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16 Apr, 9 tweets, 3 min read
Quick update thread on the Stitch Fix thesis:
The tl;dr is Stitch Fix has permission from 3.9m consumers to auto ship them products. It’s ecom’s “recommended bar” but IRL and converts at 10-20%. They know what will sell before its even produced. Can monetize this from suppliers, with private label, + their Direct Buy app.
The market didn’t like Q4 earnings, which were impacted by lockdowns + freight issues over the holidays. SFIX also recognize revenue at checkout which (usually) happens after customers receive the order and decide what to keep / send back. Could be impact from Direct Buy ramping
New CEO @ElizSpaulding joined Stitch Fix as President 16 months ago. @kmlake has consistently mentioned exec transition in podcasts, press, and earnings calls. Spaulding specifically led Direct Buy initiatives, which unlocks the next step function in Stitch Fix’s business model. Image
Stitch Fix continues transitioning it’s model, opening international markets, laddering from women’s into men’s (I just bought everything in my 2nd box) and kids clothing, + the Direct Buy app sets up expansion into footwear, jewelry, furniture, décor, beauty, resale, luxury, etc
As wardrobes reset after a year of WFH, many consumers body compositions have changed (more fit, less fit, etc), those that struggle with the clothing shopping process will be truly overwhelmed and more willing to try the product going forward.
Stitch Fix is arguably the largest vertically integrated player in apparel considering its private label lines (one literally called Algo), boxes shipped directly to consumers homes, and its mobile app collecting nuanced yes/no taste preferences. No other retailer has all of this
The recent price dip represents a good entry point (I just shifted another 2.5% of my portfolio in) for anyone looking for a long-term buy and hold. Image
“I have never worked with a company where at year 10, I see WAY MORE opportunity than ever before.”

👀 👀 $SFIX

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More from @TurnerNovak

Turner Novak Profile picture
25 Feb
“Online friend finding and social discovery is currently growing twice as fast as online dating, and we think it will be a 2x larger market as well" - Match Group

👀 👀 👀
fwiw, all these apps will add audio rooms (long $API), video rooms, games, messaging tools that reduce friction of self expression (AR filters, stickers), subscriptions, etc.

Winners will figure out moderation at scale, move fastest on new features, and crack long-term retention
we may see some vertical products emerge IE friend finding for gamers. Winners will be ones who build a unique, defensible social / interest graph (we also may just see these swallowed over time by co's with existing matching algo's and monetization models like Match, Yubo, etc)
Read 5 tweets
Turner Novak Profile picture
23 Feb
Spotify's Stream On event:

"By 2025, we could have 50m creators on our platform, whose art is enjoyed by 1b users around the world. We want to be the place educators, entrepreneurs, storytellers, and artists can touch the world through audio" - @eldsjal

Spotify says it has 40% market share of music streaming and will get to a similar share in podcasting.

Paid-audio increases from $7b to $40b/yr. Combined with podcasting, becomes a $55b opportunity.

…eamoninvestordiscussion.byspotify.com
One of the more interesting things Spotify's doing: investors have always focused on perpetually low gross margins due to payouts to record labels. The biggest expense for most labels is marketing. Spotify's now starting to capture some of that marketing spend on its ad platform.
Read 4 tweets
Turner Novak Profile picture
13 Feb
looking at my 25 startups investments in 2019-20, the two best performing consumer social co’s are literally just built on top of slack and WhatsApp. The founders created for a new format that was underserved, moved quick building, and gradually built their own app over time.
tbt to this tweet, thank you to all the awesome people and founders I connected with over this!
this deep dive on PDD was also critical and connected me with so many awesome people building similar co’s all around the world

turner.substack.com/p/pinduoduo-an…
Read 5 tweets
Turner Novak Profile picture
6 Feb
Quick thoughts + charts on $SNAP Q4 earnings
For the first time ever, Snap's largest user base is now Rest of World, or users outside North America and Europe
Snap's NorthAm / EU user growth held steady in the 8-12% range the past year, RoW continues accelerating. Wouldn't be surprised if total userbase exceeds 1 billion within five years.
Read 10 tweets
Turner Novak Profile picture
25 Jan
For everyone asking, current positioning:

Cash 18.4%
SNAP 27.1%
GME 12.0%
PDD 8.2%
SNAP Calls 7.2%
SFIX 6.5%
DIS 6.2%
SQ 5.9%
TWLO 4.7%
UBER 2.0%
SHOP 1.9%

Sold all my GME calls on the 22nd. Dumb luck easing into the stock on the 11th + 12th. Going to start trimming it today.
I also took 2x profits off the table on the FUBO puts, sold the rest at a loss a week later. This is why I very rarely short 😂
Trimming GME because we're nearing $10b in EV, which I thought was the low probability bull case by end of 2021
Read 5 tweets
Turner Novak Profile picture
16 Nov 20
Pinduoduo recently launched Duo Duo Maicai, which lets customers pick-up online orders from local shops. It was all analysts talked about on its Q3 earnings call last week and its stock jumped 30% the following two days.

Quick thread:
A pick-up ecommerce model pools multiple last mile delivery legs into one trip. 20 orders becomes just one delivery.

This lowers logistics costs significantly, which unlocks ecommerce for lower priced products, new behaviors, and makes it more accessible for low income consumers
A pick-up model also drives foot traffic to local shops. It's not a stretch to think one day we'll will bid on ecommerce pick-up traffic like digital ads.

An ad network like Pinduoduo's spanning manufacturers, consumer app, and in-person trips will likely be very, very valuable.
Read 6 tweets

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