Good stuff as usual, i read every one of your articles, keep up the good work.
One recommendation i have is would you consider incorporating more Chinese company analysis or as examples in your articles? For instance, when discussing ridehailing, DIDI may worth looking into in comparison to Uber and lyft, and for subsidies, all major chinese Internet platform practice subsidies in one form or another (BABA, meituan, PDD, etc), or for high speed rail, China now has the longest high speed rail network in the world and there are several listed operators. Would be nice to have an idea how the Chinese counterparts compare to global peers.
I do get a lot of feedback about including broader comparisons and analyses, as you suggest, but unfortunately they are the most time consuming thing to do, because they require a lot of research to be done correctly, and I only have so much time when I write these. I do understand why people are more interested in these broader comparisons than whatever narrow point I am making, so I probably will experiment with different kinds of posts in the future.
To start a company an idea is needed. Imagining an idea is partly separate from turning it into a reality. Most say that doing the work is the hard part while ideas are plentiful. But, what if this is simply wrong?
I feel that that there is a possible connection between your text and this notion. A lot of money is invested into the "doing" part, with startup accelerators being the leaders. Let me paraphrase.
Now you may ask, which is more likely:
A startup went from 0% to ~90% market share because it was a "great" rather than just a "good" idea;
A startup went from 0% to ~90% market share because startup accelerators are subsidizing X% of the total cost of the "doing" part.
Perhaps the subsidies are far too small to possibly explain how a startup captured 90% of the market in a short period of time, and so we have to conclude the startup dominates the market because it has a superior idea.
I wish to discuss and maybe even write about this idea with you.
Well, keep in mind here that no single ride-hailing company has a 90% market share - in these two cities, it's Uber and Lyft at 90% combined, but in other cities in the world, there are other ride-hailing operators like Grab.
It can be easier to think of it in terms of "traditional taxis are obsolete". It's still all about execution because you don't know who will fill the vacuum. Remember that Bill Gurley tried to invest in Taxi Magic and Cabulous before he settled on Uber. And you had Lyft and Sidecar and so on, and that was all just in the US.
Ride-hailing is dominant in most cities around the world because it is a better approach to the car hiring problem. But you have different winners depending on how well they executed or whether they grabbed early share of mind and so on.
From an investors perspective, there are two major options. Invest in a single or in many ride-hailing companies.
Assuming every company has the same idea, for sure, the winners are the ones with the best execution. And for any, monopoly is difficult to attain.
With all having the same idea, it is difficult to tell which will be the winner. Then the factors determining execution are the signals to tell how much to invest in each company. One example factor can be: the time it had to execute the idea.
But it is a different story if an idea leads to a monopoly. Perhaps the better investment model for such a case would be not to diversify.
Good stuff as usual, i read every one of your articles, keep up the good work.
One recommendation i have is would you consider incorporating more Chinese company analysis or as examples in your articles? For instance, when discussing ridehailing, DIDI may worth looking into in comparison to Uber and lyft, and for subsidies, all major chinese Internet platform practice subsidies in one form or another (BABA, meituan, PDD, etc), or for high speed rail, China now has the longest high speed rail network in the world and there are several listed operators. Would be nice to have an idea how the Chinese counterparts compare to global peers.
Thanks!
I do get a lot of feedback about including broader comparisons and analyses, as you suggest, but unfortunately they are the most time consuming thing to do, because they require a lot of research to be done correctly, and I only have so much time when I write these. I do understand why people are more interested in these broader comparisons than whatever narrow point I am making, so I probably will experiment with different kinds of posts in the future.
Specifically regarding high speed rail, I found Alon Levy to be very good when I was researching this piece, and he specializes in international comparisons, including wrt China, e.g.: https://pedestrianobservations.com/2020/04/27/construction-costs-in-china-preliminary-notes/
And wrt Chinese tech, Lillian Li has a good substack: https://lillianli.substack.com/
Great, thanks vm for the recommendations. i'll keep an eye on them
Just found your stuff today and I've been having a great time reading all of it. Thank you!
Thanks!
very interesting. thank you.
To start a company an idea is needed. Imagining an idea is partly separate from turning it into a reality. Most say that doing the work is the hard part while ideas are plentiful. But, what if this is simply wrong?
I feel that that there is a possible connection between your text and this notion. A lot of money is invested into the "doing" part, with startup accelerators being the leaders. Let me paraphrase.
Now you may ask, which is more likely:
A startup went from 0% to ~90% market share because it was a "great" rather than just a "good" idea;
A startup went from 0% to ~90% market share because startup accelerators are subsidizing X% of the total cost of the "doing" part.
Perhaps the subsidies are far too small to possibly explain how a startup captured 90% of the market in a short period of time, and so we have to conclude the startup dominates the market because it has a superior idea.
I wish to discuss and maybe even write about this idea with you.
Well, keep in mind here that no single ride-hailing company has a 90% market share - in these two cities, it's Uber and Lyft at 90% combined, but in other cities in the world, there are other ride-hailing operators like Grab.
It can be easier to think of it in terms of "traditional taxis are obsolete". It's still all about execution because you don't know who will fill the vacuum. Remember that Bill Gurley tried to invest in Taxi Magic and Cabulous before he settled on Uber. And you had Lyft and Sidecar and so on, and that was all just in the US.
Ride-hailing is dominant in most cities around the world because it is a better approach to the car hiring problem. But you have different winners depending on how well they executed or whether they grabbed early share of mind and so on.
From an investors perspective, there are two major options. Invest in a single or in many ride-hailing companies.
Assuming every company has the same idea, for sure, the winners are the ones with the best execution. And for any, monopoly is difficult to attain.
With all having the same idea, it is difficult to tell which will be the winner. Then the factors determining execution are the signals to tell how much to invest in each company. One example factor can be: the time it had to execute the idea.
But it is a different story if an idea leads to a monopoly. Perhaps the better investment model for such a case would be not to diversify.