ReportsStats Q3 2018

“Competing without software is like competing without electricity.”
-Naval Ravikant (2016)

1. DRIVERS OF CREATIVE DESTRUCTION

“The great lesson in microeconomics is
to discriminate between when technology is going to help
you and when it’s going to kill you.” -Charlie Munger (1994)

MOBILE FIRST

“The smartphone is the sun
and everything else orbits it.” -Ben Evans (2015)
follow
7.7b world population. Of them:
5.7b adults → age > 15yrs (74%)
8.5b mobile connections, SIM cards (111%)
5.1b unique mobile phone users (67%)
USA passed 50% of homes being mobile-only in 2017
3.8b smartphones, installed base (50%)
2.3b Android, 0.9b iPhones, 0.6b Chinese Android
🥇Samsung, 🥈Huawei, 🥉Apple
Huawei on track to become #1 by 2018E, overtook Apple in Q2
3.0b+ unique smartphone users (39%)
6.7b w/ electric power (87%)
5.5b TV users (72%)
3.1b w/ access to working toilets (41%)
1.4b cars (18%)
1.3b PCs (17%), 1.1b Windows, 0.2b Mac + Linux
0.6b tablets (7.8%)
43% of children aged 2-4 own a tablet (USA) vs 59% aged 5-8
20% of USA households own a voice-activated smart speaker
outpacing adoption rates of smartphones (which are seeing 0% growth)
18% of adults (USA) own a smartwatch

THE NEW U. N. (pop≈MAU)

“No nation imagines itself
coterminous with mankind.” -Benedict Anderson (1983)
read 📚
Security Council’s permanent members:
2.3b Christianity (30%) watch: 15:15s → 21:56s
2.2b Facebook (28%)
1.8b Islam (23%)
1.5b WhatsApp (20%)
1.4b China (19%)
Security Council’s non-permanent members: latest 🗺️
1.4b India (18%)
1.1b Hinduism (14%)
1.0b WeChat (13%)
1.0b Instagram (11%)
800m QQ (10%)
550m Qzone (7.2%)
510m European Union (6.7%)
430m Sina Weibo (5.6%)
335m Twitter (4.4%)
330m USA (4.3%)
Not represented in the General Assembly:
1.2b non-religious (15%)
1.1b people with no legal identification (14%)

THE INTERNET

“On the Internet, nobody knows you’re a dog.” -Peter Steiner (1993)
4.1b active internet users (54% of world pop)
3.8b active *mobile* internet users (93% of internet users)
790m in China > pop of Europe
vs 480m in India, 230m in USA
3.8b email users (95%), 3.2b active social media users (80%)
Wordpress powers >30% of the *entire* internet
vs web porn traffic claims of 5% to 20%
monthly unique visitors (USA, aggregate brand sites)
245m Google, 210m Microsoft, 210m Facebook
17 Mbps avg d/l speed for mobile (4G LTE)
vs 14 for WiFi, vs 48 for fixed broadband
77 operators in 49 countries: pre-commercial 5G trials 2017
USA to pioneer: high-res video + AR/VR will drive early adoption
proliferation of unlimited data plans, mobile data up 25% (YoY 2017)
SpaceX’s Starlink plans global internet coverage via satellites
~1% of internet data on Surface web (indexed by search engines)
vs 99% on Deep web (not indexed by search engines)
fastest growing data on the internet
Dark Web: 100% anonymous
$1 for a SSN, $20k to hire a hitman, $100k if target is VIP

CLOUD COMPUTING

“Computing Big Bangs = cloud (AWS, 2006) +
consumer mobile (iPhone, 2007).” -Mary Meeker (2018)

2b people use personal cloud storage (26% of world pop)
60% of internet users have used cloud storage
if byte of data = 1 grain of rice, then:
kB ≈ 1 cup, MB ≈ 8 bags, GB ≈ 3 shipping container lorries
$0.028/GB cost of cloud storage (2017), vs $569/GB in 1990
$0.05 cost of 1m transistors (2013), vs $527 in 1990
$0.09 cost per instance on AWS (2018), vs $0.4 in 2008
world’s most powerful supercomputer: IBM-built “Summit”
USA regains title after years of Chinese dominance
world’s highest-capacity microSD card: SanDisk Ultra microSDXC UHS-I
400GB at $130, stores ~40hrs of full HD video in stock
world’s largest-capacity SSD: Nimbus Data 100TB ExaDrive DC100 SSD
people/businesses continue relentless “march to the cloud”
30% of total IT budgets (2018) → cloud = SaaS +IaaS + PaaS
iPhone 6 CPU transistors = 625x 1995 Pentium transistors
Google Drive: 1b MAU, 4m enterprise customers
Dropbox: 500m users (12m paying), $10.9b mkt cap
fastest SaaS company to $1b/yr recurring revenues (🏁=8.3 yrs)
announces integration with Google G Suite
Box: 62m users (11m paying), $3.4b mkt cap

THE BLOCKCHAIN (aka DISTRIBUTED LEDGER TECH)

“Bitcoin is the real Occupy Wall Street.” -Julian Assange (2017)
$216b network value of all 2k+ altcoins/tokens read 📚
16 crypto-assets w/ network value > $1b
1 BTC > 5.6x Gold oz, bitcoin overtook gold in Mar-2017
17m+ BTC circulating, 21m to ever be produced, 3.6m to mine ($6k+ ea!)
Coinbase has 20m users, available in 30+ countries
$8b latest valuation, up from $1.6b in Aug-2017
“energy-hungry” bitcoin to use 0.5% of world’s electricity by 2018E
anonymous/decentralized trust enabled by blockchains: expensive read 📄
security of blockchain is linear to expenditure in mining power
vs door lock increases house security by more than cost of the lock
cost for an attacker to take over 51% of mining network:
$9b+ in hardware, $6m+/day in energy consumption
top DLT patent holders: 🥇Alibaba=90, 🥈IBM=89, 🥉Mastercard=80
USA adoption status = mainstream: fig 1, pg 3
Delaware: mandatory shareholder’s list → OK on a blockchain
Nebraska: bill LB 695 → smart contracts are enforceable
Ohio: blockchain data → legally protected e-information
Topics on cryptocurrencies/blockchain added to CFA exams
Crypto e-commerce: CraigsList, WordPress (WooCommerce), Wix.com
World Bank issues first blockchain bond, CommBank sole manager

ROBOTS

“Drones will be as ubiquitous as sprinklers.” -Chris Anderson (2017) follow
iPhones+Android phones sold > Japanese cameras *ever*
1.4b iPhones sold (since launched) vs 30m GoPro
$4k for Puck VLP-16, Velodyne’s cheapest LiDAR in stock
Boston Dynamic’s bipedal robot Atlas does backflip watch
soon for sale, over $1m but under $2m
vs Sony’s robot dog aibo sells for $2.9k pre order
MIT’s Cheetah 3: climb stairs and gallops *without* visual input watch
2m industrial robots, install base growing 12% YoY
120k warehouse robots “employed” by Amazon, 1:1 warehouse employees
Walmart to introduce grocery-picking robot Alphabot
10yrs ago drones were $m+ USA military secret tech
now Chinese drones rule the sky, DJI has ~75% mkt sh
$399 for Spark: its cheapest HD-video drone in stock
1.1m hobbyist drone fleet (USA), 870k registered owner-hobbyists
110k+ commercial drone fleet (USA), 75k certified pilots
autonomous fixed-wing airplane Zipline: top speed of 128 km/h
100km/h cruising speed, 160km range, 1.75kg cargo capacity
< 20% of Earth’s seafloor mapped (100% goal → 2030)
deploying: unmanned mapping barges + underwater vehicles
Saildrone charges $2.5k/day/drone to collect ocean data

MACHINE LEARNING (aka AI)

“The highest forms of understanding we can achieve
are laughter and human compassion.” -Richard Feynman (1988)

cpu power for AI training: 2x every 3.5mo, vs 18mo for Moore’s Law 🚨 READ report
22+ co designing custom chips for deep learning acceleration
Microsoft/Google speech recog >95% match, surpasses human threshold
Reading comp w/unanswerable questions: human performance = 86.831
🥇Microsoft=74.238, 🥈Fudan U=71.553, 🥉Alibaba=71.451
AlphaZero becomes best Chess and Go player Techmate 📰
starts from blank slate, no historical data, except game rules
24hrs to convincingly defeat world-champion programs in each case
FBI’s facial recognition database includes 50% of USA adult pop
CBP deploys Vehicle Face System scanning drivers’ faces
ICE has access to 2.2b license plate recognition database
200m surveillance CCTV cameras deployed by Chinese govt read 📰
Alibaba/Marriott test facial recog tools for automated check-ins
fake porn videos, ML maps celebrity faces onto performers’ bodies
combinations of ingredients to form metallic glass
scientists found 6k in 50yrs, vs ML → 20k in 1 yr
identifying skin cancer: AI = 95% accuracy > panel of doctors = 87%
breast cancer: doctor misclassification rate up to 30%
ChestX-ray8 has 100k+ chest X-Rays annotated images to train data
Paige.ai granted access to MSKCC database of 25m pathology slides

SOLAR ENERGY

“You don’t need a weatherman
to know which way the wind blows.” -Bob Dylan (1965)

0.0249$/kWh record-low solar energy contract, -100x since 1976 📈
learning rate: cost falls 22% for every doubling in capacity
new capacity global since 2012: renewable > fossil fuel
1TW of solar + wind gx capacity installed, 2nd TW to cost ~50%
USA coal power plant fleet: closed > those still open
Saudi Arabia (#2 oil producer) + SoftBank to build world’s largest solar farm
$200b investment will add 200GW in capacity
China’s 2018 new battery-storage capacity > Σ previous yrs
from gigafactories (60% production mkt sh) to ‘gigacities’
cumulative installed solar photovoltaic capacity (1H 2018)
🥇China=154GW, 🥈USA=58GW, 🥉Japan=52GW
USA: #2 source of new capacity additions in 1H 2018
on Sun 6-May-2018 solar panels generated 27% of UK’s electricity
vs 25% from natural gas + nuclear
cumulative installed wind energy capacity (1H 2018)
🥇China=184GW, 🥈USA=90GW, 🥉Germany=60GW
fastest-growing USA jobs: solar panel installers, wind turbine techs
CA: carbon-free electricity by 2045, utilities → 60% by 2030 by 1 vote
solar panel on all new homes, starting 2020
LA’s 220k street lighting poles: solar before 2028 Olympics

ELECTRIC VEHICLES (aka SMART CARS)

“Mr. Musk—who is 45 years old, the same age as Mr. Ford was in 1908
when he released the Model T.” -WSJ (2017)

4m+ EVs currently on the road, 0.4m electric buses escape velocity 📈
EV fleet: 🥇China=1.8m, 🥈EU=1m, 🥉USA<1m
350k+ Nissan Leaf sold: best-selling highway-capable EV starts at $30k
“ban all diesel cars” club: 7 of the top 10 economies
by 2030: India, Brazil, Italy. by 2040: China, Germany, UK, France
🇺🇸 🇯🇵 🇨🇦 → 😴
California: $7k subsidy to purchases of new clean cars
6%+ of vehicles sales in 1H 2018 = electric
LA: convert all 2.2k buses into zero-emission fleet by 2030
full EV lineup: Volvo (2019), Peugeot (2019), MBenz (2022), VW (2030)
Porsche: $8b by 2020 to electrify *entire* lineup, drops diesel
to deploy 500 fast chargers across 190 USA Porsche dealerships
EVs outnumber charging stations: USA=20:1, China=8:1, UK=6:1
UK: gas st, new homes, new street lighting columns → “must add”
ChargePoint plans 2.5m charging points by 2025, up from 53k
car dealers, brace for a lot of pain
50% of car maintenance → internal combustion engine
maintenance: $200/yr Chevy Bolt vs $600/yr VW Golf
going electric: bikes (Vespa/Harley Davidson), trains (Bombardier)
from vacuums to EVs: Dyson earmarks $2.6b for EV plant

CREATIVE CAPITAL

“An S&P 500 company is being replaced every two weeks.” -Richard Foster (2012)
30m total businesses in USA, 6.6k publicly listed companies
52% of Fortune 500 companies in 2000 → now extinct 📈
S&P500 mkt cap: Σ top 5 ≈ Σ bottom 282
S&P500 constituents cash position: 2x in 10yrs
top 5 co by mkt cap: hq=USA, exchange=USA, comp adv=tech/investments
#6 Alibaba → hq=China, exchange=USA, comp adv=tech/investments skeptics should not be silenced 📝
$160b investments by top 10 USA/China tech firms: 3x in 5yrs
40% = intangible assets, 30% = physical plant, 30% = deals
Softbank’s $1b vision fund: 3 HQs, 80 professionals, $100m min check go big or go home?
2011-17 USA company fundraising: private mkt > public mkt index watchlist
$75b invested by USA VCs (2017), $45b in 1H 2018
10 states with VC ecosystem >$1b: #1 (2017) CA>$36b, #2 NY>$11b
fundraising = blockchain’s killer app, code priced in real time
$14.4b+ via Initial Coin Offering “ICO” (Jan-Jul 2018)
1/3 new VC funds docs: explicitly allow purchase of crypto assets
$39b issued in P2P loans via LendingClub, 3.2m borrowers
$5b raised by social fundraising platform GoFundMe, 50m donors
$4b pledged to Kickstarter projects globally, 150k+ funded projects
$0.3b paid to 100k creators using Patreon
$0.3b raised via Facebook ‘birthday fundraisers’, 750k non-profits

SKILLS (aka HUMAN CAPITAL)

“Nobody owes you a career. Manage your career
so that you do not become a casualty.” -Andy Grove (1983)

learn to sell, learn to build. If you can do both → unstoppable
0 = *required* sales-focused courses @ Harvard/Stanford MBA
100% = company’s sales that comes from sales
100k/yr MBAs awarded (USA), vs $2k/tweet by a 100k followers influencer
programming = new literacy, 40% of USA schools teach it in 5-6 grade global education
25% of Goldman Sachs’ workforce (~10k) → computer engineers
25% of adults *unable* to use a computer (1.4b people)
AI skills: fastest-growing skills on LinkedIn
AI PhDs fresh out of school comp: $400k/yr (+ stock) leaked comp data 📰
vs >$100k avg blockchain developer salaries in NYC
Δ between engineering output = so high → best engineers = underpaid
if no price Δ between best and avg worker → occupation will disappear watch
6m USA jobs risk “degree inflation”: bachelor’s degree = skills
$26k for MS cpu/info tech from UPenn (full online via Coursera) apply now
3.5m cashier jobs vs 60m freelancers
UK pushes gig economy workers to access vacation/sickness pay
Canada announces “Digital Skills for Youth”: 1.2k paid internships
WeWork: largest office tenant in NYC
$0.4b/yr in-app tips for Lyft drivers, $0.6b/yr for Uber
vs <$400/mo earned by TaskRabbit workers

CHINA 从0到1

“The work ethic in Chinese tech companies
far outpaces their US rivals.” -Michael Moritz (2018)
read 📰
“9-9-6” schedule of Chinese tech employee: 9am-9pm, 6 day/wk
China pop = 4x USA, China tech employees = 10x USA
China PhD’s on AI > USA, much greater supply of STEM workers
China baffled w/ Silicon Valley’s hard time with hardware
in China: shipping atoms = shipping bits
Peter Thiel’s Zero to One, translated into Mandarin 必读
YC (top USA accelerator) announces startup program in China
Silicon Valley (10x innovation) terrified of China (20x), Europe (1x) USTR investigation
China R&D spending growing 18%/yr, vs USA at 4%/yr
USA semiconductor companies “holding the fort” → ⏳?
Chinese espionage stealing trade secrets, recruiting Americans read 📰
China = 25% of global VC (up from 5% in 2008)
Q2 2018: VC raised by China > USA, *first time ever*
China now mints more unicorns than any other country in the world
#1 unicorn: Ant Financial $150b (China) > 2x Uber $70b (USA)
$10b+ unicorns: China = 2x USA. Top 50: China = 2x USA, (EU=0)
23 IPOs 2018YTD: Chinese tech outpace USA selected F-1s: $CTK $QTT $NIO $XYF
China cuts restrictions, allows foreign majority ownership (some biz)
Tesla could now own 100% of an electric car factory in China
WeChat = the OS for the entire Chinese economy report

> > > > > > > > > > > > > > > > 中国的凯旋之旅 < < < < < < < < < < < < < < < <
“The most serious aspect of the American industrial invasion lies in the
fact that these incomers have acquired control of almost every new
industry created during the past fifteen years…What are the chief new
features in London life? They are, I take it, the telephone, the portable
camera, the phonograph, the electric street car, the automobile, the
type-writer, passenger lifts in houses, and the multiplication of
machine tools. In every one of these, save the petroleum automobiles,
the American maker is supreme; in several he is the monopolist.”

-Frederick Arthur Mackenzie (1901) 🚨 READ book

2. WINNER TAKES ALL download 1-pager

“You call it monopoly,
I call it enterprise.” -John D. Rockefeller (1911) watch episodes

APPLE (mkt cap $1.0+ *trillion*)

“Just the way he advertised:
Jesus, Gandhi, Me!” -Bill Burr (2012)
watch
$245b cash on balance sheet > Egypt’s GDP
1.3b+ active devices across: iPhone, iPad, Watch, Mac, iPod, AppleTV
60%+ of Americans own an Apple product
iPhone: most successful product of all times, #1 signal of USA wealth see chart
1.4b+ cumulative iPhones sold since launch (Q2 2007)
vs 400m Sony Walkman, 130m Nokia 3310 back in stock
$700+ avg selling price, vs $300+ for rest of industry
top-selling smartphone by dollar value in China
two tablet markets: iPads and generic cheap black plastic
iPad = 89% of tablets >$200 in USA, 35% worldwide
best-selling wearable, biggest watchmaker in the world
overtook Rolex, 15m/yr Apple Watch vs 1m/yr Rolex
Apple Watch sales > all Swiss watchmakers (Q4 2017)
Apple Watch alone would be a Fortune 300 company
Google pays $9b/yr to remain the default search engine on iOS devices
$22b+ App Store revenue (1H 2018) > 2x Google Play
500m walk into Apple’s 500+ stores, 50 in China alone
$10b+ spent in R&D (1H 2018) vs $12b for FY2017 (vs $7m in lobbying)
500m Siri users, 200+ open positions (all-time high)
Project Titan: 70 SDV, 140 drivers → #3 fleet in CA

AMAZON (mkt cap $0.9+ *trillion*)

“If Amazon is in your line of business: Sell now. If Amazon is not in
your line of business: Sell now; your business sucks.” -@GSElevator (2017)
Bezos Unbound 📰
#1 online retailer USA: 50% mkt sh (13x Walmart, 7x eBay)
5% of *all* USA retail
#1 online grocery USA: 18% mkt sh (2x Walmart)
1/3 of USA homes buy groceries online
#1 ebook seller USA: 83% mkt sh
#1 company by R&D spending: $23b (2017), vs $13m in lobbying
1.4k earnings calls mentioning ‘Amazon’ = 2x ‘Google’ or ‘Apple’
#1 cloud infrastructure provider: AWS=40% mkt sh
$20b in rev > Σ cloud (MSFT+GOOG+CRM+ORCL+BABA)
#1 voice-powered speaker: 65% mkt sh
50m Echo w/ 50k skills control 4k devices from 1k+ unique brands
Echo Dot = best-selling amazon.com product, any manufacturer/category get yours
#1 fulfillment co: 38 Amazon Air planes, 6k trailers, 20k Mercedes vans
#2 largest private employer in USA by FTE (#1 Walmart)
cashier-less Amazon Go stores → 3k by 2021: Seattle✔️ Chicago✔️
>50% units sold on Amazon 2017, from 3rd-party sellers
100m+ Amazon prime members (> Costco’s): $1.3k/yr member spending
vs $1k/yr by Amazon customer, vs $1.7k/yr by Echo owner
#4 in ads: surpassed Twitter+Snapchat. Going after Google+Facebook
50% product searches start/end on amazon.com, vs 35% google.com

MICROSOFT (mkt cap $0.9 *trillion*)

“Here comes the sun (doo doo doo doo).” -George Harrison (1969)
Windows + Office = the legacy business rev by product line 📈
88% mkt sh in desktop operating system
1.5b/day Windows devices (installed base)
1.2b/day Office users, largest productivity service available
165m/mo paid active users (commercial and consumer licenses)
31m+ Office 365 consumer subscribers (cloud version)
Office 365 = 2x G Suite’s penetration in businesses
400m Outlook users (100m mobile), 300m Skype users
Cloud + AI platform = new engine of innovation
$26b+ for LinkedIn (2016): 560m profiles, 18m companies posting jobs
$8b for GitHub (2018): outbidding Google, Amazon, Tencent, Atlassian
13% mkt sh (½x AWS, 2x Google) in cloud computing infra w/ Azure
QoQ growth = 2x AWS
Azure premium: 15 consecutive qtrs growing triple digits
150m/mo Cortana users
Word’s Resume Assistant (powered by LinkedIn) writes your resume
real-time translator: power point (60 langs), Skype (10 langs)
$13b spent in R&D in FY2017 (vs $8m in lobbying)
samples cashier-less technology to Walmart and other retailers
155m Minecraft copies sold, 60m/mo Xbox Live users

ALPHABET (mkt cap $0.8 *trillion*)

“Google searches are the most important dataset ever collected
on the human psyche.” -Seth Stephens-Davidowitz (2017)
read 📚
8 products with 1b+ MAU each
Search, Android, Maps, Chrome, YouTube, Google Play, Gmail, Drive
79% mkt sh in online search (desktop+mobile)
Android overtakes Windows as the *internet* most used OS
40%+ mkt sh, 3b active Android devices
Google Maps: satellite mapping outpacing Street View vehicles
2b Chrome installs in active use
#1 browser across all devices (60% mkt sh), vs Safari (#2, ~15%)
1.9b MAU on YouTube
1b videos captioned in 10 languages
1b Google Drive users
4m paying customers on G Suite
Facebook considering G suite instead of Office/Dropbox/Salesforce
$17b+ spent in R&D in 2017, vs $18m in lobbying (#1 in USA)
Google Assistant on 500m Android devices, available w/ 5k brands
5m+ Google Home smart speakers sold (Q2 2018), ahead of Echo again
leading employer of AI talent
13% ICML papers → Google/DeepMind author, up from 6.3% in 2017
Waymo’s fleet > 12m self-driving kms on public roads, 40k/km/day
logged more kms than all other competitors $100b+ valuation

FACEBOOK (mkt cap $0.5 *trillion*)

“If you’re offered a seat on a rocket ship,
don’t ask what seat! Just get on.” -Sheryl Sandberg (2012)
read 📰
2.5b people used at least one of Facebook’s apps per month
65%+ mobile social traffic, 20%+ digital ad revenue
80m biz profiles, 6m/mo active advertisers
Facebook: 2.2b MAU, 1.5b DAU
1.3b fake accounts closed (last 6 mos)
post CA-impasse: stock price & user engagement → *intact*
Messenger: 1.3b MAU with 500 FTE, 8b/month biz-ppl messages
goal: never dial a 1-800 number again
56% of people rather message than call customer service
400m/mo call/video chat, 20m businesses, 300k bots
WhatsApp: 1.5b MAU with 250 FTE, 65b/day messages
begins verifying biz accounts (green checkmark on profiles)
WhatsApp for business launched in USA, UK, Indonesia
click-to-chat button on website → message a business
Business API → biz respond using WhatsApp (Uber✔️)
Instagram: 1b MAU with 700 FTE, 450m/day stories
co-founders K. Systrom + M. Krieger quit
25m biz-specific profiles, 2m/mo active advertisers
blue checkmark = legitimacy seal, selling for $1k-7k on black mkt
$8b R&D in 2017 (vs $12m in lobbying)

TESLA (mkt cap $45b)

“Musk has made every Tesla customer
a venture capitalist.” -Steve LeVine (2016)

most valuable USA car makers: GM >≈ Tesla > Ford Damodaran’s valuation 📝
Tesla’s FTEs = 21% Ford, = 23% GM
best car ownership experience on the planet
buy online + mobile service (~30% of all service jobs)
autopilot “summons” vehicle to pull in/out parking spot watch
over-the-air *software-update* fixes stopping distance concern
models S,3,X awarded perfect 5-star safety rating by NHTSA watch at 0.25 speed
70k+ vehicles delivered in H1 2018
5k/wk goal Model 3 production → achieved
1m/yr production target by 2020: China confirms 0.5m/yr Tesla plant
Elon: “from production hell to delivery logistics hell”
Model S, starts at $77k, WR longest-range electric sedan
faster than any Ferrari or Lamborghini
Model X, starts at $83k, WR longest-range electric SUV
Model 3 starts at ~$50k, 420k+ reservations at $1k deposit
0-60mph in 5.6s, 210km/h top speed, 350km range
#1 by mkt sh: 23% of USA small-medium luxury cars
Roadster 2G, to be quickest production car ever: 0-60mph in 1.9s
reservations at $50k, ‘Founder Series’ → $250k *upfront* place reservation
$1.4b R&D in 2017: +2k Semi truck reservations (starts at $150k)

3. DISRUPTING THE INCUMBENTS

“The battle between every startup and incumbent
comes down to whether the startup gets distribution
before the incumbent gets innovation.” -Alex Rampell (2015) follow

DATING

“So, I asked him: What did you search?
And he goes: Jewish and my zip code!” -Aziz Ansari (2015)
watch
200m/mo use digital dating services pre app era 🤦
50%+ of top 15 apps by iOS revenue: dating
#1 place (USA) where singles met their last first date: app
56% of singles have created a dating profile
45%+ of singles have dated someone they met online
Match Group owns top brands: 8m paid members total
Tinder, Match.com, OkCupid, Plenty of Fish, Hinge
Tinder: 50m active users, 4m paid members
#3 app by consumer spend 2018YTD (AppStore+GooglePlay)
vs #2 Netflix → “Netflix and Chill?”
Bumble: 40m active users
$b acquisition offer by Match Group, rejected
Facebook launches dating service in Colombia, global roll-out to come
10m active members on ‘compensated dating’ app Seeking Arrangement
8m sugar babies, 2m sugar daddy/momma
1/7 of kids ages 12-17 have sent a sext (sex+text)
increases 4%/yr each additional year of age
UK’s compulsory age check for online porn, deadline delayed
porn is the biggest development in sexuality research ever
Pornhub network: 22m users, 115m/day visits, 100b/yr video views

RIDES

“The height of civilization isn’t the poor owning cars
but the rich sharing bikes.” -Horace Dediu (2017)
follow
NYC taxi medallion: from $1.3m (2013) to <$250k in Sep-2018
NYC considering cash bailout for medallion owners
80k ride-hailing vehicles vs 14k yellow cabs 📊
NYC Council votes to cap ride-hailing services to study impact
London proposes cap on ride-hailing: 115k drivers vs 24k black cars
first studies out: ride-hailing increased traffic congestion study 📄
Uber ($70b → 2019 IPO): moves more people than Σ airline industry
10b+ rides, 630+ cities, 65 countries, 3m drivers
Amazon of transp plan: bikes, scooters, cars, flying taxis, freight
acq bike-share company JUMP, partnered with e-scooter Lime first results 📝
Lyft ($15b → 2019 IPO): 21 consecutive qtr w/ 100% growth
1b+ rides, 640+ cities, 95% of USA pop, all 50 states, 2 countries
acq Motivate = 80% of USA bike-share (Citi Bike, Ford GoBike, etc)
daytime bicycles in London today = 4x 1999
China=16m bikes: Shanghai=1.5m (1:16 residents), Beijing=2.4m (1:5)
Ofo and Mobike claim 100m users in China’s tier-1 cities
Didi Chuxing+Ant Financial in talks buy Ofo for $2b
Mobike sold to Meituan Dianping for $2.7b
sidewalk wars: Lime ($1.1b) vs Bird ($2b), both co < 2yrs old unit economics

both companies *not* awarded operating permits in SF vis-à-vis growth 📈

ASSISTANTS

“Alexa is a revelation for the blind.” -Ian Bogost (2018)
people speak ~150 words/min, vs type ~40 words/min
voice speech recognition tech → open source
power-users by age: 25-49s=65%, 18-24s=59%, 50+=57%
smart speaker: best-selling and fastest-growing consumer gadget
17m shipped in Q2, 3x Q1 2018
100m installed base 2018E, 2x 2017 📊
China: fastest growing speaker market
Amazon’s Echo: 50m+ to date, 65% USA mkt sh, #2 in 1H 2018 sales
Microsoft Cortana integrated w/ Amazon Alexa, works on Xbox One
Sonos multi-voice smart speaker S13, supports Alexa first
Garmin’s car navigation Speak, powered by Alexa
Google Home: Mini → top-selling speaker in Q2 2018
30% USA mkt sh, but catching up fast
orders from Walmart and Carrefour enabled via Google Assistant
Bose QC35 II headphones, powered by Google Assistant
Ikea lightbulbs integrated with Google Assistant (and Alexa)
Bang & Olufsen’s BeoSound enabled by Google Assistant
Alibaba’s Tmall Genie: 800k sold in Q2, starts at $79
Apple’s HomePod: 700k sold in Q2, starts at $349
Baidu’s DuerOS: assistant available on 100m devices

COMMUNICATIONS

“😂 word of the year 2015” -Oxford Dictionaries (2015)
text messaging → most used data service in the world
3-Dec-1992: first SMS message, 20b/day today
vs 65b/day on WhatsApp, 40b/day on WeChat
50%+ of USA households no longer have landlines
2m+ developers on Twilio’s cloud communication API
customers lines to VoIP migration, target dates:
Deutsche Telekom (2018), Orange (2020), BT (2025)
Unicode approves 160 new emojis (2.8k total to date)
“Face with Tears of Joy” emoji = most popular emoji
most-used emoji on Twitter, 2.1x more than ❤️ (#2)
top langs for web content: 🥇English>50%, 🥈German>6%, 🥉Russian=6%
NSA collected metadata on 530m phone calls in 2017, 3.5x 2016
open source Signal Protocol powers the encryption of:
Facebook’s WhatsApp, Microsoft’s Skype, Google’s Allo
Slack ($7b → 2019 IPO): 9m DAU, 3m paying users, 70k paying co
500k orgs, including the Police Dept of Hartford, CT
~3t photos taken on film ever, 1t by iPhone users (2017)
most pictured: #1 scenery, #2 information I need to remember
50m/week listen to a podcast (USA)
Apple’s Podcasts app: 55% USA mkt sh, 550k shows, 20m episodes

FRAUD (ADS=PROPAGANDA)

“So it learns information about me?” -Ron Swanson (2017) watch
$200b+ USA ad industry → 50%+ digital
*mobile* ad spending > TV (first time by 2018E)
duopoly: Google + Facebook = 2x (print + radio ad industry)
Amazon ad revenue: $8b, 2x 2017
Global ad blocking users: 380m mobile, 230m desktop
120m active devices use Adblock Plus
700 ad networks w/ 100k+ clicks analyzed = 15% avg fraud
only 23 networks = fraud-free
8 networks = 100% fraudulent, 35 networks = 50% fraudulent
480 of the top 50k websites track visitors’ keystrokes
2b stolen passwords/usernames on the black market
Apple removes Adware Doctor (top paid Mac app, “Utilities” category)
app collecting user data, sending it to a server in China
60% of Gmail messages = SPAM
0.2% of top 1m sites → cryptojacking, hacker earns $6/day
FBI: 1 in 4 victims respond by wiring money to fraudsters (USA)
two types of orgs: been hacked, don’t yet know they’ve been hacked
$12m/yr: avg cost of cybersecurity for a firm (2017)
Adobe developing img manipulation detection → spot photoshopped img read 📄
‘deepfake’ videos: oppty for new/powerful forms of manipulation read 📰

PAYMENTS (CREDIT’S CAC)

“This is a Trojan horse of epic proportions.
And the US consumer will easily be co-opted.” -Josh Wolfe (2018)
follow
credit/debit cards payments > cash payments
contactless payments: 92%=Australia, 49%=UK, 0.6%=USA
18% of adults own a credit card
Visa + Mastercard ≈ 80% mkt sh, get paid ~3%/tx
1.7b people remain unbanked (17%), untapped mkt!
China’s mobile payments users, world’s largest when in China
520m Alipay, 110m WeChat Pay, 100m Baidu Wallet
260m people w/ credit score in Ant Financial, vs 200m with FICO
PayPal: 250m active accounts incl 20m merchant accounts
more valuable than American Express, $100b vs $90b
Venmo: $14b payments in Q2 2018, 2m partners (incl Uber)
Square: 90m customer profiles, 30k stores, 7m active Cash App users
Square capital: $0.4b via 60k loans in Q2 2018
Stripe: credit cards + ACH debits transactions across 26 countries
supports/partners with Apple Pay, WeChat Pay, Alipay
20% of global smartphone users → phone = wallet
250m+ Apple Pay users, ~30% iPhone’s installed base great 📝
5k partnering banks, across 25 countries, credit card w/ GSachs
60% of USA shops now accept Apple Pay
Walmart Pay: #3 wallet in USA > Android pay

COMMERCE (aka STORES 2.0)

“World’s largest company by sales (Walmart)
is now the perceived underdog.” -The Economist (2017)

9k retail stores closed in USA 2017 > 6.2k in 2008
21% USA apparel → online
growth rate for mobile tx = 4x desktop, = 10x brick & mortar
Kylie Jenner (age=21): owns $330m/yr biz, set-to-be youngest $b
distribution = 120m Instagram followers, infrastructure → Shopify
Shopify has 600k merchants, stock up +1000% since IPO
consumer goods’ ARPU: global avg = $830 ≈ China
🥇UK=$2.1k, 🥈USA=$1.8k, 🥉Sweden=$1.4k
China: $1t online sales, 80% mobile, 21% of retail sales
online retail market: to 2x in 2 yrs read 📰
$25b Alibaba’s singles day: $1b→2min, $10b→1hr+, 90%=mobile
USA: $0.4t+ online sales, 34% mobile, 13% of retail sales
$6.6b Cyber Monday, $5.0b Black Friday
Walmart acq Flipkart (77% @ $16b), outbids Amazon, buys out SoftBank
Flipkart claims 100m users, India’s #1 online marketplace
‘Spark’ last-mile grocery delivery, goal: 40% of USA homes
6m e-book titles in partnership with Rakuten Kobo
Etsy=2m sellers (99.9% USA counties), Stitch Fix=2.7m clients
$110b+ spend in global app stores 2018E ≈ GDP of Morocco
App Store net rev: per d/l ≈ 5x Google Play, per device ≈ 11x full breakdown 📊

TV

“For those of us climbing to the top of the food chain,
there can be no mercy…hunt or be hunted.” -Francis Underwood (2014)

2018 original programming budget: $11b Netflix
vs $5b Amazon, $3b Hulu, $2b HBO, $1b Apple, $1b Facebook
Netflix (Oscars=2): 125m paid subs globally
#1 non-game app by revenue (App Store + Google Play)
USA: 60m paid subs > all cable companies combined
Netflix = HBO = 23 Emmys ea, first time HBO ≠ #1 by nominations
HBO (Time Warner): 140m+ global subs, 5m HBO Now subs (USA)
Amazon (Oscars=3): movie library is 4x Netflix, 2x Hulu
26m USA subs, won Premier League streaming rights
hires M. Donoghue from ESPN (19yrs) to oversee sports division
bidding for Landmark Theatres: 250 screens, 50 locations, 27 mkts
Disney ends deal w/ Netflix, to launch Disney Play in 2019
Sports (ESPN+ for $5/mo → 1m subs already) + Family (Disney/Pixar)
85m+ ESPN USA subs, *crown jewel of cable TV* in your face [Netflix]
Hulu (controlled by Disney): 20m USA subscribers
Apple partners w/ S. Spielberg & Oprah Winfrey for original content
Baidu-owned iQiyi: 60m+ paying subs, to launch physical movie theatre
YouTube: TV = fastest-growing market
$40/mo, 60+ networks, ~100 markets, claims 800k+ subscribers
UK streaming subs > pay-tv customers, first time!

MUSIC

“We don’t ask you for free iPhones. Please don’t ask us to provide
you with our music for no compensation.” -Taylor Swift (2015)
💪 To Apple, Love Taylor
streaming is industry’s biggest source of revenue they won…in court
4th successive year of revenue growth
75% of USA music revenue = streaming (1H 2018)
Spotify revenue > 25% of global music industry
83m paid subscribers, 180m+ total active
~8% equity swap w/ Tencent Music Entertainment
TME has 25m paying subs, on IPO roadshow F-1 $TME
48m paid subscribers on Apple Music, plus ~5m trial subs
rumors it overtook Spotify in USA: ~20m paying subs
Q2 growth: Apple = 4m/mo vs Spotify = 2m+/mo
YouTube Music now in 21 countries, free with ads or $10/mo
videos/audio/lists all in one app
Taylor Swift, #1 paid musician = all albums in Spotify & Apple Music
releases *video* of “Delicate” on Spotify before YouTube
“Reputation” album released 10-Nov-17, best-selling album of 2017
25+ YouTube music videos >2b views vs 15 Spotify songs >1b streams
“Hello” by Adele: 0→1b YouTube views: 87 days
vs “Shape of You” by Ed Sheeran: 0→1b Spotify streams: 153 days
“Despacito” by Luis Fonsi (Jan-2017), #1 music video: 5.6b views
20m+ Amazon Music Unlimited subs, $10/m for Prime members

BONUS

“Facts don’t care about your feelings.” -Ben Shapiro (2016)
Brokerage: 5m accts on $0 fee app Robinhood > 2x E*TRADE
Grammar: 7m/day checking grammar on Grammarly
Gym: 5m Fitness Blender subscribers
Homework: 100m 12-18 year olds asking questions on Brainly
Locksmith: 1.5k KeyMe smart-kiosks across USA
Lost & found: 15m Tile trackers sold
Meditation: 1m paying subscribers on Headspace
Muslims: 12m/mo pray using Muslim Pro app
Neighborhoods: 200k neighborhoods on Nextdoor (90% of USA)
Period: 20m+ women track their period with Flo app
Pets: 200k vetted dog sitters on Rover
Policy: 200m users petitioning governments on Change.org
Religion: 210k communities on Pray.com
Rockets: launched by SpaceX (YTD 2018) > any company/country 0→M in 16yrs 📊
Spas: 170m/qtr appointments via wellness marketplace MindBody
Textbooks: 100k students using online textbooks by Packback
Trivia: 2.4m concurrent players during Super Bowl on trivia app HQ
Vaping: e-cigarette maker Juul has 68% mkt sh USA
Video: 500m/mo users of 15s video-sharing app Tik Tok
Virtual world: Second Life has 800k MAUs