I can& #39;t post the whole report, but by popular demand, here are a few additional excerpts from my farewell note at Bernstein:
(1/x) https://twitter.com/modestproposal1/status/1300483043006779392">https://twitter.com/modestpro...
(1/x) https://twitter.com/modestproposal1/status/1300483043006779392">https://twitter.com/modestpro...
2/ This note was originally my boss Toni& #39;s idea, i.e. that I should finally put pencil to paper on all of the various tech / investing thoughts that had been floating around my head
The specific "maxims" are partly jokes, but hopefully with kernels of truth belying them
The specific "maxims" are partly jokes, but hopefully with kernels of truth belying them
3/ "Predicting the future is easy, making money is hard"
This maxim seemed to get the most traction on Fintwit (and I really do believe it)...
This maxim seemed to get the most traction on Fintwit (and I really do believe it)...
4/ There are *so* many examples of major tech companies being founded on failed ideas:
AWS (vs LoudCloud and IBM Utility Computing)
Virtually all SaaS companies (vs the ASPs of the late 90s)
Google (vs Altavista)
Tesla (vs the GM EV1)
Spotify (vs Pressplay / MusicNet)
AWS (vs LoudCloud and IBM Utility Computing)
Virtually all SaaS companies (vs the ASPs of the late 90s)
Google (vs Altavista)
Tesla (vs the GM EV1)
Spotify (vs Pressplay / MusicNet)
5/ "In short, predicting the future of technology is easy: just look at what& #39;s already failed, and assume that somebody will eventually make a version that actually works"
Incentives matter. Execution matters. Luck matters!
Incentives matter. Execution matters. Luck matters!
6/ "The forecast is always off by a factor of 2 - just don& #39;t ask me in which direction"
This second maxim probably resonates with anyone who& #39;s ever worked on the sell-side...
When it comes to forecasts, nobody knows anything. Always distrust straight lines on charts
This second maxim probably resonates with anyone who& #39;s ever worked on the sell-side...
When it comes to forecasts, nobody knows anything. Always distrust straight lines on charts
7/ Linear extrapolation is a fool& #39;s errand in tech, where results can be mean-repelling just as much as mean-reverting
Not to call out my former employer, but we undershot our original iPhone forecast in 2006 by 5x and our EV battery cost forecast in 2011 by 4x...
Not to call out my former employer, but we undershot our original iPhone forecast in 2006 by 5x and our EV battery cost forecast in 2011 by 4x...
8/ "Any sufficiently advanced software is indistinguishable from magic"
This third maxim lays out something that everybody knows but nobody talks about - why has value in the tech stack accrued over time to software instead of hardware?
This third maxim lays out something that everybody knows but nobody talks about - why has value in the tech stack accrued over time to software instead of hardware?
9/ My thesis: hardware inherently trends towards standardization (i.e. it& #39;s just assembling semiconductors into a plastic box), while software inherently trends towards differentiation (i.e. the virtual nature of code lends it infinite degrees of freedom)
10/ "All business is either bundling, or unbundling"
This 4th maxim explains why Apple can still succeed even if hardware is a commodity - there& #39;s always value in vertical integration or disintegration
This 4th maxim explains why Apple can still succeed even if hardware is a commodity - there& #39;s always value in vertical integration or disintegration
11/ Apple captures value by vertically integrating hardware with exclusive software. So does Netapp, Cisco, and anyone else who makes money in hardware
In fact, bundling vs unbundling arguably explains the *majority* of tech industry value transfers in the last 25 years
In fact, bundling vs unbundling arguably explains the *majority* of tech industry value transfers in the last 25 years
12/ "The multiple matters just as much as the growth"
Sorry guys, I couldn& #39;t resist fitting at least one truly hot take in here...
Sorry guys, I couldn& #39;t resist fitting at least one truly hot take in here...