Benedict Evan’s latest post on Microsoft, IBM, and anti-trust is excellent. In it he argues (reminds us) that market power during one generation of tech, doesn’t necessarily guarantee market power in the next. And that anti-trust intervention isn’t actually responsible for Microsoft missing out on, among other things, mobile. The rules of engagement simply changed. The PC is now a smartphone accessory.

Here is an excerpt:

The tech industry loves to talk about ‘moats’ around a business - some mechanic of the product or market that forms a fundamental structural barrier to competition, so that just having a better product isn‘t enough to break in. But there are several ways that a moat can stop working. Sometimes the King orders you to fill in the moat and knock down the walls. This is the deus ex machina of state intervention - of anti-trust investigations and trials. But sometimes the river changes course, or the harbour silts up, or someone opens a new pass over the mountains, or the trade routes move, and the castle is still there and still impregnable but slowly stops being important. This is what happened to IBM and Microsoft. The competition isn’t another mainframe company or another PC operating system - it’s something that solves the same underlying user needs in very different ways, or creates new ones that matter more. The web didn’t bridge Microsoft’s moat - it went around, and made it irrelevant. Of course, this isn’t limited to tech - railway and ocean liner companies didn’t make the jump into airlines either. But those companies had a run of a century - IBM and Microsoft each only got 20 years.

For the full post, click here.

Last week, audio clips from an internal Q&A session at Facebook were leaked and published by the Verge. These meetings have historically always been private. In what I think was the right move, the company then decided to publicly livestream a subsequent Q&A session -- you know, to show that they had nothing to hide.

The media tended to focus on Mark Zuckerberg's comments about the threat of Facebook being broken up by regulators. #BreakUpBigTech. Lots of people are also attempting to glean what this leak might signal about the company's current corporate culture. But there are lots of other interesting soundbites.

Here's an excerpt from Zuckerberg about the Chinese social media app, TikTok:

So yeah. I mean, TikTok is doing well. One of the things that’s especially notable about TikTok is, for a while, the internet landscape was kind of a bunch of internet companies that were primarily American companies. And then there was this parallel universe of Chinese companies that pretty much only were offering their services in China. And we had Tencent who was trying to spread some of their services into Southeast Asia. Alibaba has spread a bunch of their payment services to Southeast Asia. Broadly, in terms of global expansion, that had been pretty limited, and TikTok, which is built by this company Beijing ByteDance, is really the first consumer internet product built by one of the Chinese tech giants that is doing quite well around the world. It’s starting to do well in the US, especially with young folks. It’s growing really quickly in India. I think it’s past Instagram now in India in terms of scale. So yeah, it’s a very interesting phenomenon.

TikTok now has over 1.4 billion installs outside of China according to TechCrunch. And in the first half of this year, it supposedly booked more than $7 billion in revenue (though most of it came from China). The company is also saying that it posted its first profit in June of this year.

All of this is, indeed, "a very interesting phenomenon."

But it's even more interesting because this is probably the first consumer-facing Chinese internet product with massive global adoption. And it has Facebook paying attention. They're now the ones who have to play copycat -- their version of TikTok is called Lasso. Of course, it's not nearly as popular.

The below chart from this morning's Wall Street Journal is perhaps a good example of our ongoing transformation from an industrial economy to an information economy. Just four stocks -- namely Microsoft, Apple, Amazon, and Facebook -- have accounted for 19% of the S&P 500's total return this year. All of them are "tech."

And this is not new to 2019. Similar contributions were made by tech last year and in 2018. I have been used to hearing about the 4 horsemen of tech. But apparently there's even now something called the "FAANG stocks," which refers to Facebook, Amazon, Apple, Netflix, and Google (Alphabet).

This shift is, of course, one of the reasons why every city is trying to establish a strong tech ecosystem. I saw that first-hand in Lisbon this past week. And frankly I think the city has many of the same characteristics that made Berlin a great place for tech. It's affordable. It's filled with young and smart people. And it's a fun place to be.

There's a reason that Lisbon now hosts the annual Web Summit, which is generally considered to be the largest tech conference in the world. (The North American offshoot, called Collision, relocated to Toronto this year in order to be in a more global city.)

Portugal only has a population of about 10 million people. There are some 3 million people in the metropolitan area of Lisbon. But that doesn't really matter because most startups today are immediately targeting a global customer base.

I learned more about Portugal and Spain's colonial pasts on this trip and I found it fascinating. In many ways, it was the start of globalization. But that was the Age of Discovery. Those centuries are over and done with. Our century is the Information Age. The above chart is part of that story.