test 2025-12-17

Netflix is one of those companies whose long-term stock chart prompts lots of people to imagine how much money they’d have today if they’d put $1k into the IPO. ($838k, if you’re curious.) But, more so than other long-term buy-and-hold investments, they’d own something very different from what they started with. Some companies set up a model, and just iterate it—Costco is pretty much the same model it’s had since it introduced the Kirkland brand and adding gas stations in 1995, though it’s added locations and gotten better at the real estate to subscription revenue with everything else as a loss leader pricing setup. With Netflix, the company you invested in in 2002 was a clever logistics play—DVDs were cheaper to make and easier to ship than VHS, fulfillment centers could stock a bigger catalog than a network of physical stores (especially if they were stocking them in a space-efficient format), and the rental business was already well-established and well-loathed^[1]—any time your competition is describing their relationship with customers using the term “managed dissatisfaction,” there’s probably room for a competitor.

https://read.haus/pi/CMuI1T_5