AppLovin, The Point Forward Podcast, Index Funds, and Position-less basketball
Stretch Four Insights Volume 21
Today’s Stretch Four Newsletter Volume 21 is brought to you by Neo.Tax
sponsored content
Tax day came and went and if you are like me, you filed a business and personal tax extension. On the business side, I run a startup i.e. we are not profitable but we spend money on research and development i.e. engineers, product managers, and designers.
For the first three years running a startup, I got no credit for hiring teams of technical people to make features that make the lives of accountants and taxpayers suck less. In 2020, I heard about R&D Tax Credits. So this year, before we even file our business tax return, I used Neo.Tax to get back nearly $60,000 in R&D tax credits. That is free money in the form of not having to pay payroll taxes, just for doing what every startup has to do anyways hire engineers!
Neo.Tax makes this process smooth and easy and allows my accountant to focus on what she does best which is to minimize our company’s tax liability when filing our taxes. Check out this Neo.tax today if you are building a startup to get free money kickbacks and use this link to get $250 in credits.
Happy Monday everyone,
I took last week off for Easter and Tax day but I am back this week to catch up on a few things that have been on my mind across my podcast feed, readings, the NBA, and my day job of running a startup. I am bringing this to you on a Monday, but we will move back to our regular Saturday noon drops for my weekly recaps from here on out and our long-fours will kickoff on on Wednesdays.
This week I will recap:
Two great podcasts series I have been enjoying
Book Highlights from Trillions my latest read and and an article on digital ownership
How positionless basketball is ruling in the playoffs
Updates on the next Long Four deep dive and ModernTax
Podcasts
Business Breakdowns: AppLovin: Monetizing & Marketing Mobile Apps on Apple Podcasts
This week I stumbled onto a podcast series called Business Breakdowns from Patrick O'Shaughnessy and his Colossus team. I enjoyed this breakdown on AppLovin. I had never read much about the company and only heard of it in passing, but it is a massive business strategically built to help app developers make money. I love API platforms, and Applovin is unique in that it solves a simple problem it helps app developers make money. In the interview, they discussed the origin story, fundraising hardships, and going public and my most interesting takeaway was how AppLovin has built a business that is completely reliant on massive platforms like Google and Apple and still managed to become a nearly $30B standalone company.
Point Foward: A Seat at The Table (ft. David Falk)
I have not missed one of Andre Iguodala and Evan Turner’s new Point Foward podcast. It is one of the best new podcasts I have come across, if you can deal with Evan Turner’s voice you should give it a try. This week I think they had their best episode yet with former NBA agent David Falk as a guest. They spoke on several business stories Falk has experienced in his nearly 40-year career that is highlighted by representing Michael Jordan. It includes a very candid conversation on how much race matters when it comes to representation in the sports business, how Magic Johnson missed out on $5.2 billion in equity ownership by passing on Phil Knight’s offer from Nike, how negotiating the largest NBA contract at its time for Patrick Ewing before he ever played an NBA game, and how the NBA player’s union should be led by a business person that can grow the business for players.
Bill Simmons: A Suns-Warriors Flip-Flop
Simmons brought home the point that is clear through two weekends of NBA playoff basketball: The warriors are back and are likely the favorites to win the west. Bill discussed how the Warriors are having some luck finally with the team being healthy and other teams like the Suns losing star guard Devin Booker. The other key point is the emergence of Jordan Poole, he came down to life yesterday in a loss, but in the first three playoff games of the playoffs, he’s been the key factor in the Warrior’s success. The Warriors have a chance to win it all this year and Poole will demand an $80M+ contract extension this summer.
Readings
With Elon Musk set to put a pen to paper on the acquisition of Twitter for nearly $50 billion any day now, it was timely for me to finish up Trillions this week. This book is a primer on index funds, how the market developed, and who the power players are. It is relevant to what is happening in today’s market and who has control over the market. As more and more money flows into passive investing the three major companies Vanguard, State Street, and Black Rock will continue to dominate the markets and gain more and more power. I plan to continue studying how index funds work over the next few months.
This piece by Alex Johnson from his Fintech Takes Newsletter was a good read on how ownership is evolving across the internet. Over the last year, I am beginning to see more and more unique ways to manage and control ownership of assets. Web3’s biggest use case is not NFTs, crypto trading, Defi, and anything else in between it is purely ownership. Johnson gives an example of Spotify and how if you remove the control they have and allow artists and listeners to interact with each other directly there is more value for artists to capitalize on. In the end, consumers will decide what ownership means in the new digital world, but it is hard to imagine not seeing continued changes happening over time and ownership on the internet evolving to handle more and more offline experiences like mortgage deeds, startup equity, and other things.
Upcoming Reads
If you would like to learn with me, please email me at matt@stretchfour.co to join a new book club I am starting.
These are the next three books I plan to read over the next few month.
The Founders: The Story of PayPal And the Entrepreneurs Who Shaped Silicon Valley
The Changing World Order: Why Nations Succeed and Fail
Blood in the Garden: The Flagrant History of the 1990s New York Knicks
The Warriors & positionless basketball
I watch a lot of Warriors basketball, and my biggest fear heading into the playoffs this year was that they lack legitimate size. This was even more of a glaring weakness against, albeit a depleted Denver Nuggets team, yet a team led by Nikola Jokic (likely to repeat as MVP). Four games in, the Warriors are 3-1 and likely headed for a close-out game on Wednesday back here in San Francisco. The Warriors have taken away most of my concerns regarding whether they can win another NBA championship by assaulting the Nuggets with a positionless basketball style of play. Positionless basketball is playing the best group of players on the team at one time regardless of size or position. The Warriors are playing Jordan Poole, Steph Curry, Klay Thompson, Andrew Wiggins, and Draymond Green and the lineup is like a nuclear bomb being set off against the Nugget's defense. When the Warriors unleash this lineup Jokic is a zero on defense, even in game 4 Jokic is noticeably absent from the most important play of the game where the Nuggets were able to steal the inbound pass to deny the Warriors a four-game sweep. Aaron Gordon, who the Nuggets signed to an $80 million contract extension is obsolete as well on defense as the Warriors have found mismatches with whoever he is guarding. To win a title the Warriors will need to keep it up but only a few teams can match the output when the killer lineup is clicking. On the business side of things, Jordan Poole has earned at least an $80 million payday this summer and likely even more as noted below he’s the most underpaid player in the NBA by production this season and it is not even close.
What’s next
Next up for me is finishing up my first edition of the Long Four. I wrote about my process in a previous volume and we have our next edition, hint – hint it is focused on finding tax loopholes for startups and the big vision of fully automating the business tax filing process.
This week I am finishing up the ModernTax Q1 2022 Update which is a bit late after having my son, but it focuses on some make-or-break deals for us in Q2 and fundraising.
I am also launching a Stretch Four Podcast and an audio edition, my goal is to talk to subject matter experts from the startup community with a few features and deep dives on the business side of basketball and the NBA in between.
One last plug for this week’s recap sponsor brought to you by Neo.Tax.