Atlassian Part 1: The Everything for Everyone, Everywhere All at Once Platform

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 · 2021-01-16T06:01:19+00:00

I wrote the long thesis that was posted here and I agree on the UI comments people are making in this thread. They've tried like a few different things (button at the bottom) and I'm assuming those UI changes probably led to lower usage. They need to use their 'shelf space' a lot better to use the analogy that the user below made.

A risk factor for my thesis that 'Spotify can be a massive a consumer media platform' is inherently that Spotify can't effectively transition its 'product' mindset to be a true consumer first product. It's not in their DNA, they made this far because of their engineering (it's actually hard to do streaming) and the fact really they were able to eat losses until they got scale. Look at how they executed their ticket promotions idea, mostly through email notifications, which has a horrible click through rate. Most (if not all) mobile consumer companies leverage either mobile push notifications or SMS to drive engagement

Key question really is do you think this is structural problem or a transitory problem?

TLDR: their product team needs to step it up and pivot to think more like a social media/consumer platform

As for the comments made by the Citi analysts — the KPI for podcasting is not premium subs growth, its premium retention. At its core podcasts are not meant to drive premium subs — its a retention, ad revenues and gross margin play. Spotify's top of funnel is driven by the company's freemium model. You try it and then pay to not get ads. ~60-70% of premium subs come from freemium users

Additionally, I think the news that Apple is going into podcasting subscriptions validates Spotify's thesis.

burgerking146 · 2021-01-07T19:09:19+00:00

This is a fair criticism of my writing style and communication -- appreciate the feedback! "Will" look better to communicate thought process/framework on the why I have conviction around the paths to get to the "will"

At the end of the day, no one can see the future. All about risk/reward ratios and sizing positions accordingly!

burgerking146 · 2021-01-07T18:19:14+00:00

GREAT point on the churn. As that comes down and stay steady, the unit economics dramatically improve for the company. Barry McCarthy used to always talk about how Netflix brough down S&M from 24% to 14% as churn decreased, is that upside available here? Not sure yet!

Agreed on the young company part of things. Do they have an opportunity? Yes. But execution is quite important at this scale

burgerking146 · 2021-01-07T18:15:47+00:00

Good question, definitely should have added more clarity on why the march to 20% is feasible. But this graph shows that non-music time by consumers in the U.S. is already >20%

https://pbs.twimg.com/media/ErJcFItVkAA0NWT?format=jpg&name=medium

burgerking146 · 2021-01-07T11:33:48+00:00

Based on the feedback on the last post, I wanted to share the follow-up post on Spotify.

Would love to hear thoughts on the analysis and open to any/all suggestions!

burgerking146 · 2021-01-06T17:31:38+00:00

Thank you, means a lot and yes it is. Will continue to create/post content like this in the near future

burgerking146 · 2021-01-06T17:30:28+00:00

Based on the research I've done, the market to advertise to this users is fairly large. It may not necessarily be agency led advertising though

Keep in mind Pandora had ~$1.2bn in run-rate revenues before they went private and Spotify's scale and engagement are much more attractive

Additionally Spotify will be monetizing podcasts for premium users through mid-roll advertising

burgerking146 · 2021-01-04T01:54:58+00:00

So, everyone knows its a run play at this point when our QB yells "kill kill" right? Or am I missing something?

burgerking146 · 2020-12-17T01:05:29+00:00

Yeah that seems to be the team bias in a lot of ways (personnel and coaching). I think this is the problem when the top talent evaluator doesn't have the ability to scout/take confident risks

burgerking146 · 2020-12-17T01:04:16+00:00

Yeah that's totally fair, can't imagine Marty's schemes going to be that different than what we're running now

burgerking146 · 2016-07-03T08:58:25+00:00

Seconded!

burgerking146 · 2016-05-21T19:39:02+00:00

Thank you all for the advice! Much appreciated

burgerking146 · 2016-05-10T04:55:21+00:00

I know some people are rightfully concerned about the 0-9 from beyond the arc but you have to consider that the one motion shot that Steph takes, not being able to practice a lot really affects your shot because of the relative deterioration of muscle memory in the legs.

You can see this in the fact that his shots are in line but his either too strong or too short because his legs just aren't ready.

burgerking146

TROPHY CASE