Business Breakdowns

This is Matt Reustle and today we are breaking down DuPont. We admire leaders that are in the trenches with their team members; never above any task and willing to share in risks. But, wow, did the Dupont family set a standard in that category. Whether it was Pierre Samuel Du Pont's 1818 death fighting a fire at their powder mill, Alexis Du Pont’s 1857 death in an explosion at a powder yard, or Lammot Du Pont’s famous 1884 death in an explosion while experimenting with nitroglycerines. The Du Pont family pushed the limits.

In the 1900s the company evolved away from their roots in gunpowder and dynamite and it's hard to find an industry they haven’t touched since then. To break down DuPont, we are joined by Seth Goldstein from Morningstar. Seth covers what separates commodity chemicals from specialty chemicals, we get some quick chemistry lessons on what's happening to create these well-known products like Nylon and Tyvek, and why after all of the years as a behemoth in the industry, DuPont has "unbundled" into several independent companies. Please enjoy our Breakdown of DuPont. 

For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.

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Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.

Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.

Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss | @ReustleMatt

Show Notes

[00:03:38] - [First question] - Key products that define Dupont’s history and where their products show up in our everyday lives

[00:06:23] - The science that goes into developing their products and what being a speciality chemicals business looks like

[00:10:30] - The thought process that went into their merger with Dow in December 2015

[00:13:21] - Commodity chemicals versus speciality chemicals

[00:16:01] - The importance of patents and early products that first had them

[00:19:47] - Their economic model and profile and current businesses

[00:23:56] - How their EBITDA margins today compare to the business historically

[00:25:27] - Overview and duration of their merger supply agreements

[00:27:52] - Producing on a per-order basis or on market speculation

[00:31:00] - Stability and internal investment of their cash flow cycle

[00:32:28] - History of the Dupont family and key leadership changes

[00:34:24] - Thoughts on the bull case for Dupont that will put them back on the pedestal 

[00:36:28] - The percentage of the market they represent today and their current competitors

[00:37:56] - Metrics used when valuing commodity and speciality chemical businesses

[00:40:03] - Prior regulatory fines and potential risks going forward

[00:46:44] - Key lessons for operators and investors from Dupont’s story

This is Matt Reustle and today we are breaking down the financial institution known as Charles Schwab. Schwab is a financial behemoth. They report over $8 trillion in assets under custody and a market cap scratching $120 billion but I think the most fascinating part about this breakdown is the strategic pivot taken by Schwab. While the online brokerage market has been decimated in recent years from fee compression, Schwab has been pivoting their business model to that of a traditional bank. Now what does that mean? Today, Schwab makes the majority of their money earning interest on customer cash deposits. 

To break down Schwab, I am joined by Holland Advisors’ Founder and Portfolio Manager, Andrew Hollingworth. Andrew has written extensively on Schwab, which we link to in our show notes. We cover what it means to operate as a bank vs online broker, how Charles Schwab himself grew this business out of a newsletter, and what’s on the horizon for Schwab in the future. We hope you enjoy this breakdown of Charles Schwab.

For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.

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Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.

Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.

Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss | @ReustleMatt

Show Notes

[00:03:30] - [First question] - Why Schwab isn’t well understood by the market 

[00:05:18] - The story of Charles Schwab and how active he is in the company 

[00:08:13] - The business model of Schwab itself; Holland Advisors Research

[00:12:51] - Can it be compared to a franchise model; Another Flywheel

[00:15:46] - What did they see in the space that convinced them to shift their business model

[00:18:19] - How Schwab benefits from their customers keeping money in cash

[00:20:18] - What stops competitors from copying the Schwab model

[00:23:12] - Where Schwab stands out with cash on the balance sheet

[00:24:17] - The reasoning behind the TD Ameritrade acquisition

[00:30:38] - The Schwab customer base 

[00:33:28] - Convincing new customers to transfer their accounts to Schwab

[00:37:14] - How their market share has changed over the years

[00:38:50] - Building their balance sheet 

[00:46:34] - How their acquisition of TD Ameritrade helps their balance sheet

[00:49:50] - Valuing a complex business like Schwab

[00:56:43] - Key drivers of their earnings growth 

[00:58:31] - How they use their net interest margin 

[01:00:43] - What the market pullback this year has meant for Schwab

[01:03:43] - Major lessons learned from analyzing Schwab

Today, we’re breaking down one of the strongest brands in the world - Rolex. Founded in the UK in 1905 under the name Wilsdorf & Davis, Rolex has become the leading name in luxury watches. But, while the company’s products are iconic, the business itself is highly secretive. Owned by a Foundation and run as a non-profit entity, little is known about Rolex.

To unlock the secrets, we are delighted to be joined by Ben Clymer, founder of HODINKEE, and an expert on all things luxury watches. Ben has had rare access to Rolex and the people behind the manufacturer, making him the perfect person to dissect this business with us. Please enjoy this excellent Breakdown of Rolex.

For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.

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Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.

Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.

Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss

Show Notes

[00:03:01] - [First question] - Ben's favorite Rolex watch ever; Ben's Inside Rolex piece

[00:04:24] - What makes the Rolex Daytona such a special watch 

[00:07:19] - The job-to-be-done for high-end watches beyond just telling them the time

[00:12:18] - The strategy behind marketing luxury products; The Luxury Strategy

[00:14:34] - An overview of Rolex's business

[00:19:38] - The history of Rolex 

[00:38:45] - Their genius in marketing and distribution 

[00:41:55] - How they make decisions and what others can learn from them

[00:47:14] - The financials of Rolex and other luxury watch brands

[00:49:02} - Most important business lessons others can learn from Rolex

[00:52:54] - Other luxury brands worth studying 

[00:57:26] - What Rolex hasn't gotten right

This is Matt Reustle and today we are breaking down Polish grocer, Dino Polska. This wasn't a name on our radar at Colossus but the more we dug into the story, the more intrigued we became. It starts at the macro level in Poland, a country that transitioned away from communism in 1990 so the oldest private businesses are just north of 30 years old. And on a micro level, Dino operates a rigid playbook where they target small towns and replicate the same format store, which drives better efficiency and allows them to reinvest into new locations.

To break down Dino I am joined by Jon Cukierwar of Sohra Peak Capital Partners. Jon wrote an extensive presentation of Dino which can be found on our website. We break down the unique dynamics of the Polish consumer, how Dino differentiates from its competitors, and Dino's founder of mystery Tomasz Biernacki. Please enjoy this breakdown of Dino Polska.

For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.

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Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.

Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.

Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss

Show Notes

[00:03:21] - [First question] - The fall of communism in the 1990s and how it shaped the business landscape of Poland today 

[00:05:43] - Dino’s unique and differentiating characteristics as a grocery store 

[00:08:55] - The current market landscape of superstores, proximity, and mom and pop grocers in Poland 

[00:12:36] - The size and scale of Dino as a business today  

[00:14:01] - Key players and main events in Dino’s history

[00:20:03] - Where Dino’s margins fall relative to their competitors

[00:22:47] - Their relationship to the construction side of their business

[00:26:34] - The payback period of a new Dino store and how long until they reach maturity

[00:29:09] - Owned land and other factors in their real estate strategy

[00:31:10] - How much of their accessible market opportunity has been seized and their potential growth rate over the coming years

[00:34:20] - What their growth rate would have to be to ensure they reach their projected scale

[00:36:23] - How he values grocers as an investor in both Poland and the US

[00:38:12] - Cyclicality in revenue streams and what impacts them

[00:40:26] - Ways Dino finances their growth and if any capital has been given back to shareholders in dividends

[00:42:13] - Potential risks and threats to their business

[00:45:10] - How he grew and built conviction with risks in an emerging market

[00:47:48] - The main lessons he’s learned from studying Dino Polska

Today’s business needs little introduction. Berkshire Hathaway is one of the largest businesses in the world and run by arguably the most famous investors of our time, Warren Buffett and Charlie Munger. 

To break down the business, I’m joined by Chris Bloomstran. Chris is the President and CIO of Semper Augustus and has gone as deep on Berkshire as anyone I’ve ever encountered, making him the perfect person to do this with. Given the reams of excellent content already out there about Buffett and Berkshire, we focused our conversation on the specific elements that make this business so special. Please enjoy this breakdown of Berkshire Hathaway.

For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.

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Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.

Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.

Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss

Show Notes

[00:02:26] - [First question] - What Berkshire has taught the world about float

[00:14:00] - How much of Berkshire's success was predicated on insurance 

[00:23:17] - Whether or not Berkshire’s capital source has been more important than stock selection 

[00:30:04] - Why there’s such a disparity between good stock pickers and holding companies

[00:36:24] - What the major signposts of durability are when evaluating companies

[00:38:29] - Acquiring Alleghany and using that as a case study that reflects their values

[00:47:22] - The role that energy has played in Berkshire’s growth 

[00:59:54] - Thoughts about the major pieces of Berkshire and the future of the company 

[01:05:46] - Important lessons learned about investing and business from Berkshire’s story

Today we are running a special episode in our Business Breakdowns feed. My guest is Alex Danco from Shopify - who you may remember from our Business Breakdown on Shopify in 2021. Our conversation focuses on a new concept, tokengated commerce, and how Shopify is building around this theme. Given the market turmoil in crypto assets, we talk about true use cases of tokengated commerce and why blockchain technology is unlocking something that was not possible otherwise. This episode originally ran in our Web3 Breakdowns feed and represents an interesting case study of corporations embracing blockchain technology. Please enjoy my conversation with Alex Danco.

For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.

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Web3 Breakdowns is a property of Colossus, LLC. For more episodes of Web3 Breakdowns, visit joincolossus.com/episodes.

Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.

Follow us on Twitter: @Web3Breakdowns | @ericgoldenx | @patrick_oshag 

Show Notes

[00:02:16] - [First question] - What Shopify itself is as an ecosystem and service

[00:05:14] - An example of interoperability and the power of platforms outside of Shopify 

[00:07:02] - How interoperability and platforms come together

[00:12:08] - Where a a constraint-standard resulted in failure 

[00:14:26] - Why Shopify is so heavily invested in tokengated commerce

[00:17:10] - Lessons learned about the scarcity function of tokens and how they’ll work

[00:20:34] - Whether or not Shopify will be building their own crypto wallet  

[00:24:48] - The important role blockchains play in tokengated economics

[00:28:16] - Overview of the mechanics and offering Shopify is building 

[00:32:16] - Tokens help establish protocol adoption

[00:34:27] - Which blockchains and protocols will be mostly used in Shopify’s endeavor  

[00:36:33] - Why can’t it be key-gated instead of tokengated

[00:39:00] - Conjuring demand and how Shopify will create demand for their new system

[00:45:46] - The differences between someone's identity and a token holder

[00:47:55] - Signals that suggest tokengated commerce will be a big thing 

[00:51:02] - Why this concept hasn’t been more widely adopted already

[00:54:39] - When there will be a solution to easily create and distribute tokens

[00:56:39] - Where things will go from here 

[00:59:35] - Reasons why this might not have taken off in five years

I am @Compound248 and this is the next installment in our Business Breakdowns mini-series focused on Digital Infrastructure. In this episode, we will talk about a company that delivers that airbourne experience, Gogo. Known for its eponymous inflight WiFi service, Gogo is frequently misunderstood, having undergone a transformation to focus purely on the business, or private, aviation industry. It sells equipment that gets installed on a private aviation airplane, and then, in infrastructure like fashion, monetizes that equipment with high margin service revenue for decades. We’re fortunate to be joined by Oak Thorne, who has led Gogo for 20 years into the success it is today.

For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.

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Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.

Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.

Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss

Show Notes

[00:04:02] - [First question] - Gogo’s history and how his history intersects with it

[00:08:03] - His background and what lead him to joining Gogo 

[00:10:01] - A primary focus on US airlines and high-end air travel specifically

[00:12:33] - What the competitive landscape looks like today and how many planes they have

[00:14:15] - Whether the formerly unaddressable planes will make their way into their fleet 

[00:16:04] - Their product offerings today and the differences between them 

[00:19:26] - Overview of their business economics and their digital infrastructure 

[00:21:31] - Unit economics and labor and install costs

[00:24:17] - CapEx, service revenue, and a projected 20% system growth 

[00:25:55] - Cost structure margin on their recurring service revenue 

[00:27:25] - Momentum of business growth year-over-year

[00:28:29] - How the ATG network actually works and how the 5G connection improves it 

[00:30:44] - What portion of their business comes from aftermarket installations

[00:32:18] - Competitive nature of this sector and if someone could come after Gogo

[00:40:42] - Describing the differences between GeoSatellite and Elon’s Starlink

[00:46:19] - Reasons why Starlink might become a competitor

[00:48:56] - How Gogo’s 5G and global broadband product are offensive and defensive 

[00:51:24] - Portion of new US delivery aviation planes built with in-flight WiFi solutions

[00:55:01] - How long he anticipates this growth runway to continue 

[00:56:27] - Potential risks to Gogo from a legal and regulatory perspective 

[00:59:50] - Cyclicality of their clients and suspended business periods  

[01:04:57] - Two key lessons for others attempting to build and lead a company 

This is Matt Reustle and today we’re breaking down Diploma. Diploma is a specialist distributor of medical equipment and industrial components listed in the UK. It’s a business you’re unlikely to be familiar with and, at first glance, may appear mundane. But dig a little deeper and you’ll find a high-quality operator generating significant free cash flow through a mix of organic and inorganic growth channels. 

To break down Diploma, I’m joined by Charlie Huggins, an investor in the business and Head of Equities at WealthClub.

For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.

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Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.

Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.

Follow us on Twitter: @bizbreakdowns | @JoinColossus 

Show Notes

[00:02:23] - [First question] - The history of Diploma, what they do, and what’s attractive about their business model

[00:04:39] - Size and scale of the business and their market capitalization

[00:07:03] - Overview of what their life sciences business vertical looks like

[00:10:00] - The cyclicality of the seals and controls business verticals 

[00:13:45] - Returns on invested capital and thoughts on the capital intensity of seals

[00:15:06] - What allows their businesses to keep growing and what characterizes a strong acquisition target for Diploma

[00:19:14] - An example of how Diploma fits into the value chain

[00:21:24] - How Diploma acquires for low multiples when making acquisitions 

[00:23:41] - How they drive quantitative and qualitative returns in their acquisitions

[00:27:35] - What management is like at Diploma and their longevity in the business

[00:33:19] - Overview of their competitive landscape 

[00:35:27] - What the business does with extra cash flow in the absence of M&A activity

[00:38:01] - What Charlie finds special about Diploma and what has him excited for the future

[00:41:22] - The key risks in each vertical and what worries him about them 

[00:48:07] - Lessons for investors, business executives and operators from the Diploma story

This is Dom Cooke and today we are breaking down the PGA Tour. Alongside the four standalone majors, the PGA Tour is the pinnacle of professional golf. It’s where the best players in the world earn their living and tee it up for their place in golfing history. To break down the business behind the stars and action you see on the PGA Tour, I’m joined by Neil Schuster, co-founder of golf media business No Laying Up.

Editor’s note: this conversation was recorded before the field for this week’s inaugural LIV golf invitational event was announced.

For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.

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Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.

Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.

Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss

Show Notes

[00:02:27] - [First question] - What the PGA Tour is, it’s size today, and how it generates revenue

[00:06:04] - Defining what the Tiger Tax is and its implications 

[00:08:04] - When the PGA Tour was founded and the key moments leading up to today

[00:15:40] - Deane Beman: Golf’s Driving Force; Changing the format of the Tour into a non-profit 

[00:17:24] - Being a member run organization and player influence over the board

[00:18:23] - Overview of the business structure and model of the PGA Tour 

[00:22:27] - Reasons for the 72 hole stroke-play format  

[00:24:43] - The distribution of over a billion dollars of revenue

[00:27:59] - Why their capital allocation is unique and their incentive programs

[00:31:37] - Unique pension structures of their deferred compensation plan

[00:34:30] - The Champions Tour as a secondary way to make a living after the PGA tour

[00:36:07] - Rival SGL and PGL tours and how they are trying to disrupt the PGA tour

[00:44:42] - Having a legacy name advantage to bring players and capital in 

[00:47:47] - Relying on growing viewership, ratings, and new sponsors over time

[00:52:48] - Paths to becoming a more successful tour amidst the new startup tours

[00:55:07] - Netflix’s partnership with the PGA Tour to try and bring in new viewers

[00:56:54] - The most surprising lessons about the PGA Tour he’s learned   

Today, we are breaking down Anduril. Anduril builds high tech defense systems for the US Department of Defense and its allies. Crucially, it does so with speed that emanates from Silicon Valley. Founded in 2017 by Palmer Luckey, who previously built and sold Oculus to Facebook, Anduril has achieved the rare feat of challenging the established order in the defense industry.

To break down Anduril, I’m joined by the company’s CEO and co-founder, Brian Schimpf. We discuss the history of the defense industry, how Anduril’s business is counter positioned against the legacy cost-plus model, and what Brian has learned about selling to the DoD. Please enjoy this breakdown of Anduril.

For the full show notes, transcript, and links to mentioned content, check out the episode page here.

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Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.

Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.

Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss

Show Notes

[00:02:52] - [First question] - The history of defense technology and the technological and competitive landscape when he set out to build Anduril

[00:08:22] - What the early experience was like when approaching the government and finding an early adopter

[00:12:44] - Necessity being the mother of invention when it came to developing drones

[00:16:37] - What it’s like to develop hardware and software products at the same time 

[00:20:26] - How the defense business complex works economically and overview of the detailed cost plus model

[00:24:44] - The state of military technology and military conflict today writ large

[00:31:10] - Are we heading to a future where warfare is mostly machine against machine? 

[00:33:34] - Comparing the ghost drone system to predator drones

[00:38:40] - Guiding principles as a firm and deciding on their product roadmap

[00:43:25] - An overview of their product lineup and what they’ve built so far 

[00:48:13] - Having an open innovation policy to promote competition

[00:49:37] - The nuance of politics when it comes to building and running their business

[00:51:56] - Most difficult decisions he’s had to make through Anduril’s history 

[00:53:51] - How he overcame Anduril’s lowest points and biggest challenges 

[00:58:38] - Thoughts on effectively compounding hardware innovation 

[01:02:23] - A moment he’s most proud of and regrets most in Anduril’s history

[01:04:20] - Lessons learned from observing Palantir and SpaceX 

[01:08:37] - The kindest thing anyone has ever done for him