2024 Year-end Review: Gratitude and Struggles
An Update on the Speedwell Research Business
Welcome to Speedwell Research’s Newsletter. We write about business and investing. Our paid research product can be found at SpeedwellResearch.com. You can learn more about us here.
This is our end of the year memo on the Speedwell Research business.
*Please note: As a special thank you, at the end of this memo is a free downloadable PDF of our Top 12 Business and Investing Memos from 2024.
2024 Highlights
Published 171,800 words
For context, a book is about 70k words. Speedwell’s archive now has over 6 books worth of company research reports, company updates, and business and investing memos!
Recorded podcast features with Business Breakdowns, Best Anchor Stocks, ChitChat Stocks, and Yet Another Value Blog
Our Consumer’s Hierarchy of Preferences framework was highlighted in Business Breakdowns’ “Top Anecdotes to Remember in 2024” Episode
Published 54 podcast episodes! In total we podcasted for 2,450 minutes.
We now have 12 deep-dive company episodes
Costar became our longest episode ever at 3 hours and 16 minutes
Our podcast grew from 200 to almost 3.5k followers
Wrote 18 new business and investing memos
Our Substack grew almost 2k subscribers to over 5k!
Business Update: Gratitude and Struggles.
As someone who spends so many hours analyzing and judging the quality businesses, I must confess it is a somewhat painful exercise to turn that spotlight inward. While our business has many financial and operational benefits (high margin, no physical inventory, scalable), we are dependent on continually producing new and novel content, as well as convincing strangers that they should allot multiple hours of their time to read our long and dense reports. Our content is basically a polar opposite of everything that makes TikTok so addicting.
Also, in contrast to TikTok, almost no one knows who we are. Our reach is essentially just our 6k Twitter followers, 5k Substack readers, and 3.5k podcast listeners. Each report may take 4 to 8 weeks to produce, but it is quickly buried under the relentless tide of content vying for your limited attention.
While most people have a stated preference for quality, the truth is that quantity and topicality tends to be a better business model. Each piece of work, even if mediocre, becomes a marketing event and has a chance of catching someone’s interest. Current trending stories like the UK Gambling Commission looking into how Evolution’s games end up on illegal gaming sites or commentary on stock price movement, like DFH’s 30% drawdown in the past three weeks, also tend to draw larger audiences, but it puts you on the content treadmill where you spend your time writing things no one will care about a few months, or even a few weeks, from now.
There are well over 10,000 publicly traded companies, and after 2 years of service, we have been able to only produce in-depth research reports on 15. The limitations of our content library make us less attractive to potential subscribers and the immense amount of time and effort it takes to increase it by just a single report, means we can only minutely grow our library in any period. (Yes, this reads like a 10k risk disclosure...)
We also operate in a very competitive space with no barriers to entry. Anyone can easily start an investment newsletter, and many do. While we believe our content is differentiated, you wouldn’t know that until you gave us enough time to read one of our reports.
We also have eschewed any investment recommendations, feeling that investors should never outsource their decision making—but unfortunately that tends to be a reliable way to attract attention.
So, in short, our content library is small, our reach is limited, we don’t write as often as others, and we won’t provide you with recommendations.
And yet we have much reason to be optimistic because despite all of our limitations… we still grew paying subs over 150% this year. We have clients at half of all the top 25 asset managers. We were invited to spend time with members of multiple executive teams after they read our reports, from CEOs to CPOs of publicly traded companies. We struck our first multi-seat institutional deals to provide research to multiple analysts and portfolio managers.
In fact, I think we will be successful precisely because of our limitations.
Our aim with Speedwell Research is to create investment research for long-term investors. To be a successful long-term investor, what you don’t do is much more important than what you do. That is why Terry Smith’s 3rd rule of investing is to “do nothing” and Buffett talks about carrying a punch card of your investment decisions—it’s an artificial constraint to make you do less.
We are hoping by not providing recommendations or market commentary, and producing far fewer, but more in-depth reports, we can build more trust with our subscribers. We don’t want to speak—until we have earned the right to by backing it up with research. If there are limits to our knowledge, you will know.
Truth be told, we probably initially priced our subscriptions too high at $1k a year when no one had heard of us and we had only a few reports in the library, but we wanted to signal quality. Now though, we feel much better about our value proposition, with members receiving reports that collectively took thousands of hours of research to produce and sell for over $5k if bought ala carte from us (which itself is a huge discount to the $50k we’ve been quoted for a single custom report… for the record, we can’t accept bespoke work because all of our research time is spent producing reports for Speedwell Members).
Our model does have the benefit of compounding though. The long-term focus means the shelf-life of our reports are far longer than others, and so as time passes, our library only becomes more valuable. Our Constellation Software report was written in September 2022 and is just as relevant today—sure you’ll want to read our couple updates on the company since then, but that report is still a great launching point for any investor—or operator. In fact, we sold more Constellation Software reports in 2024 than in 2022 and 2023 together—and no one has ever complained the content is dated.
As can be expected, the great financial virtues of the investment newsletter business—no upfront capital, no COGS, “infinite” inventory—also sets the stage for far more competition. Although, no one is exactly a competitor, as many investors subscribe to multiple research services and every service offers something slightly different. However, we all fight for the limited time people have.
Fear and Apprehension.
It is a bit ironic to think about it now, but almost everything we needed to do to grow more was done with extreme reluctance.
I had long since deleted my personal social media and was firmly in the camp that at best it is just a waste of time and at worst it maladaptively warps your perception of reality. Social media reminds me of this blurb Banksy wrote on advertising:
People are taking the piss out of you everyday. They butt into your life, take a cheap shot at you and then disappear. They leer at you from tall buildings and make you feel small. They make flippant comments from buses that imply you're not sexy enough and that all the fun is happening somewhere else. They are on TV making your girlfriend feel inadequate. They have access to the most sophisticated technology the world has ever seen and they bully you with it.
My impression of social media was essentially the same—in fact the advertisements are often the more benign aspect of social media—and I didn’t see what the point of increasing my exposure to that would be.
But as an unknown business that exists solely on the web, we had to do something to generate traffic. I could see the value of social media, but the truth is I had a lot of fear. I really thought that each Tweet or podcast release would receive nothing but trolls and vitriol. At the other end, we also didn’t want to spam people and I kept hoping that if the work was good enough it would sell itself. Of all places, a video Kevin sent me of Tyler the Creator talking about promotion helped change my mind about it.
“A lot of people who makes things, who don’t stand proudly by their stuff…. I don’t know if their too cool, or they don’t want to look thirsty, or they’re not proud of their sh*t.
But you went through something, you wrote words down, you figured it out… you fixed some parts, you edit it… it’s a whole thing. And you mean to tell me that you’re going to be passive with your own sh*t and just put it on your own story once?”
- Tyler Okonma (Tyler the Creator)
Instead of my fears manifesting, we had the opposite experience where, by and large, all of our engagement has been extremely positive. This reminds of something Seneca wrote:
“We suffer more often in imagination than in reality”
- Lucius Annaeus Seneca
You can always create justifications to not do something that seems legitimate, but its important to keep in mind all of our thoughts and expectations are simple extrapolations.
Our extrapolations are based off our past experiences and the media we have consumed. If we had different past experiences or consumed different content, then our expectations would be different.
There is a clear parallel to investing here too: the smaller your circle of past experiences and knowledge of history, the more likely you are to have confidence in connections that are tenuous at best. (Read our memo “Metaphor Malware”—it’s included in the PDF packet at the bottom of this post). After all, the Oracle of Delphi said Socrates was the wisest because he knew that he knew nothing. Similarly, the Oracle of Omaha has been a vocal about keeping a circle of competence, and knowing what is outside of it.
In my own case, my impressions of social media were clearly wrong and heavily biased by my own desire to avoid imagined backlash and criticism. But one of the differences between investing and running a business is you don’t get to punt. Whatever your apprehensions are, you must address them. Shirking means suffering the consequences all the same.
Either your fear or your business dies.
Darkest Moment and Future.
My darkest moment with Speedwell was when we published our 166 page, 47k word report on Meta in January 2023. After having spent two months straight doing nothing but writing and research—including working through Christmas and New Years—we published this massive report, and the immediate response was… nothing.
I never doubted the wisdom of writing research online until then. Maybe the Stratecherys, Scuttleblurbs, and MBIs were anomalies. A few weeks later though, Rez (Mostly Borrowed Ideas) wrote about our research report and we started getting sales from the traction. (I am still eternally grateful to MBI for that and for so graciously sharing our work with no expectations or asks of anything in return).
It was a lesson that the work process and the outcomes are far from linear. While this is something that we all intellectually know, it is different to viscerally live through it. We can listen to the story of Dyson’s 5,127 prototypes with awe but sticking with it for 5 years without any progress as James Dyson did is such a different lesson than just digesting the words in a book.
I am very glad we shook the disenchantment quickly and got back to work because today Speedwell is not just a real business, but it’s also a lot of fun to publicly write and talk about investing and business.
As this year comes to a close and the next year kicks off, we are more motivated than ever to continue to provide the best in-depth research for long-term investors—and free memos for all those that haven’t taken the leap to become a full member (yet). We have a lot planned on the podcast for the beginning of the year so follow us (Spotify, Apple) if you haven’t already!
New Project.
Speedwell Research has always been aimed at professional, well-read investors. Our audience has already read enough investment books that everything feels cliché. They love learning about new businesses but can quickly sniff out superficiality. They don’t have a lot of time, so they are impatient wasting it not learning. All of our 4 main products—in-depth research reports, business updates, memos, and The Synopsis Podcast—are all aimed at this audience.
However, a lot of undergrad and MBA students also reach out to us with questions on investing and business analysis. I didn’t feel Speedwell was the right venue to address many of the basic questions, but I was surprised by how hard it was to find quality info online for free.
Having already gotten over my reluctance to post on social media, I’ve decided to launch a YouTube channel. You can follow it here. It will be focused on business and investing basics, but we may cover more intermediate and advanced concepts eventually. Feel free to drop a follow and let us know what content you’d like to see there! We will release our first videos in January 2025!
Thank You!
Most importantly, we want to extend our deepest gratitude to everyone who has supported Speedwell over the past year. Whether you convinced your whole investment group to subscribe or just liked a single post, all of it helps us grow Speedwell. We are eternally grateful to each and every one of you. Any degree of success we may have had, is only because of you. Thank you.
PDF Gift: Speedwell Research Top 12 Memos of 2024
As a token of our gratitude, please enjoy free this PDF compilation of our Top 12 Business and Investing Memos of 2024!
The Synopsis Podcast.
Follow our Podcast below. We have four episode formats: “company” episodes that breakdown in-depth each business we write a report on, “dialogue” episodes that cover various business and investing topics, “article” episodes where we read our weekly memos, and “interviews”.
We have a lot planned for the podcast in 2025 so be sure to follow us below!
Speedwell Research Reports.
Become a Speedwell Research Member to receive all of our in-depth research reports, shorter exploratory reports, updates, and Members Plus also receive Excels.
(Many members have gotten their memberships expensed. If you need us to talk with your compliance department to become an approved vendor, please reach out at info@speedwellresearch.com).
I appreciate the depth and details you all get into. I know the quick hitters bite size tidbits are fashionable but when everything feels that way, finding quality is that much more worthwhile.
This is speaking from experience. I have overindulged in investment substacks, articles, podcast, youtube videos, etc. In the past 6 months I've been on a journey of isolating a handful of consistent quality, quality that gives you a peak behind the curtain, into the process and the grind. Thank you both for providing that and for being a reliable input into my investment process
A well-written YIR. Congrats to you both. What a journey and story. And thanks for the encouragement on not being bashful on social. It’s a taller speed bump that most think, because it’s hard to shill for oneself. It just feels cringey. However, it the lowest-cost distribution channel.
It is a unique insight about deep dive research that the ideal customer is time constrained. I work in the field and get 500 emails a day. 99.9% get ignored, unless I know the author, care about the topic, our the headline is descriptive enough that I might need to know.
That your work is getting through the filter is an amazing signal. I will have to pay more attention in 2025. Go deeper on industrials and transports please, wrote a self-serving commenter.
Another advantage you have is that time is on your side. Not a single sellside or buyside analyst could lock away in a cave for 8 weeks to author a report. I’ll repeat, not one. This is also an avenue of differentiation in a vertical where onlyness is scarce. There maybe a way to add another wedge, but it’s hypothesis.
In any case, I enjoyed the update Speedwell,
All my best,
Drew