Arthur Moreno (Cathcart)

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Continental Building Products: How low (cost) can you go?
Arthur Moreno (Cathcart)
Last modified on December 5, 2015 at 7:17 pm
Continental Building Products is a leading producer of wallboard in the United States. Through its unique operating model, CBP has been able to achieve industry leading operating margins and grow its market share, despite sub-scale operations relative to its peers.

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On December 13, 2015, Arthur Moreno (Cathcart) commented on Learn a New Language and Change the World :

Thanks Avilia for the post. I just happened to download duolingo earlier this week as it was widely recommended to me. As you detail, the company provides a significant amount of value to consumers and content providers. I’m still curious as to what the steady state business model will be. What is your view on how the Company will derive economics from the ecosystem that it has created over the long term? Will it be on the consumer side or the hosting side? Is it sustainable once the software becomes good enough that it doesn’t require human input?

On December 13, 2015, Arthur Moreno (Cathcart) commented on The house always wins :

Thanks SK for the great post. I felt compelled to comment given it was one of my portfolio companies before school. As you highlighted, the Total Rewards program that Caesars implemented was a complete game changer. Because customers use the card each time they play, it generates massive amounts of data. Caesars is able to mine this data in order to derive insights on consumer behavior, which further contributes to the Company’s competitive advantage as no other casino operator has a loyalty program like it. Coincidentally, it was created by a former HBS professor who left the school to found the program.

Separately, I think one of the most interesting headwinds to Casinos overall is the melting ice cube which is the slots business. Simply put, millennials don’t play slot machines (sounds like you only played poker too!), yet these machines remain a core part of industry earnings. It will be interesting to see how the company alters its operating model to adapt to this change in consumer habits.

On December 13, 2015, Arthur Moreno (Cathcart) commented on My Home Is Your Home: Airbnb Revamps the Hospitality Industry :

Thanks Komal for the great post. You really highlighted well Airbnb’s innovative and differentiated value proposition to prospective hosts (monetize high fixed cost asset with excess capacity) and guests (differentiated travel experiences at a lower cost). I also hadn’t appreciated how the collaborations with Facebook and American Express contribute to Airbnb’s economic moat, which was already strong given its network effects business model. I think it will be really interesting to watch how the business model evolves over time. As you point out, today the company makes money based on a take rate from guests and hosts. There are so many natural adjacencies which the company could enter into in the future (with ease), including lead generation for car rentals, events, flights, all of which are large and potentially lucrative markets.