Learn from European luxury

Europe hasn’t created many great software companies compared to the US and China. But Europe is home to the leading luxury conglomerates (LVMH, Kerring, Richemont) who share quite a few things with major technology companies (high revenue growth rates, high margins, being a good vehicle to become the world’s richest person).

I’ve started to listen more often to Acquired’s podcasts in the last 6-9 months and its recently released deep-dive into LVMH and its CEO and major shareholder Bernard Arnault is well worth its 3+ hour listening time.

LVMH was built by acquisition of established brands, higher margins from synergies on both the cost and distribution sides (while retaining creative decentralization), going global and a long-term view for investments. While not exactly the traditional playbook for software companies, even if the success of e.g. Constellation Software and private equity firms like Thoma Bravo is changing the playbook, LVMH is an interesting company to compare and contrast with when developing one’s own strategy.

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