The Razor's Edge

Happy new year! We kick 2021 off on the Razor's Edge by looking at a couple of the biggest trends from 2020 – COVID market distortions and SPACs. Our guest is George Arison, Co-CEO of Shift Technologies, an online used car seller. Used cars were a surprisingly hot market in 2020, in part spurring Shift to move up their calendar to go public by a year. They went public via a SPAC. So our conversation centers on the two topics; how wild was 2020 and how do you plan for the following year; and why go public with a SPAC and what was that like?

• 2:30 minute mark – Background on George and on Shift

Tesla entered the S&P 500 yesterday. What does that mean for the long-running bull vs. bear battle? A month after posting our interview with a bull - Rajiv Sud - we speak to Mark Spiegel, one of the longest-tenured, loudest, and most notorious members of TeslaQ, the short Tesla camp. The question, after a ruinous 1100% run over the past 14 months and a wild market in general, is whether there’s still electricity left in the bull case, or whether the bear case might finally bag its whale. Along with asking Mark about that and his portfolio management, we also touch on a few other topics ranging from micro-cap long ideas to inflation to Mark’s twitter presence, and I hope you’ll enjoy the conversation.

• 5:00 minute mark - The state of TSLAQ

Third time appears to be the charm. After seeing the football get pulled away from investors after Q1 and Q2 earnings, Slack and PagerDuty brought much cheer to shareholders, in the spirit of the holiday season. Slack has agreed to a deal with Salesforce.com and PagerDuty reported another solid quarter that finally woke the market up to its consistent growth opportunity.

We break down all that news. To do so, we bring on previous guests Jens Schumacher, CPO at Sajari, and Justen Stepka, co-founder of Enterprise Fund, both Atlassian alums, as well as Rich, a cloud CRM CEO.

• 3:00 minute mark - Initial reactions to the deal

Famed activist investor Daniel Loeb wrote a letter to Disney management arguing that the time to go all in on streaming is now. We've been following the streaming wars pretty closely, and we decided to break down the letter and then reconsider Disney and Netlfix's positions a year after Disney+'s launch, and 8 months into a pandemic that has accelerated the streaming game. The question came down to 'what battleground do these companies want to actually fight on'? 

• 2:15 minute mark – The need for capital and Disney’s studio business history |

Works cited or that are relevant:

• Daniel Loeb's letter to Disney - https://www.scribd.com/document/479149667/Third-Point-Letter-to-Disney-October-2020

We continue our conversation with Rajiv Sud, ad tech veteran and private and public markets investors. In this episode - essentially parts 2 and 3 of our conversation - we start with Slack and its challenges, as well as its surprising similarities to Twitter. We also quiz Rajiv on his time at AdMob and his outlook for the private tech sector, before concluding with a breakdown of his Tesla bull thesis.

• 3:00 minute mark – Slack’s position

Oops, it happened again. A company we follow closely on The Razor’s Edge reported earnings, met or beat expectations, and then sold off heavily along with a major market sell-off. Last time it was PagerDuty, this time it’s Twitter.

To work through the quarter and perhaps the angst and anxiety around it, we speak with Rajiv Sud. Rajiv is a Silicon Valley veteran, with time logged at Google, AdMob – which was bought out by Google while he was there, at TellApart, and then at Twitter after Twitter bought TellApart. He’s been out of Twitter for about two years but as a shareholder and a frequent tweeter, he still follows the company closely. We break down the company's ad server issues and why they may be in the past, the deliberate approach the company takes to product releases, and why Jack Dorsey is maybe fine as Twitter's CEO.

• 4:45 minute mark – Q3 Reaction

This week’s episode is a conversation with Jaime Lester. Jaime has been a professional investor for more than two decades, has a lot of experience with short selling, as evidenced from our conversation with him back on episode #3, on Invitae. We revisit Invitae during this conversation, but we're more focused on the overall macro picture. Whatever happens in the last 8 weeks of the year, it's been a wild ride, and it's worth taking a wider view to understand everything.

We cover SPACs, influencer investing, the manic element, the line between fraud and pivoting, and why this does not resemble the great financial crisis.

• 2:20 minute mark – high level take on what makes this market different

Twilio has had an exciting fall. First, Microsoft announced Azure Communication Services, viewed as a shot across the bow at Twilio in the developer driven communications space. Then, Twilio had its first investor day in three years, refreshing investors on their trajectory. Lastly, Twilio announced the purchase of Segment, a customer data platform that signals Twilio’s climbing of the value chain.

To break it all down, we bring on Captain Twilio, an experienced investor whose portfolio features one stock, Twilio, and Justen Stepka, our frequent guest and an Atlassian and, more relevant to today’s conversation, Docker alum who has firsthand experience with Segment as a user. This is a fun conversation for anyone following Twilio, and it also adds interesting perspective on business strategy and SaaS valuations.

• 3:15 minute mark - The Segment value proposition

Segment blog on gross margins: https://segment.com/blog/the-10m-engineering-problem/

Jeff Lawson interview with Ben Thompson: https://stratechery.com/2020/twilio-acquires-segment-what-is-segment-an-interview-with-twilio-ceo-jeff-lawson/

This week’s The Razor’s Edge goes back out to the streets. We speak with Ali Naqvi, owner of a ride-share car supplier in New York, about his experience with the COVID lockdown, what he’s hearing from his customers – rideshare drivers – and the state of New York. While a few work from home comments pop up hear and there, this is more focused on the state of Uber and Lyft’s end markets and what that might mean for a broader economy. Ali is a lifelong New Yorker and has a rolodex of celebrity encounters and Al Pacino quotes to pull from, and this is a fun conversation.

• 2:15 minute mark - Background on the business

We continue our discussion with Jens Schumacher and Justen Stepka, long-time Atlassian vets who have seen the software sector inside and out. We take a broader focus in this discussion, looking at SaaS competition, the importance of integrated cloud stacks, and the broader COVID and macro set-up. This leads to us diving in on Atlassian, on PagerDuty, on Zoom, and on Snowflake, among other topics.

• 2:30 minute mark - The onset of competition - Asana for Atlassian, Microsoft for Twilio, and writ large