Business Breakdowns

Today, we are breaking down the cloud and SaaS trailblazer, Salesforce. Founded by Marc Benioff in 1999, Salesforce has grown rapidly to become the global leader in the $100 billion CRM market. The business has 150,000 customers, including 90% of the Fortune 500, and is currently valued north of $270 billion.

To break down Salesforce, Patrick O’Shaughnessy is joined by Matt Garratt, general partner at VC firm CRV and former head of Salesforce Ventures, where he led investments in companies like Snowflake, Twilio, and Zoom.

In our conversation, we discuss the attributes that make Marc Benioff special, how he pushed against convention to usher in a new era of cloud-based businesses, and ways in which he has built a world around Salesforce’s product lines. We also cover decision-making in the company, why its culture derives from the beaches of Hawaii, and how it’s transitioning from builder to buyer. Please enjoy this breakdown of Salesforce.

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

[00:03:14] - [First question] - What Salesforce is and what it does

[00:04:55] - The scale and revenue scope of the business today

[00:06:13] - Driving variables of revenue growth and their current model

[00:09:10] - The unique founding story and becoming the first SaaS company

[00:11:06] - What about Marc Benioff made him so compelling and successful

[00:14:20] - An experience in his time at Salesforce that changed and moved him

[00:15:16] - The first buyer and what they were served as a product

[00:17:07] - Overview of Salesforce as a software platform

[00:19:58] - The core database that powers their infrastructure and user experience

[00:21:26] - Transitioning from being mostly a builder to largely a buyer and acquirer

[00:23:46] - Why building trust early on is so crucial when doing something new

[00:25:45] - What is Dreamforce, and how it’s evolved over time

[00:27:24] - The connection between Hawaiian culture and Salesforce

[00:29:14] - How they continue to market and acquire customers and spend so much on marketing

[00:30:44] - Their current addressable market and plans to expand into those areas

[00:35:05] - How priorities are set, picked, and followed through on 

[00:35:58] - What is V2MOM and the role it plays with the executive team 

[00:38:08] - The philosophy behind Salesforce Ventures and the function it serves

[00:40:27] - Potential risks the business faces going forward

[00:44:24] - Key characteristics that separate Salesforce from other businesses out there

[00:46:47] - Lessons for investors and builders when studying Salesforce’s story

Today, we are breaking down Solana. Founded in 2017 by an ex-wireless engineer from Qualcomm, Solana is a layer one blockchain like Bitcoin and Ethereum that has been built to process transactions as quickly and cheaply as possible. Where Bitcoin can process about ten transactions per second and Ethereum around 30, Solana can handle over 60,000 transactions per second, and it can do so at a fraction of the cost. Unsurprisingly, Solana’s network has attracted huge interest from developers, users, and investors alike over the last year.

In this breakdown, we cover the killer app for decentralized ledgers, the history of on-chain transaction speeds, and the fundamental difference between software and blockchain technology. We then delve into the architecture that has enabled Solana’s speed unlock and look at the platform’s potential to become a huge piece of the world’s financial infrastructure.

To help me break down Solana, I’m joined by Kyle Samani, co-founder and managing partner at Multicoin Capital.

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

[00:02:49] - [First question] - How he views the opportunity set of blockchain technology  

[00:06:37] - The evolution of transactions-per-second from Bitcoin to new cryptocurrencies

[00:13:43] - Why does decentralized finance matter versus centralized finance

[00:18:34] - What is Solana and the scope and scale of it today

[00:20:31] - Reintroducing costs with DeFi software compared to prior zero marginal costs

[00:24:13] - How to go from 30 transactions a second to 30,000 and make the system work

[00:31:03] - What about Solana’s design code that allows it to take advantage of parallelism

[00:33:05] - Differences between proof of history and proof of work

[00:39:05] - The tokenomics of Solana, their distribution setup, and what owning SOL offers

[00:46:24] - What Solana’s blockchain will enable for application development

[00:55:15] - The emerging adoption and creation of social tokens  

[00:57:40] - Thoughts on regulation and security in regards to Solana

[00:59:41] - Competition that Solana may face and layer one blockchains in general

[01:04:54] - What has him most excited about Solana and the landscape writ large

[01:08:11] - Lessons for builders and investors when studying the Solana story

[01:11:23] - Leaning into your differences and the team behind the project 

Today, we are breaking down Taboola, a company you may not know but one you’ve definitely seen. When you read articles on CNBC, Bloomberg, or the Independent, Taboola powers the sidebar and banner recommendations for what you should read next.

The company works with publishers and advertisers to help readers discover what’s new and interesting. Founded in 2007, Taboola recently went public and is now the leading recommendation engine for the open web, serving over 500 million users a day.

To break down the business, host Jesse Pujji is joined by Taboola’s founder and CEO, Adam Singolda. During our conversation, we cover the ways in which Taboola’s value prop differs from Facebook and Google, unpack the advertising concepts of Yield and ex-TAC, and dive into Adam’s vision for Taboola to recommend anything, anywhere.

Please enjoy this breakdown of Taboola.

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

[00:02:48] - [First question] - What is Taboola? 

[00:03:35] - The scale of the business, revenue, impressions, and payouts to date

[00:05:18] - What problem Taboola solves for advertisers and their user experience

[00:07:22] - Comparing the advertising differences between Taboola and Facebook

[00:09:15] - Why a publisher would choose Taboola and what they solve for them

[00:11:06] - Reasons why advertising through Taboola is desirable

[00:14:41] - The founding insight and early struggles of building Taboola

[00:18:42] - Important metrics when evaluating their business and what generates revenue

[00:20:32] - What they offer to both sides of the marketplace to grow their business

[00:22:26] - Defining yield and how they position their rates

[00:25:38] - Things they do to improve the value proposition for clients

[00:29:29] - What allows Taboola to grow and remain competitive 

[00:30:37] - Prioritizing sales and marketing spend to ensure their long term success

[00:32:24] - Positive and negative factors in relation to scaling a business like this

[00:34:11] - Reasons why they wanted to merge with Outbrain

[00:35:16] - Their latest deal with Connexity and his thoughts on M&A for the future

[00:37:50] - The top things that would maximize their success over the next decade

[00:40:05] - Cookies, privacy, and the role they might play in years to come

[00:42:09] - The biggest threats and risks for the future of Taboola

[00:44:14] - The competitive landscape of advertising and content placement

[00:46:09] - Lessons for builders and investors when studying Taboola’s story  

[00:47:47] - Where to go if you want to learn more about Taboola

Today, we are breaking down Sky Mavis, the company behind the NFT-based game, Axie Infinity. Built by a team with a long history in gaming, Axie Infinity was launched in 2018 with the idea that a blockchain-based “play-to-earn” model could create more aligned incentives between game creators and game players long-term.

Axie is one of the most incredible examples of speed-to-scale I’ve seen, with the game reporting $100,000 of revenue in January, over $190,000,000 of revenue in July, and over $360,000,000 in August.

In this breakdown, we cover the basics of Axie and how gameplay is similar to classics such as Pokemon. We dive into the economic model, how Sky Mavis generates revenue, how players earn money, and how this is all enabled by the blockchain. We discuss the importance of gameplay vs. the economic ecosystem and examine the sustainability of Axie from various angles.

To help break down Sky Mavis, Patrick O’Shaughnessy is joined by Aleksander Larsen, co-founder of Sky Mavis, and Stephen McKeon, Partner at Collab+Currency, an early investor in Sky Mavis.

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

[00:03:00] - [First question] - How many people are playing Axie and how quickly it’s grown

[00:04:03] - What play-to-earn means and how money flows through a digital ecosystem

[00:05:03] - A basic overview of the user experience of playing Axie Infinity 

[00:07:23] - What an Axie is, its features, how they’re generated, and how many exist

[00:09:32] - Monster NFTs and the fungible SLP in-game currency

[00:15:00] - Converting the SLP to fiat currency and how low-friction the process is

[00:16:40] - Are people actually playing the game or just speculating on the game’s assets

[00:23:14] - The AXS governance token, how to earn it, and what it enables for token holders

[00:27:08] - What the opportunity set looks like for Axie from an investor standpoint

[00:29:39] - Finding a balance between offering digital work and creating a player incentive 

[00:33:29] - Mystic Axie and what they are generally worth today

[00:34:42] - How much the community will have to expand and build on top of the game

[00:38:48] - Overview of the plots of land in the Axie metaverse and what they might unlock 

[00:41:57] - What a sidechain is and how the Ronin wallet works 

[00:46:41] - Why what’s good for Ronin is also good for Ethereum

[00:48:53] - Defining a bridge and how it differs from an exchange

[00:50:24] - Lessons learned about good tokenomics and token design 

[00:55:04] - The biggest potential risks to the future of Axie Infinity and its growing popularity 

[00:57:13] - What an ideal future looks like for the metaverse and Axie infinity

[01:01:09] - How the world is changing and why that unlocks value for play-to-earn games

[01:04:03] - Asset ownership inversion and how big this could become in the future

[01:05:24] - The most surprising things that have happened since joining Axie Infinity

[01:06:55] - How he thinks about assessing new opportunities in crypto and the metaverse

[01:09:19] - Where you can go to learn more about Axie and dabble in the game

Today, we will be breaking down Datadog. If you've ever used Control-Alt-Delete to force quit a frozen application - you've experienced the Activity Monitor on your own computer. Datadog is that Activity Monitor for all of a business’s systems across its apps, tools, databases, and servers. It is a SaaS-based monitoring platform that gives enterprise IT teams real-time visibility into the performance of their entire software stack. Datadog was founded in 2010 and has repeatedly out-developed competitors to build a comprehensive IT monitoring platform. Today, Datadog’s market cap is over $40 billion dollars.

To break down Datadog, host Jesse Pujji is joined by Peter Offringa, the author of Software Stack Investing. During our conversation, we discuss Datadog’s unique product development cadence, how they’re able to grow their top line at 60% a year while staying profitable, and why Web3 might be their biggest competitive threat.

I hope you enjoy this breakdown of Datadog.

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

[00:02:54] - [First question] - What Datadog does and their current scale

[00:03:58] - Their customer base today and noteworthy growth metrics 

[00:05:21] - The basics of a tech stack business and Datadog’s approach to it

[00:07:31] - What problem Datadog solves and how they came across it 

[00:08:26] - An overview of a typical backend infrastructure and how Datadog improves it

[00:11:52] - Who Datadog’s actual customer is

[00:13:21] - The founding story and what fuelled their rapid growth

[00:15:58] - What the market looks like today and who their competitors are 

[00:18:35] - Scaling the business so quickly and how they measure it

[00:21:07] - Their unique and highly successful marketing approach

[00:24:06] - Parallels between the user experiences of Datadog and Twilio

[00:26:00] - The gross margin profile and how it’s trending

[00:26:58] - Dollar revenue retention and how pricing unlocks sales and marketing spend

[00:29:18] - How Datadog’s pricing stacks up against their competitors

[00:30:41] - The advantages of using Datadog versus AWS and pre-provided solutions

[00:33:49] - Their M&A strategy and what makes it unique

[00:36:46] - What would have to go right for their market cap to double over the next decade

[00:39:12] - Potential risks or threats to Datadog’s potential success

[00:41:28] - Lessons for builders when studying Datadog’s story

[00:42:52] - Lessons for investors to take away from Datadog’s success 

[00:43:57] - Where to learn more about Datadog 

Today, we will break down Wyndham Hotels, the world’s largest and most diverse hotel franchisor with more than 9,000 hotels across 20 brands in over 80 countries.

Wyndham is a brilliant example of a ubiquitous business that often goes unnoticed. In this breakdown, we’ll start by looking at just how vast Wyndham’s portfolio of hotels and brands is, how the Highway Act of 1956 played an important role in developing that scale, and explore the economics of hotel ownership, both from the franchisee and franchisor’s perspective.

Then we’ll dive into Wyndham’s growth algorithm, the factors that make the business resilient to external shocks, and the ways in which green programs are helping to drive higher cash-on-cash returns for franchisees.

To help break down Wyndham Hotels, host Patrick O’Shaughnessy is joined by Lauren Taylor Wolfe, co-founder and Managing Partner of Impactive Capital and a Wyndham shareholder.

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

[00:02:48] - [First question] - What Wyndham is and the scope of their hotel franchise

[00:04:17] - Defining what select-service hotels are compared to traditional ones 

[00:04:49] - An overview of what the hotel business is and their important levers 

[00:06:44] - Why Wyndham’s business model is so advantageous

[00:09:22] - Franchisee expectations and the pros of franchising the brand 

[00:12:22] - Whether or not Wyndham participates in loan and debt generation

[00:13:36] - Overview of their award-winning loyalty program

[00:17:36] - Customer acquisition for their loyalty program and how it drives spending

[00:19:16] - Wyndham’s corporate history and how it affects them today

[00:22:17] - Driving growth beyond their current real-estate footprint

[00:24:30] - Possible positive or negative nonlinear events that could affect them

[00:26:09] - Overview of the sales functions inside of their business

[00:28:05] - Changes in hotel use trends as of late

[00:30:05] - What hotel management means as a business

[00:33:05] - Capital allocation and abundant free cash flow without much need for it

[00:35:48] - Considering the ESG implications when evaluating the hotel industry

[00:38:17] - Aspects of the business that make it both resilient and competitive

[00:42:14] - Big variables that could cause Wyndham to fail

[00:44:10] - What it is about Wyndham’s economic opportunity that is favorable for franchisees

[00:46:19] - Unit economics and expenses at the individual hotel level

[00:47:40] - Lessons learned about brand, investing in a brand, and identifying new brands to acquire

[00:50:22] - What she’s learned most as an investor working with Wyndham

[00:52:19] - Attractive opportunities Hilton could offer that Wyndham couldn’t

[00:53:46] - What she’s learned about being a strong operator while working at Wyndham

Today, we will break down Dexcom. Founded in 1999, Dexcom makes best-in-class continuous glucose monitors to help diabetics manage their blood sugar levels. With close ties to growing obesity rates, the diabetes market is big, expensive, and expanding. In the US alone, one-third of Americans are diabetic or pre-diabetic, and the cost of treating diabetes is expected to double over the next decade.

To break down Dexcom, Zack Fuss is joined by Aneal Tenjarla, an associate portfolio manager at Sofinnova BioEquities and an investor in Dexcom. During our conversation, we discuss how Dexcom's continuous glucose monitors have materially changed treatment, we cover the structure of the market and Dexcom’s competitors, and we discuss where the business may have future runway inside and outside of diabetes care.

I hope you enjoy this breakdown of Dexcom.

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

[00:02:37] - [First question] - What is Dexcom, their core product, and the size of their market

[00:04:43] - Overview of the expenses that diabetics accrue annually

[00:06:36] - Why continuous glucose monitors (CGMs) are important for diabetes management

[00:09:57] - Dexcom’s unit economics and their current revenue model

[00:14:10] - Whether or not there is a tech and regulatory barrier to entry 

[00:16:18] - How a diabetic or prediabetic finds their way to a Dexcom device

[00:17:41] - Their current customer base and their revenue streams

[00:19:31] - What dictates if a practitioner will refer patients to Dexcom or Abbott

[00:21:56] - Why the problem Dexcom aims to solve is so culturally relevant today

[00:25:12] - What the next chapter for Dexcom’s business could be

[00:28:51] - Sizing the opportunity and optionality in this industry

[00:32:11] - Thoughts on Dexcom’s capital allocation decisions

[00:34:22] - Reasons why Dexcom could potentially fail in the future

[00:37:59] - Competitors arising in the wearable CGM space

[00:39:49] - Overview of their management team and what a good one looks like

[00:42:52] - Whether or not they plan on stepping into the pump and insulin space

[00:45:20] - Other externalities that consumer-friendly CGMs could create for consumers and insurance companies

[00:48:56] - Lessons for builders and investors when studying Dexcom’s story

[00:53:21] - A future where CGMs could be mostly implants

[00:54:18] - The value unlock consumer-friendly monitoring will provide

Today, we will be breaking down SmileDirectClub, the oral care company known for its affordable clear aligner treatment. SmileDirectClub was founded in 2014 as a direct-to-consumer alternative to metal braces. It has since expanded to serve over 1 million customers in both the US and abroad.

To help break down the business, host Jesse Pujji is joined by current CFO Kyle Wailes.

In this breakdown, we discuss how SmileDirectClub differentiates itself relative to metal braces and clear aligner competitors like Invisalign. We touch on the company’s DTC roots, how they have expanded TAM in the oral care market, and what growth opportunities the business plans to pursue moving forward.

I’d highly recommend pairing this episode with our previous breakdown on Invisalign. It’s fun to contrast the two business models and their respective histories. There are so many fascinating details about the clear aligner industry.

I hope you enjoy this breakdown of SmileDirectClub.

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

[00:02:38] - [First question] - What is SmileDirectClub and their current scale

[00:03:56] - Their economics and revenue over the past year

[00:04:59] - What SmileDirectClub is from a consumer perspective 

[00:07:19] - The core insight that lead to founding the company

[00:08:55] - Early bets that paid off in the long run as they scaled

[00:10:00] - Differences between clear liners and traditional braces

[00:11:28] - Market size and cases that need servicing annually

[00:13:21] - Invisalign; Direct to consumer model and unit economics  

[00:15:57] - Customer acquisition funnel and diversified marketing approach 

[00:20:17] - How shops became the major form of how they provide treatment

[00:24:02] - Navigating the pandemic and reflections on 2020

[00:26:25] - Lessons learned and value unlock from a monthly subscription model

[00:28:44] - Thoughts on the market size today and opportunity for the future

[00:29:47] - Prioritizing international sales and market penetration

[00:30:39] - Lessons learned from executing in international markets

[00:31:42] - Competitors in this space and their vantage points

[00:33:29] - How SmileDirect competes with Invisalign

[00:34:55] - Their prior history with Invisalign and being an early investor

[00:35:46] - How the market may play out in the next five to ten years

[00:37:07] - What SmileDirect will have to get right to win over the next decade

[00:40:10] - Why metallic solutions and braces have survived this long

[00:42:44] - Their biggest risks over the coming decade that may threaten their growth

[00:43:42] - Navigating legal risks and challenges faced with SmileDirect’s disruptive nature

[00:45:39] - Lessons for builders when studying SmileDirect’s story

[00:46:31] - Lessons for investors when studying SmileDirect’s story

[00:47:07] - Resources for learning more; smiledirectclub.com

Today, we will be breaking down ZoomInfo. Founded as DiscoverOrg in 2007, ZoomInfo is a go-to-market software & data solution for B2B sales. When a sales rep gains access to ZoomInfo, they gain access to a database with over 130 million contacts. The ZoomInfo platform assists in finding potential customers, contacting those potential customers, and refining each phase of the workflow.

To help break down ZoomInfo, host Jesse Pujji is joined by its CEO, Henry Schuck. Henry founded DiscoverOrg and acquired ZoomInfo in 2019. During our conversation, we cover how ZoomInfo differs from traditional CRM businesses, its unique gross margin profile, their special go-to-market muscle, and Henry’s approach to M&A. As a founder, I love stories about bootstrapped businesses, and Henry’s does not disappoint. I hope you enjoy this breakdown of ZoomInfo.

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

[00:02:35] - [First question] - What is ZoomInfo and their current scale

[00:04:19] - The problem that ZoomInfo solves and an overview of their product

[00:07:23] - A consumer-friendly description of what ZoomInfo is 

[00:11:13] - The value unlock their database provides salespeople

[00:13:28] - Big milestones when bootstrapping the business and their history

[00:19:20] - Big problems that had to be solved when building the business

[00:21:26] - Giving us a sense of the data market today

[00:23:58] - Whether or not they play in a competitive landscape

[00:26:36] - The P&L of ZoomInfo and metrics he pays attention to 

[00:28:18] - Getting the data for their database and the costs associated with it

[00:30:03] - Improving their service the more data they accumulate

[00:31:48] - Overview of their contracts when offering the service to a business

[00:32:35] - Various components of their sales and marketing strategy

[00:35:35] - Same day sales cycles and how that manifests itself in ZoomInfo

[00:38:48] - What separates ZoomInfo; they sell to sellers and their velocity 

[00:40:31] - Their approach to M&A in strategy, valuation, and funding 

[00:44:16] - Things they say no to when it comes to M&A 

[00:47:19] - How they approached the funding side of their acquisitions

[00:48:06] - Why they chose to go public

[00:49:52] - Notable moments in how the business responded to the pandemic

[00:52:24] - Key factors that would allow ZoomInfo to double their market cap in ten years

[00:54:03] - Potential opportunities in AI and data science sectors

[00:55:20] - What keeps him up at night in regards to their future success

[00:57:12] - Ways he invests in his abilities that other CEOs could learn from

[00:57:54] - Whether or not BigTech poses a threat to their data accumulation

[01:01:48] - Lessons for builders and investors when studying ZoomInfo’s story

[01:03:28] - Learn more about their space; A World of DaaS Podcast

Today, we will be diving into Blackstone, the world’s largest alternative asset manager. Founded in 1985 as a boutique M&A advisory business with $400,000 of seed capital. The firm now manages over $600 billion across private equity, real estate, credit, and hedge fund strategies. In this breakdown, we will start by discussing Blackstone’s business model and how it has taken advantage of a structural tailwind in the form of low bond yields. Then, we’ll dive into the different ways Blackstone earns money, how that’s changing, and what else management has done to make the business more shareholder-friendly. Finally, we’ll cover Blackstone’s competitive strengths, their brand and scale explaining how they were built and how they’re deployed today.

To break down Blackstone, Zack Fuss is joined by Marc Rubinstein, former hedge fund manager and now the writer of Net Interest.

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

[00:02:35] - [First question] - What is Blackstone, their history, and what their scale is today

[00:04:29] - Their core competencies in the beginning and what it enabled them to do 

[00:05:57] - Examples of their early transactions that allowed them to grow their funds

[00:07:39] - Overview of the first principles of how private equity funds make money

[00:09:49] - What has allowed Blackstone to grow so large over the last thirty-five years

[00:12:30] - Things that make alternative asset management a large and lucrative industry 

[00:14:28] - Overview of revenue streams and returns to shareholders

[00:17:30] - Analysis of their corporate private equity, real estate, hedge funds, and credit

[00:21:00] - Why alternative asset managers have been so attracted to insurance companies 

[00:22:40] - Partners Blackstone might find for funding and financing

[00:24:44] - Reasons why Blackstone would consider an IPO

[00:26:15] - How an investor would evaluate Blackstone versus Berkshire Hathaway

[00:29:17] - Ways Blackstone dispels the ‘barbarians at the gate’ stigma around private equity

[00:31:12] - The importance of Steve Schwarzman and thoughts on new leadership

[00:33:31] - Building a company culture in asset management that creates longevity

[00:35:42] - What makes Blackstone so successful writ large

[00:37:54] - Emergence of neo-banks and potential threats of regulation and oversight

[00:39:05] - The one thing that allows them to always find new opportunities and succeed

[00:41:03] - Lessons for investors when studying Blackstone’s story