Competition for Deals and Using AI as Margin of Safety

Our teacher today is Justin Yoshimura, founder and CEO of CSC Generation, a profitable commerce platform doing over a billion dollars in annual revenue across brands including Sur La Table, Backcountry, and One Kings Lane.

As we explore what it takes to build an enduring company in a sector most investors have written off, we turn to Justin's unconventional path, one that challenges familiar assumptions about credentials, capital structure, and the future of retail.

Justin shares how he stopped attending school around the age of sixteen and built his own curriculum through entrepreneurship, selling cell phones on eBay as a teenager before founding a loyalty program SaaS company that was acquired by Merkle in his early twenties. He describes the influences that shaped CSC's design, including a Warren Buffett obsessed father and the long term holding company model he watched David Williams build at Merkle, and explains why he rejected the traditional buy and flip playbook in favor of permanent ownership backed by patient, contrarian capital.

This special session explores Justin's approach to acquiring retail brands in transition, the AI native operating system called Genesis that has turned loss making companies profitable within the first year of ownership, and the lessons he has carried through COVID, tariffs, and a decade of building a contrarian business in an industry many had written off. Please enjoy class with Justin Yoshimura.

For the full show notes, transcript, and links to mentioned content, check out the episode page here.

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Timestamps

(00:00:00) Welcome to Joys of Compounding

(00:04:20) Episode Intro: Justin Yoshimura

(00:07:02) Justin's Early Life and Childhood

(00:10:20) Developing an Entrepreneurial Spirit

(00:12:08) Building a Cell Phone Marketplace

(00:14:39) Resilience as a Skill

(00:16:26) Lessons from Y Combinator & Merkle

(00:19:25) Why Choose Retail

(00:22:12) Brands That Hit a Growth Wall

(00:25:18) CSC's Founding Story

(00:27:33) Direct Buy: CSC's First Deal

(00:29:29) Justin's Fundraising Journey

(00:32:15) Navigating the COVID Boom-Bust

(00:36:19) Death by a Thousand Cuts in Retail

(00:38:06) Competing for Deals

(00:40:41) Lessons from the Tariff Shock

(00:43:00) Backcountry Case Study

(00:45:23) CSC's Genesis Platform

(00:49:31) How AI is Changing Companies

(00:52:01) Building an AI-First Culture

(00:55:57) Hiring Well in the AI Era

(00:58:09) Incentive Structures & Retention

(01:01:40) Looking Ahead: CSC's Next Decade

(01:05:08) Solving the Biggest Risk in Retail

(01:08:30) The Decline of Search Traffic to Retailers

(01:10:56) Closing Advice for Young People