40 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

    NextEra Energy: The Renewable Leader

    NextEra Energy: The Renewable Leader

    I’m Zack Fuss and today we’re breaking down NextEra Energy. NextEra is America’s most valuable energy firm and consists primarily of two businesses; a high-quality regulated utility and a renewables business that is the world’s largest generator of wind and solar energy.
    To help break down the business, I’m joined by Mark Tomasovic, an investor at Energize VC. In our conversation, we discuss the structure of the energy market, what’s changed in the renewables space over the past twenty years, and how NextEra takes advantage of its cost of capital advantage. Please enjoy this breakdown of NextEra Energy.
     
    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 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.
     
    -----
     
    This episode is brought to you by 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 MITIMCo’s website to learn more about their unconventional emerging manager approach, including examples of managers they have backed. While they only partner with a handful of new firms each year, they have also created and published resources for the broader universe of emerging managers to benefit from, making them even more unusual in the LP world. Visit www.mitimco.org 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
    [00:03:16] - [First question] - Mark’s background and how he thinks about the energy markets 
    [00:03:46] - A broad overview of the electricity market and how it’s structured
    [00:05:22] - The value chain and production line of energy from facility to customer
    [00:06:59] - What informs how much an energy company is allowed to earn
    [00:09:16] - Unregulated versus regulated markets and the risks and benefits of both
    [00:11:29] - How the retail electric market looks today and alternative production methods
    [00:12:40] - NextEra’s business fundamentals and their current scope and scale
    [00:14:45] - The two business arms of NextEra
    [00:16:00] - Inputs and costs of the low cost regulated utility side of NextEra
    [00:18:33] - NEER being the world’s largest generator of wind and solar
    [00:19:43] - How they’re able to get contracts and how they work 
    [00:20:03] - Comparison of revenue generated between their different branches
    [00:21:26] - How the regulated and unregulated arms work together for NextEra vs its competitors
    [00:22:30] - What their most important benchmark is and thoughts on gross margin and profits 
    [00:24:33] - Natural cost of capital advantage given the growing focus on ESG 
    [00:25:33] - How COVID impacted the energy space, specifically in electricity 
    [00:28:20] - Conventional energy production becoming more expensive in the near future 
    [00:30:10] - How reliant NextEra is on government subsidies  
    [00:31:20] - Where they spend all their revenue, the price of projects, and ROI
    [00:33:01] - How they evaluate projects 
    [00:34:19] - Structural differences in renewable energy business models today
    [00:36:18] - What could happen that could negat

    • 43 min
    Novocure: Using Physics to Fight Cancer

    Novocure: Using Physics to Fight Cancer

    Today, we’re breaking down Novocure, a global oncology company that has pioneered a new approach to cancer treatment. For over 100 years, the tools used to fight cancer have largely remained unchanged, but there are promising signs of a renaissance and Novocure is at the vanguard of that charge.
     
    To explain the state of cancer research and how the business has developed over the past twenty years, I’m joined by Bill Doyle – Novocure’s Executive Chairman. Please enjoy this breakdown of Novocure.
     
    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 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.
     
    -----
     
    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 MITIMCo’s website to learn more about their unconventional emerging manager approach, including examples of managers they have backed. While they only partner with a handful of new firms each year, they have also created and published resources for the broader universe of emerging managers to benefit from, making them even more unusual in the LP world. Visit www.mitimco.org 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
    [00:03:05] - [First question] - The current state of cancer treatment today writ large
    [00:05:43] - What cancer is and how it becomes life threatening
    [00:06:38] - Why uncontrolled cell growth is so bad
    [00:07:27] - The main three ways we currently treat cancer 
    [00:11:29] - Whether or not there are targeted ways we can treat cancer like mRNA
    [00:14:08] - How we’ve historically detected cancer and what future detection could look like
    [00:17:12] - Death rates of cancer in the US annually and the business side as it stands today
    [00:18:20] - Key players in the cancer treatment space that serve patients
    [00:19:13] - The pioneering technology that Novocure created to treat cancer
    [00:22:38] - The mechanism that allows their tech to target the right cells
    [00:25:35] - Overview of the actual procedure that takes place with their therapy
    [00:28:36] - The impact and results of their new treatment method
    [00:33:37] - A future where we can take this in a prophylactic and preventive sense
    [00:34:44] - Why this approach to cancer treatment isn’t more widely known and accepted
    [00:38:09] - Financials of Novocure and the opportunities it presents for their business
    [00:43:10] - How they spend their R&D dollars and horizontal and vertical growth
    [00:48:01] - Unique ways how they spend their revenue to scale their business
    [00:51:05] - Biggest criticisms of the size and scope of Novocure
    [00:52:18] - Broader business lessons learned while building a cancer treatment company
    [00:55:23] - The future of healthcare more generally and what has him most excited

    • 58 min
    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 Mongo, 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 Mongo’s creative approach to R&D, learn about how database product advantages compound, and look at what protects Mongo 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

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