Today we will be diving into Visa. Starting in 1958 as a BankAmericard credit card program in Fresno, California, it then became a non-profit consortium of banks that operated the Visa network. Over the first few decades of its existence, Visa became the protocol layer that allowed essentially all the banks in the world to communicate with one another.   In 2007, Visa completed a corporate restructuring that took it public and now boasts a larger market cap than all of the banks that previously owned it as part of the consortium.   In this Breakdown, we set the stage with Visa's role in a card transaction, describe the lifeblood of Visa’s revenue, interchange, and then dive into its unique history as a consortium turned multi-hundred billion-dollar public business. We then explore Visa’s unique moat and network effect, how Visa makes money today, and look at the potential threats from other businesses and macroeconomic forces. Visa is a fascinating business, and I recommend you check out our website at JoinColossus.com, where we provide additional articles, books, and podcasts for those who want to keep unpacking the Visa story.   To help me break down Visa, I'm joined by Alex Rampell, a general partner at Andreessen Horowitz, where he focuses on investing in financial services. Prior to joining Andreessen, Alex co-founded multiple companies, including Affirm and TrialPay, which was acquired by Visa in 2015.   For the full show notes, transcript, and links to mentioned content, check out the episode page here. ----- Business Breakdowns is a property of Colossus, Inc. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.   Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.   Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss   Show Notes [00:03:20] - [First question] - Key players and functionality of a credit transaction [00:05:50] - How $3 would be split up amongst the network after a $100 purchase is made [00:10:55] - How Visa came to be a central player and why banks don’t talk to each other [00:16:26] - Other businesses that have dominating protocol effects in fragmented sectors [00:19:47] - What the internals of a business like Visa looks like and  [00:24:48] - Visa’s topline revenue is almost entirely exclusive to transaction fees [00:26:11] - Thinking of Visa as a tax and simultaneous enabler of commerce writ large [00:30:48] - Why concentration poses a risk to their business model [00:34:56] - How international standards may play a role in Visa’s future [00:41:52] - Would it be worth it for merchants to build something competitive  [00:44:33] - Thoughts on new value transfer tech companies and their relevance to Visa [00:48:59] - Plaid’s role in the payment ecosystem and as a potential competitor [00:50:40] - Parallels between the crypto space, their protocols, and open-source payments  [00:52:54] - Business lessons for entrepreneurs when studying Visa’s history [00:54:44] - Lessons learned that can be applied to investing when studying Visa’s history [00:55:37] - Books to learn more; A Piece of the Action, One for Many   

Today we will be diving into Cinnabon. Founded in Seattle in 1985, Cinnabon is the market leader among cinnamon roll bakeries and is owned by parent Company Focus Brands. Cinnabon currently operates in almost 50 countries with over 1,500 franchised locations, primarily in high-traffic venues such as shopping malls and airports.   In this breakdown, we start with Cinnabon's scale and an overview of the franchise's fascinating history. We then dive into what really makes Cinnabon special - its omnichannel ecosystem and how it balances franchisees, licensing deals, and distribution through other retails while maintaining its differentiated and relevant brand.    To help me break down Cinnabon, I'm joined by Kat Cole, the former COO and President of North America for Focus Brands. Before that role, she was the president of Cinnabon. Kat's operating and investing experience in this space and her deep understanding of the brand make her the perfect guest to break down Cinnabon. Please enjoy this Business Breakdown.   For the full show notes, transcript, and links to mentioned content, check out the episode page here. ----- Business Breakdowns is a property of Colossus, Inc. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.   Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.   Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss   Show Notes [00:03:04] - [First question] - The operational scale and complexity of Cinnabon [00:05:48] - Origins and humble beginnings of Cinnabon [00:10:07] - Diversified stakeholders involved in franchised businesses [00:14:44] - A focus on brand relevance and differentiation [00:19:38] - Building brick and mortar traffic during a recession and partnering with Pillsbury [00:23:21] - Cinnabon’s ability to thrive and support an omnichannel brand ecosystem [00:26:57] - Partnering with Burger King and fast-food market exposure [00:32:55] - Building successfully collaborative equity buckets [00:36:52] - Focus Brands and advantages of being part of a bigger ecosystem [00:41:52] - Balancing licensing opportunities while maintaining core channel partners [00:45:37] - Lessons for operators and investors we can take away from Cinnabon