Speedwell Weekly Recap

Edition #4: Junkyard MBA, Raising at the Bottom, Reliability as CAC, Apple squatting on Google, and Expensing a Dollar

This is a series where we compile some of the best content we put out each week. You can expect to get a mix of interesting and insightful takeaways on various businesses and investing! Follow us at @speedwell_llc and @kevg1412 for more timely updates!

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Speedwell Research Universe

Copart (Coming Soon)

Below, we share some quotes from the Copart management team that give us a look into how they think and what their values are. Does every $1 further their mission? How do they maintain reliability? What kind of valuation do they do when acquiring companies?

Speedwell Research @Speedwell_LLC

Such a simple, yet powerful framing to drive operational excess out. “If we spend a dollar, is it going to give us more cars or not?”

Speedwell Research @Speedwell_LLC

After Hurricane Katrina, Copart paid millions in extraordinary costs to service their clientele without surcharging. Only in crisis is it clear that “reliability” exists on a spectrum.

Speedwell Research @Speedwell_LLC

The less formal of a business education you have, the more likely you are to understand your business. Here $CPRT President Jay Adair cuts off an analyst to explain they’d never look at an acquisition based off a revenue multiple. (Jay started working at CPRT at age 19)

RH

Below, RH CEO Gary Friedman shares his perspective on raising capital, and takes a shot at “competitor” Wayfair.

Speedwell Research @Speedwell_LLC

Billionaire Gary Friedman on the wrong time to raise capital. Wayfair raising a convertible after the stock fell 90% was the wrong time.

We introduced our new Business Meditations series, where we will share some of the lessons we’ve learnt whilst doing deep research and tie it with investment thought. We started off with Gary Friedman, CEO of RH, who is a greatly understudied CEO and the head of one of Berkshire’s least-mentioned holdings.

Speedwell Research @Speedwell_LLC

Introducing the Business Meditations Series where we write about lessons learned from our deep research and tie it together with investment thought. Our first release covers a greatly understudied CEO and a seldom mentioned Berkshire holding.

speedwellsnippets.substack.comHow an Investor Can Evaluate Managers: The Gary Friedman PlaybookSpeedwell Research: Business Meditations Series

Constellation Software

On Friday, we covered Constellation Software’s 4Q22 earnings. See the full thread below for more.

Speedwell Research @Speedwell_LLC

1/ $CSU reported 4Q22. Full year 2022 review below. We touch on key financial metrics and adjustments, concluding with a valuation framework. ⬇️ ⬇️ ⬇️

General

Big Tech

Speedwell Research @Speedwell_LLC

Unclear why this isn’t a bigger deal. Apple search results are supplanting Google’s. We searched Etsy below and Apple now directs you to the website (left photo) versus prior when you went to Google first and the top link was a sponsored Etsy ad (right photo).

History

Back in 2013, Elon Musk was given the ENCORE award. To celebrate, he sat down with longtime friend and collaborator Steve Jurvetson to talk all things AI, Steve Jobs, materializing visions, Larry Page, mission-driven companies, trying to buy from the Russians, and trademarking sexy.

Kevin G. @kevg1412

Letter #69: @elonmusk + @FutureJurvetson (2013) Elon + Steve talk ambition, AI, how they met, Steve Jobs, how visions materialize, Larry Page, mission driven companies, trying to buy the largest ICBM in the Russian nuclear fleet, and trademarking sexy.

aletteraday.substack.comLetter #69: Elon Musk and Steve Jurvetson (2013)Founder of Zip2, PayPal, SpaceX, and Tesla with Founder of Future Ventures | Encore Award Conversation

Below is the letter John Riccitiello wrote when he took Unity public in 2020. Prior to Unity, he served as CEO, COO, and President of Electronic Arts. He also cofounded the PE firm Elevation Partners alongside Silver Lake’s Roger McNamee (Cofounder) and Marc Bodnick (Founding Principal) and Apple’s Fred Anderson (EVP, CFO).

Kevin G. @kevg1412

A Letter a Day -- Letter #68: John Riccitiello (2020)

aletteraday.substack.comLetter #68: John Riccitiello (2020)CEO of Unity | 2020 S-1 Shareholder Letter

18 years ago, in 2005, Lux Capital Cofounder Josh Wolfe wrote about uncertainty in investing and the difference between process and outcome.

Kevin G. @kevg1412

Josh Wolfe on certainty vs uncertainty and process vs outcome in investing (2005) "Only the disciplined, patient and confident investor can be deaf to the market's taunts and stick to their selection and allocation processes. They know that process and outcome are distinct."

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