• Brett Schafer

Deep Dive: Joe Furmanski Discusses Cloudflare Stock



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Show Notes


This week we brought Joe Furnamski from NZS Capital on the show to discuss Cloudflare. Joe is very knowledgeable about the cybersecurity, cloud, and software industries. I learned a ton listening to him talk about the company. Here are some questions we asked him:


  1. What pushed you towards the cybersecurity space? How’d you learn about it what would you recommend to the laymen?

  2. What does Cloudflare do? What value do they provide to customers? (Can hit on why 25% of internet traffic touches Cloudflare)

  3. Differences between Cloudflare and a competitor like Fastly? Why would someone add on Cloudflare services if they already use one of the big 3 cloud providers? In the future, do you think Cloudflare could compete with someone like AWS for customers?

  4. Cloudflare’s TAM has potentially gone up to north of $100 billion with its new product initiatives. What are the key drivers of this?

  5. Can you go through the unit economics? Is this a capital intensive business?

  6. How hard would Cloudflare be to disrupt? What would be the hurdles for newcomers?

  7. Thoughts on management/founder Matt Prince?

  8. Thoughts on valuation? What needs to happen for solid forward returns at 40x sales?

  9. Premortem: How could an investment in Cloudflare go wrong? Why would this business not be much bigger 3, 5, or 10 years from now?




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Disclosure: The author and podcast guests are not your financial advisors. Ryan Henderson and Brett Schafer are general partners and portfolio managers at Arch Capital. Clients of Arch Capital may hold securities discussed on this show.

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