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@turner
Turner Novak
$231M follower assets
49 following3,754 followers
Q3 2021 portfolio weights:

Cash 12.6%
$SNAP 31.0%
$SFIX 13.7%
$DIS 8.3%
$TWLO 7.6%
$SQ 6.9%
$SHOP 4.6%
$PDD 4.4%
$WISH 4.2%
$SPOT 3.3%
$AMPL 2.3%
$UBER 1.1%

I trimmed SFIX and WISH as they ran up, added a bit after some of their recent drops.

Initiated position in Amplitude this week. Also starting to slowly getting back in Uber as it seems sentiment is finally changing.

I also lost ~1% of my entire portfolio on poorly timed PDD calls in August - the stock was up ~50% and I should have just bought stock. The reason I try to stay away from options...
+ 5 comments
Stitch Fix - "the design process is almost entirely driven by data"
This was a short, interesting read on how $SFIX buys clothes. Key part:

But some are not convinced that a reliance on data is reassurance. A New-York-City-based designer who manufactures clothes for one of Stitch Fix’s private labels, speaking on condition of anonymity, said that the current over-reliance on data, both from Stitch Fix and other retail partners, puts a damper on creativity and leads to less retention.

“I think the idea of a curated box is really interesting at first,” she said. “But I know people who love it the first two or three boxes, but then it wasn’t so great anymore. You get the same stuff in the box over and over. Lame, common-denominator stuff. I don’t know how you keep that interesting. Data doesn’t make magic.”

The designer said she is one of many who does private-label business with Stitch Fix, manufacturing products in collaboration with Stitch Fix which are then sold under the name of one of Stitch Fix’s exclusive brands. While she said everyone at Stitch Fix is lovely to work with, she lamented the fact that the design process is almost entirely driven by numbers, to a fault. She said most products she produces for Stitch Fix are generic versions of the things in her own line, but simplified and toned down to fit whatever trend or data point Stitch Fix is chasing.

“It’s honestly very generic, very basic,” the designer said. “That’s what too much data does. It makes everything look the same, everything the same color and same style, the easiest fit. Everything ends up homogenized. Part of the magic of fashion is walking into a store and something catches your eye that you never would have thought you wanted. You can’t get that if everything is picked for you by an algorithm based on what you already like.”

They focus on styles they know they can sell and ones that have a higher likelihood of fit (fewer returns), and mass produced, generic products theoretically have lower costs. This could be interpreted as either good or bad depending on how you view it. I think this is a good thing for their model and the customers they're going after. What does everyone else think?
Glossy
Confessions of a private-label designer: An over-reliance on data makes everything boring
"It's honestly very generic, very basic. That's what too much data does. It makes everything look the same, everything the same color and same style, the easiest fit. Everything ends up homogenized. Part of the magic of fashion is walking into a store and something catches your eye that you never would have thought you wanted. You can't get that if everything is picked for you by an algorithm based on what you already like."

"Part of the magic of fashion is walking into a store and something catches your eye that you never would have thought you wanted. You can’t get that if everything is picked for you by an algorithm based on what you already like.”

Some variation of that quote lives on many many company and CEOs with the now "former CEO" label's tombstone.

I don't disagree with the idea for some but I think it's a little head in the sand to say everyone prefers that. Walk into a brewery on a fall day and you don't exactly see variety..you'd actually almost be convinced of the other way..that there was a dress code to get in.

And I don't necessarily believe people care, in fact they may want that. One of the ways we signal that we're a part of a tribe as humans is through the way we dress.

If her anecdote about "I know some people who get 2 or 3 boxes and then are bored" is correct, that would absolutely show up in the numbers.
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JPM Thoughts on Q4 Digital Ad Earnings
Thoughts here from JPM on $SNAP, $PINS, and $TWTR earnings.

Not sure I 100% agree with this line of thinking on Twitter. Their ad product is the worst of all the major platforms, and despite low comps, don't think there's much long-term value here unless they truly show us they're improving it and/or ramp up non-ad forms of revenue like subscription products.
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@outlet902/01/2021
I don't think Twitter has the ad stack to continue to grow. Snap has already built an impressive self-serve platform and Pinterest is well on its way.

Also, those investor expectations of 70%+ y/y revenue growth are brutal.
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Snapchat Spotlight?
Has anyone seen data around Snapchat Spotlight usage? Anecdotally, many creators are mentioning it but haven’t noticed any sell side analysts really touch on it (maybe I’m just missing this). Already been bullish, but feels like Spotlight could be a sleepy driver of a DAU beat when $SNAP announces earnings next week...

@turner I've been investigating Spotlight in recent weeks, and yes I think it could have a material impact for their earnings. I would expect Snap to talk more about the engagement it's been driving versus growth in users, however.

With the $1m/day reward for creators and the publicity some individuals have gotten with making $5-50k/day uploading short-form videos, there has been a huge increase of people uploading to Spotlight. Somewhat similar to TikTok, your audience size has minimal impact on your chances of reaching one of the top 100 spots, so this allows anyone to feel they have a shot.

Also interestingly.. at first, the top-performing content was a mix of original and re-uploaded "viral" clips, but as the weeks have progressed it's evident that the algorithm is starting to prefer content that is created within the Snapchat engine/camera. I've talked with a few creators who've had success on Spotlight, and they say the transparency of Spotlight's algo is still minimal. Regardless, the push to attract influencers onto Snap, IG, TikTok is going to be more and more important for these media platforms, so I expect further investments/strategies around this.
+ 3 comments
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