Hmm... something interesting I learned from my buddy @RomeenSheth about McKinsey.

I thought they are just a stale boring consulting co

But he told me they've acquired a ton of software co's & now have a $100M ARR tech portfolio now (!)

I'll let him explain - guest thread!

If you don’t know, McKinsey is a gigantic consulting company:

- $10B+ in revenue
- 80%+ of the F500 as clients
- Hard to get a job there. (<1% of applicants get hired)
Their bread and butter (70% of revenue) used to be “pure strategy” work. That’s now down to just 10% - why?

Clients are demanding “value based” billing. Meaning less "guys in suits talking" and more "show me something tangible"
For example -lets say a client hires McKinsey because they think they are spending too much money on procurement.

So McKinsey acquired Orpheus - a software co that does analytics for procurement.

Instead of advice, they give them a tool (a real solution)
Now Orpheus has been around for 15 years. McKinsey can buy it at a fair price, knowing that it can inject steroids into the business.

Why?
McKinsey has what most software companies don’t:

DISTRIBUTION: 80% of the Fortune 500 already works with them, and their brand is known by every CEO in america.

PRICING POWER: they can bundle the software in with a much larger consulting contract.
Over the last 5 years, McK acquired 10+ companies and created McKinsey Solutions - the business unit that’s going to drive $100M+ ARR.
McKinsey has a really specific acquisition type, either VERTICAL or HORIZONTAL.

Vertical: Solves for a problem widely observed in an industry (eg. Pharmaceutical Co.)

Horizontal: Solves for a problem for a division that all companies have (eg. HR)
The unfair advantage they have is that McKinsey PRINTS money.

Billions in revenue, and consulting margins are 70%+

They can take that cash and re-invest it into tech, that makes them even more valuable.
The software play is a gamechanger for McKinsey.

It wouldn’t surprise me if McKinsey builds a $25B+ software portfolio over the next 10 years. There’s a very quiet (but massive) business model transformation playing out

Shoutout to @RomeenSheth for the insights. Follow him!
Some interesting names they’ve acquired:
Orpheus
Numetrics
Veryday
Lixto
QuantumBlack
4Tree
Lunar
VLT Labs

via @MBentivoglio

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Reading this article, the story sounds pretty wild. But I spent a weird amount of time with Martin Shkreli, and I’m not surprised the journalist fell in love w him

A few years back my team built an app called Blab. It was like clubhouse before clubhouse.


When he first joined the app I had no idea who he was. I just saw that his live streams instantly had 3-4K viewers. More than anyone on our tiny platform.

I googled him and it came up: “Martin Shkreli, most hated man in America”

I assumed he was bad news

And he was... but also he wasn’t.

He was a douchebag, but he was in on the joke. He was a dick, but he was also very entertaining.

In the mornings he would live stream himself analyzing stocks or walking through drug discovery pathways.

In the afternoon he’d let people call in and debate him live on air. A CNN reporter tried to get him to go on TV, he refused, and said debate me here on Blab, no edits, no tv time limits.

At night he’d host late night convos - and eventually fall asleep on cam

The guy was a pain in the ass but man he drove traffic.

We had big celebs like Tony Robbins, the Jonas brothers etc... he outperformed them all.

At one point he was bringing in 100k users per month directly to his channel. And Bc he was so entertaining, they stuck.

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