A weekly(-ish) newsletter on commerce, media, science, tech, investing, & internet culture by Alex Taussig of Lightspeed.

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A weekly(-ish) newsletter on commerce, media, science, tech, investing, & internet culture by Alex Taussig. I am a partner at Lightspeed in Silicon Valley.

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Drinking from the Firehose #117


I've been a fan of comic books and superheroes since I was a kid. My most recent investment at Lightspeed, which we're announcing today, makes me feel like a kid again.

Artists, Writers, & Artisans (AWA Studios) is a modern, character-driven entertainment studio built for and by creators. The founders are the former COO/Publisher and Editor-in-Chief of Marvel Entertainment. Together, they oversaw the ascendence of Marvel out of its bankruptcy in the early 2000's to its recent heights. They also were responsible for re-introducing the world to X-men, Spider-man, Black Panther, Punisher, Wolverine, and many more characters in the Marvel universe.

AWA is just getting started, but I am excited to finally talk about it and will share more plans in the coming year. Read my blog post below for more detail. 


How to build a character universe

AWA is excited to build an entertainment studio that puts the creators at the center - enabling them to retain economics and creative control. In Axel's own words, we are offering creators the opportunity to "bet on themselves without putting it all on the line." We are greater than the sum of our parts.



Uber omission.

Uber filed to go public shortly after Lyft, its smaller competitor. A comparison between the two filings gives us a rare window into two fiercely competitive companies with similar services.

My biggest takeaway from Uber's S-1 is something it left out: retention. In fact, the filing has no cohort data at all. Considering that Lyft disclosed its rides retention data by cohort from 2015-18 in its S-1, and that Lyft filed first, that seems like a glaring omission. 

Lyft disclosed that 3-year rides retention (proportional to revenue) is 168%, with more recent cohorts tracking to a lower number closer to 150%. A 2018 Lyft customer takes about 38 trips per year at $3.50 net revenue and $1.50 contribution profit per trip.

On SecondMeasure, Uber shows fairly consistent monthly cohort retention at ~22% for customers and 35-40% for dollars. The data on Lyft is nearly identical.

Because Uber's net revenue and contribution profit per trip are smaller than Lyft's ($2.20 and $1.10, respectively), an Uber customer likely has a lower LTV. While Uber only spends 27% of net revs on sales & marketing vs. 37% for Lyft, I would guess based, on this data, that Uber has worse unit economics than Lyft. We can't know for sure, but I imagine that Uber is hiding something by not revealing its cohorts -- a relatively standard practice for recent S-1 filings.


Pirate party.

Kids are pirating content and streaming to their friends in Facebook's new Watch Party feature. This illicit activity is not necessarily a bad thing for Facebook, or for rights holders. What Facebook is proving is that it can drive new audiences to older titles through shared communities. It's relatively easy for Facebook to approach rights holders for licenses, in exchange for their permission to sell ads against the content. Win/win.


Making EVs profitable.

Electric vehicles (EVs) are clearly the future of personal transportation, but still struggle to hit cost levels competitive with internal combustion engine (ICE) driven cars. The biggest component of an EV's incremental cost over an equivalent ICE is the battery system. It comprises a third of the total cost of an EV, and 70-80% of the incremental cost over a comparable ICE. For higher mileage drivers who do 30K+ miles/yr, the economics already make sense during a typical 3-year lease period. Every 25% reduction in battery costs reduces payback by approximately one year, so to hit the same payback range for a 10K mile driver (more typical for urban environments), EV battery costs will need to fall by ~60%. McKinsey's best model shows we hit that point in 2025. In the mid-term, we are more likely to see EVs operating in high mileage fleets.  


Supermassive black hole.

It's hard not to get a little choked up when you're looking at the first black hole ever imaged by humans. This incredible achievement was the work of many scientists across the globe, collaborating to create a virtual "Earth-scale" telescope. The data processing to produce this image alone is a gargantuan accomplishment. Congrats to all involved!


Writing, and the curse of knowledge.

Steven Pinker defines the "curse of knowledge" as "a difficulty in imagining what it is like for someone else not to know something that you know." He believes it's why most people can't write good (er, well).

As someone who has no formal training in writing, but who writes every week, I relate to this knowledge curse. How do I know when I'm being unintentionally opaque? Peer review may provide one filter, but not for the layperson. Good thing I have you all to call me out when I'm unclear! :-)

Disclaimer: * indicates a Lightspeed portfolio company, or other company in which I have economic interest. I also own stock directly in AAPL, ADBE, AMZN, CRM, FB, FTCH, GOOG/GOOGL, NFLX, SPOT, SQ, TSLA, and TWLO.

Lightspeed Venture Partners, 2200 Sand Hill Rd, Ste 100, Menlo Park, CA 94025 USA Sent to — Unsubscribe