Thought Starters: Google’s AMP, FANG, unicorns and the decline of the car

Thought Starters provides me with a chance to look through the articles, research and opinion pieces I’ve read, highlighting interesting trends, developments and changes in the world you and I live in. In this week’s edition we look at Google’s Accelerated Mobile Pages (AMP), FANG, unicorns, the decline of the car and smartphones in Myanmar among other things.

App Annie’s analysis of mobile app usage points to Google Play downloads continuing to exceed iOS downloads but Apple’s App Store revenues comfortably exceeding Google’s. Just bear in mind that Google Play doesn’t currently operate in China (although it has plans to) with the majority of Android handsets running on a version of the Android Open Source Platform (AOSP):

Annual Worldwide App Revenue

Instagram has seen a substantial drop in both follower growth and engagement levels according to Locowise figures. Whilst both figures were higher than for Facebook and Twitter, the social network is looking less and less like a free lunch:

Instagram Growth & Engagement Rates

As noted in the previous edition of Thought Starters, Google and Apple have competing visions of how content should be distributed with Apple taking an app centric view with the enabling of in app ad blocking and the launch of Apple News. Google on the other hand is putting its weight behind the open web which is no surprise given its reliance on search for a large proportion of its revenues. Google’s key initiatives has been the launch of Accelerated Mobile Pages which will improve load times and provide a better experience for mobile users than the current set up.  Frédéric Filloux comments :

Privately, Google people make no mystery of their intention to clean the advertising mess. They want to get rid of the invasive formats that, by ruining the user experience, contributed to the explosion of ad blockers and threatened a large segment of the digital economy. To that end, the AMP ecosystem is their weapon of choice

Ben Thompson draws parallels in the business strategies of Facebook, Amazon, Netflix and Google (FANG) pointing out how their stranglehold on a key access point has given them near insurmountable positions in the consumer economy:

None of the FANG companies created what most considered the most valuable pieces of their respective ecosystems; they simply made those pieces easier for consumers to access, so consumers increasingly discovered said pieces via the FANG home pages. And, given that Internet made distribution free, that meant the FANG companies were well on their way to having far more power and monetization potential than anyone realized.

Whilst there’s been a recent readjustment in the valuation of a number of tech startups, Spoke Intelligence and VB Profiles research calculates there’s still 208 startups that are worth more than $1bn and 21 worth more than $10bn:

Categorisation of startups with over a $1bn valuation

Europe has had some success with GP. Bullhound’s research pointing to 40 European startups reaching the $1bn valuation mark. Where the region falls short is in building these startups to the level of Facebook, Uber or Airbnb:

Cumulative Value of European unicorns

Adam Davidson looks at the phenomenon of corporations hoarding cash rather than using it to invest in acquisitions or return to shareholders:

Which leaves one last question: Why? The answer, perhaps, is that both the executives and the investors in these industries believe that something big is coming, but — this is crucial — they’re not sure what it will be.

Licensed drivers as a percentage of their age group

The automotive sector is beginning to enter a transition phase. New technologies are emerging (notably move to electric drive trains and self driving technologies) and consumers are beginning to think more in terms of transport solutions (eg Uber) rather than simply car ownership.

An interesting indication of change in the latter was a University of Michigan study of state driver’s licensing statistics that showed in the number of under 25 year olds applying for a driver’s license in the US.

Clive Thompson takes an interesting look at what the implications for cities where car ownership declines, aided by growing indifference to car use among the young and the growth of  ride sharing services.

This doesn’t necessarily mean that auto manufacturers are dead in the water. Automotive manufacturers are experimenting with service based models such as Ford’s FordPass and GM has recently made a large investment in Lyft. That being said, it wouldn’t surprise me if many of these firms increasingly get reduced to makers of commoditised hardware much like the PC manufacturers of today.

Tech in Asia figures point to the phenomenal growth in smartphone penetration in Myanmar (see below) as the country leapfrogs over the PC era. A useful complement to the Tech in Asia article is Craig Mod’s account of ethnographic research in Myanmar which looks at some of the fundamental differences in the way that smartphones and Facebook are used in developing countries:

Percentage of Myanmar population with cellular subscriptions

Consumers are spending more of their time with their smartphones, but the mobile user interface in its current form places limits (as well as advantages) in what users can do.  Scott Jenson looks at where mobile’s user experience falls short of the PC and provides some suggestions on how they could be addressed:

Most businesses still use desktops/laptops for the simple reason that people get more work done on them. If you say that “business use” no longer matters, you’re just confusing the new and old market effect. I’m not saying desktop will beat mobile. I’m also not saying we’ll have desktop computing forever. But there are nuanced differences between desktop UX and mobile UX, and they have important implications.

There’s more evidence of the shift in the global economy from emerging to developed world markets. Emerging markets experienced an estimated $735bn in net capital outflows last year with all but $59bn of that coming from China according to recently released figures from the Institute of International Finance:

Net capital flows to China

Timothy Taylor has pulled together data visualisations which allow readers to compare the relative strengths of different economies including this one from the How Much team:

The World's Economy Divided by Area

Oxfam released research during the recent World Economic Forum claiming that the world’s 62 richest individuals have same wealth as the 3.6 billion people who make up the poorer half of humanity. There’s been some interesting critiques of Oxfam’s calculation, notably from Felix Salmon,  but I would argue the figures provide a valuable catalyst for conversations about the concentrations of wealth:

Share of global wealth

One illustration of the impact of growing concentration of wealth can be found in Jane Mayer’s profile of the Koch brother’s political campaigning in the US:

A new, data-filled study by the Harvard scholars Theda Skocpol and Alexander Hertel-Fernandez reports that the Kochs have established centralized command of a “nationally-federated, full-service, ideologically focused” machine that “operates on the scale of a national U.S. political party.” The Koch network, they conclude, acts like a “force field,” pulling Republican candidates and office-holders further to the right. Last week, the Times reported that funds from the Koch network are fuelling both ongoing rebellions against government control of Western land and the legal challenge to labor unions that is before the Supreme Court.

Laurence Dodds profiles the Hatton Garden raid in London and suggests it may well be the end of an era as criminals look for new ways for parting people from their worldly possessions:

It doesn’t quite have the romance of Hatton Garden. But while the age of John Dillinger and the Great Train Robbery is over, a new, digital lawlessness has come into being which is every bit as lucrative. It has its own romantic myths, its own folk heroes, because as long as someone is getting away with what the rest of us can only dream of, the cult of the outlaw will stay alive — in whatever form it can.

PJ Vogt and Alex Goldman’s Reply All podcast is a regular appointment in my listening schedule providing an irreverent look at the internet. A recent episode looks at the lack of diversity in the tech world (coverage from 11:50) and how this ultimately handicaps their performance. Informative and entertaining.

The featured image is the mural Mr Rooster by Etam Cru, located on the corner of 8th and Wall in the downtown Flower District in Los Angeles and published in Sour Harvest.

Thought Starters: decacorns, the iPad Pro opportunity and the implications of CRISPR

The following is a look through articles, research and opinion pieces highlighting interesting trends, developments and changes in the world you and I live in, with an emphasis on technology.

CB Insights profiles the growing valuations of the “decacorns” (private companies valued at over $10bn). Fidelity’s recent markdown of investments in Dropbox and Snapchat could be simply related to these companies’ specific circumstances or potential sign of a market correction:

Deals to Top Private Company Unicorns Valued at Over $10bn

Apple’s hoping that the release of the iPad Pro will give its tablet offering a much needed boost and the product’s performance mean that the iPad will be seen increasingly as a device to create as well as consume as John Gruber comments:

“We’ve now reached an inflection point. The new MacBook is slower, gets worse battery life, and even its cheapest configuration costs $200 morethan the top-of-the-line iPad Pro. The iPad Pro is more powerful, cheaper, has a better display, and gets better battery life. It’s not a clear cut-and-dry win — MacBooks still have more RAM (the iPad Pro, in all configurations, has 4 GB of RAM, although Apple still isn’t publishing this information — MacBook Pros have either 8 or 16 GB), are expandable, and offer far more storage. But at a fundamental level — CPU speed, GPU speed, quality of the display, quality of the sound output, and overall responsiveness of interface — the iPad Pro is a better computer than a MacBook or MacBook Air, and a worthy rival to the far more expensive MacBook Pros.”

One of the trends driving growth in a new range of startups is the shift to smartphones which is profiled in these global figures from Creative Strategies:

Percentage of time spent by device

90% of the time consumers spend on smartphones is spent in apps according to Flurry figures with Facebook, Google and Apple dominating in terms of the reach of their apps according to comScore figures:

Top 15 Smartphone Apps

Britney Summit-Gil looks at how the internet has enabled consumers to be better informed on a whole host of issues, but has lagged when it comes to understanding their own communities:

Internet users say digital tech makes them better informed than 5 years ago

Online advertising has been criticised for providing metrics that fail to reflect audience exposure.  Seb Joseph explores The Economist’s move to offer attention metrics which will better reflect consumers’ actual exposure to advertising:

“Working with analytics partners Chartbeat and Moat Analytics, The Economist tracks active time view – only counting a view when an ad is in view and the reader is actively engaged, i.e typing or scrolling up and down the page. Only those impressions that generate over 5 seconds of active view time will count towards the attention buy.”

Before brands throw all their media budget behind these new online advertising opportunities, it’s worth considering GroupM research which points to television’s lead in generating short to medium term sales (bearing in mind the research was commissioned by TV marketing body Thinkbox):

“GroupM found that media account for on average 39% of sales in the short to medium term (within three months of a campaign finishing); 33% of these media-driven sales are from TV advertising, more than any other communication channel. Paid-for online search created 22%, online display 12%, affiliates 10%, print 8%, direct mail 8%, radio 3% and outdoor 1%.”

Online media also needs to contend with declines in referral traffic from Facebook according to a report from Matthew Ingram. It’s far from clear  whether this is a result of a content glut or Facebook dialing back traffic but it does highlight how vulnerable mainstream content providers are to changes by Facebook and other intermediaries:

“The other nagging fear for media companies is that Facebook is essentially engaging in a large-scale bait and switch, by encouraging them to host all of their output on its platform, but then gradually turning off the traffic tap so that their reach declines. At that point, the social network can recommend a number of ways to boost the reach again—including by paying for promoted posts and other forms of advertising. Facebook would no doubt protest that it is doing nothing of the kind, but the fear remains.”

Michael Specter profiles the growing opportunities to manipulate our DNA with CRISPR/Cas system whilst Erik Parens chooses to explore the ethical implications of gene editing:

‘That seemingly simple question takes us to the heart of a deep tension that decent parents have felt for a very long time, but that will become ever more intense if a technology such as CRISPR-Cas9 is in fact safe and effective. I refer here to the tension between the ethical obligation of parents to accept their children as they are, and their ethical obligation to shape them.”

Rising wages in China mean that the country is facing growing competition for the title of factory to the world with Mexico also benefiting from its close proximity to the US according to a report from Ana Campoy:

Productivity Adjusted Labour Rates

UNHCR figures put the sheer scale of Europe’s refugee crisis in perspective, with the problem unlikely to abate given conflict in Syria and Afghanistan:

Migrant arrivals via the Mediterranean

If you find yourself in London over the next month, I’d strongly recommend checking out Ragnar Kjartansson’s The Visitors exhibition at the Brewer Street Car Park. A wonderful respite from the increasingly frenetic activity of central London in Christmas shopping mode.

The featured image is a Jessie and Katey mural on Ahui Street in Hawaii for the POW WOW festival.

Thought Starters: innovation, unicorns and a critical look at the sharing economy

The following is a look through articles, research and opinion pieces highlighting interesting trends, developments and changes in the world you and I live in, with an emphasis on technology.

Matt Ridley focuses on the forces that drive innovation forward, describing it as a more organic and chaotic environment that isn’t something that governments can readily turn on or off:

“The implications of this new way of seeing technology—as an autonomous, evolving entity that continues to progress whoever is in charge—are startling. People are pawns in a process. We ride rather than drive the innovation wave. Technology will find its inventors, rather than vice versa. Short of bumping off half the population, there is little that we can do to stop it from happening, and even that might not work.”

Activate provide a valuable look at the intersection of media and technology, focusing on the evolution of media usage, mobile messaging, audio, television and mobile apps. Good overview of how the landscape is likely to evolve over the next year:

Benedict Evans and Steven Sinofsky explore how smartphones represent the latest format in computers evolution, expanding technologies reach and ask what might be next in this cycle:

Wall Street Journal’s data visualisation (click through for the interactive version) makes apparent the massive growth in valuation of various venture funded startups over the last two years…exciting but also scarey:

Companies valued at $1 billion or more by venture-capital firms

The rapid growth of various unicorns has not come without its critics. Airbnb has accelerated the process of gentrification as property developers shift their focus from local residents to visiting tourists in markets already dealing with shortages of affordable housing. Steven Hill states:

“In a tight housing market, rent-controlled apartments are prey for what we might call “slamlords,” who promote condo conversions or renovations that would justify massive rent increases. Airbnb provides another layer—a powerful financial incentive as well as a technique for landlords to convert their apartment buildings into tourist hotels.”

Zeynep Tufekci looks more broadly at startups associated with the ‘sharing economy’, characterising them as fueling a growing gap  between the winners and losers in our current labour market:

“It sounds great, except for the ugly reality which lurks under the proliferation of “uber for…”s: the calcification of the two-tiered system between the overworked who need and can afford the “uber for…”s and the underpaid who are stuck in its 1099 economy of unstable, low wages.”

For the moment, the impact of the “gig economy” might be overstated. Figures from America’s Bureau of Labour Statistics points to self employment as actually decreasing in recent years (although that’s not to say this trend will continue):

The Self Employment Rate in the US

The majority of developed market economies are facing the challenge of an aging population as fertility rates decline so it’s interesting to look at those countries with large young populations with China and India standing out. A closer look at the statistics by John Poole reveals some more unsettling truths with China “missing” about 24 million girls between the ages of 0 and 19:

Half the world's teens live in these 7 countries
Countries with the largest teen populations

Climate change is reshaping our planet and forcing many indigenous ecosystems to adapt with a negative impact on our planet’s biodiversity. The effect on countries’ economies is more of a mixed bag according to Marshall Burke, Sol Hsiang, Ted Miguel’s forecast with winners and losers (click on the map for more detailed information). Whether such modelling can accurately accommodate all the different consequences of climate change remains to be seen:

Economic Impact of Climate Change on the World

The featured image is a mural by Italian artist Tellas in Shoreditch, London and published in StreetArtNews.

Thought Starters: venture capital, role of mobile and some favourite podcasts

The following is a collection of articles, thought pieces, presentations and podcasts highlighting interesting trends and changes in the world you and I live in.

Andreessen Horowitz recently released a presentation which looked at venture capital funding in the US which sparked off more conversations on whether there’s a tech bubble. Ben Thompson expands on this to provide his view on the value of the growing number of unicorns:

I think it’s this dichotomy that makes the current bubble discussion so difficult: most unicorns may be overvalued, but in aggregate they are probably undervalued. It turns out winner-take-all doesn’t apply just to the markets these startups are targeting, it applies to the startups themselves.

Ben Thompson profiles Google’s data centric strategy with Facebook’s strategy which focuses on personalisation with Twitter seemingly unable to deploy either approaches:

Facebook vs Google

Benedict Evans provides contrasting review of business strategy in the digital age, looking at the importance of curation in an age of abundance providing a review of different approaches:

  1. There is giving you what you already know you want (Amazon, Google)
  2. There is working out what you want (Amazon and Google’s aspiration)
  3. And then there is suggesting what you might want (Heywood Hill).

It’s also worth spending time with Evans’ updated Mobile is Eating the World presentation.

I have concerns about the way that pornography is reshaping sexual relations in the modern era, but Maria Konnikova’s account suggest that pornography might be more a symptom than a cause of modern ills.

A recent issue of the New Yorker has a fascinating look at a case of hate crime in North Carolina and the expanding scope of euthanasia.

For lovers of history and data visualisations,  Neil Halloran’s piece on deaths in World War 2 makes compelling viewing. Check it out The Fallen of World War II for an interactive version

I’ve been going through something of a  podcast binge recently, turning my cycle rides around town into more enriching affairs. Shows that have hit the spot recently include the following:

Children of the Magenta looking at the perils of automation in aircraft.

The Takeover looking at how a boring Facebook group developed a life of its own.

Antibodies Part 1: CRISPR looks at recent advances in gene therapy which are both exciting and bewildering.

The Birth and Death of the Price Tag looks at changes in pricing without even mentioning Uber’s surge pricing.

The President was Here leaves me even more enamoured with Barack Obama.

The featured photograph is of a Reka piece from Milan, Italy published in StreetArtNews.