Mar 19, 2023·edited Mar 19, 2023Liked by Lisa Schreiber
Hi Lisa,
Ans thank you for sharing your thoughts in understandable way.
I have a question that is not connected to SaaS investing and will be glad to see what's your opinion about it.
Recently I was looking at companies like DuoLingo, DraftKings, Samsara, Block or any other company (non-SaaS) you have noticed... Their YTD stock performance is much, much better than the SaaS companies you have in your portfolio. For the record, my portfolio is similar to yours.
I am trying to understand what could attract an investor to these companies. Why would someone invest money in companies with non-recurring revenue, lower gross margin, lower revenue growth?
And isn't that lost opportunity while waiting the return of the growth stocks? Yes, the things will change to better as you said, but this could be in 1, 2...5 years. No one knows when the good times will come back. Another question I am asking myself.
Most likely for you to answer that question you have to know better those companies, but maybe you have some observations and had discussed similar topic with fellow investors.
Thank you for your feedback and sharing your thoughts.
You've touched on a very interesting topic that we are also exploring currently, now that the busy earnings season for our portfolio companies is over for this quarter.
In general, I believe it is important to remain open-minded and look beyond the edge of our plate, so we are certainly open to investing in non-SaaS businesses as long as they meet certain criteria, such as high revenue growth (preferably recurring) and profitability, strong competitive positioning and moat, high gross margins, great management, and a great product.
I have looked into Duolingo a bit, and I think their numbers look quite interesting. However, I am not yet fully convinced of their powerful moat and business model compared to other language training tools. This is what is holding me back a bit, but I will conduct some research on them and also Samsara.
If I find another high confidence company, I definitely think it is worth opening a small position to "test the waters" and follow the company closely, especially while B2B software companies are still struggling.
One key difference between DUOL and our portfolio companies is that they target regular users instead of businesses, so they are not as susceptible to the B2B optimizations taking place these days.
I am actually quite interested in understanding Samsara and Duolingo better, and we might publish some content on them once we have conducted more thorough research.
Thanks again for your feedback, we always appreciate it! :)
Hi Lisa,
Ans thank you for sharing your thoughts in understandable way.
I have a question that is not connected to SaaS investing and will be glad to see what's your opinion about it.
Recently I was looking at companies like DuoLingo, DraftKings, Samsara, Block or any other company (non-SaaS) you have noticed... Their YTD stock performance is much, much better than the SaaS companies you have in your portfolio. For the record, my portfolio is similar to yours.
I am trying to understand what could attract an investor to these companies. Why would someone invest money in companies with non-recurring revenue, lower gross margin, lower revenue growth?
And isn't that lost opportunity while waiting the return of the growth stocks? Yes, the things will change to better as you said, but this could be in 1, 2...5 years. No one knows when the good times will come back. Another question I am asking myself.
Most likely for you to answer that question you have to know better those companies, but maybe you have some observations and had discussed similar topic with fellow investors.
Thanks a lot for your time.
Martin
Hi Martin,
Thank you for your feedback and sharing your thoughts.
You've touched on a very interesting topic that we are also exploring currently, now that the busy earnings season for our portfolio companies is over for this quarter.
In general, I believe it is important to remain open-minded and look beyond the edge of our plate, so we are certainly open to investing in non-SaaS businesses as long as they meet certain criteria, such as high revenue growth (preferably recurring) and profitability, strong competitive positioning and moat, high gross margins, great management, and a great product.
I have looked into Duolingo a bit, and I think their numbers look quite interesting. However, I am not yet fully convinced of their powerful moat and business model compared to other language training tools. This is what is holding me back a bit, but I will conduct some research on them and also Samsara.
If I find another high confidence company, I definitely think it is worth opening a small position to "test the waters" and follow the company closely, especially while B2B software companies are still struggling.
One key difference between DUOL and our portfolio companies is that they target regular users instead of businesses, so they are not as susceptible to the B2B optimizations taking place these days.
I am actually quite interested in understanding Samsara and Duolingo better, and we might publish some content on them once we have conducted more thorough research.
Thanks again for your feedback, we always appreciate it! :)