⁠Stock Analysis Compilation
Clearbridge on Light and Wonder $LNW US

Thesis: Light and Wonder’s focus on expanding its gaming equipment leasing and its entry into online gaming position it well for growth, particularly as more U.S. states approve online gambling.

(Extract from their Q3 letter) https://t.co/Y83MDr1bJ9
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⁠Ahmad Jivraj
Convergence to the mean: The notion that companies with the highest profitability decline while the lowest rise. https://t.co/V6HQdRvTc9
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⁠Stock Analysis Compilation
Patient Capital Management on Dave & Buster’s Entertainment $PLAY US

Thesis: Dave & Buster’s ongoing transformation efforts and share buybacks position it for significant growth once consumer spending rebounds.

(Extract from their Q3 letter) https://t.co/T94FO0cqN2
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⁠iinvested
Great write up by White Falcon Capital Management on $DAVA

More fund letters here:
https://t.co/ccjFhSPQ2v https://t.co/vawrQmTEXA
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⁠Investing visuals
Alphabet $GOOGL kicks off big tech earnings on Tuesday. Earnings preview:
🔹Est. Revenue: $86.2 Bln (+12.4%)
🔹Est. Earnings per share: $1.85 (+19%) https://t.co/pd6WsxyuIR
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⁠Startup Archive
Netflix founder Reed Hastings tells the story of the startup CEO who cleaned the coffee cups

Reed recalls being 28 years old working as an engineer at a failed startup in the AI space called Coherent Thought:

“I worked so hard as an engineer writing code. I was there every night, all night — the kind of thing, you know, how hard can you push? And I would build up over time on my desk this gross set of coffee cups. And every now and then the janitor would clean them all. So I learned that if I just waited long enough, I didn’t have to clean them.”

Then, one morning Reed came into work really early at 5am:

“I walk into the bathroom and there were all my cups being cleaned. I looked up and it was our CEO Barry Plotkin who was cleaning them.”

Reed asked him, “Barry what are you doing?”

Barry: “I’m cleaning your cups.”

Reed: “Have you been doing it the whole year? And you never said anything?”

Barry: “Well you work so hard and this is the only thing I can do for you.”

Reed remembers:

“I just thought, Wow, I’ll follow this guy to the end of the earth… And that’s exactly where he led us.”

He explains:

“What happened is he was an incredibly charismatic guy that didn’t have a good product/market fit vision. And we built an incredibly elaborate product and ultimately sold one copy of it to one customer who never installed it… It’s a funny thing about leadership. You can be very personally compelling and high integrity — that’s great. But you also got to lead people in the right direction.”

Video source: @StanfordGSB (2014)
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⁠iinvested
3Q'24 Giverny Capital Asset Management on $MEDP

https://t.co/TzSPBekveK

More fund letters here:
https://t.co/ccjFhSPQ2v https://t.co/ga3HRaYHK3
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⁠Startup Archive
RT @then_there_was: This is a common enough story I’ve noticed: Entrepreneur tries to build, but stumbles upon a problem nobody else has fixed yet.

Person fixes problem, then notices it’s better than what they were trying to originally make.

It’s very telling this happened twice with the same game, as if it ultimately didn’t matter what they built because the same obstacle exists on many paths.

And it also suggests many other businessmen stumbled upon the same problem and for whatever reason didn’t notice it or couldn’t fix it.

Ben Horowitz tells the story of Slack’s pivot from a failed gaming app into a $28 billion company

Ben recalls investing in Stewart Butterfield’s new company Tiny Speck.

In 2001, Stewart began building an online game, pivoted into Flickr, and the company was acquired by Yahoo in 2005 for $25 million. In early 2009, Stewart decided he wanted to try building the online game again. This time, it would be called Glitch.

Ben tells the story:

“And so he builds Glitch. I love Glitch - it was a marvelous game. But it had two major problems. One, he started it in 2006 and built on Flash before Steve Jobs declared war on Flash. So it wasn’t going to work on the iPhone. And then the other problem was people would finish the game in two days, and so that’s not very good for retention.”

After raising more than $15 million to build Glitch, Stewart called Ben to tell his investor that they only had $6 million left:

“Ben, I’ve got $6 million left. I have no way to raise money because I’ve made really no progress because of these issues. It’s going to cost me more than $6 million to finish the game. So I’ve got three choices. I can pray for rain and try and finish it. I can shut down the company and give you your $6 million back. Or we build this tool that we use in our engineering team to communicate with each other and make engineering work a little better, and I could just put that out as a product.”

Ben replies:

“What? You just like built some tool to talk to each other and you want to put that out as a product? And you’re a consumer guy and you want to become an enterprise software guy?”

Stewart says, “Yeah, I think it’d be a pretty good idea.” And so Ben said, “$6 million isn’t going to make a big difference in my life. If you really think it’s a good idea and you want to do that, go ahead.”

Stewart decided to call the new product Slack, and it soon became the fastest growing enterprise software company of all time before SalesForce acquired it for $27.7 billion in July 2021.

Ben points out an important lesson here:

“A lot of the process is do you have a secret? Do you know something that nobody else knows? And because [Stewart] was pulling his hair out, literally smoking 8 packs of cigarettes a day, trying to get Glitch out the door, he was doing everything to optimize that development, and so he learned where software development was suboptimal… And that’s a really big key. You have to do something really hard if you want to learn something about the world that nobody else knows or is acting on. That’s when you have a breakthrough. But it starts with hard work.”

Video source: @SutardjaCenter (2020) - Startup Archive
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⁠Stock Analysis Compilation
Clearbridge on Broadcom $AVGO US

Thesis: Broadcom’s custom silicon business and acquisition of VMware provide durable growth opportunities, making it a strong investment in the AI sector with a favorable risk/reward profile.

(Extract from their Q3 letter) https://t.co/PZ2Ik1f63U
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⁠Startup Archive
RT @foundertribune: 9 Lessons from Peter Thiel by @JTLonsdale https://t.co/1zutaYqgWx
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