Domain 03 · 24 cases
Finance & Unit Economics
CAC and LTV, cash conversion, take rates, debt and the gap between a great story and the math underneath, from Amazon and Costco to WeWork and MoviePass.
- Separate a narrative valuation from the operating economics
- Know your numbers by channel before you scale spend
- Turn working capital and pricing structure into a weapon
Allbirds: DTC Economics and the Profit Problem
Allbirds became the it-shoe of the late 2010s: sustainable merino wool sneakers, a clean direct-to-consumer story, and a cult following in every Silicon…
Amazon: Reinvestment Over Profit
For nearly two decades Amazon reported razor-thin profits or outright losses while its stock climbed relentlessly. Analysts dug through quarterly earnings…
Berkshire Hathaway: Capital Allocation as the Job
Berkshire Hathaway began as a failing textile company. Warren Buffett took control in the mid-1960s, slowly realized the textile business was a poor use of…
Beyond Meat: Hype Valuation Meets Reality
Beyond Meat went public in 2019 near $25 a share and ran past $200 within weeks. The product had not changed and the business had not changed; the story had.…
Blue Apron: CAC, LTV, and the Retention Problem
Blue Apron went public in 2017 at roughly a $2 billion valuation, and within a year the stock had lost most of it. The pitch was appealing and the growth was…
Carvana: Growth, Debt, and Cash Burn
Carvana built a genuinely better way to buy a used car, online, delivered, returnable, with glass vending machines as the marketing hook. Wall Street fell in…
Costco: Membership Margins and Deliberate Discipline
Costco sells merchandise at margins so thin it barely profits on what it puts on the shelf. The Kirkland olive oil, the six-pound tub of cashews, the…
Dell: The Cash Conversion Cycle as a Weapon
While rival PC makers built to stock, warehoused inventory, and waited for retailers to pay, Michael Dell built each machine only after the customer ordered…
GE: Financial Engineering and Its Limits
For decades, General Electric was considered one of the best-run companies in the world, hitting or beating quarterly earnings estimates almost without fail,…
Groupon: Growth on a Broken Model
Groupon became the fastest company in history to reach about a billion dollars in revenue, and turned down a reported $6 billion offer from Google in 2010.…
MoviePass: Selling Dollars for Cents
In 2017 MoviePass slashed its price to about $9.95 a month for nearly unlimited movies, and subscriptions detonated from roughly 20,000 to more than three…
Netflix: Funding a Content Moat with Debt
Starting with House of Cards in 2013, Netflix did not just dabble in original content, it bet the company on it. The plan: own the shows that make…
Peloton: Demand Whiplash and Inventory
In 2020 Peloton could not build bikes fast enough; waitlists stretched into months and the press crowned it the product of the pandemic. Two years later the…
Robinhood: Payment for Order Flow
When Robinhood launched in 2013, the product was simple: stock trades for free, while every other brokerage charged five to ten dollars a pop. It pulled in…
Salesforce: Inventing the SaaS Model
In 1999 Marc Benioff launched Salesforce under a deliberately provocative banner: "No Software." It read like a product jab at Oracle and SAP, but it was…
SoftBank Vision Fund: the Cost of Too Much Capital
SoftBank's Vision Fund raised roughly $100 billion and deployed it at a pace the venture industry had never witnessed. Masayoshi Son's thesis was elegant and…
Spotify: the Gross-Margin Trap
Spotify has roughly 600 million users and dominates music streaming, and yet it runs one of the thinnest margins of any large tech business on earth. That is…
Stripe and Square: the Take-Rate Model
Stripe charges roughly 2.9 percent plus 30 cents per transaction, a cut small enough to feel like a rounding error. Run it across billions of transactions a…
Toys R Us: the Leveraged Buyout That Sank It
In 2005, a private equity consortium took Toys R Us private and loaded it with roughly $5 billion in debt, a deal pitched as a turnaround away from…
Uber: Blitzscaling and the Road to Profitability
For years, Uber subsidized nearly every ride it sold, burning billions to win cities, outspend rivals, and lock in drivers and riders on both sides of its…
Wayfair: The Economics of Free Shipping
Wayfair promises free shipping on a $500 sofa that weighs 150 pounds, and for a long stretch it was mostly Wayfair footing that bill. Furniture is the worst…
Webvan: Premature Scale and Cash Burn
Webvan raised over a billion dollars to build automated grocery warehouses across the United States, and went bankrupt in 2001 without ever proving the model…
WeWork: Narrative Versus Unit Economics
WeWork was once valued near $47 billion, sold as a consciousness-elevating movement rather than a landlord. Adam Neumann was a magnetic storyteller, and…
Zoom: Efficient Hyper-Growth
Eric Yuan left Cisco WebEx in 2011 convinced video conferencing could be far better, and spent years quietly selling a simpler, more reliable product to…
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