00:45:45 · Brian Neider, CJ Gustafson
[00:45:45] S0: I'm willing to play ball. [00:45:46] S1: Yes. First one I got for you, Rentrak. I think it's in the movie industry. So maybe you could give me the t l d r of what do they do and what makes that business hard to recreate.
00:45:55 · Brian Neider
[00:45:55] S0: Absolutely. So Rentrak previously was a business called Comscore Movies, which was owned by Comscore, who's a public company, and it's a data provider within the movie industry. They basically collect data from tens of thousands of movie theaters in regard to box office sales. They become the sole source of truth for the performance of motion pictures. And so what ends up happening is they have long term data sharing agreements with basically every movie theater chain in the in The United States as well as, you know, a lot of the independent movie theaters. And they now know what the sales of each one of the movies are on every single screen, in every single locale, in every single geography, in every single zip, and they can deliver that data. And that's ultimately purchased by a bunch of different stakeholders within the industries, most notably the studios themselves. And that data allows the studios to make better decisions around their movie releases, around marketing budgets. It allows them to do a lot of the accounting, for instance. So when you hear a a headline that says, you know, x y z movie just grossed $50,000,000 in opening weekend, that data is typically gonna be coming from Rentrak. And then on top of that, you have a situation where you might have a movie where, you know, the lead actor is being paid some percentage of the gross sales above and beyond a certain figure. Well, how do they get those numbers? How do they understand exactly what it is? Rentrak is kind of the source of truth. And so it's a really nice business, and what's hard about it is they have unique relationships with thousands and thousands of movie theaters and movie theater companies to be able to receive that data and have it flow in in a in a sort of understandable, legible way. They have unique relationships with all the studios who are willing to have them be kind of the Switzerland in the middle of everything, managing all of the data and putting it out to everyone. It's really a unique asset that's very, very difficult, if not impossible, to recreate. You know, there's a lot of ways for them to leverage AI within their business for sure, but you can't just spin up a company to do this because the amount of theaters that you need to go out to to actually pull the data in, it makes an, you know, effectively an insurmountable challenge.
00:48:16 · CJ Gustafson
[00:48:16] S1: This is great because people always in a hand wavy way are like, oh, well, AI can't replace trust. This this this is a real example of it.
00:48:23 · Brian Neider
[00:48:23] S0: I think that that's exactly right. Next one I got for you, Clearwater Analytics. Clearwater actually is a software business, and I would say that in Clearwater's case, the reason why we got comfortable with it and get excited about it is more from like a compliance and regulatory angle. So they have a couple of different business lines, but their core business is really becoming the sole source of truth ownership on behalf of any type of institution, whether that's a corporate, a financial, whatever it might be. So you could imagine that if you're a corporate treasury department and you have a significant amount of money in the bank and you have all different bonds that you hold and fixed income instruments that are earning you interest, you wanna know exactly down to the penny on a very frequent basis, if not in real time, exactly what you own on that day at that time, what interest you're gonna earn from it, what that's gonna be from your free cash flow forecasting, all that type of stuff. If you're a asset manager and you have a bunch of client accounts, you wanna know exactly what you own, what your client's own, where it's held. And that is really important to get right. And you need that sole source of truth. And so Clearwater Analytics is kind of like the de facto standard for large financial institutions, large corporates to use to manage all of their securities exposure, and it's a very important tool. That one is one where, you know, could somebody theoretically vibe code something similar? Could they come in with some competitive offering? Yeah. I guess theoretically you could do that. But the distribution angle there, the way... The trust that they've built with their customers, the importance around the compliance and management, and, you know, being that sole source of truth, it's a very, very special business and a very unique business and one that we don't think is very easy to replicate.
00:50:16 · CJ Gustafson
[00:50:16] S1: Alright, this is fun. I got one more for you and this is a super fascinating company, Electric.
00:50:21 · Brian Neider
[00:50:21] S0: Electric is a cool business. So the short answer for Electric is, what they do is they are a specialty distributor of medium voltage parts, which are typically components that will go into a data center or into a large scale utility project that are essential and critical for for building the infrastructure. So there's a large number of what are called horizontal or broad line distributors that have hundreds of thousands, if not millions of SKUs for things that electrical contractors and builders can buy as components for their data centers or big projects. The problem is that a lot of that componentry, it's not readily available right now. It might be on back order. You need to know how different parts from different manufacturers might interoperate with one another to create a composite view and build the right package for an end customer. And you really need to have a tremendous amount of know how. So for a lot of these projects, the customers want the product yesterday. Things are moving at the speed of light. There's shortages and we believe will be shortages for meaningful amounts of time. And you need a specialized distributor who really understands the market and can offer alternatives, come up quickly to respond to your RFPs, and really be in a position to deliver an entire package rather than a single part here, single part there, but go talk to this other company to get the third part. You wanna be able to deliver everything. Electric just has unbelievable deep knowledge in that ecosystem, and that is the most important... Or one of the most important ecosystems in the construction industry today, and the company has been doing amazing. So Mario, who's the CEO, is a is a wonderful entrepreneur, an incredible guy, and he's built a business, and it it sort of took off. It was his idea. Him and his partner, Tim, really started it and did did an amazing job. And they said, look. Like, we've never built a company. We don't know exactly who we need to hire. We don't know exactly what to do to build this. We just know that we've got lightning in a bottle, and we came in as a as a partner investor, came into the company and have worked very closely with them to help continue to build it and hire out and shore up their team, and we are super excited to be on that that ride with them.