Ben Thompson Archives

Thought Starters: Andreessen’s forecast, Google Assistant, Brexit and the global wealthy

Thought Starters provides me with a chance to review and highlight some of the more important or interesting research and opinions that I’ve read over the last week or so. This edition looks at the Marc Andreessen’s forecast for the future of tech, Google’s recent keynote address and launch of Google Assistant, an update on Brexit and a look at how the wealth differ between countries among other matters.

The advertising industry has seen a lot of change over the last 15 years with the growth of online advertising, social media and smartphones all impacting how brands reach consumers. What Eric Chemi’s analysis of DB5’s figures suggests is that these changes haven’t really enabled the marketing industry to take a greater share of the pie with advertising budgets staying constant as a proportion of GDP:

One more recent window into how the world of marketing is changing can be seen in product discovery. Amazon is now where more than half of online US consumers begin their product searches according to Spencer Soper’s report on Bloomreach research, with the online retail behemoth strengthening its hold on consumers thanks to its low prices, growing delivery network and Amazon Prime offering.

Marc Andreessen in an interview with Timothy B. Lee gives his view on where technology and innovation will be sending us next. This sees him cast his opinion on artificial intelligence, drones, employment and autonomous cars:

To me the problem is clear: The problem is insufficient technological adoption, innovation, and disruption in these high-escalating price sectors of the economy. My thesis is that we’re not in a tech bubble — we’re in a tech bust. Our problem isn’t too much technology or people being too excited about technology. The problem is we don’t have nearly enough technology. These cartel-like legacy industries are way too hard to disrupt.

Google’s I/O 2016 keynote saw the company launch various new offerings including the Pixel smartphone, Daydream virtual reality headset, Chromecast Ultra streaming device, Google Wifi router and Google Home smart home assistant. The most interesting feature from the Pixel smartphone is Google Assistant, offering a real step forward from Google Now and Apple’s Siri:

Ben Thompson’s analysis of the launch of Google Assistant points to it as signalling a real change in Google’s mobile strategy, with its move to limit the service to Pixel rather than all Android handsets:

Google has a business-model problem: the “I’m Feeling Lucky Button” guaranteed that the search in question would not make Google any money. After all, if a user doesn’t have to choose from search results, said user also doesn’t have the opportunity to click an ad, thus choosing the winner of the competition Google created between its advertisers for user attention. Google Assistant has the exact same problem: where do the ads go?

After all, if a user doesn’t have to choose from search results, said user also doesn’t have the opportunity to click an ad, thus choosing the winner of the competition Google created between its advertisers for user attention.

Sony is in the throes of releasing its Playstation VR headset which is expected to be a frontrunner in the race to get virtual reality in consumers’ living room. Brian X. Chen’s review suggests we’re still a long way off from having virtual reality in most of our homes:

Virtual reality is still in its early days, and it’s unclear whether it will ever catch on with people beyond gamers. If you already own a PlayStation, spending a few hundred dollars for the headgear and accessories is a worthwhile purchase to get started on virtual reality.

But for the average consumer, the thrill of virtual-reality gaming with PlayStation VR may be fleeting. Initially, virtual reality will probably mesmerize you because it’s so unlike any gaming experience you have ever had. But the scarce number of good games available today, combined with the fatigue you will experience after 30 minutes of game play, may drive you back to gaming on your smartphone or television screen.

Another area that might not live up to the current hype is self driving cars. We’re seeing Google and Uber trying out live experiments but there’s little sign of these being available to consumers (Tesla’s Autopilot is a much more limited version of self driving) and Tom Simonite suggests we’re not likely to have this situation change anytime soon:

But don’t expect to toss out your driver’s license in 2021. Five years isn’t long enough to create vehicles good enough at driving to roam extensively without human input, say researchers working on autonomous cars. They predict that Ford and others will meet their targets by creating small fleets of vehicles limited to small, controlled areas.

One area where we have seen real change is in consumers’ growing adoption of digital photography, fueled by the now ubiquitous smartphone. It’s been interesting to watch is how smartphone software is increasingly giving high end cameras a run for their money in their picture quality as Michael Zhang’s comparison of the iPhone 7 and Leica M9-P attests to:

Diane Coyle provides a valuable refresher on how the move into the digital age is changing our conceptions of property ownership:

Conceptions of property seem to be evolving again with the rise of the “sharing economy”. The ease of using digital matching platforms make the consumer’s decision to buy or rent less stark than in the past ; the legal ownership rights are clear but the economic choices and consequences are changing.
The wider point is that technology and the law have between them significant effects on the kinds of market transactions that take place. Some consequences might seem minor. Others concern land grabs for economic assets.

Brexit has been thrust back into the spotlight by British Prime Minister Theresa May’s announcement that the country will start formal negotiations for Britain to leave the EU by March 2017. Gideon Rachman criticises May for essentially giving away one of the few bargaining chips that the country has in its negotiations with the European Union:

So why has Mrs May been so reckless? The short answer is politics. If the prime minister had delayed triggering Article 50 any longer she might have faced a revolt from Conservative MPs, who would have feared that she was backsliding on Brexit. By making her announcement just before the Tory party conference, she has also guaranteed herself some favourable headlines and applause in the conference hall. She may have bought herself another couple of years in 10 Downing Street. But she has also significantly increased the chances that Brexit will cause severe damage to the British economy.

Theresa May and British foreign secretary Boris Johnson would be well advised to give an ear to Centre for European Reform director Charles Grant who provides some valuable advice on how we would best negotiate Brexit.

There’s been a lot of talk of protecting manufacturing jobs in both the US and UK but does this really reflect problems of contemporary society? Binyamin Appelbaum suggests it might be more a case of reflecting the group that shouts the loudest rather than those most worthy of support:

The enduring political focus on factory workers partly reflects the low profile of the new working class. Instead of white men who make stuff, the group is increasingly made up of minority women who serve people. “That transformation really has rendered the working class invisible,” says Tamara Draut, the author of “Sleeping Giant,” a recent book about this demographic transformation and its political consequences.

The old working class still controls the megaphone of the labor movement, in part because unions have struggled to organize service workers. Manufacturing was, logistically speaking, easier to organize. There were lots of workers at each factory, and most knew one another. Service work is more dispersed and done in smaller crews. Workers living in the same city and employed by the same retail chain, for example, would likely know only a handful of their compatriots. Fostering a sense of trust and shared purpose under these conditions is difficult.

Tyler Cowen draws on Jonathan Wai and David Lincoln’s research into the global wealthy to point out differences between countries with some counterintuitive results:

Our World in Data provides a reassuring forecast of the growing levels of education we can expect in the coming years. This should go someway to addressing the issue of global population growth and increasing standards of living:

The Economist has collated Nobel laureates’ age at the date of their award and the trend is definitely older (with the exception of the Peace category). Now if only I’d achieved half as much as Malala Yousafzai had by the age of 17:

Amnesty International has released the following map which points to the disproportionate load that some countries are bearing in the hosting of the world’s refugees. What makes this even more concerning is the state of many of these countries’ economies leaving them ill placed to host refugees compared to the countries of Western Europe and North America:

The featured image at the top of the page is Stone Quarry by Zest in Villars-Fontaine, France which was published in StreetArtNews.

Thought Starters: Pokémon Go, Complexion Reduction and Brexit

Thought Starters provides me with a chance to review and highlight some of the more important or interesting research and opinions that I’ve read over the last week or so. This edition looks at why there’s so much noise being made about Pokémon Go, what is Complexion Reduction, the impact of Brexit and whether automation is going to put you out of a job among other things:

Salesforce is the market leader in CRM, so its announcement that its Android mobile app will only support Samsung and Nexus branded handsets is a sign that not everyone is prepared to go along with the fragmented Android landscape.

Unilever and Procter & Gamble are the giants that have dominated the FMCG sector. Whilst neither brands have been afraid of taking over competitors in the past, Ben Thompson suggests that Unilever’s takeover of the Dollar Shave Club represents something more fundamental:

AWS and Amazon itself, having both normalized e-commerce amongst consumers and incentivized the creation of fulfillment networks, made the creation of standalone e-commerce companies more viable than ever before. This meant that Dollar Shave Club, hosted on AWS servers, could neutralize P&G’s distribution advantage: on the Internet, shelf space is unlimited. More than that, an e-commerce model meant that Dollar Shave Club could not only be cheaper but also better: having your blades shipped to you automatically was a big advantage over going to the store.

That left advertising, and this is why this video is so seminal: for basically no money Dollar Shave Club reached 20 million people. Some number of those people became customers, and through responsive customer service and an ongoing focus on social media marketing, Dollar Shave Club created an army of brand ambassadors who did for free what P&G had to pay billions for on TV: tell people that their razors were worth buying for a whole lot less money than Gillette was charging.

The net result is that thanks to the Internet every P&G advantage, save inertia, was neutralized, leading to Dollar Shave Club capturing 15% of U.S. cartridge share last year.

Simply Measured’s survey of American marketers points to the challenges faced managing social media and also points to Faceboook as having the strongest ROI:

July the 17th was apparently World Emoji Day and the top tweeted emojis give an interesting (if rather nonsensical) window into national psyche of different countries:

Pokémon Go’s growth has been phenomenal going from nothing to the most popular mobile game in the US in the space of less than a month:

Whilst Pokémon Go got a headstart based on the popularity of the Pokémon franchise, it’s Niantic’s augmented reality technology blending the real and gaming world that got people really excited. Matthew Lynley explores the gameplay and monetisation that has made the game such a huge consumer and commercial success:

Niantic here does such a good job of creating just enough friction that, at the exact moment, it can capture an opportunity for monetization. Players don’t feel compelled to spend money, and instead they’re offered a delightful experience when they elect to spend money. Those eye-popping visuals continue, they keep throwing Pokéballs and they don’t have to wait to see some of the most powerful Pokémon game.

It’s also interesting to see how Pokémon Go is quickly emerging as a promotional opportunity for bricks and mortar businesses with this link further strengthened with Nintendo’s launch of sponsored locations:

The more salient point here is that no marketing channel is evergreen, but businesses that want to win have to keep one eye open for these big shifts-and they have to capitalize on them when it’s time. With Pokemon Go, businesses have an unprecedented opportunity to create strong emotional bonds with new customers, and for very little money.

Even if Pokemon Go isn’t as powerful a tool for driving sales six months or a year from now, the customers that you delight today are going to remember you tomorrow.

Michael Horton provides a look at what he’s describing as Complexion Reduction, pointing to how many traditional design cues are disappearing on mobile in the quest for a better user experience:

1. Bigger, bolder headlines
2. Simpler more universal icons
3. Extraction of color

Google commissioned SOASTA to look at how poor mobile site performance can significantly degrade user experience, providing a valuable reminder that publishers need to keep an eye on the speed dial:

Whilst much has been made of the inexorable rise of Amazon, British bookseller Waterstones has provided an interesting counterpoint providing an example of where bricks and mortar retailers can face off against the ecommerce giant. Stephen Heyman profiles James Daunt’s strategy which has seen local store managers taking great control enabling them to act more like a local book shop and less like a one size fits all franchise:

While Barnes & Noble devolves from a bookstore into a thing store, Waterstones, the biggest bookstore chain in Britain, is plotting an entirely different course. In 2011, the company—choked with debt and facing the same existential threat from Amazon and e-books as B&N—nearly declared bankruptcy. Today, however, Waterstones isn’t closing shops but opening a raft of them, both big-box (in suburban shopping centers) and pint-size (in train stations). It has accomplished a stunning turnaround under the leadership of its managing director, James Daunt, who just announced Waterstones’ first annual profit since the financial crisis. How he pulled that off is a long story, involving old-fashioned business cunning, the largesse of a mysterious Russian oligarch, and some unexpected faith in the instincts of his booksellers.

Amazon has been rightly lauded for its move from retailer to platform provider but that’s not to say it has gone without a hitch. There have been growing reports of third party sellers listing counterfeit goods on Amazon upsetting consumers and brands:

Now Amazon is filling up with counterfeits, a term that can mean several things:

* A near-identical (or identical) knock-off, sometimes even made in the same factory as the original goods, and sold out the back door
* Factory rejects that failed inspection
* Low-quality fakes that look like originals, but are made from inferior or defective materials or suffer from defective/shoddy manufacturing

The Brexit referendum now means that Britain’s exit from the European Union is now more than just a Nigel Farage’s pipe dream but the end goal is far from clear. Ian Dent’s report based on discussions with Dr. Holger P. Hestermeyer, Professor Anand Menon, and Dr James Strong is worth read if you want a closer look at the different options faced by Theresa May.

London’s economy has benefited hugely from being the financial capital of Europe as Ryan Avent details in his book Work, Power and Status in the Twenty-First Century quoted in Marginal Revolution. Given this, it’s no wonder that other European centres are keen to see London’s access to European financial markets curtailed:

London is the richest city in Europe. Real output per person is central London is nearly four times the average in the European Union, and nearly twice that Europe’s other large, rich metropolitan areas, such as Amsterdam and Paris. Strikingly, London is more than twice as rich as the next richest region within Britain. However one slices it, the city is an extraordinary economic outlier.

Whilst the coup in Turkey seems to have quickly passed, the impact on the country’s civil society are more wide reaching as Erdoğan pushes the country further away from the foundations of Atatürk, as James Palmer profiles:

Erdoğan’s populist authoritarianism threatens a frightening change in Turkey — a dictatorship with the barest veneer of democracy laid over it as cover, fueled by resentment and religious conviction, and drawing in elements from jihadists to intelligence officers to organized crime to shield itself and assault its enemies.

Will robots put you out of a job? McKinsey have analysed the impact that automation will have on different occupations, with more and more jobs impacted directly or indirectly:

The last 30 years has seen substantial gains in income for much of the world’s population, but the middle classes of the US and Western Europe haven’t fared nearly as well. I’d argue that these disparities in incomes between the developed and developing world would inevitably reduce over time as education levels improve and as technologies enable international collaboration. Unfortunately one of the side effects has has been the rise of populist politicians such as Donald Trump and Nigel Farage in the US and Europe:

The Brexit referendum has exposed a less tolerant side to British society. Pew Research Center figures enable a comparison between UK and other Western countries suggesting that it’s hardly an outlier:

Laurie Penny provides a thoughtful critique of the culture of wellness with its very individualistic view of the world providing a barrier to a more collective view of society:

The wellbeing ideology is a symptom of a broader political disease. The rigors of both work and worklessness, the colonization of every public space by private money, the precarity of daily living, and the growing impossibility of building any sort of community maroon each of us in our lonely struggle to survive. We are supposed to believe that we can only work to improve our lives on that same individual level. Chris Maisano concludes that while “the appeal of individualistic and therapeutic approaches to the problems of our time is not difficult to apprehend . . . it is only through the creation of solidarities that rebuild confidence in our collective capacity to change the world that their grip can be broken.”

The featured image is “Taste” or “В К У С” in Russian is the first big solo mural by Sergey Akramov in his hometown of Yekaterinburg, Russia for the Stenograffia Street Art Festival and published in StreetArtNews.

Thought Starters: Google I/O, property puzzle in England and rates of innovation

Thought Starters provides me with a chance to review and highlight some of the more important or interesting research and opinions that I’ve read over the last week or so. This edition looks at Google and Apple at a crossroads, England’s property market and questions over the rate of innovation among other things:

Whilst many technological and social indicators point to the lead that Western Europe and North America has over the developing world, there are cases where incumbent infrastructure slows down the introduction of new technologies. An example of this from the World Economic Forum is the lead Sub-Saharan Africa has in mobile money accounts, aided by the lack of traditional financial services infrastructure:

Interesting benchmark figures from Pew Research on the use of online services by the American population. There’s obviously plenty of opportunity for growth still across many different categories:

Google I/O developer conference happened on Wednesday which saw the launch of new virtual reality, mobile messaging, smart home and virtual assistant platforms and updates for Android, Android Wear and Android Auto. It’s worth checking out The Verge’s coverage of the leading announcements if you’re wanting more details on what to expect in the coming months.

Ben Thompson has an interesting follow on to the conference pointing to Google’s technical process but also suggesting that other factors at play are likely to hamper the organisation’s success:

The problem is that as much as Google may be ahead, the company is also on the clock: every interaction with Siri, every signal sent to Facebook, every command answered by Alexa, is one that is not only not captured by Google but also one that is captured by its competitors. Yes, it is likely Apple, Facebook, and Amazon are all behind Google when it comes to machine learning and artificial intelligence — hugely so, in many cases — but it is not a fair fight. Google’s competitors, by virtue of owning the customer, need only be good enough, and they will get better. Google has a far higher bar to clear — it is asking users and in come cases their networks to not only change their behavior but willingly introduce more friction into their lives — and its technology will have to be special indeed to replicate the company’s original success as a business.

Another company that’s had a strong run but for which the future is harder to anticipate is Apple. Marco Arment has been a valuable commentator and proponent of Apple and its broader ecosystem and his concerns about Apple’s long term health should definitely be taken seriously:

But if Google’s right, it won’t be enough to buy Siri’s creators again or partner with Yelp for another few years. If Apple needs strong AI and big-data services in the next decade to remain competitive, they need to have already been developing that talent and those assets, in-house, extensively, for years. They need to be a big-data-services company. Their big-data AI services need to be far better, smarter, and more reliable than they are. And I just don’t see that happening.

As a venture capitalist, David Pakman has a vested interest in a more entrepreneurial music ecosystem. That being said, I do believe he has a strong point talking about how major record labels are squeezing some of the innovation out of the music sector:

In my mind, it would have been in the long-term best interests of the recorded music business to enable the widespread success of thousands of companies, each paying fair but not bone-crushing royalties back to labels, artists and publishers. But the high royalty rates imposed upon startups, even after clear signs over the past 19 years that the strategy killed companies, prevented a healthy ecosystem from emerging. It’s a bed the music industry made for itself, and now it is left to lie in it.

Whilst there’s a been a lot of talk about the polarisation of incomes in the West, research from Walter Frick points to a similar polarisation in corporate performance with leading firms galloping ahead of everyone else:

Donald Trump’s nomination for the Republican party is pretty much a given now, and I’m glad to see more and more commentators coming out to express their opposition to his candidacy. Robert Kagan’s is definitely among the more eloquent, let’s just hope the US population listens to reason:

And the source of allegiance? We’re supposed to believe that Trump’s support stems from economic stagnation or dislocation. Maybe some of it does. But what Trump offers his followers are not economic remedies — his proposals change daily. What he offers is an attitude, an aura of crude strength and machismo, a boasting disrespect for the niceties of the democratic culture that he claims, and his followers believe, has produced national weakness and incompetence. His incoherent and contradictory utterances have one thing in common: They provoke and play on feelings of resentment and disdain, intermingled with bits of fear, hatred and anger. His public discourse consists of attacking or ridiculing a wide range of “others” — Muslims, Hispanics, women, Chinese, Mexicans, Europeans, Arabs, immigrants, refugees — whom he depicts either as threats or as objects of derision. His program, such as it is, consists chiefly of promises to get tough with foreigners and people of nonwhite complexion. He will deport them, bar them, get them to knuckle under, make them pay up or make them shut up.

The UK referendum on whether the country chooses to leave the European Union is fast approaching leading to some scaremongering from the pro Brexit camp. Providing a rather different perspective is research from Philippe Legrain who points out the economic benefits potentially provided by the influx of refugees to Europe:

Refugees who arrived in Europe last year could repay spending on them almost twice over within just five years, according to one of the first in-depth investigations into the impact incomers have on host communities.

Refugees will create more jobs, increase demand for services and products, and fill gaps in European workforces – while their wages will help fund dwindling pensions pots and public finances, says Philippe Legrain, a former economic adviser to the president of the European commission.

Over the following decade, England’s population rose by 4.1m while its housing stock rose by only 1.7m, something which any economist will tell you is going to cause some problems. This shortage is exacerbated by disparities between local authorities as The Economist recently mapped (click through for the interactive version):

A further indication of the overheated nature of certain parts of the UK housing sector can be seen in the fact that the average first time buyer in London now earns £85k and has a deposit of £123k according to the ONS figures:

Frans de Waal has taken a critical look at economics, pointing to its vision of the self interested human being rather different from how societies developed or currently operate:

Economists should reread the work of their father figure, Adam Smith, who saw society as a huge machine. Its wheels are polished by virtue, whereas vice causes them to grate. The machine just won’t run smoothly without a strong community sense in every citizen. Smith saw honesty, morality, sympathy and justice as essential companions to the invisible hand of the market. His views were based on our being a social species, born in a community with responsibilities towards the community.

There’s been a lot of debate over the rate of innovation, with the naysayers attitudes illustrated by Peter Thiel’s infamous statement “We were promised flying cars and we got 140 characters.” Neil Irwin has looked at the big inventions over the last 150 years, and suggests the nature of what is being invented might have changed but the pace of innovation hasn’t:

In short, the sheer number of ways a person can be in touch with others, and consume information or entertainment, has exploded, and the price has collapsed.

This is the area in which human life has changed the most in the last 46 years. We live and travel much as we did in 1970. We eat more variety of foods. Products of all types keep getting a little safer, a little more efficient, a little better designed.

But the real revolution of recent decades is in the supercomputer most people keep in their pocket. And how that stacks up against the advances of yesteryear is the great question of whether an era of innovation remains underway, or has slowed way down.

One innovation I am expecting to see much more of in the coming years is augmented reality with its fusing of the virtual and real life. Keiichi Matsuda provides a rather dystopian view of the world we might face in years to come:

The featured image is from eko.

Thought Starters: A look at Facebook, Snapchat, hidden truths and London

Thought Starters provides me with a chance to review and highlight the more important or interesting research and opinions that I’ve read over the last week or so. This edition looks at adtech bloat, Facebook and Snapchat’s role in the social media landscape, the truth behind the statistics and London’s changing economic landscape.

There’s been a lot of coverage about the growing adtech bloatware face and the countervailing rise of ad blockers as consumers look to improve their user experience and increase their privacy. I have considerable sympathy for the media sector which is in many cases scrabbling for a decent revenue model. But the situation doesn’t look great when consumers end up footing the bill with growing data chargers as highlighted by Rob Leathern:

When I cover deceptive ad practices/fraud, some people find it interesting, sure, but when I have explained how mobile websites are making far less money from ads than you’re paying in mobile data… People. Got. Pissed.

A recent report in The Information (paywall) points to consumers using Facebook less to share their personal thoughts, although figures from GlobalWebIndex indicate these might be part of a broader trend:

Ben Thompson puts Facebook’s position in the context of the broader social media landscape, contrasting it with the more personal mediums such as Snapchat (see below). Facebook’s launch of Moments and Facebook Live suggest it’s not happy being typecast in just this role:

It is increasingly clear that there are two types of social apps: one is the phone book, and one is the phone. The phone book is incredibly valuable: it connects you to anyone, whether they be a personal friend, an acquaintance, or a business. The social phone book, though, goes much further: it allows the creation of ad hoc groups for an event or network, it is continually updated with the status of anyone you may know or wish to know, and it even provides an unlimited supply of entertaining professionally produced content whenever you feel the slightest bit bored.

The phone, on the other hand, is personal: it is about communication between you and someone you purposely reach out to. True, telemarketing calls can happen, but they are annoying and often dismissed. The phone is simply about the conversation that is happening right now, one that will be gone the moment you hang up.

The growth of smartphones has had more than a helping hand in the growth of sexting among teenagers. This has raised serious questions for lawmakers who face criminalising teenagers using child pornography laws that were designed with different situations in mind and risk compounding the problem as Madeleine Thomas reports:

“You can allow them, or you can prohibit them, but [teens] are going to sext and they are going to have sex regardless,” Hasinoff says. “The potential for harm that technology creates is legitimately new, but the way we’re dealing with it is just completely the wrong approach. If you think you can stop it by criminalizing consensual sexters, it just doesn’t make any sense.”

Snapchat is one of the platforms most closely associated with sexting with figures from comScore showing the disproportionately high share of younger age categories when compared to other social networks in the US:

Snapchat’s recent launch of an updated version of its mobile messaging platform with a richer range of features again put it in the spotlight and left many marketers wondering how they can get onboard. Dakota Shane Nunley does his bit to pour cold water on some of this excitement pointing out there are plenty of situations where Snapchat simply doesn’t make sense:

Snapchat is not for:

Big brands looking to be “relatable” (unless those brands are buying space on Discover, Filters, or paying Influencers)

Businesses not based around an individual or personality

People without a social following elsewhere

Most small to mi-sized businesses

The commercial launch of Oculus Rift has left many commentators wondering whether virtual reality is the next big thing. The platform’s hardware costs mean that it’s not going to challenge the smartphone for the foreseeable future but that will change over time. For a closer look, it’s worth having a read of Benedict Evans’ look at the different development paths and the relationship with its cousin, augmented reality:

If one can answer those questions, then AR has the potential to be a new computing platform in a way that VR cannot – AR can be with you everywhere whereas VR needs a room, and so AR could be the next universal computing platform after mobile.

The transition from physical to digital distribution of music has been a far from smooth one with no shortage of musicians complaining that the shift to a streaming model is leaving them out in the cold. Figures from the International Federation of the Phonographic Industry suggest the industry may have now turned a corner with the fastest revenue growth since 1998 – whether that money reaches musicians remains to be seen:

The Guardian is one of my go to news sources even if I am not always in sync with their view of the world and their drift to a more lifestyle format. Given this, I was disheartened to read Michael Wolff’s analysis of the organisation’s management under Alan Rusbridger which suggests it may face the same fate of other newspapers struggling to make the transition to a digital world:

Alan Rusbridger’s disciples consider him a visionary, but the former Guardian editor oversaw enormous losses, a huge fall in circulation and a ruinous faith in free content. Now, as he returns as chairman of its parent company, has his legacy of unchecked idealism condemned the iconic brand to terminal decline?

Right through my university career I identified as politically correct reflecting strongly held views on the sexism, racism and homophobia of various aspects of contemporary society. Given this, I’ve watched with considerable interest recent debates around political correctness particularly in American universities of today with commentators pointing to activists overreaching and the silencing of broader debates. Whilst I feel too far removed to give a considered judgement, Greg Lukianoff and Jonathan Haidt’s article in The Atlantic and Lauren Modery’s commentary on Medium gave me plenty of food for thought.

Tim Harford has become one of my favourite commentators, separating the truth from fiction in news reports via the More or Less radio show/podcast and his regular column in the Financial Times. A recently penned feature article profiles the distortion of statistics and outright lies by politicians looking to shore up support among the general public – something well worth reading as UK approaches the Brexit referendum and the US head towards their presidential elections:

Perhaps the lies aren’t the real enemy here. Lies can be refuted; liars can be exposed. But bullshit? Bullshit is a stickier problem. Bullshit corrodes the very idea that the truth is out there, waiting to be discovered by a careful mind. It undermines the notion that the truth matters. As Harry Frankfurt himself wrote, the bullshitter “does not reject the authority of the truth, as the liar does, and oppose himself to it. He pays no attention to it at all. By virtue of this, bullshit is a greater enemy of the truth than lies are.”

Whilst we’re on the subject of politics and its impacts, CEPR have had a look at the economic impacts of Brexit and it’s unsuprisingly not positive:

The economic consequences of leaving the EU will depend on what policies the UK adopts following Brexit. But lower trade due to reduced integration with EU countries is likely to cost the UK economy far more than is gained from lower contributions to the EU budget.

Even setting aside foreign investment, migration and the dynamic consequences of reduced trade, we estimate the effects of Brexit on trade and the UK’s contribution to the EU budget would be equivalent to a fall in income of between 1.3% and 2.6%. And once we include the long-run effects of Brexit on productivity, the decline in income increases to between 6.3% and 9.5%. Other possible political or economic benefits of Brexit, such as better regulation, would have to be very large to outweigh such losses.

Diet is one area where we’ve seen the media and public opinions shaped by evidence that often falls well short of gold standard in scientific research. Ian Leslie’s fascinating coverage of attitudes to sugar points to a situation where strong scientific wasn’t enough to change societal norms with personal politics getting in the way of the truth (see below). Unfortunately many countries are now paying the price with growing obesity rates:

It is a familiar complaint. By opening the gates of publishing to all, the internet has flattened hierarchies everywhere they exist. We no longer live in a world in which elites of accredited experts are able to dominate conversations about complex or contested matters. Politicians cannot rely on the aura of office to persuade, newspapers struggle to assert the superior integrity of their stories. It is not clear that this change is, overall, a boon for the public realm. But in areas where experts have a track record of getting it wrong, it is hard to see how it could be worse. If ever there was a case that an information democracy, even a very messy one, is preferable to an information oligarchy, then the history of nutrition advice is it.

There’s been growing awareness of discrimination faced by women in the workplace, reflected in the lack of women in leadership roles and the gender pay gap. Whilst a lot of attention focuses on the need for flexibility in the workplace and familial demands, research from ICEDR suggests that what thirtysomething women are really interested in is better pay:

London has long had a character that set it apart from the rest of the UK both in terms of its international character and its economic output. One of the more recent consequences of this is the growing squeeze on poorer residents, reflected in the decline in the number of children eligible for free school meals as London’s central boroughs increasingly gentrify (see below). It’s no surprise that first time buyers are finding it increasingly hard to get on the property ladder compared to the rest of the country with regulation compounding the problem of population pressures:

Silicon Valley with its sea of office parks provides a rather different development model to London. Hunter Oatman-Stanford provides a fascinating look at the growth of this suburban corporate campus model as companies looked to flee inner cities. Unfortunately by sealing themselves off from the rest of society, businesses risk losing touch with the noisy and chaotic world they’re in many cases trying to serve:

While many modern office developments specifically include lounges or multipurpose zones where employees might randomly interact with one another, these spaces are entirely limited to office staff—with the aim that conversations would further relationships or spark ideas beneficial to the business. “I look at Apple’s Norman Foster building, and it’s 1952 all over again,” Mozingo says. “There’s nothing innovative about it. It’s a classic corporate estate from the 1950s, with a big block of parking. Meanwhile, Google is building another version of the office park with a swoopy roof and cool details—but it does nothing innovative.”

Online dating is reshaping the way people meet their flings / boyfriends / girlfriends / future partners. You can see this in Michael J. Rosenfeld and Reuben J. Thomas’s research from the US (see table below). The 2009 cut off date suggests the graph is substantially underreporting the current situation given the growing penetration of smartphones, services such as Tinder and growing social acceptance of online dating. Alex Mayyasi reports on some of the consequences of this trend including a likely growth in assortative mating which is ultimately likely to undermine social mobility:

Whilst we’re on the subject of relationships, it’s worth reading Gay Talese’s account of one motel owner’s voyeurism. You might not learn a whole lot about human relationships, but it does makes for an entertaining read.

The featured image is a GoddoG mural from Bordeaux published in ekosystem.

Thought Starters: innovation, intellectual capital & circular economy

Thought Starters provides me with a chance to review and highlight the more important or interesting research and opinions that I’ve read over the last week or so. This edition looks at questions over the pace of innovation, the growing portability of intellectual capital, the American presidential nominations and the circular economy among other things, all making for great weekend reading.

David Rotman profiles the work of economist Robert J. Gordon who takes a relatively dim view of the productivity gains over the last ten years. A valuable perspective although one focusing on economic gains doesn’t necessarily encompass other benefits enabled by new technologies and innovations:

An interesting complement to the Rotman’s article is Prashant Gandhi, Somesh Khanna and Sree Ramaswamy’s review of the levels of digitisation across different parts of the US economy. Information technology inevitably leads the charge but it’s more valuable to look at the laggards where we’re likely to see considerable changes and innovations in the coming years:

One area that we have seen substantial advances recently is technologies that enable remote teams to more readily collaborate (eg Slack). Samuel Hammond points to a world where intellectual capital is increasingly portable even if immigration barriers mean that this mobility is more virtual than actual:

Consistent with the premature futurism thesis, smart writers have been predicting large and looming social implications from telecommuting and remote work for decades, only to have their visions stymied by some unforeseen technical or psychological barrier. While hiring international freelancers has gotten a lot easier, for many jobs people just prefer face to face contact. Yet we seem to be finally reaching a critical point where video streaming, virtual reality, and collaboration tools are converging to make even the most complex team production viable across borders.

Uber is one of the shining stars of the startup sector with its growth and funding leading many entrepreneurs to pitch their business as ‘Uber for ____’. Farhad Manjoo points out that we should be wary of trying to draw direct parallels between Uber and other business use cases given the particular characteristics the ridesharing:

But Uber’s success was in many ways unique. For one thing, it was attacking a vulnerable market. In many cities, the taxi business was a customer-unfriendly protectionist racket that artificially inflated prices and cared little about customer service. The opportunity for Uber to become a regular part of people’s lives was huge. Many people take cars every day, so hook them once and you have repeat customers. Finally, cars are the second-most-expensive things people buy, and the most frequent thing we do with them is park. That monumental inefficiency left Uber ample room to extract a profit even after undercutting what we now pay for cars.

But how many other markets are there like that? Not many. Some services were used frequently by consumers, but weren’t that valuable — things related to food, for instance, offered low margins. Other businesses funded in low-frequency and low-value areas “were a trap,” Mr. Walk said.

Dan Lyons’ rather humourous account of joining HubSpot provides a valuable antidote to some of the overinflated hubris sometimes associated with startups:

The truth is that we’re selling software that lets companies, most of them small businesses like pool installers and flower shops, sell more stuff. The world of online marketing, where HubSpot operates, though, has a reputation for being kind of grubby. Our customers include people who make a living bombarding people with email offers, or gaming Google’s search algorithm, or figuring out which kind of misleading subject line is most likely to trick someone into opening a message. Online marketing is not quite as sleazy as Internet porn, but it’s not much better either.

A lot of noise has been made about younger consumers fleeing Facebook for the newer social media platforms but comScore data from the US points to the platform maintaining its appeal among millennials – suggest we’d see teenage audiences telling a rather different story:

Snapchat updated its mobile messaging platform recently providing a richer range of features for users as well as changing its privacy policy which is likely to see a broader array of targeting options for Snapchat advertisers. It’s worth reading Ben Thompson’s piece on Snapchat if you want to take a broader look at how the platform has evolved since its launch in 2011.

Virtual reality is now well and truly out in the open with Oculus Rift now available to the general public. Brian X. Chen’s review of the headset suggests that in its current state, it’s one for the early adopters:

The Rift’s graphics, sound and head tracking, which is the device’s ability to follow where the viewer looks, do feel like something out of science fiction. While the system’s setup is somewhat complex, the smoothness of the graphics and the high-quality design of the headgear make virtual reality feel ready for prime time.

And yet there may be a higher reward for those who wait to buy the Rift.

Soundcloud Go launched on the 29th of March in the US, adding to the list of streaming providers that are offering a subscription service for music consumers. Another route to monetise content might sound great for musicians but Dave Wiskus’ review of the service suggests something much more insidious:

You can slice it, package it, or spin it however you like, but the bare fact is that you’re making money off of songs you aren’t paying for. Worse, you’re doing it while perpetuating an air of exclusivity around the concept of making money. All while you’re pretending to be a friend to the little guy. There’s nothing artist-friendly about this approach.

Sven Skafisk’s overlaying of smartphone sales on top of traditional camera sales illustrates how much mobile phones have come to dominate how the majority of consumers experience photography – click through for the full length chart which really puts things in perspective:

The success of Amazon’s Alexa highlights the significant market opportunity for user friendly smart home solutions, which has even led to religious authorities offering advice on its use during Shabbos. What consumers may be less aware of is that in many cases they are buying into a service rather than a piece of hardware with the demise of Revolv leaving consumers in the lurch (although it looks like Nest may be stepping in to address some of these concerns now).

With the release of the Panama Papers, it’s worth revisiting which countries enable financial secrecy. One of the interesting insights to come out of the reports is the relatively limited number of Americans caught up in reports reflecting relatively lax controls in some states. The US falls in third place in the Tax Justice Network’s Financial Secrecy Index.

NPR’s Planet Money (well worth subscribing to their podcast) has looked at the changing structure of employment in the US where you can see changes both in terms of the number of jobs and as percent of the total. No huge surprises but it will be interesting to see how the chart changes as machine learning and artificial intelligence make inroads into white collar professions which have traditionally proven more immune to automation:

Another podcast worth recommending is Vox’s The Weeds, providing a valuable window into American politics and policy. A recent episode looks at the tax implications of Donald Trump, Ted Cruz, Hillary Clinton and Bernie Sanders’ policies (from 34:20). One of the interesting conclusions is how comparatively robust both Democratic candidates proposals are compared to the leading Republican candidates despite Clinton and Sanders taking rather different policy approaches:

https://soundcloud.com/panoply/weeds-episode-24

One area where Bernie Sanders and Donald Trump do seem to have something in common is their relatively protectionist approach to trade. Whilst I am all for ensuring employees gets appropriate protection around the world, it could put a real dampener on emerging markets’ economies as Jordan Weissmann points out:

With those last few words, Sanders has effectively written off trade with any country that is not already rich and prosperous—which is simply inhumane.

Encouraging the circular economy is likely to be a more appropriate way of encouraging local employment. Walter R. Stahel profiles this closed loop approach to production which offers benefits in terms of reduced emissions, increasing in employment and reduction in waste:

As UK fast approaches the Brexit referendum, immigration and the country’s health system lead concerns facing Briton’s – issues not unrelated given the reliance Britain’s NHS has on foreign born staff:

Potentially allaying the concerns of immigration opponents is research from Mette Foged and Giovanni Peri in Denmark which points to the benefits of immigration, even for the low skilled populations:

Instead of a small negative effect on the local native-born — as most studies in the U.S. tend to find — Foged and Peri found a positive effect. That’s right — low-skilled immigrants actually raised the wages of their less-educated native-born counterparts in the surrounding area. The data followed the native-born workers for a long time, letting the authors confirm that the change was durable.

The featured image is a Nelio mural made for the Marion gallery in Panama.

Thought Starters: look at AMP, Amazon’s dominance, corporate profits & music industry

Thought Starters provides me with a chance to review the research and opinions that I’ve read over the last week or so. This edition looks at the launch of Accelerated Mobile Pages, Amazon’s growing dominance in the digital world, rising corporate profits, the declining fortunes of the music industry and terrorism among other things.

Google’s Accelerated Mobile Pages is now out in the open. Alex Bauer profiles what it offers mobile internet users and also what is going on behind the scenes:

AMP isn’t actually new technology. In fact, AMP is what the web could have been all along, if it had been originally designed with nothing but mobile device performance in mind. This “mobile-only” approach is important because one of the ways AMP achieves its blazing-fast performance is by completely ignoring any device that is not small enough to fit in your pocket. AMP is emphatically not about making desktop websites look good on phone screens, but rather a totally separate, alternative presentation of the same content. It’s the web we already know, except stripped back to the bare essentials and then subjected to aggressive validation and rendering controls.

Alex Muir points to Facebook’s Hydra like offering as something any entrepreneur should consider as a competitor before launching a business into the B2C space:

Today, **if you’re building a service for communities or individuals then Facebook is almost certainly your biggest competitor. ** B2B: Excel, B2C: Facebook.

Ben Thompson recently profiled how Amazon is leveraging its scale in ecommerce and cloud computing to gain a near insurmountable competitive advantage. Eugene Kim’s collection of charts profiling Amazon provides a valuable complement to Thompson’s words illustrating what a behemoth the organisation present (at least in the US):

Bastion of free market economics, The Economist has made a convincing argument that the US economy needs more competition (and regulation) pointing to growing concentration and rising profits among the country’s leading firms:

Scott Santens joins the chorus of voices raising concerns about the threat automation poses to employment with Google DeepMind’s AlphaGo illustrating the major advances in artificial intelligence capabilities which could upturn society as we know it:

No nation is yet ready for the changes ahead. High rates of labor force nonparticipation leads to social instability, as does a lack of consumers within consumer economies. It turns out, humans are good at designing things, but not so great at picturing a world that their technology will create. What’s the big lesson to learn, in a century when machines can learn? Maybe it is that jobs are for machines, and life is for people.

Ben Sisario and Karl Russell profile the declining fortunes of the music industry over the last ten years with growth streaming services and vinyl sales failing to fill the hole left by declining CD sales. Whilst the figures don’t allow for revenues from other revenue streams such as concerts, sponsorship and branded content initiatives, overall, the picture isn’t particularly healthy:

An interview with Michael Rosenfeld sheds some light on how online dating is (and isn’t) changing the nature of relationships in the 21st century:

I don’t think that that theory, even if it’s true for something like jam, applies to dating. I actually don’t see in my data any negative repercussions for people who meet partners online. In fact, people who meet their partners online are not more likely to break up — they don’t have more transitory relationships. Once you’re in a relationship with somebody, it doesn’t really matter how you met that other person. There are online sites that cater to hookups, sure, but there are also online sites that cater to people looking for long-term relationships. What’s more, many people who meet in the online sites that cater to hookups end up in long-term relationships. This environment, mind you, is just like the one we see in the offline world.

The rise of Donald Trump is one of the more interesting (and scary) phenomenons in the US’s current election cycle. Clare Malone looks at where Trump’s support comes from:

The Upshot’s look at the geography of Trumpism showed a number of variables linked to areas of deep Trump support — counties where a high proportion of the population is white with no high school diploma, where there are large numbers of mobile homes, and where there is a poor labor-force participation rate. Political scientists Michael Tesler and John Sides recently pointed to new research that shows “both white racial identity and beliefs that whites are treated unfairly are powerful predictors of support for Donald Trump in the Republican primaries.”

Whilst playing to race is an important part of Donald Trump’s success, changing demographics point to a strategy of appealing to America’s white population as becoming increasingly untenable in the future according to Pew Research forecasts:

The recent terrorist attack has led to an inevitable concerns among Europeans about their personal safety. Annalisa Merelli’s analysis of deaths and injuries from terror attacks in Western Europe point to the region being no more dangerous than in the recent past although digital media is no doubt amplifying current fears:

The featured image shows a Hazul Luzah mural from Underground Paris’ interview with the Portuguese artist.

Thought Starters: Moore’s Law, Snapchat, questions about online advertising and the perils of Donald Trump

Thought Starters provides me with a chance to look through the articles, research and opinion pieces I’ve read, highlighting the more interesting trends, developments and changes in the world you and I live in. This edition looks at Moore’s Law, the ins and outs of Snapchat, some of the questions being raised out online advertising and the threat Donald Trump poses to politics among other things.

Nature recently published an article profiling Moore’s Law and how semiconductor manufacturers are looking at avenues beyond simply adding more transistors to chips. It’ll be interesting to see how the technology industry adapts given the cornerstone that Moore’s Law and the associated industry roadmap of innovation has provided in enabling the computing infused world we live in today.

One of the challenges the semiconductor industry has had to face is the transition from PC to mobile which can be clearly seen in the following graph from Creative Strategies’ Ben Bajarin with the rapid growth of Android, iOS and AOSP:

Quartz’s recent release of a mobile app provides an interesting example of publishers adapting to mobile, offering a stripped back feed of notifications and advertising, familiar to anyone using mobile messaging services:

Snapchat can prove baffling for the uninitiated, with a user interface and visual language that sets it apart from the more traditional social networks (I’m looking at you Facebook and Twitter). Ben Rosen provides a handy guide, drawing on sage advice from his 13 year old sister:

Whilst mobile, PCs and tablets are the dominant paradigms, we’re also beginning to see the emergence of a growing array of new devices blurring the boundaries of what a computing device is. The Amazon Echo is one of the more interesting devices to hit the market recently with the Uber integration providing an indication that the world envisioned in Her isn’t as far off as some people would have you believe:

The online advertising industry has been one of the clear winners over the last ten years with Google and Facebook in particular coming out ahead according to analysis from the Be Heard Group:

That’s not to say the online advertising industry is away laughing. The sector has come under growing scrutiny for failing to deliver for advertisers with Bloomberg last year pointing to growing click fraud with some advertising networks clearly dominated by bot rather than human traffic.

Another key metric is advertising viewability – there’s no point serving an advert to a human if the creative can’t be seen. Research from Meetrics points to a large proportion of European advertising not meeting IAB and the Media Rating Council (MRC) viewability, food for thought for media buyers:

Ben Thompson in a recent posting points to the stranglehold that Facebook and Google have on the online advertising market, offering greater effectiveness, reach, and ROI than their smaller competitors:

Here’s the kicker, though, and the big difference from the era of analog advertising: the Facebook and Google platforms turn TV and radio’s disadvantages on their head:

Facebook and Google have the most inventory and are still growing in terms of both users and ad-load; there is no temporal limitation that works to the benefit of other properties (and Facebook in particular is ramping up efforts to advertise using Facebook data on non-Facebook properties)

It is cheaper to produce ads for only Facebook and Google instead of making something custom for every potential advertising platform

Facebook and Google have the best tracking, extending not only to digital purchases but increasingly to off-line purchases as well

Facebook doesn’t always get its way with the recent judgement by the Indian Government’s blocking the social network’s Free Basics service. A case of neocolonialism by a hungry multinational or an honest attempt to widen internet access to the digitally excluded? I’ll let you be the judge.

Another social network that’s taken a hit recently is Twitter. Whilst the company has been improving its monetisation of traffic, latest figures point to negative user growth which definitely takes some of the shine off things for investors:

Twitter isn’t the only tech company that’s taken a battering of late with talk of a popping of the tech bubble. A more careful examination of stock performances suggest that investors’ FoMO (Fear of Missing Out) has fueled the valuation of some companies well above what they were worth, whilst the fundamentals of others hold up to closer scrutiny:

Donald Trump’s run for president has kept many of us well entertained over the last few months but Ezra Klein gives a pointed reminder of why we shouldn’t be taking his candidacy lightly:

Trump answers America’s rage with more rage. As the journalist Molly Ball observed, “All the other candidates say ‘Americans are angry, and I understand.’ Trump says, ‘I’M angry.'” Trump doesn’t offer solutions so much as he offers villains. His message isn’t so much that he’ll help you as he’ll hurt them.

As Britain’s decision on Brexit looms, President of the European Parliament Martin Schulz provides an impassioned defence of British membership of the European Union:

Dan Fox provides a valuable defence of pretentiousness in The Guardian, suggesting that it typically says more about the accuser than the accused:

Being pretentious is rarely harmful to anyone. Accusing others of it is. You can use the word “pretentious” as a weapon with which to bludgeon other people’s creative efforts, but in shutting them down the accusation will shatter in your hand and out will bleed your own insecurities, prejudices and unquestioned assumptions. And that is why pretentiousness matters. It is a false note of objective judgment, and when it rings we can hear what society values in culture, hear how we perceive our individual selves.

The featured image is a GoddoG mural from LED Thionville in France.

Who to follow on Twitter

There’s been a lot of talk in the press recently about Twitter’s move to an algorithmic feed. There’s definite potential if it eases the burden of sifting through our current feed but there’s a real risk that in doing so, Twitter might loose the ‘special sauce’ that makes it so attractive to its current users (it’s worth reading Adam D’Angelo on this).

I figured now might be a good time to give a plug for the Twitter accounts that provide me with a healthy signal to noise ratio and generally avoid double posting (my current pet hate).

Tech, Startups, Media and Marketing

Balaji S. Srinivasan tech analyst, CEO of 21 inc of, board partner of Andreessen Horowitz and blockchain fan.

Ben Thompson technology analyst behind the Stratechery blog and host of the Exponent podcast.

Benedict Evans technology analyst with a focus on mobile who is now working as partner at Andreessen Horowitz. Apparently not a great fan of cultural world of San Francisco despite living there.

Chris Dixon Hunch founder and another Andreessen Horowitz with pointers on the world of technology and startups.

Ian Maude UK based technology, media and internet analyst working for the Be Heard Group.

Marc Andreessen cofounder of Netscape, Loudcloud and now Andreessen Horowitz with strong opinions on technology, economics, the world of startups and politics (libertarian). Bit more noise to signal than the other recommendations.

Om Malik technology analyst, founder of GigaOm and now partner at True Ventures

News and Analysis

If You Only… Matter cofounder Bobbie Johnson provides a recommended long form journalism read each day.

Max Roser: typically provides an antidote to the naysayers of the world with data that point to human development around the world.

The Economist Daily Charts: provides a regular feed of charts, maps and infographics shedding light on issues in the news.

Tim Harford, journalist who writes as the Undercover Economist at the Financial Times and presenter of More or Less on Radio 4. Great for shining light on some of the issues that matter.

Cycling

Inner Ring: providing updates on the Inner Ring website and announcements from the world of professional cycling

And Me…

Finally, if you’re interested in following me on Twitter, more digital content can be found here and if you like riding bikes there’s here as well.

The featured image is No Amnesia by Pastel in West Palm Beach, Florida, USA

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):

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:

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:

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:

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.

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:

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:

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:

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:

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: young people’s media and device use, Facebook Messenger’s evolution, grey zone conflicts and the gender pay gap

Thought Starters provides me with a chance to look through articles, research and opinion pieces, highlighting interesting trends, developments and changes in the world you and I live in. Among the stories and research we look at in this edition are the habits of children and young adults, the growth of Facebook Messenger, grey zone conflicts, the gender pay gap and lots more.

There’s been growing speculation that Twitter may increase the character length of its posting as it looks to get ahead of Facebook in its user growth stakes (see below). Shira Ovide gives a strong argument for retaining it as it is, although I would argue there’s definitely scope for excluding links, images and video URLs from tweets’ character limit:

Younger audiences given an indication of future habits of the general population. Dan Kopf analysis young adults habits in the American Time Use Survey which unsurprisingly points to growing gaming, computer use and reading and decline in time spent watching television:

Benedict Evans on the other hand has used Ofcom’s Children and parents: Media use and attitudes report to look at the habits of British children which points to the substantial transition to mobile phones and tablets:

Flurry has released their analysis of Europeans’ use of smartphones and tablets based on their app data which shows wide variations in device penetration as well as giving clues on how mobile devices are being used:

Facebook has done a great job of transitioning to a mobile world with 78% of its ad revenues now coming from mobile. Facebook though is not one to rest on its laurels, with Facebook Messenger seen as a key component in strengthening its hold on mobile consumers. Facebook has just published a review of highlights for Messenger from 2015 which gives an indication of the social network’s ambitions for the mobile messaging service:

As mobile phones approach market saturation in developed markets, consumer electronics brands are looking to new categories for a boost in their revenues. Unfortunately for the brands, Accenture‘s global research profiled by Matt Rosoff suggests that consumers aren’t getting caught up in the hype for new products despite a growing array of offerings:

Gartner’s CMO Spend Survey points to growing marketing budgets and an emphasis on digital commerce, innovation, sales conversion and customer retention. You can find further analysis of the survey results from Simon Yates who points among things to the blurring distinction between offline and online marketing:

Interested in knowing what jobs are likely to keep you employed into the future? The Federal Reserve Bank of St Louis has analysed employment and unemployment rates for jobs on the basis of how routinised and levels of cognition which might give you some pointers whether you need to be retraining:

Figures from Bloomberg point to the substantial cuts in employment some banks have taken post financial crisis. It might be rather too optimistic to hope that those people whose actions fueled the crisis might have been among the first to leave:

Cass R. Sunstein profiles Gabriel Zucman’s The Hidden Wealth of Nations: The Scourge of Tax Havens, examining the growing role that tax havens play in enabling corporations and the wealthy to avoid paying their fair share of taxes. Zucman’s analysis provides a guide to the scale of the problem and also points to the successes and failures different institutions have had in addressing the problem of tax evasion:

In the aftermath of the financial crisis, you might expect that there would be an international crackdown on the use of tax havens, and as we shall see, international attention is indeed growing. But the numbers demonstrate that no crackdown has occurred. In Luxembourg, offshore wealth actually increased from 2008 to 2012 (by 20 percent). In Switzerland, the increase has been comparable; foreign holdings are now close to an all-time high. Disturbingly, the new wealth is coming mostly from developing countries, which poses a serious problem in light of the severe strains on their limited budgets.

China’s economy is going through a rough patch, with the share market in a nose dive. Given the over inflated valuation of many of the assets. Given the overinflated value of many of the assets in the country’s equity markets, this trend is unlikely to change (unless the government chooses to prop it up):

High profile Silicon Valley venture capitalist Paul Graham’s recent blog posting in which he argues that income inequality per se is not a bad has inevitably kicked up a storm of reactions. Among the more nuanced responses is Ben Thompson’s analysis who points to the risks and benefits associated with a more deregulated economy and calls out for the need for a strong social safety net that is independent of our employers:

Technology is changing the world, and it is naive to not expect the world to begin to push back. Rather than always be reactionary, it is past time for the technology industry broadly and Silicon Valley in particular to get serious about what that world will look like in the future, especially given the fact there is actually a way forward that is a win for not just technology companies and their investors, but for those who are impacted — i.e. everyone. Just as we should separate the means by which Uber allocates drivers from the ability to pay for a ride, it makes sense to separate work from the provision of a social safety net, and those most able to capitalize on this new world order should be the most willing to pay.

The conflict in Syria and the resulting flood of refugees fleeing to Europe is unfortunately leading to an anti immigration backlash in many European countries. Victims aside from the refugees fleeing harm in the middle of a European winter include the Schengen Agreement which previously allowed the free flow of people across much of mainland Europe:

Peter Pomerantsev uses the examples of China in the South China Sea, Russia in Crimea and Syria and ISIS with its terrorist attacks to highlight the growing importance of messy grey zone conflicts around the world:

It’s a brave new war without beginning or end, where the borders of peace and war, serviceman and civilian have become utterly blurred—and where you and I are both a target and a weapon.

Whilst we’re on the subject of globalisation and its impacts, The Economist has updated its Big Mac Index, pointing to who is paying over the odds for their guilty pleasure:

The Freakonomics podcast is one of my regular listening appointments and this week’s edition looking at the causes and effects of the gender pay gap is well worth downloading.

The featured mural is by eko from his Flickr page.

Tag: Ben Thompson