My guest this week is Turner Novak, a partner at Gelt VC. Many of the largest companies in the world today are consumer social companies, so Turner and I discuss the past, present, and future of those businesses. When executed right, they are often the fastest-growing companies in history, and the rise of TikTok and some other companies we discuss makes it clear that there may always be more room at the top. The network effects that support these companies make them unique beasts to analyze, and Turner’s writing has been among my favorite content on the topic. Please enjoy our detailed conversation on this important are of public and private markets.

 

This week’s episode is sponsored by Bottomless. Bottomless is a smart coffee subscription which automatically re-orders coffee for you based on your consumption habits. 

Bottomless is offering one month and your second bag of coffee for free at bottomless.com/patrick.

 

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Show Notes

(2:18) – (First question) – History of consumer social companies

(3:28 – The importance of quality growth over rate of growth

(4:43) – Importance of friends and identity in a social network

(6:21) – Major markers he analyzes in new social networks

(7:59) – The meteoric rise of TikTok and how it compares to other social networks

            (8:08) – The Rise of TikTok and Understanding Its Parent Company, ByteDance

(13:38) – How TikTok deals with user friction

(17:28) – Why TikTok copies is a waste

(21:08) – Advising companies to build a media arm in this environment

(24:18) – Business models beyond advertising for social networks

(30:44) – His thoughts on Pinduoduo and the opportunity for a similar company in the US

(37:36) – What Snapchat is doing

(43:51) – How social eCommerce could be a competitor to an Amazon

(46:31) – His review of Zynn

            (46:36) - Attack of the Clones: TikTok’s Rival Kuaishou Lands in the US

(52:22) – The geopolitical battle of social networks

(53:36) – Creating social commerce companies

(54:27) – Fantasy draft portfolio

(59:18) – Kindest thing anyone has done for him

 

Learn More

For more episodes go to InvestorFieldGuide.com/podcast.

Sign up for the book club and new email newsletter called “Inside the Episode” at InvestorFieldGuide.com/bookclub.

Follow Patrick on Twitter at @patrick_oshag