Month: April 2019

In Zuck We Trust?

In Zuck We Trust?

Mark Zuckerberg does not trust his people.

Facebook is a great example of a company that has lost its way as founder CEO Mark Zuckerberg increasingly exercises control over product decisions.

Tightening control. It is difficult to fault Zuckerberg for tightening his grip on Facebook’s strategic reins in the aftermath of the Cambridge Analytica scandal. Whether or not you agree with Zuckerberg’s strategic decision to evolve Facebook into a secure messaging platform is beside the point. Where we have a bone to pick with Mr. Zuckerberg is his decision to insert himself into Product Management decisions that typically are the purview of Product Managers. Zuckerberg wouldn’t be the first founder to believe that because he got it right once he can do no wrong. Zuckerberg’s power grab and product meddling has resulted in a number of Facebook senior executives leaving the ranks in recent months.

Zuck lacks “Trust”. Zuckerberg does not sufficiently trust his people – those who spend all day every day living and breathing Facebook’s various products, features and functionality. This lack of trust is in line with Zuckerberg’s “trust” score based upon the CEORater Big 5 Personality Analysis that we ran. Zuckerberg’s “trust” score sits at the 62nd percentile relative to the broader population. For comparison, Tim Cook’s trust score is at the 78th percentile, Elon Musk at the 80th percentile and GM’s CEO Mary Barra at the 90th percentile. The below image is from Zuckerberg’s Big 5 Personality Analysis which you may access by clicking the link in the image caption.

Mark Zuckerberg “Trust” Score. Click Here for full Zuckerberg personality analysis.

Instagram – Killing the Golden Goose. One could argue that were it not for Instagram’s success, Facebook’s reported usage metrics and valuation would be substantially less than where those figures stand today. Zuckerberg’s meddling in Instagram’s user experience (UI/UX) is ultimately what caused Instagram co-founder Kevin Systrom to leave last year. We touched on this topic last year in a TEK2day Podcast episode when Systrom announced his Facebook resignation. To borrow a football analogy, rather than continue to run the plays that have worked, Zuckerberg chose to throw out the playbook and change the offensive coordinator.

At the root of Instagram’s problem is Zuckerberg’s desire to further monetize Instagram by driving Ads into the user feed. This change is similar to forcing Las Vegas hotel guests to walk through casino floors in order to access checkout services and elevators. Instagram users must sift through Ads in order to access the content they care about. Further, Ads aren’t clearly marked, carrying only a “sponsored” label which users must train themselves to look for in order to distinguish advertisements from user-generated content. Ads create friction, dilute the user experience and can quickly turn users against a social media platform. Our bet is that Instagram usage declines both in terms of user growth rate and user activity on the platform. My behavior has changed in recent weeks as a result of Instagram Ads. I’m not willing to pay the toll of having to face ads at Instagram logon prior to my accessing the content I care about (speaking both of our CEORater and TEK2day Instagram content as well as my personal content). Time will tell. Whether or not these product and strategic decisions work for Facebook – they will be Zuckerberg’s decisions – regardless of outcome.

Facebook founder & CEO Mark Zuckerberg testifying before Congress April 2018.

CEORater Big 5 CEO Personality Analysis

Autonomous Robots

Autonomous Robots

A mashup of 3D printing, computer vision, machine learning and other advanced technologies.

Boston Dynamics (Softbank) “Spot” robot

It’s an exciting time at the intersection of robotics, computer vision, AI, machine learning, deep learning/neural networks and 3D printing. We roamed MIT’s campus earlier this week as we were on site for a 3D printing class. While unsuccessful in our quest to 3D-print a robot of our own, we did spot a few delivery bots on campus. Below are snippets of content we found interesting about one of MIT’s more famous spin-outs, Boston Dynamics. We are working to get founder Marc Raibert on the TEK2day Podcast. The Boston Dynamics robots operate much like an autonomous vehicle, leveraging LiDAR technology to power “vision” and spatial awareness.

3D printing utilized in the manufacturing of robotics hardware

Boston Dynamics Founder Marc Raibert’s Ted Talk.

Spot mini – Boston Dynamics
spot mini specs
Spot mini – Boston Dynamics
Spot mini – Boston Dynamics

shrinking form factor (right to left) Boston Dynamics and founder Marc Raibert

Cloud Wars: AWS vs. Azure vs. Google Cloud Platform (“GCP”)

Cloud Wars: AWS vs. Azure vs. Google Cloud Platform (“GCP”)

It’s all about the cloud. Given that Amazon’s AWS business unit and Microsoft’s Azure business unit are the two finalists for the Pentagon’s $10 billion “JEDI” contract, we thought it timely to publish AWS, Azure and GCP revenues for the 12-month period ending 12/31/18. As per usual, see the video and image content “below the fold.”

Amazon (AWS): $25.7 billion. Amazon reports AWS figures in its SEC filings. The $25.7 billion figure represents 47% year-over-year growth.

Microsoft (Azure): $6.5 billion. This figure is our estimate based upon certain public disclosures made by Microsoft. We estimate that Azure revenues grew 82% year-over-year.

Google (GCP): $4.5 billion. This figure is our estimate based upon certain public disclosures made by Google. We estimate that GCP revenues grew 32% year-over-year.

Continue reading “Cloud Wars: AWS vs. Azure vs. Google Cloud Platform (“GCP”)”
Amazon’s Autonomous Robotics Acquisition: Canvas Technology

Amazon’s Autonomous Robotics Acquisition: Canvas Technology

Last week Amazon acquired Canvas Technology, an autonomous robotics company designed to automate fulfillment centers.

This is Amazon’s second acquisition of a robotics company deployed in fulfillment centers. The first was Amazon’s March 2012 $775 million acquisition of Kiva Systems, which we had an opportunity to interact with last year in Boston. Amazon reportedly acquired Canvas for over $100 million. Boulder, CO-based Canvas had raised $15 million over three rounds, most recently a Dec. 2017 Series A round with Palo Alto-based Playground Global, an AI-focused VC firm founded by Android and Essential phone founder Andy Rubin.

Canvas Technology in action

Working to assemble a Kiva (Amazon Robotics) robot at Boston’s Children’s Museum.

Streaming Services Unbound

Streaming Services Unbound

There are a number of new streaming content providers on the block such as YouTube TV, ESPN+ and the forthcoming Disney+. In addition, legacy content providers such as the New York Times and CBS have caught subscription fever. (free article)

Subscription fatigue? Time will tell. We provide subscriber metrics including number of paid subscribers and subscription revenue for the following companies: Amazon, Apple, AT&T, CBS, Disney, Factset, Google, Hulu, Netflix, New York Times and Spotify.

Click here to access the PDF version of the below table. Email us at to request in Excel format.

Continue reading “Streaming Services Unbound”
Disney – New King of the Jungle?<span class="badge-status" style="background:red">Premium</span> 

Disney – New King of the Jungle?Premium 

Disney May Be the New King of the Content Jungle. Disney+ Coming to A Screen Near You in November.

We’ve previously written in these pages that “Content Is King“. Similarly, back in 2017 we posited that “Netflix Loses in A Disney Fox Deal“. Disney – owner of the world’s best content library – was in full force at yesterday’s investor day. The highlight of course was Disney+, the forthcoming streaming service to be launched in the U.S. on November 12th 2019 for $6.99/month or $69.99/year.

  • We have culled through 200+ pages of Investor Day slides to bring you the below highlights including the financial outlook for Disney+, ESPN+ and Hulu.
  • Subscribers will have access to Disney’s library of film and television entertainment.
  • Disney+ will be the exclusive home for films released by Disney Studios in 2019 and beyond.
  • Disney stated that it is likely that Disney+ will eventually be offered as part of a larger bundle with ESPN+ ($4.99/month or $49.99/year) and Hulu – the latter which Disney is the majority owner of.
  • Disney/Fox/Marvel/Lucasfilm content now available on Netflix will be removed from Netflix once content license contracts expire.
The Subscription Economy

The Subscription Economy

Our Conversation with “Subscription Economy” Pioneer and Zuora (tkr: ZUO), Co-Founder & CEO Tien Tzuo

This article serves as a follow-up to our earlier article: “Every Company Should Consider Adopting A Subscription Revenue Model
  • We favor subscription revenue models for a variety of reasons:
    • Providing a better service: Subscription models (aka – “usage-based models” or “consumption-based models”) align value provided to the customer with customer payments. The Cloud is tailor-made for usage-based services. Consider Netflix. The company’s content recommendation engine suggests content that you are likely to enjoy based upon your viewing history and preferences. Consider any one of a number of services that make wine recommendations based on your wine consumption history and preferences. The cloud enables companies to: 1) observe customer usage 2) to refine service elements that users value most. The output is growing a better service, which leads to greater customer loyalty, predictable revenue and a stronger competitive moat.
    • Greater strategic flexibility: Subscription revenue models provide companies with superior revenue visibility and operational predictability – enabling them to take a longer-term strategic approach to capital allocation.
    • Premium valuations: Investors award valuation premiums to subscription revenue companies vs. upfront license revenue models which lack predictability and can be volatile.
    • Usage-based models are becoming the norm: In many cases customers prefer to engage with companies via consumption-based models vs. paying for everything upfront. Auto OEMs, content providers (video games, feature film, episodic television, live sports, newspapers), ride share, short-term office rental – you name it – subscriptions are where it’s at.
Continue reading “The Subscription Economy”
Apple Will Have A New CEO Within 5 Years<span class="badge-status" style="background:red">Premium</span> 

Apple Will Have A New CEO Within 5 YearsPremium 

Apple will have a new CEO within 5 years. You may thank Apple CEO Tim Cook and former Microsoft CEO Steve Ballmer.

Microsoft shares flat-lined from 2001 to 2013 during a series of flubs including being late to the Internet, late to mobile, late to the cloud, late to AI, slow to capitalize on the Surface technology it had pioneered in the early 2000s and refusing to partner with others. Former Microsoft CEO Steve Ballmer and co-founder Bill Gates had a semi-public boardroom breakup, but not before Ballmer rushed through the ill-fated Nokia acquisition. This 12-year period where MSFT shares were as flat as the Bonneville Salt Flats served as a very public teachable moment (or decade). No CEO in the Bay Area wants to have their own Microsoft moment. Apple is at risk of suffering a similar fate under caretaker CEO Tim Cook. Mr. Cook operates at a pace that puts AAPL at a disadvantage, not to mention some of the strategic blunders (we address below) which may not be reversible. While 5G may boost iPhone sales, we are well beyond the point where the iPhone may save the day over the long-term. We provide our 3 key strategic recommendations for kickstarting Apple’s long-term growth.

Fintech Founder 5

Fintech Founder 5

We took a snapshot from our CEORater database of Fintech companies led by Founder CEOs. The “Fintech Founder 5” consists of those companies that have generated the highest total stock return Year-to-Date.

The Fintech Founder 5: GreenSky (tkr: GSKY), MSCI Inc. (tkr: MSCI), Pegasystems (tkr: PEGA), Square (tkr: SQ) and SS&C Technologies (tkr: SSNC). Click Here for company snapshots including: company specific returns, our CRScores and the Autonomous Investment Ops platform.