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.

Below is a chart from Benedict Evans comparing annual revenue from the Wintel era (Microsoft + Intel) to the current GAFA era (Google, Apple, Facebook, and Amazon). 

His argument is that, today, “the scale of tech winners” is about 10x what it was during the previous cycle.

And here is a chart, from that same post, showing how the internet ate print ads when it comes to global revenue:

A lot of this has to do with the unprecedented growth of smartphones and the sheer number of people who came and are coming online. Mobile is 10x the PC market.

But the other interesting narrative from the post is the argument that these companies (GAFA) have learned from previous generations just how aggressive you need to be to survive.

The shift to mobile posed a structural threat to Facebook. At the time of its IPO, there were serious doubts as to whether the company would be able to pull off this transition.

Which is why the founder went out and spent 10% of the company to acquire companies that would help with this transition and ensure its survival. That seems to have worked.

In the words of Andrew Grove: “Only the paranoid survive.“ And in today’s tech world, the rewards for surviving are that much bigger.

Today’s blog post is coming to you live from Quantum Coffee at the corner of King and Spadina in Toronto.

I’m sitting by the window (where I keep running into friends) in a beautiful space that used to be an ugly youth hostel. Nice work Reflect Architecture and MAAST. 

It’s my first time at Quantum, but I am so intrigued by all that is happening here that I feel compelled to share.

So Quantum is a coffee shop. The americano I had this morning was quite good. I hope to have another one sometime in the future. But there’s more to this story. 

Quantum is actually just one leg of something bigger. Attached to it – literally upstairs – is something called BrainStation. And across the street from it is something called The Konrad Group.

The Konrad Group is a digital agency that does everything from brand strategy to mobile development. BrainStation teaches those same skills to other people via in-person courses in this recently renewed heritage space. And Quantum is the stimulant that helps fuel it all.

The connective tissue between these 3 businesses, which are all basically owned by the same poeple, is something that I find super fascinating.

It also feels like the intersection of design, technology, and space (real estate). And as many of you know, that’s what I’m all about.

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.

Below is a chart from Benedict Evans comparing annual revenue from the Wintel era (Microsoft + Intel) to the current GAFA era (Google, Apple, Facebook, and Amazon). 

His argument is that, today, “the scale of tech winners” is about 10x what it was during the previous cycle.

And here is a chart, from that same post, showing how the internet ate print ads when it comes to global revenue:

A lot of this has to do with the unprecedented growth of smartphones and the sheer number of people who came and are coming online. Mobile is 10x the PC market.

But the other interesting narrative from the post is the argument that these companies (GAFA) have learned from previous generations just how aggressive you need to be to survive.

The shift to mobile posed a structural threat to Facebook. At the time of its IPO, there were serious doubts as to whether the company would be able to pull off this transition.

Which is why the founder went out and spent 10% of the company to acquire companies that would help with this transition and ensure its survival. That seems to have worked.

In the words of Andrew Grove: “Only the paranoid survive.“ And in today’s tech world, the rewards for surviving are that much bigger.

Today’s blog post is coming to you live from Quantum Coffee at the corner of King and Spadina in Toronto.

I’m sitting by the window (where I keep running into friends) in a beautiful space that used to be an ugly youth hostel. Nice work Reflect Architecture and MAAST. 

It’s my first time at Quantum, but I am so intrigued by all that is happening here that I feel compelled to share.

So Quantum is a coffee shop. The americano I had this morning was quite good. I hope to have another one sometime in the future. But there’s more to this story. 

Quantum is actually just one leg of something bigger. Attached to it – literally upstairs – is something called BrainStation. And across the street from it is something called The Konrad Group.

The Konrad Group is a digital agency that does everything from brand strategy to mobile development. BrainStation teaches those same skills to other people via in-person courses in this recently renewed heritage space. And Quantum is the stimulant that helps fuel it all.

The connective tissue between these 3 businesses, which are all basically owned by the same poeple, is something that I find super fascinating.

It also feels like the intersection of design, technology, and space (real estate). And as many of you know, that’s what I’m all about.