Updated: Dec 20, 2025
Concentrated investing in category leaders. 1-2 exceptional opportunities per year. 10-year horizon.
Making category leader investing accessible in public markets
While private equity and venture capital dominate access to high-growth category leaders at Series C and beyond, public market investors can apply the same rigorous analysis when exceptional companies become available through IPOs. This portfolio demonstrates that individual investors can identify and invest in businesses that define entirely new markets and capture 76% of category value.
The strategy: A systematic framework across four critical filters, saying "no" to 95% of opportunities. This disciplined approach typically surfaces just 1-2 exceptional investments every 1-2 years—patience becomes a competitive advantage.
The goal: Build concentrated positions in 3-5 category leaders, allowing time for these businesses to compound and deliver transformational returns. Every decision is documented—wins, losses, and lessons learned—making this approach accessible to any investor willing to be patient and disciplined.
Category leader creating and dominating Zero Trust Data Security
Four-filter system requiring strong performance across all criteria. Subjective assessments, not objective ratings or recommendations.
| Filter | Weight | Key Criteria |
|---|---|---|
| Category Creator/Leader | 30% | Defining new problem/space, 40%+ market share, owns the language |
| Strong Fundamentals | 25% | 30%+ revenue growth, 60%+ gross margins, path to profitability |
| Durable Moat | 25% | Network effects, switching costs, data advantages, regulatory barriers |
| Long Runway | 20% | $50B+ TAM, <10% penetration, multiple expansion paths |
High-conviction private category leaders being tracked for public market entry
Agentic AI Development Platform
Note: See "The No Pile" below for Databricks—the highest-conviction company currently being tracked, but too expensive at $100B private valuation. Waiting for post-IPO correction to $30-50B for entry opportunity.
Companies that failed the framework—learning from different rejection patterns
❌ REJECTED
Failed Framework
Pattern: Weak Fundamentals
Declining revenue growth, weak category ownership ("Enterprise AI" is too broad/crowded), deteriorating fundamentals. Not a true category creator—AWS/Azure/GCP all have competing enterprise AI solutions.
Lesson: Trust the framework over hype. Don't force deployment into mediocre opportunities.
❌ REJECTED
Failed Framework
Pattern: Commoditizing Market
Created the RPA category but losing ground rapidly. Everyone is building automation now—market is commoditizing. Margins compressing, growth slowing dramatically, weak competitive moat.
Lesson: Category creators can lose leadership. RPA became table stakes, not a moat.
⚠️ PASS
Good Quality
Market Cap: $42B
Pattern: The $50B Problem
Clear category leader in Cloud Data Platform. Strong fundamentals (26% growth, 72% margins), good moat. Quality company at terrible valuation—would need $420B market cap for 10x (larger than Oracle).
Lesson: Quality ≠ Opportunity. Amazing company at wrong valuation = pass. Would buy at $25-30B market cap.
⏸️ WATCHLIST
Meets Framework
Current: $160 (34x sales)
Pattern: Meets Framework, Fails Valuation
Qualifies on framework—category leader in edge computing/CDN. BUT trading at 34x sales leaves no margin of safety. Growth decelerating (30% → 25% → 20%). Paying 34x for slowing growth is poor risk/reward.
Lesson: Valuation discipline matters as much as quality. Watching for correction to $140 or below (25x sales).
✅ TOP WATCHLIST
Highest Conviction
Valuation: $100B (private)
Pattern: Highest Conviction, Wrong Timing
Best company being tracked. Invented "Data Lakehouse" category, $2.4B+ ARR growing 50%+, clear category leader. BUT $100B private valuation would need $1T for 10x. Wait for IPO, then wait for 30-50% post-IPO correction (same pattern as SNOW).
Lesson: Patience pays. Target entry at $30-50B market cap. Sometimes the best move is waiting years for the right price.
The Reality of Disciplined Investing: 87% rejection rate across 15+ companies evaluated. Common failures: weak fundamentals, commoditizing markets, too expensive ($50B+ can't 10x), valuation discipline failures, or wrong timing.
The competitive advantage is saying "no" to 95% of opportunities and holding cash at 3.69% until companies that meet all framework criteria appear at reasonable valuations—roughly every 1-2 years. The "No Pile" isn't a failure list. It's proof the framework works.
Quarterly portfolio updates documenting positions, analysis process, and lessons learned. Educational commentary, not investment advice.
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The principles guiding every investment decision
Index funds provide market returns (~10% annually) through broad diversification. This approach seeks transformational outcomes through concentrated positions in 3-5 category leaders, accepting higher volatility for potential 10x+ returns over 10-year horizons. Not better or worse—just a different risk/return profile.
Private equity and venture capital dominate access to high-growth category leaders. We apply institutional-quality analysis to public markets, investing when exceptional companies become available to individual investors—patiently waiting for valuations that align with long-term value creation.
Long holding periods remove pressure for quarterly performance, allowing category leaders time to compound. Most exceptional returns require 7-10 years of patient holding through market volatility.
Companies that create new categories capture 76% of market value and maintain 50%+ market share. We invest in category designers, not category participants.
Better to own 3-5 exceptional companies than 20 mediocre ones. Quality compounds, diversification dilutes.
We combine Graham's margin of safety with Buffett's quality focus. Only invest when exceptional businesses trade at reasonable valuations—patience is competitive advantage.
Background in software product management provides direct understanding of these businesses—product-market fit, technical moats, unit economics, and category positioning. We invest in companies within our circle of competence.