As with any investment, your capital is at risk.
Whatever your view of President Trump, his unpredictability challenges anyone investing in the US. But positioning a portfolio to try to benefit from his sudden shifts is a fool's game.
How then do we navigate? We double down on those things that we believe we have an edge in analysing. We focus on the structural growth that's happening within the economy, drivers of change over the next five to 10 years. Examples include:
- The falling cost of batteries, which is boosting demand for electric vehicles and power storage
- The falling cost of ‘inferencing’ – deploying machine learning, which allows us to do things with AI that five years ago we didn't believe possible
- Better understanding of human genetics, which has the potential to help us find better cures and treatments
Furthermore, finding companies with strong fundamentals provides resilience in the face of short-term changes in the macro environment and geopolitics, and the adaptability of leadership teams to embrace paradigm-shifting technologies is also critical.
The cultural blueprint
Ultimately, it all boils down to culture. We believe company culture, and our analysis of it, is the most critical factor in navigating change and delivering good long-term returns. We place culture at the heart of our philosophy and process, and, because of Baillie Gifford’s own corporate structure and shared beliefs, we have an advantage over others in analysing culture and harnessing it for our clients.
I think about culture in two broad ‘buckets’: foundational culture and created culture.
- Foundational culture is about deeply held beliefs unique to the chief executive or founder. It defines what problems they look to solve, how they go about it, and how big decisions are made within an organisation.
- Created culture is the manifestation of foundational culture. It’s influenced by the founder’s vision, but it's specific to the tasks at hand. Created culture can be nimbler, evolving to unlock long-term growth opportunities.
A management team can’t directly control how company culture manifests. Their job is to install the right scaffolding, ensuring core tenets permeate throughout the organisation.
Understanding events and influencing the future requires mastery of four ways of looking at things, as they were, as they are, as they might become, and as they ought to be.
Foundational culture focuses a company on the ought-to-be. Created culture is akin to the building blocks that help a company move through the stages from as-they-were, to as-they-ought-to-be.
I think of the best company founders and leaders as builders, looking to create something functional and durable. These visionaries are willing to build height and breadth, and add the occasional extension, even when it’s deeply unpopular to do so. Critically, they are also willing to demolish parts of what they have built if needed.
Two examples of these culture-creating visionaries whose companies we back are:
Andy Florance: CoStar
Florance founded CoStar, a US data analytics and marketplace platform, in 1987. Its foundational culture is all about the ruthless execution of its aim to help a multitude of players within the real estate industry.
Historically, this has been a siloed and closed sector, with little opportunity to harness all relevant data. Florance saw it as a web of opportunity and spent decades stitching its parts into a holistic platform.
In 2009, it added data analytics with the acquisition of Property and Portfolio Research. In 2011, the company bought LoopNet, which would go on to become its commercial property marketplace business. In 2014, it bought Apartments.com, at the time the fifth largest apartment rental marketplace in the United States, for $585m, when its revenue was around $85m.
A decade later, Apartments.com has become the number one rental marketplace in the US, with revenue of more than $1bn. It was the first part of CoStar to reach that milestone.
In 2021, the company made its boldest decision to date: it acquired Homes.com, marking the business's first foray into residential property buying. Last year, CoStar invested more than $1bn in sales and marketing to build the Homes.com brand in the US, bringing the UK’s Rightmove monetisation model across the Atlantic.
The market baulked at this, but our deep engagement with the management team maintained our confidence. We've seen its playbook on Apartments.com and understood how it might work out with Homes.com. We've closely analysed CoStar’s corporate culture for nearly a decade, consistently observing Andy Florance’s methodical approach to strategic integration. We’ve seen this pattern before and backed Andy Florance and his team to deliver again.
Tobi Lütke: Shopify
Shopify is a platform for online merchants. Its master builder Lütke designed it so that Shopify only wins if these merchants win too.
Launched in 2006 to help small and medium-sized businesses create an online presence, in 2013 it branched into point-of-sale and payment services. In 2021, it began investing in logistics, an unusual move for an asset-light company, but two years later, Lütke pulled the plug, shifting to investing in AI. Logistics was a singular opportunity, he explained, but AI was a far larger, more relevant one.
Since then, Shopify has embraced generative AI tools, such as Shopify Magic and Sidekick, to enhance productivity. It is also exploring ‘declarative software’, which could allow users to log in and say, for example, “make me an advertising campaign for 13-to 25-year-olds on TikTok to launch my new drinks brand.” If it can unlock such opportunities, it becomes an actual liability not to be on their platform. That’s a colossal opportunity.
We had been analysing Shopify’s culture since 2016, and so while others in the market were questioning the move, we had a hypothesis that this decision was reflective of Shopify’s foundational culture in action, underpinning its adaptability. Lütke’s decision has led to strong operational performance in the subsequent years.
Others we could highlight where leadership seems equal to these times of transition are:
- DoorDash. It empowers local commerce via its logistics and delivery platform. From restaurant food delivery, it has moved into convenience and grocery and is looking to expand further. DoorDash’s cultural advantage stems from CEO Tony Xu’s big ambition and microscopic operational focus, which we believe offers a lasting execution edge. He’s known for spending 15 minutes each day on frontline customer support calls to stay close to user pain points. He keeps hiring standards sky-high, once interviewing 100–200 candidates for every C-suite post. This rigour underpins a culture of compounding 1 per cent improvements to deliver Xu’s long-term vision of connecting local communities.
- Stripe. A private company in the trust, Stripe helps businesses manage and accept payments. Its recent acquisition of Bridge means it can help businesses accept stablecoins (cryptocurrencies pegged to commodities or actual currencies) and boost global borderless payments. The founders, Patrick and John Collison, see stablecoins as improving the ‘usability of money’ and this acquisition is emblematic of the culture they have built, characterised by its operating principles (the created culture), which emphasise collaboration, curiosity, and a focus on solving complex problems. It's a company that values humility, resilience, and a macro-optimistic outlook, where setbacks are seen as opportunities for growth. Stripes (employees at Stripe) are known for being meticulous, user-focused, and ambitious, with a strong emphasis on teamwork and raising the bar for each other. This culture has led to a service with apparent unmatched reliability and product completeness.
These are just a few examples of unique founder-led cultures that are mirrored across the companies in the whole portfolio.
The founder advantage
The companies we've highlighted share a common thread: they are led by founders or founding-minded leaders who have instilled their vision deep into the organisational DNA. Andy Florance's relentless focus on connecting real estate's fragmented ecosystem, Tobi Lütke's commitment to merchant success above all else, and the other visionary leaders we back all demonstrate how foundational culture becomes a competitive moat.
These founder-led businesses have a better chance of long-term success because their leaders think in decades, not quarters. They're willing to make bold, seemingly contrarian moves, like CoStar's massive investment in Homes.com or Shopify's pivot from logistics to AI, because their foundational culture provides the conviction to see beyond short-term market scepticism.
This is why we believe founder-led businesses often represent the most compelling investment opportunities. When market volatility strikes or technological disruption threatens, companies with strong foundational cultures don't just survive; they use these moments to extend their competitive advantages. The founder's vision becomes the North Star that guides thousands of employees through uncertainty toward long-term value creation.
In an era of ever-present unpredictability and rapid technological change, we find our edge not in trying to time political cycles, but in analysing and backing the exceptional founders who are building tomorrow's dominant companies today.
Risk factors
The views expressed should not be considered as advice or a recommendation to buy, sell or hold a particular investment. They reflect opinion and should not be taken as statements of fact nor should any reliance be placed on them when making investment decisions.
This communication was produced and approved in August 2025 and has not been updated subsequently. It represents views held at the time of writing and may not reflect current thinking.
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