Technology company or not ?

AVC: give software valuations only to software company becuase onlòy those can sustain >75% gross margins. Software is eating the world but still software companies have higher margins than non SW. The Great Public Market Reckoning

Stratechery follows Christensen in saying that a technology company is one that can offer something intrinsically more valuable thanks to disruption – What is a tech company?

Bill Gurley replies to AVC with his 2011 mammoth post on startups valuation titled All Revenue is Not Created Equal: The Keys to the 10X Revenue Club

Mauboissin Competitive Advantage Period or CAP that explains valuation in firms with lasting competitive advantage Competitive Advantage Period “CAP,” The Neglected Value Driver

in the news, IPO’s of pure tech (SaaS etc) outperform transactional platforms and hardware first https://twitter.com/DKThomp/status/1183898414695755776

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drones, cruise missiles and strategic balance

cheap cruise missiles with autonomous GPS guide are a new threat, do they change the strategic balance? More

https://www.thedrive.com/the-war-zone/29874/the-strike-on-saudi-oil-facilities-was-unprecedented-and-it-underscores-far-greater-issues

Economst wrote about cheaper missile, rocket galore in 2012

not really related, sort of catch all post, 2008 RAND war games featuring Cina and US carriers

Click to access 2008_RAND_Pacific_View_Air_Combat_Briefing.pdf

How good i stealth? https://nationalinterest.org/blog/buzz/how-good-stealth-f-22-and-f-35-anyway-82791?page=0%2C1

F-35 tracked bu german radar vendor at air show ? https://www.c4isrnet.com/intel-geoint/sensors/2019/09/30/stealthy-no-more-a-german-radar-vendor-says-it-tracked-the-f-35-jet-in-2018-from-a-pony-farm/

Building moats

Moats, growing popular concept

frameworks and charts from Measuring the Moat from here:

also Measuring the Moat – Credit Suisse by Mauboissin sound Porter framework of industry and competition analysis

Strateachery’s Moat Map relating to difference Platforms vs. Aggregators, network effects internlized vs. externalized

(Ryan Reeves 3d collecting all strategic frameworks ) https://twitter.com/investing_city/status/1176629867594387456

 

von Neumann defines games

“Chess is not a game. Chess is a well-defined form of computation. You may not be able to work out all the answers, but in theory there must be a solution, a right procedure in any position. Now real games,” he said, “are not like that at all. Real life is not like that. Real life consists of bluffing, of little tactics of deception, of asking yourself what is the other man going to think I mean to do. And that is what games are about in my theory.” (von Neumann)

From “Strategy” Lawrence Freedman

VC power curve

6% of the deals make 60% of the profits

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VC’s performance is driven by how big are their hits, not how many their flops

Screenshot 2019-06-10 at 14.45.18

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from Ben Evans “In Praise of Failure”

found on Chen of a16z  “Why startups are hard — the math of venture capital returns tells the story”

Found at Fred Wilson’s https://avc.com/2019/09/the-hit-rate/

the rate of return of the whole VC industry correlates perfectly with the share of investment generation 10X+ returns

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Mc Luhan quote on tools

“We shape our tools and thereafter our tools shape us” — Marshall McLuhan

Ben Evans “Hence, channeling Marshall McLuhan, new tools start out being made to fit the existing workflows, but over time the workflows change to fit the tools.”

https://www.ben-evans.com/benedictevans/2015/5/21/office-messaging-and-verbs

In a post speaking of Slack and sw envirnments for productivity

“Ironically, Lotus Notes, one of the earliest corporate messaging programs, was intended to be much more than email, calendaring and so on – there was a vision of a unified development environment, database and messaging system – ‘groupware’. It didn’t quite work out like that, and actually using Lotus Notes as I had to 15 years ago was rather like using an email client built with Microsoft Access – theoretically possible but not a very good idea. OLE in the 1990s was another concept that didn’t quite work, embedding pieces of one program’s document inside another. But today, Facebook’s platform on the desktop is pretty much Ray Ozzie’s vision built all over again but for consumers instead of enterprise and for cat pictures instead of sales forecasts – a combination of messaging with embedded applications and many different data types and views for different tasks. Hence, one could propose one future model as ‘Facebook for the enterprise’, but with the platform, not the social, being the point of the analogy.”

started from a post on Microsoft capitulation, giving up on Windows everywhere which in hindsight helped to go back on top of the tech world

https://www.ben-evans.com/benedictevans/2015/7/8/capitulation

This is turning into Ben Evans quotes “That is, Google tests new opportunities to see if they fit in the same way that a shark bites a surfer to see if they’re a seal. If not, you don’t change Google to fit the opportunity – you spit out the surfer (or what’s left of him). ”

Google as a “vast machine learning engine”

https://www.ben-evans.com/benedictevans/2015/4/14/what-does-google-need-on-mobile

 

Moats vs. pace of innovation

like a re-run of Maginot line vs. blitzkrieg, strategy (management) falls back into war-like metaphors

Economist today on Buttonwood – Buffet, value investing, moats The quest to find companies that have a lasting competitive edge