Invest Like the Best with Patrick O'Shaughnessy Modest Proposal – Better, Cheaper, Faster: Why Companies that Reduce Friction Win - [Invest Like the Best, EP.193]
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Sep 29, 2020 Modest Proposal, a well-respected thinker on financial Twitter, dives into investment strategies for today's dynamic market. He discusses the shift towards prioritizing future potential over historical performance. The conversation also highlights how reducing friction can enhance consumer engagement, with examples like Uber and Zillow. Additionally, Modest delves into the evolution of seemingly trivial business ideas and the complexities of navigating online marketplaces. His insights on monopoly dynamics and valuation challenges provide a fresh perspective on investing.
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Airbnb Example
- Airbnb's initial idea of room sharing seemed silly, but it demonstrated consumer demand.
- Seeing companies ladder up from initial entry points is crucial for identifying big opportunities.
Consumer Signal and Nonlinear Behavior
- Removing friction from consumer experiences unlocks nonlinear behavior changes.
- Strong consumer signal indicates product-market fit, showing that consumers want the product.
iBuying Example
- iBuying, like Uber and AirPods, was immediately recognized as a superior experience.
- It addresses a major consumer pain point by simplifying the home selling process.
