Business Breakdowns

Today, we are breaking down The National Football League or, as most know it, The NFL. It’s a sport that dominates American Sundays from late summer into early winter. Behind what happens on the field is a $15 billion dollar business with a unique operating and ownership structure and many stakeholders. 

To help break down the NFL, Jesse Pujji is joined by Jay Kapoor. Jay is currently General Partner of venture fund VSC Ventures, and prior to his career as an investor, Jay worked in the League Strategy office at the NFL. During the conversation, we break down some of the fascinating dynamics of the NFL, including how it dominates linear TV, the unique revenue considerations for the league and its teams, and what makes the NFL stand out relative to other sports. I hope you enjoy this breakdown of the NFL.

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

[00:02:18] - [First question] - What is the NFL?

[00:03:26] - The size and scale of the NFL as a business

[00:04:55] - Points of growth on the league side and the team side

[00:06:42] - The growth rate of the NFL over the past five years

[00:07:24] - How many people are watching the NFL and the size of their audience

[00:09:53] - The structure of the NFL compared to other major sports leagues

[00:14:08] - Distribution of the revenue generated by media rights

[00:15:53] - Other factors that make the NFL’s model unique 

[00:18:11] - How the NFL came to dominate the landscape of American sports

[00:21:26] - When the NFL became bigger than the MLB and why

[00:23:00] - How viewership and media rights have changed over the years

[00:24:52] - Complexity of scheduling games and creating scarcity

[00:26:14] - How the NFL Schedule is Created

[00:27:43] - Additional sources of revenue at the league level

[00:30:54] - Major costs to operate the NFL at the national level

[00:31:50] - Contributing factors that make annual operating costs $1.5 billion

[00:32:29] - How much it costs to run an NFL game

[00:33:35] - Major drivers and ways to increase the topline of the business

[00:36:09] - How much of the league revenue share is distributed to team owners and players

[00:39:06] - Seat sales, boxes, and sponsorship revenue

[00:40:40] - Who owns stadiums and an overview from a management and cost perspective

[00:42:43] - Non-player related operating costs

[00:45:46] - Operating leverage as an owner in this business

[00:47:08] - What a commissioner is and the governance model of the NFL

[00:51:31] - Overview of an executive team beneath the owners

[00:53:01] - Collective Bargaining Agreements 

[00:57:15] - How enterprise value is created and why it’s growing so fast for the teams

[00:59:11] - His perspective on comparing teams to assets generating revenue multiples

[01:00:51] - Defining relevance in regards to the NFL and what it means for the future

[01:04:39] - Plans to embrace a D2C model and the impact streaming might have on them

[01:06:56] - How the Superbowl became such a pivotal sporting event and why they made it

[01:11:35] - What will have to go right in order to grow exponentially over the coming decade 

[01:17:34] - Potential risks and concerns that could negatively impact the NFL’s growth

[01:22:21] - A big lesson we can learn from the NFL for entrepreneurs

[01:23:29] - Lessons for investors when studying the NFL

[01:24:48] - Learn more about professional sports and the NFL; The Game Plan; Tailgating, Sacks, and Salary Caps (book)

I’m Zack Fuss and today we’re breaking down NextEra Energy. NextEra is America’s most valuable energy firm and consists primarily of two businesses; a high-quality regulated utility and a renewables business that is the world’s largest generator of wind and solar energy.

To help break down the business, I’m joined by Mark Tomasovic, an investor at Energize VC. In our conversation, we discuss the structure of the energy market, what’s changed in the renewables space over the past twenty years, and how NextEra takes advantage of its cost of capital advantage. Please enjoy this breakdown of NextEra Energy.

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

[00:03:16] - [First question] - Mark’s background and how he thinks about the energy markets 

[00:03:46] - A broad overview of the electricity market and how it’s structured

[00:05:22] - The value chain and production line of energy from facility to customer

[00:06:59] - What informs how much an energy company is allowed to earn

[00:09:16] - Unregulated versus regulated markets and the risks and benefits of both

[00:11:29] - How the retail electric market looks today and alternative production methods

[00:12:40] - NextEra’s business fundamentals and their current scope and scale

[00:14:45] - The two business arms of NextEra

[00:16:00] - Inputs and costs of the low cost regulated utility side of NextEra

[00:18:33] - NEER being the world’s largest generator of wind and solar

[00:19:43] - How they’re able to get contracts and how they work 

[00:20:03] - Comparison of revenue generated between their different branches

[00:21:26] - How the regulated and unregulated arms work together for NextEra vs its competitors

[00:22:30] - What their most important benchmark is and thoughts on gross margin and profits 

[00:24:33] - Natural cost of capital advantage given the growing focus on ESG 

[00:25:33] - How COVID impacted the energy space, specifically in electricity 

[00:28:20] - Conventional energy production becoming more expensive in the near future 

[00:30:10] - How reliant NextEra is on government subsidies  

[00:31:20] - Where they spend all their revenue, the price of projects, and ROI

[00:33:01] - How they evaluate projects 

[00:34:19] - Structural differences in renewable energy business models today

[00:36:18] - What could happen that could negatively impact NextEra’s growth

[00:38:22] - Considering risks when underwriting turbines 

[00:39:15] - Is nuclear power a potential tail risk?

[00:40:05] - Being forward-leaning when adopting digital technology and innovation

[00:41:23] - Lessons that can be learned from NextEra for builders and investors

Today, we’re breaking down Novocure, a global oncology company that has pioneered a new approach to cancer treatment. For over 100 years, the tools used to fight cancer have largely remained unchanged, but there are promising signs of a renaissance and Novocure is at the vanguard of that charge.

To explain the state of cancer research and how the business has developed over the past twenty years, I’m joined by Bill Doyle – Novocure’s Executive Chairman. Please enjoy this breakdown of Novocure.

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

[00:03:05] - [First question] - The current state of cancer treatment today writ large

[00:05:43] - What cancer is and how it becomes life threatening

[00:06:38] - Why uncontrolled cell growth is so bad

[00:07:27] - The main three ways we currently treat cancer 

[00:11:29] - Whether or not there are targeted ways we can treat cancer like mRNA

[00:14:08] - How we’ve historically detected cancer and what future detection could look like

[00:17:12] - Death rates of cancer in the US annually and the business side as it stands today

[00:18:20] - Key players in the cancer treatment space that serve patients

[00:19:13] - The pioneering technology that Novocure created to treat cancer

[00:22:38] - The mechanism that allows their tech to target the right cells

[00:25:35] - Overview of the actual procedure that takes place with their therapy

[00:28:36] - The impact and results of their new treatment method

[00:33:37] - A future where we can take this in a prophylactic and preventive sense

[00:34:44] - Why this approach to cancer treatment isn’t more widely known and accepted

[00:38:09] - Financials of Novocure and the opportunities it presents for their business

[00:43:10] - How they spend their R&D dollars and horizontal and vertical growth

[00:48:01] - Unique ways how they spend their revenue to scale their business

[00:51:05] - Biggest criticisms of the size and scope of Novocure

[00:52:18] - Broader business lessons learned while building a cancer treatment company

[00:55:23] - The future of healthcare more generally and what has him most excited

I’m Zack Fuss, and today we’re breaking down AutoZone, the leading retailer and distributor of auto parts in the Americas. From the outside, AutoZone might look like a dull business in a mature industry, but once you dive into the details, you quickly realize it’s a hidden gem that echoes the best of Walmart and Costco, earns some of the highest returns on capital in retail, and has a long history of outsized shareholder returns.

To help break down the business, I’m joined by Freddie Lait, founder and CIO at London-based Latitude Investment Management. Please enjoy this fascinating breakdown of AutoZone.

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

[00:02:58] - [First question] - The general state of the auto part industry and its key players

[00:06:14] - Similar and differing characteristics of AutoZone, O'Reilly, and Advanced Autoparts  

[00:08:04] - The history of AutoZone and how they got to where they are today

[00:12:11] - ESLs involvement with AutoZone and notable moments from that partnership

[00:13:29] - Unit economics, sales per store, how much a store costs, and general features

[00:16:32] - Other retail businesses that rank close to the unit economics of AutoZone

[00:17:43] - How a customer interacts with their business

[00:19:40] - What is being sold that allows them to earn such high gross profits

[00:20:57] - Ways AutoZone has kept their competitors at bay

[00:23:05] - Additional opportunities in their systems that offer competitive advantages

[00:24:18] - Low inventory turnover working in specialty retail merchandise

[00:26:14] - How they manage their stock locally and regionally to ensure a reliable supply

[00:27:36] - Supplier finance mechanics overview for retailers

[00:29:12] - Some of the private label programs they’ve had success with

[00:31:40] - Failure oriented parts and what products inhabit this category

[00:32:58] - How management and integrated culture find opportunities in DIFM

[00:36:08] - Moving up and down the call list and gaining favor as a retailer

[00:38:45] - The threat electric vehicles might pose to Autozone

[00:37:48] - Whether or not an eCommerce giant may penetrate and disrupt this sector

[00:44:58] - Paths AutoZone has taken to return capital to its shareholders

[00:49:21] - COVID’s impacts and detriments to the business

[00:53:04] - What we can learn as builders and investors from studying AutoZone’s story

I’m Jesse Pujji and this is Business Breakdowns. Today we are doing a different kind of breakdown. We are covering an entire category, Amazon Aggregators. These are the companies that are buying up hundreds of Amazon’s third-party sellers. The concept of Amazon Aggregators is relatively new, tracing back to 2018 with the founding of Thrasio, but the ecosystem is already huge and growing. Most recent numbers peg it at around $300bn dollars in revenue and growing faster than Amazon itself. These aggregators have unique moats and high-quality entrepreneurs.

To help break down the marketplace and business of acquiring Amazon storefronts, I’m joined by Ali Hamed, a partner of CoVenture, who is also a popular guest on Invest Like the Best. In our conversation, we discuss the three superpowers Amazon sellers have, why there’s only $8bn in funding for a market doing $50bn in EBITDA, and we go into detail on how Amazon Aggregators are structured and operate. Please enjoy this unique breakdown on Amazon Aggregators.

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

[00:03:23] - [First question] - What is an Amazon aggregator, and who sells through Amazon?

[00:05:26] - The scale and size of the aggregator market in general

[00:06:43] - The history of third-party sellers and the utility they offer Amazon

[00:08:20] - When they started inviting third parties to join their network and their market share

[00:09:47] - Amazon’s 40% take-rate and overview of the economic structure

[00:10:24] - How many individual storefronts exist and what they look like 

[00:13:19] - Who is starting Amazon stores and an overview of a seller writ large

[00:14:43] - The initial insight that led to incorporating third-party aggregators

[00:21:17] - How many aggregators exist in the space today

[00:24:41] - Why vertical integration isn’t such a primary focus for aggregators

[00:26:53] - Ways aggregators find businesses and how they tend to acquire them

[00:31:29] - What the top 10 aggregators look like and their acquisition frequency

[00:32:25] - The common value add aggregators deliver post-acquisition

[00:36:47] - Deal pipelines and other sales and marketing functions

[00:40:22] - Interesting things in the space given how unique of a marketplace it is

[00:43:57] - New innovations and secondary ecosystems emerging as a result of aggregators

[00:45:13] - How an aggregator should think about Amazon and risks to their business

[00:48:29] - Why Amazon won’t use their data and customer ownership to own the market

[00:50:10] - Macro and system risks that would threaten the success of this business model

[00:52:35] - What keeps Amazon up at night and potential worries about aggregators

[00:53:54] - Reasons why they would pass on an acquisition opportunity

[00:55:32] - Contributing factors to explosive growth that exceeded expectations

[00:58:10] - Biggest takeaways for builders and investors from 3rd party aggregators

[01:01:04] - Where to learn more about Amazon’s third-party aggregators

Today, we’re breaking down HelloFresh. HelloFresh delivers weekly meal kits to people’s homes. With eight million active customers, the Berlin-based business is the most popular company of its kind in the world.

To break down HelloFresh, I’m joined by its CEO and co-founder, Dominik Richter. We discuss the challenges of scaling an operationally intensive business, why HelloFresh is more like CPG companies than grocery stores, and what he’s learned about brand building.

Meal-kits are a notoriously difficult business model to get right and this is a great example of process power; a competitive advantage you don’t come across often. Please enjoy this great breakdown of HelloFresh.

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

[00:04:07] - [First question] - What HelloFresh does for its customers

[00:05:53] - How many meals are delivered a year and the scale of the business today

[00:07:08] - The full customer experience of ordering a meal kit for the week

[00:08:03] - What the original service was and the original version of their product

[00:10:26] - Overview of the business from a P&L standpoint

[00:14:09] - Their centralized and widespread manufacturing plants 

[00:16:35] - Attributes of a good recipe that benefits both the customers and the business

[00:18:32] - Thoughts on the cost of ingredients and how they impact everything

[00:20:43] - How the HelloFresh supply chain differs from traditional ones

[00:23:58] - The magnitude of waste and its impact on gross margins

[00:27:38] - Identifying customers, acquiring them, and retaining them

[00:30:52] - Why other meal kit companies have seemingly done poorly

[00:35:53] - Differences in the customer experience of HelloFresh subscribers that allowed them to thrive

[00:38:38] - Managing a business that’s dependent on process power and balancing which levers to pull and when

[00:41:24] - An example of a decision made to improve tiny percentages of performance

[00:44:17] - How a world returning to normal might impact their pandemic propelled growth

[00:47:22] - Thoughts on potentially expanding to private supply and distribution

[00:50:23] - Lessons learned about successful advertising, branding, and marketing

[00:52:41] - Key variables in HelloFresh’s growth for the coming years

[00:57:10] - What drives the decision to acquire and build a portfolio of brands

[01:00:01] - The biggest risks that the business might face in the future

[01:02:27] - What his favorite meal is from their menu and why

I’m Jesse Pujji and today we’re breaking down MongoDB. The MongoDB story traces back to 2007 when the founding team was running DoubleClick, a large adtech business now owned by Google. They could not find an existing database software with the agility and scalability that the internet requires. Today, MongoDB has over 25,000 customers across 100 countries. 

To help break down Mongo, I'm joined by Ro Nagpal, an investor at Holocene Advisors. Listeners will recognize Ro from our breakdown of Twilio earlier this year. During our conversation, we get a 101 on database software, talk through Mongo’s creative approach to R&D, learn about how database product advantages compound, and look at what protects Mongo from larger players like Microsoft and Amazon. Please enjoy this business breakdown of MongoDB. 

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

[00:03:51] - [First question] - What MongoDB is, what they do, and their scale today

[00:05:03] - The functions of a database and why they’re important

[00:07:37] - The unmet market need that led to founding MongoDB and the history of the space leading up to today

[00:11:13] - What big data means and how it applies to MongoDB

[00:12:42] - Things that would lead customers of Oracle to leave them for MongoDB

[00:13:42] - The technology stack behind a company like weather.com

[00:14:52] - Types of companies and services that couldn’t exist without MongoDB

[00:16:40] - State of the database marketplace today and where they fit into it

[00:17:51] - How big the new market of big data is and current competitors

[00:19:22] - What makes MongoDB so distinct and why they’re winning

[00:21:34] - The most important metrics and numbers for the business

[00:23:28] - Gross margins and why they spend so much on sales and marketing

[00:24:55] - How investors can justify a company spending so much on marketing

[00:26:19] - The P&L and unit economics of the business

[00:26:47] - How a customer grows after they’ve been acquired

[00:27:21] - Clever ways that MongoDB spends and uses their resources

[00:29:26] - Different types of open source models and how they use it to their advantage

[00:31:22] - One thing MongoDB does exceptionally well and something they could improve

[00:34:19] - What MongoDB has managed to get so right compared to their competitors

[00:36:04] - Their unique go-to-market strategy and why it worked

[00:37:15] - The things that would have to go right for MongoDB to compound over a decade

[00:39:00] - Market factors that may impact their future growth and potential M&A opportunities

[00:40:27] - Biggest risks that may affect MongoDB’s growth trajectory over the next few years

[00:41:01] - What allows them to exist in a world dominated by Google and Microsoft

[00:42:34] - Lessons for builders and investors when studying MongoDB’s story

[00:44:17] - Why changing their CEO was necessary and helped the company recover and thrive

Today we’re breaking down Universal Music Group. As one of the largest music businesses in the world, UMG is home to many of the world’s greatest artists, including Taylor Swift, U2, and The Beatles catalog. A discussion on UMG requires a deep dive into the history of music itself, how it was historically monetized, the shift from physical to digital, and what streaming has meant for the various pieces of the ecosystem.

Our guest, Arman Gokgol-Kline, a partner and investor at Ruane, Cunniff & Goldfarb, walks us through that evolution of the music industry before we dive in on UMG.

In our discussion, we first break down the industry pre and post Napster, looking at the ways music was sold historically, and how that led to both record profits and a consumer revolution. We then assess streaming’s impact on the industry and how, contrary to what you might think, labels may be more important in a marketplace where it’s easier than ever for creators to record and release music. Finally, we finish with UMG’s place in the ecosystem. The primary drivers of the business, how they’re able to attract the world’s superstars, and how they think about deploying dollars to acquire new artists and timeless catalogs.

Please enjoy this fantastic breakdown of Universal Music Group.

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

[00:03:28] - [First question] - How technology disrupted the music business and it’s evolving history

[00:12:11] - What the industry of music labels looks like from the 90s to today

[00:20:46] - How it feels as a high-tier artist to engage with a label directly today

[00:27:47] - The revenue and business model of an artist akin to Taylor Swift

[00:30:11] - The differences between UMG's main sources of revenue; music publishing and recording

[00:34:35] - General margins and trends for music publishing

[00:35:49] - Ownership and mechanics of monetizing an artist’s Intellectual Property 

[00:40:24] - How streaming revenues are divided among stakeholders

[00:45:50] - History of the bargaining power of labels and streaming platforms

[00:50:52] - Capital allocation, ROI, and acquiring IP and catalogs

[00:57:06] - Thoughts on the growth profile of the industry as an investor

[01:01:50] - Potential risks to UMG from emerging technology and new creator trends 

[01:08:17] - Reasons why an artist would pick UMG over other major labels

[01:12:09] - Diversity and how artists are sometimes treated by labels

[01:13:31] - A growing increase in music consumption across the world

Today, we’re breaking down Uber. Despite a corporate history that spans just over a decade, the ink spilled on Uber could have its own wing in a library. So rather than record with our typical Breakdown format, we decided to host two portfolio managers and familiar guests on the podcast, Mario Cibelli, and Ram Parameswaran, to walk through their bull cases on Uber stock.

Uber is the case study for network effects in two-sided marketplaces but a controversial corporate culture, ongoing regulatory battles, and a debate over unit economics has made it a battleground stock since going public in 2019. During our wide-ranging conversation, we cover the opportunity for Uber’s business segments, what deteriorating service means for the product, and what COVID may have revealed regarding Ubers’ financials.

While Mario and Ram are clearly Uber bulls, it’s particularly fun to hear where their views align and differ. It’s a great reminder that we can all take very different paths to arrive at the same conclusion. Please enjoy this great breakdown of Uber.

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

[00:03:16] - [First question] - What they find most interesting about Uber

[00:04:40] - Major aspects of the business today in regards to bookings and revenue

[00:07:47] - The importance of multiple use cases and what happens by exploring verticals

[00:10:47] - History of getting drivers to join the company and what matters on the supply side

[00:15:01] - Impact of higher wait times and ride prices and emerging trends in a post-covid era

[00:17:48] - Thinking about Uber as a busted but booming model

[00:22:31] - The unit economics and journey of $100 flowing into Uber

[00:29:32] - Possible concerns and needs for capital Uber may have in the future

[00:37:13] - The role that DoorDash plays in this ecosystem and where it’s a potential threat

[00:39:01] - Is Lift an equally worthy competitor compared to DoorDash

[00:41:59] - What we can learn about labor and regulation when studying Uber

[00:43:44] - Thoughts on current management and capital allocation

[00:49:56] - Parallels between Amazon Prime and Uber’s membership program 

[00:52:25] - Using the accumulated data to integrate an advertising model into their app

[00:56:33] - The biggest potential threats to Uber’s growing success 

Today, we are breaking down John Deere. With a history dating back almost two centuries, Deere has been a mainstay in the agriculture industry for generations. And despite its rich history as an incumbent, Deere is also on the leading edge of technology and innovation in ag-tech. To help break down John Deere, Zack Fuss is joined by Matt Coutts. Matt comes from a multi-generation family of farmers, and brings a unique ability to connect finance and farming. During our conversation, we discuss what the ag ecosystem looks like today, what drives farming economics, and why Deere holds such a strong competitive advantage that seems to only be growing. Please enjoy this breakdown of John Deere.

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, Inc. 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

[00:03:04] - [First question] - What Matt does as a farmer and where he spends his time

[00:03:54] - How big the global crop production and agriculture industry is 

[00:05:48] - Key considerations in production efficiency with such a large market

[00:08:15] - John Deere’s role in the global agriculture industry

[00:08:58] - Deere’s business model and how they generate revenue

[00:10:14] - What farmers tend to buy and how distribution works

[00:12:06] - How a farmer traditionally thinks about their business

[00:13:18] - Some of the large machine purchases that a farmer needs

[00:14:11] - What a combine does and its role in crop production

[00:14:53] - The landscape and types of family farms 

[00:15:57] - Whether or not farmers can earn above industry returns through any cycle

[00:18:18] - The role Deere plays in controlling variable costs to improve returns

[00:20:38] - The things Matt’s most focused on as a farmer and how Deere optimize outcomes

[00:22:48] - Brand loyalty and mixing and matching machines from different brands

[00:24:55] - What precision agriculture actually means

[00:27:55] - Overview of a harvest and how Deere equipment interacts with it

[00:31:16] - Unit economics and how their recurring relationship generates profit

[00:34:01] - Interpreting data, who owns the data, and digital agriculture analytics

[00:35:55] - What enables Deere to generate such large margins as an industrial manufacturer

[00:40:35] - Is Deere a higher-priced product than its competitors?

[00:41:16] - Recent acquisitions and what it says about their growth

[00:43:17] - The John Deere API and potential third party integration 

[00:44:28] - Will farmers even be physically operating machinery in the future?

[00:46:35] - Lessons learned as a builder and an investor from John Deere’s story