Exploring the Landscape of Internet-Scale Businesses

My guest today is Ram Parameswaran, founder of Octahedron Capital. Ram started Octahedron this year after more than 5 years as a partner at Altimeter Capital where he made investments in Square, Bytedance, Pinduoduo, and Udaan. In our conversation we cover the potential for internet scale businesses, explore the common characteristics of these businesses, and then go through a rapid-fire round of the most important qualities for 8 business models. This conversation was a blast of energy and could have gone on for 2 more hours. I hope to have Ram on again and can't imagine what his conversations are like at the dinner table with his wife and former podcast guest, Anu Hariharan. Please enjoy this awesome conversation with Ram Parameswaran.  

For the full show notes, transcript, and links to mentioned content check out https://www.joincolossus.com/episodes/22392883/parameswaran-internet-scale-businesses

This episode of Invest Like the Best is sponsored by Canalyst. Canalyst is the leading destination for public company data and analysis.  If you’re a professional equity investor and haven’t talked to Canalyst recently, you should give them a shout. Learn more and try Canalyst for yourself at canalyst.com/Patrick.  

This episode is brought to you by the MIT Investment Management Company (MITIMCO). MITIMCO is always on the looking for promising investment managers with the potential to compound our capital for a decade or more. If you think your firm is too small, too young, or too non-institutional, you might just be exactly what we are looking for. Check us out at https://mitimco.org/partner/ or e-mail us at  partner@mitimco.org. Please also see our new page for emerging managers https://mitimco.org/emerging-managers/.

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Show Notes

[00:03:45] – [First question] – The opportunity of the commercial internet

[00:11:18] – Identifying the companies that will take advantage of this shift to online commerce

[00:18:30] – How businesses build scale, in particular internet vs non-internet businesses

            [00:23:09] – How Amazon Wins: By Steamrolling Rivals and Partners

[00:24:19] – The Carvana playbook

[00:30:11] – Using frequency of use as a factor in valuing a business

[00:33:55] – Evaluating ByteDance and what can others learn from them

[00:40:52] – Finding success in an experiment

[00:43:32] – How online commerce business will grow globally, with India in focus

[00:55:28] – How they approach and evaluate online advertising businesses

[00:54:50] – Evaluating direct content subscription online businesses

[00:55:42] – Biggest challenges in building ecommerce online businesses

[00:58:31] – The lens to evaluate online marketplace businesses

[00:59:43] – What distinct things matter for on-demand online businesses

[01:01:56] – The competition in the online payment space business

[01:06:35] – Rake/Take rates outside of the US

[01:08:25] – Things that matter for consumer software

[01:10:25] – How that compares to enterprise software

[01:11:44] – Evaluating developer companies

            [01:11:51] – Jeff Lawson Podcast Episode

[01:13:53] – Advice to help people be successful early in their investing career

[01:17:22] – Kindest thing anyone has done for him