“Did you hear about the accountant who became an embezzler? He ran away with the accounts payable!”JACKIE MASON
Bill.com is an AP automation company that makes it easier to manage the accounts payable and receivable process for SMB’s. This blog always likes to dig deeper, so let us start at the basics, what are accounts payable and receivable?
A good mental model for companies is to think of them as product transformers. They take inputs (raw materials) and transform them into outputs (products). Value is created when the finished products can be sold to the consumer at a higher price than the cost it took to procure and transform the inputs. Inputs for one company can be outputs of another company – its specialization all the way down.
Continue reading “Cash rules everything around me – a look at Bill.com (NYSE: BILL)” →
Upstart Holdings, an online lender recently filed their S1. This is the first blog post that I have collaborated on. It was too good to pass up collaborating with another Rohit :). Y’all are in for a treat, it’s a 2-Rohit’s-for-the-price of one analysis!
What is Upstart?
Upstart is an online consumer lender and a lending technology provider. Their core differentiation is that they use Artificial Intelligence for lending decisions. Upstart claims that this results in automated disbursals, higher approval rates, better risk-adjusted performance, and reduced fraud. Their main customer interface is via its website http://www.upstart.com and through bank partners. Currently, their cloud lending platform is available only in the US. Software is eating the world, but in a financial services business, the product is always money. Upstart is an online lender first. They have operated a lending platform for years and now pivoting to providing a SaaS (ish) platform for banks.
Continue reading “Neither a borrower nor a lender be | A tour through Upstart’s S1” →
Affirm filed for an IPO last week. I’ve wanted to do a deep dive into the BNPL segment and Affirm’s filing is the inspiration that I’ve been waiting for!
Let us start at the very beginning. Once humans came together in groups, the concept of lending aka credit has been willed into existence. The very earliest example of lending dates back to over 4,000 years ago in Mesopotamia, 2,000 BCE, where farmers bought seeds on credit and repaid the debt after the harvest. Pre-industrial revolution most economies were rural. Lending was like having a tab at your corner store. All underwriting was social and very few folks wanted to risk being cut off from the local economy by defaulting on their debt. All credit was local.
Continue reading “The song remains the same, a look at the Buy Now Pay Later (BNPL) players” →
For our last 10K club we discussed Shopify ($SHOP). Giorgio has a fantastic post going into the 10k details. The bull case for Shopify is all over the interwebs but to truly understand the company, it’s useful to formulate the other side of the argument. In this post lets deep dive into Shopify’s business model and strategy and work out the bear case. Standard disclaimer: this is not investment advice and I do not hold any positions in $SHOP. This is a thought experiment using the good business/bad business framework.
What is Shopify’s business model?
Continue reading “Portrait of an arms dealer – a look at Shopify (SHOP:NYSE)” →
“Only two ways to make money in business: One is to bundle; the other is unbundle.” – Jim Barksdale
In the last post, I talked about the history of merchant acquiring and how the industry evolved. This post talks about the natural progression of the trend and the rise of the full stack acquirer.
A quick recap
The core jobs to be done for merchant acquiring is to enable a merchant to accept credit card payments. It started with one institution, the bank, and then unbundled into a plethora of entities. We now have a complicated ecosystem consisting of the card networks, issuing banks, acquiring banks, payment processors, and the alphabet soup of PSPs and MSP’s. Merchant acquiring transitioned to being a commodity business and scale became king. The need for scale caused the companies to grow via acquisition. Continue reading “Money often costs too much – a look at Adyen (ADYEN:EN)” →
Ayden was the next pick for the Fintech PM guild’s next 10k session. As I dug through their financials, I realized that I wasn’t familiar with the history of the business they were in. Why does merchant acquiring exist as an industry? What is the history of this business, why does it exist the way it does today? Let us take a step back and take a walk through memory lane.
To understand any system it is useful to have a framework around the core jobs to be done in the system. In a payment system, money is the main asset exchanged between parties and there are three main jobs to be done.
Continue reading “The history of merchant acquiring |Rise of the full stack acquirer” →
I’m a broken record on this topic :), reading 10ks is the best free learning tool if you want to understand how businesses work. We have a 10K a month group as part of the Fintech PM guild and this month we tackled the travel behemoth, Booking Holdings.
What is Booking holdings?
Booking Holdings is the holding company for a constellation of brands and is an Online Travel agent company (OTA) that primarily serves the international market (Ex-US). It was previously known as the Priceline Group, renamed to Booking Holdings in 2018, and is listed on the NYSE (BKNG). The founding of the company has its roots in the acquisition of booking.com by priceline.com in 2005. They are headquartered in Amsterdam with operations in multiple countries. Their main brands are Priceline, booking.com, Kayak, OpenTable, and Agoda. In 2019 they did ~$15B in top-line revenue and their current market cap is ~$62B. A majority of booking.com revenue is driven by hotel bookings. Continue reading “To travel is to live – A journey through Booking Holdings (NYSE:BKNG)” →
I’ve often talked about 10K’s as being the perfect way to get up to speed in a new industry. Once a month a few of us PMs get together and do a deep dive on a particular company via its 10k. We call it our “10K a month” club :). Drop me a note if you want to be added to the group, the more diverse viewpoints the better the learnings! Last month we researched and chatted about Zillow. Highlights from our conversation follow. Continue reading “No place like home – A look into Zillow (NYSE:ZG)” →
Business success contains the seeds of its own destruction. The more Successful you are, the more people want a chunk of your business and then another chunk and then another until there is nothing ― Andrew S. Grove, Only the Paranoid Survive
So who should LiveNation be paranoid about? Who are its competitors?
As we saw the last post, LiveNation can be thought of a vertically integrated full-service live entertainment company. A comparable public competitor is the Madison Square Garden Company (MSG). They also describe themselves as the premier live entertainment company. Via their 10k Continue reading “Compete or Die – LiveNation Part Deux” →
In the last post, I talked about getting into the habit of reading 10k’s. Time to dogfood my own advice :), for this post, I wanted to look at a completely new industry than the usual fodder. LiveNation is my first pick (NYSE:LYV). Latest 10K for 2018.
What are the goals of this exercise?
- Understand the business model and a bit about the industry the company is in
- What are the key growth levers for the business? What is the flywheel/network effect?
- Who is the customer? What are the customer groups?
- A brief look at the numbers
- And finally – What is the competitive advantage of the business?
So let us begin! Continue reading “Mo Concerts Mo Money – A look at Live Nation (NYSE: LYV)” →