Maybe more interesting than SHOP growing at 45% at a $400m/quarter scale is that GOOG is still growing at 20% at 100x the scale ($40 billion/quarter).
Just wow. So yeah, I’m not super worried about the growth prospects of our little companies with revenue of about $100m/quarter or less.
Bear
I’m as big a fan as they come in our high-growth companies but there’s little to no comparison IMO.
In Dec 2004, GOOGL was at about $1B quartlery revenue, had 230% YoY quarterly rev growth, and a PS of ~20
Mar 05: $1.25B, 94%, 19 PS
Mar 07: $3.6B, 62%, 13 PS
Point is, Google was growing Much, much faster for much, much longer than most of the companies we talk about today.
I’m not saying that makes our companies bad investments (I’m invested in them afterall), but I think we should be careful how closely we compare our companies to companies we know are the best in the world (with the benefit of hindsight).
Most companies will not have nearly as large of a TAM and won’t turn out to be nearly as large as Google or Amazon.
Lucky for us, they don’t have to be
Over Googles lifetime (or since 2004 at least)
Their quarterly revenue is up 4,730%
Quarterly YoY revenue growth is down 91% (much larger base, growing much slower compared to early days)
PS ratio is down 56% (PS COMPRESSION DESTROYS ALL RETURNS RIGHT?!?)
and the stock has returned 2,400%
so again, our companies likely won’t be as large or successful as google. But, we don’t have to hold them forever and even with 50% of the performance we would still make a 1,200% return over 15 years… I’ll take it.