My views on the market, tech, and everything else


Gross Margin for Fun and Profit – Involves Beer and Music Streaming!

The primary challenge with this blog post on gross margins is to make it interesting enough for people to read. So let’s start out with beer. Who doesn’t like beer!  One way to understand more about the cost of making beer is to look at the financials of Ballast Point Brewing on a percentage basis at the time it filed for an initial public offering. By the last quarter before […]

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Everyone Poops and has Customer Churn (and a Dozen Notes)

Everyone Poops is the title of the American edition of a Japanese children’s book written and illustrated by Tarō Gomi. This post will explain why every business from Tesla to a hot dog stand has churn, just like everyone poops. I decided to use this analogy because both churn and poop are both inevitable and important parts of an essential process. For example, both individual and business customers all die […]

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Why is it so Hard to Forecast the Future?

  For most of human history the life experiences of people have been overwhelmingly linear. Human are accustomed to encountering situations that reflect a simple proportional relationship between cause and effect. People expect that when they do X that Y will happen if Y was what happened in the past. This type of linear relationship is comforting to people since it is familiar. Ray Kurzweil believes: “our intuition about the […]

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Tren’s Advice for Twitter

Jack Dorsey very recently asked for feedback on Twitter. The focus of nearly all of the comments he received was on ways to make Twitter’s service qualitatively better for consumers. If Twitter does not have a great product for consumers, nothing else matters. But having a great product for just one side of a three-sided market is not enough to make Twitter into a successful business. In a deeper analysis below […]

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A Half-Dozen Ways to Look at the Unit Economics of a Business

  McCaw Cellular Communications sold to AT&T for $12.6 billion in September 1994. And yet the business did not show an accounting profit on its income statement until the second quarter of that year (after the deal was announced on August 17, 1993). The McCaw  Cellular example shows that you can create a tremendous amount of value for shareholders without showing any profit on an income statement. Or not. Here […]

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What You Can Learn about Business from a Dozen Lines in the Godfather

  1. Michael Corleone:  “I have always believed helping your fellow man is profitable in every sense, personally and bottom-line.” Michael seems to be claiming that he agrees with Charlie Munger who once said: “You’ll make more money in the end with good ethics than bad. Even though there are some people who do very well, like Marc Rich–who plainly has never had any decent ethics, or seldom anyway. But […]

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We Have Not “Reached an Innovation Plateau”

The economist Robert Gordon is the author of a book entitled “The Rise and Fall of American Growth.” I have yet to read a review that does not like most of Gordon’s book. For example, Bill Gates writes in his review of the book https://www.gatesnotes.com/Books/The-Rise-and-Fall-of-American-Growth: “Gordon does a phenomenal job illustrating just how different life was in 1870 than it was in 1970, through both an economic analysis and engaging narrative […]

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