IP Company Learning Journeys, Update on Our Offering, Instalco, SpaceX, Capital One, KPG, Fortinet
Quality Primary Research
inpractise.com/articles/ip-company-learning-journeys-update-on-our-offering-instalco-spacex-capital-one-kpg-fortinet
New: IP Company Learning Journeys
6. HEICO: Flight Support Group
9. Wayfair
11. Bergman & Beving
Interviews Published Last Week
1. Instalco: Post-Merger Integration - A Seller's Perspective
2. Instalco: Finnish Installation Market, Selling to Instalco & Incentives
3. Capital One: Subprime Credit Cards
4. Kelly Partners Group: A Selling Partner's Perspective
5. LGI Homes: Underwriting Process & Quality
6. SpaceX: Mission Operations, Business Model & Culture
7. Fortinet: Channel Breakdown, Competition & Bundle vs Point Solution
IP Company Learning Journeys
As the firehose of executive interviews from all providers continues to grow, we’re increasingly thinking about how to curate insights from our library to save you time and help you learn about businesses. A real focus on signal over noise. After all, what use is an interview library if it’s too difficult or tiresome to source any insight?
Our new Company Learning Journeys aims to do just this. For each business we study, we curate a journey of certain interviews and research to read that highlight insights that help us understand the business.
We spend years and tens of thousands on primary research for each company in our small, selective coverage. IP Company Journeys aims to save you time and help you navigate effectively to insights that help you build conviction.
For example, take Amazon. We have over 100 articles on AMZN across AWS and retail. We split the learning journeys out for both businesses.
1. How a parcel flows through AMZN’s fulfillment network vs incumbent carriers to understand variable unit shipping cost differences
2. How to decouple AMZN Retail P&L from consolidated accounts and estimate underlying retail FCF margins
3. How AMZN’s advertising business is structured between endemic and non-endemic advertising and estimating long-run ad revenue / GMV
In a standard reverse-chronological feed of hundreds of interviews it’s difficult to piece together each line of thinking in our research. Our Amazon Retail Learning Journey pieces our research process together and shares what we learned with links to the original source.
We walk through how AMZN’s network is structured between fulfillment centres, sortation centres, and delivery stations. And, more importantly, how unit shipping costs may change as AMZN insources more deliveries through its own network.
We link to our own interviews, research, and specific insights in our library that help us understand the business.
We help filter the 10+ AMZN advertising interviews into a more intuitive flow to understand how AMZN Ads is structured, its targeting quality, and growth opportunity.
For smid caps that you may not have studied before, we provide context to why we’re studying the business before curating insights from our primary research. For example, take Howden Joinery, the UK trade kitchen distribution business.
We share fundamentals on the business and links to industry data as context to help you better understand the research on our platform.
Although we’ve only published a few interviews on HWDN, our research has been focused on two topics: the threat from Wren Kitchens and HWDN's international opportunity. Rather than rely on investors searching our platform for HWDN, we curate the insights into a Company Learning Journey to save you time:
Given creating these journeys requires our (hopefully decent) judgement in determining what we’ve learned, it’s always worth reading the original source interviews. You may pick up different insights or learnings than us. However, given the time and money we spend learning about these businesses, hopefully this level of curation can save you time and research spend or, at the very least, provide an intuitive way to navigate the firehose of interviews available in the market.
Our Offering
Since September, we’ve phased out interview-only individual and group subscriptions. We’ve simplified our offering into 1 price per fund for the full library of interviews, IP Research, and now Company Learning Journeys.
Company Learning Journeys are available to all existing IP Research subscribers and renewals since September on our new, simplified Paid Tier. Subscribers who signed up before September will have the option to renew on our new Paid Tier or switch to our free tier upon renewal. Please contact us if you wish to upgrade sooner.
Our Paid Tier now includes our full interview library, IP Research including all Surveys and Company Learning Journeys.
We don’t spend anything on marketing and prefer to reinvest everything into producing the best investment research products possible. We’re also not stopping here. We believe it’s a lifelong journey to understand industries and businesses. We plan to bolt-on other research products that align with our focus of studying businesses that stand the test of time. If you have any ideas or suggestions, please let us know!
We published 11 Company Learning Journeys last week and have 30+ planned for the next 3-4 months. Please provide us with feedback on this new format as it’s an early experiment and we’re keen to iterate to save you time and help you understand businesses.
Instalco
From a business seller's perspective, Instalco is oftentimes a better alternative to Bravida in the Nordic region's installation and service market. This is largely due to Instalco's decentralized approach to running the business, which allows founders and CEOs to maintain their entrepreneurial DNA post-acquisition.
"There are companies I'm not interested in selling to, for example, Bravida, because it's quite different. If you sell to Bravida, you have to change the company's name and that's a lot. It's a significant difference. I wanted my company to remain intact. - Founder and Former CEO of a Swedish Heating & Plumbing Installation Company
In this interview, the founder and former CEO of a Swedish Heating & Plumbing Installation Company sheds light on the journey of his business after it was acquired by Instalco.
In a second interview, a Former Instalco OpCo CEO who sold his business to Instalco, explores the challenges in Finland and differences in M&A between Bravida and Instalco.
"I think it might have something to do with Robin becoming CEO. Before that, there were no country managers in Finland. When they appointed two country managers, they assured us that these managers were there to assist us. However, gradually, the country managers started interfering with our work. After the earnout period, we lost control over everything, everything was decided for us." - Former Instalco OpCo CEO
Capital One
There are a subset of subprime lenders that witness a high degree of loyalty from their borrowers, despite their higher-than-average APR. Their customers willingly come back, even as their credit score improves.
"From the feedback I received directly from customers, there was a sense of loyalty. When I joined Premier, we had about 200,000 customers who had been with us for more than 15 years. We weren't diligent about creating lifecycle products. We were still charging them a $99 annual membership fee. However, they felt a sense of loyalty and gratitude for us being there when no one else would help. This is the only area in credit that isn't a commodity. Customers won't leave for a lower price or a better reward." - Former COO at Credit One Bank
In this interview, the former COO of Credit One Bank sheds light on the subprime credit card market, what drives consumer demand, and how subprime borrowers cater to this niche.
LGI & US Homebuilding
By making sure that the majority of the homes LGI builds are priced under the FHA (Federal Housing Administration) eligibility threshold, first-time home buyers can get access to FHA loans to finance their LGI homes and the company is able to see higher absorption rates in each of the communities it develops. This in turn is enabled by LGI's efficient and streamlined end-to-end process that minimizes the company's development and construction costs.
"An FHA loan is a federal loan program in the United States. Many people mistakenly believe that they need to put down between 10% and 20% of the purchase price to buy a home. However, first-time homebuyers can be eligible for an FHA loan, which only requires a 3% down payment... LGI Homes takes FHA loan eligibility into account in their underwriting process. They aim to price their homes below the FHA loan limit to ensure that potential buyers can afford the down payment. - Former Land Acquisition at LGI
SpaceX
Starship, SpaceX’s new rocket, aims to dramatically lower the cost per kg to orbit with its new spacecraft. In this interview, a former SpaceX executive describes the business, leadership and culture at SpaceX.
While those factors are important, I believe the main reason for SpaceX's success and large market share is its culture. Elon Musk's greatest strength is his ability to hire and empower intelligent people, and then let them take the lead. Engineers are not penalized for making mistakes, but for being lazy. - Former Mission and Launch Operations Executive at SpaceX
Kelly Partners Group
Kelly Partners Group is a $200m AUD Australian roll-up of accountancy firms. The company is now planning to expand into the US and UK. This executive sold his business to KPG in the early years and explores life working at KPG, its operating model, and Brett Kelly's leadership.
"Reflecting on the past seven years, I believe our practice has improved. Most of my partners from seven years ago are still with us. If they were not satisfied, they would have pursued other interests. Even some of our junior staff, or rather senior managers, have elevated themselves to partnerships. This indicates that there must be something right about our approach." - Former Partner at Australian Accountancy Firm
Fortinet
Last week, an interview with a Former Fortinet executive discussed the company's sales channels. This week, a Fortinet distributor explores the company's product offering and how products are bundled for end customers.
"It's not really an obstacle because Fortinet is offering their SASE solution in terms of point products. They're suggesting that they can provide all the products needed to create your SASE solution, rather than providing SASE directly. Fortinet does have a SASE solution that they sell directly to customers. If someone approaches Fortinet requesting SASE, they will sell them FortiSASE, which is a SKU already available on the price list. However, Fortinet often suggests creating your own SASE product using the Fortinet products we bring to market. That's their current approach." - Fortinet Product Specialist at Exclusive Networks
Related Content
Howdens, Intuitive Surgical, Vistry, Evolution Gaming, AMZN vs Wayfair, TransDigm, Palo Alto
SHEIN, Temu & Retail Supply Chains, Intuitive Surgical, Litigation Funding, HEICO, Wayfair, Alteryx, CSU, KPG
Boeing vs TDG, HEICO, TTD & NFLX Ads, Brookfield, Burford, Instalco, LGIH, KMX & CVNA, Fortinet
Costco, Kinsale, Transdigm, HEI, Burford Capital, Danaher
Copyright Notice
This document may not be reproduced, distributed, or transmitted in any form or by any means including resale of any part, unauthorised distribution to a third party or other electronic methods, without the prior written permission of IP 1 Ltd.
IP 1 Ltd, trading as In Practise (herein referred to as "IP") is a company registered in England and Wales and is not a registered investment advisor or broker-dealer, and is not licensed nor qualified to provide investment advice.
In Practise reserves all copyright, intellectual and other property rights in the Content. The information published in this transcript (“Content”) is for information purposes only and should not be used as the sole basis for making any investment decision. Information provided by IP is to be used as an educational tool and nothing in this Content shall be construed as an offer, recommendation or solicitation regarding any financial product, service or management of investments or securities.
© 2024 IP 1 Ltd. All rights reserved.