stack solution.
12/ On-Demand companies?
-Supply side & local network effects are critical. Prouct & process, and supply exclusivity is what drives on-demand companies forward.
13/ Payments?
-Hard to dislodge $V & $MA which are two of the best businesses in the world. Besides that there are merchants & processors & aggregators.
-What conversion gains are you able to create for a merchant?
14/ Software? For consumer software co's it all comes down to network effects & reducing friction.
15/ Developer tools? Look for virality, number of GITs, number of devs using it, amount of interaction on dev forums.

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More from @JohnStCapital

11 Jan
0/ $WMT announced that they are partnering with @mickymalka & the @RibbitCapital team to "offer next generation digital financial products." Each week, over 265 million customers and members visit approximately 11,400 stores under 55 banners in 26 countries and eCommerce websites
1/ We have seen traditional brick & mortar / omni-channel retailers explore FinTech originally with closed loop / branded credit cards & then by embracing BNPL, and having digital wallets for reward points. This looks to be the first foray into digital banking directly
2/ They are reportedly looking at both potential M&A opportunities & partnerships. Would imagine we would see companies like @Galileo_Tweets @Marqeta @usealloy, Rize, Bond, Moov, Unit, etc.. all look to find a way to get involved here.
Read 4 tweets
11 Jan
0/ Another good memo out from @HowardMarksBook discussing value vs. growth investing and why the two should not be viewed as mutually exclusive to begin with and some insights he's gleaned from his son in 2020 who manages growth oriented investments for the family.
1/ On value investing, "Importantly, value investors recognize that the securities they buy are not just pieces of paper, but rather ownership stakes in actual businesses."
2/ "The value investor understands that-rather than informing us as to what a given asset's value is--Mr. Market is there to serve us by offering up securities at a price, which can be meaningfully disconnected from the actual value of a stake o claim in the underlying business."
Read 19 tweets
29 Dec 20
0/ Thoma Bravo just filed a $900M S1 for a SPAC entitled Thoma Bravo Advantage.

They've executed 270 software transactions & in '17, '18, and '19 were named the top performing buyout firm based on all funds raised from '05-'14; so this is a notable new entrant.
1/ They talk about extending their expertise in the public market, "We believe there is a robust pipeline of high quality software companies that are both ready to take advantage of the opportunities that the public market has to offer & would benefit from partnering with us."
2/ They also provide some macro data- "The overall enterprise software market, estimated to be about $477B in '19, is anticipated to grow at a 7.9% CAGR through '24. There are currently ~990 software companies w/ post-money valuations of $1B+ which is their relevant pipeline
Read 16 tweets
28 Dec 20
0/ 10 Thoughts as 2020 comes to an end regarding the FinTech market including (i) Alternative Assets (ii) B2B Infrastructure (iii) Crypto (iv) M&A (v) InsurTech (vi) Content Creation (vii) Payments  (viii) Public Markets (ix) SPAC's & (x) Vertical SaaS

1/ For alternative assets we pointed to the growth of platforms like @OnRallyRd@pipe. In '21 we expect to see the maturation of the ecosystem with enhanced data / buyside participation / distribution / & secondary trading as well as their entry into the rebundling trend.
2/ For B2B API enabled infrastructure we agree w/ what @CharleyMa recently said about the next wave of infrastructure players & expect to see further consolidation in the space as well as innovation around product offerings such as self-driving money as a result
this development
Read 11 tweets
27 Dec 20
0/ $BTC hit another new ATH this morning and is now exhibiting top 5-15% trailing 1-60D performance all time.

Notably up 60% over the trailing 30D & 106% over the trailing 60D which hasn't happened since May '19 & June '19 respectively (prior to that was Dec '17-Jan '18).
1/ With this move $BTC's "market cap" has passed $500B for the first time ever. 2020 has been the year of the "institutional investor" b/w Paul Tudor Jones, Druckenmiller, Guggenheim, Corporate purchases ( $MSTR & $SQ), OneRiver, Mass Mutual, Ruffer Management, Renaissance, etc..
2/ At $500B $BTC is just starting to get interesting (but still too small) for the real institutional community (Pensions, Endowments, Sovereigns, & Central Bank's).

The Top 10 Central Bank's own ~9.2% of the total gold discovered to date & ~0.0% of the total $BTC.
Read 7 tweets
20 Dec 20
0/ It's been a big 2 weeks for $BTC as it hits a new ATH, $MSTR completes a $650M convert, Mass Mutual invests $100M, Ruffer Management buys $745M, Jeffries recommends a 5% allocation, Guggenheim's CIO gives a $400K PT, OneRiver, FinCen rules better than feared & Coinbase S1
1/ $MSTR completed a $650M convertible bond offering at 0.75% with the intent to purchase $BTC (and per @michael_saylor) it looks like they completed that buy. Since first announcing their $BTC purchase in mid-August the stocks +143% (with BTC over 2.0x during that time)
2/ Mass Mutual with its ~$235B general investment account purchased $100M of $BTC through NYDIG (after making an equity investment alongside @BessemerVP & $MS).
Read 11 tweets

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