Can insights from startups transform into public market calls?

1. can insights from
startups transform into
public market calls?

2. TL;DListen
• in investing in modern, public tech, most equity
research often too far removed from core drivers
of these businesses
• thesis: business driver knowledge is locked within
networks of startup employees.
• information isn’t private, but trickier to unearth.
• today’s session, not a lecture: let’s debate that!

3. disclaimers
• hobbyist: i only trade/track tech stocks
• day job: invest in early-stage co’s (illiquid)
• not data-driven
• special time of tech seeping into real world
• longer-term holds (no quick trades, shorts)
• nervous: this isn’t a topic i’ve discussed
publicly before, so thank you for listening

4. the trigger
• $yelp
• platform shift (mobile) cir. 2008
• general search (web) -> local search (phone)
• mobile distribution constraining fast
• market cap: @ IPO ($900m), today ($4.2B), high
(~$8B).

5. the big one
• $fb
• mobile distribution constrained
• apple not optimizing app store
• $fb cheapest mobile acquisition channel
• $fb acquiring mobile dev tools for SDKs (ex Parse)
• market cap: @ IPO ($100B), today ($209B), high
($209B), low (<$50B)

6. obvious in hindsight
• $tsla
• google’s self-driving car (platform)
• rise of ridesharing (networks, like Uber)
• battery tech + integrated hw/sw (drivers)
• market cap: @ IPO (<$20B), high ($35B),
low (<$20B for years!), today ($29B)

7. ok, that’s great @semil,
so...what’s next?

8. ex: media consolidation
• digital media = attention, and attention is the most
scarce asset today
• songza, stitcher, swell, soundtracking, exfm, and too
many others (in video tech, too) to list here.
• tiny startups, next up big public digital media
brands?
• ex: $p, $gpro, $nflx > gobbled up?

9. ex: redmond mandate
• $msft as the fifth horseman
• new ceo > new mandate > RIFs > extended
to iOS platform > focus on cloud + mobile
> new investment in startup ecosytem
• little moves, a prelude to a big move?
• ’14: up ~33%, $80B+ cash on hand, $___?

10. tying it together
• info shared is public, convergence of trends
amassed via living inside startup ecosystem
• key: how to unlock this knowledge? my thesis is
current equity research not designed to discover
this material.
• 1: is this a viable or ridiculous method?
• 2: can this apply outside of tech?
• 3: is this a special time in tech, or unsustainable?