The Razor's Edge

The Razor's Edge

By Shortman StudiosBusinessInvesting
Download on the App Store

The Razor's Edge episodes

  • #26: The Atlassian Mafia Part 1: Enterprise Search And Sajari W/Former Head of Jira Product

    We speak with a couple of Atlassian alums on this week's episode, as the first of a two-parter. Our guests are Justen Stepka, co-owner of Enterprise Fund, Atlassian alum, and previous The Razor's Edge guest (episode #16); and Jens Schumacher,  employee number #12 at Atlassian, and the Head of Product for Jira Service Deck, who is now Chief Product Officer at Sajari, a search technology company. In today's episode, we talk about the Atlassian mafia effect and go more into focus on Sajari. This leads to a lot about Elastic Search, about the e-commerce market, and about SaaS development and machine learning that should be of interest.

    Topics Covered
    • 3:00 – Jens's background and the emergence of the Atlassian mafia
  • 10:00 – What does it mean that a cohort of former colleagues keep working together?
  • 13:30 – Atlassian roots and background
  • 16:00 - Snowflake digression
  • 18:00 – The challenges in search
  • 26:00 – Breaking down machine learning vs. algorithmic search
  • 35:00 - What stage of the e-commerce rush are we in?
  • 42:00 – How much of this will stick for e-commerce

    •  

     

     

     

     

    49 min
  • #25: WallStSaasBro With An Up Close View On The SaaS Market

    In a growth-y market, it pays to have a fresh perspective. We interview WallStSaaSBro, a notorious member of fintwit who has firsthand experience on what's going on in the software sector. As an account executive in New York who has seen one sector - healthcare - go beyond acceleration into actual soup to nuts adoption of modern technology in 2020 - he has a value-added take on what's going on in the sector. He also has an interesting story and we have a wideranging conversation on his background, the state of New York, and the state of SaaS.

    This call was recorded August 28th. 

    Topics Covered
    • 4:45 minute mark – Background and setting the NYC scene
  • 12:45 – The changing expectations for sales hires at the big SaaS firms.
  • 14:45 – Learning from unlikely sources – Martin Shkreli.
  • 18:45 – AT&T as the jumping off point.
  • 23:15 – The home healthcare market opportunity.
  • 28:45 – Communications as a service.
  • 32:45 – Parallels to past bubbly markets.
  • 37:00 – CRM and WDAY stepping up – a beat?
  • 40:15 – The 20-something tech perspective both personal and professional - ZoomInfo.
  • 55:45 – Sales climate.
  • 58:45 – WFH Impact.
  • 1:03:15 – What does New York look like?
  • 1:07:15 – Is New York dead?
  • 1:20:15 – How could sales change, and automation.
  • 1:25:15 – SaaS Bro’s top career investments.
  • 1:34:15 – Explaining Coupa Software and Spend Management.
  • 1:36:15 – The cybersecurity challenge.
  • 1:40:15 – Covering Slack.
  • 1:49:15 – The value of sales as a career path.
    • 1 hr 55 min
  • #24: Another PagerDuty Earnings Alert - Mission Critical, Or A Bubble Pop?

    The end of summer often serves up surprises for the market, and this year was no different. The cadence of Zoom reporting and setting the market ablaze towards the end of earnings season, followed by PagerDuty reporting just as the euphoria faded is an all too familiar one for PagerDuty shareholders.

    We discuss the smaller SaaS company's report and why, for all the talk of billings, net retention, and everything else, this was a solid fundamental report. And why, amidst a September 1st that could be a market turning point and a bunch of crazy factors, it didn't matter at all. We also preview Slack's report, talk SaaS consolidation, get meta about the investing podcasting boom, and talk about why an IPO matters for more than a company's initial trading.

    Topics Covered
    • 4:00 minute mark – The laggards rally, with CRM as a stand-in.
  • 13:00 – Bull market philosophies.
  • 18:20 – Long-term outlook for PD.
  • 21:30 – The expectations and comp set for SaaS names.
  • 27:45 – Breaking down PagerDuty’s report – what about the billings matter.
  • 37:00 – How to look at a SaaS, and the differences between companies in the sector.
  • 41:30 – PD’s expansion, and telling their story.
  • 45:00 – Pager Duty maintaining their competitive lead.
  • 51:15 – Leftover damage from the 2019 IPO, and net dollar-based retention rate. 
  • 56:00 – The broader market pullback. 
  • 1:02:00 – COVID-19 vs. Y2K.
  • 1:07:00 – PD’s runway going forward, how it is not a COVID play, and the competitive bounds on all players here.
  • 1:12:45 – Consolidation and the parallels to streaming or semiconductors.
  • 1:19:00 – Slack Earnings call preview.
  • 1:23:00 – September 1st – Euphoria peak?
  • 1:31:00 – The podcast boom as a sign of the market.
  • 1:34:00 – Last notes on PagerDuty’s earnings.
  • 1:38:30 – The importance of storytelling and the narrative, and the market context.
    • 1 hr 49 min
  • #23: F5 Networks' Transformation, Or What Makes A Compelling Growth (Or Value?) Pitch

    We flip the script. Daniel pitches Akram on a new idea - f5 Networks - and Akram plays the role of portfolio manager, hearing out and testing the thesis. While Daniel might hope you like the idea itself, this episode should be a little more educational, as we break down what makes it a good or not-so good pitch, what's missing, and what could go into the thesis next. It also highlights a lot of the challenges in both growth and value investing.

    We do get into other ideas, including Dropbox, and into the state of the market and whether the Alteryx report is a warning sign.

    Topics Covered
    • 3:30 minute mark - What brought us to f5?
  • 6:30 - The long case for F5
  • 10:30 - How the ADC market used to size up 7:00
  • 13:45 – The inflection point for f5
  • 16:00 – What is the future of the ADC
  • 21:00 – What is the competition
  • 24:30 The nature of service revenues
  • 28:30 – What is it exactly that f5 does here
  • 33:00 – Revisiting value and what does a low multiple mean, and the Alteryx report
  • 39:00 – When the numbers aren’t enough
  • 42:45 – The research process
  • 47:30 – The limits of value investing
  • 49:30 – Dropbox as another example
  • 55:30 – Growth vs. value, or story vs. numbers
  • 59:30 – Studying Tesla
  • 1:04:30 – Alteryx – exception or warning?
  • 1:10:45 – The hunt for the coming inflection
  • 1:15:30 – Covid-19 Bull market geniuses and the market climate
  • 1:22:30 – IPOs vs. SPACs and what that says about where we are

    • Reading materials:

    Full pitch on Seeking Alpha: https://seekingalpha.com/article/4369321

    What Makes Stocks Go Up: https://dubra.substack.com/p/the-anatomy-of-stocks-that-go-up

    Life Magazine - "New Kid On The Street" (scroll to 62a):  https://books.google.es/books?id=bU8EAAAAMBAJ&printsec=frontcover&hl=es&source=gbs_ge_summary_r&cad=0#v=onepage&q&f=false

    Dropbox: The First Dead Decacorn - https://alexdanco.com/2015/08/24/dropbox-the-first-dead-decacorn/

    1 hr 30 min
  • The Razor's Edge #22: Scott Norton of Sir Kensington's on Recessionary Dislocation And Adaptation

    With the economy working through a recession - though certainly a unique mix of crosswinds - we thought it would be good to get out of the software space. Scott Norton, co-founder and CEO of Sir Kensington's, joins the Razor's Edge to talk about what he's seeing in this macro environment, both as someone who started out in finance and as the CEO of the condiments maker. He shares insights from the company's founding in the last recession and what makes the modern consumer goods company different from the big brands (though the big brands can still win, he points out). And since this is the Razor's Edge, we still talk a little bit of SaaS.

    Topics Covered
    • 3:00 minute mark – Sir Kensington’s calling its shot, but also missing out on another big startup
  • 11:00 – How did the last recession shape the firm, and Scott’s career?
  • 15:00 – The market’s liquidity rush and does the bill ever come due?
  • 21:30 –Past recessions and Japan as models to keep an eye on as we work through this period
  • 30:00 – What does 2020 look like for Sir K both in terms of work from home and changing habits?
  • 37:00 – The feedback loop for the modern consumer goods company
  • 40:30 – Cross pollination in the Unilever family
  • 43:00 – What this period means for habit dislocation
  • 46:00 – Planning amidst uncertainty
  • 51:00 – New software tools?

    • A few links referenced in the conversation:

    • Premium Pete interview with Scott: https://www.youtube.com/watch?v=Ds01YpbWfRE
  • Healthyish's Toum Recipe: https://www.bonappetit.com/story/toum-recipe
  • Sir Kensington's social media group: https://tastebuds.socialmedialink.com/members/sign_in#/

    •  

    59 min
  • The Razor's Edge #21: Captain Twilio On His Only Position, Twilio

    Today’s episode continues our conversation with Captain Twilio. Our guest, a financial professional and a friend of Akram’s, invests personally in a very concentrated fashion. Last time, we spoke about his previous position, Netflix. This time, we cover his current position, that’s a single position, Twilio. Akram and he talk about why he’s so confident in the stock, the risks of such concentration, and how to think about SaaS companies or really any sort of company in the current market.

     

    Topics Covered

    - 5:00 minute mark – The initial TWLO long case and the inherent risks from the start 

    - 12:30 – The Uber ‘gift’ and the shift to selling to firms; and Flex 

    - 15:30 – The value of new technologies – cost savings – and do they really deliver? 

    - 18:15 – Uneconomic end markets for Twilio – a risk? 

    - 21:00 – The dynamics of pricing models, and Twilio’s competitiveness 

    - 28:00 – The relative value of valuation vs. focus 

    - 31:45 – What cost savings means for TAM analysis, and the importance of TAM analysis (or its limits) 

    - 36:00 – Wild IPO pricing and what it means 

    - 40:15 – Why the concentration 

    - 45:40 – Survivorship bias and growth investing 

    - 49:00 – Market multiples and the importance of company culture 

    - 53:30 – Revisiting the macro element, and what sort of 100-year events are happening 

    - 59:00 – Echoes of 2000 

    - 1:01:00 – If things go back to normal, what happens to SaaS 

    - 1:07:00 – Risk to Q2 earnings season and guidance

     

     

     

    1 hr 17 min
  • The Razor's Edge #20: Captain Twilio on Netflix's Dominant Position And The Streaming Wars

    We're joined by friend of The Razor's Edge and professional investor Captain Twilio, as he's known. As someone who has only owned two stocks in his portfolio since 2012 - Netflix from 2012-2017 and Twilio in the three years since - he has a laser focused approach to growth investing, and it's worked.

     

    In the wake of Netflix's most recent, pandemic-fueled earnings report, we brought him on to see where he thinks the company sits, and what we all make of the report and Netflix's positioning. We also cover Captain's Twilio position at length, though that will be part two of this episode, coming out around Twilio's earnings. 

    Topics Covered  
    • 3:30 - Background on the Captain's positioning  
    • 7:30 - Understanding the old Netflix long case and the growth investor mindset 
    • 12:30 - Why swap out? 
    • 14:30 - Attention span issue and the new threat of Tiktok 
    • 21:00 - The competitive landscape 
    • 27:00 - The old distribution vs. content question 
    • 30:00 - The streaming wars and what attrition looks like 
    • 34:30 - The most recent earnings call, and what lands are left for Netflix to conquer? 
    • 43:00 - Peak Hollywood and our changing viewing habits 

      • Relevant Links:

      Akram's Razor - Netflix: This Stock's Story Is Over

      Vox - Land of the Giants Podcast Season 2

      54 min
    • The Investing Edge Announcement
      A quick update about the programming on this channel - this channel will be only featuring the Razor's Edge going forward. To get new Value Investor's Edge Live podcasts, subscribe to the Marketplace Roundtable Podcast channel, available here:
      iTunes/Apple Podcasts
      Spotify
      Stitcher
      Seeking Alpha
      1 min
    • The Razor's Edge #18: The Bankruptcy Market With Sam Zughayer
      One of the stranger dislocations in 2020 has been the behavior of stocks that are bound to or have already filed bankruptcy, with Hertz's offering of new equity this week as the biggest example of the phenomenon. We speak with Sam Zughayer, managing director of Berenson & Company, about what might explain this, what he's seeing, and where this may end up.
      Topics Covered
      4:00 – Where Sam gets involved in the process normally
      8:00 – What makes this time different
      14:00 – What the government learned in 2009 and how that affects things
      18:30 – Rule of contract law in the current climate
      21:00 – The implication of the Hertz ruling
      27:00 – The capital structure component and the structural effects for business
      32:00 – The Hertz precedent and effect on other bankruptcies
      35:00 – The longer-term legacies of this period
      38:30 – The problem with shale oil
      45:00 – Is this unhealthy? The Zombie element of sustaining firms.
      47:00 – And the formerly healthy companies that fall, what of them?
      50:00 – Looking back at stock buybacks
      53:00 – Will behavior change?
      55 min

    About The Razor's Edge

    From the publisher's feed

    The Razor’s Edge is an investing podcast that combines a prop trader’s viewpoint and deep-dive fundamental research to provide a unique take on the markets. The show is co-hosted by Akram’s Razor, a trader, tech enthusiast, meat lover, Marvel fanboy, battle tested activist short-seller and humble market servant, and by Daniel Shvartsman, a long-time editor and director for Seeking Alpha who has seen thousands of investing pitches and ideas, as well as how these ideas play out.