Learning and experience curves

“The difference between learning curves and experience curves is that learning curves only consider time of production (only in terms of labour costs), while experience curve is a broader phenomenon related to the total output of any function such as manufacturing, marketing, or distribution”

looking for data of experience curves on Electrolysis I found this

on this paper on cost trajectories of main electricity storage technologies

scales of S-curves, network effects

This is a point Reid Hoffman makes in Blitzscaling: network effects are nice when a company grows, but they’re terrible when it’s subscale.

Marketplaces are so hard to get rolling that you should expect to take heroic measures at first. In Airbnb’s case, these consisted of going door to door in New York, recruiting new users and helping existing ones improve their listings.

mostly you have to choose the scale of your desired S-curve, where newtork effects can bu built, the egg and chicken death loop risolved with some affordable marketing effort

Groupon -> sign up merchants in a city and get user to signup with percks, cinema tickets in citydeal

These are basic concepts but nicely explained here Surfing the Right S-Curve

Tesla what s written in the numbers

current valuation might imply 30 to 50% market share in the future but let’s look at it like a tech and not a car company

sustainable advantage in batteries? It is claimed by Musk, is it real ?

Tesla is an operating system with around a car, car design turned upside down. Will it translate into a sustaiable advantage vs car producers?

Tesla first at autonomous drive with Autopilot, famously claimed in a keynote where Tusk promised your Tesla could work for you as a Taxi while you don’t use it

Imagine Tesla can pack all these unique features in a skateboard other producers can customize with fancy bodies. The skateboard is the operating system in a android-mobile phones analogy

There is a tech story that holds, but theere is also 3 checks to performs, answer the 3 questions, will Tesla really be able to be consistently ahead of all car makers in the world ? In the end, will it be economies of newtok and winner takeall like in software and social networks? Let’s see

Managerial concept I missed

the whale ! Customer Profitability Whale Curve https://demonstrations.wolfram.com/CustomerProfitabilityWithTheWhaleCurve/ (found on the Management Myth

Cash Conversion Cycle (negative for Apple) https://www.investopedia.com/terms/c/cashconversioncycle.asp#:~:text=The%20cash%20conversion%20cycle%20(CCC)%20is%20a%20metric%20that%20expresses,into%20cash%20flows%20from%20sales.

Trailing Free Cash Flow FCF

https://www.investopedia.com/terms/t/trailing-fcf.asp#:~:text=Trailing%20free%20cash%20flow%20(FCF)%20measures%20a%20company’s%20free%20cash,over%20a%20period%20of%20time.&text=A%20trailing%20twelve%20month%20FCF,from%20the%20previous%20twelve%20months.

“Amazon is run for cash, not net income. Jeff Bezos always says that he runs it for ‘trailing 12 months’ absolute free cashflow’, not net income”

Apple, Windows, strategy and product development

Steve Sinofsky, lead at MS dev team for Apple software, knows both worlds well

https://medium.learningbyshipping.com/apples-relentless-strategy-and-execution-7544a76aa26

commenting on Apple switch to own silicon in Macs, toos 2 years, it is at once a short time for such a deep change affecting the entire product ecosystem, very long one if you think indeed you are committing an entire ecosystem to it and for 2 years you keep going whatever will happen

“16/ To execute requires everything in the company to operate as though strategy matters most. It means communication. Performance reviews and rewards. It means management top down reinforces it and isn’t “random” or “inconsistent”. That is so difficult internally. Painful even.”

15/ It is incredibly clear that everyone at Apple puts strategy requirements above anything “local”. When you wonder why there isn’t more new in Notes or why Mail is missing stuff it’s because supporting a multi-year strategy trumps individual teams and that’s a good thing.

Covd-19 winners and losers (tech)

Artificial intelligence definitely loser, phisicians were faster to retrain than  neural networks, even in imaging AI was a pain in the ass trying to solve problems that did not exist while not properly trained

Blockchain big loser, tracing app need to track individual contacts in full respect of privacy, with decentralized protocols. Blockchain to the rescue ? Nah, Google and Apple provided it for Android and iPhone

3d Printing not the general technology people hoped for few years back but oncle an ICU runs out of cheap ventilator valves and the producer isn’t quick to restock, a bunch of hackers save live3d printing hackers save lives, and that happened all over the world

Genetics Moderna messenger RNA vaccine has started human trial first, ahead of all other vaccines developed with more traditional technologies. Let’s whether the mRNA approach works and genetics makes the difference in this crisis

Moats, gross margins and strategy sounding fluff

Moats Before (Gross) Margins

so you got to have gross margins, fat gross margins. But you end up doing only software

but you know Apple has not SW margins but it is a good company.

Gotta have moats moats moats, baby

so what are htese moats? Founders feeling the crisp air of the morning while standing on top of the tower and look beyond their moats. The fascination of military metaphors that is strategy 🙂

BTW of course a fixation on gross margin is ok if you have to win the startup race on the internet, everyone will have a go at the next tool, platform, aggregaotor and we know the rules of competition there. But then strategy does not stop there

Moats are just a beautiful, inspiring image

Confirmation bias and New Thought

“By 1890, this stream of religious philosophy had morphed into a set of mystical beliefs in the power of thought to affect the material world beyond the self”

“Elements of New Thought have recently seeped into strategic thinking through literature on leadership and vision”

Excerpt From: Rumelt, Richard. “Good Strategy/Bad Strategy”. Apple Books.

also, confirmation bias from Fooled by Randomness, who has made money feels optimist until maybe they blow, maybe they don’t.

Helicopter VC Money

1. some says the stock market has matured, all blue chips company are pretty much well managed, so it does not really matter picking the right one, so passive investing

2. But some other noted that if you take out the value created by a 4% of high-performers the rest of the pubblic companies just thred water, so pick thos 4% and grow rich. So pick the google and facebook early. Buy a crystal ball

3. Or just get into any seed round you can, because someone says this is the best way to gt into those winners

1. would Maubouissin in this paper The Incredible Shrinking Universe of Stocks

2. would be The best-performing four percent of listed companies explain the net gain for the entire U.S. stock market since 1926, as other stocks collectively matched Treasury bills

3. is Angel List If you miss the best-performing seed investment, you will eventually be outperformed by someone who blindly invests in every credible deal.