I am Compound248 and today we are pleased to announce and kick-off a Business Breakdowns mini-series focused on Digital Infrastructure. This inaugural episode of the Digital Infrastructure Business Breakdowns mini series will begin with one of the broadest, most important companies in the industry, DigitalBridge. A company that is part private equity firm, part asset owner, and part infrastructure operator of assets across the digital infrastructure spectrum. For the full show notes, transcript, and links to the best content to learn more, check out the episode page here. ----- Business Breakdowns is a property of Colossus, LLC. 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[00:04:22] - [First question] - What digital infrastructure means and how it came to be[00:09:58] - The nuance of digital infrastructure and how big the addressable opportunity set is[00:12:47] - How DigitalBridge became the company it is today [00:19:06] - How he thinks about portioning the fee and value creation economics between shareholders and employees[00:23:15] - The differences between their earlier funds and current funds from how the economics split within the team and owners[00:25:53] - A look into their balance sheet today between funds and operating assets[00:28:39] - How big the digital infrastructure space could be in the future from an IM standpoint [00:30:41] - Their US and non-US opportunity set and how towers and mobile infrastructure compare and contrast across their verticals[00:34:03] - How DigitalBridge professionals operate with portfolio companies and how they add value to them[00:38:47] - Changes in standard growth and the slow downs in the Hyperscale or Telco side of the business[00:40:37] - If Edge competes with their core assets and how it works across all of their portfolio companies[00:42:21] - Where we are on the 5G rollout and how it touches their businesses[00:43:39] - His view on building out Edge and data center capacity from a DigitalBridge standpoint[00:45:35] - How the competitive environment and risk and return profiles have shifted [00:46:33] - How inflation affects the business and how he manages lease renewal[00:50:19] - If Elon Musk building Starlink is a threat or an opportunity [00:52:12] - How DigitalBridge thinks about consumer facing digital infrastructure [00:54:48] - What could happen to lead to their success and business evolution in the future [00:56:28] - Two key lessons he’d give as advice to someone looking to build and lead a company

Today we’re breaking down AppLovin. It’s a business you may not recognize but have likely interacted with. Founded in 2012, AppLovin provides a platform for developers to market and monetize their mobile apps. The business also owns some of the most popular mobile games in the world, which they use to feed richer data into their software platform. To help breakdown the business, I’m joined by its CEO and co-founder, Adam Foroughi. Please enjoy this breakdown of AppLovin. For the full show notes, transcript, and links to the best content to learn more, check out the episode page here. ----- Business Breakdowns is a property of Colossus, LLC. 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[00:02:41] - [First question] - The first risk taken when creating AppLovin and how it all began[00:05:05] - Why was there pushback against games and adtech back in 2012[00:07:12] - What it was like in the early days to get the app in front of a customer [00:08:54] - Building a platform and software product versus becoming an advertising agency[00:10:47] - The major components of AppLovin and how it works [00:15:21] - The space or areas where most people interact with them and see their work [00:16:26] - What he considers to be the next key chapters after AppLovin’s early days [00:18:25] - How they determine strategy between the app developer side of the business and app ownership[00:25:50] - How AppLovin interacts with Apple, Android, and the relationship between products[00:27:11] - What he’s learned about the importance of scale in advertising [00:28:58] - The major breakout points in the business that led to where he is today [00:30:22] - Their revenue model and it how it breaks between software and apps[00:33:55] - The margins of gaming, its business proposition, and the future value of this side of the franchise[00:38:53] - His perspective on what defines great digital marketing today [00:40:31] - Walking through the shifts in privacy, targeting, and data as technology changes[00:43:13] - His thoughts on emerging platforms as competitive threats and/or opportunities [00:44:58] - How they’ve kept the business nimble and very product-focused on a corporate level[00:46:53] - Their concept of meetings and how they’ve learned to run them effectively[00:50:24] - The missing pieces in his strategic mission that he still wants to do in five years time[00:51:42] - What he’s learned from Facebook, Google, and game studios he’s worked with[00:54:32] - How he thinks about defensibility and power in the business as they evolve and grow[00:57:19] - His philosophy on the maturity of the business and if they’d pay dividends in the future[00:59:32] - How he has most improved in his career during his time with AppLovin [01:02:03] - Questions that the world’s largest bear would ask him today[01:03:18] - The most interesting trends happening around him in the digital space[01:06:04] - His thoughts on the eventual impact of Facebook and Google becoming competitors rather than the collaborators they are today 

This is Jesse Pujji and today’s episode is a follow up of last weeks’ Block episode, covering Afterpay the buy-now-pay-later giant. Founded in Sydney Australia in 2015, Afterpay was a rapid success in the buy-now-pay-later market before being acquired by Block for $29bn in 2021.  To breakdown Afterpay, I am joined by investor Joe Magyer. We cover how buy-now-pay-later compares to traditional credit cards, what differentiates Afterpay from direct peers, and how each player of its ecosystem benefits from its offering. Please enjoy this business breakdown of Afterpay. For the full show notes, transcript, and links to the best content to learn more, check out the episode page here. ----- Business Breakdowns is a property of Colossus, LLC. 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[00:02:52] - [First question] - What is Afterpay and what it does[00:07:07] - Size and scope of Afterpay today[00:08:27] - The founding story and their growth being such a young company[00:12:11] - History of the buy now pay later industry[00:13:34] - How their payment models tend to work and how these companies make money[00:16:35] - Unit economics, transaction structure and how money is made[00:21:44] - How Afterpay drives leads to people via their app and merchant aggregation[00:23:39] - An early focus on fashion and expanding beyond their core clientele[00:27:13] - Cost of sales and thoughts on taking more credit risk[00:31:54] - Losses as a part of cost of sales and interest[00:33:48] - Unique things that Afterpay can do given their business model that others can’t[00:35:21] - Growth levers for this business [00:38:29] - Other major things they’re spending money on and their acquisition by Block[00:44:28] - The competitive landscape in the BNPL industry[00:47:54] - Afterpay’s flywheel and how they’ve built it better than others[00:49:34] - Whether or not regulation plays a role in this space[00:52:21] - What will have gone right in the next five years to ensure Afterpay’s growth curve[00:55:01] - What will have happened if Afterpay’s growth doesn’t work out in the future[00:56:31] - Whether or not interest rate risk could turn south for them[00:57:30] - Lessons for investors, builders, and where to learn more about Afterpay’s story; Buy Now, Pay Later 

This is Jesse Pujji and today we’re breaking down Block – formerly known as Square. This software and financial services business was founded by Jack Dorsey and Jim McKelvey in 2009. It has since expanded from its first product – a payments card reader – into a $75 billion market cap with six businesses that build on the firm’s mission of economic access and empowerment. Those are: Square, Cash App, Afterpay, Tidal, Spiral, and TBD. To break down Block, I’m joined by payments expert and investor at TDM Growth Partners, Hamish Corlett. We cover the common threads that have enabled Block to organically build two major ecosystems in Square and Cash App, how the recent Afterpay acquisition can strengthen the connective tissue between those businesses, and the competitive frontiers Block faces. Please enjoy this business breakdown of Block. For the full show notes, transcript, and links to the best content to learn more, check out the episode page here. ----- Business Breakdowns is a property of Colossus, LLC. 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[00:02:52] - [First question] - What is Block and what it does as a business[00:04:58] - How is Block organized, their scale, and how many merchants they serve[00:08:03] - Their founding story and the insight that lead to creating Block[00:10:49] - Major milestones in the last decade after releasing their card reader[00:13:47] - The story behind their Cash App and what it is[00:18:59] - What Afterpay is and how it creates connections for merchants[00:21:23] - Overview of the payment ecosystem and where Block fits into it[00:25:03] - The P&L of Square, its blended gross margin, and customer acquisition strategy[00:30:42] - How Cash App makes money and its P&L[00:35:54] - The balance sheet of Block and how they’ve stood out in a competitive space[00:38:31] - The ways their product organization allows them to move at a rapid pace[00:40:30] - How they avoid fraud that’s seemingly everywhere in financial service businesses[00:42:01] - His thoughts on the competitive environment and how they’re succeeding[00:47:56] - Highlights of M&A and how they reconcile them with their overall strategy[00:54:44] - Their view on Bitcoin and crypto and how it plays into Block’s business[00:59:09] - Things that could happen in a macro environment to aid their future growth[01:01:30] - What could go wrong in the future and the macro environment’s impact[01:03:49] - Lessons for builders and investors when studying Block’s story[01:06:20] - Places to go to learn more about Block

This is Jesse Pujji and today we’re breaking down McKinsey & Company, the world’s pre-eminent management consulting firm. Founded in the thick of the Industrial Revolution, McKinsey set about professionalizing the way businesses were managed. An accountant by trade, James McKinsey, took inspiration from a range of well-established professions like engineers, doctors, and lawyers to create a new category.  Today, some 100 years later, management consultants are entrenched in every part of the global economy and McKinsey continues to lead the field. To break down the business, I’m joined by Romeen Sheth, a McKinsey alum and the current President of Metasys Technologies. Please enjoy this business breakdown of McKinsey & Company. For the full show notes, transcript, and links to the best content to learn more, check out the episode page here. ----- Business Breakdowns is a property of Colossus, LLC. 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 McKinsey & Company and what management consulting looks like[00:04:52] - Their project-based model and what’s being bought and sold when McKinsey makes a sale[00:07:36] - The scale of the business and how profitable it is[00:08:58] - How many projects McKinsey is running and how big of an opportunity management consulting is[00:10:37] - McKinsey’s famous ownership model and how it works[00:12:49] - The history of McKinsey, who started it, and how it has evolved in modern times[00:19:01] - How the firm has changed in the post-Bower era[00:22:12] - McKinsey’s biggest competitors, their dynamics of practice groups, and vertical projects[00:25:46] - How a CEO or top level manager decides which management consulting firm to do business with[00:27:38] - The overview of a normal project for McKinsey, what they sell, and costs associated with it[00:33:07] - The process of marketing and sales and their talent flywheel[00:36:07] - The traditional side of their sales and marketing and the McKinsey Quarterly[00:37:44] - How someone can pitch business to McKinsey and their sales process[00:39:47] - What makes the organization special and unique from a team or work perspective[00:41:01] - Their talent model and how they find and develop their talent [00:45:14] - How their staffing model is unique and how they tie feedback into staffing[00:51:06] - Examples of the scandals that have happened and why[00:55:24] - The biggest growth levers of the business looking forward[01:03:52] - What could happen to make McKinsey a shell of its former self [01:05:38] - Where Romeen would direct people to go for further study; The Firm[01:06:31] - Lessons for builders and investors when studying McKinsey’s story

This is Jesse Pujji, and today we are breaking down Fanatics. If you’ve recently bought sports apparel online, you interacted with Fanatics. They power the entire digital commerce experience for the NFL, MLB, NBA, NHL, and hundreds of other sports leagues around the world.  To break down Fanatics, I am joined by an early investor, Deven Parekh, from Insight Partners. Deven has been an investor in Fanatics since 2011. We cover Fanatics' unique vertically integrated commerce model, how they redefined their TAM, and how the company is aggressively entering NFTs, real money betting, and other expansion areas. Please enjoy this business breakdown of Fanatics. For the full show notes, transcript, and links to the best content to learn more, check out the episode page here. ----- Business Breakdowns is a property of Colossus, LLC. 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[00:02:40] - [First question] - What is Fanatics and the scale of the business today[00:04:26] - What the core business of Fanatics does[00:05:41] - The history of Fanatics and what led to its success[00:10:59] - Michael Rubin’s story and the role that GSI played in Fanatics’ growth[00:13:58] - How the licensing business works and how Fanatics’ relationship with the leagues differs from their competitors [00:15:34] - The landscape of this industry before Fanatics[00:16:36] - Why the change from the best commerce experience to a broad digital sports platform[00:19:02] - Differences of Fanatics’ P&L compared to others in the industry[00:21:05] - How the real-time advantage helps drive growth in the business[00:23:12] - Whether or not the leagues participate in gross margins and how much of a focus they place on cost optimization [00:25:25] - Distinctive things about Fanatics from an investor’s perspective  [00:26:22] - Why hasn’t Amazon stepped into this space yet[00:27:30] - Which leagues have opted out of working with Fanatics and interesting team and player dynamics[00:28:59] - Reasons behind getting involved with NFTs, trading cards, betting, and how it might evolve in the future[00:32:22] - Ways they’re taking the core business and augmenting other branches[00:34:36] - What will have gone right over the next five years for Fanatics to continue growing at the pace they are today[00:37:59] - What will have gone wrong over the next five years that will hurt Fanatics’ growth[00:39:59] - Lessons for builders and investors when studying Fanatics’ story 

Today's episode was originally featured in our Web3 Breakdowns feed. For listeners unfamiliar with Web3 Breakdowns, the concept was inspired by Business Breakdowns but intended to be a place fully dedicated to the emerging ecosystem around blockchains, crypto assets, and everything that makes up Web3. This Breakdown of Anchorage Digital has a foot in both camps, by diving into a business that’s enabling traditional institutions to participate in and profit from digital assets. If you enjoy this episode, be sure to subscribe to Web3 Breakdowns and enjoy our growing catalog of episodes.   My guest today is Diogo Monica, co-founder and President of Anchorage Digital. Diogo started Anchorage in 2017 to meet the growing institutional need to custody and use crypto assets. The business has since grown into a full-service financial platform for institutions, allowing them to securely participate in web3. Our discussion breaks down Anchorage’s business, explores what great digital security looks like, and reveals what new behaviors web3 is unlocking for traditional institutions. Please enjoy this breakdown of Anchorage Digital.   For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.   -----   This episode is brought to you by Coinbase Prime. Coinbase Prime combines advanced trading, battle-tested custody, financing, and prime services in a single solution. Clients have used our comprehensive investing platform to execute some of the largest trades in the industry because we are the only publicly-traded company with experience trading and custodying crypto assets at scale. Get started with Coinbase Prime today at coinbase.com/prime.   -----   Web3 Breakdowns is a property of Colossus, LLC. For more episodes of Web3 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: @Web3Breakdowns | @ericgoldenx | @patrick_oshag    Show Notes [00:02:40] - [First question] - Why he got into the crypto space and what set him down the path that would to founding Anchorage  [00:05:53] - An overview of digital security, state of it today, and where people should spend their time learning about it [00:09:16] - A future of perfect authentication and data protection being so core to this space [00:13:29] - How custody should be considered in the modern world and with digital assets [00:18:59] - What it means to be a great qualified institutional custodian [00:25:17] - The business and unit economics of Anchorage [00:28:07] - What it was like working with their first big institutional client [00:30:52] - Speed as a component of digital security and its implications writ large   [00:35:51] - How they’re differentiated from their competitors by expanding beyond custody [00:39:46] - Different challenges between securing NFTs versus currencies and tokens [00:42:43] - New behaviors he finds most interesting about institutions due to Anchorage [00:48:46] - Breakdown of what players and services contribute to and create Anchorage’s clients today [00:51:24] - The best case scenario for the future of the business [00:53:37] - What would worry him about Anchorage’s development if it swayed from their original mission [00:55:55] - Opportunities he finds most interesting that haven't materialized yet  [00:57:46] - Will we need a public blockchain to create the infrastructure needed to bring the world to a more crypto-fluid place [01:00:07] - The kindest thing anyone has ever done for him 

This is Zack Fuss and today we’re breaking down European-based payment business, Adyen. Adyen was founded in Amsterdam in 2006 by a group of payments entrepreneurs who had already built and sold a business in this space. Adyen was their chance to start afresh and build a modern solution to displace the patchwork legacy system that merchants were being forced to use. To break down the business, I’m joined by Michael Willar, a portfolio manager at Stenham Asset Management. Our discussion covers Adyen’s single platform solution in detail, the driving force behind their track record of profitable growth, and why payments isn’t a winner take all market. Please enjoy this breakdown of Adyen. For the full show notes, transcript, and links to the best content to learn more, check out the episode page here. -----Business Breakdowns is a property of Colossus, LLC. 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 | @zbfussShow Notes[00:02:55] - [First question] What Adyen is and what they do [00:05:54] - General overview of how payment processing works[00:07:29] - Flow of a transaction and how they manifest[00:09:52] - How the business generates revenue and their revenue model[00:11:25] - Where Adyen sits in the industry and the size of it today[00:13:37] - The reality of processing 50-60% of their addressable market [00:16:19] - What about their culture and founding story makes them so nimble [00:21:18] - The competitive strengths of the business and their innovative solutions [00:24:07] - Key revenue drivers for Adyen [00:26:01] - What is it about Adyen’s business structure that enables them to grow so rapidly while still being profitable[00:29:34] - Key growth drivers [00:32:44] - What gives Adyen its competitive advantage over other payment providers[00:35:56] - Having one platform is beneficial but why isn’t it a more popular approach? [00:37:42] - The secret sauce behind their successful growth trajectory[00:39:25] - The essence of Adyen’s culture and how it manifests in their day-to-day work[00:42:04] - What Adyen plans to do with all of the cash they produce[00:43:35] - What keeps him up at night and potential threats to the business[00:47:54] - Is there a chance anyone could build a platform comparable to Adyen?[00:50:06] - Key differences between Stripe and Adyen[00:56:23] - Lessons learned from studying Adyen and what payment service builders can learn from them

This is Matt Reustle and today we are breaking down Cadence Design Systems. Cadence operates in the semiconductor ecosystem where they offer electronic design automation software - also known as EDA software - which is used for chip design. Putting that in much simpler terms - our phones now carry an entire 1980s Radio Shack inside them, and Cadence makes that possible with software to design smaller and more powerful chips.  To break down Cadence, I'm joined by two well-known tech investors and experts in the semiconductor space, Brinton Johns and Jon Bathgate of NZS Capital. We cover the value chain of semiconductors, the evolution of Cadence and the EDA market, and how Cadence reduced it's cyclical exposure over the last decade. I think some of the most interesting lessons come from businesses that face adversity and truly re-invent themselves with a micro-strategic change. Cadence is a prime example. Please enjoy this breakdown of Cadence. For the full show notes, transcript, and links to the best content to learn more, check out the episode page here. ----- Business Breakdowns is a property of Colossus, LLC. 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[00:03:15] - [First question] - Everyday products that Cadence helps bring to life[00:07:28] - The rise of Cadence and the origins of the semiconductor industry [00:10:26] - Major players in the semiconductor space back in the 80s [00:12:13] - Going from plan, to chip, to production[00:16:58] - The life cycle of a chip and the cost to design one [00:19:19] - Differences between software design and embedded software [00:21:25] - The history of Cadence and the size and scope of their business today [00:28:05] - Existing customer base and how diversified they are[00:30:55] - What a contract actually looks like between Cadence and a customer[00:35:05] - Protection, off-the-shelf IP blocks and custom IP [00:35:53] - Cadence’s revenue growth, important metrics, and their KPIs[00:37:03] - How correlated their revenue is to semiconductor cycles[00:39:30] - Unit economics and the margin profile of the business[00:42:13] - Contributing factors to growth and thoughts on pricing[00:45:46] - Benefits of scale and what they like to see as investors from their R&D spend[00:48:12] - Risks and competitors that may threaten Cadence’s success[00:50:22] - Potential scenarios where the ecosystem becomes more vertically integrated[00:52:56] - What would drive a 10x growth for Cadence in next five years[00:54:58] - Things that would affect their growth in the next five years [00:57:38] - Lessons for investors when studying Cadence[00:59:15] - How they navigated the pandemic and how it impacted their business

This is Jesse Pujji and today we’re breaking down The New York Times. Since its founding in 1851, The New York Times has become known as the national “newspaper of record” through its focus on truth seeking and quality journalism. To underline that status, it has won 132 Pulitzer Prizes, almost double its nearest competitor. However, the business behind the Times hasn’t always been easy and it has faced several existential threats over its history, most recent of which has come from the internet and digital mediums. To break down The New York Times, I’m joined by Morning Brew co-founder and host of Founder’s Journal and Imposters podcasts, Alex Lieberman. It’s particularly interesting to hear a new media operator dissect the heritage and evolution of one of the most storied brands in his industry. Please enjoy this breakdown of The New York Times. For the full show notes, transcript, and links to the best content to learn more, check out the episode page here. ----- Business Breakdowns is a property of Colossus, LLC. 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[00:02:55] - [First question] - What The New York Times is as a business[00:04:35] - Snapshot of the scale of The New York Times and it’s readership[00:08:06] - The origin story of The New York Times and becoming a national news source[00:11:40] - How the business is distinctive being family-run for five generations[00:15:00] - Unpacking the shift from physical to digital and how it impacted their numbers[00:20:00] - Course correcting after the first few years of their digital strategy not succeeding as anticipated[00:23:43] - The cost of sales and the margins of the business and growth levers[00:27:47] - Revenue differences between advertising and subscriptions [00:29:37] - What does their non-digital advertising business look like[00:31:43] - The biggest levers for growing the topline and bottomline of the business[00:35:18] - Acquiring Wirecutter & historical M&A performance[00:37:57] - Other categories and businesses that help build a bigger audience[00:42:00] - Differences between the Netflix and New York Times subscription models[00:44:37] - Leaning into world events and politics[00:48:22] - Macro factors and specific things that would lead to reaching their subscriber goal in the future[00:51:10] - Mistakes and threats that could negatively impact their goals[00:55:43] - Biggest lessons for builders, entrepreneurs, executives and investors[00:58:30] - Learn more about the New York Times; Peter Kafka, Rich Greenfield, Lightshed Partners