The Internet Economy

We are living in an era of bundling. The big five consumer tech companies — Google, Apple, Facebook, Amazon, and Microsoft — have moved far beyond their original product lines into all sorts of hardware, software, and services that overlap and compete with one another. But their revenues and profits still depend heavily on external technologies that are outside of their control. One way to visualize these external dependencies is to consider the path of a typical internet session, from the user to some revenue-generating action, and then (in some cases) back again to the user:

When evaluating an internet company’s strategic position (the defensibility of its profit moat), you need to consider: 1) how the company generates revenue and profits, 2) the loop in its entirety, not just the layers in which the company has products.

Craigslist, Wikipedia, and the Abundance Economy

You’ve heard it before. Maybe you’ve even said it. “There’s no such thing as a free lunch.”
“You can’t get something for nothing.”

“Somebody has to pay.”

People recite these sayings with confidence, as though they were quoting Newton’s Laws of Motion.
But history has shown: you often can get something for basically nothing.

And even when somebody has to pay, that somebody doesn’t have to be you, and the amount doesn’t have to be very much at all.

In some cases, the benefits so vastly outweigh the costs that it is — for all practical intents and purposes — a free lunch.

How we eradicated Polio from the face of the Earth

The Shut-In Economy

Angel the concierge stands behind a lobby desk at a luxe apartment building in downtown San Francisco, and describes the residents of this imperial, 37-story tower. “Ubers, Squares, a few Twitters,” she says. “A lot of work-from-homers.”

And by late afternoon on a Tuesday, they’re striding into the lobby at a just-get-me-home-goddammit clip, some with laptop bags slung over their shoulders, others carrying swank leather satchels. At the same time a second, temporary population streams into the building: the app-based meal delivery people hoisting thermal carrier bags and sacks. Green means Sprig. A huge M means Munchery. Down in the basement, Amazon Prime delivery people check in packages with the porter. The Instacart groceries are plunked straight into a walk-in fridge.

This is a familiar scene. Five months ago I moved into a spartan apartment a few blocks away, where dozens of startups and thousands of tech workers live. Outside my building there’s always a phalanx of befuddled delivery guys who seem relieved when you walk out, so they can get in. Inside, the place is stuffed with the goodies they bring: Amazon Prime boxes sitting outside doors, evidence of the tangible, quotidian needs that are being serviced by the web. The humans who live there, though, I mostly never see. And even when I do, there seems to be a tacit agreement among residents to not talk to one another. I floated a few “hi’s” in the elevator when I first moved in, but in return I got the monosyllabic, no-eye-contact mumble. It was clear: Lady, this is not that kind of building.