Peter Thiel On the Valuation of Companies

I’ve put down The Guermantes Way for a moment to crunch through Zero to One, a book by Peter Thiel on notes on startups, monopolies, and how to build the future. So far, it’s proven to be an interesting read (it’s also my first time “reading” a book through Audible– I don’t know how to feel about that yet- but more on that for another time).

In Zero to One, Thiel advises on critically measuring a company’s long -term profitability and urges us to contemplate the following questions:

1. Growth measurability vs. durability

  • Opt to see one’s market potential over its current  or “near-term” growth measurability, so.. an example would be having the prescience to value a company for its projected future market cash flow rather than solely looking at x company’s present market cap.

2. What does a company with large cash flows far into the future have in regards to qualitative characteristics?

  • proprietary technology
  • network effects
  • economies of scale
  • branding

It would be interesting to see how this applies to my present company and other businesses of interest:

barneys

supreme

a-cold-wall

alpha

For instance, what are the network effects of cult brands such as Supreme and emerging brands like Alpha Industries and A-COLD-WALL?

What kind of proprietary “innovations”do creative houses boast and have helped them become the monopolies they are today within their respective markets?

How do creative businesses navigate the land of commerce and manage to thrive when one quality exists in the midst of a dearth in others?

Bises,

Soo

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