Stratechery, Ben Thompson
Dropbox Comp, 2/26/18
I chose this article because one, I have a good friend who had a similar idea to Dropbox before Dropbox existed and I had no idea what he was talking about when he told me about his business plan at the time. Smith, let’s call me friend, still has a similar data storage business with his brother, but if he had sold his company twelve years ago, holy shit Smith would be rich. Instead, though, Smith is still fine with a nice house in the ‘burbs, a good wife, a couple of kids and a burgeoning art collection. I’m not sure that there’s a point to this other than it’s curious how things break…
And second, I am not nor have I ever been a fan of Dropbox. I have used Dropbox for work and for personal I almost always hit the data limit. Maybe it shows my age, but I will always prefer to have my data on a hard drive where I can physically access it. I use Google Drive, but this is only for my document storage and organization. The major storage I need is for photos, video and audio and Dropbox is shyte for this.
In his post, Ben Thompson draws a line between Dropbox and Box. While Dropbox has marketed to individuals, Box markets to larger firms with a top down approach. It’s a tradeoff that results in Dropbox spending more money marketing and not allowing them to differentiate. Box also has more potential for revenue growth, but there’s an interesting tradeoff: because Box has to pay so much more in marketing per customer, they have shown slower growth and their earnings are so diluted that their owner only owns 5% of the company as compared to 23% for Dropbox.
While Dropbox’s future is not at the cutting edge of enterprise computing, their storage system is still valued at $10bb. Not bad for what looks to be staid growth in the future.
This kind of hearkens back to Thompson’s previous observations about IBM, Microsoft and Google: companies may innovate all they want but in the end, a core product is what makes money.
The Aggregator Paradox, 2/21/18
The argument that Thompson offers here is the for too long (months, weeks?) Facebook ignored it’s only advertising free offering, their News Feed, in aggregating user data. Facebook is losing the advertising war with Google because it does not offer the speed with which Google’s Accelerated Mobile Pages (AMP) pushes publisher content more quickly and specifically while Facebook’s Instant Articles does not align quickly enough marketing and publisher content.
Thompson’s final argument is that this competition between the top two news and advertising aggregators only helps consumers because both of their services are free. I’m not sure that I really care, although this is important info. Because most people get their news from SEO searches on Google or on the Facebook News Feed, the trick then is how to get one’s media organization priority in both of those. I don’t see either Facebook or Google going away so the strategy for media organizations remains the same for the time being…
Derek Thompson, The Atlantic
The Most Expensive Comment in Internet History? 2/23/18
This article interviews Ryan Holiday about his book and at the time inside access to Peter Thiel’s grudge against Gawker Media being played out in court in a lawsuit he funded for Hulk Hogan after Gawker released a tape of Hogan having sex with a friend’s wife.
I am a fan of Gawker and still follow the media suite sans it’s founder and original site. They very much still, as Thompson asserts, “epitomize the barbed brilliance of New York’s young media crowd.” How did this barbed cadre piss Thiel off then? By outing him as gay and saying “more power to him.” Yep. The lesson to media startups then? Don’t piss of billionaires who’ll bear a grudge.
There’s not much more to the interview other the interesting story of how the Hogan video was set up by a shock jock DJ who wanted dirt on Hogan and then the video surfaced because another DJ, who wanted the original’s time slot, stole the video and leaked it.
My observation is that one, it’s good that Gawker Media’s matured into a semi-classy organization that supports specific demographics (African American’s with The Root, women with Jezebel, etc.), but they had that potential all along. It’s a scary world where a billionaire with a grudge can take down an entire media organization.
Wait a minute… did I just type that? That’s the world we’ve always lived in. A media organization with global aspirations eithers blossom into Vice Media and joins the parade of billionaires or gets ground down in the machine. It’s the way of the world. Always has been and always will be.
Airbnb and the Unintended Consequences of ‘Disruption’ 2/17/18
Hahaha, Thompson’s previous post eerily presages his Thiel coverage with an almost Thielian quote. Thompson says that, “we were supposed to get flying cars, instead we got Netflix.” Thiel said the same thing with a different internet startup: “we were supposed to get flying cars, instead we got 140 characters.” Weird…
Thompson goes on to describe how, with Air BnB as an example, the tech disruption ain’t really what it looks to be. Sure, Air BnB is the second most valuable startup in history at $31bb, just behind Uber. But, instead of driving hotels out of business, hoteliers are making more profits instead.
Because Air BnB caters to young, urban travelers and hotels to business travelers, there hasn’t been much disruption…in that market. What Thompson observes, though, is that Air BnB has affected something else more significant: rent.
When downtown housing is used year-round for travelers instead of renters, this leaves a dearth of housing and higher prices.
Seeing as I’m on my second place in six months in Eugene, that I’m lucky to have scored it and slept on a tile for for seven days instead of my truck, I’d argue that Thompson has identified at least a factor. If homeowners can make more money renting out their place on weekends than dealing with tenants, why not?
How do we solve this issue? That’s a question Thompson doesn’t address. But movements like the River Road Neighborhood Initiative that I am covering, who call for more urban, dense housing surrounded by communal institutions with local businesses they’re supporting could be something, even if it is a bit pie in the sky idealistic.