This week’s podcast is about ANE Logistics, which is a compelling business model for digitizing and consolidating less than truckload logistics in China.You can listen to this podcast here or at iTunes and Google Podcasts.Here is my new book (released December 1):Moats and Marathons (Part 1): How to Build and Measure Competitive Advantage in Digital Businesses Kindle EditionMy questions for ANE Logistics:Does a franchised logistics network with digital connectivity lower the barrier to entry?What happens when the volume is greater a network with the same number of nodes and linkages as another?What happens when the geographic density is increased? More nodes and / or more linkages.---------Related articles:Podcast 26: Is Baidu the New AT&T? The Basics of Physical vs. Virtual Networks.Will JD Logistics Become a New Type of Ecosystem? (Asia Tech Strategy – Podcast 71)From the Concept Library, concepts for this article are:Networks vs. Platforms vs. Network EffectsFranchised NetworksLogisticsFrom the Company Library, companies for this article are:ANE Logistics———-I write and speak about digital competition and China / Asia’s leading tech companies.I also run Asia Tech Strategy, a podcast and subscription newsletter on the strategies of China / Asia tech companies.This content (articles, podcasts, website info) is not investment advice. The information and opinions from me and any guests may be incorrect. The numbers and information may be wrong. The views expressed may no longer be relevant or accurate. Investing is risky. Do your own research.Support the show (https://jefftowson.com)

Jeff's Asia Tech Class

An Intro to ANE Logistics and Franchised Physical Networks (110)

This week’s podcast is Brazilian Stone Company (STNE), the Berkshire Hathaway-invested payment platform that has fallen in share price by +80%.You can listen to this podcast here or at iTunes and Google Podcasts.Here is my new book (released December 1):Moats and Marathons (Part 1): How to Build and Measure Competitive Advantage in Digital Businesses Kindle Edition——-Related articles:Brazilian Stone Co, Chinese Ant, and American Square Are All Building Complementary Payment Platforms (1 of 2) (Asia Tech Strategy – Daily Lesson / Update)What Ant Financial Tells Us About Square’s Future. (Jeff’s Asia Tech Class – Daily Update)Ant Financial Is 3 Platform Business Models Combined. (Jeff’s Asia Tech Class – Daily Lesson / Update)From the Concept Library, concepts for this article are:Payment PlatformsDigital-Physical HybridFrom the Company Library, companies for this article are:Stone Company------Support the show (https://jefftowson.com)

Berkshire-Invested Stone Co Has Now Dropped +80% in 2021 (109)

This week’s podcast is about how to assess specialty companies within enterprise software and services. And about Tuya, which an interesting example of a specialty B2B play.You can listen to this podcast here or at iTunes and Google Podcasts.Here is my new book (released December 1):Moats and Marathons (Part 1): How to Build and Measure Competitive Advantage in Digital Businesses Kindle EditionHere are my 5 questions (thus far) for assessing the viability of a specialty ecommerce company.Is the company sufficiently differentiated in the user experience? Or did they just get there first?Can the company compete and/or differentiate in logistics or infrastructure without ongoing spending?Does the company have a strong competitive advantage in a circumscribed market?Is there a clear path to significant operational cash flow?Has the company avoided markets and situations that are attractive or strategic for the major ecommerce companies? Here are my 5 questions (thus far) for assessing the viability of a specialty enterprise company.Is the company sufficiently differentiated in the user experience? Or did they just get there first?Can the company compete and/or differentiate in sales / marketing or R&D without ongoing spending?Does the company have a strong competitive advantage in a circumscribed market?Is there a clear path to significant operational cash flow?Has the company avoided markets and situations that are attractive or strategic for the major enterprise companies? Pay attention to hierarchies of control.—----Related articles:Etsy and How to Predict the Winners in Specialty Ecommerce (Asia Tech Strategy – Daily Lesson / Update)An Introduction to Tuya and Its Play for an IoT Ecosystem (Pt 1 of 2)(Asia Tech Strategy – Daily Lesson / Update)From the Concept Library, concepts for this article are:Hierarchy of ControlEnterprise SpecialtyFrom the Company Library, companies for this article are:Tuya----------—-I write and speak about digital competition and China / Asia’s leading tech companies.This content (articles, podcasts, website info) is not investment advice. The information and opinions from me and any guests may be incorrect. The numbers and information may be wrong. The views expressed may no longer be relevant or accurate. Investing is risky. Do your own research.Support the show (https://jefftowson.com)

Tuya and How to Predict the Winners in Specialty Enterprise (108)

This week’s podcast is about Alibaba and Singles&apos; Day. Just my thoughts on what really matters.You can listen to this podcast here or at iTunes and Google Podcasts.Here is my new book (released December 1):Moats and Marathons (Part 1): How to Build and Measure Competitive Advantage in Digital Businesses Kindle EditionMy list of 7 things people are getting wrong about Singles&apos; Day:Business model is about building demand-side scale. This is also about economies of scale as a relative advantage.Operating model is about user-facing innovation that adds value.Consumer facing innovation is likely about live-streaming, metaverse and NFTs.Merchant-facing innovation is likely about R&D and financing.Physical assets have traditionally been about supply-side scale and building a barrier to entry.Alibaba is also separating supply side into a new business that is the "new infrastructure of commerce".Singles Day is both a moonshot program and a yearly stress test for the company. Here are the Digital Operating Basics. Here is the Alibaba slides for adding value to merchants. —----Related articles:7 Questions for Alibaba on Singles’ Day (pt 1 of 2)Behind the Scenes with Alibaba on Singles’ Day (Jeff’s Asia Tech Class – Podcast 5)From the Concept Library, concepts for this article are:Digital Operating Basics: DOB2 Never-Ending Personalization and Customer ImprovementNetwork Effects - Demand side Economies of ScaleEcommerceFrom the Company Library, companies for this article are:Alibaba-------I write and speak about digital competition and China / Asia’s leading tech companies.I also run Asia Tech Strategy, a podcast and subscription newsletter on the strategies of China / Asia tech companies.This content (articles, podcasts, website info) is not investment advice. The information and opinions from me and any guests may be incorrect. The numbers and information may be wrong. The views expressed may no longer be relevant or accurate. Investing is risky. Do your own research.Support the show (https://jefftowson.com)

7 Things Everyone Is Getting Wrong About Alibaba Singles' Day (107)

This week’s podcast is more about Snowflake, the “data ecosystem” company. And how multiple companies are competing to create the standards and architecture for cloud services.You can listen to this podcast here or at iTunes and Google Podcasts.Here is my new book (released December 1):Moats and Marathons (Part 1): How to Build and Measure Competitive Advantage in Digital Businesses Kindle Edition—-Related articles:Snowflake is Building 3 Complementary Platforms with 4 Network Effects (Pt 1 of 3) (Asia Tech Strategy – Daily Lesson / Update)Kingsoft Cloud and How to Think About Cloud Services in China (Asia Tech Strategy – Daily Lesson / Update)What Everyone is Getting Wrong About Snowflake (Asia Tech Strategy – Podcast 105)From the Concept Library, concepts for this article are:Innovation: Dominant DesignInnovation: Increasing Returns to Tech AdoptionCloud ServicesFrom the Company Library, companies for this article are:SnowflakeTuya-----------I write and speak about digital China and Asia’s latest tech trends.I also run Asia Tech Strategy, a podcast and subscription newsletter on the strategies of China / Asia tech companies.This content (articles, podcasts, website info) is not investment advice. The information and opinions from me and any guests may be incorrect. The numbers and information may be wrong. The views expressed may no longer be relevant or accurate. Investing is risky. Do your own research.Support the show (https://jefftowson.com)

Snowflake, Tuya and the Fight for Dominant Design in Cloud (106)

This week’s podcast is about Snowflake, the "data ecosystem" company. It is one of the most compelling digital business models out there. It is one of the few companies that could become the next Google or Microsoft.You can listen to this podcast here or at iTunes and Google Podcasts.Here is my new book (released December 1):Moats and Marathons (Part 1): How to Build and Measure Competitive Advantage in Digital Businesses Kindle EditionA summary of the Digital Operating Basics:Scale and growth and small incremental cost.Personalization. A digital core for operations. Ecosystem and connectedness. People, culture and work design form a social engine that enables innovation and execution personalized for each customer. Operational cash flow. Here is a previous podcast on that.Lessons in Digital Operating Basics from Ram Charan. Part 1 of 2 on “Rethinking Competitive Advantage”. (Asia Tech Strategy – Podcast 98)—-Related articles:Snowflake is Building 3 Complementary Platforms with 4 Network Effects (Pt 1 of 3) (Asia Tech Strategy – Daily Lesson / Update)Snowflake is Building 3 Complementary Platforms with 4 Network Effects (Pt 2 of 3) (Asia Tech Strategy – Daily Lesson / Update)Part 3: Snowflake’s Big Growth and Competition Questions (Pt 3 of 3) (Asia Tech Strategy – Daily Lesson / Update)From the Concept Library, concepts for this article are:Complementary PlatformsDigital Operating BasicsFrom the Company Library, companies for this article are:Snowflake---------I write and speak about digital China and Asia’s latest tech trends.This content (articles, podcasts, website info) is not investment advice. The information and opinions from me and any guests may be incorrect. The numbers and information may be wrong. The views expressed may no longer be relevant or accurate. Investing is risky. Do your own research.Support the show (https://jefftowson.com)

What Everyone is Getting Wrong About Snowflake (105)

This week’s podcast is about core vs. adjacency growth. This is a good framework for thinking about growth in digital businesses&apos;.You can listen to this podcast here or at iTunes and Google Podcasts.Most of this is a summary of work by Chris Zook at Bain&apos;s strategy practice. I am citing the books:Profit from the CoreBeyond the CoreMost all sustainable growth is based on 1-2 strong cores. A profitable core is centered on the strongest position in terms of loyal customers, competitive advantage, unique skills, and ability to earn profits.Six growth adjacencies:New customer segments:Micro-segmentation of current segmentsUnpenetrated segmentsNew segmentsNew geographiesGlobal expansionLocal expansionNew channelsInternetDistributionIndirectNew productsNew to worldComplementsSupport servicesNext generationJust new products / servicesNew BusinessesNew to world needsNew substitutesNew modelsCapability adjacenciesNew value chain stepsForward integrationBackwards integrationSell capability to outsideHow to assess an adjacency move:Factor 1: Adjacency is tightly tied to a strong core.Factor 2: An attractive adjacency market in terms of profit poolsFactor 3: The ability to capture economic leadership in that market. Competitive advantage as an attacker and then an incumbent.—----Related articles:Growth, ROIC / RONIC and Growth + Sales in Digital Valuation (Asia Tech Strategy – Podcast 102)An Intro to Growth and “Birds in the Bush” in Digital Valuation (Asia Tech Strategy – Daily Lesson / Update)From the Concept Library, concepts for this article are:Growth: Core vs. AdjacencyDigital Operating Basics——-I write and speak about digital China and Asia’s latest tech trends.I also run Asia Tech Strategy, a podcast and subscription newsletter on the strategies of China / Asia tech companies.This content (articles, podcasts, website info) is not investment advice. The information and opinions from me and any guests may be incorrect. The numbers and information may be wrong. The views expressed may no longer be relevant or accurate. Investing is risky. Do your own research.Support the show (https://jefftowson.com)

Core vs. Adjacency Growth in Digital Businesses (104)

This week’s podcast is about how digital impacts society, business, news and politics. And how centralized planning might be the best solution in a digital world.You can listen to this podcast here or at iTunes and Google Podcasts.—Related articles:Valuation Like Warren Buffett in 1 Slide (Asia Tech Strategy – Daily Lesson / Update)An Intro to Digital Valuation (Asia Tech Strategy – Daily Lesson / Update)Why DCF Sucks for Digital Valuation. (Asia Tech Strategy – Podcast 101)From the Concept Library, concepts for this article are:Coordination and Transaction CostsEcosystems vs. Platforms vs. NetworksTheory of the FirmFrom the Company Library, companies for this article are:n/a ------------I write and speak about digital China and Asia’s latest tech trends.I also run Asia Tech Strategy, a podcast and subscription newsletter on the strategies of China / Asia tech companies.This content (articles, podcasts, website info) is not investment advice. The information and opinions from me and any guests may be incorrect. The numbers and information may be wrong. The views expressed may no longer be relevant or accurate. Investing is risky. Do your own research.Support the show (https://jefftowson.com)

Info Dictators and Why Mark Zuckerberg Will Choose the Next President (103)

This week’s podcast is about growth and how it relates to value and valuation. ROIC vs. RONIC is an important part of separating past and continuing value.You can listen to this podcast here or at iTunes and Google Podcasts. —-Related articles:Valuation Like Warren Buffett in 1 Slide (Asia Tech Strategy – Daily Lesson / Update)An Intro to Digital Valuation (Asia Tech Strategy – Daily Lesson / Update)Why DCF Sucks for Digital Valuation. (Asia Tech Strategy – Podcast 101)From the Concept Library, concepts for this article are:ValuationGrowth, ROIC/RONIC and ValueGrowth + SalesFrom the Company Library, companies for this article are:n/a--------I write and speak about digital China and Asia’s latest tech trends.I also run Asia Tech Strategy, a podcast and subscription newsletter on the strategies of China / Asia tech companies.This content (articles, podcasts, website info) is not investment advice. The information and opinions from me and any guests may be incorrect. The numbers and information may be wrong. The views expressed may no longer be relevant or accurate. Investing is risky. Do your own research.Support the show (https://jefftowson.com)

Growth, ROIC / RONIC and Growth + Sales in Digital Valuation (102)

This week’s podcast is about how to apply DCF in valuations of digital companies.You can listen to this podcast here or at iTunes and Google Podcasts.For the tennis ball story and DCF details, here are the slides.–----Related articles:Valuation Like Warren Buffett in 1 Slide (Asia Tech Strategy – Daily Lesson / Update)An Intro to Digital Valuation (Asia Tech Strategy – Daily Lesson / Update)From the Concept Library, concepts for this article are:Valuation: DigitalDiscounted Cash FlowFrom the Company Library, companies for this article are:n/a———-I write and speak about digital China and Asia’s latest tech trends.I also run Asia Tech Strategy, a podcast and subscription newsletter on the strategies of China / Asia tech companies.This content (articles, podcasts, website info) is not investment advice. The information and opinions from me and any guests may be incorrect. The numbers and information may be wrong. The views expressed may no longer be relevant or accurate. Investing is risky. Do your own research.Support the show (https://jefftowson.com)

Why DCF Sucks for Digital Valuation. (101)

This week’s podcast is about Hillhouse Capital and how they are buying and digitizing Chinese and increasingly Asian companies. I talk about their deals with Belle and Gree.You can listen to this podcast here or at iTunes and Google Podcasts.Here is my summary of digital operating basics (Dr. Ram’s book combined with some of my own thinking):Scale and growth at small incremental cost.Continuous personalization and customer-facing innovation.A digital core for operations.Ecosystem and connectednessPeople, culture and work design create a social engine that enables innovation and execution – increasingly personalized for each customer.Money-making at scale makes the company sustainable. It enables continuous innovation, including big bets where the ability to withstand losses is important.The picture I use to summarize Value Point is shown here.—–Related articles:How I Learned to Love SoftBank and Its Investment Strategy (Jeff’s Asia Tech Class – Daily Update)Lessons in Digital Operating Basics from Ram Charan. Part 1 of 2 on “Rethinking Competitive Advantage”. (Asia Tech Strategy – Podcast 98)Meituan vs. Ctrip vs. Alibaba: Who Will Win in China Services? (Jeff’s Asia Tech Class – Podcast 22)From the Concept Library, concepts for this article are:Digital Operating BasicsValue Point (Ques 7)From the Company Library, companies for this article are:Hillhouse Capital GroupBelleTopsport International HoldingsGree Electric——-I write and speak about digital China and Asia’s latest tech trends.I also run Asia Tech Strategy, a podcast and subscription newsletter on the strategies of China / Asia tech companies.This content (articles, podcasts, website info) is not investment advice. The information and opinions from me and any guests may be incorrect. The numbers and information may be wrong. The views expressed may no longer be relevant or accurate. Investing is risky. Do your own research.Support the show (https://jefftowson.com)

How Hillhouse Capital Invests In and Digitizes Chinese Companies. (100)

This week’s podcast is my second on Ram Charan’s new book “Rethinking Competition Advantage“. I think it has a lot of great insights about the basics of digital operations.You can listen to this podcast here or at iTunes and Google Podcasts.Here is my summary of digital operating basics (Dr. Ram’s book combined with some of my own thinking):Scale and growth at small incremental cost. Continuous personalization and customer-facing innovation. A digital core for operations.Ecosystem and connectedness.People, culture and work design create a social engine that enables innovation and execution – increasingly personalized for each customer. Money-making at scale makes the company sustainable. It enables continuous innovation, including big bets where the ability to withstand losses is important. —–Related articles:Lessons in Digital Operating Basics from Ram Charan. Part 1 of 2 on “Rethinking Competitive Advantage”. (Asia Tech Strategy – Podcast 98)Meituan vs. Ctrip vs. Alibaba: Who Will Win in China Services? (Jeff’s Asia Tech Class – Podcast 22)From the Concept Library, concepts for this article are:Digital Operating Basics------I write and speak about digital China and Asia’s latest tech trends.I also run Asia Tech Strategy, a podcast and subscription newsletter on the strategies of China / Asia tech companies.This content (articles, podcasts, website info) is not investment advice. The information and opinions from me and any guests may be incorrect. The numbers and information may be wrong. The views expressed may no longer be relevant or accurate. Investing is risky. Do your own research.Support the show (https://jefftowson.com)

More Lessons in Digital Operating Basics from Ram Charan. Part 2 of 2 on “Rethinking Competitive Advantage”. (99)

This week’s podcast is about Ram Charan&apos;s new book "Rethinking Competition Advantage". I think it has a lot of great insights about the basics of digital operations. But not much about competitive advantage.You can listen to this podcast here or at iTunes and Google Podcasts.Here is the link to the Q&A on Sept 7:Live Chat with Prof Jeff on Asia Tech StrategyHere is my interpretation of the book&apos;s digital operating basics:A personalized consumer experience is key to continued growth. Continually innovating on the consumer experience enables cross-selling more and more products and services to a broad audience. A "market of one" is the ultimate personalization.Companies need a digital core for operations. Algorithms and data are essential weapons.A company needs an ecosystem. Every major player needs at least 10 partners for sharing data, meeting a range of consumer preferences, growing faster than it otherwise could and continually refreshing with technology and innovation.Companies need powerful moneymaking models. Target a big opportunity and increase cash gross margin by innovation and cost reductions over time. Fund multiple experiments against consumer experience. Add revenue streams on the same digital core.People, culture and work design form a social engine that enables innovation and execution personalized for each customer. Decision-making is designed for innovation and speed.—–Related articles:Can Foodpanda / Delivery Hero Get to Profitable Scale in On-Demand Food? (Asia Tech Strategy – Daily Lesson / Update)Meituan vs. Ctrip vs. Alibaba: Who Will Win in China Services? (Jeff’s Asia Tech Class – Podcast 22)From the Concept Library, concepts for this article are:Digital Operating BasicsFrom the Company Library, companies for this article are:n/a———-I write and speak about digital China and Asia’s latest tech trends.I also run Asia Tech Strategy, a podcast and subscription newsletter on the strategies of China / Asia tech companies.This content (articles, podcasts, website info) is not investment advice. The information and opinions from me and any guests may be incorrect. The numbers and information may be wrong. The views expressed may no longer be relevant or accurate. Investing is risky. Do your own research.Support the show (https://jefftowson.com)

Lessons in Digital Operating Basics from Ram Charan. Part 1 of 2 on “Rethinking Competitive Advantage”. (98)

This week’s podcast is about assessing specialty ecommerce companies (i.e,. the anteaters) vs. the ecommerce giants (i.e,. the lions). Which will survive? Which will thrive?You can listen to this podcast here or at iTunes and Google Podcasts.Here is the link to the Q&A on Sept 7:Live Chat with Prof Jeff on Asia Tech StrategyHere are my 5 questions (thus far) for assessing the viability of a specialty ecommerce company.Is the company sufficiently differentiated in the user experience?Can the company compete and/or differentiate in logistics or infrastructure without ongoing spending?Does the company have a strong competitive advantage in a circumscribed market?Is there a clear path to significant operational cash flow?Has the company avoided markets and situations that are attractive or strategic for the major ecommerce companies?Addendum: Don’t overestimate first mover, virality or growth hacks.Here&apos;s my assessment of various specialty ecommerce companies:Thriving:Etsy – huge suite of unique products for mass market by capturing unique merchants.Oriental Trading Company – unique product for niche market by unique logistics.Pinduoduo - engagement driven ecommerce.Survive, but questionable:Global-e – cross border logisticsI&apos;m not optimistic:DingdongFarfetchSituations that may be overestimating first mover, virality or growth hacks.Delivery Hero:Shein——--Related articles:Can Foodpanda / Delivery Hero Get to Profitable Scale in On-Demand Food? (Asia Tech Strategy – Daily Lesson / Update)Meituan vs. Ctrip vs. Alibaba: Who Will Win in China Services? (Jeff’s Asia Tech Class – Podcast 22)From the Concept Library, concepts for this article are:Specialty EcommerceInteractive and Engagement-Focused EcommerceFrom the Company Library, companies for this article are:EtsyOriental Trading CompanyPinduoduo---------I write and speak about digital China and Asia’s latest tech trends.I also run Asia Tech Strategy, a podcast and subscription newsletter on the strategies of China / Asia tech companies.This content (articles, podcasts, website info) is not investment advice. The information and opinions from me and any guests may be incorrect. The numbers and information may be wrong. The views expressed may no longer be relevant or accurate. Investing is risky. Do your own research.Support the show (https://jefftowson.com)

Pinduoduo, Etsy, and OTC: How Specialty Ecommerce Can Thrive Against the Giants. (97)

This week’s podcast is about the recent political issues around China tech and Alibaba in particular.You can listen to this podcast here or at iTunes and Google Podcasts.——Related articles:Can Foodpanda / Delivery Hero Get to Profitable Scale in On-Demand Food? (Asia Tech Strategy – Daily Lesson / Update)Meituan vs. Ctrip vs. Alibaba: Who Will Win in China Services? (Jeff’s Asia Tech Class – Podcast 22)From the Concept Library, concepts for this article are:Role of the StateUncertainty Investing ApproachesFrom the Company Library, companies for this article are:Alibaba———I write and speak about digital China and Asia’s latest tech trends.I also run Asia Tech Strategy, a podcast and subscription newsletter on the strategies of China / Asia tech companies.This content (articles, podcasts, website info) is not investment advice. The information and opinions from me and any guests may be incorrect. The numbers and information may be wrong. The views expressed may no longer be relevant or accurate. Investing is risky. Do your own research.Support the show (https://jefftowson.com)

What Worries Me About Alibaba Long-Term (96)

Executive education in China’s tech leaders and on the strategies and tactics of Asian digital combat. Jeff’s Asia Tech Class offers:-A weekly lecture you can listen to as a podcast at the gym or in the car or wherever.-A weekly article with more in-depth material.-2-3 weekly updates on what’s happening digital China / Asia.Available at jefftowson.com with a 30 day free trial.

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