Earl Lee


Early Insights 1

I'm considering starting a newsletter so have been jotting down thoughts from content I'm consuming. This is a first take and mainly just a random collection of thoughts that might be interesting to people like me. Please send me feedback on what you would like for me to dig into more detail, what specific thoughts you thought were insightful, and anything else!

🧠 Musing: Lyft-DoorDash Merger

  • Is a Lyft-DoorDash merger what both companies need to compete more effectively against Uber? Coincidentally, they both partnered with Chase on its Sapphire Reserve card, giving their membership pass for free and crediting extra rewards points on spend.
  • With Uber's potential acquisition of GrubHub becoming less of a reality now, this may be less of an imperative.
  • Merging could increase leverage over driver supply as a combined company and perhaps optimize costs by sharing drivers from both communities.

🗞️ Scale & loyalty more important online than offline, CAC is new rent - Gavin Baker

  • I thought CAC for e-commerce as the new rent for brick-and-mortar retail was a very elegant comparison.

💰 Spotify a good buy?

  • Spotify has been popping up a lot lately in various newsletters I follow, and over the past couple years has been on a tear with M&A. I did a deep dive on podcasting in Summer 2019 and ultimately concluded that Spotify is well-positioned to capitalize on the space and is existentially driven to execute aggressively on podcasting given the low margin and negotiating leverage of their core music business.

🎙 Did I get podcasting wrong?

  • After doing a deep dive on the space last summer, I generally thought it was not a good space to invest in given the structural advantages held by Spotify and Apple. Both having existing distribution to customers, and the former being existentially motivated and well-capitalized.
  • In retrospect, if I had looked at it from the lens of investing in companies that could eventually get acquired by the incumbents, perhaps I would have ended at a different conclusion. Pick the right time and idea that can build something quickly, and Spotify may come knocking.
  • The rise of independent publishers and authentic thoughts—not just through podcasting but also newsletters (see next)—has also been a huge boon. One way to look at this is that society has grown tired of overly curated and perfect media which saturates our attention span these days.

📫 Substack Adoption

  • Interesting to see acceleration in Substack adoption. Many friends starting their own newsletter. Lower barrier to entry than podcasts—you don't need to know how to speak well or have high quality microphones. Just write. Editing is easier too.
  • Feels like newsletters are the new old-school blogs, easier to create than podcasts and more thoughtful than tweets. Last generation of newsletters were collection of links. Now, the best newsletters are collection of analysis on news. Lets readers peer into the thought process.

💻 Remote work

  • With more companies announcing plans to make remote work a permanent fixture—in part or whole—even post-COVID-19 there will be second-order effects for how office workers get social interaction. I hypothesize the growth of local communities oriented around interest such as sports, entertainment, and hobbies.

💼 Tech vs. business/finance culture

  • After spending a year in business school meeting people from all kinds of finance (private equity, hedge funds, investment banks) and consulting, one things I've noticed is that design rarely comes up in conversations when talking about companies. Product peripherally comes up, but even then the conversations seem to lack depth relative to my experience talking with folks from the tech industry.
  • Growing inorganically through the form of M&A, particularly rollups, comes up often too. This is in stark contrast to what's heralded in Silicon Valley—organic, product-driven growth.
  • Lastly, business people seem to love the idea of learning to code—so they can speak the language better. It came up in a case discussion where I took a strong stance against the value of a finance/business person learning to code for the sake of trying to understand tech better. The amount you would have to learn to get value, in my opinion, is far too great and the little learning one might gain from taking an intro course on programming may in fact be harmful by giving an inflated sense of confidence and understanding when talking with engineers. This can be very off-putting.

    • In contrast, I think business people should learn design properly. One of the perennial challenges and tension I hear about in companies is how the business person always wants to show progress by shipping a product. Designers tend to want to take their time and make sure they build something people actually want. This oftentimes results in restarting work and not being able to show progress from the lens of the business person—after all, if there's no tangible product, what progress have you made? In fact, learning what not do ship by talking to the market and even prototyping is progress. Absence of new products and features does not equal lack of progress. Business people, by understanding and learning design, would be able to empathize better with their R&D teams.

🤳 Influencer marketing price opacity and TikTok ROAS

  • Influencers with the same reach might transact at vastly different (10x to 100x) prices because there are no industry standards or price transparency. It is not programmatic. Big brands like McDonald's are willing to pay high amounts for influencer marketing and are less price-sensitive.