38 episodes

Business Breakdowns is a series of conversations with investors and operators diving deep into a single business. For each business, we explore its history, its business model, its competitive advantages, and what makes it tick. Learn more and stay up to date at www.joincolossus.com

Business Breakdowns Colossus

    • Business

Business Breakdowns is a series of conversations with investors and operators diving deep into a single business. For each business, we explore its history, its business model, its competitive advantages, and what makes it tick. Learn more and stay up to date at www.joincolossus.com

    AutoZone: Exemplary Capital Allocation

    AutoZone: Exemplary Capital Allocation

    I’m Zack Fuss, and today we’re breaking down AutoZone, the leading retailer and distributor of auto parts in the Americas. From the outside, AutoZone might look like a dull business in a mature industry, but once you dive into the details, you quickly realize it’s a hidden gem that echoes the best of Walmart and Costco, earns some of the highest returns on capital in retail, and has a long history of outsized shareholder returns.
     
    To help break down the business, I’m joined by Freddie Lait, founder and CIO at London-based Latitude Investment Management. Please enjoy this fascinating breakdown of AutoZone.
     
    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. We created Business Breakdowns to uncover the lessons and frameworks behind every business, and that's what makes Tegus our perfect launch partner. Much of the foundational prep for these episodes starts with research on the Tegus platform.
     
    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 Coinbase, Hinge Health, Farfetch, or almost any company of interest. All you have to do is log in. If you're ready to go deeper on any company and you appreciate the value of primary research, head to tegus.co/breakdowns for a free trial.
     
    -----
     
    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. This holiday season Eight Sleep will be running their biggest sale of the year. To capture the savings be sure to visit eightsleep.com/patrick or use code "Patrick" this Black Friday or Cyber Monday.
     
    -----
     
    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
    [00:02:58] - [First question] - The general state of the auto part industry and its key players
    [00:06:14] - Similar and differing characteristics of AutoZone, O'Reilly, and Advanced Autoparts  
    [00:08:04] - The history of AutoZone and how they got to where they are today
    [00:12:11] - ESLs involvement with AutoZone and notable moments from that partnership
    [00:13:29] - Unit economics, sales per store, how much a store costs, and general features
    [00:16:32] - Other retail businesses that rank close to the unit economics of AutoZone
    [00:17:43] - How a customer interacts with their business
    [00:19:40] - What is being sold that allows them to earn such high gross profits
    [00:20:57] - Ways AutoZone has kept their competitors at bay
    [00:23:05] - Additional opportunities in their systems that offer competitive advantages
    [00:24:18] - Low inventory turnover working in specialty retail merchandise
    [00:26:14] - How they manage their stock locally and regionally to ensure a reliable supply
    [00:27:36] - Supplier finance mechanics overview for retailers
    [00:29:12] - Some of the private label programs they’ve had success with
    [00:31:40] - Failure oriented parts and what products inhabit this category
    [00:32:58] - How management and integrated culture find opportunities in DIFM
    [00:36:08] - Moving up and down the call list and gaining favor as a retailer
    [00:38:45] - The threat electric vehicles might pose to Autozone
    [00:37:48] - Whether or not an eCommerce giant may penetrate and disrupt this sector
    [00:44:58] - Paths AutoZon

    • 56 min
    Amazon Aggregators: Buying Third-Party Sellers

    Amazon Aggregators: Buying Third-Party Sellers

    I’m Jesse Pujji and this is Business Breakdowns. Today we are doing a different kind of breakdown.  We are covering an entire category, Amazon Aggregators. These are the companies that are buying up hundreds of Amazon’s third-party sellers. The concept of Amazon Aggregators is relatively new, tracing back to 2018 with the founding of Thrasio, but the ecosystem is already huge and growing. Most recent numbers peg it at around $300bn dollars in revenue and growing faster than Amazon itself. These aggregators have unique moats and high-quality entrepreneurs.
     
    To help break down the marketplace and business of acquiring Amazon storefronts, I’m joined by Ali Hamed, a partner of CoVenture, who is also a popular guest on Invest Like the Best. In our conversation, we discuss the three superpowers Amazon sellers have, why there’s only $8bn in funding for a market doing $50bn in EBITDA, and we go into detail on how Amazon Aggregators are structured and operate. Please enjoy this unique breakdown on Amazon Aggregators.
     
    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. We created Business Breakdowns to uncover the lessons and frameworks behind every business, and that's what makes Tegus our perfect launch partner. Much of the foundational prep for these episodes starts with research on the Tegus platform.
     
    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 Coinbase, Hinge Health, Farfetch, or almost any company of interest. All you have to do is log in. If you're ready to go deeper on any company and you appreciate the value of primary research, head to tegus.co/breakdowns for a free trial.
     
    -----
     
    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. This holiday season Eight Sleep will be running their biggest sale of the year. To capture the savings be sure to visit eightsleep.com/patrick or use code "Patrick" this Black Friday or Cyber Monday.
     
    -----
     
    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
    [00:03:23] - [First question] - What is an Amazon aggregator, and who sells through Amazon?
    [00:05:26] - The scale and size of the aggregator market in general
    [00:06:43] - The history of third-party sellers and the utility they offer Amazon
    [00:08:20] - When they started inviting third parties to join their network and their market share
    [00:09:47] - Amazon’s 40% take-rate and overview of the economic structure
    [00:10:24] - How many individual storefronts exist and what they look like 
    [00:13:19] - Who is starting Amazon stores and an overview of a seller writ large
    [00:14:43] - The initial insight that led to incorporating third-party aggregators
    [00:21:17] - How many aggregators exist in the space today
    [00:24:41] - Why vertical integration isn’t such a primary focus for aggregators
    [00:26:53] - Ways aggregators find businesses and how they tend to acquire them
    [00:31:29] - What the top 10 aggregators look like and their acquisition frequency
    [00:32:25] - The common value add aggregators deliver post-acquisition
    [00:34:30] - One of the weirdest things that’s enhanced optimization and improved revenue
    [00:35:

    • 1 hr 2 min
    HelloFresh: Delivering on Process Power

    HelloFresh: Delivering on Process Power

    Today, we’re breaking down HelloFresh. HelloFresh delivers weekly meal kits to people’s homes. With eight million active customers, the Berlin-based business is the most popular company of its kind in the world.
     
    To break down HelloFresh, I’m joined by its CEO and co-founder, Dominik Richter. We discuss the challenges of scaling an operationally intensive business, why HelloFresh is more like CPG companies than grocery stores, and what he’s learned about brand building.
     
    Meal-kits are a notoriously difficult business model to get right and this is a great example of process power; a competitive advantage you don’t come across often. Please enjoy this great breakdown of HelloFresh.
     
    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. We created Business Breakdowns to uncover the lessons and frameworks behind every business, and that's what makes Tegus our perfect launch partner. Much of the foundational prep for these episodes starts with research on the Tegus platform.
     
    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 Coinbase, Hinge Health, Farfetch, or almost any company of interest. All you have to do is log in. If you're ready to go deeper on any company and you appreciate the value of primary research, head to tegus.co/breakdowns for a free trial.
     
    -----
     
    This episode is brought to you by MIT Investment Management Company (MITIMCo), the endowment office of MIT. MITIMCo seeks to find people who are focused on achieving exceptional long-term investment returns, partner with these firms early, and stick around for the very long term. Visit mitimco.org and their new emerging managers page to learn more.
     
    -----
     
    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
    [00:04:07] - [First question] - What HelloFresh does for its customers
    [00:05:53] - How many meals are delivered a year and the scale of the business today
    [00:07:08] - The full customer experience of ordering a meal kit for the week
    [00:08:03] - What the original service was and the original version of their product
    [00:10:26] - Overview of the business from a P&L standpoint
    [00:14:09] - Their centralized and widespread manufacturing plants 
    [00:16:35] - Attributes of a good recipe that benefits both the customers and the business
    [00:18:32] - Thoughts on the cost of ingredients and how they impact everything
    [00:20:43] - How the HelloFresh supply chain differs from traditional ones
    [00:23:58] - The magnitude of waste and its impact on gross margins
    [00:27:38] - Identifying customers, acquiring them, and retaining them
    [00:30:52] - Why other meal kit companies have seemingly done poorly
    [00:35:53] - Differences in the customer experience of HelloFresh subscribers that allowed them to thrive
    [00:38:38] - Managing a business that’s dependent on process power and balancing which levers to pull and when
    [00:41:24] - An example of a decision made to improve tiny percentages of performance
    [00:44:17] - How a world returning to normal might impact their pandemic propelled growth
    [00:47:22] - Thoughts on potentially expanding to private supply and distribution
    [00:50:23] - Lessons learned about successful advertising, branding, and marketing
    [00:52:41] - Key variables in HelloFresh’s growth for the coming years
    [00:57:10] - What drives the dec

    • 1 hr 3 min
    MongoDB: The Database Platform

    MongoDB: The Database Platform

    I’m Jesse Pujji and today we’re breaking down MongoDB. The MongoDB story traces back to 2007 when the founding team was running DoubleClick, a large adtech business now owned by Google. They could not find an existing database software with the agility and scalability that the internet requires. Today, MongoDB has over 25,000 customers across 100 countries. 
     
    To help break down M***o, I'm joined by Ro Nagpal, an investor at Holocene Advisors. Listeners will recognize Ro from our breakdown of Twilio earlier this year. During our conversation, we get a 101 on database software, talk through M***o’s creative approach to R&D, learn about how database product advantages compound, and look at what protects M***o from larger players like Microsoft and Amazon. Please enjoy this business breakdown of MongoDB. 
     
    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. 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 Coinbase, Hinge Health, Farfetch, or almost any company of interest. All you have to do is log in. If you're ready to go deeper on any company and you appreciate the value of primary research, head to tegus.co/breakdowns for a free trial.
     
    -----
     
    This episode is brought to you by the MIT Investment Management Company, known as MITIMCo. As the endowment office of MIT, MITIMCo searches for investment firms that are focused on achieving exceptional long-term investment returns. MITIMCo's goal is to create long-term relationships. They will partner with firms as early as Day 1 and do not ask for general partner economics in return. Visit www.mitimco.org to learn more about their unconventional emerging manager approach, including examples of managers they have backed.
     
    -----
     
    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
    [00:03:51] - [First question] - What MongoDB is, what they do, and their scale today
    [00:05:03] - The functions of a database and why they’re important
    [00:07:37] - The unmet market need that led to founding MongoDB and the history of the space leading up to today
    [00:11:13] - What big data means and how it applies to MongoDB
    [00:12:42] - Things that would lead customers of Oracle to leave them for MongoDB
    [00:13:42] - The technology stack behind a company like weather.com
    [00:14:52] - Types of companies and services that couldn’t exist without MongoDB
    [00:16:40] - State of the database marketplace today and where they fit into it
    [00:17:51] - How big the new market of big data is and current competitors
    [00:19:22] - What makes MongoDB so distinct and why they’re winning
    [00:21:34] - The most important metrics and numbers for the business
    [00:23:28] - Gross margins and why they spend so much on sales and marketing
    [00:24:55] - How investors can justify a company spending so much on marketing
    [00:26:19] - The P&L and unit economics of the business
    [00:26:47] - How a customer grows after they’ve been acquired
    [00:27:21] - Clever ways that MongoDB spends and uses their resources
    [00:29:26] - Different types of open source models and how they use it to their advantage
    [00:31:22] - One thing MongoDB does exceptionally well and something they could improve
    [00:34:19] - What MongoDB has managed to get so right compared to their competitors
    [00:36:04] - Their unique go-to-market strategy a

    • 46 min
    Universal Music Group: The Gatekeepers of Music

    Universal Music Group: The Gatekeepers of Music

    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.



    -----
     
    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.
     
    -----
     
    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.
     
    -----
     
    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
    [00:03:28] - [First question] - How technology disrupted the music business and it’s evolving history
    [00:12:11] - What the industry of music labels looks like from the 90s to today
    [00:20:46] - How it feels as a high-tier artist to engage with a label directly today
    [00:27:47] - The revenue and business model of an artist akin to Taylor Swift
    [00:30:11] - The differences between UMG's main sources of revenue; music publishing and recording
    [00:34:35] - General margins and trends for music publishing
    [00:35:49] - Ownership and mechanics of monetizing an artist’s Intellectual Property 
    [00:40:24] - How streaming revenues are divided among stakeholders
    [00:45:50] - History of the bargaining power of labels and streaming platforms
    [00:50:52] - Capital allocation, ROI, and acquiring IP and catalogs
    [00:57:06] - Thoughts on the growth profile of the industry as an investor
    [01:01:50] - Potential risks to UMG from emerging technology and new creator trends 
    [01:08:17] - Reasons why an artist would pick UMG over other major labels
    [01:12:09] - Diversity and how artists are sometimes treated by labels
    [01:13:31] - A growing increase in music consumption across the world

    • 1 hr 15 min
    Uber: The Undeletable App

    Uber: The Undeletable App

    Today, we’re breaking down Uber. Despite a corporate history that spans just over a decade, the ink spilled on Uber could have its own wing in a library. So rather than record with our typical Breakdown format, we decided to host two portfolio managers and familiar guests on the podcast, Mario Cibelli, and Ram Parameswaran, to walk through their bull cases on Uber stock.
     
    Uber is the case study for network effects in two-sided marketplaces but a controversial corporate culture, ongoing regulatory battles, and a debate over unit economics has made it a battleground stock since going public in 2019. During our wide-ranging conversation, we cover the opportunity for Uber’s business segments, what deteriorating service means for the product, and what COVID may have revealed regarding Ubers’ financials.
     
    While Mario and Ram are clearly Uber bulls, it’s particularly fun to hear where their views align and differ. It’s a great reminder that we can all take very different paths to arrive at the same conclusion. Please enjoy this great breakdown of Uber.
     
    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 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.
     
    -----
     
    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.
     
    -----
     
    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
    [00:03:16] - [First question] - What they find most interesting about Uber
    [00:04:40] - Major aspects of the business today in regards to bookings and revenue
    [00:07:47] - The importance of multiple use cases and what happens by exploring verticals
    [00:10:47] - History of getting drivers to join the company and what matters on the supply side
    [00:15:01] - Impact of higher wait times and ride prices and emerging trends in a post-covid era
    [00:17:48] - Thinking about Uber as a busted but booming model
    [00:22:31] - The unit economics and journey of $100 flowing into Uber
    [00:29:32] - Possible concerns and needs for capital Uber may have in the future
    [00:37:13] - The role that DoorDash plays in this ecosystem and where it’s a potential threat
    [00:39:01] - Is Lift an equally worthy competitor compared to DoorDash
    [00:41:59] - What we can learn about labor and regulation when studying Uber
    [00:43:44] - Thoughts on current management and capital allocation
    [00:49:56] - Parallels between Amazon Prime and Uber’s membership program 
    [00:52:25] - Using the accumulated data to integrate an advertising model into their app
    [00:56:33] - The biggest potential threats to Uber’s growing success 

    • 1 hr 1 min

Top Podcasts In Business

You Might Also Like

More by Colossus