Okay, let’s get into it.
It’s felt like a relatively quiet week. Has it been? I wanted to find out…
Kind of! First time all year we’ve had three weeks in a row with positive 1-2% movement each week! First time since January we’ve had three weeks of +/- only 1-2% movement each week. Interesting…
One of the following scenarios feels right:
We’re either in an indefinite holding pattern.
We’re resting at the top of a hill, before climbing on to the next one.
We’re at the top of the rollercoaster before the way down.
Only time will tell.
In trying to take advantage of the (again) relative quiet. I initiated/added to a few positions:
I missed Twilio the first time. Patrick O'Shaughnessy had co-founder/CEO Jeff Lawson on his “Invest like the Best” pod in March. It was a great conversation and I was impressed. But alas, I did nothing.
But that’s okay—there is still time!
Here, we’ve got a founder-led business, literally off-the-charts net dollar retention (see chart ⬇️ from Jamin Ball), a product made more necessary by Covid (cloud communications tools for companies to add messaging, voice, and video to web/mobile applications). Lots of good stuff.
Despite its $30B market cap, this feels like a company built for our current and future worlds. I’ll talk more about Twilio in a future email… but for now, a lot to like.
I’ve got a little Okta in another account, so it’s been on my radar, but I felt it was finally time to put on the big boy pants and add it to Mazwood.
It’s another founder-led business, also high in the net-dollar retention department (11th in the chart above), and also made all the more necessary by Covid. (Is there an echo here??) Okta “enables organizations to securely connect the right people to the right technologies at the right time. With over 6,500 pre-built integrations to applications and infrastructure providers, Okta customers can easily and securely use the best technologies for their business.” This is literally how workers get to work in 2020.
@hhhypergrowth had an awesome thread on $OKTA earlier this week that I encourage anyone interested to check out:
Some highlights regarding the product include:
And regarding the business:
There’s a lot to like.
In a smaller account, I bought Tencent in May 2018. Sea Limited smells a lot like Tencent.
Based in Singapore, Sea is leading Southeast Asia in gaming, e-commerce, and digital payments. A peak into their annual report discusses these three segments:
“Our digital entertainment business, Garena, is a global game developer and publisher with a significant presence in Southeast Asia, Taiwan and Latin America and a global footprint. It was number one in market share in our region by revenue in the combined PC and mobile game market in 2019.”
“Our Shopee e-commerce platform was the largest e-commerce platform in our region in 2019 by GMV and total orders.”
“Our SeaMoney business is a leading digital financial services provider in our region in 2019… SeaMoney currently offers e-wallet services, payment processing, credit related digital financial offerings, and other financial products.”
Julie Young published a great overview of the company last week here. (More substack!)
She tells us:
To recap, this is a gaming company that launched one of the number one games on the planet, and also built an e-commerce platform… and a payments/wallet platform… And all three of these efforts gained huge traction simultaneously, despite requiring very very different types of talent, skillsets, and resources.
American investors and product people tend to flinch at diversification that appears orthogonal in this way. But when you look at Sea’s chosen businesses in the context of “How do we best engage the high ARPU internet user in SE Asia?”, these three areas make a lot of sense. Sea wants to own the wallet and all of the commerce that users engage with - both for physical items (Shopee) and digital entertainment (Garena).
I’m excited to follow Sea more meaningfully and see what the future holds.
Added to Positions:
Nothing major, just added a little to last week’s starter position.
From Around the Internet:
Super cool “Screenshot Essays” idea ⬇️ from Eric Stromberg.
And a great article from the team at LightShed (sign-up required). Long $ROKU, $GOOG.
Thanks to everyone for giving this weekly review a read. Have a great weekend!