zeroToOneBusinesses
When it comes to researching companies, it helps to understand the fundamentalsāmanagement, the business model, cash flow, āmarket sizeā (sometimes some madeup figure to get investors excited) etc etc. You can have a great business and a bad balance sheet. You can have a great business idea, good financials, great funding, and very large competitors who arenāt napping either (the Day One mentality of Amazon).
But it also helps to understand whether itās a āone to Nā or a āzero to 1ā businessāa concept that Peter Thiel (an investor in SpaceX, FB, co-founder of PayPal) came up with. He taught it at Stanford and co-wrote a book about it. It should be a number one business read in the 21st century.
Are these companies doing something thatālike Coca-Cola or McDonaldāsāalmost have no real large competition? There were sugary drinks before Cola, it must have been not the first and not the last. Great marketing > lemonade?
Red Bull is a zero to one business. Great marketing.
Fast-learning differentiated businesses > Businesses with loads of competition
Experience != Future performance
Fast learning > Experience
Imitation is for competition
āDo one thing uniquely well.ā - Peter Thiel
He also said:
āWhat great business exists that nobody is buildingā ā businesses that donāt conform.
If a company enters a busy marketāreal estate, for example, that is ready for disruptionāwhat will it be doing that is so different that users will be flocking to it? Zillow etc use techādata driven stuff. They can value all houses in the US.
The history of energy drinks is full of imitation. So many are trying to be like Red Bull. Great marketing and a unique formula, like Coca-Cola.
The history of financial services is full of imitation and competition. But when you compete like crazy all the profits will be competed away.
JPMorgan has been up against HSBC, Barclays, Bank of America, Morgan Stanley, Goldman Sachs, Deutsche Bank etc etc. When you compete like crazy, āyou lose sight of whatās importantā.
Early Netflix did things differently. Now the giants are trying to imitate it and some of them have vertical business models.
Netflix should probably be doing something now that is so differentiable, Disney canāt offer it. Perhaps itās the original content, āprivate cinemaā, and unique insights into its users.
Airbnb is different. Have you used Homeaway (no)? Booking.com now offers apartments. But Airbnb also does experiences. OYO is nowhere near yet.
Googleānot the first search engine to start in late 90sāis different (the algorithm, the UX).
Amazon.
Apple, arguably.
SpaceX vs old big pocketed 
companies.
What are they doing that is so different? Do they have serious competition?
