Hi friends,
Welcome to August. This summer is going by a bit too quickly.
Thanks for giving me a pass last week. Cliffs Notes version:
How was Alaska? Great. Highly recommend.
How was the cruise? It was my first cruise ever and highly enjoyable. I benefited from sailing with a few expert cruisers. One even built a website called Cruise Sheet specifically for cruise bookings: Check it out here.
Did you feel the earthquake? Nope.
Are the icebergs melting? Yeah. Definitely accelerating.
Did people on the cruise get COVID? Yup. One on Day 4. Two more by Day 6. That said, there were over 3,000 people on the ship.
Do I recommend it to you? Strong yes.
Today's Contents:
- Weekly Song: The Sign
- The Metaverse
- Global EdTech
- Good Reads
|
|
Weekly Song: The Sign
Ah, The Sign, the classic 90s tune of a couple contemplating the state of their relationship and seeing the sign that it was time breakup, which has universal metaphorical power for anytime you allow yourself to realize it is time to change direction.
As I like to say:
You see the sign before you know.
You know before you believe.
You believe before you decide.
You decide before you act.
All matters of life (personal, professional, investing, business building) get better as you speed up your ability to move through that pattern.
The more challenging layer is when you add group dynamics on top and have to ask the question 'Is it worth it?' Is it worth my energy to influence this group to see the sign? How much energy is it going to take for how much gain?
The Sign by Ace of Base
I saw the sign and it opened up my eyes, I saw the sign
Life is demanding without understanding
I saw the sign and it opened up my eyes, I saw the sign
No one's gonna drag you up
To get into the light where you belong
But where do you belong?
|
|
The Sign: The Metaverse
I'm going to tell you a story, and then I'm going to link to a bunch of articles.
We stopped in Juneau during the cruise and some of us took the opportunity to visit the beautiful Mendenhall Glacier. Yes, it involved 90 minutes of paddling a canoe against difficult headwinds, but it was worth it.
Not everyone from our crew joined. While a few of us were hiking the glacier, others were taking advantage of a decent Wi-Fi connection and plugging into the Metaverse on Oculus headsets to by play multi-player immersive games. You see my experience above and theirs below:
The Metaverse has been in the news recently as Mark Zuckerberg has defined the future of Facebook as helping to being the metaverse to life. He describes his vision in an interview for The Verge here.
A few more reads:
Everything Matthew Ball. Here
The Metaverse has always been a dystopia. Here in Vice. This article details the Metaverse definition and vision as outlined in Snow Crash by Neal Stephenson (fun fact: I spend a full semester in a college independent study analyzing the book)
Reconnected: Decentralizing the Internet alone will not lift it above politics or save it from corporate co-optation. Here in Real Life magazine.
Metaverse tracker. Over 300 projects tagged here.
|
|
The Sign: Global EdTech
Duolingo ($DUOL) went public with much fanfare. Many see this as a strong sign for consumer education technology.
- ~30% IPO pop
- Valued at $4.2B, up 100% from its last private raise in Nov 2020
- 20x LTM Revenue, 105x MAUs, and 700x LTM EBITDA
Powerschool ($PWSC) went public with less fanfare. Here is the S-1. It's a student information systems and enrollment software company.
- Trading flat
- Valued at $3.5B EV
- 7.5x LTM Rev, 7x ARR and 25x EBITDA
China cracked down on the for-profit education sector and impacted stocks declined 40-75% over the week. Late last week, a memo detailing draft legislation leaked stating that home-schooling or off-campus education companies would need to register for non-profit status and barred local authorities from approving any new agencies.
I thought Lillian Li had an interesting take on Twitter reminding people that the implicit rules of China are that the government sets goals for the country and revert back to key objectives that the country should be attaining. Her thread is here. Here is her piece on the Five Year Plan released by China in March.
What does the future hold for US-listed Chinese companies? Carson Block is skeptical.
So, over to India where the highest valued private company is $15Bn Byju's which is aggressively expanding globally with a wave of splashy acquisitions. This article titled "The Next Wave Of Edtech Will Be Very, Very Big - and Global" is basically a profile of Byju's
 .
If you want real, honest coverage of Byju's, I always recommend that people pay for the articles put out of The Ken, a high-quality technology publication in India. They've written over 12 long-form articles in 5 years on the company. Check it out here.
|
|
Good Reads: Other signs
Why do healthcare technology companies hate services? This VC makes a compelling case about how technology + services can be an incredibly strong combination in markets where software adoption requires a lot of implementation support. I'm a believer in this opportunity, and not just for healthcare.
In the SaaS technology world, customer service is a cost center. It is a hit to the bottom line of businesses, and built into the price that customers are charged. The goal for a SaaS product is to minimize customer service needs, so that margins can stay high. But in healthcare, customer service needs are multiplied due to the complexity of customers. And all of a sudden, 90%+ SaaS margins start to erode…sometimes down to sub 50%. All because we are spending so much time on implementations, ongoing support, and having to fill in product holes with human capital.
How fast is too fast? On the state of the venture capital ecosystem.
Japan Small Value: An island of potential in a sea of expensive assets from GMO.
The Danger of Early Hype in Consumer Social. I'm not generally that interested in consumer social but if Sarah Tavel writes it, I'll read it. Here.
The FinTech Revolution. Excellent industry analysis report by Jackie Reses and Michael Gilroy.
Last but not least, The Afterpay Investment Case Study I shared in DS .76, in case you are wondering what Square just bough for $30Bn in equity.
|
|
|
Thanks for reading, friends. Please always be in touch.
Best,
Katelyn
|
|
|
|
