I thoroughly enjoyed going through these pictures, and you probably will too.
Here are three things I’d recommend you read about Amazon, to get a better sense of the company and what it has been up to:
I thoroughly enjoyed going through these pictures, and you probably will too.
Here are three things I’d recommend you read about Amazon, to get a better sense of the company and what it has been up to:
Capital Mind, one of my favorite blogs to read, recently posted an excellent write-up on how Bharti Airtel is faring over the last three to four years. You might have to sign up in order to read it, but happily, Capital Mind allows you a free trial, so you should still be able to access it.
Why do I think you should read it, and why am I talking about this today? Because we need to think about telecommunications, technology, monopolies, scale, regulations, FDI in order to understand why Amazon may well be interested in buying Airtel, or at least in owning a stake.
Airtel has issued a boilerplate disclaimer since, but, well. Come on.
But hang on a second. We first need to get a basic framework in place, before we start thinking about everything else.
Our framework will consist of three things (or actions) that we tend to do on the internet, three international behemoths that are very, very interested in India, and three telecommunications firms that are very heavily invested in India.
First, the three things that all of us tend to do on the Internet. We create content, we consume content and we engage in commerce.
Let’s begin with the one in the middle. When you’re lying on your sofa at three in the morning, flicking through Netflix’s endless library of content, you are very much a consumer. When you roll your eyes at the latest dripping-with-insanity forward you receive on your family Whatsapp group, you are a consumer of content online. When you run a search for a PDF that will help you finish an assignment in college: consumer. For most of us, the internet enables us to consume stuff at levels that have never before been possible. Music, videos, podcasts, the written word: all consumption.
Now let’s move on to the one on the left: creation. You weren’t around when I wrote these words that you are reading, but I was creating stuff. Your latest Instagram story? Creation of content. The latest GIF that you created before sharing it? Creation of content. Do you upload videos on Insta/YouTube/Vimeo? Do you blog? Do you create podcasts? All content creation.
And finally, the reason Jeff and Mukesh are as rich as they are: commerce. Online shopping is literally blowing up in front of our eyes in terms of value. Amazon, Flipkart, Nykaa, all of Jio’s online shopping, MakeMyTrip, Oyo, Airbnb, Uber, Zomato… the list is endless, and exhausting. That’s the third thing you do online. Commerce.
Ah, you might say. What about a Whatsapp call with friends, or a Skype call with family, or a Zoom online seminar (god help us all)? That’s arguably consumption and creation at the same time, no?
Well yes. Or call it communication.
Creation and consumption of content are really two sides of the same coin, and when they happen simultaneously, they are all of what we spoke about in the last paragraph.
There is a world of thinking to be done about the blue rectangle on the left. About how Google cornered the consumption of stuff online using Gmail, Google Maps etc, by piggybacking on it’s search monopoly, and about how Facebook took away the search monopoly by creating its own walled garden and making Google search irrelevant within it, and how Google tried to respond with Google Buzz-no-Wave-no-Plus-no-WhateverNext and failed… and this can go on. But here’s the quick takeaway:
When it comes to content creation, or content consumption, or communication, Google and Facebook have the market pretty much tied up between them. The battle for who wins between them will continue for a while, and it will be a fascinating story, but for our purposes, it is enough to realize for today that Google and Facebook are mostly on the left. That’s not entirely true (Google Play Store, Froogle, Facebook Marketplace being just some examples), but it’s good enough for now.
Google and Facebook are mostly communication based firms who dabble in commerce.
And Amazon, of course, is the easiest example to think of when it comes to online commerce. The Amazon app, sure, but also its delivery and logistics arm, and, of course, AWS. If I want to buy stuff online, Amazon is literally the first – and more often than not, the only – thing that comes to mind. Zomato and Swiggy for food, Uber and Ola for travel, OYO and Airbnb for hotels/lodging, MakeMyTrip/Cleartrip/Yatra for travel are also very valid examples. But we’re, as consumers, not passively consuming content over here in this space: it is a very specific transactional approach.
But then things began to get complicated.
Consider Amazon. Commerce company, very much so. But what about Amazon Prime Video? What about Amazon Prime Music? What about Amazon Photos? What about Alexa and the Echo family?
Or consider Google. What about, as we have already mentioned, the Google Play Store? What about Froogle? What about Play Movies, Play Books?
Our neat little framework now has overlaps, and there are insurgencies along this virtual boundary. But we can add to our framework to help us keep it relatively simple:
Google, which is a firm that started life as a software firm, then started to make hardware as well (Nexus, Pixel, Chromebooks, Pixel tablets, Google Glass etc). Of course people could create and consume content on these devices. Of course these devices would help Google learn more about the people who owned these devices. But wouldn’t it be great (Google thought) if we could make moaarrrrr money by using this gleaned information ourselves? Hey, let’s get into commerce.
Facebook tried to say the same thing, but with rather more limited success.
And Amazon, a firm that started life as an online seller, started to make hardware as well, precisely so as to learn more about people’s consumption habits online and offline. That’s the Echo devices, the Kindle, the Firestick and so on.
And don’t forget Apple! They no longer can rely on selling hardware alone for growth, mostly because they have already sold all the devices they possibly can to as many people as they possibly can (at least in the USA, but they’re coming for you too). And so, services! Apple Music, Apple TV, iCloud – all of these are not hardware related, they’re all about consumption of content.
So even our latest attempt at simplifying the framework fails, because none of these blue rectangles are neat and delineated: firms from every blue rectangle want to be present in the creation, consumption and commerce space.
They want to do this for a variety of reasons, but the most important reason is simply the following: they’d much rather get a “360 degree” view of their consumer, without having to rely on some other firm to share information.
If, for example, Jio manufactures the device I use to go online (JioPhone), and I log on to that device to watch JioTV, and visit Ajio to buy clothes using that device, and post about the sneakers I just bought on a social media platform owned by Jio (or well, something like that), then I’ve obviated the need for Google! Neither the device, nor the steaming platform, nor the shopping platform, nor the social media has anything to do with Google. How then, does Google know me enough to advertise effectively to me?
But, if I use a Pixel phone to stream content on my Chromecast device, and buy a pair of sneakers on Flipkart (well, in a parallel universe…) and post about it on whatever is Google’s next attempt to build a social media platform, I’m living entirely in the Google Universe.
It’s no longer about companies living in one blue rectangle, you see. It is about one company dominating all blue rectangles, and so knowing everything there is to know about the consumer. That’s the end game here.
And speaking of all blue rectangles…
And that, my friends, is why Amazon wants to be friends with Airtel, Google wants to be friends with Vodafone.
Because Mukesh has his finger in each of these pies, and Mark has acknowledged as much.
Homework: as a consumer, and as an investor, which of the three are you betting on? Amazon, Google or Jio? Why?
“Alexa, play Hush, by Deep Purple.”
That’s my daughter, all of six years old. Leave aside for the moment the pride that I feel as a father and a fan of classic rock.
My daughter is coding.
My dad was in Telco for many years, which was what Tata Motors used to call itself back in the day. I do not remember the exact year, but he often regales us with stories about how Tata Motors procured its first computer. Programming it was not child’s play – in fact, interacting with it required the use of punch cards.
I do not know if it was the same type of computer, but watching this video gives us a clue about how computers of this sort worked.
The guy in the video, the computer programmer in Telco and my daughter are all doing the same thing: programming.
What is programming?
Programming is the art and science of translating a set of ideas into a program – a list of instructions a computer can follow. The person writing a program is known as a programmer (also a coder).
Go back to the very first sentence in this essay, and think about what it means. My daughter is instructing a computer called Alexa to play a specific song, by a specific artist. To me, that is a list of instructions a computer can follow.
From using punch cards to using our voice and not even realizing that we’re programming: we’ve come a long, long way.
It’s one thing to be awed at how far we’ve come, it is quite another to think about the path we’ve taken to get there. When we learnt about mainframes, about Apple, about Microsoft and about laptops, we learnt about the evolution of computers, and some of the firms that helped us get there. I have not yet written about Google (we’ll get to it), but there’s another way to think about the evolution of computers: we think about how we interact with them.
Here’s an extensive excerpt from Wikipedia:
In the 1960s, Douglas Engelbart’s Augmentation of Human Intellect project at the Augmentation Research Center at SRI International in Menlo Park, California developed the oN-Line System (NLS). This computer incorporated a mouse-driven cursor and multiple windows used to work on hypertext. Engelbart had been inspired, in part, by the memex desk-based information machine suggested by Vannevar Bush in 1945.
Much of the early research was based on how young children learn. So, the design was based on the childlike primitives of eye-hand coordination, rather than use of command languages, user-defined macro procedures, or automated transformations of data as later used by adult professionals.
Engelbart’s work directly led to the advances at Xerox PARC. Several people went from SRI to Xerox PARC in the early 1970s. In 1973, Xerox PARC developed the Alto personal computer. It had a bitmapped screen, and was the first computer to demonstrate the desktop metaphor and graphical user interface (GUI). It was not a commercial product, but several thousand units were built and were heavily used at PARC, as well as other XEROX offices, and at several universities for many years. The Alto greatly influenced the design of personal computers during the late 1970s and early 1980s, notably the Three Rivers PERQ, the Apple Lisa and Macintosh, and the first Sun workstations.
The GUI was first developed at Xerox PARC by Alan Kay, Larry Tesler, Dan Ingalls, David Smith, Clarence Ellis and a number of other researchers. It used windows, icons, and menus (including the first fixed drop-down menu) to support commands such as opening files, deleting files, moving files, etc. In 1974, work began at PARC on Gypsy, the first bitmap What-You-See-Is-What-You-Get (WYSIWYG) cut & paste editor. In 1975, Xerox engineers demonstrated a Graphical User Interface “including icons and the first use of pop-up menus”.
In 1981 Xerox introduced a pioneering product, Star, a workstation incorporating many of PARC’s innovations. Although not commercially successful, Star greatly influenced future developments, for example at Apple, Microsoft and Sun Microsystems.
If you feel like diving down this topic and learning more about it, Daring Fireball has a lot of material about Alan Kay, briefly mentioned above.
So, as the Wikipedia article mentions, we moved away from punch cards, to using hand-eye coordination to enter the WIMP era.
It took a genius to move humanity into the next phase of machine-human interaction.
9/There was no stylus..no pen. How could one input or be PRODUCTIVE? PC brains were so wedded to a keyboard, mouse, and pen alternative that the idea of being productive without those seemed fanciful. Also instant standby, no viruses, rotate-able, maintained quality over time…
— Steven Sinofsky (@stevesi) January 27, 2020
The main tweet shown above is Steven Sinofsky rhapsodizing about how Steve Jobs and his firm was able to move away from the WIMP mode of thinking to using our fingers.
And from there, it didn’t take long to moving to using just our voice as a means of interacting with the computers we now have all around us.
That leaves the business model, and this is perhaps Amazon’s biggest advantage of all: Google doesn’t really have one for voice, and Apple is for now paying an iPhone and Apple Watch strategy tax; should it build a Siri-device in the future it will likely include a healthy significant profit margin.
Amazon, meanwhile, doesn’t need to make a dime on Alexa, at least not directly: the vast majority of purchases are initiated at home; today that may mean creating a shopping list, but in the future it will mean ordering things for delivery, and for Prime customers the future is already here. Alexa just makes it that much easier, furthering Amazon’s goal of being the logistics provider — and tax collector — for basically everyone and everything.
Punch cards to WIMP, WIMP to fingers, and fingers to voice. As that last article makes clear, one needs to think not just of the evolution, but also about how business models have changed over time, and have caused input methods to change – but also how input methods have changed, and caused business models to change.
In other words, understanding technology is as much about understanding economics, and strategy, as it is about understanding technology itself.
In the next Tuesday essay, we’ll take a look Google in greater detail, and then about emergent business models in the tech space.
Five articles that I enjoyed reading this week, with a couple of sentences on why I think you might benefit from reading them.
The extent to which Amazon, via the Kindle, tracks your reading habits. Most of this article did not come as a surprise to me, and of course the Kindle and the books on it are as cheap as they are precisely because Amazon makes money by tracking precisely what this article says they do. Personally, I am OK with that – but you might want to read this before you make your own decision.
Could Amazon’s monopoly over the publishing industry change the nature of books themselves? As a result of the economic pressures of the streaming industry, the length of the average song on the Billboard Hot 100 fell from 3 minutes and 50 seconds to 3 minutes and 30 seconds between 2013 and 2018. Will books be the next art form to be altered? Greer said it is possible.
“Never underestimate the power, or willingness, of tech companies to do almost anything to make a little extra money – including shifting the entire way we make music or read and write books,” she said. “They are perfectly willing for art to be collateral damage in their pursuit of profit.”
The equilibrium is being solved for in Vancouver, by observing the lack of an equilibrium in other cities. On Uber, Lyft, British Columbia, and the last mover advantage:
“A decade after Uber got its start, and eight years after Lyft changed the ride-hail model by allowing anyone to use their everyday car to pick up passengers, British Columbia thinks it has nailed how to regulate these companies, which have often slipped into the gray areas between transportation and labor laws. Call it the last mover advantage. Government officials in the province have spent years studying how other places dealt with an influx of ride-hail vehicles—and the sometimes unfortunate effects they had on local transportation systems.”
Vivek Kaul explains one application of the law of unintended consequences in this article in the Livemint, about onions.
When prices of an essential commodity, like onions, go up, state governments can impose stockholding limits. This leads to a situation where wholesalers, distributors and retailers dealing in the essential commodity need to reduce the inventory that they hold in order to meet the requirements of a reduced stock limit. The idea is to curb hoarding, maintain an adequate supply of the essential commodity and, thus, maintain affordable prices. This is where the law of unintended consequences strikes. Instead of ensuring prices of the essential commodity remain affordable, ECA makes it expensive.
Small governments aren’t necessarily great governments, but large governments don’t always do well either. But if you must choose when it comes to government, size does too matter! Via Marginal Revolution.
The plots do not support the hypothesis that small government produces either greater prosperity or greater freedom. (In reading the charts, remember that the SGOV index is constructed so that 0 indicates the largest government and 10 the smallest government.) Instead, smaller government tends to be associated with less prosperity and less freedom. Both relationships are statistically significant, with correlations of 0.43 for prosperity and 0.35 for freedom.
Samanth Subramanian on the joy of quizzing.
To attend these contests, quizzers rearrange the furniture of their lives, budgeting their time away from their families, or ensuring that they don’t travel overseas for work during a quiz weekend. I know one quizzer who switched jobs because his city’s quiz scene wasn’t active enough; I know another who scheduled his wedding to avoid a clash with a quiz. Once, while we were waiting around for a popular annual quiz to begin, a friend remarked that his wife was heavily pregnant; he hoped she wouldn’t go into labour over the next few hours. That would be unfortunate, we agreed.
“No, you don’t understand,” he said. “If my daughter’s born today, that means she’ll have a birthday party on this date every year. Which means I can never come to this quiz again.”
My daughter, all of six years old, doesn’t really know what a computer is.
Here’s what I mean by that: a friend of hers has a desktop in her bedroom, and to my daughter, that is a computer. My laptop is, well, a laptop – to her, not a computer. And she honestly thinks that the little black disk that sits on a coffee table in our living room is a person/thing called Alexa.
How to reconcile – both for her and for ourselves – the idea of what a computer is? The etymology of the word is very interesting – it actually referred to a person! While it is tempting to write a short essay on how Alexa has made it possible to complete the loop in this case, today’s links are actually about understanding mainframes better.
Over the next four or five weeks, we’ll trace out the evolution of computers from mainframes down to, well, Alexa!
Five articles from The Ken today.
This is not, by any means, either an endorsement or a recommendation to subscribe to The Ken, neither do I have any contacts at this website. I have been a subscriber for a while now (though not yet a paying one), and I wanted to share a selection of their free articles to acquaint you with their write-ups, their business, and to familiarize you some alternative business models in the world of media.
With a mission to electrify 30% of its vehicles by 2025, what share does India have of this global, lucrative and largely Asian manufacturing pie?
On trying to understand why India doesn’t have a gigafactory yet – and might not in the near future, with a short concluding section on how to make the best of what is a bad situation.
5. “Hotstar’s watershed moment came in May 2019, when it broke its own global record of 10.3 million concurrent viewers. 18.6 million watched the final game of the Indian Premier League (IPL) cricket tournament during the weekend of 11-12 May. It shattered the record again in July when 25.3 million tuned in to watch India take on New Zealand in the Cricket World Cup semi-final.
But its appeal isn’t just sports. Hotstar has given viewers major titles like Game of Thrones—which it said was its most popular show in 2019—and blockbuster films like Marvel’s Avengers: End Game.”
On understanding Hotstar better.
Five articles about spends during the festive season in India this year: