#101 - Duolingo S1, More Profitable Than Netflix? $SPCE Comes Down To Earth & Telehealth Startup Promises to Fix Low-T
In this week's episode of Reformed Millennials, Broc and Joel look at consumer subscription businesses through the lens of the Duolingo's S1, disney+ and Hone Health - a startup providing an at home solution for men with hormone imbalance or low testostorone. We'll also highlight an early stage Canadian startup called Eli.health tackling a similar problem in telehealth. Lastly we'll share some insights from a David sacks podcast on what it takes to successfully scale these types of businesses.
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👉 For specific investment questions or advice contact Joel @ Gold Investment Management.
Overhead supply is a theme we’re seeing all over these days. And this isn’t just true for the stock market, but it’s also dominating the commodity landscape.
Crude Oil reached 76 and turned lower. Copper remains stuck below its former 2011 highs. And Gold has been an absolute mess since peaking last August.
Even the few commodities that have recently broken above resistance zones — such as Gasoline and Heating Oil — have yet to follow through and confirm their new highs in any meaningful way.
Commodities have enjoyed some explosive moves over the past year. Now, many are at logical levels to pause and digest recent gains. This is healthy stuff. Normal market behavior.
And when we consider the recent US dollar strength as an added headwind, it makes plenty of sense to see commodities continue to cool off and correct.
When there aren't any bears left, the market has a funny way of creating new ones.
That's been one of the biggest questions from me over the past few weeks. Where did all the bears go?
Meanwhile, which asset class have investors been piling into the most this year?
We’ve been seeing the lowest amount of bond exposure in my entire life!
And the highest stock market exposure in decades…
The break-in yields this week is a big one.
Here's a long-term look at that key 1.4% level in the 10-year. And then the zoomed-in look at the past week.
Looks like a big break to me: from All Star Charts
Messy for longer remains the message of the market.
From the Podcast:
The American listing of Softbank (ticker: $SFTBY), is a Chinese tech holding company. Softbank has a market cap of $116 billion and the American listing currently trades at $33.72. Here is an interesting discussion on the SOTP valuation of the company, calling attention to Softbank's ~30% stake in $BABA and seems to be trading 50-60 cents on the dollar:
💸Reformed Millennials - Post of The Week
What's The Next WMT & HD?
asking for a friend.
Imagine being 20 in 1981 and buying $10,000 of $HD only to retire at 60 with $141 million. lord.
Free Tier as a Strategy
One of the somewhat unique things about Duolingo is that all the content is accessible completely for free. It is a freemium product in the sense that there is a premium tier, but that premium tier unlocks boosts and benefits and not any “new content” as such.
This has led to two core benefits:
A. Organic Growth:
Compared to a lot of the competition and alternatives for language learning, Duolingo’s “free” price tag is of tremendous value. As such, Duolingo has gotten a lot of organic word-of-mouth growth. It has been downloaded over 500M times and has more than 40M monthly active users.
B. generating a lot of data:
The other advantage of the free tier is that the users generate a lot and a lot of data, which improves the product for all users, free and paid.
Duolingo users complete over 500M exercises daily, generating data that can be used to power A/B testing and improve the product for all users, free and paid.
Duolingo calls this their learning flywheel, shown below
Proving the might of the Marvel brand, Black Widow set a new benchmark for the pandemic era in opening to $80 million at the domestic box office. The female-led superhero pic snared the biggest North American start since the COVID-19 crisis commenced, and the largest since Disney/Lucasfilm’s Star Wars: The Rise of Skywalker in Dec. 2019. Overseas, the film earned $78.8 million from 46 territories for a worldwide theatrical debut of $158.8 million.
Additionally, Black Widow made at least $60 million from Disney+ Premier Access — a household has to pay $30 to watch the film — for a global start of $218.8 million, according to Disney. It’s unprecedented for a studio to announce a premium VOD or streaming viewership number on a film’s opening weekend, and Disney’s decision to do so prompted a flurry of conversations across Hollywood on Sunday as to whether this will lead to more transparency. (Disney, for instance, has yet to say what the Disney+ Premier Access numbers were for Cruella or Raya and the Last Dragon.)
The visibility into Black Widow’s streaming revenue is indeed unprecedented, and I’m not sure if it’s going to continue; the most obvious explanation for Disney’s announcement is that it wanted to buttress the mystique of the Marvel brand by advertising a >$100 million opening weekend, even if this raises questions about just how successful it’s other streaming launches have been, both retroactively and going forward.
What is worth highlighting is how few subscribers that big number requires: $60 million at $30 a pop is only 2 million homes, a fraction of Disney+ 103 million subscriber base. Moreover, Disney gets to keep all of the revenue, instead of sharing it with theater owners, which means those 2 million homes are particularly profitable. The downside, though, is a reduced ability to make money in other release windows
🌊Best Links of The Week🔮
Hone Health - Hone treats men's hormone imbalances and low testosterone by providing access to at-home lab testing, physician consultations, and medication from the comfort of your home to get your SPARK BACK & BE YOUR BEST.
Eli.health - Eli enables women to take control of their health across their lives, by providing them with powerful information on their daily hormone profile.