First things first, check out my recent conversation Jon Staenberg on Startup Project. I have recently recorded an episode with Matt Mcilwain, managing director at Madrona venture capital, who are early investors in Amazon, Snowflake, Redfin & other iconic tech companies. Keep an eye out for it by subscribing ( SPOTIFY , APPLE or YOUTUBE ) to the pod!
1/ What’s next for Netflix growth?
Netflix is winning all around. In one of the most challenging quarter they added 9 million new subscribers. The main source for this being curbing on password sharing.
Now Netflix knows how to juice growth levers. So its obvious that the password crackdown is not turned up to a 100%. They will milk the password cow for couple more quarters at max.
But after that where will Netflix’s growth come from? After a point password cracking will not convert to operating income growth?
Also cracking down passwords from ROW (rest of the world) users will not add to revenue or earnings. Games is exciting for long turn but not for near term.
So what growth hack will Netflix come up with next?
THEATRICAL RELEASES!
My prediction is, in next 4-6 quarter Netflix will start releasing big budget movies in theatres. This can boost their operating income significantly with out increasing costs.
Wait & watch (in a theater near by).
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2/ SNAP is mismanaged & no one can do anything about it!
Snap is being mismanaged. Thanks to dual class shareholder structure the board has no real power to do anything about it.
I am talking about their high stock compensations to employees and executives. In last quarter Snap issued stock worth $0.99B & made a revenue of $1.19B. You can see below how they keep growing their stock compensation yearly.
To be clear this is not about Snap as a product but about how they are looking at creating value to shareholders. What is the point of buying shares in a company that will dilute the stock at this rate?
I don’t see an end in sight for SNAP’s stock comps, I would stay away from the stock.
3/ Techstars Seattle
It’s very exciting to see this new cohort of TechStars Seattle and be part of their mentor network. The Seattle TechStars team has elevated their game and attracted some amazing founders.
Here are some interesting companies that caught my attention from the cohort.
- AdGencyAI
- Moyae
- Pezzo
Till next time, stay above average!
Nataraj