DRIVERS OF CREATIVE DESTRUCTION
“The great lesson in microeconomicsis to discriminate between when technology is going to help youand when it’s going to kill you.” -Charlie Munger (1994)
SMART PLATFORMS
“The smartphone is the sunand everything else orbits it.” -Ben Evans (2015)
• 7.7b world population. Of them: 🗒️ notes on overpopulation
5.7b adults → age > 15yrs (74%)
• 8.0b mobile connections, SIM cards (104%) 5.1b unique mobile phone users (67%)
• 6.7b w/ electric power (87%), ~1b to go!
• 5.5b TV users (71%)
• 5.4b w/ access to working toilets (70%) 🚽 in 🇮🇳
• 4.0b unique smartphone users (51%), new unit shipments -4%
2.4b Android, ~0.7b Chinese Android, 0.9b iPhones
• 1.5b cars (19%), of which EV=0.4%
car ownership is rising, not declining, on track to 2b
• 1.3b PCs (16%) = 1.1b Windows, 0.2b Mac + Linux 47% of new PC sales (Q2 2019) = Lenovo + HP 0.4b tablets (4.7%)
• 170m smart watches (2.2%), 53m in USA
• 160m smart speakers (2.1%), 76m in USA (>1 per household) outpacing adoption rates of smartphones
THE NEW U. N.
“No nation imagines itselfcoterminous with mankind.” -Benedict Anderson (1983) 📙
• Security Council’s permanent members:
2.4b Facebook (31%)
• Security Council’s non-permanent members:
1.4b India (18%)
1.1b Hinduism (14%)
1.1b WeChat (15%)
1.0b Instagram (13%)
1.0b TikTok (13%)
• Not represented in the General Assembly:
1.2b non-religious (15%), aka “humanists”
THE INTERNET
“If your big policy idea boils down to restoring the pre-internet status quo,it is not going to work.” -Balaji S. Srinivasan (2019)
• 4.5b active internet users (59% of world pop) growth is slowing
• 3 separate *mobile* internets: 🇨🇳=850m 🇪🇺=300m 🇺🇸=270m
🇮🇳=580m choose b/w: govt surveilled, data protected, corp custodians
• 3.9b email users (89%), 3.5b active social media users (79%)
• Wordpress ($3b) powers >33% of the *entire* internet vs web porn traffic claims of 5% to 15%
• avg d/l speed: 28 Mbps mobile, 66 fixed broadband, 112 5G (🇰🇷)
• 3G coverage @ 95%, LTE > 70%, 5G rollout (IoT revolution) begins
• 2k+ satellites (comms + observation), growing +500/yr and accelerating
🇺🇸=901, 🇨🇳=299, 🇷🇺=153
• satellite-based broadband constellations ("fiber" anywhere on Earth) 🛰️ in🚀 SpaceX's Starlink: 60/12k (7k FCC authorized) Telesat: 0/300 (to be launched by Blue Origin) OneWeb: 6/648, Viasat: 0/3, Amazon's "Project Kuiper": 0/3.2k
• ~1% of internet data on surface web (indexed by search engines) ~99% on deep web (not indexed), fastest growing data
CLOUD COMPUTING
“Computing big bangs = cloud (AWS, 2006) +consumer mobile (iPhone, 2007).” -Mary Meeker (2018)her bible v2019
• people/businesses continue relentless “march to the cloud”
• $800b cloud market cap, on track to $1 trillion Amazon’s AWS to build VW industrial cloud: data from 122 factories Microsoft's Azure to move AT&T's non-networking infra to the cloud
• world’s most powerful supercomputer: IBM-built “Summit”
• Google quantum cpu faster than super computers: 200sec vs 10k yrs
• $0.025/GB cost of cloud storage (2019), vs $4.4k/GB in 1990
• ubiquitous 1TB: SD Card (Lexar), microSD card (SanDisk and Micron) SSD: Nimbus Data 100TB ExaDrive DC100 SSD → 20k HD movies
• $0.05 cost of 1m transistors (2013), vs $527 in 1990
Moore's law still in effect, but chip-specialization driving price
• Google Drive: 1b MAU (5m paying)
• Dropbox: 600m users (13.6m paying), $8.3b mkt cap fastest SaaS company to $1b/yr recurring revenues (🏁=8.3 yrs) integration with Google G Suite + Office 365
• Box: 65m users (12.3m paying), $2.5b mkt cap
THE BLOCKCHAIN
"What if this technology could do for the transfer of value,what the internet did for the transfer of information?" -Abigail Johnson (2017)
• every single asset in the world will be tokenized
• $220b network value of all 2.4k altcoins/tokens 11 crypto-assets w/ network value > $1b
• crypto exchanges by *verified* BTC ADTV: 🥇Binance 🥈Bitfinex 🥉kraken
Coinbase, Kraken et al develop the Crypto Rating Council
• Coinbase: 30m users in ~40 countries, insured accounts #1 crypto-custodian for institutions: $7b AUM, 120 clients
• anonymous/decentralized trust enabled by blockchains → still expensive security of blockchain is linear to expenditure in mining power vs door lock increases house security by more than cost of the lock
• Facebook-led digital currency Libra includes 28 companies (3 out)
• Bank of England's synthetic hegemonic currency → "end" USD dominance
• People’s Bank of China digital yuan: prototype ✔️, to launch
• adoption: 🇸🇪 RE registrar, 🇨🇦 grants, 🇪🇪 digital ID, 🇳🇿 legal tender
• top patent filings: 🥇IBM 🥈Mastercard 🥉Bank of America
• JP Morgan + 330 banks = ETH-based blockchain to settle payments
• 5-10% interest on crypto backed loans: BlockFi, Binance, et al
MACHINE LEARNING
“The highest forms of understanding we can achieveare laughter and human compassion.” -Richard Feynman (1988)
• cpu power for AI training: 2x every 3.5mo, vs 18mo for Moore’s Law
80 co designing custom chips for deep learning acceleration
• reading comp w/unanswerable questions: human performance = 86.83 🥇Google+Toyota🇺🇸=89.73 🥈PINGAN🇨🇳=88.59 🥉Google+Toyota🇺🇸=88.10
• AlphaZero becomes world’s best Chess, Go, and Shogi player starts from blank slate, no historical data, except game rules
• combinations of ingredients to form metallic glass: scientists found 6k in 50yrs, vs ML → 20k in 1yr
• 3m scientific abstracts (1922-18) analyzed: insights to new materials 📝
• medical research/knowledge: 2x every 70 days (2020E) via deep learning 2x every 3.5yrs (2010), 2x every 50yrs (1950)
• DL accuracy 26 skin conditions ≈ USA board-certified dermatologists
• Paige.ai's "breakthrough" diagnoses prostate/skin/breast cancer > 98%
• DeepMind's acute kidney injuries accuracy > 90%
• "Smart city IoT" rationale allowing facial recognition tech deployment
• 640m driving license photos scanned by FBI+ICE
Pentagon's laser: identify people from a distance by their heartbeat
• deepfake "fakes": cpu generated ppl, porn videos, impersonification
ROBOTS
“Drones will be as ubiquitous as sprinklers.” -Chris Anderson (2017)
• 2.5m industrial robots 2018, installed base growing 15% YoY robots per 10k employee: 🥇🇸🇬=830 🥈🇰🇷=775 🥉🇩🇪=340…🌎=99
• sidewalk delivery robots coming: Amazon's Scout, Postmates's Serve
• Boston Dynamic: Atlas’s does backflip, Handle’s stacks boxes
• SD-airplane Zipline: 128km/h speed, 160km range, 1.75kg cargo capacity
• 1.3m hobbyist drone fleet (USA, 2018), 900k registered owner-hobbyists 0.3m commercial drone fleet (USA, 2018), 116k certified pilots
• Chinese drones rule the sky, DJI has ~70% mkt sh
• smartphones killed the Japanese cameras, but high-end lens up
• LiDAR "Moore's law": every 18mo → sensor resolution 2x, price 1/2x
$4k for Puck VLP-16, Velodyne’s cheapest LiDAR
• Waymo to sell in-house developed LiDAR “Laser Bear Honeycomb”
launches Open Dataset, 1k 20s clips of sync camera+LiDAR data
• 60+ carmakers issued autonomous vehicle testing permits by CA DMV
• 15% of Earth’s seafloor mapped (100% goal → 2030) Saildrone charges $2.5k/day/drone to collect ocean data
CLEAN ENERGY
“You don’t need a weathermanto know which way the wind blows.” -Bob Dylan (1965)
• 0.032$/kWh avg solar contract (incl Federal subsidy), -160x since 1976 learning rate: cost falls 29% for every doubling in capacity
• price of solar/wind so low → many subsidies no longer necessary
• 1.3TW of solar/wind installed (2018), plus 200GW by 2019E
• 10% of global energy consumption (2017) = renewable, 13% by 2023E
• USA coal power plants: closed > open. 25% of open → closed by 2025
• cumulative installed solar photovoltaic capacity (1H 2019) 🥇China=186GW 🥈USA=69GW 🥉Japan=58GW USA: #2 source of new capacity additions in 1H 2019 (#1 natural gas)
• cumulative installed wind energy capacity (1H 2019) 🥇China=193GW 🥈USA=98GW 🥉Germany=60GW
• renewable energy employees (2018): 4m 🇨🇳, 1m 🇧🇷, 0.9m 🇺🇸 fastest-growing USA jobs: solar panel installers, wind turbine techs
• CA: carbon-free by 2045, currently at 32%, utilities → 60% by 2030 solar panel on all new homes, starting 2020
• USA states wind/solar gx: 🥇ND=54% 🥈KS=47% 🥉OK=43.4% transition to renewable energy is fully underway: 18 states @ >10%
ELECTRIC VEHICLES
“Mr. Musk—who is 45 years old, the same age as Mr. Ford was in 1908when he released the Model T.” -WSJ (2017)
• 7m EVs currently on the road, plus 0.5m e-buses EV fleet: 🥇🇨🇳=3.2m 🥈🇪🇺=1.5m 🥉🇺🇸=1.3m
• 1H 2019 sales: 🇨🇳=630k, 🇺🇸=230k, 🌎=1.4m
best-seller race, first to 500k sold: Tesla Model 3 vs Nissan Leaf
• EVs to public charging st: 🇨🇳=3:1 🇪🇺=7:1 🇺🇸=19:1
• ChargePoint has 100k charging points (2.5m by 2025)
• VW: $50b e-plan, EV-only plant in China → the [Chinese] people’s car 1m EV/yr goal 2025-2030, EV-only cars by 2030 Electrify America: 1.5k/2k fast chargers, 308/500 stations
• Toyota testing solar-powered Prius 57km range (47km/day avg USA driver)
• Porsche drops diesel, $8b by 2020 to electrify *entire* lineup
• top 10 economies ban non-EV cars “announcements” by 2023: 🇮🇳 by 2030: 🇧🇷 🇮🇹 by 2040: 🇨🇳 🇩🇪 🇬🇧 🇫🇷 by 20😴: 🇺🇸 🇯🇵 🇨🇦
• 🇳🇴 (#1 EV per capita) 2025: 100%. 1H 2019 sales = 48% all-electric
• California ($7k subsidy) 1H 2019 sales = 8% zero emission vehicles all public transit routes electric by 2040, EV-only purchases by 2029
• $176/kWh avg Lithium-ion battery pack price, down 85% since 2010
• car dealers/suppliers brace for a lot of pain
• e-bikes: Giant 600k by 2019E, Harley Davidson and Trek launching too
CREATIVE CAPITAL
"Sorry, are you gonna give us the moneyor not?" -Cameron Howe (1985)Go Mutiny
• USA: 5.9m biz (1-499 FTE), 19.5k (500+ FTE) newco? → Stripe Atlas, sorry lawyers 10k co w/ mkt cap > $300m, 8k co w/ mkt cap < $300m
• 7k listed co NYSE+NASDAQ → $50t mkt cap
57% of Fortune 500 co in 2000 → not F500 anymore, only 60 since 1955
• top 5 co by mkt cap: hq=USA, exchange=USA, comp adv=tech/investments 🇪🇺 S&P500 mkt cap: Σ top 5 ≈ 15% ≈ Σ bottom 225 $1.7t cash + cash eq held by non-financial USA corp biz
• 2011-19 USA co fundraising: private mkt > public mkt, 1H 2019 → 5:1
SEC: to "take fresh look" pro retail access, wealth ⇏ sophistication
• $55b by USA VCs (1H 2019) 2.8k deals, vs $145b & 16.9k global VC 📝
9 states w/ $b+ VC ecosystem 2019E: 🥇CA=$61b 🥈NY=$16b 🥉MA=$10b📝
• Long Term Stock Ex: USA's 5th nat sec exchange, HQ=San Francisco
• $170b+ in underpriced IPO (1980-2019) → direct listing
• $50b in P2P loans to 4m borrowers issued by LendingClub
• $15b raised by 2k tokens via Initial Coin Offerings NVCA→SEC allow crypto + secondaries
• $4.6b pledged to 170k project via Kickstarter
• $3.1b in grants to 5.6k awards through main USA federal agencies
• $1.0b passed to 100k creators using Patreon
SKILLS
“Nobody owes you a career. Manage your careerso that you do not become a casualty.” -Andy Grove (1983)
• learn to sell, learn to build. If you can do both → unstoppable
• college tuition USA 1978-2018 → 1,375% > 4x overall inflation
online=mainstream: HBX rebrands to HBS Online, enrollment up 70%
investor day videos are the new free biz school
• AI-based + blockchain: LinkedIn’s fastest-growing skills
• STEM higher starting salaries, mid career social sci majors catch up 500k+ followers: $3.9k per YouTube video, $2.1k per Instagram post Medium.com writers: 55%>$0, 8%>$100, #1>$14k, $4k+ best single story
• >25% of adults *unable* to use a cpu (1.4b people), vs 1b+ illiterate
• 2k Coursera B2B partners, skill building offered by employers *up*
• WeWork: #1 tenant in NYC w/ 0.7m mt2, #2 JP Morgan
• 15% of USA labor force (30m) = gig workers vs 3.6m cashier jobs
• USA labor mkt: 0.9 unemployed per 1 job opening (7m+ job openings)
CHINA
“The American dream is alive. In China.” -NYTimes (2018)
• 1978 (42yrs ago) capitalism=illegal, entrepreneurship → death sentence
• China ’09 → #1 Exporter, ’13 → #1 Trader, ’17 → #1 Shipping+Ports
• #1 unicorn: ByteDance $75b > 2.3x SpaceX (1.5x $UBER)
“9-9-6” schedule of Chinese tech employee: 9am-9pm, 6 day/wk
~400 global unicorns: 🇺🇸=197 v 🇨🇳=98. Decacorns: 🇺🇸=12 v 🇨🇳=6
• Silicon Valley (10x innovation) terrified of China (20x), Europe (1x)
• $0.9t new silk rd investments eat EU 🇬🇧🇨🇭🇩🇪 + EMkts 🇧🇷🇵🇰🇳🇬, 🇺🇸<10%
• Chinese government to pork industry: embrace the “ABCD” 📙 Artificial Intelligence, Blockchain Tech, Cloud Computing, Big Data state oversight officials sent to 100 private firms: Alibaba, ...
• 11 Chinese IPOs in USA exchanges (1H 2019)
Shanghai Stock Ex launches Nasdaq-style tech exchange: STAR Market
London SE board unanimously rejects $37b takeover bid by Hong Kong SE
• USA semiconductor companies “holding the fort” → ⏳?
WINNERS TAKE ALL
“You call it monopoly, I call it enterprise.” -John D. Rockefeller (1911)
MICROSOFT
($1,062b mkt cap)"The greatest mistake everis whatever caused Microsoft not to be what Android is. What's that worth? $400b." -Bill Gates (2019)big miss
• 1.2b/day Office users, #1 productivity service, #1 SaaS product 214m Office cloud subs > Σ Spotify + Amazon Prime, paying ~$99/yr of which 35m Office 365 consumer subs Office 365 > 2x G Suite’s penetration in businesses >1b MS Word installs on Google Play Store 400m Outlook users (100m mobile), 300m Skype users
• 16% mkt sh (½ AWS, 2x Google) in cloud computing infra w/ Azure
16 consecutive qtrs at >60% QoQ rev growth
• 88% mkt sh in desktop operating system 1.7b/day Windows devices (installed base), 900m on Windows 10 alone
• $26b+ for LinkedIn (2016): 645m profiles, 30m companies
• $7.5b for GitHub (2018): outbids Google, Amazon, Tencent, Atlassian
• Cortana to be replaced by Microsoft Search Word’s Resume Assistant (powered by LinkedIn) writes your resume real-time translator: powerpoint (60 langs), Skype (10 langs)
• 110m/mo active Minecraft players, 65m/mo Xbox Live users
• $9b spent in R&D (1H 2019) $1b committed to OpenAI (nonprofit AI research) samples cashier-less technology to Walmart and other retailers
APPLE
($1,012b mkt cap)“Just the way he advertised: Jesus, Gandhi, Me!” -Bill Burr (2012)
• $210b cash on balance sheet > New Zealand's GDP
• 2.3b devices sold, 1.5b active (0.9m = iPhones)
• #1 dx channel: Google pays $12b/yr → default search eng on iOS devices new ruling in India: Apple can sell its devices online
• iPhone: #1 product of all times, 1.7b cumulative sold (since Q2 07)
vs 400m Sony Walkman, 130m Nokia 3310
• iPhone, #1 signal of USA wealth, $700+ avg price vs $260+ for Android
83% of USA teens: iPhone. Next phone? → 86% iPhone
• 80m Apple Watch sold cumulatively, 2019E: 27m > Σ Swiss watchmakers
• AirPods → fastest growing product, 40m+ by Q2 2019, 60m by 2019E
• iPad = 89% of tablets >$200 in USA, 29% global mkt sh (Q2 2019)
• $26b in App Store revenue (1H 2019), 1.8x Play Store
• 0.4b Apple Pay users. Apple Card (GSachs+MCard) → iOS Wallet
• 90m Apple News readers. Apple News+ = 300 publications @ $10/mo
• $8b in R&D in 1H 2019 (3.7m spent on lobbying)
AMAZON
($859b mkt cap)“If Amazon is in your line of business: Sell now.If Amazon is not in your line of business:Sell now; your business sucks.” -@GSElevator (2017)
• #1 company by R&D spending: $17b in 1H 2019, vs $29b in 2018
• #1 e-retailer USA: ~40% mkt sh (10x Walmart), 4% of *all* USA retail 60% units sold = 3rd-party: 600m SKUs, vs 120k Walmart, 4k Costco Apple to sell directly on Amazon (iPhones, iPads, and Apple Watches) Lady Gaga's new line of cosmetics: exclusively on Amazon
• 105m prime members >Costco: $1.4k/yr prime member vs $1k non-prime
• #1 fulfillment co: 65 Amazon Air planes, 6k trailers, 125k e-vans
• #1 cloud infrastructure provider: AWS=33% mkt sh $16b in 1H 2019 rev > Σ cloud (MSFT+GOOG+IBM+BABA)
• #1 smart speaker USA: 55% mkt sh (70% June sales), 60m Echo’s sold 1k/s Echo Dot on CyberMonday, 10k people working on Alexa
• #1 ebook seller USA: 83% mkt sh, audible.com $ > Σ 1-5 NYC publishers
• #2 largest private employer in USA by FTE (#1 Walmart)
• #3 in ads (9% mkt sh): $2b/qtr business (heads-up Google/Facebook) 2/3 of *product* searches start/end on amazon.com vs 20% Google
• #4 online grocery USA: 26% mkt sh vs Walmart=35%
ALPHABET
($845b mkt cap)“Google searches are the most important datasetever collected on the human psyche.” -Seth Stephens-Davidowitz (2017) 📙 read
• 9 products with 1b+ MAU each: Search, Android, Maps, Chrome, YouTube, G Play, Gmail, Drive, Photos
• >80% mkt sh in online search (desktop+mobile)
• Android overtook Windows as the *internet* most used OS (Nov-2017) launched in nov-2007, now 40%+ mkt sh, 2.5b active Android devices
• 2b Chrome installs in active use
#1 browser across all devices (63%+ mkt sh), vs Safari (#2, 16%)
• 2b MAU on YouTube, 490 channels w/ 10m subs
• 1b devices with Google Assistant, but 17% mkt sh on smart speakers 4m+ Google Home sold in Q2 2019, now behind Amazon and Baidu chose not to form a partnership w/ Huawei on smart speaker
• leading employer of AI talent (Google acq DeepMind in 2014) 13% ICML papers → Google/DeepMind author, up from 6.3% in 2017
• Waymo’s fleet >16m self-driving kms on pub roads, 16b in simulation logged more kms than all other competitors, vs Uber <5m kms
• $12b+ spent in R&D in 1H 2019
($508b mkt cap)“If you’re offered a seat on a rocket ship,don’t ask what seat! Just get on.” -Sheryl Sandberg (2012)
• 2.7b/mo used at least one Facebook-family app
• Facebook: 2.4b MAU, 1.6b DAU
• Messenger: 1.3b MAU with 500 FTE, 20b/mo biz-ppl messages goal: never dial a 1-800 number again 56% of people rather message than call customer service 400m/mo call/video chat, 90m businesses, 300k/mo bots
• WhatsApp: 1.5b MAU with 250 FTE, 65b/day messages click-to-chat button on website → message a business Business API → biz respond using WhatsApp (Uber✔️)
• Instagram: 1b MAU with 700 FTE, 500m/day stories
25m biz-specific profiles, 2m/mo active advertisers using Stories
130m/mo users tap on a shopping ad
• blockchain subsidiary Calibra led by D. Marcus (ex $PYPL), 100 FTE
• $6b R&D in 1H 2019
purchased ~90 companies over the last 15 years
TENCENT
($398b mkt cap)“Ideas are not important in China –execution is.” -Pony Ma (2011)
• largest games company in the world: by revenue and users #1 by users (China): League of Legends (PC) + Honor of Kings (mobile) 400m/mo PUBG Mobile players (50m DAU) > 250m from Fortnite
• #1 smartphone community (China): 1.1b+ MAU on Weixin & WeChat WeChat = the OS for the entire Chinese economy 1m mini apps that run inside WeChat, one with 250m users WeChat app ecosystem = 50% Apple App Store (2.1m apps)
• #1 mobile payment platform (China): 0.8b MAU, 1b/day tx 100m users on wealth mgmt platform LiCaiTong: $110b AUM 810m MAU on QQ (short+mini videos), 550m MAU Qzone (blogs)
• >100m digital content subs, 50% YoY
• active investment portfolio of 700 co: 120+ unicorns, 60+ IPOs $4.5b → DiDi, $1.8b → Tesla, $1.4b → Flipkart, $150m → Reddit owns 12% of investment bank China International Capital Corp (CICC)
• $2b in R&D (1H 2019), cloud infra revenues 2x in 2018, reach $1.3b computing center for driverless tech with BMW post ZTE block → support China’s chip industry w/ semiconductor R&D
• Prosus (Nasper's arm owns 31% Tencent) IPOs on Euronext Amsterdam
TESLA
($43b mkt cap)“Musk has made every Tesla customer a venture capitalist.” -Steve LeVine (2016)
• most valuable USA car makers: GM = 1.2x Tesla = 1.5x Ford
• best car ownership experience
• 245k vehicles delivered in 2018, 95k in Q2 2019 (ATH) → 7k/week leaked email
• Shanghai plant, aim for 1k/week 2019E. goal 500k/yr
• Model S @ $80k, 592km range (WR any EV) #1 by mkt sh (37% USA) faster than Ferrari/Lamborghini, Model S 100D 0-60mph in 2.4s
• Model 3 @ $39k, 496km range, 0-60mph in 3.2s, 260km/h top speed
#1 passenger vehicle in CA, IIHS: top marks, Euro NCAP: 5★ rating
• Model X @ $85k, 520km range (WR any electric SUV), #2 by mkt sh
• Model Y (2020E) @ $58k, “roomier” model 3 crossover
• Roadster 2G, to be quickest production car ever: 0-60mph in 1.9s reservations at $50k, ‘Founder Series’ → $250k *upfront*
• $0.7b R&D 1H 2019: 2k Semi truck pre-paid reservations, starting $150k 📷 with 🧠 proprietary data + chips + footage + GPS = new products eg. insurance 📝 V3 Supercharger: 1.5k/cars/day, Megapack: 3 MWh utility-scale battery
BITCOIN
($146b mkt cap)“Bitcoin is the best performing assetover the last decade.” -Anthony Pompliano (2019)
• first digital/unforgeable/scarce commodity in the history of the world
• stock-to-flow model shows statistical significance w/ BTC mkt value
• 1 BTC > 5.75x Gold oz, bitcoin overtook gold in Mar-2017
• 10yrs old BTC: 18m circulating (86%), 3m to mine ($8.4k+ ea!)
• 51% attack cost: $16b in hardware, $11m/day in electricity consumption strongest computing network in the world = bitcoin attacked 1k/x/day, impenetrable for 10+ yrs
• bitcoin’s “electricity-hungry” consumption ≈ 0.32% world ≈ 🇦🇹 Thermodynamics 101: "energy can neither be created nor destroyed; energy can only be transferred or changed from one form to another"
• $4b/yr spent by miners in securing the network
• market is smaller, but more efficient/regulated, than reported
• <0.1% avg price deviation (1 exchange vs aggregate top 10 exchanges) $91m BTC futures volume (CME + CBOE), pre Bakkt Bitcoin Futures TDAmeritrade (among USA's oldest/largest brokers) offers BTC futures
• $GBTC most actively traded stock on OTCMarkets on 7-May-2019
ORGANIZATIONAL HOARDING
“The banks took the money the American people gave them,and used it to pay themselves huge bonusesand lobby the Congress to kill big reform.” -The Big Short (2016) 📙
• Pension funds ($3,356b)
• Corporate ($693b): cash+ST+LT investments $210b Apple $142b Berkshire Hathaway $137b Microsoft $121b Alphabet $82b China Mobile
• Robo-advisors ($239b)
• Private vehicles ($179b): (strategy) $108b Softbank Vision Fund II (PE) $21b Blackstone IX (RE) $20b Brookfield Infrastructure Fund IV (Infra) $18b Global Infrastructure Partners IV (NR) $13b GS Mezzanine Partners VII (Debt)
• University endowments ($162b) $41b Harvard $34b UTexas $30b Yale $30b Stanford $26b Princeton
• Foundations ($128b): non-profit $52b Bill & Melinda Gates $31b Wellcome Trust $20b H. Hughes Medical Institute $13b Garfield Weston $13b Ford Foundation
INDIVIDUAL HOARDING
“There is nothing so disturbing to one’s well-being and judgementas to see a friend get rich.” -Charles Kindleberger (1978)
• CEOs ($1,188m): salary+bonus+stock/options $513m E. Musk - NASDAQ:TSLA $256m B. Kennedy - NASDAQ:TLRY $147m R. Iger - NYSE:DIS $142m T. Cook - NASDAQ:AAPL $131m N. Arora - NYSE:PANW
• Musicians ($610m): not only touring $185m Taylor Swift 🇺🇸 $150m Kanye West 🇺🇸 $110m Ed Sheeran 🇬🇧 $84m Elton John 🇬🇧 $81m Beyoncé Knowles 🇺🇸
• Actors ($356m): not only movies $89m Dwayne Johnson (47yrs) $76m Chris Hemsworth (36yrs) $66m Robert Downey Jr (54yrs) $65m Akshay Kumar (52yrs) $58m Jackie Chan (65yrs)
• Athletes ($420m): ex-endorsements $92m Canelo Alvarez 🥊 $92m Lionel Messi ⚽ $81m Russell Wilson 🏈 $80m Aaron Rodgers 🏈 $75m Neymar ⚽
• Authors ($207m): books + movies rev $86m James Patterson $54m J.K. Rowling $27m Stephen King $21m John Grisham $19m Jeff Kinney, Dan Brown (tied)
• Billionaires ($465b): TGP=The Giving Pledge
SOVEREIGN HOARDING
“The rules!” shouted Ralph, “you’re breaking the rules!”“Who cares?” -Lord of the Flies (1954) 📙
• GDP ($48t): 2019E, current prices
$21.3t 🇺🇸 USA
• Military power: 0=perfect score 0.0615 🇺🇸 USA 0.0639 🇷🇺 Russia 0.0673 🇨🇳 China 🐉 vs 🦅 0.1065 🇮🇳 India 0.1584 🇫🇷 France
• Fiat currencies: avg daily trading (Forex trading) $4.5t (90%) 🇺🇸 dollar $1.5t (31%) 🇪🇺 euro $1.0t (21%) 🇯🇵 yen $0.7t (12%) 🇬🇧 pound sterling $0.4t (7%) 🇦🇺 dollar
• SWF ($3,812b): non-pension, “rainy days” + “future gen” $1,074b 🇳🇴 Norway “Oil Fund” SWF $940b 🇨🇳 China Investment Corporation $696b 🇦🇪 Abu Dhabi Investment Authority $592b 🇰🇼 Kuwait Invest Authority $509b 🇭🇰 Hong Kong Monetary Authority Investment Portfolio
• Rich individuals (150k): net worth > $30m 81k 🇺🇸 USA 25k 🇨🇳 China + Hong Kong 18k 🇯🇵 Japan 16k 🇩🇪 Germany 10k 🇨🇦 Canada
• Gold reserves ($982b): tonnes in central banks at $1,495/oz 💰 gold fever $429b 🇺🇸 USA $178b 🇩🇪 Germany $129b 🇮🇹 Italy $128b 🇫🇷 France $118b 🇷🇺 Russia
DISRUPTING THE INCUMBENTS
“The battle between every startup and incumbentcomes down to whether the startup gets distributionbefore the incumbent gets innovation.” -Alex Rampell (2015)follow
DATING
“So, I asked him: What did you search?And he goes: Jewish and my zip code!” -Aziz Ansari (2015)📙
• 200m/mo use digital dating services 15%+ of top 20 apps by iOS revenue: dating
• USA: 48% created a dating profile, 39% of heterosexual couples met online
• Match Group owns 3 of top 10 apps (by rev): Tinder, Pairs, Match.com
• Tinder: 50m MAU, 5m+ paying, #1 (non-game) app by global rev Q2 2019
Q2 2019 results: $0.5b in rev (18% YoY), 41% EBITDA mg, 0.5m new subs
male liked 60%+ female profiles, female liked <5% of male profiles
• Rimberg Intl owns 2 of top 10 apps: Bumble and Badoo 60m Badoo (w/ 450m registered), 50m on Bumble
• Facebook Dating available in 20 countries incl USA suggests other Facebook Dating users as potential matches
• 10m MAU on ‘compensated dating’ app Seeking Arrangement 8m sugar babies, 2m sugar daddy/momma
• 20k girls using MyGirlFund.com, chat/flirt for money
• 1/7 kids ages 12-17 = sent a sext (sex+text), + 4%/yr ea year of age
• MindGeek owns 24 .com sites: PornHub, RedTube, YouPorn… and AgeID Pornhub (launched 1mo before iPhone): 100m/day visits, 22m reg users
• porn is the biggest development in sexuality research ever
RIDES
"Energy consumption (cal/g/km) for a bicyclistis one fifth of that for an unaided walking man." -Scientific American (1973)
• NYC sets $17.22/hr min wage for ride-hailing drivers
• first studies: car traffic ↑ bus rides ↓, specially under 5kms
• Uber: 71% USA mkt sh, 35% x̄ fare take-rate, 800+ cities, 60+ countries
1m trips (100k users) w/ JUMP bikes/scooters in SF post acq
moves more people than airline industry, Uber Air → 2020✌️
• Lyft: 27% USA mkt sh, 38% x̄ fare take-rate, 95% USA pop coverage
• 4m e-bikes in 🇩🇪 (~10% household) threshold for mass adoption
25% families w/ 2 children in Copenhagen: cargo bike replaces car
• street/sidewalk wars: micromobility → fastest tech adoption in history
• e-bikes flatten hills. In 🇨🇳: 700m/rides/day > 2x 300m conventional SF allows 1k/scooters/co: JUMP, Lime, Spin, Scoot (Bird). 2x coverage
• 70 cities w/ Lime's 🚲+🛴 → 100m rides: 0 to 50m:18mo, 50m to 100m:5mo
• Boeing tests VTOL flying taxi prototype, rumored to be for Uber
• 16yr old SpaceX: 64% mkt sh (80 rockets launched), cargo + passengers
• USA House bill: $5M for Hyperloop Cleveland→Chicago (550kms in 28min)
• Boring Co 1st contract: 1km shuttle around Las Vegas Convention Center
ASSISTANTS
"You don’t have a smart speaker.You have a smart microphone.There is no intelligence in the speech.The intelligence is in the listening." -Horace Dediu (2019)
• Stanford develops 'quantum' mic, picks up phonons prev undetectable
• people speak ~150 words/min vs type ~40 words/min
voice speech recognition tech → open source
• 160m installed smart speakers, 26m sold Q2 2019, 2016-2020E CAGR = 48%
• 77m/mo use voice assistants in cars (USA), vs 46m/mo on smart speakers
Sherpa.ai claims 5m users (85% Spanish-speaking), working w/ Porsche
• 60m Amazon’s Echo shipped since Q1 2017, 6.6m in Q2 2019 (25% mkt sh)
100m Amazon devices with Alexa installed
• 11m Baidu's smart speaker installed, #2 in Q2 2019 sales (17% mkt sh) DuerOS on 400m devices (150m in Nov-2018), 2k skills
• 42m Google’s speakers shipped since Q1 2017, 4.3m in Q2 2019 1b installed Google devices that “allow” voice commands w/ Assistant
• Microsoft's Xbox (~50m installed) supports Cortana, Alexa, G Assistant
• Sonos One G2: compatible w/ Alexa, Siri, G Assistant, starts at $199
• Alibaba’s Tmall Genie: 18m sold since Q1 2017, starts at $79
• Apple’s HomePod: 4m sold in Q4 2018, starts at $299
• Facebook Portal video calling devices, "Hey Portal" and Alexa too
COMMUNICATIONS
“😂 word of the year 2015” -Oxford Dictionaries (2015)
• text messaging → most used data service in the world 26b/day SMS vs WhatsApp=65b/day, WeChat=45b/day
• 55% of USA households no longer have landlines Zipwhip text-enables landlines, serves 3.8m numbers across 20k biz
• migration to VoIP deadline: 🇨🇭by ’19 🇳🇿🇦🇺🇩🇪 by ’22 🇬🇧 by ’25 🇫🇷 by ’30
• 2m+ developers on Twilio’s cloud communication API
$1b ARR threshold passed, WhatsApp = $45m = 7% of 2018 rev
• most pictured iPhone (2017): #1 scenery, #2 info I need to remember
• 2.8k Unicode approved emojis v 470k entries in Merriam-Webster
• NSA collected metadata on 530m phone calls in 2017, 3.5x 2016 FCC proposal to carriers “track 911 caller’s locations ~3 meters”
• open source Signal Protocol powers the encryption of:
Facebook’s WhatsApp, Microsoft’s Skype, Google’s Allo
• 12m DAU on Slack vs 13m DAU Microsoft Teams (91 Fortune 100 co)
• Zoom @ $21b, underdog founders, oversaturated/unsexy videoconf mkt
• 70m MAU podcast users USA. NPR's 2020E: podcasts revenue > broadcast
• 85m MAU on Apple News (330m on Reddit). Snap/Facebook to launch "news"
SCAM
“Fraud is not a trade secret.” -Tyler Shultz (2016)
• $300b+ digital ad industry, (68% mobile): 1st time >50% of total
• USA: Google/Facebook duopoly 90% → 60%, + Amazon → 69%
$88b triopoly > $85b Σ tv + radio + print
WhatsApp: ads within Status feature launching 2020
• placement on Amazon (10% results) 'advertising', Walmart: 'marketing'
• $72b spent on the lottery (USA 2017), $220/yr/adult
• GrubHub updates restaurant listings w/ GrubHub-owned phones/domains
• Adobe developing img manipulation detection → spot photoshopped
• 50%+ of USA women >25yrs → dye their hair, 7% in 1956
40% of those → blonde. Naturally genetic blonde rate: ~2%
• 40% of internet traffic → “non-human” signals, 55% of emails = SPAM
• 47% internet users globally use ad-blockers, Adblock Plus @ 120m MAU
• Brave re Google "data not anonymized" → "shares personal info"
• Linux Foundation: Confidential Computing Consortium to set standards
• 12b stolen emails/passwords on the black mkt, $60 = scanned passport
• FBI: 25% victims wire money to fraudsters, FCC: 50% of calls = SPAM
• malware attacks to biz + critical infra: +200% in 1H 2019 vs 1H 2018
CREDIT
“This is a Trojan horse of epic proportions.And the US consumer will easily be co-opted.” -Josh Wolfe (2018)
• when cash tx <7% → cost to manage cash > mg profit on that cash sale
• 18-sept-1958: birth of the most valuable network effect of all times
• 1.7b remain unbanked (17%), 50% in 🇧🇩🇨🇳🇮🇳🇲🇽🇳🇬🇵🇰 untapped mkt!
• Bitcoin surpassed PayPal in transacted volume at $1.3t/yr
• PayPal: 290m accts, 22m merchant, $PYPL mkt cap $122b > $100b $AXP
PayPal Checkout conversion = 2.9x other digital wallets
1st international company to obtain payments license in China
• Square: 90m customers, 15m/mo w/ Cash App, $5b in loans since 2014
• Stripe ($35b) in 34 countries: supports WeChat-Alipay-SquareCash etc
Stripe Capital new loans product, customer repays from sales
• 380m+ Apple Pay users, 1b tx/mo: growing 4x faster than PayPal Apple + GSachs + MCard = Apple Card: 1-3% in cash back
• WhatsApp: P2P payments/remittances in India, mobile wallet in 🇮🇩
• China: people pay w/ phones > USA pop. 🥇TenPay(WeChat)=910m
• 31% adult pop covered by credit bureaus, 400+ rating agencies in USA 260m w/ Ant Financial credit scores vs 200m w/ FICO scores
COMMERCE
“World’s largest company by sales (Walmart)is now the perceived underdog.” -The Economist (2017)
• everything the internet did to media is happening to retail
8.4k retail stores to close 2019E > 6.2k in 2008. But 11.3k to open
• 1% goods sold in Africa on screen, if @ 10% (≈USA/Europe) → $75b boom
• Kylie Jenner (age=22) fully owns $360m/yr biz, world’s youngest $b
front-office = 150m Instagram followers, back-office → Shopify
• consumer goods’ ARPU: global avg = $0.6k = China 🥇USA=$2.0k 🥈UK=$1.6k 🥉Korea=$1.5k ... South Africa=$90 (ninety)
• China: $1.9t online sales 2019E, 80% mobile, 35% of retail sales $31b Alibaba’s singles day: $1b→1min 25s, $10b→1hr 1min, 90%=mobile
• USA: $0.6t online sales, 40% mobile, 16% of retail sales reminder: Amazon has a low single digit mkt sh of USA retail $7.9b Cyber Mon (36% mobile), $6.2b Black Fri ($1b w PayPal mobile)
• Apple App Store: $26b revenues (1H 2019), 2.2m apps Apple App Store revenue per download = 5.2x Google Play
• Google Play Store: $14b in revenues (1H 2019), 3.3m apps
• Walmart's $98/yr unlimited grocery delivery from 1.4k stores
• Costco’s simple 40yrs old formula works
TV
“For those of us climbing to the top of the food chain,there can be no mercy…hunt or be hunted.” -Francis Underwood (2014)
• 9 in 10 USA homes were pay-tv subs (2010), but NPS score < 0 streaming service subs > cable TV subs. UK TV viewers: -50% since 2010 avg daily min spent (USA): 226min mobile > 216min TV
• 2019 original program budget: $15b NTFX, $6b AMZN, $6b AAPL, $3b HBO
• Netflix (Oscars=6): 165m paid subs globally, #2 non-game app by revenue 📝 USA: 60m paid subs > 47m subs Σ top 6 cable companies Netflix compression tech: 3.3x Amazon Prime, 7.0x Apple iTunes wins $200m deal w/ “Game of Thrones” creators, outbids Amazon/Disney signs $60m three-project deal with Beyoncé
• >50% top 50 Netflix shows → owned by rivals launching streaming services
• Disney+ live Nov-12, $7/mo ($70/yr), bundle w/ ESPN+ & Hulu → $13/mo
• Amazon (Oscars=3): movie library is 4x Netflix, 10x Hulu
• Apple TV+ premiers Nov-1 in 100 markets: $5/mo 🇺🇸, £5/mo 🇬🇧, €5/mo 🇪🇺
• 140m global HBO subs, 8m HBO Now subs (USA). 2020: HBO Max → "Friends"
• 1.5m YouTubeTV subs @ $50/mo cable-free live TV is here (70 networks)
• >100m paying subs to iQiyi, <100m Tencent Video Subs
MUSIC
“We don’t ask you for free iPhones.Please don’t ask us to provide you with our musicfor no compensation.” -Taylor Swift (2015)
• 1% of performers take 60% of all concert-ticket revenue (1982: 26%)
• streaming = 50% industry’s source of revenue
• top 3 labels (Vivendi+Sony+Warner) streaming rev: $960k/hr
• >60m paid streaming subs USA (1H 2019), streaming rev +26%
• USCRB "give songwriters 44% pay hike to 15%" by 2023, apply retroactively
• Spotify: 110m paid sub global, 230m MAU, 10% podcast mkt st (USA)
• Tencent Music to buy 10-20% of Universal Music Group (owned by Vivendi)
• Apple Music: 60m paid subs global, 28m in USA (> 26m for Spotify) launches web player (beta) to subs: any device w/ browser, no iTunes all Apple Music catalog, users libraries, 100k global radio stations 35% iPhone customers → Apple Music subs; 30% → Apple Podcasts subs
• 30m+ Amazon Unlimited subs, growing @ 70% YoY > Spotify/
• YouTube Music available in 80 countries, videos/audio/lists all in one free with ads or $10/mo, $5/mo for students, $15/mo family pack
• Winamp returns w/ mobile/desktop app, reached 60m users in 2011
BONUS
“No part of the GDP is immune to innovation.” -Vinod Khosla (2019)
• Brokerage: 6m accts on $0 fee app Robinhood
• Car lease: 45k/mo users of Fair vehicle leases
• Cycling: 0.5m Peloton subscribers cycling from home
• Food stamps: Propel manages food benefits of 2m/mo Americans
• Governments: 2k gov'ts use analytics/visualization SaaS OpenGov
• Grammar: 20m/day checking grammar on Grammarly
• Gym: 5.5m Fitness Blender subscribers
• Homework: 150m students on Q&A network Brainly (35 markets)
• Locksmith: 2k KeyMe smart-kiosks across USA
• Lost & found: 20m Tile trackers sold
• Meditation: 2m paying subscribers on Calm app
• Muslims: 12m/mo pray using Muslim Pro app
• Neighborhoods: 250k neighborhoods on Nextdoor ($2b)
• News: 3.8m NYT digital-only paying subscribers (81% of total)
• Period: 30m women track their period with Flo app
• Pets: 200k vetted dog sitters on Rover
• Policy: 315m users petitioning governments on Change.org
• R&D: 170k scientists using research workflow mgmt Benchling
• Religion: 270k communities on Pray.com
• Textbooks: 250k students using online textbooks by Packback