No. of Recommendations: 12

I didn't realize the term "diworsification" as Peter Lynch used it was purely about building one's portfolio. I stand corrected there. Thank you.

Still, the more important point here than proper use of the term is whether or not a company is laser focused and is or is not expanding business units wisely. A restaurant adding a musical act may be damaging the experience and hurting business or that act could bring in tons of business. If it adds a business line that hurts business and muddies the story, I'm fine calling that "diworsification."

My key point is the simpler the mission, the more likely the company is to succeed. I agree 100% that Salesforce, Microsoft, Amazon, etc. have shown an incredible ability to expand wisely. I think we'd agree that expanding product lines is something that ideally comes after a successfully executed strategy, a la Amazon with books - then add other things, rather than do too many things simultaneously.


I appreciate your clarifying the difference between how I'm using the term story and how it's traditionally used. I'm not remotely talking about newsworthiness or the famous car company's CEO and his antics. A great Story as I'm using the term is one that is simple to see how Company X earns and protects massive profits. And again I like to see a tight alignment between the CEO and the mission. But in the tollbooth example, yes the operator must show up for work daily and collect the tolls or the Story is worthless.


As far as Roku - I didn't mean to imply the company's all about cord cutting. My point is again, simply, that Netflix has a simpler mission. And for that reason alone likely to be a better investment. I doubt Roku ever reaches Netflix's heights. They need to build gadgets, a platform, aggregate content and sell ads. I like the mission you laid out there though for its greater coherence. My bad on not giving them the respect they deserve. But I stand by my key point though that if you need to explain to customers what it is, this is problematic. No one has ever had an iota of confusion about what Netflix is or how to use it.

To the other poster's point, as far as naming a company after the CEO's sixth business, I don't like it. It's like Lew Cyrne naming his company New Relic. It's self-involved. A great brand name should inspire prospects/customers and at least make it clear what the thing does. Again, I fully realize many brilliant people think this stuff is irrelevant or close enough to irrelevance as to be unworthy of discussion. And I do think Roku sounds cool and is short and memorable.


Lastly, as for the CEO being captain of the ice hockey team at Princeton - that's impressive. That's an indication of strong leadership skills. It's ONE piece of data about the most important person in the company. It's not a story. You can say that what an older man did in college is not relevant. But again, this is nitpicking. The bigger point is that the biography of the leader is relevant. I'm basically just saying the same thing here that David Gardner's been passionate about for years - invest in founder-led companies. I'm just putting a little meat on that bone.

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Bottom line - I am noticing an interesting relationship between a well-told Story as it's traditionally defined and the performance of our best picks. Simplicity, clarity and concision are relevant factors fueling Saul's success.

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