The Tech Strategy Podcast

Latest Episodes:

Berkshire-Invested Stone Co Has Now Dropped +80% in 2021 (109) Nov 25, 2021

Show notes

This week’s podcast is Brazilian Stone Company (STNE), the Berkshire Hathaway-invested payment platform that has fallen in share price by +80%.
You can listen to this podcast here or at iTunes and Google Podcasts.
Here is my new book (released December 1):

Moats and Marathons (Part 1): How to Build and Measure Competitive Advantage in Digital Businesses Kindle Edition

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Related articles:

From the Concept Library, concepts for this article are:

Payment Platforms
Digital-Physical Hybrid

From the Company Library, companies for this article are:

Stone Company

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Tuya and How to Predict the Winners in Specialty Enterprise (108) Nov 18, 2021

Show notes

This week’s podcast is about how to assess specialty companies within enterprise software and services. And about Tuya, which an interesting example of a specialty B2B play.
You can listen to this podcast here or at iTunes and Google Podcasts.
Here is my new book (released December 1):

Moats and Marathons (Part 1): How to Build and Measure Competitive Advantage in Digital Businesses Kindle Edition

Here are my 5 questions (thus far) for assessing the viability of a specialty ecommerce company.

Is the company sufficiently differentiated in the user experience? Or did they just get there first?
Can the company compete and/or differentiate in logistics or infrastructure without ongoing spending?
Does the company have a strong competitive advantage in a circumscribed market?
Is there a clear path to significant operational cash flow?
Has the company avoided markets and situations that are attractive or strategic for the major ecommerce companies?

Here are my 5 questions (thus far) for assessing the viability of a specialty enterprise company.

Is the company sufficiently differentiated in the user experience? Or did they just get there first?
Can the company compete and/or differentiate in sales / marketing or R&D without ongoing spending?
Does the company have a strong competitive advantage in a circumscribed market?
Is there a clear path to significant operational cash flow?
Has the company avoided markets and situations that are attractive or strategic for the major enterprise companies?
1. Pay attention to hierarchies of control.

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Related articles:

From the Concept Library, concepts for this article are:

Hierarchy of Control
Enterprise Specialty

From the Company Library, companies for this article are:

Tuya

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I write and speak about digital competition and China / Asia’s leading tech companies.
This content (articles, podcasts, website info) is not investment advice. The information and opinions from me and any guests may be incorrect. The numbers and information may be wrong. The views expressed may no longer be relevant or accurate. Investing is risky. Do your own research.

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7 Things Everyone Is Getting Wrong About Alibaba Singles' Day (107) Nov 10, 2021

Show notes

This week’s podcast is about Alibaba and Singles' Day. Just my thoughts on what really matters.
You can listen to this podcast here or at iTunes and Google Podcasts.
Here is my new book (released December 1):

Moats and Marathons (Part 1): How to Build and Measure Competitive Advantage in Digital Businesses Kindle Edition

My list of 7 things people are getting wrong about Singles' Day:

Business model is about building demand-side scale. This is also about economies of scale as a relative advantage.
Operating model is about user-facing innovation that adds value.
Consumer facing innovation is likely about live-streaming, metaverse and NFTs.
Merchant-facing innovation is likely about R&D and financing.
Physical assets have traditionally been about supply-side scale and building a barrier to entry.
Alibaba is also separating supply side into a new business that is the "new infrastructure of commerce".
Singles Day is both a moonshot program and a yearly stress test for the company.

Here are the Digital Operating Basics.
Here is the Alibaba slides for adding value to merchants.
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Related articles:

From the Concept Library, concepts for this article are:

Digital Operating Basics: DOB2 Never-Ending Personalization and Customer Improvement
Network Effects - Demand side Economies of Scale
Ecommerce

From the Company Library, companies for this article are:

Alibaba

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I write and speak about digital competition and China / Asia’s leading tech companies.
I also run Tech Strategy, a podcast and subscription newsletter on the strategies of China / Asia tech companies.
This content (articles, podcasts, website info) is not investment advice. The information and opinions from me and any guests may be incorrect. The numbers and information may be wrong. The views expressed may no longer be relevant or accurate. Investing is risky. Do your own research.

Support the show

Snowflake, Tuya and the Fight for Dominant Design in Cloud (106) Nov 02, 2021

Show notes

This week’s podcast is more about Snowflake, the “data ecosystem” company. And how multiple companies are competing to create the standards and architecture for cloud services.
You can listen to this podcast here or at iTunes and Google Podcasts.
Here is my new book (released December 1):

Moats and Marathons (Part 1): How to Build and Measure Competitive Advantage in Digital Businesses Kindle Edition

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Related articles:

From the Concept Library, concepts for this article are:

Innovation: Dominant Design
Innovation: Increasing Returns to Tech Adoption
Cloud Services

From the Company Library, companies for this article are:

Snowflake
Tuya

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I write and speak about digital China and Asia’s latest tech trends.
I also run Tech Strategy, a podcast and subscription newsletter on the strategies of China / Asia tech companies.
This content (articles, podcasts, website info) is not investment advice. The information and opinions from me and any guests may be incorrect. The numbers and information may be wrong. The views expressed may no longer be relevant or accurate. Investing is risky. Do your own research.

Support the show

What Everyone is Getting Wrong About Snowflake (105) Oct 26, 2021

Show notes

This week’s podcast is about Snowflake, the "data ecosystem" company. It is one of the most compelling digital business models out there. It is one of the few companies that could become the next Google or Microsoft.
You can listen to this podcast here or at iTunes and Google Podcasts.
Here is my new book (released December 1):

Moats and Marathons (Part 1): How to Build and Measure Competitive Advantage in Digital Businesses Kindle Edition

A summary of the Digital Operating Basics:

Scale and growth and small incremental cost.
Personalization.
A digital core for operations.
Ecosystem and connectedness.
People, culture and work design form a social engine that enables innovation and execution personalized for each customer.
Operational cash flow.

Here is a previous podcast on that.

Lessons in Digital Operating Basics from Ram Charan. Part 1 of 2 on “Rethinking Competitive Advantage”. (Asia Tech Strategy – Podcast 98)

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Related articles:

From the Concept Library, concepts for this article are:

Complementary Platforms
Digital Operating Basics

From the Company Library, companies for this article are:

Snowflake

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I write and speak about digital China and Asia’s latest tech trends.
This content (articles, podcasts, website info) is not investment advice. The information and opinions from me and any guests may be incorrect. The numbers and information may be wrong. The views expressed may no longer be relevant or accurate. Investing is risky. Do your own research.

Support the show

Core vs. Adjacency Growth in Digital Businesses (104) Oct 19, 2021

Show notes

This week’s podcast is about core vs. adjacency growth. This is a good framework for thinking about growth in digital businesses.
You can listen to this podcast here or at iTunes and Google Podcasts.
Most of this is a summary of work by Chris Zook at Bain's strategy practice. I am citing the books:

Most all sustainable growth is based on 1-2 strong cores.

A profitable core is centered on the strongest position in terms of loyal customers, competitive advantage, unique skills, and ability to earn profits.

Six growth adjacencies:

New customer segments:
- Micro-segmentation of current segments
- Unpenetrated segments
- New segments
New geographies
- Global expansion
- Local expansion
New channels
- Internet
- Distribution
- Indirect
New products
- New to world
- Complements
- Support services
- Next generation
- Just new products / services
New Businesses
- New to world needs
- New substitutes
- New models
- Capability adjacencies
New value chain steps
- Forward integration
- Backwards integration
- Sell capability to outside

How to assess an adjacency move:

Factor 1: Adjacency is tightly tied to a strong core.
Factor 2: An attractive adjacency market in terms of profit pools
Factor 3: The ability to capture economic leadership in that market. Competitive advantage as an attacker and then an incumbent.

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Related articles:

From the Concept Library, concepts for this article are:

Growth: Core vs. Adjacency
Digital Operating Basics

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I write and speak about digital China and Asia’s latest tech trends.
I also run Tech Strategy, a podcast and subscription newsletter on the strategies of China / Asia tech companies.
This content (articles, podcasts, website info) is not investment advice. The information and opinions from me and any guests may be incorrect. The numbers and information may be wrong. The views expressed may no longer be relevant or accurate. Investing is risky. Do your own research.

Support the show

Info Dictators and Why Mark Zuckerberg Will Choose the Next President (103) Oct 12, 2021

Show notes

This week’s podcast is about how digital impacts society, business, news and politics. And how centralized planning might be the best solution in a digital world.
You can listen to this podcast here or at iTunes and Google Podcasts.
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Related articles:

From the Concept Library, concepts for this article are:

Coordination and Transaction Costs
Ecosystems vs. Platforms vs. Networks
Theory of the Firm

From the Company Library, companies for this article are:

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I write and speak about digital China and Asia’s latest tech trends.
I also run Tech Strategy, a podcast and subscription newsletter on the strategies of China / Asia tech companies.
This content (articles, podcasts, website info) is not investment advice. The information and opinions from me and any guests may be incorrect. The numbers and information may be wrong. The views expressed may no longer be relevant or accurate. Investing is risky. Do your own research.

Support the show

Growth, ROIC / RONIC and Growth + Sales in Digital Valuation (102) Oct 04, 2021

Show notes

This week’s podcast is about growth and how it relates to value and valuation. ROIC vs. RONIC is an important part of separating past and continuing value.
You can listen to this podcast here or at iTunes and Google Podcasts.
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Related articles:

From the Concept Library, concepts for this article are:

Valuation
Growth, ROIC/RONIC and Value
Growth + Sales

From the Company Library, companies for this article are:

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I write and speak about digital China and Asia’s latest tech trends.
I also run Tech Strategy, a podcast and subscription newsletter on the strategies of China / Asia tech companies.
This content (articles, podcasts, website info) is not investment advice. The information and opinions from me and any guests may be incorrect. The numbers and information may be wrong. The views expressed may no longer be relevant or accurate. Investing is risky. Do your own research.

Support the show

Why DCF Sucks for Digital Valuation. (101) Sep 28, 2021

Show notes

This week’s podcast is about how to apply DCF in valuations of digital companies.
You can listen to this podcast here or at iTunes and Google Podcasts.
For the tennis ball story and DCF details, here are the slides.
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Related articles:

From the Concept Library, concepts for this article are:

Valuation: Digital
Discounted Cash Flow

From the Company Library, companies for this article are:

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I write and speak about digital China and Asia’s latest tech trends.
I also run Tech Strategy, a podcast and subscription newsletter on the strategies of China / Asia tech companies.
This content (articles, podcasts, website info) is not investment advice. The information and opinions from me and any guests may be incorrect. The numbers and information may be wrong. The views expressed may no longer be relevant or accurate. Investing is risky. Do your own research.

Support the show

How Hillhouse Capital Invests In and Digitizes Chinese Companies. (100) Sep 19, 2021

Show notes

This week’s podcast is about Hillhouse Capital and how they are buying and digitizing Chinese and increasingly Asian companies. I talk about their deals with Belle and Gree.
You can listen to this podcast here or at iTunes and Google Podcasts.
Here is my summary of digital operating basics (Dr. Ram’s book combined with some of my own thinking):

Scale and growth at small incremental cost.
Continuous personalization and customer-facing innovation.
A digital core for operations.
Ecosystem and connectedness
People, culture and work design create a social engine that enables innovation and execution – increasingly personalized for each customer.
Money-making at scale makes the company sustainable. It enables continuous innovation, including big bets where the ability to withstand losses is important.

The picture I use to summarize Value Point is shown here.
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Related articles:

From the Concept Library, concepts for this article are: