Business Books about Big Tech and Internet
- Books to do
- Big Tech - Common Key Facts and Trends
- Technology Trends
- DNA Key Factors - How they got Huge
- Key Factors behind Big Tech
- === ACTIONABLES: Positives of Big Tech Company Cultures - Lessons for Careers
- ==== Big Consumer, E-Commerce, Internet Companies in Depth
- Entertainment, Social Media, Advertising
- Big Consumer Services
- Big Cloud, SaaS, and Software Companies
- Big Hardware Companies
Books to do
- Seth Godin Books This is Marketing
Big Tech - Common Key Facts and Trends
HUGE Size Big Tech Cos
- Amazon, Apple, Facebook and Google are trending to become trillion dollar market cap, already combined exceed the GDP of India
Reach Users: Deep and wide across Billions of Users
App domination - shown here FB dominates, but so does Google Maps, xlate, and WeChat, etc.
Users are addicted - millenials spending huge part of their lifetimes in these social media apps.
Know Users in Depth = Invade YOUR Privacy
Knowing more about you helps them profit more!
High Growth => Superior stock performance
- as of 2016, 5 yr past growth has been
FB 43%, CRM 32%, AMZN 26%, TripAdvisor 25%, Priceline 25%, Google 21%, RHAT 18%
Non tech companies that grew fast - ALSO did great on stock markets (past 5yrs 2016)
- Welltower >50%
- Alexion Pharma 37%
- Cognizant 22%
- American Tower 19%
- Equinix 18%
- Under Armour 30% - but fell apart on loss of franchise and bad acquisitions
High Profit Margins - getting better yoy
- All the big tech as well as other companies that have had above average (>15% REVENUE growth), as well as strong profit margins (high ROIC, ROA), are growing both EPS very strongly.
Nearly all S&P500 companies use their economies of scale and bargaining position with suppliers to improve internal productivity, and net margins year after year.
However tech companies use the wonders of technology and bleeding edge R&D to ALSO improve their internal algorithms and processes.
For example "pity any media company that is not google .. " both improving click through rates, reducing costs of click through pricings.
Voice is replacing User Interface/Screens - Amazon owns 70% of voice
Disrupt by Eliminating Friction in lives of Millions of Consumers
The tech companies used technology to disrupt and reduce the “friction” includes every obstacle in the way of satisfying a given desire.
This is how they got huge - by fighting the entrenched masses.
Own search - Price super low to get users hooked to your platform
Today, it’s possible to purchase anything online, from books, to beer, to batteries, and, within a day, have it delivered to your doorstep – all without getting up from the couch.
DNA Key Factors - How they got Huge
Used MEGA Home base to expand globally
The Big US Tech companies have thrived within a hyper-consumer, de-regulated capitalist culture. - Starting in America, then rapidly scaling throughout the world, - China's firewalls
Manipulate YOU to buy more, Stay in their proprietary Walled Gardens
- Google - killing Yelp, other map providers
Recurring Revenue Relationships are FAR better than starting from scratch
- PRIME membership 58% >> own a gun 44% or go to church 51%
- Replaced cable subscription with a subscription to a pipeline.
Look for Vision and Growth over Profits - the Amazon story
- While big Five have both high growth and profit, the strongest one is the Amazon.
The SP500 are trapped in the "profitability" box - cannot invest in R&D or growth as their stock would be broken!
Amazon - huge valuation - but low profitability
- Netflix - keeps losing money - pulling more money into content, huge debt.
Run by Algos : Data Mines and Recommends Content to ENGAGE
Facebook uses all your pieces of data to predict the kind of content that you are likely to enjoy because of your own parameters. So it will show you content which is likely to align with your previous opinions, preconceptions and interests. It’s in Facebook’s interest to do this, because they want you to feel happy while you are on their site. However, this has a tendency to lock people into the same trend they currently are pursuing, and polarizing society. FB algorithms have full control of the content that you do see, even if it greatly polarizes your world view.
Secure Home base, Using profits to Expand into Huge Side Markets
Strive for Global Reach
Any contender to the throne would need to make a product that can reach consumers in any part of the globe. This would likely be a partially digital product.
Be a Cunning Thief - Copy and Extend
The Big Techs are all cunning thieves
Apple's Steve Jobs created a game-changing computer by blatantly stealing Xerox’s idea for a mouse-driven graphical user interface now known as the desktop. Though the desktop was Xerox’s brainchild, the company didn’t have the resources nor the ability to fully realize its vision, leading to Apple, who knew how to build computers and incorporate software, being able to swoop in and take the idea. The rest is history.
Microsoft, copied Apple's graphic system.
Google Copied Apple's iPhone to make Android succeed.
Google gathers information from around the web and then provides us with a “valuable free service” – the ability to search the information it has gathered. While the “borrowed” information Google’s property, Google still profits from it. For example Yelp and Pinterest are being slowly killed by Google featuring equivalent content in easy to use side bars and google reviews and images.
Facebook functions in a similar way by allowing users to create content – and then selling the data revealed by that content to advertisers. But Facebook isn’t really stealing our vacation photos or our impassioned posts; it’s just “borrowing” them.
Amazon, lures in sellers by inviting them to use its platform to find new buyers. Once these sellers start selling on Amazon, however, they must then begin competing with Amazon, because Amazon will start “borrowing” newcomers’ business ideas to offer similar products at lower prices. It also forces them to advertise to get proper positioning and all sellers must give MFN pricing often cutting profits - it is a take it or lose it proposition.
Key Factors behind Big Tech
There needs to be a superior product than any of “the four” companies’ products. It would likely need to be in a category that doesn’t constitute the main strengths of any of “the four”.
Each of “the four” have a uniquely defined vision which pictures the future world a certain way. Amazon, for instance, strives to deliver items seamlessly and allow to buy any product in the world, while Google strives to control all information in the world. These high level visions attract the largest of investors.
Likability Strong seeking of Positive Image - We are NOT evil
Learning from Microsoft, it has become very important for a company of such size. This allows them to avoid government scrutiny. We are already starting to see this factor slip for each of the 4 companies mentioned here, causing them to receive some negative attention.
Vertical Integration - Control of Lifecycle
Independence and Full Vertical Integration allows them to have full control over their entire product delivery process: from conception to distribution. “The Four” all have this.
AI is what allows these companies to have insider knowledge about the consumers that their competitors do not have. They achieve this by collecting and analyzing vast amounts of consumer and business data.
Steve Jobs took the idea of the mouse and desktop computer from Xerox. He was just able to bring it to market, whilst Xerox could not do so.
Attract BEST Talent - Accelerant - Attract Top Global Talent
They have constant early access to the best, brightest and cheapest talent that becomes available on the market.
A factor that attracts top talent by letting them know that their career can be accelerated by working there.
Heavy investment in R&D, Technology Based - Geography of Innovation
Each of the four companies is near a top American university (Stanford, UC Berkeley, University of Washington - Amazon had strong ties with Princeton also), and have great relationships with them.
=== ACTIONABLES: Positives of Big Tech Company Cultures - Lessons for Careers
Get a Strong College Degree
On average, college graduates make 10x more money than people with only a high school education. Another alternative is certifications in specific skills. Having the certificate gives you authority and a credential to set yourself apart.
Relocating to a Strong Global City
Cities have a concentration of wealth and opportunities. 90% of new jobs are created in big cities in the world. The best in this regard are - - SF - NY - Austin and Dallas, TX - Singapore - Hong Kong
EQ, Maturity, Calm under stress, Reward Influencers
One thing clear from success at Big tech is they reward overall strength of character, and versatility. The ability to stay “emotionally mature” and calm under stress.
Life Long Learning as need to upskill in changing technology environments
Constantly learning new skills will continue to be highly valued in the future.
Ownership of your responsibility, project or business is the next important quality. It comes out from an innate desire to achieve results, and if missing, then even a skilled person will not try hard enough. Ownership is an enabler and multiplier that makes a difference between just an employee who follows orders and someone that treats each task as their own baby.
Build your Brand and Social Media Presence
Get on all the social channels, and broadcast your professional presence to the world. If you don’t do this then other people who do will have a big advantage over you.
Change is speeding up, Data Driven Decisions, AI/Big Data already here
People who embrace the pace of change, stay curious and learn new skills will be favored for future opportunities. This is partly because of Machine Learning and the potential to automate non-creative, repetitive tasks.
==== Big Consumer, E-Commerce, Internet Companies in Depth
Own the Product search habit
- Amazon is rapidly increasing search - this is old 2016 data, but now 70% by 2019.
Amazon - Consumption focus
- more people have Prime than go to church or own a gun
Past 5 years annualized growth rate AMZN 26%
Amazon feeds us with anything we may need — be it food, fashion, books or technology. Amazon has recently become the #1 starting point for all consumer goods purchases in the United States and is spreading to other countries fast as the go-to destination.
Bought Whole Foods - stores near wealthy "whole check" seller.
Amazon grew by killing brick and mortar - avoiding expenses, and till recently didn’t pay sales taxes.
It is a superb efficient machine, and is growing so fast.
Dark side is it doesn't treat their employees well. There are many articles on the internet complaining about the conditions in Amazon’s distribution centres.
Dark: Amazon is destroying tens of thousands of jobs
By one estimate, the growth Amazon experienced in 2017 destroyed roughly 76,000 jobs. N
Due to its size, Amazon is able to sell far more than basically any competition they might have. This puts competing companies out of business, thus destroying thousands of jobs in the process.
And Amazon doesn’t necessarily create jobs, either. Have you ever questioned why there are so few pictures taken from inside Amazon warehouses? Well, there’s a reason for that: these warehouses are eerily devoid of people. Indeed, Amazon’s human workforce is increasingly being replaced by robots and mechanization.
The world’s largest retailer, with almost half a billion active users.
It accounts for 63% of Chinese retail (as of Oct, 2017) - however it is very limited to China as Alibaba doesn’t have global reach.
Alibaba is currently tightly coupled to the Chinese government.
With almost 12,000 physical stores in total, out of which more than half (6,300) are outside the US. 270 million weekly customers and 2.2 million employees.
Has seen mixed results in its attempts for continued expansion into emerging markets.
A longer history and more experience than Amazon.
In China since 1996. In India since 2009.
Likability can also be thought of as a weak point for Walmart, due to the low wages for most of its workers. The company has also been seen as a threat to small businesses.
Entertainment, Social Media, Advertising
Past 5 years annualized growth rate FB 43%
Facebook taps into the basic human condition of needing social interaction and personal connections. It helps us stay up-to-date on our current friends, reconnect with old friends, message each other, discover new friends and also receive tiny dopamine snacks of chemical pleasure when someone likes our content. Facebook can make us feel truly happy due to satisfying our social needs, such as celebrations, events, and interactions with like-minded people.
Facebook is our gateway to human communities, friends and family. Facebook has the most digital consumers socially connected in one digital space, ever in history: one-sixth of the world’s population.
Dark: Fb deeply knows your personal data.
Every interaction that you do on Facebook is linked against your private details: your age, gender, location, or any other of the hundreds of personal details and behavioral characteristics.
Dark: Content can be biased - Manipulate Elections
Facebook refuses to take responsibility for the content that’s posted on its platform. This helps them keep costs down, because they do not need to hire content editors. Because Facebook is not a news source, they are not obligated to try and present unbiased content.
Dark: Facebook sells all our most private information to the highest bidder. Facebook sells the metadata that results from our posts, comments and engagement behavior to advertisers.
Google - Thirst for knowledge
Past 5 years annualized growth rate Google 21%
Google knows the answer to every question instantly. Google can provide answers on the most intricate and detailed questions you may have about life, by tapping into its massive reserves of internet and user behavioral data.
We end up trusting Google more and more. Therefore Google becomes a “modern day confessional”. All these queries leak information about us to Google, which they then can mine endlessly. You may, for example, search the name of your previous romantic partner, telling Google that you are still thinking of that person. Or you may search for disease symptoms, indicating to Google that you have specific problems with your health.
Dark: They watch everything you do every minute of every day. You probably give more information to Google regarding your behavior and thought patterns than you do to your significant other or family.
Dark Ads served using your secrets. the information they need to dominate the advertising space — endlessly optimizing the ads and offers you see online, based on your search habits. Google claims not to actually own this behavioral information, but they profit solely from it all the same.
- Owns YouTube - #1 social media company.
Fail: Hardware efforts have failed despite HUGE billions of investments. Motorola bought and divested at loss of billions - only useful thing was residual portfolio of patents.
Dark: Google lobbies against antitrust rulings accusing them of eliminating their competition by prioritizing their own products and services over smaller competitors in internet search results.
Big Consumer Services
Consumer Services has had High Growth
Past 5 years annualized growth rate TripAdvisor 25%
Past 5 years annualized growth rate Priceline 25%
This ride sharing service has a fleet of over two million drivers (as of 2017), makes Uber the preferred mode of transport in many large cities.
Uber is in 80 countries and 600 cities, so it has global reach.
Uber has strong company vision and the big data acumen that’s comparable but slanted differently from “the four” companies.
Likability, however is low, due to Travis Kalanick’s forced resignation. There are also rumours and controversy surrounding the tracking of people in real time, “shadow banning” of users, and singling out people who are threats to the company and to their platform.
Big Cloud, SaaS, and Software Companies
Past 5 years annualized growth rate CRM 32%
Microsoft - Professional Tools, Networks
Owns LinkedIn, which is a rising star in social networking. If linked in keeps gaining and retaining its users, as facebook interest continues declining, this can be one of the strongest assets that makes Microsoft a candidate to potentially outpace the “big four” club. Microsoft also controls the internals of 90% of the worlds computers with their Windows operating system product.
Big Hardware Companies
IBM - retains mainframe - few new sales
Acquired RHAT at a huge premium as its past 5 years annualized growth rate over 18%
Apple - Sexy one
Apple gives us sex appeal through their lush products, which are unjustifiably expensive for what they do. Apple is the most profitable company of all time. Apples products are widely considered to be not technically superior to the competition, however their sex appeal and luxury is what drives sales.
OWNS PROFITS IN PHONES. Apple’s 2015 profits were more than $53 billion. These numbers are unheard of for any single company. In 2016, even though Apple controlled only 14.5% of the smartphone market, they were able to make 79% of all the profit in that whole sector.
Premium pricing model, combined with simple, sleek designs that give their products sex appeal and a strong trend factor. They, at the same time, have a high profit ratio due to the low cost of their manufacturing process compared to their high product prices.
Dark: Apple did not follow a court order to unlock phones for terrorist attack investigations.
Sony - lost out to digitization of Media
The Four: The Hidden DNA of Amazon, Apple, Facebook and Google by Scott Galloway
- Why is it so hard to ditch Apple, Amazon, Google and Facebook? | WIRED UK
- The Four Scott Galloway Review (Summary)
- Four Summary
- Who are “The Four” and how are they reshaping our world ?— Some personal insights & reflexions (inspired by author Scott Galloway, French President Emmanuel Macron and Terminator )
- Scott Galloway - The Four - What To Do - YouTube
- Book review of The Four: The Hidden DNA of Amazon, Apple, Facebook and Google by Scott Galloway - The Financial Express
- The Four (Scott Galloway) — Book Summaries: EP49 - Alexei: App maker, interested in many topics. - Medium
- The Four – Scott Galloway Review Summary – ConsciousED
- The Four -
- The Four | Scott Galloway | Soundview Book Review