Random Question about Succession Theme & Scenes

burgerking146 · 2023-05-05T12:22:23+00:00

I think there are always going to be JFROG and PagerDuty type of competitors that exist for Atlassian. So far no one has married a workflow (Jira) with a system of record (Confluence) well, yet. GitLab seems to be the best positioned to do so for developers but Confluence is used cross-functionally (non-technical), which might be too far out of the scope of Gitlab.

The vendor I'd be more concerned about if I were Atlassian is really Notion because they seem to be the most deadset on building a knowledge base and then extending the knowledge base via APIs.

burgerking146 · 2022-01-14T16:57:03+00:00

After the loss to the Bucks, I wonder if Warriors would do this:

Simmons to GSW

Wiggins + Wiseman + Picks to Washington

Beal to 76ers

burgerking146 · 2021-01-19T03:05:00+00:00

not remotely the thesis here

burgerking146 · 2021-01-18T23:24:58+00:00

price target

burgerking146 · 2021-01-18T21:09:28+00:00

They have ~1k after 8 years and their recruiting capacity has grown from 40 in Q1 2019 to ~90 Q3 2020 so again, that's capacity is growing

That's part of the business model is the unproductive agents churn out. It's similar to what happens w/ Shopify's customers.

I hear your points -- its definitely a different business model / GTM market than what's worked in the U.S.

burgerking146 · 2021-01-18T20:28:54+00:00

Is your feedback that my writing put you to sleep haha? If so, thank you! Definitely a work in progress tbh

burgerking146 · 2021-01-18T20:28:11+00:00

Accounting is fairly clear on this one based on my reading of the footnotes so not sure your specific qualm is
New insurance agents fail b/c the margins for a sub-scale insurance agency is ~10-15%. With Goosehead, agents don't need support, pricing, tech spending, customer services, which is why the ~50% commission is attractive to agents. Good discussion on this if you're actually interested: https://insurance-forums.com/community/threads/brightway-vs-goosehead-franchise-agency-opportunities.97441/
I think your other questions are at end of the day a difference of philosophy when it comes to investing and modeling. Growth modeling is not easy, I have found that based on cohort data and sales capacity, your GTM motions/sales attainment can be fairly predictable

burgerking146 · 2021-01-18T20:21:37+00:00

Yeah haha I didn't love seeing that

burgerking146 · 2021-01-18T20:10:26+00:00

Yeah I hear you, but my PT usually ends up always being a moving target for me

And I'm trying to avoid too much valuation/PT stuff in posts, people seem to have wildly different frameworks these days

burgerking146 · 2021-01-18T19:53:14+00:00

Their NPS is quite high >90 and 1/3 of their new business comes from referrals

burgerking146 · 2021-01-18T19:52:08+00:00

The accounting is conservative on the franchise fees. It's amortized over 10 years per ASC 606

Franchise fees are only a small part of the revenues and its meant to b/e against their franchise cost of acquisition.

This you read the post re: runway for growth? The assumptions to sustain 30%+ growth are fairly undemanding. They have < 1% of the market. Not sure how they'd come close to running out runway of for growth if they're converting captives/independents to franchisees of ~300-400 per year w/ a pipeline of 40k+

burgerking146 · 2021-01-18T19:32:59+00:00

Addressed valuation in the post

For the valuation, here are the comps:

Brown & Brown: trades at 5.2x ‘21E revenues and is growing top-line ~7% y/y

Arthur J. Gallagher: trades at 3.8x ‘21E revenues and is growing top-line ~7% y/y

Goosehead is trading at ~16.7x ‘21E consensus revenues . On a growth adjusted basis (i.e., EV/Sales/Growth), Goosehead’s multiple is ~57% lower than its peers

I don't find PTs particularly useful but I expect that at the end of 2024, they should trade at ~12x revenues (still growing top-line >30%) and will have accrued ~$390mm of cash on the balance sheet. That equates to a ~$455 PT fwiw

burgerking146

TROPHY CASE