
The scale of tech winners - mercutio2
http://ben-evans.com/benedictevans/2017/10/12/scale-wetxp
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rdlecler1
>”There probably won’t be a technology that has 10x greater scale than
smartphones, as mobile was 10x bigger than PCs and PCs were bigger than
mainframes, simply because 5bn people will have smartphones and that’s all the
(adult) people.”

Well written. Although I’d argue that IoT + AI will be 10x bigger (and more).
Yes, there are finitite humans, but for every human we could have hundreds,
even thousands, of devices. At some point those won’t be consumer devices,
they’ll mostly be D2D. We’ll be analyzing the macro market and building new
devices that can partake in this new market and we may not always understand
the emergent behavior. At some point we’ll start evolving these devices so
that they’re as individual as you or I, even with the same hardware. For the
first 10,000 years technology was an incredible uphill climb, we’re now
hitting an inflection point where it’s fast ice all the way down.

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skinnymuch
I'm not sure about those being 10x bigger in terms of pure numbers. But it's
possible. Some multiplier when compared to smartphones is def possible.
There's a chance something with IoT or AI will happen or come out in a decade
or two that will be so obvious and so ubiquitous and not limited to just one
persons use or only one is wanted per person.

Like I said in another child comment, smartphones for 5B people is already
playing a bit loose with the device usage. A decent number of phones out
already are cheap or old Androids or iPhones that are five generations old. A
number of those people don't use their smartphone as many readers on HN might
use theirs.

So thinking that way with some future advances with IoT, automation, and/or
AI, there could be something that comes out and is wanted in mass numbers,
more than one per person.

But really. Who knows :p

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leggomylibro
10 things per person is 10x bigger.

Hm...what if someone had a removable eink tattoo to sell you? But nah, you
could argue that the app market is already way more than 10 per device.

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CamelCaseName
Is 10x the revenue considered 10x bigger?

If so, I see driverless vehicles (or the driverless vehicle's OS) as an
obvious 10x market.

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leggomylibro
Yeah, that could do it.

Further reading:
[https://en.wikipedia.org/wiki/Trucks_(short_story)](https://en.wikipedia.org/wiki/Trucks_\(short_story\))

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norswap
I'm not too convinced by the relevance of these groupings (GAFA vs Wintel).
For one, Intel is a hardware company. And Microsoft seems to do well in a lot
of key areas.

Also, isn't Oracle on the same scale as the other that are mentioned?

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chinathrow
Apple is also mostly a hardware company.

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skywhopper
Apple is almost entirely a hardware company, revenue-wise. Microsoft is almost
entirely a software company. Amazon is a retail (revenue-wise) and IaaS
(profit-wise) company. Facebook and Google are advertising companies.

~~~
skinnymuch
Apple has been aiming for 20% of their revenue to be services. Though really
they are mostly tied to their hardware. Much like Microsoft hardware, Surface,
which is doing better than I was expecting, is there for their software like
you state. And Google's successful ventures like Android and Chrome are there
for keeping their data and advertising going.

~~~
foobarchu
Even if they achieve that, they are still a hardware company, because those
services are linked to the vendor lockin they've spent years cultivating.
Nobody would use any of their services without the hardware, so they will
always be a hardware company in the end.

~~~
skinnymuch
Yeah for sure.

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dmarlow
"three times the revenue of Microsoft and Intel combined"

I would think profits are a more reasonable metric for the overall comparison.
Amazon alone has a huge disparity between revenue and profits.

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nostrademons
Depends what you're measuring. Shareholders (ultimately) care about profits,
but if you're a pundit trying to predict the impact of technology on human
populations (as Ben Evans ultimately is, though he works for a shareholder),
revenues is a more relevant metric. It shows "how many dollars flow through a
company", rather than "how many dollars does the company get to keep"; the
former is a metric for how much impact the company has, while the latter is a
metric for how efficiently it generates that impact.

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maneesh
Exactly. To dive one more dimension in, if a company is extremely profitable,
that is typically a sign that the company doesn't know how to deploy their
capital towards growth. High profits are often a sign of stagnation in a
corporation.

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coolkomal
Looks like more people are supporting this argument in the media.

[https://techcrunch.com/2017/10/22/ask-not-for-whom-the-
deadp...](https://techcrunch.com/2017/10/22/ask-not-for-whom-the-deadpool-
tolls/)

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d--b
It's not really a fair comparison. Apple is the only one that compares to
wintel. Amazon should be compared to Walmart, Google and Facebook to media
companies like TimeWarner. Perhaps Gafa is not 10x bigger than wintel + tw +
Walmart

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warrenm
Amazon competes with Walmart for selling crap

But they're also a hardware company (Kindle, Fire, etc)

And a media company (Prime Video, etc)

And a logistics company

And a *aaS company

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warrenm
>in the past, tech companies always talked about buying premium TV shows but
didn’t actually have the cash, but now it’s part of the marketing budget

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hueving
>”There probably won’t be a technology that has 10x greater scale than
smartphones, as mobile was 10x bigger than PCs and PCs were bigger than
mainframes, simply because 5bn people will have smartphones and that’s all the
(adult) people.”

Why is the presumption that the next technology is limited by the number of
humans? I buy food nearly every day so the multiplicative factor is 300x
myself in that regard.

A technology that significantly changes everything can easily move the entire
economy to the point where everything depends on it and everyone is buying it
every day (think electricity).

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muzani
Is this adjusted for inflation? It warps the data quite a bit if it isn't.

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elgenie
Did you look at the graph?

"Annual revenue ($bn, real)"

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CalChris
The article is about companies. But for startup employees, I've always thought
of baseball:

    
    
      foul       layoff.
      strike     getting fired.
      strikeout  your at bat, for whatever reason, is over.
    
      single     AKA a job.
      double     a well paying, secure, somewhat prestigious job
                 with a decent stock option payout, a house.
      triple     early employee and financial security.
      home run   8+ figures after taxes.
      grand slam billionaire unicorn founder, successful exit.

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bhalperin
"The division of labor is limited by the extent of the market"

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empath75
I think this can mostly be expected due to the size of the markets these
companies are playing in— it’s much easier to build a truly global business
than in the past— as well as the increasing size of the economy in general.
Just due to a power law distribution, the big winners are all going to be
bigger than ever. The largest should be twice as large as the second largest,
and three times as large as the third largest and so on.

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pkaye
Isn't Apple a big tech company of the past even though they are quite
successful at this time?

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HocusPocusLocus
Meanwhile the number of homeless grow.

It's like two separate worlds.

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drharby
Relevancy to OP?

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cyberpunk0
What do you think happens to people due to gentrification brought on by these
companies?

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adventured
Gentrification didn't cause the vast expansion of homelessness in the 1970s
and it didn't cause it in the last decade either. They were both caused by the
same things.

1) a terrible healthcare system that neglects mental health problems and 2)
zero income growth for 40 years due to massive dollar debasement over that
time, which has eaten the poor alive (the rich can hedge a 80% decline in the
value of the dollar since 1970, the poor cannot). The great recession -
courtesy of the Fed's intentional asset bubble party - and the Bush dollar
debasement (war, out of control spending & deficits), gave us the increase in
poverty since 2006.

