Episode 58: Catapult Dominates, Nine Cleans House, More OnlyFans, Nintendo's Brilliance and the Queen of LinkedIn
Adam and Adir discuss Catapult's brilliant run, Nine CEO gone, the profitability of OnlyFans and Craigslist, Nintendo's history, and a deep dive with LinkedIn superstar, Lisa Teh, live in the studio.
The Contrarians catchup
Adam is still coming to terms with losing the situp challenge during fitness week at Luxury Escapes, but he did take home his third planking win in four years.
Adir compared Adam’s wife’s pole dancing competition with last week’s analysis of OnlyFans.
Adir on Nine CEO Mike Sneesby stepping down: “The share price went down 59%. You can survive a share price going down 59% if everything else goes right, if investors love you, if the optics look right and so on. It's a tremendously difficult business to run. I'm not sure this business is going to stay together for much longer.”
Adam disagrees with Mark Di Stefano’s AFR takedown article about Linktree (Hyped unicorn Linktree is another ZIRP horror story) - “I thought in this case, the Linktree guys are doing a great job and they’re soon to be profitable. They’ve quickly course-corrected and learned from it. I think they're doing an unbelievable job. They could be making $50M profit in two years and be a genuinely great business.”
Adam has taken 7-8 strokes off his handicap since working with golf coach Brent Westwick, who uniquely coaches on the course.
Adir: “Advice of a general nature is useless advice.”
Adir was blown away by the Ray-Ban Meta Wayfarer sunglasses, especially the audio quality.
Adir isn’t sure about Mimco’s strategy to move down-market with products that are perceived to still be high-quality, albeit stuck in a dangerous territory of mid-market brand equity.
Catapult shares up 125% in 12 months
Adir is Executive Chairman for Catapult (ASX:CAT), which is one of the hotter companies on the ASX, now valued at $600M. In fact, if you invested in the company when The Contrarians started, you’d be up 100%.
Adir: “When you're a public company, institutional investors are your customers. You've got two businesses. One business has customers, which is what generates revenue. And the other business, frankly, is being able to clearly articulate your story to investors and explain it to them. And even if you think your business is good and investors think it’s junk, then either you're wrong or you have not been good at communicating the story to investors. Because if an investor thinks you're business is bad and you think it's good and you're sure that you're right, you can't just say they're dumb.”
Adir: “I feel like, for a long time we were not good enough at clearly communicating where the leverage was in the business and what the margins looked like, and when it would tip through this inflection point that fixed costs would not need to rise. And most of the incremental revenue would flow through to contribution profit, and ultimately to dollars to cash flow.”
Adam and Adir are OnlyFans fans
After Adir sprung a deep dive into the incredible economics of OnlyFans in last week’s episode, Adam returned to the topic after taking time to dig into its greatness. With $6B of TTV, $1.3B of revenue, and only 40 staff (they make $50M in profit per employee), OnlyFans tops the list of company revenue by employee. Other companies on that list are Nvidia, Meta, Alphabet, Netflix, Apple, and Craigslist.
Craigslist still does $700M in revenue with only 50 employees and can boast about being the platform that helped launch Airbnb and Uber.
Adir: “I’d rather own Craigslist than eBay.”
Adam: “Well, eBay is a more valuable business.”
Adir: “But you probably don’t have to do much work to run Craigslist.”
Nintendo under control
Nintendo reported some tough numbers last week with revenue dropping 47% and profit falling 55%. They sold 2.1M Nintendo Switches, down 46% year on year.
Adir took his son to Nintendo Live recently, a huge physical brand activation in Sydney that was “poorly organised” and uniquely held outside of Japan or North America. You couldn’t purchase tickets to attend - you had to win tickets through a lottery.
Adir: “Nintendo is a crazy company. I would say it would not be unfair to characterise them as kind of hating their fans, but the fans love them so much anyway that they're willing to go through fire in order to do these things. And so when you talk about this Nintendo performance and the numbers are down and whatever the reason that's happening, it doesn't really matter.”
Adir: “What I disagree with on the seven powers is that I think there’s an eighth power. I think product is a power and companies that consistently make a fundamentally differentiated and better product, there is something about that proxy output of power.”
Adam: “As you say, you don't bet against a religion. And I think Nintendo's a religion.”
The Queen of LinkedIn, Lisa Teh
If you haven’t heard of Lisa Teh, you might not be on LinkedIn enough. An incredible founder in her own right, Lisa is the Founder/Director of CODI Agency, who have worked with brands like Uber Eats and Uber, Lenovo Australia and New Zealand, L’Oreal, Coles Liquor, Dotti, Portmans, Moet & Chandon, and Just Jeans.
Lisa: “I was in tax law for about seven years, and that was a very, very long time ago, probably 2007. I started at KPMG and I was always really creative. I had a really good tax lecturer at uni and so that's why I end up going to tax, I think. And so I thought it was going to be really interesting and amazing, and it really wasn't. Surprise, surprise. And so along the way I started a fashion, beauty and lifestyle website, which is still running today.”
Lisa: “You look at Instagram and you look at their traditional UX/UI. It's kind of what we call an infinite scroll. You can sort of see what's coming up next, so you just keep scrolling. But with TikTok, it's technically bad UX/UI because it shows you that one video at a time. But the best thing about it is it forces you to have a reaction to that video. So you might swipe past quickly, you comment, you like, you share, etc. so it can quickly go on and work out exactly what you like.The algorithm is so good that you don't even need to follow people anymore because you just get served their content well.”
[Plus lots and lots of tips on how to grow your LinkedIn engagement].
Five other stories worth following:
Uber is doubling down on rides sans driver. The rideshare giant will expand its alliance with Waymo. Robotaxi rides can currently only be hailed via Uber app in Phoenix; next year, they’ll add Austin and Atlanta.
US traders are betting that the Fed will trim rates this week for the first time since March 2020 (ICYMI: rates are at a two-decade high). This month, fresh data boosted bets that the Fed’s cut will be more of a snip than a slash (25 basis points versus 50).
The final Polaris Dawn update: mission accomplished. The four crew members, who broke many records in the SpaceX journey, safely splashed down off the Florida coast early Sunday morning after completing history’s first commercial spacewalk.
Boeing is rarely in the news for a good reason. This time, new CEO Kelly Ortberg is getting some heat for buying a $4.1M house in Seattle while 33k Boeing machinists went on strike over wages not keeping pace with the cost of living.
Hart House, a vegan fast-food chain fronted by actor Kevin Hart, closed all four of its LA-area locations. Two years after launching with lofty national expansion goals, the brand posted a “Hartfelt goodbye” on Instagram.