Thought Starters

Our 72 hours with Warren Buffett

We are writing this from our Airbnb in Omaha, Nebraska where we have been staying for the Berkshire Hathaway annual general meeting. Every year, 45,000 people descend on the town to hear Warren Buffett and Charlie Munger speak.

And what a weekend it was.

We spent Friday picking up our passes and joining thousands of other Buffett fans (aka investing nerds) at the Berkshire Hathaway expo, where all of Berkshire’s portfolio companies set up booths and sell their wares. That sees companies as varied as private jets to cowboy hats, large-scale energy infrastructure to underwear and sleepwear all side-by-side in booths.

Saturday was the big day. Leaving the house at 4am to get a good place in line, doors opened to the basketball stadium it was being held at 7am. Attendees were treated to a movie at 8:30am (which featured Warren trying to convince Charlie to buy a stock by enlisting the help of Jamie Lee Curtis). Then the main event kicks off just after 9am. And save for a lunch break at midday, Warren (92 years old) and Charlie (99) spend the next six and a half hours answering questions.

Tune in to this morning’s episode of Equity Mates Investing Podcast (Apple / Spotify / website) to hear our recap of the day and to listen to our favourite answers from Warren and Charlie.

For two people in their 90’s (nonagenarian’s as we’ve learnt) they were impressive. Charlie always had a witty line and Warren a considered answer. And they covered a lot of ground. From the future of value investing to US-China relations, and from the green energy revolution to Elon Musk’s recent antics.

On Sunday, we joined the 5km ‘Invest in Yourself’ fun run (side note: Ren has been fixated all weekend on why it is a 5km fun run when Americans hate the metric system - he’s still looking for a good answer). And then after the run we recorded this morning’s episode of Equity Mates.

All-in-all, an epic weekend. We learnt a lot, met a lot of people and made plenty of content. Next stop New York. We can’t wait!

The unified content business model

One of the biggest challenges for all content businesses is the revenue model. Free content and rely on advertising? Or paid content and rely on subscriptions?

This post from Ben Thompson unpacks that question and looks at the benefits and pitfalls of each. He concludes with the rhetorical question - why can’t we have both. Then looks at three of the most successful content businesses of our time - the New York Times, YouTube and Netflix - to unpack how they are all moving towards this hybrid revenue model.

All three of these businesses started one way or the other, but they are all converging on the same model today. For Ben, there is a lesson in that. His blog, Stratechery, is one of the most-read publications in Silicon Valley and for us here at Equity Mates, this was particularly interesting as this is a question we’ve grappled with over the journey.

Atlassian: The Everything for Everyone, Everywhere All at Once Platform

Atlassian is arguably one of the greatest companies ever created in Australia. Alongside Canva, it stands as our greatest software export and something that continues growing and taking on its American and European rivals.

This post is a two-part deep dive on everything Atlassian, where it has come from and where it is going. Part 1 looks at the founding of Atlassian, some of the early pivots of Mike Cannon-Brookes and Scott Farquhar and the acquisitions that helped it grow to the size it is today.

Part 2 looks at where Atlassian is going from here. The biggest challenge and opportunity for Atlassian at the moment is their transition to the cloud. When Atlassian was founded, it was an on-premise product. When it IPO’ed in 2015, cloud deployment only represented 25% of revenues. The company now wants to move that to 100%.

This is a big moment of transition for Atlassian, and one that sees heightened risk but also great opportunity. This article is a great primer on everything you need to know about one of the great software businesses, not just from Australia but from around the world.

The future of fertility

A new crop of biotech startups are working to revolutionise human reproduction. This article from The New Yorker takes at look at their ambitions, their progress and what human fertility may look like in the coming decades if they’re successful.

You’ve likely heard of IVF. Well in 2016, two Japanese researchers proved that IVG was possible in mammals. Essentially, they took non-reproductive cells from a mouse’s tail and reprogrammed them into reproductive egg cells which, once fertilised, were able to give birth to baby mice. According to Stanford Professor Henry Greely, “If ripe human eggs could be derived from a person’s skin cells, it would avoid most of the cost, almost all of the discomfort, and all of the risk of IVF.” That is the promise of this relatively new area of research.

That isn’t the only thing Greely has predicted. In 2016, he suggested that “in the next twenty to forty years sex will no longer be the method by which most people make babies.” This article is a fascinating (and at times scary and dystopian) look at the flock of new companies working to prove Greely right.

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