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Tren Griffin

@trengriffin

Jan 23

1/ This thread is about "AMP IT UP" by Snowflake CEO Frank Slootman. It is a readable no-nonsense book written by a proven business operator. It won't take you long to read it. The book is modern in its format. It doesn't waste your time with a lot of fluff. Less is more.

2/ The set up: Anyone who writes a book deserves a respectful review. Being a published author requires both hard work and bravery. The author(s) deserve to have *their* book reviewed. Comments should not be about the reviewer, but rather about the ideas and writing in the book.

3/ There are sentences in AMP IT UP that jump out at me:

“Hire people ahead of their own curve."

"Be careful about what elevators we get into early in our careers.”

“No two companies are alike and just because another company is doing it, doesn’t make it right.”

I agree.

Read 9 tweets

Tren Griffin

@trengriffin

Jan 20

1/ Peloton's predicament is an opportunity to practice your unit economics skills.

"Average net monthly connected fitness churn, which Peloton uses to measure retention of connected fitness subscribers, ticked up to 0.73% from 0.52% a year earlier." cnbc.com/amp/2021/08/26…

2/ Gross Margin: 32.6%

Bill Gurley: "There is a huge difference between companies with high gross margins and those with lower gross margins. Using the DCF framework, you cannot generate much cash from a revenue stream that is saddled with large, variable costs."

3/ Assume to keep the math simple that Peloton ARPU is $39 a month. How high can customer acquisition cost (CAC) be and generate 10% ROIC? Remember, any equipment subsidy is part of CAC.

You are "solving for" CAC. Invert!

Extra credit: estimate unaddressed TAM & CAC impact.

Read 7 tweets

Tren Griffin

@trengriffin

Jan 16

https://twitter.com/planet4589/status/1482757237483491333

1/ Understanding why SpaceX's Starlink constellation currently has ~1,800 active and soon to be active satellites and the OneWeb constellation currently has fewer requires that you examine the inherent trade offs given the physics of wireless and how that impacts unit economics.

https://twitter.com/planet4589/status/1482757237483491333

2/ OneWeb's higher orbit means fewer satellites and gateways are required to cover the Earth and this reduces system costs, but higher orbit translates to a worse link budget which means the signal isn't as strong as in lower orbit. To learn more: itu.int/en/ITU-R/space…

3/ "I don't care" you say. "When do I get the Starlink terminal I ordered?" The issue usually for people in the northern US now is capacity not coverage. There's only so much capacity in a cell and it is shared. Will capacity increase over time? Yes, but it is not unlimited.

Read 6 tweets

Tren Griffin

@trengriffin

Jan 15

1/ In the new Infinite Loops podcast I explain why Gates and Allen saw more in the microprocessor than Intel. They wanted to solve a personal problem. Paying for computer access via a timeshare was $40 an hour in 1970s dollars. They wanted to own a computer at a low fixed price.

2/ Bill Gates told a Financial Times writer in 1988: "Intel themselves did not understand the importance of the advance they had made in building the microprocessor. Paul Allen and I wrote to Intel to tell them what an unbelievable device they had created. That was in 1974."

3/ "The last time Jim Manzi and I really talked at length was at the PS/2 introduction in April 1987. Jim was saying to me, 'Bill your company is fully valued. And I said to him, 'Jim, you’re right.' You know it is fully valued!” Forbes, December 7, 1992

Prediction is hard.

Read 9 tweets

Tren Griffin

@trengriffin

Jan 15

1/ Seeing this chart of NASDAQ 100 from 2000-02 made me think about a time in my life when we were in triage mode trying to keep businesses from dying. Some people were trading then, but our focus was on actual businesses running short of runway (eg cash).ritholtz.com/2022/01/living…

2/ The funding environment from 2000 to 2002 was in a state where assets of a business would sometimes not produce the ability to generate enough cash to get though a valley of death. Just one example was Nextel as this chart illustrates. I hope you never see a time like this.

3/ Control of XO Communications was up for grabs (if you had cash, which was rare at that time, you could gain control of companies in Chapter 11). We had to decide whether to try to gain control of XO or double down on Nextel. We correctly chose Nextel and avoided that battle.

Read 5 tweets

Tren Griffin

@trengriffin

Jan 14

1/ Me: "My worst nightmare is somebody I love is in trouble and I can’t help them. That’s the point of having money. That’s the point of having strength. That’s the point of preparing yourself. I’m always ready to do that, because I couldn’t live with him myself if I couldn't."

2/ "Start a company, you've got to be brave. Write a book, you've got to be brave. Paint that painting behind you, you've got to be brave. You must be willing to say: 'This is my painting.'"

There is a transcript of this podcast that is out today at: infiniteloopspodcast.com/tren-griffin-w…

3/ "If you give children opportunities to make mistakes and do things, they will be independent. When they go to college and through life, they're going to make great decisions. If you truly love them, do that. The downside is they're not going to call you often. Do it anyway."

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