⁠Startup Archive
RT @garrytan: Great founders don’t capture TAM

Great founders create TAM

Tobi Lutke explains what the VCs who passed on Shopify got wrong

Tobi recounts pitching Shopify to VCs on Sand Hill Road a few years after founding Shopify.

Investors passed because they thought the addressable market was too small. At the time, there were about 40,000-50,000 online stores, and even if Shopify captured 50% of the market, that still wouldn’t be a venture-scale business.

When Tobi ran into the VC partner a few years ago, the partner asked Tobi what he missed (Shopify is valued at almost $100 billion today).

Tobi explained:

“You were actually correct, but what you didn’t realize was that Shopify was the solution to the very problem you identified. The reason there was only 40,000 online stores was because it was hard, expensive, and everyone who tried ran into all these brick walls of complexity, which Shopify, one after another, smoothed over and made simple to do.”

Tobi believes this is a common mistake:

“What a lot of free-market thinkers don’t understand is that between the demand and eventual supply lies friction. And I actually think that friction is probably the most potent force for shaping the planet that people just generally do not acknowledge… That was my theory when I turned my snowboard store into Shopify: there was a lot more people like me except there was too much friction which we needed to solve. And Shopify has proven out that every time we make the process simpler, there’s more consumption. At this point, we have a million merchants on Shopify, which is a mind-blowing number. So friction is a major component, and it’s something that software is uniquely good at reducing.”

Video source: @danmartell (2019) - Startup Archive
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⁠Capital Employed
Recap of content published in January...

38 Stock Pitches (18th-31st January)💡
Interview #106 : Dave Waters (Tactile Fund LP) 📗
41 Stock Pitches (1st-17th January)⚡
Q4 2024 Fund Letters Round-Up✍️
Interview #105 : John Khabbaz (Phoenician Capital)📗

https://t.co/jEccgMyfbM
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⁠InsideArbitrage
Warburg Pincus and Berkshire Partners are in advanced talks to acquire aircraft parts and services supplier Triumph Group $TGI for about $3 billion, including debt, Bloomberg reports.

The private equity firms are discussing paying $26 per share for the Radnor, Pennsylvania-based company.

Triumph Group $TGI is exploring options including a sale of the company - Bloomberg

The aircraft components maker is working with a financial adviser to solicit acquisition interest from strategic buyers as well as private equity firms. - InsideArbitrage
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⁠Hidden Value Gems
Congrats to all the $GKP.L holders, the deal has been approved by the Iraqi parliament although the exports will not restart for another few months 👇 https://t.co/7EjwR2TvjP
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⁠Hidden Value Gems
I like this concept 👉 Forbes Cover Curve

h/t @yardeni https://t.co/Ll1ok7D3Bo
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⁠Hidden Value Gems
Curious what you think?

What is the probability that Trump rolls back tariffs within a month?
- Less than 25%
- 25-49%
- Over 75%
- 50-75%
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⁠Hidden Value Gems
Some interesting stock comments in the latest David Einhorn letter (besides Fartcoin).

New positions 🛒 $CNH $CNC $PTON
Increased 🛍️ $CPRI
Exits 🚮 $LIVN $ODP $THC Defence ETF (expecting RU-UKR war to end soon)

Theses on select names 👇

1/3
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⁠InsideArbitrage
Triumph Group $TGI to be Acquired by Warburg Pincus and Berkshire Partners for $3 Billion -
✈️Triumph shareholders will receive $26.00 per share in cash, representing a premium of 38.74% from the stock’s last close.
✈️The deal is expected to close in the second half of 2025.
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⁠Dimitry Nakhla | Babylon Capital®
Insights from a Hedge Fund Legend 🪨

Mark Massey, founder of AtlaRock Partners, boasts an impressive track record, with CAGR of >20% since 2016 📈

When asked about the most critical investment mistakes and how to avoid them, Massey shared his expert advice👇🏽 https://t.co/OZKamI0hFO
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