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Invest Like the Best with Patrick O'Shaughnessy

Exploring the ideas, methods, and stories of people that will help you better invest your time and money. Learn more and stay-up-to-date at https://joincolossus.com/
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Now displaying: October, 2021
Oct 28, 2021

Today, we are running a special episode of Business Breakdowns on our Invest Like the Best feed. When we launched Breakdowns, we hoped to cover industries and businesses that we were “well known but poorly understood.” This deep-dive on UMG and the music industry is just that - you will walk away with a whole new appreciation for artists, labels, and what streaming technology has done for a historic industry. If you enjoy this episode, please be sure to subscribe on your preferred podcast player and check out our growing catalog of episodes.

 

Today we’re breaking down Universal Music Group. As one of the largest music businesses in the world, UMG is home to many of the world’s greatest artists, including Taylor Swift, U2, and The Beatles catalog. A discussion on UMG requires a deep dive into the history of music itself, how it was historically monetized, the shift from physical to digital, and what streaming has meant for the various pieces of the ecosystem. Our guest, Arman Gokgol-Kline, a partner and investor at Ruane, Cunniff & Goldfarb, walks us through that evolution of the music industry before we dive in on UMG.

 

In our discussion, we first break down the industry pre and post Napster, looking at the ways music was sold historically, and how that led to both record profits and a consumer revolution. We then assess streaming’s impact on the industry and how, contrary to what you might think, labels may be more important in a marketplace where it’s easier than ever for creators to record and release music. Finally, we finish with UMG’s place in the ecosystem. The primary drivers of the business, how they’re able to attract the world’s superstars, and how they think about deploying dollars to acquire new artists and timeless catalogs.

 

Please enjoy this fantastic breakdown of Universal Music Group.

 

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 Quartr. With Quartr, you can access conference calls, investor presentations, transcripts, and earnings reports – straight from your pocket. Quartr is 100% free and includes companies from 12 markets including the US, the UK, Canada, India, and all the Scandinavian countries. Quartr is available for both iOS and Android, so check out the app today.

 

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This episode is brought to you by Brex. Brex began as the first corporate card for startups and now offers a full financial stack built for scale. Get 10-20x higher credit limits, uncapped rewards, easy deposits and payments, and expense management all in one. Grow your business faster with Brex.

 

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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

 

Show Notes

[00:04:01] - [First question] - How technology disrupted the music business and it’s evolving history

[00:12:44] - What the industry of music labels looks like from the 90s to today

[00:21:19] - How it feels as a high-tier artist to engage with a label directly today

[00:28:20] - The revenue and business model of an artist akin to Taylor Swift

[00:30:44] - The differences between UMG's main sources of revenue; music publishing and recording

[00:35:08] - General margins and trends for music publishing

[00:36:22] - Ownership and mechanics of monetizing an artist’s Intellectual Property 

[00:40:57] - How streaming revenues are divided among stakeholders

[00:46:23] - History of the bargaining power of labels and streaming platforms

[00:51:25] - Capital allocation, ROI, and acquiring IP and catalogs

[00:57:39] - Thoughts on the growth profile of the industry as an investor

[01:02:23] - Potential risks to UMG in emerging technology and new creator trends 

[01:08:50] - Reasons why an artist would pick UMG over other major labels

[01:12:42] - Diversity and how artists are sometimes treated by labels

[01:14:02] - A growing increase in music consumption across the world

Oct 26, 2021

My guest today is Alex Rampell, General Partner at Andreessen Horowitz. Alex has a long history in fintech, having co-founded six companies in his career, including Affirm and TrialPay. During our conversation, we cover Alex’s framework for positive selection in investing, why the best investments are often operating systems or systems of record, and Alex’s views on the future of fintech. For those that have listened to our Business Breakdown on Visa with Alex - you know the intellectual horsepower he brings to every discussion. This conversation is no exception. 

 

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 has built the most extensive primary information platform available for investors.

 

With Tegus, you can learn everything you’d want to know about a company in an on-demand digital platform. Investors share their expert calls, allowing others to instantly access more than 20,000 calls on Affirm, Teladoc, Roblox, or almost any company of interest. All you have to do is log in. Visit tegus.co/patrick to learn more.

 

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This episode is brought to you by Hall Capital Partners. Hall Capital is always looking for exceptional investment talent at any stage and size, so if you are raising capital or looking for a career change in the San Francisco or New York areas, you should check them out at hallcapital.com or e-mail at invest@hallcapital.com. 

 

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Invest Like the Best is a property of Colossus, LLC. For more episodes of Invest Like the Best, visit joincolossus.com/episodes

 

Past guests include Tobi Lutke, Kevin Systrom, Mike Krieger, John Collison, Kat Cole, Marc Andreessen, Matthew Ball, Bill Gurley, Anu Hariharan, Ben Thompson, and many more.

 

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: @patrick_oshag | @JoinColossus

 

Show Notes

[00:03:32] - [First question] - Lean into positive selection and avoid adverse selection

[00:07:48] - Thoughts on growing capital formation in private markets

[00:14:01] - Why it’s useful for investors to think in terms of bonds and call options instead of equity

[00:18:39] - Doing more with less and hunting for operating systems to invest in

[00:28:08] - His views on infrastructure and the presentation layer conundrum

[00:33:32] - The sequencing involved in building an operating system over time

[00:40:11] - Rise of the creator class and the coming tailwind post-cloud technology; the rise of the solopreneur 

[00:43:32] - The pig joke and his thoughts on the FinTech space

[00:47:47] - Big financial services functions that will be embedded in non-financial businesses

[00:51:07] - Deciding which functions and financial services models are most attractive

[00:57:01] - What a shift towards data and FinTech might unlock for the world writ large

[01:02:40] - How to improve payment profits by reducing credit rates

[01:04:12] - The threat that Buy-Now-Pay-Later companies pose to Visa and Mastercard

[01:12:17] - How the struggle between distribution and innovation continues to change

[01:15:04] - The kindest thing that anyone has ever done for him 

Oct 19, 2021

My guest today is Sam Bankman-Fried, founder and CEO of leading cryptocurrency exchange, FTX. In a little over two years, FTX has registered 1.2 million users, grown to facilitate $10.9 billion of daily trading volume, and reached an $18 billion valuation. Prior to FTX, Sam worked at Jane Street Capital before founding a quant trading firm of his own, Alameda Research. At just 29, Sam has packed a lot into a short period of time, and as I’m sure you’ll hear, he has a special ability to harness uncertainty and think deeply across a range of topics.

 

In our discussion, we cover the building blocks of a perfect market, the key areas of inefficiency in today’s exchanges, and Sam’s north stars of product design and effective altruism. We also talk about fairness in crypto markets, how FTX thinks about user acquisition, and derivatives as key enablers of properly functioning markets.

 

Please enjoy my great conversation with Sam Bankman-Fried.

 

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

 

------

 

This episode is brought to you by Tegus. Tegus has built the most extensive primary information platform available for investors.

 

With Tegus, you can learn everything you’d want to know about a company in an on-demand digital platform. Investors share their expert calls, allowing others to instantly access more than 20,000 calls on Affirm, Teladoc, Roblox, or almost any company of interest. All you have to do is log in. Visit tegus.co/patrick to learn more.

 

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This episode is brought to you by Hall Capital Partners. Hall Capital is always looking for exceptional investment talent at any stage and size, so if you are raising capital or looking for a career change in the San Francisco or New York areas, you should check them out at hallcapital.com or e-mail at invest@hallcapital.com. 



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Invest Like the Best is a property of Colossus, LLC. For more episodes of Invest Like the Best, visit joincolossus.com/episodes

 

Past guests include Tobi Lutke, Kevin Systrom, Mike Krieger, John Collison, Kat Cole, Marc Andreessen, Matthew Ball, Bill Gurley, Anu Hariharan, Ben Thompson, and many more.

 

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: @patrick_oshag | @JoinColossus

 

Show Notes

[00:03:57] - [First question] - What motivates him and what the true north of his vision is

[00:07:12] - Evaluating the impact of well-functioning markets and philanthropic spending

[00:11:55] - The key functions and building blocks of a perfect market

[00:14:59] - Who pays $50 million to access fiat market order books

[00:21:49] - What is valuable about having access to order book data

[00:25:41] - Assessing and understanding the state of fairness in crypto markets today

[00:31:51] - Can crypto only move as fast as the fiat system keeps up

[00:32:43] - The advantages and disadvantages of stablecoins and USDT

[00:34:46] - How much fiat inflow there is into crypto markets and exchanges today 

[00:37:36] - What it is about cryptocurrency exchanges that are so appealing to him 

[00:42:21] - Building in a dynamic world and deciding the sequence of problems to solve

[00:45:12] - Whether or not the US is on the wrong side of crypto and countries competing for healthy regulatory environments in this emerging asset class

[00:47:25] - Thoughts on centralization and what being decentralized unlocks

[00:50:22] - Why derivatives are such a key function of properly functioning markets

[00:52:38] - The competitive landscape between derivatives and exchanges

[00:54:35] - Spending marketing dollars and paid acquisitions for FTX

[00:57:30] - The growing trend of user-generated content becoming user-generated assets 

[01:02:24] - How many layer one blockchains we’ll need and the competition for dominance

[01:05:18] - Thoughts on Bitcoin as the pioneer of the space and how relevant it still is

[01:06:26] - Possibly reaching a state where everything happens on-chain

[01:08:23] - What he means when he says he has more RAM than hard drive space

[01:09:39] - Amassing wealth insanely fast and whether or not it affects him

[01:10:26] - Important things to consider in this rapidly growing space

[01:12:02] - A decision he made while respecting the power laws that govern us

[01:13:10] - The kindest thing anyone has ever done for him

Oct 12, 2021

My guest today is Nick Neuman, CEO and co-founder of Casa. Casa helps bitcoin investors and owners keep their digital assets safe from loss or theft by providing managed self-custody services. In our discussion, we cover the history of asset custody from ancient temples to decentralized ledgers, look at the mechanics of how private keys work, and explore why people are better off holding the keys themselves. We then dive into the future of digital wallets as gateways into our virtual lives, what’s interesting about identity authentication more broadly, and whether these innovations may lead to unintended consequences. Please enjoy this great conversation with Nick Neuman.

 

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

 

------

 

This episode is brought to you by Tegus. Tegus has built the most extensive primary information platform available for investors.

 

With Tegus, you can learn everything you’d want to know about a company in an on-demand digital platform. Investors share their expert calls, allowing others to instantly access more than 20,000 calls on Affirm, Teladoc, Roblox, or almost any company of interest. All you have to do is log in. Visit tegus.co/patrick to learn more.

 

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This episode is brought to you by Eight Sleep. Eight Sleep's new Pod Pro Cover is the easiest and fastest way to sleep at your perfect temperature. Simply add the Pod Pro Cover to your current mattress and start sleeping as cool as 55°F or as hot as 110°F. To embrace the future of sleep and get $150 off your new mattress go to eightsleep.com/patrick or use code "Patrick".

 

------

 

Invest Like the Best is a property of Colossus, Inc. For more episodes of Invest Like the Best, visit joincolossus.com/episodes

 

Past guests include Tobi Lutke, Kevin Systrom, Mike Krieger, John Collison, Kat Cole, Marc Andreessen, Matthew Ball, Bill Gurley, Anu Hariharan, Ben Thompson, and many more.

 

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: @patrick_oshag | @JoinColossus

 

Show Notes

[00:03:23] - [First question] - The history of asset custody

[00:07:56] - What private keys are and their role in financial security 

[00:12:21] - Overview of storing a token in a wallet and accessing with a private key 

[00:15:28] - Thoughts on private keys through the lenses of convenience and safety

[00:18:49] - Solving both self-custody of assets and peace of mind

[00:21:39] - How the user experience will feel once self-custody is properly developed

[00:24:11] - Why asset custody is so interesting and what a perfect scenario unlocks

[00:27:05] - Is the DeFi ecosystem an early manifestation of a self-custody financial system 

[00:28:57] - Ways Casa is planning to become a convenient and diverse platform for users

[00:32:16] - The role wallets will play in the future of a digital world

[00:34:56] - Forms of authentication that are most appealing in creating a seamless user experience

[00:37:39] - Overview of what hardware wallets are and how they work

[00:40:17] - Different security options that Casa offers from the simplest to the most secure

[00:44:51] - How many crypto holders there are and how many use self-custody

[00:47:31] - The craziest security set up around Bitcoin he’s ever heard of 

[00:48:49] - What the most ideal outcome for Casa looks like in the coming decade 

[00:51:26] - Thoughts on the competitive landscape and potential growth challenges 

[00:53:07] - Important aspects of the crypto ecosystem other than security  

[00:55:49] - How empowered people feel when they successfully adopt self-custody

[00:57:13] - Whether or not there are ways that the current centralized system is more secure

[00:59:58] - Thoughts on offering a way for users to display they are protected by Casa 

[01:01:31] - The kindest thing anyone has ever done for him

 

Oct 7, 2021

My guest today is Devin Finzer, co-founder and CEO of OpenSea, the world’s largest NFT marketplace. In a journey that started like many other founders in the space, Devin went deep down the crypto rabbit hole in 2017 and became particularly fascinated with the potential behind digital assets.

During our conversation, we touch on the origin story of OpenSea, how Devin differentiates between the spectrum of NFTs in the market, and what he sees as the opportunity in the future for the industry. We also talk about the various risks within a blockchain, from security dynamics to market speculation. I hope you enjoy this great conversation with Devin Finzer.

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

 

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This episode is brought to you by Canalyst. Canalyst is the leading destination for public company data and analysis. If you've been scrambling to keep up with the deluge of IPOs and SPACs these days, Canalyst has models on Robinhood, Marqeta, Grab, and everything in between. Learn more and try Canalyst for yourself at canalyst.com/patrick.

 

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This episode is brought to you by Eight Sleep. Eight Sleep's new Pod Pro Cover is the easiest and fastest way to sleep at your perfect temperature. Simply add the Pod Pro Cover to your current mattress and start sleeping as cool as 55°F or as hot as 110°F. To embrace the future of sleep and get $150 off your new mattress go to eightsleep.com/patrick or use code "Patrick".

 

-----

 

Founder's Field Guide is a property of Colossus, Inc. For more episodes of Founder's Field Guide, 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: @patrick_oshag | @JoinColossus

 

Show Notes

[00:02:56] - [First question] - When he first thought up the genesis of OpenSea

[00:06:00] - What is listed on OpenSea, assets and volume, and the scope of the platform

[00:07:26] - Thoughts on potentially becoming the current era “everything store”

[00:09:22] - How they managed to become the main NFT trading platform

[00:12:28] - What NFTs are, their various classes, and ways they’re stored on the blockchain

[00:15:25] - How much transaction and auction volume happens on-chain

[00:17:07] - Profile picture style NFTs and what’s exciting about them

[00:19:24] - ArtBlocks and the mass interest in AI-generated art

[00:21:22] - What he’s learned and seen about the emerging crypto gaming space

[00:24:38] - The user experience of buying an NFT on OpenSea

[00:26:45] - How the ownership transfer works between wallets

[00:28:04] - Whether or not they have plans to partner with other companies

[00:30:32] - How they think about what gets placed on OpenSea and why

[00:32:09] - Thoughts on take rate and their 2.5% take rate of transactions

[00:33:22] - Why their take rate is so low compared to other sale platforms online

[00:34:47] - OpenSea’s relationship with the Ethereum blockchain and other integrations

[00:36:50] - Perspective on wallets both as businesses and products

[00:39:16] - Potential risks and the dark side of the unregulated NFT space

[00:40:48] - The massive boom and bust cycles of crypto and the high prices of NFTs

[00:41:59] - Interesting areas of Web3 that are in development today

[00:44:19] - The project he’s enjoyed watching grow the most in the crypto world

[00:46:42] - What OpenSea might look like in the future if the best-case proves true

[00:48:59] - The kindest thing that anyone has ever done for him

Oct 5, 2021

My guest today is Jenny Lefcourt, an equal General Partner at seed-stage venture firm Freestyle Capital, where she manages $450 million in seed investments. Jenny has been engrained in the tech world since the early days of the internet. She dropped out of her Stanford MBA program to co-found online wedding registry startup WeddingChannel.com with classmate, Jessica Herrin, which was subsequently acquired by The Knot. During our conversation, we cover Jenny's investment frameworks, why she believes a deep understanding of the customer is key for founder success, and what makes great go-to-market strategies. We also touch on some of Jenny's favorite market themes around technology for the aging population, the future of work, and the growing low-code/no-code market. Please enjoy my conversation with Jenny Lefcourt.

 

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

 

------

 

This episode is brought to you by Tegus. Tegus has built the most extensive primary information platform available for investors.

 

With Tegus, you can learn everything you’d want to know about a company in an on-demand digital platform. Investors share their expert calls, allowing others to instantly access more than 20,000 calls on Affirm, Teladoc, Roblox, or almost any company of interest. All you have to do is log in. Visit tegus.co/patrick to learn more.

 

------

 

This episode is brought to you by Eight Sleep. Eight Sleep's new Pod Pro Cover is the easiest and fastest way to sleep at your perfect temperature. Simply add the Pod Pro Cover to your current mattress and start sleeping as cool as 55°F or as hot as 110°F. To embrace the future of sleep and get $150 off your new mattress go to eightsleep.com/patrick or use code "Patrick".

 

------

 

Invest Like the Best is a property of Colossus, Inc. For more episodes of Invest Like the Best, visit joincolossus.com/episodes

 

Past guests include Tobi Lutke, Kevin Systrom, Mike Krieger, John Collison, Kat Cole, Marc Andreessen, Matthew Ball, Bill Gurley, Anu Hariharan, Ben Thompson, and many more.

 

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: @patrick_oshag | @JoinColossus

 

Show Notes

[00:03:24] - [First question] - Her background and some formative experiences that lead her to where she is today

[00:08:38] - Common patterns of desirable founders when it comes to customer focus

[00:09:50] - Her investing framework for evaluating and deciding which companies to invest in

[00:12:32] - Innovation and adoption in the technology sector for the older generation

[00:15:11] - The biggest jobs to be done in this space currently today

[00:17:33] - Cultural differences in how the West views and treats their elderly

[00:21:02] - Business model options for turn-key apartments offered by UpsideHoM

[00:22:48] - Other categories and potential opportunities in tech geared towards the elderly

[00:24:59] - What you need to do differently when building products for the elderly

[00:27:32] - How she learns about a new prospect’s go-to-market approach and reverse engineering an action plan to execute it

[00:32:03] - Founders, You Want to Sell Viagra

[00:33:33] - Selling transformation and an overview of this idea with BetterUp

[00:36:30] - Her thoughts on how the world and the future of work might change 

[00:41:14] - Interesting approaches to improving the onboarding and recruiting process

[00:43:24] - The emerging movement of low code/no code tools

[00:46:58] - How she as an investor adjusts as the world becomes more digitally connected

[00:49:02] - Ways her life has most dramatically changed over the past few years

[00:51:33] - Lessons learned from her time at All Raise

[00:53:40] - Outstanding and remaining barriers to inclusive and diverse teams

[00:58:47] - The kindest thing anyone has ever done for her

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