Do you know Aston Villa?

The operator/investor who focuses 70% on the present and 30% on the future might as well be a completely different species than one who focuses 30% on the present and 70% on the future. Totally different mentalities.

My mother-in-law’s mahjong club is all-in on the SpaceX IPO. This is financial advice.

The Ugly Teenage Phase of Profitable Growth This is a phase that companies that were once high-growth, high-burn companies (that are typically transactional) go through as they try to get profitable. Phase 1: You start with high revenue growth, high burn rate. Then you realize due to market conditions that you need to get profitable. Phase 2: You drive for operating leverage: - You cut operating expenses - inefficient marketing spend, headcount, etc. -All out focus on enhancing gross margins - pricing, COGs, shipping, etc. Phase 3: You focus on improving working capital dynamics. -renegotiate with vendors, suppliers, manufacturers, etc. to enhance payment terms to improve cash. Phase 4: You clean up the balance sheet - Optimize inventory, renegotiate/refinance debt, try and solidify cash, etc. During these four phases, revenue is declining YoY (sometimes materially) because you're comping against prior quarters with heavy marketing spend. This is why this is the "ugly teenage phase" - it looks ugly if all you're looking at is the top-line. But, there are usually good signs: -marketing and sales efficiency is improving -all opex lines are decreasing as a % of revenue -EBITDA and/or OCF is growing Phase 5: Revenue is declining YoY, but you have achieved profitability (EBITDA and/or FCF). At this phase, you are still ugly to the world because revenue is declining, but the end of the teenage years is on the horizon. Phase 6: Maintaining profitability and returning to YoY revenue growth by investing some of your own cash flow back into growth. This happens typically in 4 steps: -step 1: sequential Q/Q gross margin growth -step 2: sequential Q/Q revenue growth -step 3: YoY gross margin growth -step 4: YoY revenue growth The revenue growth comes from first from delivering real customer value and then: -efficient marketing spend -introducing new products -expanding new channels -reactivating churned customers -pricing -defending the base of loyal customers The challenging part of this journey is the ugly period can last a long time. From Phase 1-5, you don't get much of any credit. It's not until you hit Phase 6 that outsiders will believe in the company again. But, those close to the company can watch as each phase is cleared and know that the company is going in the right direction. However, to be fair, until you get to Phase 6, you haven't reached the ultimate end goal. **For the sake of clarity, this is a general observation across several different companies in different contexts many of which I'm not involved with. This is not an observation or prediction related to any specific company.

True or false: If you’re not a buyer, you’re a seller. And why?

Saying you’re building a trillion dollar company seems to have replaced the aspiration to build a billion dollar company. I hear it on a weekly basis now when I never heard it once in the first 27 years of my career.

A couple of new additions to the collection…

Livestream #12 x.com/i/broadcasts/1qxvvvwRN…

In case you missed it - livestream today at 10:00am EST on X. Just hanging out...

Good piece of advice from a board meeting today: Go to every vendor, ask them for their AI strategy, after they share it - say ok great, we will renew at a 20% discount and you can keep any additional savings you get from AI. Implement for all vendors from audit firm to tech.

Enjoyed this speech... great in so many ways.

A major competitive advantage for those with this DNA: "Thiel said the number one predictor of which of his students went on to build something important was not intelligence. It was tolerance for being publicly wrong-sounding for years before being right."

Finishing up the annual Volition Leadership Summit at Fenway Park which was awesome. We had 100 portfolio company execs come together over a couple of days. Going to be posting some Summit reflections on various topics we covered over the next few days.

NYT: Why US Mobile’s Cheap Cell Phone Planes Are Suddenly So Popular nytimes.com/wirecutter/revie…

True…. Working with founders in private companies, there’s a tremendous sense of ownership. That sense often disappears in larger companies that can easily turn into expansive bureaucracies that only know how to add but not subtract.