This is Matt Reustle and today we are breaking down Dolby Labs. Our favorite Breakdowns are those businesses, which are widely known but barely understood. Dolby fits the bill. You see the logo everywhere but what does Dolby technology do and how does the business work? To answer those questions and break down Dolby, I was joined by Paul Vincent and William Nott from investment manager, Ninety One. We cover the backstory of Ray Dolby, what Dolby's actually building and selling, and how the business model works. Please enjoy this breakdown of Dolby.

For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.

(for me - https://joincolossus.com/episodes/69279744/vincent-dolby-the-sound-standard) 

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This episode is brought to you by Tegus. Tegus is the modern research platform for leading investors. I’m a longtime user and advocate of Tegus, a company that I’ve been so consistently impressed with that last fall my firm, Positive Sum, invested $20M to support Tegus’ mission to expand its product ecosystem. Whether it’s quantitative analysis, company disclosures, management presentations, earnings calls - Tegus has tools for every step of your investment research. They even have over 4000 fully driveable financial models. Tegus’ maniacal focus on quality, as well as its depth, breadth and recency of content makes it the one-stop, end-to-end research platform for investors. Move faster, gather deep research to build conviction and surface high-quality, alpha-driving insights to find your differentiated edge with Tegus. As a listener, you can take the Tegus platform for a free test drive by visiting tegus.co/patrick.

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Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.

Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.

Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss | @ReustleMatt | @domcooke

Show Notes

(00:02:50) - (First question) - The problem that Dolby initially set out to solve

(00:05:02) - Some of the well-known products Dolby offers today 

(00:08:41) - The path from noise reduction to enhancing the listener experience 

(00:13:23) - Invisalign: Patents, Patients, Profits; How their codec technology is actually implemented 

(00:16:40) - Whether or not how we record and what we record on can inhibit our ability to use Dolby’s products

(00:18:32) - What the end markets for Dolby look like today  

(00:21:04) - Whether or not they can offset against the consolidation of consumer technology 

(00:22:54) - Targeting manufacturers as customers

(00:26:55) - The trouble in defining Dolby’s total addressable market 

(00:28:15) - Metrics used for measuring the size and relevance of the business 

(00:31:23) - Outlining their royalty pricing model, its evolution, and the model’s dynamics  

(00:34:54) - Whether or not the decline of movie theaters will impact their growth 

(00:38:01) - Thoughts about Dolby’s cyclicality and potential trend impacts  

(00:42:38) - The margin profile and how capital intensive the business is 

(00:46:03) - His views on the potential risks to Dolby’s future 

(00:50:30) - What stops Amazon or Apple from producing Dolby adjacent products in house

(00:53:18) - How risky it is for Dolby to start pushing into the visual side of entertainment 

(01:00:53) - Lessons for investors and builders when studying Dolby’s story 

This is Matt Reustle and today we are breaking down the iconic video game publisher, Electronic Arts. EA’s corporate history dates back to the 1980s and the business has evolved with all of the industry shifts in the decades since. To break down EA, I am joined by the author of The10thMan blog. We cover the role of a publisher in the video game ecosystem, the history and dynamics behind crown jewels like FIFA and Madden, and what the growth in mobile and new forms of monetization mean to a business like EA. Please enjoy this breakdown of EA.

For the full show notes, transcript, and links to the best content to learn more, check out the episode page here. 

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This episode is brought to you by Tegus. Tegus is the modern research platform for leading investors. I’m a longtime user and advocate of Tegus, a company that I’ve been so consistently impressed with that last fall my firm, Positive Sum, invested $20M to support Tegus’ mission to expand its product ecosystem. Whether it’s quantitative analysis, company disclosures, management presentations, earnings calls - Tegus has tools for every step of your investment research. They even have over 4000 fully driveable financial models. Tegus’ maniacal focus on quality, as well as its depth, breadth and recency of content makes it the one-stop, end-to-end research platform for investors. Move faster, gather deep research to build conviction and surface high-quality, alpha-driving insights to find your differentiated edge with Tegus. As a listener, you can take the Tegus platform for a free test drive by visiting tegus.co/patrick.

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Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.

Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.

Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss | @ReustleMatt | @domcooke

Show Notes

(00:02:18) - (First Question) - EA’s role as a video game publisher within the broader industry

(00:05:06) - EA’s size and scale today compared to its competitors 

(00:08:15) - The founding story and the company’s background

(00:16:12) - The impact of licensing agreements with sports games like Madden and FIFA

(00:28:31) - The proportion of their games made for mobile, console, and PC

(00:32:29) - Economics of a typical new game development and launch

(00:34:38) - Expected lifespan of a game or its peak popularity

(00:35:57) - How the industry is shifting from up-front sales to in-game sales

(00:38:19) - The cost of keeping games up to date and working properly

(00:40:00) - Working with third-party game engines versus developing a proprietary engine

(00:44:45) - In-game purchases like loot boxes and the legal risks of being deemed gambling

(00:48:26) - The video game M&A landscape and a discussion of Microsoft and Activision

(00:50:19) - How EA uses a subscription model to unlock value from their back catalog

(00:51:43) - Hypothetical top-line growth in the future and the bull case for EA

(00:55:48) - Lessons for builders and investors when studying EA’s story

Today we’re breaking down India’s largest jewelry business, Titan. Titan began life as a watchmaker in 1984 through a joint venture between India’s biggest conglomerate, Tata Group, and the Tamilnadu state government. Today, the vast majority of its $4 billion in revenue come from its collection of jewelry brands, and Tanishq in particular.

To break down the business, I’m joined by Saurabh Mukherjea, the founder and Chief Investment Officer of Marcellus Investment Managers. We cover the importance of jewelry to Indian consumers, the intricacies of retailing across India, and how Titan stands head and shoulders above its competitors in terms of profitability. Please enjoy this breakdown of Titan.

For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.

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This episode is brought to you by Tegus. Tegus is the modern research platform for leading investors. I’m a longtime user and advocate of Tegus, a company that I’ve been so consistently impressed with that last fall my firm, Positive Sum, invested $20M to support Tegus’ mission to expand its product ecosystem. Whether it’s quantitative analysis, company disclosures, management presentations, earnings calls - Tegus has tools for every step of your investment research. They even have over 4000 fully driveable financial models. Tegus’ maniacal focus on quality, as well as its depth, breadth and recency of content makes it the one-stop, end-to-end research platform for investors. Move faster, gather deep research to build conviction and surface high-quality, alpha-driving insights to find your differentiated edge with Tegus. As a listener, you can take the Tegus platform for a free test drive by visiting tegus.co/patrick.

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Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.

Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.

Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss | @ReustleMatt

Show Notes

(00:02:45) - (First question) - What Titan is, where it operates, and its size and scale

(00:06:50) - The bulk of the demand when it comes to Indians buying gold 

(00:08:24) - Getting their start in watches in the 80s and evolving into what Titan is today 

(00:14:52) - What a typical Tanishq store looks like and overview of store economics

(00:18:58) - How their return profile is changing and what types of stores they want to open

(00:23:51) - What gold on lease is and the implications of it for their business model 

(00:25:33) - Why make jewelry when they could just be selling gold for savings purposes

(00:27:36) - Managing inventory and keeping costs under control at the store level

(00:31:54) - Whether or not they have artisans spread out across the country and difficulties of shipping and freight at their current scale in India 

(00:33:38) - How they’re attracting customers to stores and store-level marketing strategies

(00:37:57) - Splitting their business into middle class, premium, and wedding jewelry 

(00:39:22) - Where e-commerce figures into the scope of their business

(00:42:47) - Thoughts and philosophy on allocating surplus capital and acquisitions 

(00:45:38) - Additional competitive advantages Titan has

(00:48:42) - Building brand trust in a low trust economy in such a short time period 

(00:50:22) - Where future growth will come from and if they can sustain their current growth rate

(00:54:04) - The bull case for their business and what a Saree is

(00:57:03) - Risks the business faces as they look out at the future 

(01:00:12) - What he’s learned as an investor studying Titan’s business

This is Matt Reustle and today we are breaking down the National Basketball Association. The NBA topped $10bn in revenue last season, in line with MLB and behind only the NFL in terms of major sports leagues. The initial headlines for the next media rights deal, which is coming in 2025 suggest a 200% to 300% increase versus the previous contract. But what's particularly interesting about these data points is that they stand in sharp contrast to declining viewership numbers. 

To break down the NBA, I'm joined by Ethan Strauss. Ethan has been intimately involved with the league for the past decade and often writes about why the NBA, like other sports leagues, is not a traditional business. We cover who and what made the NBA into the giant it is today and whether that's getting stronger or less strong. Please enjoy this breakdown of the NBA. 

For the full show notes, transcript, and links to the best content to learn more, check out the episode page here. 

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This episode is brought to you by Tegus. Tegus is the modern research platform for leading investors. I’m a longtime user and advocate of Tegus, a company that I’ve been so consistently impressed with that last fall my firm, Positive Sum, invested $20M to support Tegus’ mission to expand its product ecosystem. Whether it’s quantitative analysis, company disclosures, management presentations, earnings calls - Tegus has tools for every step of your investment research. They even have over 4000 fully driveable financial models. Tegus’ maniacal focus on quality, as well as its depth, breadth and recency of content makes it the one-stop, end-to-end research platform for investors. Move faster, gather deep research to build conviction and surface high-quality, alpha-driving insights to find your differentiated edge with Tegus. As a listener, you can take the Tegus platform for a free test drive by visiting tegus.co/patrick.

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Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.

Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.

Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss | @ReustleMatt | @domcooke

Show Notes

(00:03:11) - (First Question) - His background and his entry into the basketball business

(00:09:24) - Key turning points that enabled the league to mature to what it is today

(00:12:53) - An overview of the league’s economics and scale

(00:16:01) - The dynamics of negotiating national and regional TV deals

(00:18:57) - How viewership is faring with an increasingly fractured TV audience

(00:22:40) - The counter-intuitive notion that lower TV viewership can help extract more media rights profits

(00:25:47) - The international market for the NBA

(00:31:06) - The unique role of the NBA commissioner and how it compares to other sports

(00:34:12) - How individual teams and their owners influence league dynamics

(00:37:27) - Rough splits between the NBA’s various revenue streams

(00:39:32) - Astronomical franchise purchase prices and owner dynamics

(00:41:34) - The possibility of expansion and the creation of new franchises

(00:44:41) - How the NBA’s star players draw in fans but also wield power over the league

(00:50:07) - The extent to which players’ popularity depends on nationality

(00:54:03) - How much players make in salary versus endorsement deals

(00:58:11) - Variables that could threaten the success of the league as a whole

(01:00:26) - Probable drivers for future success and growth of the NBA

(01:02:14) - The role of marketing in the NBA’s continued success

(01:04:15) - Cues the NBA could take from other leagues in terms of its media presence

(01:07:15) - Lessons for builders and investors when studying the NBA’s story

Compound248 is back to host another episode of Business Breakdowns. His most recent podcasts have focused on digital infrastructure and today we continue with that theme, but with a twist. Our guest is Wall Street Legend Jim Chanos, famed for bringing a skeptical eye to a credulous world. Together, we walked through his short thesis on the US Data Center REITs, his bear case for commercial real estate, and some broader wisdom on how management can thoughtfully respond to short sellers. Let's get started.

For the full show notes, transcript, and links to the best content to learn more, check out the episode page here. 

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This episode is brought to you by Tegus. Tegus is the modern research platform for leading investors. I’m a longtime user and advocate of Tegus, a company that I’ve been so consistently impressed with that last fall my firm, Positive Sum, invested $20M to support Tegus’ mission to expand its product ecosystem. Whether it’s quantitative analysis, company disclosures, management presentations, earnings calls - Tegus has tools for every step of your investment research. They even have over 4000 fully driveable financial models. Tegus’ maniacal focus on quality, as well as its depth, breadth and recency of content makes it the one-stop, end-to-end research platform for investors. Move faster, gather deep research to build conviction and surface high-quality, alpha-driving insights to find your differentiated edge with Tegus. As a listener, you can take the Tegus platform for a free test drive by visiting tegus.co/patrick.

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This episode is brought to you in partnership with Roundhill Investments, the advisor to the Roundhill IO Digital Infrastructure ETF – BYTE - which trades on the New York Stock Exchange under the ticker symbol BYTE. The fund tracks the BYTE Index, which measures the performance of 40 leading global digital infrastructure businesses, such as towers and mobile communications, fiber and fixed line connectivity, and data centers. For a prospectus and more information, please visit roundhillinvestments.com/etf/byte.

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Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.

Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.

Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss | @ReustleMatt | @domcooke

Show Notes

(00:03:30) - (First question) - His counter-narrative thesis of shorting traditional data centers

(00:09:34) - How data center hyperscalers have been shifting the industry since 2016

(00:12:14) - The size, margins, and depreciation profile of the data center industry

(00:16:14) - The cash burn problem with digital REITs

(00:18:30) - How he thinks about interest rates, liquidity, and leverage in the space

(00:20:25) - More on why the value of these data centers is so elusive

(00:21:57) - The extent to which macro tech slowdowns intersect with his thesis

(00:23:13) - What investors see in these businesses that he discounts

(00:26:59) - Risks for the short and the bull case for data centers

(00:29:04) - Big concerns about the broader commercial real estate market

(00:36:34) - The best way for operators to handle a short thesis about their company

(00:39:49) - Critical mistakes he recommends managers avoid

Today, we’re breaking down Markel. Markel is an insurance and investing business. It shares the same operating structure as Berkshire Hathaway in that it uses insurance underwriting profits to fund an investing portfolio that includes both minority and controlling interests in public and private businesses. It was founded in 1930 by Sam Markel to insure Jitney buses and today it is a Fortune 500 company with a market value of $17 billion.

To break down Markel, I’m joined by Peter Keefe and Saurabh Madaan. Peter is an investor at Avenir and longtime Markel shareholder, while Saurabh was the Deputy CIO at Markel and is now the founder and managing member of Manveen Asset Management. We discuss why the Berkshire comparison is unfair, how a specific set of values is so deeply embedded in the business, and we use Markel as a lens to talk about capital allocation and the psychology of investing more broadly. Please enjoy this breakdown of Markel.

For the full show notes, transcript, and links to the best content to learn more, check out the episode page here. 

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This episode is brought to you by Tegus, the modern research platform for leading investors. I’m a longtime user and advocate of Tegus, a company that I’ve been so consistently impressed with that last fall my firm, Positive Sum, invested $20M to support Tegus’ mission to expand its product ecosystem. Whether it’s quantitative analysis, company disclosures, management presentations, earnings calls - Tegus has tools for every step of your investment research. They even have over 4000 fully driveable financial models. Tegus’ maniacal focus on quality, as well as its depth, breadth and recency of content makes it the one-stop, end-to-end research platform for investors. Move faster, gather deep research to build conviction and surface high-quality, alpha-driving insights to find your differentiated edge with Tegus. As a listener, you can take the Tegus platform for a free test drive by visiting tegus.co/patrick.

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Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.

Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.

Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss | @ReustleMatt | @domcooke

Show Notes

(00:02:34) - (First question) - How they would explain Markel’s unique business model to a friend

(00:04:24) - The values and systems that make Markel stand out

(00:08:57) - Subtleties that differentiate Markel from Berkshire

(00:11:22) - Markel’s stance and perspective in the larger insurance industry

(00:15:31) - The structural factors that enable Markel’s excellence across many different classes of insurance

(00:18:55) - Why this specialized business model is still not widely replicated

(00:20:18) - The disproportionate amount of legacy companies in the insurance industry

(00:22:58) - The evolution of Markel’s investment portfolio and investing style

(00:29:22) - Key differences between Markel Ventures and the public equity portfolio

(00:32:25) - How their decision-making and allocation process differs from traditional funds

(00:36:42) - How their small team is able to outperform the bigger competitors

(00:39:50) - Summoning patience to reap the benefits of holding positions long-term

(00:42:37) - The famous American Tower investment story 

(00:46:10) - How they would evaluate Markel from an outside investor perspective 

(00:53:43) - Key-man risk in Markel’s agile leadership

(00:55:33) - Other risks and challenges they think about with Markel

(00:57:05) - How experience with Markel has informed their perspective on the insurance industry

(01:00:50) - Lessons for builders and investors when studying Markel’s story

This is Jesse Pujji and today we’re breaking down The Walt Disney Company. Disney needs no introduction. We have all interacted with the entertainment empire in some capacity. It was founded 100 years ago as the Disney Brothers Cartoon Studio and over the ensuing century, the business has grown into a conglomerate of entertainment properties that includes the likes of Pixar, Marvel, Disneyland, ESPN, National Geographic, and Disney+.

To explain how the business fits together, I’m joined once again by Ben Weiss, the Chief Investment Officer of 8th & Jackson. We talk about Disney’s famous flywheel, its push into streaming, and why it's such a difficult business to manage. Please enjoy this business breakdown of Disney.

For the full show notes, transcript, and links to the best content to learn more, check out the episode page here. 

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This episode is brought to you by Tegus, the modern research platform for leading investors. I’m a longtime user and advocate of Tegus, a company that I’ve been so consistently impressed with that last fall my firm, Positive Sum, invested $20M to support Tegus’ mission to expand its product ecosystem. Whether it’s quantitative analysis, company disclosures, management presentations, earnings calls - Tegus has tools for every step of your investment research. They even have over 4000 fully driveable financial models. Tegus’ maniacal focus on quality, as well as its depth, breadth and recency of content makes it the one-stop, end-to-end research platform for investors. Move faster, gather deep research to build conviction and surface high-quality, alpha-driving insights to find your differentiated edge with Tegus. As a listener, you can take the Tegus platform for a free test drive by visiting tegus.co/patrick.

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Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.

Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.

Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss | @ReustleMatt | @domcooke

Show Notes

(00:02:23) - (First question) - Overview of Disney and their size and scale today 

(00:05:15) - Major milestones across Disney’s one hundred year history 

(00:07:17) - What lead to their decision to buy ABC and subsequently ESPN 

(00:08:00) - Disney’s Original Flywheel; How Disney’s flywheel compounds on top of itself

(00:10:11) - Characterizing their competitors and the markets they play in  

(00:12:58) - Overview of Disney’s theme park business 

(00:15:07) - Fixed costs, growth, and thoughts about volume for their theme parks

(00:17:40) - Their cable business and the drivers of growth and success for it 

(00:21:33) - Netflix: The Original; What’s different about Disney+ compared to Netflix and why they’re losing money 

(00:23:14) - Disney+ verses Netflix in the competitive landscape 

(00:24:45) - How far Disney can extend their content offering without degrading their brand

(00:27:42) - Overview of Disney’s movie business and its growth levers 

(00:29:04) - Creativity, Inc.; A revenue case study of the Cars franchise

(00:33:08) - Company culture in running an effective enterprise as big as Disney 

(00:35:43) - The recent leadership transition and his thoughts on it as an investor

(00:37:24) - Reasons behind the Marvel acquisition in 2009

(00:40:05) - What will have to go right if Disney became the next trillion dollar company

(00:43:32) - Possible reasons why Disney could fail over the coming decade  

(00:45:56) - Lessons for builders and investors when studying Disney’s story

(00:48:54) - Learn more about Disney; Creativity, Inc., The Ride of a Lifetime 

Today we are breaking down the world’s fastest-growing sports league, The Indian Premier League. The Indian Premier League, often shortened to IPL, is a cricket competition that takes place in India every year between the end of March and end of May. There are 10 teams, 74 matches, and the competition starts and ends within 2 months. 

The biggest sports leagues tend to come with long histories. You can trace the NFL back to 1920, the NBA to 1946, and Formula 1 to 1950. In stark contrast, the IPL and its teams were founded in 2008. But despite its relative youth, the IPL is already a sporting giant. It has revolutionized the game of cricket and is the second biggest sports league in the world if you measure it on a per-game basis.

To break down the story and business, I’m joined by Ed Cowan. Ed played professional cricket for Australia in the early 2010s and is now an investor at TDM Growth Partners. Please enjoy this breakdown of the Indian Premier League.

For the full show notes, transcript, and links to the best content to learn more, check out the episode page here. 

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This episode is brought to you by Tegus. Tegus is the modern research platform for leading investors. I’m a longtime user and advocate of Tegus, a company that I’ve been so consistently impressed with that last fall my firm, Positive Sum, invested $20M to support Tegus’ mission to expand its product ecosystem. Whether it’s quantitative analysis, company disclosures, management presentations, earnings calls - Tegus has tools for every step of your investment research. They even have over 4000 fully driveable financial models. Tegus’ maniacal focus on quality, as well as its depth, breadth and recency of content makes it the one-stop, end-to-end research platform for investors. Move faster, gather deep research to build conviction and surface high-quality, alpha-driving insights to find your differentiated edge with Tegus. As a listener, you can take the Tegus platform for a free test drive by visiting tegus.co/patrick.

-----

Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.

Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.

Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss | @ReustleMatt | @domcooke

Show Notes

(00:03:05) - [First question] - An overview of the Indian Premier League (IPL) today

(00:07:41) - How cricket fits in the context of Indian culture and markets

(00:11:06) - The mechanics of T20 cricket and its history

(00:19:33) - The genesis of the IPL

(00:21:42) - How the original eight teams were sold by the league and seeded by investors

(00:24:44) - The IPL’s conception and the rockier aspects of its startup phase

(00:30:13) - The revenue structure and business model broken down into their many streams

(00:33:44) - How Indian culture influences media deals in cricket

(00:41:55) - How operators have structured the IPL to optimize for media rights 

(00:44:53) - More on league-level economics, costs, and IP monetization 

(00:47:22) - Dynamics of individual franchises within the league

(00:55:19) - The infrastructure model and overhead costs for individual franchises

(00:59:03) - A deep dive into the player auction and how it works

(01:07:48) - Fanbase demographics and the importance of female representation in the IPL

(01:12:38) - How IPL creates and leverages scarcity value

(01:17:26) - The increasing international reach of the IPL draft

(01:19:32) - How the BBL in Australia stacks up against the IPL

(01:25:18) - Premortem case for the IPL

(01:28:22) - Why he thinks cricket and the IPL won’t be disrupted any time soon

(01:31:59) - Lessons for operators and investors when studying the IPL story

This is Zack Fuss, an investor at Irenic Capital, and today we’re breaking down Wise. Wise helps individuals and small businesses move money across borders. It offers significantly faster and cheaper international transfers than traditional banking routes because of its innovative closed-loop system. Twelve years after its founding, Wise serves six million customers and earned close to £1 billion in income last year. Investors currently value the business, which is listed in London, at £6 billion.

To break down Wise, I’m joined by former payments exec and now investor at Sydney-based TDM Growth Partners, James Revell. We cover the broken system of correspondent banking, which has led to slow, opaque, and expensive transfers and then explore how Wise has counter-positioned itself to take advantage of this large market. Please enjoy our breakdown of Wise.

For the full show notes, transcript, and links to the best content to learn more, check out the episode page here. 

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This episode is brought to you by Tegus. Tegus is the modern research platform for leading investors. I’m a longtime user and advocate of Tegus, a company that I’ve been so consistently impressed with that last fall my firm, Positive Sum, invested $20M to support Tegus’ mission to expand its product ecosystem. Whether it’s quantitative analysis, company disclosures, management presentations, earnings calls - Tegus has tools for every step of your investment research. They even have over 4000 fully driveable financial models. Tegus’ maniacal focus on quality, as well as its depth, breadth and recency of content makes it the one-stop, end-to-end research platform for investors. Move faster, gather deep research to build conviction and surface high-quality, alpha-driving insights to find your differentiated edge with Tegus. As a listener, you can take the Tegus platform for a free test drive by visiting tegus.co/patrick.

-----

Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.

Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.

Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss | @ReustleMatt | @domcooke

Show Notes 

[00:02:27] - [First question] - Overview of Wise, their key product, and core competency 

[00:04:17] - The founding story of Wise and the road leading to today

[00:09:18] - Wise’s size and scale today compared to 2011

[00:11:07] - Their competitive advantages and how it informs their goals 

[00:19:24] - Exploring Wise’s closed loop system and why their model can’t be copied

[00:21:28] - Unique characteristics of their business model that allows them to capture such robust margins

[00:25:32] - Overview of Wise’s unit economics and their revenue model

[00:34:49] - Interchange fees and how Project Zero guides the business

[00:36:44] - Why their lower take rate doesn’t destroy the industry 

[00:38:24] - Ways Wise’s business model can’t simply be copied and replicated 

[00:44:35] - Thoughts on who their true competitors are

[00:48:10] - Their customer acquisition flywheel 

[00:49:49] - Float, increasing net margin, and how they contribute to durability

[00:53:55] - Key risks associated with Wise when evaluating the business

[00:58:35] - Reasons behind the decision to raise money as a direct listing in the UK

[01:01:03] - How people looking at Wise should think about margins over time

[01:03:32] - Lessons for builders and investors when studying Wise’s story  

This is Matt Reustle and today we are breaking down Europe's largest airline, Ryanair. As we do more breakdowns, we start to look for patterns of successful business models that succeed across different industries. Ryanair is another case study in low-cost shared economies of scale. To break down Ryanair, I'm joined by Holland Advisors’ founder and portfolio manager, Andrew Hollingworth.

On this episode, we talk about what makes airlines such a difficult industry for investors, how CEO Michael O'Leary has taken a truly unique approach to building this business, and how to frame cyclical versus secular dynamics in the airline market. 

Now, one quick note before we transition to the episode. You'll hear Andrew and I talk about O'Leary's unique PR approach with shareholders, the union, and pretty much anyone that he deals with. If you're interested in that type of dark arts of communication and media, make sure to check out our newest show at Colossus, Making Media. It operates as an ongoing Business Breakdown of our own business, Colossus, and we spend a lot of time studying the world of communications and media more broadly. You'll find a link to that series in our show notes. Make sure to subscribe. 

For the full show notes, transcript, and links to the best content to learn more, check out the episode page here. 

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This episode is brought to you by Tegus. Tegus, the modern research platform for leading investors. I’m a longtime user and advocate of Tegus, a company that I’ve been so consistently impressed with that last fall my firm, Positive Sum, invested $20M to support Tegus’ mission to expand its product ecosystem. Whether it’s quantitative analysis, company disclosures, management presentations, earnings calls - Tegus has tools for every step of your investment research. They even have over 4000 fully driveable financial models. Tegus’ maniacal focus on quality, as well as its depth, breadth and recency of content makes it the one-stop, end-to-end research platform for investors. Move faster, gather deep research to build conviction and surface high-quality, alpha-driving insights to find your differentiated edge with Tegus. As a listener, you can take the Tegus platform for a free test drive by visiting tegus.co/patrick.

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Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.

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Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss | @ReustleMatt | @domcooke

Show Notes

[00:03:12] - [First question] - Why airlines have such a bad reputation with investors 

[00:04:20] - An overview of Ryanair and its size and scale today 

[00:05:43] - Unique characteristics about Ryanair’s business model that distinguishes them from their competitors

[00:09:10] - What keeps customers coming back to Ryanair

[00:10:49] - What else stands out about Michael O’Leary that is key to Ryanair’s success

[00:12:16] - Michael O’Leary: Turbulent Times for the Man Who Made Ryanair

[00:14:22] - How Ryanair’s business model has evolved against cycles and opportunities

[00:19:29] - What else goes into their cheap seat cost structure 

[00:23:10] - Approaching labor in light of a unionized industry and workforce 

[00:28:07] - The cyclicality of margins and how theirs look compared to their competitors

[00:33:47] - Interesting data on airplane utilization and dynamic pricing  

[00:36:40] - What’s contributing to the lack of growth at easyJet 

[00:42:37] - The risks to Ryanair’s growth as a shareholder  

[00:44:00] - Industry responses to cycles and recessionary environments 

[00:46:31] - The main takeaways from Ryanair that could be applied elsewhere