Invest Like the Best with Patrick O'Shaughnessy

Latest Episodes:

Chetan Puttagunta and Jeremiah Lowin – Open Source Crash Course - [Invest Like the Best, EP.188] Aug 25, 2020

Show notes

My guests this week are Jeremiah Lowin and Chetan Puttagunta. Jeremiah is the founder of Prefect.io, an open-source software company where my family and I are investors, and Chetan is a partner at Benchmark Capital. Both are past guests and good friends. I asked them on to help the audience understand the open source software business model. I’ve been fascinated with this model in which companies give a huge chunk of their work and value away for free to a community of developers, and then make money by building additional tools, functionality, and services on top of their free and open platform. While this may strike you as a wonky discussion on a niche software topic, I think it is valuable for everyone because the ideas can be applied to more than just code. I view much of my own activity as open-sourcing investment research and knowledge. It is also important because much of the world’s technology is built on top of open source projects. I hope you learn something new about this emerging category. Please enjoy.

This episode of Invest Like The Best is sponsored by Canalyst. Canalyst is the leading destination for public company data and analysis.

If you’re a professional equity investor and haven’t talked to Canalyst recently, you should give them a shout. Learn more and try Canalyst for yourself at canalyst.com/Patrick.

For more episodes go to InvestorFieldGuide.com/podcast.

Follow Patrick on Twitter at @patrick_oshag

Show Notes

(2:40) – (First question) – Originator business in open source software; Redhat

(5:51) – Why open source is valuable in building a business

(7:40) – Examples of the benefits of open source projects

(10:27) – Open source business models that produce the best results

(17:04) – Defensibility of open source companies

(25:02) – Mentoring younger founders on using open-source

(30:54) – The benefits of launching open-source

(36:41) – Building a digital community

(41:31) – Lessons from Open Source that can be applied to other businesses

(50:04) – The opportunity sets available in the open source space

(53:33) – Future of open source

(56:31) – Tobi Lutke Podcast Episode

Learn More

For more episodes go to InvestorFieldGuide.com/podcast.

Follow Patrick on Twitter at @patrick_oshag

Katrina Lake – The Next Wave of E-Commerce - [Invest Like the Best, EP.187] Aug 18, 2020

Show notes

My guest today is Katrina Lake, the co-founder and CEO of Stitch Fix. Stitch Fix is a multi-billion-dollar public company which has brought an entirely new model to retail apparel by combining data science, technology, and personal stylists to create a unique shopping experience tailored to the individual consumer. I first met Katrina through past guest Bill Gurley and have been excited to host her since that first meeting. In our conversation, Katrina and I discuss all aspects of Stich Fix—its history, business model, innovations, and its future. Please enjoy this great and thought-provoking conversation with Katrina Lake.

This week’s episode is sponsored by Bottomless. Bottomless is a smart coffee subscription which automatically re-orders coffee for you based on your consumption habits.

Bottomless is offering one month and your second bag of coffee for free at bottomless.com/patrick.

For more episodes go to InvestorFieldGuide.com/podcast.

Follow Patrick on Twitter at @patrick_oshag

Show Notes

(2:19) – (First question) – Where E-Commerce stands and what the future might hold

(4:37) – Why personalization makes Stitch Fix stand out from the others

(9:34) – Why data science is foundational to their business

(12:15) – What makes for a good augmented human and hiring stylists

(14:34) – Stakeholder value and creating a great partnership with suppliers

(18:10) – Their emphasis on stakeholder focus and social justice

(19:28) – The capital efficiency of their business in the early days

(24:46) – Her superpower of recruiting

(29:46) – Her strengths in building Stitch Fix

(31:56) – Transparency vs authenticity

(32:59) – Big break for the business

(37:15) – Exclusive brands to Stitch Fix

(39:01) – The next act for Stitch Fix

(41:43) – Lessons learned in pricing services

(44:24) – Future trends in retail apparel

(48:02) – Hardest thing to copy about Stitch Fix

(49:59) – Lessons for putting data science at the center of your business

(53:37) – Moments during her journey she’s felt most alive

(55:23) – Kindest thing anyone has done for her

Learn More

For more episodes go to InvestorFieldGuide.com/podcast.

Follow Patrick on Twitter at @patrick_oshag

Brian Armstrong – The Future of Crypto - [Invest Like the Best, EP.186] Aug 11, 2020

Show notes

My guest this week is Brian Armstrong, the co-founder and CEO of Coinbase. The topic of our conversation is the future of cryptocurrency and decentralized finance. Its been a while since I checked in on the world of crypto and while prices are still below the 2017 highs, there’s been a ton of additional work and infrastructure laid. We discuss the major events of the past decade and what might happen in the 2020s. Perhaps most interesting, we cover the potential benefits of a modernized financial system, which Coinbase hopes to help usher in. As I’m trying to do more in conversation with CEOs, we also discuss the lessons he’s learned building a business. Please enjoy my conversation with Brian Armstrong.

This week’s episode is sponsored by Bottomless. Bottomless is a smart coffee subscription which automatically re-orders coffee for you based on your consumption habits.

Bottomless is offering one month and your second bag of coffee for free at bottomless.com/patrick.

For more episodes go to InvestorFieldGuide.com/podcast.

Follow Patrick on Twitter at @patrick_oshag

Show Notes

(2:23) – (First question) – Most important developments in cryptocurrencies

(3:00) - What happened in crypto over the last decade

(3:01) – What will happen to cryptocurrency in the 2020s

(4:01) – Long term vision for Coinbase

(6:57) – Why should we be aiming towards an open financial system

(11:41) – How crypto improves the movement of money

(14:22) – Creating sound money and currencies

(16:21) – Why economic freedom is an important variable in what he’s trying to do

(19:44) - How economic freedom can happen with various regulators around the world and in different countries

(22:49) – How Coinbase attracted its first users

(26:33) – The December 2017 madness of cryptocurrencies

(29:50) – How he thinks about recruiting teams and motivating them to be productive

(33:40) – Mistakes with people he’s learned from

(34:56) – Steering a product roadmap and creating a successful business

(37:17) – What do the non-Bitcoin currencies offer that Bitcoin doesn’t

(41:19) – Innovation in cryptocurrency that excites him: DeFi

(43:40) – Interesting geographic locations and their impact on crypto

(45:29) – How his thoughts on company building has changed over the years

(46:47) – Battling any loss of confidence as a founder

(51:01) – Improving decision making as a leader

(53:54) – Aspects of the job that he loves the most today

(56:25) – Largest impediments to mass adoption of crypto

(58:25) – His curiosity for scientific research and bioengineering

(59:19) – Advice that helped him that he would offer others

(1:01:38) – Kindest thing anyone has done for him

Learn More

For more episodes go to InvestorFieldGuide.com/podcast.

Follow Patrick on Twitter at @patrick_oshag

Matt Ball - The Future of Media: Movies, the Metaverse, and More - [Invest Like the Best, EP.185] Aug 04, 2020

Show notes

My guest today, Matthew Ball, is a long time coming. He’s the former head of strategy at Amazon Studios, an investor, and probably my favorite business essayist writing today. In fact, I can’t think of another author whose work I read as quickly once a new essay drops. Read his latest on the past and future of Nintendo and you’ll see why. Our conversation is all about the past and future of media. We discuss movies, music, television, video games, and the metaverse. When I re-listened to this episode I couldn’t believe how much information was in Matthew's head and how easily he covered so many topics in depth. Please enjoy this great conversation.

This week’s episode is sponsored by Bottomless. Bottomless is a smart coffee subscription which automatically re-orders coffee for you based on your consumption habits.

Bottomless is offering one month and your second bag of coffee for free at bottomless.com/patrick.

For more episodes go to InvestorFieldGuide.com/podcast.

Follow Patrick on Twitter at @patrick_oshag

Show Notes

(2:20) – (First question) – Compulsive interest of how people entertain themselves

(4:19) – Changes of intellectual property and trademark in media

(9:12) – Cross media world building and Netflix’s strategy

(11:47) – Competing with the major power players at the top

(16:54) – Fate of movies in the new media landscape

(20:38) – Fate of music in the new media landscape

(25:40) – Age and gaming in this media transition

(26:20) – Gavin Baker Podcast Episode

(29:50) – Legacy of the Marvel Cinematic Universe

(34:48) – How he defines the notion of a metaverse

(39:53) – Creating a more interoperable version of our digital world

(47:37) – What is not included in the metaverse and investing in one

(52:14) – Tim Sweeney’s role in Epic Gaming

(58:12) – The unreal engine

(1:07:46) – What should investors be thinking about when it comes to gaming worlds

(1:12:43) – Opportunities in the gaming space for investors

(1:19:59) – Cloud gaming’s impact on the space

(1:26:54) – Will other media platforms have to copy the gaming industry

(1:30:51) – How interactivity and feedback loops plays into his investment decisions

(1:33:07) – Ease of creating a new media business today

(1:35:20) – Trends media storytelling

(1:38:50) – What makes for good IP in media content

(1:42;14) – Why he wants to explore payment platforms and block chain

(1:44:56) – Kindest thing anyone has done for him

Learn More

For more episodes go to InvestorFieldGuide.com/podcast.

Follow Patrick on Twitter at @patrick_oshag

Kat Cole – How to Operate: Lessons in Brand, Distribution, and Leadership - [Invest Like the Best, EP.184] Jul 28, 2020

Show notes

My guest today is Kat Cole, the COO and president of North America for Focus Brands, which owns famous companies like Cinnabon, Carvel, Jamba, and more. Kat’s story and career trajectory are remarkable, as are the lessons she’s picked up along the way which she shares with us all in this conversation. We discuss negotiation, distribution, brand building, brand extension strategies, and leadership. I always enjoy having a true operator on the show, so I was very excited to discover Kat and her thinking. Please enjoy this great conversation.

This week’s episode is sponsored by Bottomless. Bottomless is a smart coffee subscription which automatically re-orders coffee for you based on your consumption habits.

Bottomless is offering one month and your second bag of coffee for free at bottomless.com/patrick.

For more episodes go to InvestorFieldGuide.com/podcast.

Follow Patrick on Twitter at @patrick_oshag

Show Notes

(2:13) – (First question) – Her call to prayer

(2:16) – Kat Cole on Pomp’s podcast

(5:20) – Her positivity lens

(7:59) – Applying that positivity lens in business

(13:34) – How to show positivity in early interactions with someone

(17:37) – Overview of Kat’s career

(21:03) – Lessons learned building brands

(27:11) – Changing relevance or differentiation within a brand

(32:34) – Keeping a brands dominant position in people’s minds

(36:00) – The power of franchising and shared commitment

(40:50) – How her experience makes her a better investor

(42:55) – Lessons around distribution

(46:24) – Effectively negotiating and getting your fair share in a partnership

(52:49) – Attributes of a brand that get Kat most excited

(56:34) – Transferring her brand lessons to software and tech companies

(59:09) – Biggest lessons in leadership she’s learned

(1:04:13) – Checking In: the power of intention, reflection, and action to be your best and help others do the same

(1:05:18) – Most effective questions in her check-ins

(1:06:29) – Personal check-ins vs professional check-ins

(1:10:44) – Balancing gratitude and ambition

(1:14:37) – The kindest thing anyone has done for Kat

Learn More

For more episodes go to InvestorFieldGuide.com/podcast.

Follow Patrick on Twitter at @patrick_oshag

Eric Vishria – The Past, Present, and Future of SaaS and Software - [Invest Like the Best, EP.183] Jul 21, 2020

Show notes

My guest this week is Eric Vishria, a general partner at Benchmark Capital. Eric joined Benchmark after spending the first part of his career as an operator and CEO. The topic of our conversation is the past, present, and future of software businesses. We begin by explaining why public software companies trade at such incredibly high multiples today. We then explore the several different generations of these businesses and why the future remains so bright for companies building software as their primary product. I’d go one step further and suggest that the information in this episode is even more valuable for non-software businesses and investors, because its crucial to understand the impact that these products will have on the overall business landscape. COVID has accelerated the long-running transition to digital across the corporate world, and Eric serves as the perfect guide. Let’s dive in.

This week’s episode is sponsored by Bottomless. Bottomless is a smart coffee subscription which automatically re-orders coffee for you based on your consumption habits.

Bottomless is offering one month and your second bag of coffee for free at bottomless.com/patrick.

For more episodes go to InvestorFieldGuide.com/podcast.

Follow Patrick on Twitter at @patrick_oshag

Show Notes

(2:29) – (First question) – His take on public markets, and specifically as it relates to SaaS businesses

(4:04) – Why these companies trade so high

(7:53) – Peter Zeihan Podcast Episode

(11:19) – The competitive frontier in the digital markets

(14:02) – The API competitive frontier

(14:22) – Chetan Puttagunta Podcast Episode

(18:36) – Every Company is Becoming a Software Company

(20:10) – John Collison Podcast Episode

(22:54) – Charging in an API business model

(24:09) – Describing the different generations of SaaS, starting with Gen 1

(28:15) – Gen 2 SaaS businesses

(31:52) – Being an investor in SaaS

(36:55) – Gen 3 and importance of traditional SaaS companies to get into API

(38:06) – Other problems software can solve

(44:19) – Why more money isn’t going into SaaS

(46:48) – Lessons from the investment universe and how it could apply to SaaS

(47:26) – The Hierarchy of Marketplaces — Introduction and Level 1 - Sarah Taval

(51:49) – Lessons about scaling

(57:51) – Cross customer strategy

(1:00:01) – Energy and Civilization: A History

(1:01:28) – Qualities of an interesting investor

(1:03:52) – Kindest thing anyone has done for him

Learn More

For more episodes go to InvestorFieldGuide.com/podcast.

Follow Patrick on Twitter at @patrick_oshag

Turner Novak – The Past, Present, and Future of Consumer Social Companies - [Invest Like the Best, EP.182] Jul 14, 2020

Show notes

My guest this week is Turner Novak, a partner at Gelt VC. Many of the largest companies in the world today are consumer social companies, so Turner and I discuss the past, present, and future of those businesses. When executed right, they are often the fastest-growing companies in history, and the rise of TikTok and some other companies we discuss makes it clear that there may always be more room at the top. The network effects that support these companies make them unique beasts to analyze, and Turner’s writing has been among my favorite content on the topic. Please enjoy our detailed conversation on this important are of public and private markets.

This week’s episode is sponsored by Bottomless. Bottomless is a smart coffee subscription which automatically re-orders coffee for you based on your consumption habits.

Bottomless is offering one month and your second bag of coffee for free at bottomless.com/patrick.

For more episodes go to InvestorFieldGuide.com/podcast.

Follow Patrick on Twitter at @patrick_oshag

Show Notes

(2:18) – (First question) – History of consumer social companies

(3:28 – The importance of quality growth over rate of growth

(4:43) – Importance of friends and identity in a social network

(6:21) – Major markers he analyzes in new social networks

(7:59) – The meteoric rise of TikTok and how it compares to other social networks

(8:08) – The Rise of TikTok and Understanding Its Parent Company, ByteDance

(13:38) – How TikTok deals with user friction

(17:28) – Why TikTok copies is a waste

(21:08) – Advising companies to build a media arm in this environment

(24:18) – Business models beyond advertising for social networks

(30:44) – His thoughts on Pinduoduo and the opportunity for a similar company in the US

(37:36) – What Snapchat is doing

(43:51) – How social eCommerce could be a competitor to an Amazon

(46:31) – His review of Zynn

(46:36) - Attack of the Clones: TikTok’s Rival Kuaishou Lands in the US

(52:22) – The geopolitical battle of social networks

(53:36) – Creating social commerce companies

(54:27) – Fantasy draft portfolio

(59:18) – Kindest thing anyone has done for him

Learn More

For more episodes go to InvestorFieldGuide.com/podcast.

Follow Patrick on Twitter at @patrick_oshag

Charlie Songhurst – Lessons from Investing in 483 Companies - [Invest Like the Best, EP.181] Jul 07, 2020

Show notes

My guest this week is Charlie Songhurst, the former head of strategy at Microsoft and a prolific investor, having personally invested in nearly 500 companies throughout his career. I met Charlie at an event hosted in New York and you can tell within one minute of meeting him that his mind is sparkling with ideas and curiosity. Its no wonder he’s been among the most commonly requested guests when I asked several top investors and CEOs who I should have on the show. We discuss the lessons he’s learned about business, investing, and people from such a large sample size of companies. I won’t reveal any more here, I highly recommend you just listen to Charlie and learn. Let’s dive in.

For more episodes go to InvestorFieldGuide.com/podcast.

Follow Patrick on Twitter at @patrick_oshag

Show Notes

(1:25) – (First question) – Stack ranking the vices of power, money and fame

(2:41) – Memorable response to the stack ranking question

(3:13) – Best scenario to explore this stack ranking concept

(3:55) – Other ways to rank founders

(4:44) – Quick look at this career

(5:16) – Time at Microsoft

(6:03) – Features he looks for in startups

(10:55) – Managing the declining curve of productivity

(14:55) – Why founders are often unique people

(14:57) – Jeff Gramm Podcast Episode

(15:04) – Aliens, Jedi & Cults

(19;43) – How early entrepreneurs need to make recruitment a serious part of their work

(23:06) – How successful founders win the best candidates

(25:27) – The East Coast vs. West Coast investment strategies

(30:40) – When it’s time to bring in quantitative factors into early stage investing

(34:36) – The markers that pop up in companies that hit

(37:22) – Boring but successful investments

(39:28) – Investor aesthetics

(41:29) – Characteristics of investors that he believes are important to success

(42:57) – Impacts of Covid and some of the permanent changes that have happened as a result

(47:49) – Investing opportunities in the local community

(49:13) – His take on cryptocurrencies

(53:47) – Most mis valued asset in the world

(55:16) – Investing opportunities in Europe

(57:34) – Make up of his 483 investments

(57:58) – Matt Clifford Podcast Episode

(59:17) – Curation as a skill

(1:01:54) – Timing and startup success

(1:05:11) – Kindest thing anyone has done for him

Learn More

For more episodes go to InvestorFieldGuide.com/podcast.

Follow Patrick on Twitter at @patrick_oshag

Blake Robbins – Investing in Gaming - [Invest Like the Best, EP.180] Jun 30, 2020

Show notes

My guest today is Blake Robbins, a partner at Ludlow Ventures. We talk about all things video games, including the major companies in the industry, how games monetize, how in-game economies work, how e-sports has evolved, and much more. This is a fast-growing segment of consumer attention and interest, I believe we are in the very early days of gaming going mainstream.

I also have a favor to ask. My team and I have built a small survey for Invest Like the Best listeners and if you’ve enjoyed the podcast, I’d deeply appreciate it if you took 5 minutes to fill it out at investorfieldguide.com/survey. It will help shape the future direction of the show, which I intend to keep improving in the years to come. Thank you, and now please enjoy my conversation with Blake Robbins.

For more episodes go to InvestorFieldGuide.com/podcast.

Follow Patrick on Twitter at @patrick_oshag

Show Notes

(1:35) – (First question) – Overview of the gaming industry and how folks may get involved as an investor

(3:46) – Some of the biggest players in the space

(5:30) – The monetization methods of these gams

(9:22) – How do these games respond to real currencies

(14:49) – The landscape of e-sports/e-gaming as a whole

(19:57) – His involvement with 100 Thieves

(25:52) – The media landscape and the role of influencers

(29:05) – When he invests and what the opportunities are out there

(33:07) – The engines behind a lot of this; Unity and Unreal

(34:58) – Other investors that get this trend

(37:43) – Other interesting areas of investment for him, including the creator economy

(41:25) – Opportunities to build out and invest in the infrastructure of the creator economy

(45:37) – Infrastructure opportunities that need to be built

(48:08) – Advice for younger professionals

(49:04) – Investment allocation he is most proud of

(50:08) – A unique skill he couldn’t teach or train in others

(52:27) – Something in gaming he doesn’t understand or wants to learn more about

(54:08) – The kindest thing anyone has done for Blake

Learn More

For more episodes go to InvestorFieldGuide.com/podcast.

Follow Patrick on Twitter at @patrick_oshag

Brad Gerstner – Public and Private Investing - [Invest Like the Best, EP.179] Jun 23, 2020

Show notes

My guest today is Brad Gerstner, the founder and CIO of Altimeter Capital, a multi-billion dollar technology-focused investment firm. Brad and his team are known for a deep expertise in internet-enabled businesses, including Expedia, Facebook, Uber, and many more. We discuss the evolution of opportunity in this style of investing, including the important shift to private investing, where so much of the value creation now happens. I won’t soon forget our discussion of consumer intent on the internet and how it has shifted, the role that essentialism plays in Brad’s business and life, and the rise of the Chinese internet giants like Bytedance. Please enjoy this great conversation with Brad Gerstner.

This episode is brought to you by the MIT investment management company (MITIMCO)

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