Business Breakdowns
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Official account of the Business Breakdowns Podcast. Diving deep into a single business and finding the key lessons for investors and operators. @colossusmag
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Today's episode is a unique one. Shortly after Opendoor reported earnings, Matt Reustle spoke with CEO Kaz Nejatian for a breakdown of $OPEN. We talk about the quarter in the context of Opendoor's turnaround, including Kaz's view of the business as a market maker, the priorities on the product roadmap, the opportunity in attached services, and the path to profitability. Some highlights from the conversation: 1/ Opendoor is a market maker, not a prop desk. 2/ I was shocked by how the company was being run by outside consultants for so long. The people who were making decisions for the company had almost no stake in the outcome of those decisions. The OPEX was just honestly stupid. 3/ Saying Opendoor is an asset manager that happens to have software is like saying Amazon was a warehouser of books that just happened to have software. 4/ Opendoor has fewer than seventy engineers. I think that would surprise most people. 5/ When we buy lots of homes and sell them very quickly, we get very live feedback about actual market conditions. We pick up data in a way that no one else does. We have a 90 to 120-day advantage on the market. 6/ My job is to make sure that when you want to buy a home, sell a home, that you think of Opendoor the way you think about Uber or Amazon. 7/ Opendoor has an embedded advantage compared to every other buyer and seller of real estate in our cost of capital. But that has not been adequately used by the company. 8/ I want the teacher in Kansas City to have a one-click mortgage, title, escrow, and home buying experience and home selling experience. 9/ Opendoor has had too little discipline when it comes to being a for-profit business because it has been able to reach for capital markets over and over again. 10/ I think it's important that Opendoor be funded by its cash flow. 11/ What I think is very hard to say is that the largest real estate company on the public market in the United States should not be very large. There isn't a $100 billion market cap real estate company in the public markets in the US. That feels like a flaw in the matrix. 12/ I know what every single one of our engineers is working on because we don’t have the luxury of waste. 13/ I can take a series of services in a highly fragmented market, all of whom have very low NPS scores, and jam them all together. All of these players have to pay for CAC, and I don't. They all have to pay for gathering information. I don't. That's the opportunity. Timestamps: 00:00 Intro 00:42 What Kaz found inside Opendoor 03:12 The business model 05:49 How Opendoor makes money 06:48 The data and information advantage 12:18 Sizing the TAM 15:19 Product roadmap: title, escrow, mortgage, solar 18:33 The bundling thesis 21:37 Capital allocation and path to profitability 23:39 70 engineers and AI leverage
Business Breakdowns140,539 Aufrufe • vor 3 Monaten
Qasar Younis was COO of Y Combinator when Sam Altman was its president. Peter Ludwig was an early engineer on Android Automotive at Google. Both are Detroit guys with family roots at General Motors. In 2017, they started Applied Intuition to make a billion machines intelligent. Putting intelligence into a machine is one of the hardest problems in technology. A car, a tractor, and a mining vehicle each have different hardware, different sensors, and lives on the line if the software fails. So instead of building one machine, they built the technology that goes into all of them. Cars, trucks, defense vehicles, mining equipment, combines, robots. Like Nvidia sells chips into everyone else's machines, Applied Intuition sells intelligence. They are the only company in the world that does this across all of these industries. They have raised about a billion dollars. They have never spent any of it. Qasar believes that when we look back 25 years from now, the most important companies in the world will all be physical AI companies. Last week they launched Dana, an agent platform built to get there faster. Enjoy! Qasar Younis Applied Intuition Timestamps: 0:00 Intro 4:08 Why Physical AI Will Be Enormous 5:54 What Applied Intuition Actually Builds 9:25 Timing the Autonomous Revolution 13:59 From Tools to a Full AI Stack 21:40 Why Chatbots Can’t Build Robots 25:18 The Physical AI Data Flywheel 28:19 The Moat Behind Machine Intelligence 30:13 What’s Slowing Physical AI Down? 32:30 Applied Intuition’s Business Model 36:10 Competing in a Massive Market 39:24 The Hardware Renaissance 41:09 Why They Raised $1 Billion 43:49 A World Filled With Intelligent Machines
Business Breakdowns27,283 Aufrufe • vor 28 Tagen
.Opendoor CEO Kaz Nejatian on how investors misunderstand the company: "Opendoor is a market maker, not a prop desk." The business is to make it easier to buy and sell houses, not to profit from owning them. "The underlying assumptions about the business are fundamentally wrong. Those assumptions were held by some people inside the building for a while. People in New York were wrong. People in San Francisco were also wrong. Saying Opendoor is an asset manager that happens to have software is like saying Amazon in its early days was a warehouser of books that just happened to have software. Did Amazon warehouse books? Sure. But was it a warehouser of books? No. That's not where the leverage comes from. There's a very real difference between a prop desk and a market maker. If you're a prop desk and you hold assets for profit, you do one set of things. If you're a market maker and your fundamental job is to not hold assets for profit, you do a different set of things. Opendoor is a market maker, not a prop desk. Do we have to be very good at underwriting? Damn right we do. But there's a real difference about where that underwriting engine is pointed. Citadel gathers a crap ton of data. The end matters as much as the means."
Business Breakdowns43,691 Aufrufe • vor 3 Monaten
Applied Intuition's mission is intelligence on a billion machines in the next decade. Qasar (Qasar Younis) and Peter on Dana, their new agentic platform for physical AI that will help us get there faster: "If you ask why don't we have intelligent robots and intelligent vehicles everywhere today, it really comes down to building this stuff is really hard, and that is the limiting factor. Dana really is the culmination of everything we've worked on over the last decade. It makes developing these systems so much easier than it has been in the past. If you wanted to build a delivery robot for college campuses or a little vacuum that cleans your house, it's a pretty daunting thing even for hobbyists and computer scientists. These complex workflows would require switching between 20 different tools in the past... Now with Dana, all of those complex workflows can be very seamlessly orchestrated from an agentic interface. The thing that we really wanna do is just lower the bar. So anybody, starting with engineers, but ultimately really anybody can develop robots."
Business Breakdowns10,307 Aufrufe • vor 27 Tagen
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