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)
PLATFORMS
“The smartphone is the sunand everything else orbits it.” -Ben Evans (2015)
• 7.8b world population, 5.8b adults → age >15yrs (74% of world pop)
• 8.1b mobile connections, SIM cards (105%) 5.2b unique mobile phone users (67%)
• 6.9b w/ electric power (89%), <1b to go!
• 5.8b w/ access to working/adequate toilets (74%)
• 3.6b unique smartphone users (48%)
~1.1b Chinese Android, ~1.0b Android, ~0.9b iPhones
120m devices using KaiOS, now 3rd mobile OS after Android and iOS
• Q4 2019 sales (units): 🥇Apple 🥈Samsung 🥉Huawei
iPhone XR = top-selling smartphone in 2019
• India surpasses USA → #2 largest smartphone market
• 1.6b cars (20%), of which EV = 0.5% car ownership is rising, not declining, on track to 2b
• 1.2b PCs (15%) = 1.1b Windows, 0.2b Mac + Linux
• 1.0b bikes (13%), Copenhagen 2016: 1st time bikes in street > cars
• 480m tablets (6.2%)
• 237m smart speakers (3.1%). USA: 1 per household
• 186m smart watches (2.4%). USA: 25% woman, 18% men
NATIONS
“No nation imagines itselfcoterminous with mankind.” -Benedict Anderson (1983) 📙
• Security Council’s permanent members:
• Security Council’s non-permanent members:
1.4b India (18%)
1.2b WeChat (15%)
1.2b Hinduism (15%)
1.0b Instagram (13%)
800m TikTok (8.1%)
• Not represented in the General Assembly:
1.2b non-religious, aka “humanists” (15%)
1.0b people with no legal identification (13%)
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 (58% of world pop)
• 4.0b email users (87%), 3.8b active social media users (84%)
• separate *mobile* internets: 🇨🇳=850m 🇮🇳=665m 🇺🇸=270m 🇪🇺=260m
• WordPress powers 35% of the *entire* internet, vs porn traffic ~10%
• 27% of all mobile internet traffic = YouTube (2b MAU)
• 430m MAU on Reddit, the internet's front page
• Wikipedia edit rate = 1.8s, only nonprofit site in top 10, zero ads
• avg d/l speed Mbps: 31=mobile (112=🇰🇷5G), 75=broadband (153=🇸🇬)
• 3G coverage=90%, LTE=80%, 5G<1% …🧨 IoT revolution
• COVID-19: traffic up 25-50%, not higher peak, but extended peak
• 2.2k satellites (comms + obs): 🇺🇸=1k(45%) 🇨🇳=323(15%) 🇷🇺=164(7.4%)
internet constellations: SpaceX=360 Planet=150 OneWeb=74 → ch. 11
• ~10% of internet data on surface web (indexed by search engines)
~90% on deep web (not indexed), fastest growing data
CLOUD
“Computing big bangs = cloud (AWS, 2006) +consumer mobile (iPhone, 2007).” -Mary Meeker (2018)her bible v2019
• ppl/biz → “march to the cloud”, storage at ~30% (50% 2025E) to pass:
• $0.25 trillion growing mkt: 🥇AWS=33% mkt sh 🥈Azure=18% 🥉Google=8%
• EM Cloud Index mkt cap = $1t (52 companies), vs <$0.1t (20 co) in 2010
• Dropbox ($8b): 14m paying users (600m total), Box ($2b): 14m (65m)
• Google Drive: 5m paying users, 2b MAU which includes Gmail
• $0.017 cost of 1GB of storage (2020), vs $4.4k in 1990
• Swiss researchers store DNA-encoded data into silica glass spheres
• Catalog Technologies stores 14GB of data in DNA molecules
• fastest cpu race: IBM 'summit' (classic) v Google 'Sycamore' (quantum)
• 31m Raspberry Pi sold, #3 best-selling general purpose cpu
• Moore's law still in effect, but chip-specialization driving prices
$0.002 cost of 1m transistors (2019) vs $527 in 1990
• semiconductor co's racing to develop 5G, AI, SDV, Robots, etc chips “there’s an app for that” → “there’s a chip for that” Qualcomm announces 'Snapdragon X60', Intel announces 'Atom P5900'
• next-gen AI microchips funded by DARPA: keep USA ahead of China
OPEN SOURCE
“We are all in on open source.” -Satya Nadella (2018)
• low-cost way to kick-start innovation: N strangers, 1 cause
results in *licensed* software, but free of charge
• 2008 USA Fed Appeals Court: "violation of free software license...
...conditions → copyright infringement" 2008-18 projects: 79% CAGR
• 80% of the Web powered by Linux operating system 0.17 bugs per 1k lines, vs proprietary software @ 25/1k lines
• 98% enterprise co = open-source software offerings in some capacity
• Tesla: open sources patents = "strengthen not diminish our position"
• GitHub may open China office: not subject to USA trade restrictions
• Google's TensorFlow library for prototyping machine learning models Airbnb: listing images → detect household objects at scale
• Waymo's Open Dataset: 2k 20sec clips of sync camera and LiDAR data labeled data: 12.6m 3D labels (LiDAR) + 11.8m 2D labels (camera)
• littleBits makes available the circuit designs in each module
• Arduino single-board microcontroller kits for bldg digital devices
• 2011 CERN releases CERN Open Hardware License (OHL)
• MIT posts open-source plans for $100 emergency ventilator
• Open Source for America advocates for OSS in USA federal government
• Mil-OSS group: advancement of OSS use and creation in the military
• Signal Protocol powers the encryption of WhatsApp and Skype
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
🇸🇪 RE registrar 🇨🇦 gov't grants 🇪🇪 digital ID 🇺🇸 shareholder’s list
• blockchain apps: computers that make commitments, ie vending machine
human disappears, software keeps commitments, indefinitely
• Arweave's permaweb storage tokens: record content → fight censorship
• open crypto lending protocols so anyone can earn interest on their money
• $180b network value of all 5.3k altcoins/tokens 11 crypto-assets w/ network value >$1b
• Coinbase: 30m wallets, 40 countries, insured accounts
#1 crypto custodian for institutions: $7b AUM, 120 clients
• SEC halts Telegram's $1.7b ICO, digital ↛ avoid Fed securities laws
• SEC: only two digital assets, Bitcoin and Ethereum, not securities
• banks of 🇬🇧🇨🇦🇯🇵🇪🇺🇸🇪🇨🇭 assess case for central bank digital currency
• India’s supreme court overrules central bank ban: crypto trade is OK
• ex-CFTC chairman announces Digital Dollar Foundation think thank
• Coinbase's CLO joins Office of the Comptroller of the Currency
• COVID-19 stimulus bills define the term "Digital Dollar", *first time*
• People’s Bank of China digital yuan: pre-launch testing ongoing no bank acct required, backed by state’s ability to impose taxes
• JP Morgan's blockchain 'Quorum' based on ethereum: 400 banks join
CAPITAL
“Sorry, are you gonna give us the moneyor not?” -Cameron Howe (1985)Go Mutiny
• USA: 6m biz <500 FTE, 20k ≥500 FTE, 7k co NYSE+NASDAQ ($55t mkt cap)
• top 5 co by mkt cap: hq=🇺🇸🇨🇳, exchange=USA, comp adv=tech/invest
• S&P500 mkt cap: Σ top 5 ≈ 18% ≈ Σ bottom 325 = $4.6 *trillion* $2t cash + cash eq held by non-financial USA corp biz
• $107b by USA VCs (2019) 5.8k deals, vs $295b & 32.8k global VC
• $170b+ in underpriced IPO (1980-2019) → direct listing, 🖕 Wall St
• Long Term Stock Ex: USA's 5th nat sec exchange, HQ=San Francisco
• Members Exchange "MEMX" awaiting regulatory approval from SEC
• SEC: simplify exempted investments + raising crowdfunding limits
• $57b in P2P loans to 4.5m borrowers issued by LendingClub
• $12b-15b raised by 2.2k tokens via Initial Coin Offerings
• $4.9b pledged to 180k project via Kickstarter
• $3.1b in grants to 5.6k awards through main USA fed agencies (2018)
• $1.8b startup investments, 10m angels/entrepreneurs on AngelList
• $1.0b passed to 150k creators using Patreon, 3m MAU patrons
• $1.0b in rev-share funding to 2.2k companies by Clearbanc
MACHINE LEARNING
“The highest forms of understanding we can achieveare laughter and human compassion.” -Richard Feynman (1988)
• underlying point is machine learning means computers can 'see'
• cpu power for AI training: 2x every 3.5mo, vs 18mo for Moore’s Law 103 co designing custom chips for deep learning acceleration
• reading comp w/ unanswerable questions: humans score = 86.83
🥇PINGAN🇨🇳=90.39 🥈Shanghai JT Univ🇨🇳=90.11 🥉PINGAN🇨🇳=90.00
• MuZero algorithm #1 player in Chess, Go, Shogi, 57 Atari games
starts from blank slate, *without* knowledge of the game rules
• 2.8m potential compounds library to build a battery
ML → 5 weeks to Pareto-optimal design, vs 50yrs via human analysis
• medical research/knowledge 2x every 70 days (2020E) w/ deep learning 2x every 3.5yrs (2010), 2x every 50yrs (1950)
• Google Health using retina scans: anemia detection accuracy 74% → 88%
• Paige.ai diagnoses prostate/skin/breast cancer >98%. FDA-approved SaaS
• USA gov't: $2b to American AI Initiative, DOE: $40m + access to data
• 770m surveillance cameras installed globally, 1b by 2021E (🇨🇳=45%) camera:person (2018): 🇨🇳0.25 🇺🇸0.21 🇹🇼0.18 🇬🇧0.15 🇸🇬0.14 ...🌎0.10
• 🇮🇳 #1 biometric id DB: citizens’ irises + fingerprints + photos
• Hanwang Tech: facial recog that works even if wearing a mask
• 🇪🇺 to interconnect DNA, fingerprint, vehicle databases of all states
ROBOTS
“Drones will be as ubiquitous as sprinklers.” -Chris Anderson (2017)
• 2.5m industrial robots 2018, installed base growing 17% YoY robots per 10k employee: 🥇🇸🇬=830 🥈🇰🇷=775 🥉🇩🇪=340…🌎=99
• 2k Walmart stores w/ floor cleaning robots (40% of total USA stores)
• Boston Dynamics’s 'Handle' plus OTTO Motors: warehouse automation
• 30 nations w/ defensive SD weapons: engagement speed > human
Elon: 'F35 fighter jet era has passed' → lethal autonomous weapons
• Tactical Robotics VTOL tech: deliver supplies in combat/emergency
• 1.3m hobbyist drone fleet (USA 2018), 900k registered owners
0.3m commercial drone fleet (USA, 2018), 116k certified pilots
• Chinese drones rule the sky, DJI has ~77% mkt sh, latest for $399
• SD-Zipline: 128km/h speed, 160km range, 1.75kg cargo capacity
• LiDAR "Moore's law": every 18mo → sensor resolution 2x, price 1/2x $7.5k Waymo 'Honeycomb', $599 Livox 'MID-40', $100 Velodyne 'VelaBit' Bosch's internally developed LiDAR → “affordable mass market”
• Waymo ($30b) at 1.5k FTE: simulation, LiDAR, trucking...$1b/yr burn
• CA: SD permits to 65 carmakers, pilot w/ *passengers* OK: Cruise, ...
3m autonomous miles logged in 2019 (40% YoY)
• 20% of Earth’s seafloor mapped (100% goal → 2030) Saildrone charges $2.5k/day/drone to collect ocean data
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)
• 7.8m EVs currently on the road, plus 0.5m e-buses EV fleet (2019): 🥇🇨🇳=3.8m 🥈🇪🇺=1.8m 🥉🇺🇸=1.5m
• 2019 sales: 🇨🇳=1.2m 🇪🇺=0.4m 🇺🇸=0.3m 🌎=2.2m best-seller race: 448k Tesla Model 3 v ~450k Nissan Leaf
• EVs to public charging st: 🇨🇳7:1 🇪🇺10:1 🇺🇸19:1
• top 10 economies non-EV cars “announcements”: 🇺🇸🇯🇵🇧🇷→😴
100%(🇬🇧→’35 🇨🇦🇫🇷→’40), 🇮🇳30%→’30, 🇨🇳25%→’25, 🇩🇪10m→’30, 🇮🇹1m→'22
• 🇳🇴 100%→2025. 2019 sales = 42% all-electric v California at 7.7%
• VW: $66b e-plan, 300 models (12 brands) e-version by 2025
• Daimler: $12b to electrify MBenz lineup by 2022, diesel out by 2039
• Continental spins off non-EV business, $2.8b write-off
• Toyota: $1b EV factory in China. Honda: EV-only in Europe by 2021
• LG Chem's '811' breakthrough: NMC battery 80% Ni + 10% Mn + 10% Co
• $160/kWh avg Lithium-ion battery pack price, down 85% since 2010 VW claims they pay <$100/kWh, consensus for $100 "threshold" → 2023
• EU: $3.5b for battery R&D, stimulus could add $5b from private co
• car maintenance for conventional vehicles = 2.3x EV 400k 🇩🇪 jobs at risk: EV = fewer moving parts
• EasyJet + Wright Electric: 186-seat hybrid electric Wright 1 by 2030
CHINA
“The American dream is alive. In China.” -NYTimes (2018)
• 1978 (43yrs) capitalism=illegal, entrepreneurship → death sentence
China ’09 → #1 Exporter, ’13 → #1 Trader, ’17 → #1 Shipping+Ports
• China R&D spending $499b (4.1% of GDP) v USA $543b (2.8% of GDP)
• #1 unicorn (ex Ant Financial): TikTok ~$95b > 2.6x SpaceX ~$36b
• Alibaba's $13b secondary listing SEHK: more Nasdaq co to follow
• $1.2t in infra investments by Belt and Road Initiative (60 countries)
• BeiDou Navigation Satellite System to rival USA's GPS 70% Chinese smartphones work: Southeast Asia, E. Europe, Africa
• USA enjoys comp adv in AI and semiconductor chips
• AI startups: 🇨🇳=$17b in investment ($34m/startup) > 2x 🇺🇸 🇨🇳: automation, oil/gas, facial recog, edtech, AV, mental health
• DOJ: since 2012, 80% econ espionage + 60% trade secret theft = China
acq of sensitive 🇺🇸 tech: fill gaps in Mil+Econ Chinese initiatives
• USA blacklists Huawei: -10% of 2019 revenue (~$12b), -20% of 2020E
WINNERS TAKE ALL
“You call it monopoly, I call it enterprise.” -John D. Rockefeller (1911)
MICROSOFT
($1,200b 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
• 89% mkt sh in desktop/laptop operating system 1.7b/day Windows devices (installed base), 1b on 10 alone
• 1.2b/day Office users, #1 productivity service, #1 SaaS product 2011: $21b/yr MS Office, Office 365 (subscription) is launched 2019: $36b/yr MS Office, $25b/yr Office 365 (238m subs)
• >1b Android devices w/ Word, Excel, PPoint, OneDrive, Skype installed 0.4b Outlook users (100m mobile), 0.3b Skype (40m DAU w/ COVID-19)
• 18% mkt sh in cloud computing infra w/ Azure
• $27b for LinkedIn (2016): 675m profiles (310m MAU), 50m companies
• 44m DAU on Teams (500k orgs), $MSFT fastest-growing biz app ever
93% Fortune 100 companies using Teams
Teams for Linux in public preview; 1st *open source* Office app
• $7.5b for GitHub (2018): 40m MAU developers acq of npm, default package manager for Node.js, 75b/mo downloads
• 110m/mo active Minecraft players, 65m/mo Xbox Live users
• $18b in R&D (2019): $1b to OpenAI, $1.4b acq of Affirmed (5G co)
APPLE
($1,113b mkt cap)“Just the way he advertised: Jesus, Gandhi, Me!” -Bill Burr (2012)
• $207b cash on balance sheet > New Zealand's GDP
• 2.6b devices sold, 1.7b active (0.9b = iPhones)
• dx channel: Google pays $12.2b/yr → default search eng on iOS devices
• F500 boardrooms wanted *their* iPads to work on the corp network
• iPhone: #1 product of all time, 1.8b cumulative sold (since Q2 '07)
• By rev: iPhone >> Services > Wearables > Mac > iPad
• AirPods → fastest growing product, 60m sold 2019, 100m+ since launch
• 99m Apple Watches sold cumulatively, 31m in 2019 > 21m Σ🇨🇭watchmakers
• $55b in service revenues (incl App Store) in 2019, + $2b/yr in ads
• $21b in R&D in 2019, new iPad Pro w/ LiDAR scanner → AR, 3D, mapping
• 100m MAU on Apple News, 500m devices w/ Siri, 3m Apple Card holders
AMAZON
($970b 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: $36b in 2019, vs $29b in 2018
• #1 e-retailer USA: 39% mkt sh (7.3x Walmart), 4.6% of *all* USA retail 53% units sold = 3rd-party: 1,200k SKUs, vs 120k Walmart, 4k Costco
• #1 ad spender in world. $11b in 2019 = 2% of global ad expenditure
• 150m Prime members >Costco: $1.4k/yr Prime member vs $1k non-Prime
• #1 fulfillment co: 40 planes, 6k trailers, 130k e-vans (2030) carries 45% of own USA shipments, bldg own air traffic mgmt system
• #1 cloud infrastructure provider: AWS=33% mkt sh, $35b in 2019 rev
• #1 smart speaker USA: 55% mkt sh, 70m Echo’s sold (10m in Q3) 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 online grocery USA: 29% mkt sh vs Walmart=37%
• #2 largest private employer in USA by FTE (#1 Walmart)
• #3 in ads (10% mkt sh): $2b/qtr business (heads-up Google/Facebook) 50% *product* searches start/end on amazon.com, 65% if Prime user
• avg Go store: $1.5m/yr ≈ 150% convenience store w/ cashiers Go Grocery = cashier-free tech. 'Dent' subsidiary → licenses
($475b mkt cap)“If you’re offered a seat on a rocket ship,don’t ask what seat! Just get on.” -Sheryl Sandberg (2012)
• 2.9b used at least one Facebook-family app per mo, 2.2b daily
• Facebook: 2.5b MAU, 1.6b DAU, majority of searches → people
• Messenger: 1.3b MAU, 40m biz, 20b/mo biz-ppl messages, 300k/mo bots
goal: never dial a 1-800 again, 40% prefer live chat vs call
• WhatsApp: 1.5b MAU, 1b DAU, 65b/day messages
• Instagram: 1b MAU, 25m biz-specific profiles (2m MAU using Stories) >90% users are following a biz, 130m/mo users tap on a shopping ad ~$20b in ad revenues 2019 (>25% of Fb rev) v YouTube @ $15b
• $14b R&D in 2019, acq 80+ co in 15yrs, passed on Musical.ly c 2016
• India: #1 country by FB users, 0.4b WhatsApp users (payments to come) in talks: 10% stake in telecom operator Reliance Jio
TENCENT
($469b mkt cap)“Ideas are not important in China –execution is.” -Pony Ma (2011)
• #1 gaming company in the world: by revenue and users
• #1 corp dev team to *own* content: 100% Riot (LoL)
• #1 OS for the entire Chinese economy: 1.2b+ MAU on WeChat & Weixin
ecosystem: 1m mini apps w/ 300m DAU, 1.5m developers
• gaming revenue: mobile = 2.4x PC/Mac = 2.9x home consoles Nintendo + Tencent (titles + cloud) = Switch console in China Huawei + Tencent = game lab to explore cloud gaming, AI, VR, AR
• #1 mobile payment platform 🇨🇳: 1b/tx/day, 800m MAU, 50m merchants
• Tencent's fintech biz: if stand alone → 🇨🇳 #4 largest public co Hong Kong Monetary Authority grants blockchain bank license
• $85b AUM on wealth mgmt platform LiCaiTong, 100m users
• active investment portfolio of 700 co (100 in 2019): 160+ unicorns $4.5b → DiDi, $1.8b → Tesla (5%), $1.4b → Flipkart, $150m → Reddit 18% Snap, 12% CICC (bank), 10% Universal Music Group, 8% Spotify
• 106m TencentVideo subs, #4 video app by rev 2010-2019, #3 in 2019
• $3b in R&D (2019): cloud business makes $2.4b with 1m paying users
BITCOIN
($115b network cap)“We have elected to put our money and faithin a mathematical framework that is freeof politics and human error.” -Tyler Winklevoss (2013)
• first digital/unforgeable/scarce commodity in world history
• single most mispriced risk in entire financial system #BlackSwan
• coercion into a centralized monetary base: silver coins → gold coins
→ gold bars in private banks → gold bars in the government → fiat
• BTC cost of transportation+validation ≈ 0, w/o counterparty risk
• stock-to-flow model shows statistical significance w/ BTC mkt value
• 1 BTC > 4.0x Gold oz, bitcoin overtook gold in Mar-2017
• 11yrs old BTC: 18.3m circulating (87%), 2.7m to mine @ $6.3k
• 6%+ of Americans own BTC (0.4% global) → Fidelity rolls out custody
• 51% attack cost: $21b in hardware, $14m/day in elec consumption strongest computing network in the world = bitcoin attacked thousands plus times, impenetrable for 11+ yrs 7k+ bitcoin ATMs worldwide, arbitrage is *almost* over
• $1.9b in cumulative fee revenues (miners securing the network)
• bitcoin’s “electricity-hungry” consumption ≈ 0.3% world ≈ 🇦🇹 coal power plant in NY installs 15 MW crypto-mining server farm
TESLA
($97b mkt cap)“Musk has made every Tesla customer a venture capitalist.” -Steve LeVine (2016)
• most valuable USA carmaker *ever*: Tesla = 3.3x GM = 4.9x Ford
• #1 ownership experience: buy online + over-the-air *software* updates
Tesla's AI chips 6yrs ahead of VW+Toyota. 🇯🇵 eng: "we cannot do it"
luxury rivals = too expensive. entry-level = not attractive enough
• safest vehicles ever tested: NHTSA 5☆ safety ratings all categories
• 🏁 first carmaker to 1m EVs, 0.4m in 2019, 88k in Q1 2020 → 7k/week
• Model S @ $80k, 629km range (WR any EV) #1 by mkt sh (37% USA)
• Model 3 @ $39k, 518km range, 0-60mph in 3.2s, 260km/h top speed #1 selling EV in the world, 360k during 2019 > 1,000 per day
• Model X @ $85k, 565km range (WR any electric SUV), #2 by mkt sh
• Model Y @ $53k, “roomier” model 3 crossover
• Roadster 2G, 0-60mph in 1.9s, reservations at $50k, total $250k
• Semi truck: 2k pre-paid reservations at $20k, total $150k
• $1.3b R&D 2019E: 0.6m Cybertruck pre-orders, production late 2022
proprietary data + chips + footage + GPS = new products eg. insurance
V3 Supercharger: 1.5k/cars/day, Megapack: 3 MWh utility-scale battery
UBER
($48b mkt cap)“This company is undoubtedly the most successful startup
in the history of Silicon Valley.” -Bill Gurley (2017)📙
• 110m/mo active platform consumers, 3 marketplaces, 10k cities riders↔drivers + eaters↔restaurants + carriers↔shippers
• #15 downloaded app in 2019 (AppStore + Google Play), ahead of Amazon
• #1 app in ground transportation (passed Avis in Q1 2017)
• moves more people than airline industry $48b mkt cap vs $56b ∑ top 7 🇺🇸 airlines
• $70b GMV ≈ eBay 2012 ≈ Amazon 2013 ≈ Shopify 2020 $14b in revenue (20% avg take-rate)
• Rides: 75% of revenues (86% in 2017), 21% take rate
70 countries, 900 cities, >60% mkt sh
• Eats: 24% of revenues (14% in 2017), 9.5% take rate, 6,000 cities
• Freight: 1% of rev (0% in 2017), 50k carriers operating 🇺🇸🇨🇦🇳🇱🇩🇪🇵🇱
• $2.5b in R&D 2019, >$11b "war chest" (cash in hand)
other bets on urban mobility: $140m acq dockless e-bike JUMP
• Advance Technology Group → autonomous vehicles & Uber Elevate (VTOL) $1b from SoftBank + Toyota + DENSO to accelerate development
TWILIO
($13b mkt cap) “Connecting large volumes of cellular connected IoT devicesis still too difficult for customers.” -Sam George (2019)
• #1 *programmable* telecom platform: messaging, voice, video, email
real time telecom infra w/o geo boundaries + software like margins
• 3b+ phone numbers in 100+ countries
• $4t global IT budget: 36% communications vs 10% software, 5% cloud
• roadmap: 2008 voice, 2010 SMS, 2015 video/chat, 2019 email, 2020...
• 179k active customer accounts 2019, up from 34k (2016) small customers: notify a diner when a table is ready large customers: power entire omni-channel contact centers
• WhatsApp, Shopify, Uber, Lyft outsourcing their comms infra
• 14% of total revenue = top 10 customer concentration, v 31% (2016)
• 2m developers, developer-first model: community = sales + marketing acquire developers like consumers → spend like enterprises
• Twilio SIM: 1 SIM number, 1 API, 1 billing relationship, global reach mass activate/suspend hundreds of SIMs with a few clicks Microsoft Azure: connect/auth IoT devices to internet w/ Twilio Lime e-scooters w/ Twilio: 100m rides across 30 countries in 2yrs
• $0.4b in R&D, 46% of FTE $14m acq of automatic speech recognition company Capio (2019)
HOARDERS (ppl)
“There is nothing so disturbing to one’s well-being and judgementas to see a friend get rich.” -Charles Kindleberger (1978)
• CEOs ($2,729m): salary+bonus+options
$2,300m 🇿🇦🇺🇸 E. Musk - NASDAQ:TSLA
• Musicians ($610m): not only touring
• Athletes ($420m): ex-endorsements
$92m 🇲🇽 Canelo Alvarez 🥊
$92m 🇦🇷 Lionel Messi ⚽
• Actors ($356m): not only movies $89m 🇺🇸🇨🇦 Dwayne Johnson [47M] $76m 🇦🇺 Chris Hemsworth [36M] $66m 🇺🇸 Robert Downey Jr [54M] $65m 🇨🇦 Akshay Kumar [52M] $58m 🇭🇰 Jackie Chan [65M]
• Authors ($235m): books + movies rev $92m 🇬🇧 J.K. Rowling $70m 🇺🇸 James Patterson $36m 🇺🇸 Michelle Obama $20m 🇺🇸 Jeff Kinney $17m 🇺🇸 Stephen King
• Billionaires ($448b): TGP=The Giving Pledge
$125b 🇺🇸 Jeff Bezos
HOARDERS (orgs)
“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 ($3,365b) $1,374b 🇯🇵 Govt Pension Invest Fund $579b 🇺🇸 Fed Ret Thrift Invest Board $573b 🇰🇷 Ntl Pension Service $462b 🇳🇱 Ntl Civil Pension Fund $377b 🇺🇸 California Public Emp
• Corporate ($674b): cash+ST+LT invest
$207b 🇺🇸 Apple
• Religious orgs USA ($215b): estimates
• Foundations ($177b): non-profit
$49b 🇩🇰 Novo Nordisk Foundation
$48b 🇺🇸 Bill & Melinda Gates
• University endowments ($177b): USA
• Private vehicles ($184b): (strategy)
HOARDERS (gov't)
“The rules!” shouted Ralph, “you’re breaking the rules!”“Who cares?” -Lord of the Flies (1954) 📙
• GDP ($50t): 2019E, current prices $22.3t 🇺🇸 USA $15.3t 🇨🇳 China $5.4t 🇯🇵 Japan $4.0t 🇩🇪 Germany $3.2t 🇮🇳 India
• Military power: 0=perfect score
• Fiat currencies: avg daily trading (Fx) $5.8t (88%) 🇺🇸 dollar $2.1t (32%) 🇪🇺 euro $1.1t (17%) 🇯🇵 yen $0.8t (13%) 🇬🇧 pound sterling $0.5t (7%) 🇦🇺 dollar
• SWF ($3.8t): non-pension
$1,009b 🇳🇴 Norway “Oil Fund” SWF
• Rich ppl (150k): net worth > $30m 81k 🇺🇸 USA 25k 🇨🇳 China (HK = 9k) 18k 🇯🇵 Japan 16k 🇩🇪 Germany 10k 🇨🇦 Canada
• Gold reserves ($1t): @ $1,594/oz $457b 🇺🇸 USA $189b 🇩🇪 Germany $138b 🇮🇹 Italy $137b 🇫🇷 France $129b 🇷🇺 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
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
• 51% of USA adults (2019): college = "very important," vs 70% in 2013 43% of college grads work at jobs that don’t require a degree
• >25% of adults *unable* to use a cpu (1.5b people) vs 1b+ illiterate
• YouTube: full of rewindable (patience = ∞) instructors/teachers online courses co new valuations: Yuanfudao ($8b), Udemy ($2b)
• Lambda School ISA: repay tuition when job salary = $50k/yr
• 70m w/ criminal records (1/3 adults) → pain in finding a job
• 57m freelancers (35% USA workforce), 1st time: choice > necessity $1t/yr = 5% GDP > Construction, $28/hr median *skilled* freelancer
• 30m gig workers (16% workforce), 1 in 6 workers in org = gig worker
• 1.6m workers on Steady: #1 Grubhub=$1.2k/mo...Target=BestBuy=$1.1k/mo
• 2m RE agents (1% workforce): $75b/yr in commissions
• NYC's private offices tenants: 🥇WeWork 🥈JP Morgan 🥉Citigroup
• Medium.com writers Feb-2020: #1=$18k, 8% >$100, 66% >$0, $8k=#1story
• Gumroad creators 2019: 3 >$1m, 106 >$100k, 1.1k >$10k, 5k >$1k
• Uber tips: 4m drivers global (Rides + Eats) → $2b/yr
• 3.2m unemployment claims, vs 0.7m ≈ Oct-1982 ≈ Mar-2009
DATING
“So, I asked him: What did you search?And he goes: Jewish and my zip code!” -Aziz Ansari (2015)📙
• dating liquidity & tx volume → efficient pricing → divorce rates drop
• 200m/mo use digital dating services
• Match Group owns 4 of top 10 dating apps by rev: Tinder, Pairs, Match.com, Hinge: 9m+ paying users altogether
• Tinder: 50m MAU, 6m paying, #1 (non-game) app by global rev 2018+19
• MagicLab ($3b) owns 2 of top 10 apps: Bumble and Badoo 60m Badoo (w/ 470m registered), 80m on Bumble (11m active)
• Facebook Dating available in 20 countries
• 15m MAU on ‘compensated dating’ app Seeking Arrangement
• 20k girls using MyGirlFund.com, chat/flirt for money
• 12m registered users on OnlyFans, $300m to its 150k content creator
• 1/7 kids ages 12-17 = sent a sext (sex+text), +4%/yr ea year of age
• 20m registered on MindGeek: PornHub, RedTube, YouPorn
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)
• people speak ~150 words/min vs type ~40 words/min voice first: easy, intuitive, fast, convenient, natural
• 75% use voice assistants to access info in the car, 95% by 2022E
• 77m/mo use voice assistants in cars (USA) Honda's R&D acquires Drivemode, provides drivers w/ voice-to-text Garmin launches car navigation Speak, powered by Alexa Tencent w/ Chang’an Automobile Group: in-car version of WeChat Amazon w/ ExxonMobil pay for gas via voice command at 12k gas st
• 5m Sherpa.ai users, 85% 🇪🇸speaking, hires Siri co-founder Tom Gruber
• 237m installed smart speakers (157m in USA), 49m sold Q4 2019
• 84m Amazon's speakers, 16m in Q4 2019 (🥇31% mkt sh), 0.2b devices
$1.4m of $5m target = Alexa revenue from in-skill purchases
• 58m Google’s speakers, 13m in Q4 2019 (🥈25% mkt sh), 1.0b devices Assistant translates and read aloud text on websites, 40+ languages
• 21m Baidu's speakers, 6m in Q4 2019 (🥉12% mkt sh), 0.4b devices
• 27m Alibaba’s Tmall Genie, 21m Xiaomi's speakers
• 50m Microsoft's Xbox → adds Alexa + G Assistant, drops Cortana
• Sonos One G2 ($149) compatible w/ Alexa, Siri, G Assistant
• Facebook Portal ($129) video calling devices, "Hey Portal" + Alexa
COMMUNICATIONS
“A little bit of math can accomplish what all the guns and barbed wire can’t: a little bit of math can keep a secret” - Edward Snowden (2019) 📙 read now, use Tor
• Twitter killed institutional media, source of truth → decentralize
• text messaging → most used data service in the world WhatsApp=65b/day, WeChat=45b/day, SMS=26b/day
• ISDN phase-out → VoIP: 2019🇨🇭 2022🇳🇿🇦🇺🇩🇪 2025🇬🇧 2030🇫🇷
• top *web content* languages: 🥇🇬🇧=60% 🥈🇷🇺=9% 🥉🇪🇸=4% most spoken lang (ex 🇨🇳🇮🇳) 🥇🇬🇧=1.1b 🥈🇪🇸=0.5b 🥉🇫🇷=0.3b
• 423m phone calls where NSA collected metadata in 2018
• 2016 internet landmark: encrypted web traffic (HTTPS) > unencrypted
• 12m MAU on privacy browser Brave. Mozilla's VPN service @ $5/mo
• Firefox Private Network (servers in 30 geos) → WireGuard standard
• Tor Foundation individual donations new annual record
• BBC/NYT/FB launch dark web version: 🇨🇳🇻🇳 don't allow direct access
• Brian Acton (co-founder of WhatsApp) joins Signal Foundation
• 12m DAU on Slack (vs 44m MSFT Teams), 900 customers @ $100k/yr spend
• 650 Zoom customers @ $100k annual spend, 400k downloads on 13-march
• 430m MAU on Reddit, #5 visited site USA, 130k active communities
AUDIO
“We don’t ask you for free iPhones.Please don’t ask us to provide you with our musicfor no compensation.” -Taylor Swift (2015)
• $24b streaming rev > 50% Music industry’s source of revenue
• $9b in streaming rev by top 3 labels Vivendi+Sony+Warner
• $11b music rev (USA 2019), 4th yr of growth, 80% streaming (>1t songs)
• $10/mo for 10yrs now: music streaming = commodity = 0 pricing power
• 1% of performers take 60% of all concert-ticket revenue (1982: 26%)
• Spotify ($22b): 124m paid sub global, 270m MAU, acq sports podcast app Kids app: ages 3-12, 6k curated songs + learning/playing playlists ~8% swap w/ Tencent Music ($17b mkt cap, 650m MAU, 40m paying)
• Apple Music: 70m paid subs global, 34m in USA > 33m for Spotify 35% iPhone customers → Apple Music subs; 30% → Apple Podcasts subs
• 55m Amazon Music global subs, growing faster Spotify and Apple Music
• 77m MAU YouTube Music, videos/audio/lists all in one from $10/mo
• India: ByteDance launches Resso, but already 152m MAU on Gaana
• SoundCloud: 200m tracks, #1 audio catalogue, SiriusXM → $75m invest
• 3b/wk users on terrestrial radio. NPR 2020E: podcasts rev > broadcast
• 100m/mo podcast users USA: 42% mkt sh Apple, 20% Spotify
• NYT acq Audm: pro actors read long-form journalism for audio content
RIDES
“Energy consumption (cal/g/km) for a bicyclistis one fifth of that for an unaided walking man.” -Scientific American (1973)
• street/sidewalk wars: micromobility → fastest tech adoption in history 37m/yr trips on shared bikes + 39m/yr on shared scooters (USA 2018)
• 🇩🇰 Copenhagen: 49% trips to work/school → bicycles, vs 6% Portland 25% families w/ 2 children: cargo bike replaces car
• e-bikes flatten hills. In 🇨🇳: 700m/rides/day > 2x 300m conventional
• 5m e-bikes in 🇩🇪 (~10% household), 1.4m e-bikes sold in 2019
• Lyft #1 bikeshare operator in N. America: 48k bikes at $0.15/min
• 113 cities w/ Lime's 🚲+🛴 → 100m rides: 0→50m=18mo, 50m→100m=5mo
• USA drivers in big cities: 99hr/yrs lost to traffic, #1 Boston=149hrs
• 36% of USA adults have used ride-share services, 15% in 2015
first studies: car traffic ↑, bus rides ↓, specially under 5kms
• NYC sets $17.22/hr min wage for ride-hailing drivers
• ride-hailing USA: 51% mkt sh for Uber, vs 49% for Lyft
• The Boring Co completes excavation of first 2 tunnels in Las Vegas
• Hardt Hyperloop: connect Amsterdam to European cities @ ~1,000km/h
• 16yr old SpaceX: >60% mkt sh, 89 cargo rockets launched
• Blue Origin opens new HQ and R&D lab in Kent, WA, total FTE @ 2.5k
• London→Sydney flight: 🏁 distance 17,800km + 🏁 time 19hr19min
CREDIT
“This is a Trojan horse of epic proportions.And the US consumer will easily be co-opted.” -Josh Wolfe (2018)
• 1.7b remain unbanked (17%), 50% in 🇧🇩🇨🇳🇮🇳🇮🇩🇲🇽🇳🇬🇵🇰 untapped mkt!
• when cash tx <7% → cash mgmt cost > mg profit on that cash sale
• Visa + Mastercard + Amex > 96% mkt sh, avg fee: 3.61%/tx
USA poor: 10% of income = fees+tx costs = spent on food = $140b/yr
• ever-changing, fragmented, highly competitive *payments* landscape
• Apple Pay: 440m users, 5% card tx. 🥇🇺🇸=30m users, 70% retail accepts
• PayPal: 0.3b accts, 24m merchants, $10b in loans, 52m Venmo App users
• Square: 90m profiles, 24k shops, $6b in loans, 24m Cash App users
• Stripe: live in 37 countries supports WeChat, Alipay, Apple Pay
• Adyen: 100m biz, including McDonald’s, Domino’s Pizza, Uber
• Amazon+GSachs: loans to SME. Amazon Lending $0.9b since 2011
• 1b AliPay users, 0.8b TenPay(WeChat), 0.2b Du Xiaoman Pay (ex-Baidu)
Alipay+TransferWise send remittances using recipient’s Alipay ID
• 31% global adult pop w/ credit scores
78% in USA: 400 credit agencies, 200m FICO scores
• 50m users crypto today, decentralized ID → reputation scores for 5b?
• $0.7b AUM by BlockFi, loans guaranteed by bitcoin and ethereum
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
Dixons Carphone close 531 brick-and-mortar stores, cuts 2.9k jobs
Bose closes *all* brick-and-mortar 🇺🇸+🇨🇦+🇬🇧+🇪🇺+🇯🇵+🇦🇺 = 119 stores
• Craigslist (1995): $1b/yr, FTE=30, owners=2, bought back eBay’s 25%
• Kylie Beauty (2014): $0.2b/yr, FTE=12, mktg=@kyliejenner, 51% @ $0.6b
• Shopify: 1m merchants, 175 geos, $60b GMV, $1.5m/s BF+CM global sales
• consumer goods (ex content) ARPU/yr: 🥇🇰🇷=$1.4k 🥈🇺🇸=$1.4k 🥉🇬🇧=$1.3k
• China 2019: $1.5t online sales, 25% of retail sales, 80% mobile vs USA: $0.6t online sales, 13% of retail sales, 32% mobile
• $38b GMV Alibaba Singles Day: $1b→68sec, $13b→1hr, 90% mobile
USA: $9.4b Cyber Monday + $7.4b Black Friday = $16.8b = 44% Alibaba
• Apple App Store: $55b/yr rev, $100 in-app spending per active iPhone
• WhatsApp for Business adds catalogues to enable mobile commerce
• USA e-commerce is still in its infancy:
• 44m use food deliv apps (USA 2019): ~26%≈DoorDash≈Grubhub≈UberEats
DECEPTION
“Fraud is not a trade secret.” -Tyler Shultz (2016)
• $300b+ digital ad industry (68% mobile), USA: Google/Facebook @ 61%
• $72b spent on the lottery (USA 2017), $220/yr/adult
• Amazon marketplace sellers mislabel: FDA approved, UL certified, ...
• 40% Scotch whisky "not as old as ad", scientists determined true age
• police raids Porsche's offices again → evidence for Dieselgate 11m VW cars exceeded pollution limits + deceived emissions tests
• Swiss firm Crypto AG covertly owned by CIA + West German intel
• fines for sharing user's data: $91m T-Mobile, $57m AT&T, $48m Verizon
• 85% of global email messages = spam. 45% of USA mobile calls = spam
• black PR disinformation services create/spread false content
• 15% of USA men 50-64yrs → dye their hair, 50%+ of USA women >25yrs
• 36m users and 20k surgeons on plastic surgery app GengMei
• KIDS Act regulate apps design, ads, and harmful content for <16yrs
• reproducible research = paper + full source code + data to recreate
• end of ads: BInsider, The Information, Politico turned profits in 2019 NYT digital-only subs from $15/mo → $17/mo, first time since 2011
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)
• 2010: 9 in 10 USA homes were pay-tv subs, but NPS score < 0
• 2019: 3 in 4 USA homes subs to streaming video on demand
• 2020E $ for originals: $17b NTFX, $6b AMZN≈AAPL, $3b HBO≈DIS, $1b FB
• Netflix (Oscars=8 Emmys=43): 168m paid subs, #4 non-game app by rev
• 2019 USA box office: 🥇Disney=40% 🥈Warner=16% 🥉Universal=15%
• 29m subs Disney+ (live Nov-12), $7/mo or $13/mo w/ ESPN+ Hulu
catalog: Disney/Pixar/Marvel/StarWars/NatGeo
30m downloads, #1 app USA Q4 2019 (2x TikTok), #2 global
• Amazon (Oscars=3 Emmys=15): #1 title library > 3x Netflix, > 4x Hulu
38m/mo active viewers on Twitch #1 live-stream platform
• Apple TV+ live in 100 markets: 🇺🇸$5/mo, 🇬🇧£5/mo, 🇪🇺€5/mo original "The Morning Show" wins first Screen Actor's Guild award 5yr deal w/ R.Plepler (HBO) → original series/movies/documentaries
• 140m HBO subs, 8m HBO Now subs (USA). AT&T TV launches in 15 markets
• 2m YouTube TV subs, $50/mo cable-free live TV from 70 networks