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| Stephanie Pakrul created a flowchart for getting what you want delivered, like food, drink, clothes, drugs, and things that "cannot be categorized." "Bring me what? A visual guide to on-demand delivery in San Francisco" (Medium) |
Being in San Francisco and the Valley today, or other tech savvy bastions of capital like New York, it's hard not too see a bubble when the umpteenth food delivery service turns up in the app store. The chart above indicates the absurdity of the combinations and flavors available. But is it really so crazy…? For example, Brian Chesky of Airbnb shared a few of his original rejection letters 7 Rejections — Medium. The iPhone and mobile internet have unleashed the sharing economy in a way that does enable some initially crazy ideas to blossom.
The Economist explains how there is a lot of private capital right now chasing these ideas, and it probably is driving up their valuations in the private space on the promise of future market share dominance. Not many of us will be too sad to see a billionaire lose some of his or her bet.
We do see this in the public space too. In recent earnings seasons, the volatility around stocks like Netflix, Twitter, Yelp and Linkedin is indicative of their reliance on user and engagement momentum. These companies do not make a profit - even if sometimes they indicate one with their non-GAAP results (How Much Do Silicon Valley Firms Really Earn? - Barron's). So their valuation is based on their user trajectory towards a far off level that the community assumes ensures unassailable revenues and profits.
Twitter is the most interesting of these right now, as it grapples with its product strategy and path to profitable growth as a public company (What Twitter Can Be. | LOWERCASE capital). Perhaps it really should have stayed private. Or perhaps it needed to go public to go bust and finally get picked up by Google or Facebook that can best leverage it's functionality within a larger platform. I personally struggle with Twitter as a business, while see great value in its role in the great moments of our lives today. That role just does not seem to monetize to me.
Of those established profitable companies, Google and Facebook seem to be on a role while the second tier is likely to be subsumed, as AOL was by Verizon. Yahoo post the spin off of their Alibaba shares is on a trajectory of declining revenues and profits and perhaps will need to find its own sugar daddy.
So, it's an exciting time right now. Google and Facebook seem to have digital advertising cornered for now, but the sheer size of internet traffic and time, the new business models maturing in the private space, as well as the offline/online merging of media and commerce, suggest to me plenty of opportunities ahead.
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Bring me what? — On Demand — Medium: There is so much here and companies are vying to bring stuff right to your home. If you don’t need to brave MUNI, BART, parking (ha!), and SF’s damn hills, why not open an app and stay in your PJs?
What Twitter Can Be. | LOWERCASE capital: Hundreds of millions of new users will join and stay active on Twitter, hundreds of millions of inactive users will return to Twitter, and hundreds of millions more will use Twitter from the outside if Twitter can: Make Tweets effortless to enjoy, Make it easier for all to participate, and Make each of us on Twitter feel heard and valuable.
How Much Do Silicon Valley Firms Really Earn? - Barron's: The result is an inflated and distorted earnings figure -- a number that doesn’t conform with generally accepted accounting principles, or GAAP, yet is widely embraced by analysts and investors in valuing tech companies. We estimate that a dozen leading companies this year will fail to expense $16 billion in stock compensation against their non-GAAP earnings.
How Much Do Silicon Valley Firms Really Earn? - Barron's: The result is an inflated and distorted earnings figure -- a number that doesn’t conform with generally accepted accounting principles, or GAAP, yet is widely embraced by analysts and investors in valuing tech companies. We estimate that a dozen leading companies this year will fail to expense $16 billion in stock compensation against their non-GAAP earnings.
To fly, to fall, to fly again | The Economist: Look beyond the mere size of that boom and bust, though, and the differences with today’s situation are clear. For one thing, the base of today’s success is broader. In 2000 some 400m people around the world had access to the internet; by the end of 2015 3.2 billion people will. And the internet reaches into these people’s lives in many more ways than it could 15 years ago. “Technology is no longer a vertical industry, as it’s been understood by everyone for four decades,” says John Battelle, a journalist and entrepreneur who launched the Industry Standard, a magazine which reported on the dotcom boom before itself going bankrupt in 2001. “Technology is now a horizontal, enabling force throughout the whole economy.”
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