Discl: Held IRL 7.2% and in SM

I got a lot out of the interview as I am in a deliberate review process of each and every company I own and deciding what action to take amidst "AI-mageddon". I decided that going back to focusing on my companies is a positive way to channel the horribly nervous energy while the market is open and reducting the tempation of doing something stupid.

Nothing really new in terms of the CAT business - the points have all been well known/well-made. But there were some insights on how Will and CAT are thinking about the business, the market etc which is very helpful.

This is completely THESIS REAFFIRMING:

• Remains mission-critical focused as they continue to scale - Will’s point about learning to say No, is very reassuring
• Is both increasing and prosecuting the TAM to “make the technology accessible to make more teams “sophisticated” - this is a market-making vs market-driven mindset
• Is Data focused, front and centre - this is the moat within the moat. Public LLM’s are as smart or dumb as the data they can learn from. Public LLM’s can’t touch this. CAT has full access and control and has already been deploying AI in the past 7 years
• Last bastion of live entertainment - Sport is growing but do have the sophistication.

This is highly grounded thinking against the clear goal of scaling.

Am already at High allocation with CAT from lower levels, so will only nibble very carefully to take advantage of sharper downward moves.

Here are my notes - have only focused on things that are new-ish or provided more clarity.

TECH IN SPORT IS STILL IN VERY NASCENT, EARLY DAYS

Will describes a 3-stage maturity model of Sport Tech:

• Stage 1 - Digitisation - capturing of data, data is overwhelming
• Stage 2 - Optimisation - creating some predictability and prescriptibility from the data ie. What does it mean?
• Stage 3 - Transformation - technology starts to drive meaningful business model changes, still very far away

Sport is just transitioning from Digitisation to Optimisation - starting to create these insights - “What do I do with all these insights”.

Example of new insights now available: Success of a wide receiver player in American Football comes not from how fast they can accelerate but actually how fast they can decelerate instead. The training for these aspects are totally different.

Transformation is very far away. Example: currently teams have no tech-driven correlation between how much is spent on player roster vs coaching staff. At some point in the future, this will be a tech-drive correlation.

Sport is growing but do have the sophistication.

STATE OF LIVE SPORTS INDUSTRY

Industry is expanding - sport is the last bastion of live entertainment - “the product may be poor, but it has lots of fans”

Technology disruption will drive growth - this is driving the adoption of technology

CAT GROWTH DRIVERS FOCUS AREAS

How to Make The Technology More Accessible

• ~20,000 teams
• 10 years ago, 7,000 to 8,000 teams would be addressable by CAT as they have budget and sophistication
• This has now risen to 10,000 to 11,0000
• Challenge is how to make the technology more accessible to make more teams “sophisticated” - this is market-making vs a market-driven mindset

How To Take Huge Volumes of Data And Make This More Useful In The Workflow of Teams

• 5PB of data, where 1PB = 1,000TB
• Expand share of wallet
• Teams use technology in a very fragmented manner - CAT is focused on providing a more cohesive view

WILL’s LEADERSHIP

Start Point

• CAT was an organisation of a bunch of small companies, will say Yes to a lot of things because they have to
• Had great product, great strategy, but did not know how to scale it
• Needed to (1) define what are the things to stay mission-critical focused (2) put people around me that has done this before and knew what it takes to transition a company to scale (3) have people in the organisation who knew what KPI’s to look for (4) be the Chief Customer Advocate - to bring the customer into the organisation at every conversation
• Fortitude to transition from perpetual licenses to subscription-based as this involved going backwards in revenue essentially
• Role was not so much about coming up with incredibly innovative POV’s on strategy or direction - it was actually learning to say No
• When trying to scale, need to define what are the things we are going to stay focused on - need to say No to a lot of things around it

Focus

• The ultimate output for CAT - we are helping athletes and teams do better and that the fans get the best of what the love and watch
• Need to keep the organisation focused on this long-term view, the rest is just relentless hard work on it
• Owners mindset - made equity a big component of salary so that everyone has skin in the game to succees

Leadership Style

• “Amazon Memo” approach to decision making for 1-door, hard-to-change-course-once-decided decisions
• Push 2-door decisions, those decisions where if a mistake is made, can be rectified/modified, down the organisation as far as possible

VIEWS ON AI

AI is positive for sport, not a negative - it equalises the playing field a bit more. Think of CAT in 3 layers:

• “Oil Fields” - raw first party data, there will always be a need to capture this, AI cannot deal with this physical attribute, CAT has a lot of very large oil fields
• “Refiners” - AI sits here primarily, the refinement, “How can I make more contextual sense of the data” - not only help discover better insights but translate those insights INTO less and less sophisticated teams - the “democratisation” of data
• “Petrol Stations” - the consumers - where to consume it, when and how to use it, CAT’s tech is very well designed for the sport and region it operates in

AI is an enabler - supports giving customer better, faster information to make smarter decisions

“Not as big a disruptor as people think it is”

“Have used AI for 7 years now”