Escape velocity out of a small base: management describes the business compounding at a rate its own size cannot absorb
The model's full reasoning — Q2 2022 call → NOWe need to determine if management describes the company as being at a point where the rate of accumulation is the dominant fact, with multiples and small base. Let's analyze the transcript. Key points: David Barrett talks about growth, but does he use multiples? He mentions "we have enormous untapped markets", "hundreds of millions of businesses", but that's market size. He talks about "our business model is really focused on acquiring this vast untapped SMB market". He mentions "we are the only ones that can make 5 important claims" etc. He talks about "we've been investing tremendously in products" and "we've actually doubled down our subscription model". He mentions "we've adjusted pricing in. In the past couple of years, we've actually thickened our margins". He talks about "we've been focusing SMB from the very start". He mentions "we've invested a tremendous amount in our own employees" and "our average person has been here over about 5 years". He talks about ExpensiCon and "it always pays for itself" and "we've been able to pay for the past 6 months before the event even hosts because everyone's taken to get the required them to increase revenue". That's about revenue generation. Ryan Schaffer gives numbers: "754,000 paid members", "revenue was $43.1 million", "annualized $172 million". He says "we did see a little dip in paid members from Omicron but we saw the end of Q1 that really rebounding and that rebound continued all the way through Q2". He says "this is the best quarter in company history. Our previous best quarter was Q1 of 2020 before the pandemic and we are actually above that previous high watermark with a higher price and just a substantially better company than we were then." That's a comparison to previous best, not a multiple. He says "The Expensify Card continues to grow at a rapid rate, 142% year-on-year growth and then sequential quarter-over-quarter, 40% growth". That's a multiple: 142% year-on-year, 40% sequential. But is that the dominant framing? He also says "we had a strong cash flow and we were profitable. We had the highest quarter for paid member growth, now exceeding pre-COVID numbers. The Expensify Card is up 142% from last year and we believe we're more recession-proof competitors with plenty of momentum." So he uses a multiple for the card growth.
| Ticker | Company | Call | Date | Call grade |
|---|---|---|---|---|
| DASH | DoorDash, Inc. | Q3 2023 | 2023-11-01 | C+ |
| SYM | Symbotic Inc. | Q3 2022 | 2022-08-01 | B+ |
| SNOW | Snowflake Inc. | Q3 2022 | 2021-12-01 | A |
SNOW · Q3 2022 → YESThe question is about whether management describes the company as accumulating at a rate that's the dominant fact, using multiples or repeated doublings of its recent past, and treating the base as st...YES Frank Slootman repeatedly frames the current state in terms of multiples of the recent past: product revenue “growing 110% year-on-year” (more than doubling), EMEA “up 174%” and Asia-Pacific “219%”, BUILD Summit registrations “three times last year’s”, Snow Day “ 23,000 registrations”, Data Marketplace “grew 41%”, stable edges “more than 130% annual increase”, Powered By Snowflake partners “growing 137% quarter-on-quarter” and product revenue from them “173% year-on-year”.
DASH · Q3 2023 → YESThe question is whether management describes the company as accumulating at a rate that's the dominant fact, using multiples or repeated doublings of its recent past, and treating the base as still sm...YES The transcript shows management repeatedly framing the business in terms of multiples of its recent past: non-restaurant selection "going from 0 nearly 3 years ago to a multibillion-dollar business that's at scale now growing fast"; grocery GOV "has doubled year-on-year"; international growth "at multiples of what we see around the world"; and new verticals accelerating from the prior quarter.
SYM · Q3 2022 → YESThe question is about whether management describes the company as accumulating at a rate that's the dominant fact, using multiples or repeated doublings of its recent past, and treating the base as st...YES Management repeatedly frames the current state using multiples of recent past activity: backlog more than doubled (from $5.2B to $11.