This week I sit down with Kinsey Grant (Twitter @KinseyGrant) from Morning Brew (@MorningBrew) and the Business Casual Podcast (@bizcasualpod).I asked Kinsey to be on the podcast because I’m a huge fan of what MorningBrew.com is doing to spread business and financial literacy to the masses through educational and FUN email newsletters and now podcasts.You can either play the podcast directly in your browser by hitting the play button at the top of this page or find it on your favorite podcast player (links below).This podcast is part of my free investing newsletter. There is an option to pay $5/month or $50/yr if you want to help support the newsletter and podcast. We also appreciate you hitting the heart to “like” this post and sharing it on your favorite social media platforms to help others find us.Subscribe to the podcast, listen, and leave us a review on:Apple iTunesGoogle PlaySpotifyStitcherTopics Discussed & Approximate Timestamps 2:20 Kinsey Intro + How we connected over Twitter + empowering others7:40: Getting over the fear/imposter syndrome of reaching out to high-profile guests9:40: Understanding the importance of hardwork (and a little bit of luck)11:40 How Kinsey got her job at Morning Brew14:40 Why Kinsey started looking for new career opportunities while she was in a job she enjoyed at Thestreet.com19:40 What Kinsey has learned about taking feedback as a journalist/content creator. 21:40 How she’s navigated25:00 Kinsey’s creative process, how she prepares for writing + podcasting and what her week looks like. The best creators are great readers29:40 The origin story of Business Casual Podcast31:40 Kinsey’s Tweetstorm with lessons learned from getting their first 1M podcast downloads.34:40 What’s up next for the business casual podcast36:40 Two things Kinsey is trying to improve on professionally39:00 Obligatory Hot Seat QuestionsKinsey’s favorite episode of morning brewDoes hiring social media people make it feel like you’re in prison?How Kinsey’s mom saved her Instagram life. The Kindest thing anyone has ever done for KinseyMy Key Takeaways Take action - reach out to your idols, the worst thing that can happen is they say noWhen a great opportunity is put in front of you take it! You gotta risk it to get the biscuit.The team at MorningBrew starts creating the next day’s newsletter around 12:00 or 1:00 and covers similar stories to other big magazines. To be successful, we don’t have to invent the next light bulb, but do something meaningful our own way. The team started the podcast without knowing exactly what the format would be and who they would interview (just start!) Get full access to Founder Stock Investing at austin.substack.com/subscribe

Founder Stock Investing

Kinsey Grant from Morning Brew Interview: Getting Comfortable Being Uncomfortable

Hey Investors.. trying something new. You can consume this update however you’d like. If it’s in your email you can hit play to listen to the audio at the top of the email, or what the embedded YouTube video. The podcast is also available on your favorite podcast player search: “Founder Stock Investing”. Would love for you to subscribe to the podcast, Youtube channel, and/or this email — whatever works best for you. Atlassian’s (TEAM) Q2 FY20 earnings reportMicrosoft (MSFT) Q2 FY 2020 Earnings ResultsEarnings Call TranscriptSatya Nadella -- Chief Executive OfficerMicrosoft Teams is the leading hub for teamwork. Now with more than 20 million daily active users, people are increasingly engaged across the platform in richer forms of communication and collaboration, participating in more than 27 million meetings a month. Integrated calendaring, pop-out chats and one touch to join meetings from your phone keeps work, conversations and meetings in the context, eliminating the need to bounce back and forth between apps.We are reimagining the meeting rooms of the future with Teams integration with Cisco's Webex and new devices from Lenovo. And our partnership with Samsung, along with the new walkie-talkie feature in Teams gives first-line workers the technology they need to be more collaborative, productive and secure on-the-go. All this innovation is driving usage. 64,000 employees at L'Oreal are using Teams. More than 70,000 first-line employees at IKEA are moving to Teams for shift management. From Nestle to Tesco, the world's largest companies are choosing Microsoft 365, and we continue to see increased demand for our premium offerings from customers like AXA, Rockwell Automation, Berkshire Hathaway Specialty Insurance and Duracell.Mark Murphy -- J.P. Morgan -- AnalystYes, thank you. Satya, a few quarters ago, you had commented that Teams is the fastest-growing app in the Company's history. Wondering if you could clarify if that is a reference to daily active user growth or bookings impact. Or is that a comment on user engagement and the time being spent in Teams or some other criteria? As well, Amy, wondering if you could offer any kind of directional thoughts on just how to model the Windows OEM line post-Windows 7 end of support and going into fiscal year '21. And any high-level thoughts on how you think that could trend versus what happened in the prior cycle?Satya Nadella -- Chief Executive OfficerYeah. Thanks for the question, Mark. My comment was mostly around deployment, engagement, the depth of engagement. There are very few types of products, which have these platform effects. Teams is a scaffolding, that is, obviously, related to messaging, which has significant usage. It's also driving usage of the rest of Office, because rest of Office gets integrated in the usage patterns around channels. It's, obviously, used in meetings. It's also the place where business process workflows in context of messaging happen and both for knowledge workers and first-line workers. So, when I look at all of that cumulative effect, it's much broader than any other user experience scaffolding and in terms of its ability to drive that type of platform effect and engagement. So we're excited about it. And we continue to see that, and you saw that in my remarks as well.From Q1 FY 2020 Earnings CallSatya Nadella -- Chief Executive OfficerTeams keeps all of your work, conversations and meetings in context, eliminating the need to bounce back and forth between different apps with features like integrated calendaring one-touch to join meetings from your phone and we are broadening our opportunity with 2 billion first-line workers worldwide adding priority notifications, role specific targeted messages, and the ability to clock in and clock out of a shift.Our differentiated offering is driving usage, making Teams the category leader, more than 350 organizations now have more than 10,000 users of Teams. More broadly, all this innovation is fueling growth. Office 365 Commercial monthly active users surpassed 200 million this quarter. The leading organizations like Cerner, Chevron and the Lego Group are choosing our premium Microsoft 365 E5 offerings for their advanced security and productivity experiences. Get full access to Founder Stock Investing at austin.substack.com/subscribe

Microsoft & Atlassian Earnings - The Force is Strong in the Cloud.

Time got away from me and I couldn’t get last week’s update out last Friday. This week will be a little weird. Today we’re covering last week (week ending October 11th) and on Friday, October 18th, we will be back on schedule. I am considering moving portfolio performance updates to once a month which will give me more time to focus on covering individual companies. Would love to hear your thoughts/preference. Reply to this email and let me know!First a little housekeeping. For some strange reason, I feel compelled to start the podcast back up. If you’re reading via email, you’ll still continue to get updates and podcasts you can play directly in your inbox. You’ll also be able to listen through your favorite podcast player so please, subscribe to Founder Stock Investing and leave a review. It will help others find us!Apple PodcastsSpotifyAll results through October 11, 2019.7-Day return: +1.57%Year-to-date return: +25%Transactions: 0Holdings & allocation %Alteryx (AYX): 19%The Trade Desk (TTD): 19%Twilio (TWLO): 16%Mongo Database (MDB): 16%Okta (OKTA): 7.6%Zscaler (ZS): 7%Anaplan (PLAN): 6.5%Pager Duty (PD): 5%Zoom (ZM): 3%Slack (WORK): 2.5%Datadog (DDOG): 2%Elastic (ESTC): 1.5%Crowd Strike (CRWD): 1.5%Options: Short 1 x CRWD January 17, 2020 $60 Put Short 2 x PD Feb 21, 2020 $25 PutsShort 1 x ZM Jan 17, 2020 $65 PutShort 2 x ZS Jan 17, 2020 $45 PutsI am also long some calls on NTNX and NKTR which are basically a lost cause. Big time losses on those. What I’m thinkingFor now, it appears most of the #SaaSpocolypse has passed us. I made that up, but it’s the best I can do to describe what happened to basically all of the companies I own (and most “high-growth” companies) over the last month or so. It was tough to watch my portfolio meltaway from being up more than 60% YTD in July to up around 15% YTD at the low point about a week ago. I view that as part of the game when it comes to this type of investing.My belief that I am investing in some of the best companies in the world remains. I also believe that at least some of these companies will continue to grow for many years to come and reward investors handsomely. That’s why I stayed fully invested during the recent sell-off and why I intend to stay that way.The Top 4I’m very comfortable with my top 4 holdings (AYX, TTD, TWLO, MDB). I don’t plan to make any changes to them unless one surpasses 20% of our portfolio. Then I’ll look to trim it down to under 20%. The Middle 4I’m a bit less confident in the middle 4. Or at least in Anaplan and Pager Duty. I believe Anaplan is basically creating their own industry with connected planning and they appear to be a clear leader. But I want to see them execute well in the next quarter. I strongly believe in Pager Duty as well and the service they offer is critical to businessess where downtime costs hundreds of thousands or even millions of dollars per minute. However, I won’t buy any more shares until management shows continued strong performance in the face of the competitive environment that seems to be keeping pressure on the share price. Simon Erickson from The Motley Fool did a great Tweetstorm on the company recently which confirmed some of my thesis. Simon is a great investor and his vote of confidence is reassuring. The Bottom 5I am a big fan of pretty much everything about Zoom and plan to add shares over time (especially if I sell something else). There’s a lot of fear of competition and lack of moat, but I think Zoom’s numbers prove those fears wrong (at least so far). I do believe Zoom has a moat since they’ve built out the hosting capabilities for their cloud-first products since day 1. They’re also building strong partnerships with companies like Verizon and deepening their offering with Zoom phone. The world is moving to more of a distributed model and Zoom enables companies to work remote in ways they never could before. One reason shares may have sold off recently could be lockup expiration. I’m not one to make short-term predictions (here comes a short term prediction) but I think we will see a 10%-20% gain in Zoom’s share price over the next month to 10 years (see what I did there?).What can I say about Slack? I’ve been dead wrong on it so far. I’m keeping my 2.5% position and not adding to it anymore. I still believe in the company and management. I think much of the Microsoft Teams fear is overblown and similar to my Zoom thesis, Slack in leading the way into the future of work. To my knowledge, Teams doesn’t offer anything close to this type of workflow capability or nearly as many (if any) integrations like Slack does. Datadog, Elastic, and Crowdstrike are all companies I plan to add to. Especially if I sell PD or PLAN and/or if the share prices keep coming down for no apparently good reason. Thank You:If you enjoy this content and want to help support the newsletter please hit the ❤️ at the top of the email, subscribe to our podcast: Founder Stock Investing, share all this awesomeness with your fake friends on social media and real-life friends, and become a paying subscriber at this link (you’ll get all the same stuff you get for free + a virtual hug). Get full access to Founder Stock Investing at austin.substack.com/subscribe

Last Week's Portfolio Update: +1.57% Up $8,045

My experience with Zoom since it became a publicly traded company (since it IPO’d) in April is a great learning opportunity. I have probably displayed every bad investor tendency with this company so far. I just bought 80 shares of Zoom at $101/share for a total cost basis of $8,008. A 1.25% position in my portfolio.Now let’s rewind a take a look at how ridiculous my decision making has been with this company so far.Zoom IPO Day: April 18 Bought 160 shares at $62.50 = $10,000: those shares are now worth $16,000 so that’s our comparisonHere is what I said at the time:I added ZM despite it’s incredible 70%+ rise and its extremely high price to sales ratio that apparently even CEO Eric Yuan thinks is a bit excessive (NY Times article). He and many who are saying the company is overvalued right now are probably correct. I’m a big fan of this company and I plan to be an investor long term. I started a 2.5% position in the company so it is relatively small. I invested because I think this company will be much larger in 5-10 years than it is now and I wanted to have at least a small position.April 22: Sold 160 shares at $59.04 = $9,446. So I was at -$554 with Zoom. A 5% loss.Here is what I said at the time:I think an important part of investing (and life) is to be able to admit when we're wrong. Or at least when we made a bad decision.I love Zoom's business but I like many others think it's too expensive and the risk/reward is not worth it at this point.I am confident I'll own shares at some point, but will wait for some volatility either in the market or in ZM individually to buy.There are a lot of other great businesses with a bit slower growth but much lower Price to Sales ratios.Keeping the proceeds in cash for now to see if we get that volatility soon.So then I decided to get “smart” and sell two $75 Strike August 16,2019 Puts. This meant that if Zoom went lower than $75 before August 16, I would be obligated to buy 200 shares at $75 because each contract represents 100 shares. I was paid a premium of $10.5 for each contract so $2,100 total.May 10: SOLD 2 ZM Aug16'19 75 PUT @ 10.5But then I got scared for whatever reason and wanted a lower strike price. To get that, I had to buy back the Puts I sold with a $75 strike and sell new Puts at $70. May 13: BOUGHT 2 ZM Aug16'19 75 PUT @ 12 So I had sold the $75 Puts for a total of $2,100 and bought them back for a total of $2,400. My total loss on Zoom at this point (adding my loss from the shares back in) at this point was $854.May 14: SOLD 2 ZM Aug16'19 70 PUT @ 8.49 On June 6, I got really foolish and decided to try some short-term earnings based options gambles. I figured the stock would move a lot in one direction or the other so I wanted to try and profit from that volatility. Before doing that, I wanted to purchase the $70 Puts I had sold to get rid of that obligation to buy shares if they dropped significantly. June 6: BOUGHT 2 ZM Aug16'19 70 PUT @ 6.4 I sold those puts on May 14 for $1,698 and bought them back (closed them) on June 6 for $1,280. This brings my total loss on Zoom down from $854 to $436.Now for the earnings gamble. I bought Puts and Calls so you’ll see the Buys/Sells reversed from when I sold Puts previously. It’s confusing which is a great reason not to get involved with options strategies like these (if you have not already picked that up!).BOUGHT 10 ZM-COMB @ 5.1 = $5,100June 7: Earnings came out, stock popped something like 30% and I got lucky.SOLD 10 ZM-COMB @ 10.58 = $10,580Here is what I said on that day:So again, reiterated that I believe the company could 5x or 10x in 10yrs. Why in the world would I not just own shares of a company if that’s what I think? That brought me to:Total loss/gain on Zoom = +$5,044 Remember, if I would have just held the $10,000 position I initially started, I would own $160 shares with a $6,000 unrealized gain. That means no taxes (which are going to take a big chunk out of that $5,044 gain I currently have and a heck of a lot less stress.So again.. reminder to myself. Get back to investing with a long-term ownership mindset in the absolute best founder-led companies I can find.This lesson is painful and a bit embarrassing to share. Like I said before, just about every common investing mistake is there. Greed, fear, action-bias, herd mentality, all of it. I don’t know what is going to happen to Zoom’s share price (or the market) today, next week, or next year. But I do know this is one of the best businesses from a fundamental, cultural, and leadership stand point I have ever seen. I believe Zoom is going to innovate and come up with new products we never imagined. The best companies always do. I also think Zoom is far more than just a video teleconferencing company. So I am going to be a long-term owner of this business.Some recent material I’ve read/listened to on Zoom that helped me be informed:Acquired Podcast: The Zoom IPO - With Santi SubotovskyMedium Article: Zoom IPO | S-1 BreakdownAnd finally - Zoom Founder/CEO Eric S. Yuan delivering customer happiness: Get full access to Founder Stock Investing at austin.substack.com/subscribe

New Position: Zoom (ZM) @ $101 Per Share

Yesterday we covered the results from Anaplan’s First Quarter 2020 Earnings Report. Today in Part 2 we will cover management’s prepared remarks and the Q&A from the earnings call. Prepared remarksFrank Calderoni — Chief Executive OfficerI like to watch the verbiage and how management communicates to open calls. If we see changes in this tone, I’ll start to dig deeper.We are very pleased with our first-quarter results as it marked a strong start to the year with solid financial and operational performance.On the competitive landscape.We believe we are the leading modern business planning platform as we are the only connected planning solution that can address the phenomenon of digital transformation. The rapid growth and expansion we are seeing is the result of the key role Anaplan plays in helping enterprises, regardless of industry, adapt faster to the increased business dynamics.Land with a new customer. This quarter, one of our largest insurance companies in the world selected Anaplan as part of a large-scale effort to modernize their financial processes and functions. This customer has over 50,000 employees in almost 1,000 locations, so they needed a platform that could extend beyond finance. Expand with an existing customer.A key customer expand this quarter was with one of our largest multinational technology companies through their digital transformation effort to focus on transforming user experience with their products. They were already using the Anaplan platform for financial planning and workforce planning, and we are now focusing on their global marketing operations. Previously, manual processes and limited visibility into spending across geographies led to millions of lost marketing campaign dollars.Framework for Anaplan’s land/expand model; the honeycomb.We have a new framework to visualize how Anaplan's many use cases typically expand and connect within our customers, which we call the honeycomb. Starting with one use case or a single hexagon within a honeycomb, we typically see that rapidly expands into additional use cases often in related or adjacent business areas.On Gartner ratings. Note the movement from “niche player” to “leader”.We are very proud of our recent achievements as Anaplan was recognized as a leader by Gartner in the 2019 Sales and Operations Planning Systems of Differentiation S&OP Market Magic Quadrant.In Gartner's last version of this report, we were considered a niche player, and we have quickly moved to a leadership position. We believe the recognition in the elitist quadrant is because of the high customer satisfaction and impressive capabilities of our supply chain solution. It's important to note that we are one of the few included in six different Gartner categories for a single platform. Driving further adoption of our platform globally is an area of focus.Dave Morton — Chief Financial OfficerFor the first quarter of fiscal 2020, we exceeded our expectations across all of our key financial metrics. On remaining performance obligation (RPO).Our remaining performance obligation or RPO consists of both billed and unbilled consideration for contracted business remaining to be performed that we expect to recognize as subscription revenue. We exited the first quarter with a total RPO of $473 million, up 53% over last year, which accelerated compared to last quarter's year-over-year growth rate of 44%. There are two key factors that can influence RPO. First is the timing of large enterprise renewals, and second is the weighted average contract term length.Raised full-year 2020 guidanceFor the full fiscal of 2020, we are raising our revenue and operating margin outlook driven by the first-quarter performance and ongoing strength we see in our business.Analyst Questions and AnswersQuestion 1 : A.) How we should think about the renewal opportunity this year versus last? B.) And then as we think about some of the recent changes in the sales and marketing leadership, just an update on how that's going, what you're looking for and what you're expecting there? Answer: A.) At the end of the day, we're just finding some great customer success not only with the land but then also with expands. We continue -- I mean even this quarter, our top 10 deals, both lands and expands, continue to be well above $500,000. B.) Our focus, and I mentioned this last time and internally this is what we talk about, is scaling the business to $1 billion and beyond. And so we've been putting plans in place, making our investments in order to do that.Question 2: Just the mix of business across, as you call them quadrants, whether it's finance sales, supply chain and HR, have you noticed any changes, any discernible changes in terms of the mix across those quadrants? And then I have a follow-up.Answer 2: The overall mix continues about the same, where it's about 60% in finance and 40% outside of finance. But similar -- and I've mentioned this in the past that, but I have to say in the last quarter alone, it continues to accelerate, which is supply chain. It was great to see the recognition by Gartner as the leader in the Magic Quadrant. I think that also solidified many of the great customers and the use cases that we have in supply chain and how Anaplan is uniquely positioned across supply general, not just in one specific area and really trying to connect the supply chain.But I have to say, more and more at the Gartner Supply Chain Conference just a week or so ago, we got a strong interest in Anaplan, and we continue to see that outreach. If I go back to what I mentioned in the prepared remarks talking about spirits and also cosmetics, if you look at those companies, and those are large companies on a global basis, pretty much all of them are either using or looking to use Anaplan in supply chain. And it works extremely well for them to help digitize and streamline a lot of the metrics and the process by which they manage their demand and supply.My conclusionAs I stated in part 1 (and with my actions by starting a 5% position), I believe this was a strong quarter and I expect the momentum to continue. I like management’s focus on long-term growth and that they are having success growing in both the financial and supply-chain verticals. Take a look at the earnings call transcript in the links below if you want to read the rest of the questions and answers.LinksAnaplan First Quarter 2020 Earnings Press ReleaseAnaplan First Quarter 2020 Conference Call and PresentationAnaplan First Quarter 2020 Earnings Call Transcript - The Motley FoolThank youThat’s all for today. I’ll get to management’s prepared remarks and the Q&A portion of the conference call in our next email/podcast.If you want to support the newsletter, please like (hit the heart above it helps people find us!), share with friends, or change to a $5/month or $50/year “subscription” which includes the exact same content you are currently reading for free. Get full access to Founder Stock Investing at austin.substack.com/subscribe

Anaplan First Quarter 2020 Earnings Part 2

Our Position:I had my eye on Anaplan (PLAN) before it IPO’d (became a public company) but chose not to invest because I was concerned with sales and marketing spend and wondered if the company would be able to grow.So far, they have executed well, proven there is demand for their product, and the stock had increased around 80% since it IPO’d in October before I opened a position. Common investing “wisdom” would caution people from investing after a stock had increased that much in such a short period of time, but I love to see signs of strength from companies and believe this is an indication of more to come from Anaplan.Shares Owned: 519Average Purchase Price: $44.67 (opened initial position May 30, 2019)Total Purchase Price: $23,200Current Share Price: $47.50Current Value: $24,700Unrealized Gain: +6.3%Position Size in Portfolio: 5.28% (small)First Quarter 2020 ResultsTotal revenue: $75.8 million, up 47% year-over-year. Subscription revenue: $65.1 million, up 45% year-over-year. Billings $87.1 million, up 57% year-over-yearDollar-based Net Expansion Rate 123%Customers with Annual Recurring Revenue (ARR) >$250K = 279GAAP operating loss: $37.1 million or 48.9% of total revenue, compared to $25.3 million in the first quarter of fiscal 2019 or 49.1% of total revenue. Non-GAAP operating loss: $20.1 million, or 26.5% of total revenue, compared to $23.3 million in the first quarter of fiscal 2019, or 45.2% of total revenue.GAAP loss per share: $0.30, compared to $1.21 in the first quarter of fiscal 2019. Non-GAAP loss per share was $0.16, compared to $0.25 in the first quarter of fiscal 2019.Cash and Cash Equivalents: $332.7 million as of April 30, 2019.Key Slides/GraphsSubscription revenue is continuing to grow steadily. We should see increased growth in Q2 and Q4 if last years’ trends continueI’ll keep an eye on this number. If we see growth of customers spending >$250k ARR begin to slow, it will be a red flag for future growth potential.I expect margins to stay relatively flat with potential increases as the company and their products become more well-known/established.Billings growth longs very strong.Updated Full-Year 2020 GuidanceI generally don’t pay too much attention to guidance. The companies I am invested in usually provide very conservative guidance that they’ll easily beat. However, I DO pay attention when companies warn about guidance, lower guidance, or raise guidance.Anaplan raised it’s guidance for full-year 2020:Total revenue is now expected to be between $326 and $331 million (was between $310 and $314 million).Non-GAAP operating margin is now expected to be between negative 22.5% and 23.5% (was between negative 26% and 27%).Recent HighlightsI don’t pay too much attention to these. Of course companies are going to highlight recent successes, but results are far more important than self-selected business highlights. I learned this lesson with a company called Nutanix that I was previously invested in. Management boasted about all kinds of highlights, they were/are a leader in Gartner’s Magic Quadrant, but the results we relatively week and confusing for multiple quarters. The stock has suffered tremendously over the last year +. There is at least one important benefit from being identified as a leader according to Gartner. It makes it easier for customers to legitimize using a “new” solution like Anaplan because of the recognition of Gartner’s name/ratings.Anaplan Positioned as a Leader in 2019 Gartner Magic Quadrant for Sales and Operations Planning Systems of Differentiation.MUFG Investor Services announces their choice to use Anaplan for clients’ real-time planning processes.Anaplan announces CPX 2019 in San Francisco, expected to welcome over 2000 attendees from around the world June 10-12.To be continuedThat’s all for today. I’ll get to management’s prepared remarks and the Q&A portion of the conference call in our next email/podcast.If you want to support the newsletter, please like (hit the heart above it helps people find us!), share with friends, or change to a $5/month or $50/year “subscription” which includes the exact same content you are currently reading for free.LinksAnaplan First Quarter 2020 Earnings Press ReleaseAnaplan First Quarter 2020 Conference Call and PresentationAnaplan First Quarter 2020 Earnings Call Transcript - The Motley Fool Get full access to Founder Stock Investing at austin.substack.com/subscribe

Anaplan First Quarter 2020 Earnings Pt 1.

Salesforce Signs Definitive Agreement to Acquire TableauThis seems like a smart acquisition for Salesforce (CRM) and I think Tableau (DATA) will benefit from it as well. Tableau shares are currently up 33% in pre-market trading which is a nice day for investors. As regular readers know, my entire portfolio is made up of what can be called SaaS/software companies that operate in different markets. I expect this to mean our portfolio will have a great day and maybe even a great week. However, it’s important to stay humble and remember how volatile the market can be…and has been lately. I’m not making any changes to my long-term holdings in my portfolio based off of this news. One quick thought on the possibility for our companies to get acquired, then I’ll share highlights from the acquisition press release.We should never invest in a company because we hope they get acquiredInvestors can enjoy really nice one day pops when companies are being acquired, but if we truly believe in the long-term prospects of our companies, we are far better off if they stay independent. I hope none of the companies I currently own get acquired.Here’s the overview provided in the article:We are bringing together the world's #1 CRM with the #1 analytics platform. Tableau helps people see and understand data, and Salesforce helps people engage and understand customers. It's truly the best of both worlds for our customers--bringing together two critical platforms that every customer needs to understand their world," said Marc Benioff, Chairman and co-CEO, Salesforce. "I'm thrilled to welcome Adam and his team to Salesforce.Salesforce's incredible success has always been based on anticipating the needs of our customers and providing them the solutions they need to grow their businesses," said Keith Block, co-CEO, Salesforce. "Data is the foundation of every digital transformation, and the addition of Tableau will accelerate our ability to deliver customer success by enabling a truly unified and powerful view across all of a customer's data.Joining forces with Salesforce will enhance our ability to help people everywhere see and understand data," said Adam Selipsky, President and CEO of Tableau. "As part of the world's #1 CRM company, Tableau's intuitive and powerful analytics will enable millions more people to discover actionable insights across their entire organizations. I'm delighted that our companies share very similar cultures and a relentless focus on customer success. I look forward to working together in support of our customers and communities.To summarize, the management teams from both companies believe that adding Tableau’s analytics and visualizations to Salesforce’s platform will give customers additional insight to help inform business decisions. I’m no expert in this stuff, but it makes sense that Salesforce should be able to leverage it’s existing user base to sell these capabilities as a new feature. I’ve worked with several companies that use Salesforce and although it’s clearly a crucial platform for them, the most common complaint I have heard is how every additional add-on is so expensive. So I do wonder just how much more Salesforce can continue squeezing out of customers.Alteryx (AYX) is currently my 4th largest position at 15% of my portfolio. It is the most similar to Tableau out of all the companies I own. It is currently trading up 5% in pre-market. I’m sure we will begin to hear talks of potential acquirers of Alteryx and I personally hope they don’t get acquired.I will watch to see how this impacts AYX. Tableau and Alteryx do different things and commonly partner to work with customers on big projects. On their most recent earnings report, Alteryx announced that it is beginning to target larger enterprises. Salesforce is embedded in a lot of HUGE companies so this could either benefit Alteryx with more and larger partnership opportunities, or it could threaten them if Salesforce and Tableau begin to attempt to push Alteryx out of these opportunities (potentially developing a similar capability). I see the former as a more likely scenario, but it’s something I’ll watch. Especially since Alteryx is such a large position of mine.I won’t cover the other two articles for today, but they’re linked below if you want to get a feel for how customers use Anaplan (PLAN) and Zoom (ZM).Anaplan: Unlocking Value Through Leading Commercial Planning CapabilitiesZoom: Investment Bank DBO Turns to Secure, Efficient Zoom Video for Client Engagement - This is why I think the potential growth for Zoom is potentially STILL under appreciated. Even though I generally don’t care about valuations, I am hesitant to invest in ZM at around a $25B valuation when there are so many sub $10B market cap companies.Thank youThat’s all for today. As always, thank you for your time and attention. I would love your feedback so I can continually improve this newsletter.Also, if you want to support the newsletter, please like (hit the heart above it helps people find us!), share with friends, or change to a $5/month or $50/year “subscription” which includes the exact same content you are currently reading for free. Get full access to Founder Stock Investing at austin.substack.com/subscribe

Salesforce Buys Tableau and Anaplan & Zoom User Stories

This is part 2 of my review of Zscaler (ZS) Third Quarter 2019 Earnings. Today we will cover the questions and answer portion of the earnings call. ZS is currently a 7.5% position in my portfolio.We covered the results and prepared remarks in part 1 here.Before we get back into the earnings let’s talk about the last few days in the market and our companies. There’s been a lot of panic and some big sell-offs. This is a completely normal and healthy aspect of investing. In fact, it’s required for building long-term wealth in the stock market. Here’s a chart of the last 5-days - ranging from +.78% to down 10%Here’s a chart of the last 1 year - ranging from up 92% to up 185%I’m using this sell-off as an opportunity to assess my emotional response, test my discipline (if I’m panicking now, what will I do when a 20% or 30% drop happens?), and make sure I’m invested in what I believe are the world’s best Founder-led companies.Zscaler Third Quarter 2019 Earnings Q&AQuestion: Help us understand your differentiation vs some of the competitors that are leveraging public cloud partnerships to compete with Zscaler. Answer: Appliance vendors are having to compete for the cloud using technology that it wasn't meant from the cloud. So when they are spinning these virtual machines on public cloud and claiming to have presence in 100 locations or more is totally misleading. Let me walk through a little bit on how these public clouds work. Google, AWS, they're very large centralized data centers in about 100 locations around the world. They call them regions. That's where applications run, that's where storage and compute actually runs.Now in addition they have 100 some locations, some of them call them points of presence, others call them natural edge locations and these are front doors that collect information so that the thing can be sent to the regions, which are about 20 or so. So these clouds are built to run applications as the destinations, not an in transit cloud. For example take AWS data center in Ohio. It is kind of staying away from Chicago, so the traffic goes there and comes back. Speed of light is speed of light, so the performance can't be good unless you build a cloud that's distributed to handle security to enforcement hence the response time architecturally can't be good.Question: Can I ask you about when your competitors is having a lot of internal issues and just how Zscalar kind of react to that? Does it change your planning and you become more aggressive? Does it change the dialogue with customers? How are you guys reacting to your chief competitor being extremely weak at the moment?Answer: If we were selling a security box or a proxy box with the same channel looking for refresh opportunities, this will be a big impact. We have always said we have been selling top down transformation. Our need is driven by applications like Office365, projects like SD-WAN. So our whole business comes from securing new local breakouts, which is a greenfield opportunity. But in almost all cases where Zscaler is deployed we end up replacing secure web gateway or web proxy, just generally sitting in centralized locations. Weak competitors does it help us generally? Yes. Does it change our sales process? Not really.Question: I was hoping you guys could talk a little bit about the degree to which you have any challenges in hiring of sales people, what the environment looks like and how how much of the spending is going into new hires to drive future growth? It seems like given the tense -- the difficult market out there that may be a challenge to continue to scale at that rate. Is that an issue that we should be concerned about? Answer:It is a competitive environment, Alex. This is Remo. However, I think we're making -- we're doing well on a hiring front. That's something that we are investing insignificantly. We're not giving out what our RSM (ph) headcount is. However when you take a look at sales and marketing headcount, it remains in the 40% 45% range of our total company headcount. This last quarter we added over a 110 employees, approximately 44 in sales and marketing. In some of the regions it's easier than others and I had a conversation with one of our VP's this morning who's a bullish relative to hiring.So I think that Zscaler being a public company for about a year now as well as the momentum that we're having, as well as the market continuing to come to us with our performance, I think we're getting more visibility and we're hopeful that we're going to do a good job in hiring our sales and marketing people as we continue to go forward. As Jay mentioned our focus is sales and marketing, but in addition we're a technology company. So we're looking to continue to do development through tuck-in type acquisitions as well as growing our R&D organization.There were several more questions asked in the Q&A. I want to reiterate that I believe this was a good quarter for Zscaler, I’m fully confident in the company’s business and management, and I’ll look to keep it between an 8%-10% position in my portfolio.LinksThank you so much for your time and attention. I love providing this information but as investors, the best way to learn is to dig into these reports on your own and come to your own conclusions. Here are all the links below.I’ll generally review the release, then listen to the earnings call (this is important because we can gather so much from tone and communication styles), then read the transcript and take notes.Zscaler Third Quarter 2019 Earnings ReportZscaler Third Quarter 2019 Earnings Call (replay)Zscaler Third Quarter 2019 Earnings Call Transcript (Motley Fool)Thank youThat’s all for today. As always, thank you for your time and attention. I would love your feedback so I can continually improve this newsletter.Also, if you want to support the newsletter, please like (hit the heart above it helps people find us!), share with friends, or change to a $5/month or $50/year “subscription” which includes the exact same content you are currently reading for free. Get full access to Founder Stock Investing at austin.substack.com/subscribe

Zscaler Third Quarter 2019 Earnings Pt. 2

Hey everyone, There will surely be a lot of headlines in the news today, many will probably negative because that’s what gets clicks but most of the headlines don’t matter.We’re focused on one story today: Zscaler’s Third Quarter 2019 Earnings. Zscaler (ZS) reported earnings on May 30th and they were pretty good. Today we’re going to focus on the prepared remarks to keep this under five minutes, tomorrow I’ll cover Q&A.Our positionNumber of shares: 439Average purchase price: $51.85Cost basis: $22,800Position size: 7.43% (medium)Current share price: $68.31Current value: $30,100Unrealized gain: $7,310 | +32%ResultsRevenue grows 61% year-over-year to $79.1 million Calculated billings grow 55% year-over-year to $84.7 million Deferred revenue grows 69%year-over-year to $211.5 million GAAP net loss of $12.2 million compared to GAAP net loss of $8.8 million on a year-over-year basis Non-GAAP net income of $7.4 million compared to non-GAAP net loss of $2.6 million on a year-over-year basisPrepared RemarksCustomer Story from Jay Chaudhry -- President, Chief Executive Officer and Chairman of the BoardLet me highlight several new customer deals in the quarter. I will start with a deal that shows how large enterprises are buying the ZIA and ZPA platform. One of the world's largest pharmaceutical companies with its headquarters in Europe purchased our transformation bundle for 100,000 users aims the ZPA for over 17,000 users. Moving from a decentralized IT business units to a centralized IT model. This customer had a strategy to transform to the cloud, for their network and for their applications. To achieve this, the IT team identified two initiatives, one increase use of cloud including a move to Office365, Zoom and AWS.And number two network and security transformation. They adopted a strategy to create secure local Internet breakouts for 200 offices around the globe. Our cloud security platform allowed them to realize the vision, a perimeter less enterprise with direct access to any service or application from anywhere, on any device without back hauling traffic through regional hubs. The results reduced business risk, faster user experience and significant cost savings. They will no longer need either a site to site VPN to AWS, or remote access VPN. ZPA also enables the customer to rapidly integrate mergers and manage divestitures, while increasing the level of security with a zero trust network access approach.Comments on the competitive landscape As organizations increasingly make the shift to the cloud, traditional firewall and VPN vendors are finally acknowledging that the legacy security appliances can secure the new digital enterprise and are attempting to build a security cloud using single tenant software designed for on-premise appliances just like you can't create a Netflix service by stacking thousands of DVD players in the cloud. You can't offer an inline high performance security cloud by spinning up a bunch of virtual machines in a public cloud. This is a defensive strategy of cloud imitators, which in our view serves the self-preservation of the vendor not the needs of the customers.We believe, we have a significant competitive advantage as a result of the technology, architecture and maturity of cloud security platform including one, we were born in the cloud, for the cloud just like Salesforce and Workday. Two, we have a purpose built globally distributed multi-tenant cloud for fast user experience, unlike imitation cloud, Zscaler requires no back hauling from front doors to a central compute data center of a public cloud. Three, we perform SSL inspection at scale as a purpose built proxy for better security. Four, we deliver zero trust network access that provides application access without network access reducing business risk unlike firewalls and VPN's.And lastly we have over 10 years of experience running a mission critical inline cloud for Global 2000 customers, processing 65 billion transactions a day. As someone said, it is really no compression algorithm for experience. We continue to innovate and invest in maintaining our significant technology lead. Our latest fourth generation large data centers provide multiple 100 gigabits per second links. We continue our strategy of targeted tuck-in acquisitions. Our previously announced trust path acquisition is already well integrated into the Zscaler platform and their machine learning and AI technology is helping us deliver better threat detection.LinksThank you so much for your time and attention. I love providing this information but as investors, the best way to learn is to dig into these reports on your own and come to your own conclusions. Here are all the links below. I’ll generally review the release, then listen to the earnings call (this is important because we can gather so much from tone and communication styles), then read the transcript and take notes.Zscaler Third Quarter 2019 Earnings ReportZscaler Third Quarter 2019 Earnings Call (replay)Zscaler Third Quarter 2019 Earnings Call Transcript (Motley Fool)Thank youThat’s all for today. As always, thank you for your time and attention. I would love your feedback so I can continually improve this newsletter.Also, if you want to support the newsletter, please like (hit the heart above it helps people find us!), share with friends, or change to a $5/month or $50/year “subscription” which includes the exact same content you are currently reading for free. Get full access to Founder Stock Investing at austin.substack.com/subscribe

Zscaler Third Quarter 2019 Earnings Part 1

Twilio Launches $750M Stock Offering This doesn’t alarm me at all. The stock seems to be down a few percent after hours. Maybe because of this news.. who knows.Intends to use the net proceeds for general corporate purposes, which may include the acquisition of other companies or businesses, the refinancing or repayment of debt, capital expenditures, working capital, and share repurchases.MongoDB is Running Out of SpaceThis is such a bad article that I had to share it. Mongo Database is my third largest holding. I have no idea what will happen to the stock over the next year. I do believe it is one of the most innovative companies around with great products and great management. I would never ever ever short it. Again..terrible articleMongoDB's stock is up 475% since its IPO.Competition in the DBaaS and SaaS market is increasing.At a $7.6B valuation, MongoDB looks like a good short opportunity.Simon Erickson, one of my favorite investors talks Zoom $ZM on Twitter. Incredible that we can interact and community source investing like this. Also makes me a bigger fan of Zoom. I currently have exposure to Zoom through some puts I sold. That’s probably a waste of time and effort and I should probably just own shares of this awesome company.Follow Simon on Twitter! Get full access to Founder Stock Investing at austin.substack.com/subscribe

Twilio Stock Offering, Short MongoDB and go broke, Zoom Tweetstorm

Okta Chief Customer Officer, Krista Anderson-Copperman named one of the Bay Area’s Most Influential Women in Business.I don’t know the criteria for making this list, but I found this important because Okta chose to highlight it on their company blog. I believe the best companies are focused on diversity and inclusion. Here’s a quote from Krista in the article:As the Chief Customer Officer, I ensure that we are constantly living our core value “Love Our Customers” by providing a world-class post sales experience where customers solve real identity challenges and gain tangible value from the products Okta delivers. This includes professional services, education, support, the CSM function, and, of course, renewals because that is the ultimate measure of how successful our customers are with us.Twilio announces general availability of PCI compliant payments over the phoneTwilio announced at their SIGNAL user conference last year. Now it’s generally available to the public. I doubt this product itself will make a meaningful impact on Twilio’s numbers, but it shows they are continuing to innovate. That’s what we like to see in our companies. allows you to accept PCI compliant payments over the phone with a single line of code.Before , businesses needed to build their own PCI compliant payment systems with custom voice payment prompts, build a system for validation, and integrate with a third party for payment processing. After building, you would be subjected to yearly auditing for compliance. removes the need to jump through these hoops, allowing you to focus on building a secure voice payment experience that enables your customers to pay over the phone, anytime of day.Inbox Health, an early adopter of , is committed to improving the patient billing process; making the experience more transparent and personalized for providers and patients. They have found that embedding in their Twilio-powered IVR has helped them drive efficiency and save on costs.Before , Inbox Health would have been required to “invest a lot more in PCI compliance than we otherwise had to,” says CEO Blake Walker.  “ allows patients to pay their medical bills over the phone when it works for them. In fact, 53% of patients are able to pay over the phone without needing to speak to an agent at all.”5 Reasons to Buy The Trade Desk and Hold for the Long Term - by Danny Vena from The Motley FoolDanny is one of my favorite writers. I love it when authors have what is called “skin in the game”. Danny owns shares of The Trade Desk which gives him skin in the game.On a conference call late last year, The Trade Desk's CEO explained the company's significant advantage. "Because The Trade Desk does not transact indirectly identifiable consumer data and because we don't own a search engine, we can provide a Unified Open ID that enables advertisers to compare every destination on their media plan to every other destination objectively," Green said. "Our data and the data of our third-party partners cannot be directly associated with an individual. Data in The Trade Desk platform does not include names, phone numbers, or Social Security numbers, for example." Get full access to Founder Stock Investing at austin.substack.com/subscribe

Okta Customer Love, Twilio , Buy The Trade Desk The Trade Desk

Jeff Green the Founder and CEO of The Trade Desk was on Mad Money with Jim Cramer on Tuesday May 14th. Here are my very rough notes:Cramer Intro:Stock down over last 2 weeks -- is it a buy?!? Cramer said the company reported very strong earnings, management guided conservatively as usual.Cramer: How much would investors have made if they bought IPO?Green: IPO priced at $18 and was in mid 20s at end of day — up 1,000% in 3 yearsCramer: How does platform work?Green: If you want to buy google or facebook, you go there. But they don't do the rest of the internet. What we do is help companies figure out...should I buy ads on NYT.com, CNBC, HULU, etc? We help them use data to figure out where to advertise.Cramer: What is the Rule of 40Green: Rule of 40 — trying to figure out the right multiple of profit and growth  Cramer commented TTD’s ratio is number 1 of any software company, apparently clocking in around 80 (I did not confirm)Rule of 40 explained: The rule of 40% The rule of 40% is nothing more than a rule of thumb to analyze the health of a software/SaaS business. It takes into consideration two of the most important metrics for a subscription company: growth and profit. Which means that your growth rate plus your profit should add up to 40%Cramer: You are willing to try China when everyone is running from China. Why is that smart?Green: What we have done well is being able to partner with anyone because we don't own any media. We're the only company in the world that can partner with everyone. We did something unique which most companies don't do in China. We brought money into China vs out of China. It made it easy for us to go into China when everyone else is running out.China: 2nd largest ad market in the world, growing twice as fast as US. We're hoping to go into every other country tooCramer: Comcast gave HULU to Disney. How do you feel about that?Green: CTV is one of the greatest transitions we will ever see. Most consumers can't afford another subscription. So ad-funded model is the way to goGreen: TAM is growing from $725B to $1T in 7 years, growing at 1.5x GDPLink:The Trade Desk Founder and CEO Jeff Green on Mad Money with Jim Cramer Get full access to Founder Stock Investing at austin.substack.com/subscribe

015 Jeff Green & The Trade Desk on Mad Money

Hey everyone,This newsletter is hosted by Substack.com which makes it super easy for non-tech oriented folks like myself. They have recently introduced a podcast function so I’m going to give a quick daily podcast a shot. I’d love to know what you think about that. You have the ability to hit unsubscribe from these podcast episodes which will allow you to continue getting the regular emails you’re used to, but not the podcasts.Podcast format..I’m going to call these “Founders Five”. They’ll be a quick five minute daily podcast covering anything I think is meaningful for our little collection of founder-led companies. There is a lot of noise out there so even though this is going to be a daily podcast, I hope to bring some valuable high-quality content in little bite-sized pieces.This may change, but for now, I’ll probably type out my own transcript below so if you’re reading via email you can stay up to date without hearing my DJ voice. First up - China Trade Talk Fears: Yes, they are happening, they have been for about a year and a half. The market has been hit pretty hard these last few days on news that we didn’t have a deal by our already extended deadline. I have no idea what is going to happen or when. I think eventually, we will get past this like we have gotten past so many other world events over the last 100+ yearsWhat I do know is that we have to control what we can control. For me, that’s living below our means, only investing money I don’t need for more than three years, and staying invested in what I believe are the world’s best founder-led companies.Second Story - Zoom Hits 98% Satisfaction at The University of SydneyI don’t own shares of Zoom but I really want to. There’s no way on Earth to justify the current share price, but I just have this feeling we are under appreciating the quality of their team and product as well as their growth potential. I will probably start a small position (again) and look to add to it overtime.Third Story - The Year of the Tech IPO: Exploring App Growth in the Okta Integration NetworkOkta is a pretty awesome company with a very important product for their customers. It also gives them some deep insight into the inner-workings and app usage of their customers. This is great for Okta to develop their own future products, but also lets them do cool reports like this. Takeaway from this article — Zoom is the clear winner for 2019 with Slack close behind. I don’t think I’ll invest in Slack at it’s IPO. At least not if it has anywhere near the price to sales ratio of Zoom. Slack’s revenue growth is around 60% year over year where as Zoom’s is over 100% growing off of a much larger base. Pager Duty which we also own is also featured as is another company, CloudFlare which is not public yet, but plans to IPO during the first half of 2019. We will have to keep a close watch on it.Here’s how the four companies’ YOY customer growth looks (graph in the email)Image Source: OktaThat’s all for today. If you’re listening to this podcast and you want to help support us or subscribe to receive our free investing newsletter head over to austin.substack.com. Note, there is an option to pay $5 a month or $50 a year if you want to help support us. This is totally optional and the free vs paid content is the same.Thanks and see you tomorrow! Get full access to Founder Stock Investing at austin.substack.com/subscribe

Founders' Five Daily Podcast

This week’s podcast was incredible. I had the opportunity to interview Meagen Eisenberg, the Chief Marketing Officer (CMO) at TripActions. Prior to joining TripActions, Meagen was CMO at Mongo Database (MDB), a company we have owned in our portfolio for more than a year, and before that, Vice President of Marketing and Customer Acquisition at Docusign (DOCU). These are three incredible companies, and in my opinion, Meagen was a big part of what made each of them successful. Become a supporter of this podcast:https://anchor.fm/founderstockinvesting/support Get full access to Founder Stock Investing at austin.substack.com/subscribe

013 TripActions CMO Meagen Eisenberg - Make Sure That Youre The Best At It

Hey Friends, Last year, Sarah and I started a podcast to share our journey investing in Founder-led stocks and hopefully inspire others to get started investing. We took a long hiatus because life got busy, but I’m going to do my absolute best to start publishing a podcast every Monday again. Sarah will be on the show when possible, but it’s tough for us both to get the time to record each week…we will do our best because she truly is the star of the show.This week’s podcast was incredible. I had the opportunity to interview Meagen Eisenberg, the Chief Marketing Officer (CMO) at TripActions. Prior to joining TripActions, Meagen was CMO at Mongo Database (MDB), a company we have owned in our portfolio for more than a year, and before that, Vice President of Marketing and Customer Acquisition at Docusign (DOCU). These are three incredible companies, and in my opinion, Meagen was a big part of what made each of them successful.Here’s a photo of Meagen and one of her daughters which I borrowed from a LinkedIn post of hers.There are two ways you can listen to the podcast. Either directly through this email (above) or on your favorite podcast app (links below). I’d love to know which method you prefer. You can either reply to this email or let me know in the comments below. Apple iTunesSpotifyGoogle PlayCastboxStitcherSoundcloudI really enjoyed talking to Meagen. She is such a talented and authentic leader. Here were my three biggest takeaways. I’d love to know what yours are.Hard work and persistence are key to being successful at anything we do (business, parenting, friendships, etc)Never stop learning. Meagen has 22+ years of experience and has held executive roles at some of the most innovative companies of our time....and she’s still curious/learning every dayParenting (and relationships in general) aren't about quantity (of time), but quality. It's clear that Meagen is a wonderful example for her daughters and other parents as well.And the timestamps for our conversation:0:00 - Intro1:50 - How have you maintained tenacity and work ethic?2:30 - As a leader, how do you know when to push the limits and when to slow down/hold back?5:00 - Explanation of Docusign, MongoDB, and TripActions8:00 - International Women's day10:13 - How have you helped scale such incredible teams/orgs?11:20 - What are you excited about w/TripActions right now?15:12 - Challenges on your radar?17:04 - What makes a successful leader/founder?18:00 - How has the cloud and social changed marketing and your job as a CMO?19:30 - What will be the biggest change in tech and marketing in 5-10 years?20:40 - An area you'd like to see tech improve?22:23 - Your experience as an advisor and how it has made you a better CMO?24:50 - Thoughts on raising your daughters?28:25 - Last time you were late to work?29:20 - Last time you lost an argument with one of your daughters?30:00 - Which App do you give up?31:40 - What have you been reading/book that's had a profound impact?33:10 - What's the kindest thing someone's ever done for you?Here are links to find Meagen on Twitter and TripActions Website if you want to learn more. They’re hiring!! Get full access to Founder Stock Investing at austin.substack.com/subscribe

Podcast #013 With TripActions Chief Marketing Officer Meagen Eisenberg

Investing your money should be enjoyable and empowering. This podcast is dedicated to simplifying investing, finding the best founder-led companies, and sharing our real portfolio results. Subscribe to our email newsletter at https://austin.substack.com austin.substack.com

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