I know it'll be an unpopular opinion, but I really think Uber could be in for a big fall. Not because they haven't been successful, but because they've been too successful - they've opened the market up for themselves but also competitors.
Most Uber drivers I ride with have at least one other ride share app open, none of them have a loyalty to the company. In fact, many actively dislike it. And riders I talk to aren't loyal either - they'll happily flip between Lyft, Uber, and whatever else is available, depending on who is offering a discount code that week. I don't doubt that Uber has a better investment in the future (self driving cars and the like) but it remains to be seen if they'll make it that far - that future is still a ways off.
By itself that wouldn't be so drastic, but Uber has taken on a lot of funding and obstinately refused to go public. It could put pressure on other companies that are currently quite happily staying private, too.
Worst case scenario they pull out of China (where they are purposely hemorrhaging money). Their profitability in America, means they are in no threat of "dying".
Imagine a new startup launches today offering ridesharing in NYC. Drivers - who already have Lyft running - add the app to their roster. After some advertising spend, so do users. What is Uber's strategy to stop them? Spend more money, usually - more advertising! More drivers! Is that sustainable?
Driverless cars at least half a decade if not a decade away from widespread adoption in cities. Who's to say they'll last that long? What does "state of the art engineering infrastructure" give users? I don't recall Lyft's app ever failing on me.
Finally, Uber get's pushed out of relevance by driverless cars, from BMW, Mercedes-Benz, Chevy, Ford, etc., who will ultimately never let them have this market.
Driverless cars don't exist and there's literally zero evidence that Uber has a stronger claim on that market than any other aspiring company.
Engineering for an app like this is non-trivial but hardly insurmountable.
The one advantage they do have is network effect, the more drivers and users they have the quicker it is to get a ride and more lucrative for drivers. That does matter, the question is how much.
If anything Driveless cars is a huge threat to uber. Buying the cars would be a massive capital investment. Right now they rely on their employees/contractors to bring a 20k+ asset to work with them.
Someone like Hertz or a General Motors already have fleets and know how to manage them. All they have to do is engineer an app.
What is easier? A nationwide vehicle fleet or an app that connects drivers to riders.
Driverless cars will happen at the same time for everyone. Uber's competitors will get them at the same time they do. It will not amount to a long-term or even short-term advantage.
Maybe the party with biggest publicity budget wins, or maybe it's the one with lower overhead (in things like publicity), or maybe it's the one that pays better the drivers...
Or maybe there comes a company with a really open network, and destroys the entire market in exchange for a couple million (what is a good thing, by the way).
Citing previously undisclosed financial documents,
Bloomberg pegs Uber’s February US profit per ride at
$0.19 (not including “interest, taxes, and equity-based
compensation for employees").
The article isn't specific enough to know for sure whether that's average profit per ride, or whether that's the margin they skim off the top per ride
Does that $0.19 come from (total margins from US rides - total US operating expenses) / (total number of US rides), or is it (total user payment - total driver costs) / (total number of US rides). The former means that they're actually bringing in about 10m in total net profit per month, which isn't terrible. The latter means they're probably not doing so well.
Agree - Uber suffers from the same problem as Square. They created a new product expecting it to be stickier than it actually turned out to be.
In Uber's case it turns out "better than a yellow cab" is a pretty low bar to clear, and neither drivers nor consumers have much loyalty and are highly price sensitive, creating a race to the bottom.
In Square's case it turns out merchants will gladly use a slightly-worse iPad UI for payments if the fees are lower, and consumers don't really care regardless. Again, race to the bottom.
Right now it looks like Uber is engaged in an epic price war in many markets where the prices are unsustainably low - and these prices are sustained by a combination of setting VC cash on fire and squeezing driver pay. Having no insider information into Uber, I'm a bit skeptical that they're that close to be sustainably profitable.
Uber's problem seems to be that they need to raise prices and cut driver rates once they've captured a market and driven out competition. Either that, or they need to switch to driverless cars to eliminate that component of their business - but that seems to be a ways off, and there's no reason to think other players won't be just as successful when you're able to remove drivers, one of the larger variables, from the overall equation.
Better than a yellow cab (UberX) isn't the interesting part of Uber's business, Pool (and a swarm of dynamically routed cars buzzing around a city, picking up and dropping off people and cargo) is. Further, that swarm becomes more cost-effective the larger it is.
Brand loyalty is practically a myth at this point. I don't use any service or any product without some reservations about the company that made it, especially when it comes to apps and cloud stuff.
People I talk to about this sort of thing USE online services, but we're also fully backed up and ready to move at a moment's notice. Probably a consequence of watching so many of these things go up in smoke.
What matters more, driver loyalty or user loyalty? Uber feels like the Kleenex of its industry. Outside of the tech hubs I don't feel that most people are even aware that non-Uber ride services exist. I certainly here people asking their friends "should we get an Uber?" all the time.
I agree but not, I think, in the way you intend. If someone asks for a Kleenex and they get passed a non-Kleenex brand tissue, they rarely object. "Uber" could just become the 21st Century "Hoover".
Tissue paper is bought at a grocery store with each brand sitting next to each other. If tissue paper brands each had their own store, like ride sharing apps do, then I think Kleenex wouldn't have the problem you describe.
Uber still has to compete on price, for sure. But there's certainly friction to A) download non-Uber ride sharing apps and (even greater IMO) B) open multiple apps to compare prices.
If Uber's price doesn't seem unreasonably high, what reason is there for people to compare?
There was a similar app during the check-in app craze (where a half-dozen competing apps existed) but that didn't stop Foursquare from eventually winning the space (even though it was arguably not the best of the options).
And loopt, brightkite, whrrl (spelling?) and probably more. And that was just within the "check into a place" category. There were also other categories like checking-in to what you're watching on tv (GetGlue), checking-in to what you're eating (Foodspotting), checking in to what you're drinking (Untappd).
Some of these are still around but most are not. Not sure if the ride-sharing space will turn out the same or not. I feel at least Uber and Lyft are probably safe.
This may be related to my provincial ignorance (I was in Ann Arbor during the check-in boom), but I remember Gowalla being the Lyft to Foursquare's Uber. Of course, there is an actual business model for the ride-sharing companies, so maybe there's room for multiple players.
It's not a great comparison because Gowalla had essentially no competitive advantage, whereas Lyft at least has the chance to have one. Gowalla competed on "better design" for a while but ultimately the network effect of Foursquare mattered far more. Lyft is making headway in some cities so I think they're doing fine.
They invented the concept, so far as I was aware, in the form of Dodgeball. Foursquare was just their relaunch of Dodgeball after the failed Google acquisition.
It's a fair point, honestly Lyft or whoever should be doing this themselves. If they just listed competing prices (heck, even link out to the other apps) that would be a strong reason to use their app as your default.
> I wonder how difficult it would be to build an app that lists and estimates fares for different local car services.
Google Maps (on Android, at least, but I assume generally, I just haven't checked elsewhere) has that feature already, though when I've checked what it showed it only listed Uber. Even if it is currently Uber-only, the feature's UI makes very clear that its intended to be a ride service time & cost estimate comparison feature, so...
Not sure I agree. I'm in Boston and my friends (mostly not in the tech industry) use Uber, Lyft, and Fasten pretty equally. Its all about where we can get a cheaper ride from
That's probably more commonly true in cities where people already heavily use public transportation and cars are not necessities; much more likely to be aware of these sorts of things. In contrast, cities where you only use ride-sharing on weekend nights a couple of times a month when you drink too much, there's less of a need.
Yeah, I see the same thing. Multiple apps open. Zero driver loyalty. Ride-sharing companies commodified drivers, so drivers commodified ride-sharing companies.
And so have customers. It's like grocery shopping. One store might be a little cleaner than another, have longer hours or feel safer, but, mostly, you go with the low-price leader.
A big part of Uber's advantage is corporate nullification. I'm sure their app is nice, but avoiding regulation appears to be their big advantage. Government may be slow, but it will catch up eventually. There are already several cities moving to update regulations so that Uber and the local taxi companies are playing by the same rules.
I don't think Uber is going to completely turf out, but I believe they will experience a correction in their valuation.
It looks like they last raised money at a $62.5 billion valuation [1], which suggests that investors are expecting the company to operate at a global level. Unfortunately, Uber is facing extremely stiff competition in China [2] and India [3]. There's also the well-publicized tension between Uber and various European companies. And that's not even taking into account increased regulation in US cities like San Francisco [4].
So, while Uber is clearly a successful company - how successful will it be? $62.5 billion dollars successful? My guess would be no, which would drive a correction for the company.
It's worse than that: not only are there plenty of competitors to Uber (especially on a local scale), but in a way, Uber sowed the seeds of its own destruction. Before Uber, all the regulations around the taxis business were a pretty high barrier to entry. But with billions of dollars of VC backing, Uber has done a pretty good job of clearing the regulatory hurdles out of its way... and out of the way of its competitors too. I suppose we should be thankful to the venture capitalists for so generously donating money to improve competition in the taxi industry.
What I think could/should happen is someone releasing an open-source version of Uber/Lyft and selling support for city governments to run city-owned ride-sharing services. If the Uber app only worked in the city I live, I wouldn't mind at all. It would also be no trouble to download the local ride-sharing app when visiting a new city.
This would be a win-win for many reasons, one of which would be that cities would keep the revenue from these services, or they could run it at cost and send more money to the drivers (thus stimulating the local economy and not VC valuations)
No ill will towards these companies/founders, but:
- Fab
- Theranos
- Homejoy
- Zirtual
- To some degree Foursquare and Zenefits (still have time to fix)
- The flash sales category
One challenge is that when things aren't going well companies are much quieter than when companies are going well.
I have a great pets.com story, to add a little light heartedness to a serious topic like this.
At their HQ the bottom floor had astroturf and a lot of windows. This is where the pet day care was for all of the employees. You'd walk past and see how great it was to work there - just look at the pet day care!
When they shut down, they shut down so suddenly that nobody cleaned up that area.
I forget how long that space was vacant, but I want to say it was roughly a year. You'd walk by the space and you'd see little doggie turds in various forms of decay on the nearly-neon astroturf. The dot com boom in a nutshell!
Twitters is a company that honestly needs to fail. While people love Twitter, there's no business strategy to speak of. It's pretty unforgivably that a company as old a Twitter aren't making their own money at this point.
I do believe in paying for solid articles, but 29$ is about 2 orders of mag to Much. The paywall implementation is horrible too, I couldn't even Sign in with Facebook
I too was having paywall issues as well. Contacted customer support, and they said i didn't have the web access enabled for whatever reason. Enabled and problem solved. Might be worth contacting them.
You're not really missing anything. WSJ is pretty much a clickbait mill; just skip the link and go straight to the comment section for actual interesting information and discussion of the topic.
So long as the Fed's policy is effectively 0% interest rates, that will continue to support significantly inflated valuations (privately and publicly). And the Fed isn't going to raise rates meaningfully (they can't), they've been lying about that for years. At this point negative rates in the US are more likely than any sort of normalization is.
If journalists keep writing articles about tech bubbles every few months, someone is bound to be correct. Looks like this "trend" started up again in 2013.
I lived through 2001. This is not a bubble. As exhibit one I point out that everyone has been calling bubble since 2012. Real bubbles have more rah rah and less skepticism and more crazy.
I do see a slowdown but this is nothing like dot.com. Seems like a normal correction and is not really separate from the rest of the economy being uncertain. Nothing tech specific.
Bubble is an overused term. An inflated market is not a bubble, and a correction is not a bubble bursting. Markets go up and down all the time.
An inflated market can be called a bubble, it just depends on how inflated it is and how people interpret that. Just because something is a bubble doesn't mean it's destined to burst. What we're seeing now could be considered a cool-down that would prevent a burst. There's nothing overly negative calling something a bubble when it does appear to be a bubble.
It is not a bubble in that market caps are not "popping" - disappearing instantly, overnight, leaving shares worthless and dissolving fortunes. The current tech market is more like a punctured soccer ball, slowly leaking air. Regular people won't see this as a crash in their etrade portfolios; rather, they will notice a long, slow decline in the value of their pension/retirement funds.
Yeah, it's not a violent growth/crash cycle that people usually refer to as the outcome of a "bubble" (1929, 1987, 2001). I.E. the velocity is different.
Right now it looks like a gentler reversion to the mean in GDP growth from the peak of this 6-year business cycle, which was much less pronounced than previous business cycle peaks.
But who knows - the failure of a large firm that was generally thought to be solvent could set off another crash.
Part of it is that regular people don't have a ton of exposure to this alleged bubbled. They don't have start up equity. Last time around the bubble caused the stock market as a whole to become overvalued. This time it's limited to mostly private companies.
Someone invested in a mutual funds or index funds will have pretty little exposure. Sure Apple, Google, Twitter, and Facebook might lose some value, but those aren't a huge portion of a diversified portfolio.
Even the first web bubble only had modest real impact on the general economy. It put the country into a shallow recession for a few quarters but that was it.
Same here. I'd have friends in the investment industry ask me about some new IPO or another. "I can't tell you what these guys do." Still, they'd pour money into them.
Even worse was pouring money into things like Nortel after the crash was well under way. People just chased it to the bottom.
Edit: I thought I'd add that even in a bloodbath like 2001, not everything tanked. The (tiny) company I was with continued to grow in revenue. We weren't doing anything glamourous, just focusing on business value. No IPOs, although some folks were trying to push us that way in the late 90's.
Compared to 2001 this is a correction not a bubble. I also survived that and not only did you lose money it took 10 years to pay off the bad tax debt from failing to sell it was like a double whammy, lose your money while also gaining a huge stock options tax bill.
Not all bubbles are the same. Credit is free and money is inefficiently allocated. Just because we are not seeing price inflation, that does not mean that all is well. The global economy has been unravelling for the past year as central banks push assets into equities which would not "deserve" the investment without a manipulated yield curve.
While I don't think that the bubble is bursting, it does seem that the values some companies which have been massively overvalued, are being adjusted. I'd much rather see this than companies loosing 90-99% of the value overnight - That's a burst.
If interns are making $80k a year, I think most of us are safe (for the time being).
"Many" meaning the 1000's of interns working at places like Facebook (~8k + housing), Dropbox, and Jane Street.
I personally wouldn't consider $25/hr to be particularly lucrative in the grand scheme of things considering how highly paid many interns in SV/SEA/NYC area. In my area, yes.
I think this is pretty close to the truth. Investment capital getting out tech should cause people to be more discriminating in their business proposals, and the market will adjust accordingly. If anything, this will help prevent a crash.
I'm sure there is a bubble bursting, whatever that means. But it's interesting that this narrative always involves mentioning Zenefits, which is suffering because it ran afoul of the law, not due to an economic downturn.
There is no bubble. There may be a dip in funding for companies of a certain stage, which could be due to any number of factors. Fund vintage (funds raised optimally at bottom of 2009 are now fully allocated); shift in focus away from sectors (no money for social media); random variance in relatively small pool of VC (tiny portion of total capital invested in small businesses).
These journalists, along with most people outside the tech industry, fail to see the overall picture. 4 out of 5 of the largest companies on earth are tech firms, and none of them were even close to that position 10 years ago. Software runs the world and tech companies are the single largest driver of the modern American economy, making the overall pool of companies that may go belly up at any given time larger. Public consciousness just hasn't caught up to that fact yet since it happened so fast.
Additionally, much of what most consider "tech" is actually media and entertainment. c.f. facebook, twitter, etc. - which just happen to utilize technology in their products.
There is surprisingly little tech going on in "tech" today.
You could say that Ford is in the automobile industry and they happen to utilize manufacturing in their products, but I don't think it's a useful distinction to make.
Just like Ford's cars are made by factories, Facebook's products are made by programmers.
Even if you want to look at the "tech industry" as meaning "creates tech for use by other people" instead of just "develops tech-based products for consumers," Facebook still has some solid output (React Native, Nuclide, etc).
Apple and Microsoft make technology as their primary purpose. But if Facebook and Twitter could sell as many ads without technology, then that's what they'd do, because that's what business they're really in.
I'm sure Facebook has people who work there because social networking and a solid cross-platform messaging system are both useful services to a huge number of people.
Warner Bros. makes plenty of money off of product placement, but it doesn't make them not a movie studio.
And what about Oculus? Are we writing off VR as a technology because Facebook might put advertising in it?
Technology isn't just an industry - it's a way of doing things and is becoming ubiquitous. When people think "tech" they may think of sharing status updates or searching for a restaurant. What about driverless trucks (transportation), gene sequencing (healthcare), industrial robotics (manufacturing), automated warehouses (retail), solar research (energy), farm-specific yield optimization (agriculture)?
This stuff is all being driven from within the tech industry, even when it will benefit "other" industries.
I think the point the previous commentator was trying to make is the distinction between the 'tech industry' a la Silicon Valley versus other industries - and it would be unfair to credit the former with any innovation in the latter. Pretty much every industry since we have invented fire has grown through advances in 'tech'. So what makes a firm a 'tech' firm - in this day and age it's hard to say, and I'm not sure if it's a useful exercise.
All the tech he mentioned in the conventional industries are being driven by fundamental changes in the "conventional" tech space. Smartphone market dropping price of mobile computing, cloud-connected robotics deployed across manufacturing floors, all ideas that became mainstream in SV. So, where do you draw the line?
A "tech" company is a company that provides a good or service that is either completely new and only possible because of a technological innovation, or is a new company providing an existing service using a different vertical stack based on technology which came available after the incumbents were started.
Uber is a "tech company" because as they are providing a new business model for a livery service based on using an application to make a market that is distinct from the previous market.
Facebook is a "tech company" because they are providing a business model around sharing information between acquaintances (a social network) using an application and a web site.
Fedex is not a tech company as they are augmenting but not replacing their model or their processes. Foster Farms is not a tech company as they have not fundamentally changed the way in which they raise chicken.
I go back and forth on Tesla or SpaceX. Consider Tesla, they are a car company but electric cars have been around forever, their most successful incarnation, the Golf Cart, has dominated golf courses for decades. It wasn't the "idea" or the "product" that made the Roadster and then the Model S successful, it was the execution on the vision. Similarly SpaceX rockets are just rockets with better execution and better alignment with available technology.
It is a strange, strange world in which Uber is considered "tech" but turning around a rocket after it's boosted a payload toward orbit and then landing it back on earth exactly where intended isn't technologically innovative enough to qualify.
In all deference to what you're trying to say... I'd submit that most companies are tech companies.
Biggest example is Goldman Sachs. Their CEO came out and said "We're not an investment bank anymore, we're a tech company." Their rationale is that they have to use technology to defeat their competitors--before their competitors can use technology to defeat them.
A better definition might be, how much revenue (measured % of sales) does this firm reinvest back into R&D?
Let's try a few examples:
P&G: Not a tech company. They spend tons of money on advertising to get products on shelves and on TV that tons of Americans buy. They can innovate in packaging and distribution, but honestly not that much.
Tesla: tech company. Spending tons of R&D. I don't know how much, but it's a lot.
Pepsi: Not a tech company.
Your local grocery store: tight margins, probably not a tech company.
AmaGooFaceSoftPle: Billions/yr on new product development. Tech companies for sure.
> A "tech" company is a company that provides a good or service that is either completely new and only possible because of a technological innovation, or is a new company providing an existing service using a different vertical stack based on technology which came available after the incumbents were started.
That's such a vague definition and one could seemingly fit every company into being a "tech" company if they wanted to. How do you unilaterally define something that is "completely new"? What precisely is a technological innovation? Isn't the iPhone not "completely new", since we had palm pilot and blackberry before it? Is a personal computer considered "completely new" even when mainframes existed before? How do you draw the line between a laptop that has a touch screen (but still has a keyboard) and one that is just a touch screen (iPad Pro for example)?
Great discussion. What I was trying to capture was the difference between businesses that wouldn't be possible without the tech they are using and businesses which could operate but would perhaps be less efficient or perhaps less profitable. I certainly agree it is an arbitrary distinction and one which has been debated literally for decades in the SF Bay Area at least.
But I don't think that being arbitrary makes it invalid, the goal is simply to put a stake in the ground so that the conversation can move forward. One of the challenges of having discussions about tech bubbles or tech economies is agreeing on what companies are considered (by the speaker) to be tech companies, and which are not. Then the listener can translate that into their own set of companies and look past the definitional challenge and then on to the meatier question of the role of technology in the economy and the businesses that are currently considered valuable by that economy (or not).
I would argue FedEx is a tech company. Creating and shipping labels can be done via the FedEx API, and pickups can be arranged too, like Uber. The supply chain solution is so good that companies can keep very low inventory of high value goods. Drivers use software to optimize routes (eg no left turns in US). I believe software is a very important part to keeping FedEx efficient.
But your other examples made a lot of sense to me.
That may be true for products from the industrial era where the end user isn't directly affected by software.
Companies that want to keep customers (in some cases keep customers alive [cars 'n shit]) are going to have to start caring about software as it becomes the conduit for every interaction their customers have with their products. It's not just social networks that are getting funded now—it's companies that build the previous poster's top five drivers of the US economy. I believe you have to call pretty much any company in those verticals tech companies to some degree.
Not at all. Companies have a need for all kinds of services unrelated to their main purpose. Technology is just another service. In many cases it is important for them to have software departments, but that has been true for a long time. For example, banks have for more than 30 years relied on technology departments to do business. For all this, banking hasn't become part of the tech industry, and never will because this is not their purpose.
Following this reasoning you could say that accounting is ruling the world, because accountants are needed in any company, no matter their size or industry. The reality is that in many industries technology is an important and even essential tool, but it is does not replace that industry. This is true is energy, banking, general services industry, manufacturing, etc.
I actually do agree with your idea that accounting is ruling the world, especially when it comes to creative accounting, mergers and acquisitions, IPO's.
Any Tech company, facebook and apple included, has a ton of accounting DNA when it comes down to the nuts and bolts - how to pay their employees, how their stock compensation is structured, and even how the founder keeps control of the company.
Accounting really is taking over the world - in every single industry, tech / high - tech included.
I think one problem with this discussion is what is encompassed by "tech". If you just use "tech" as an abbreviation for "technology", then sure, tech has been driving human civilization for millennia. Agriculture? Buildings? Roads? Language? Writing? Man, those are some technologies that have paid off big time.
If by "tech", you mean "high tech", well, that encompasses an awful lot of different things, and of course the goalposts are constantly moving as today's high-tech becomes tomorrow's tech becomes the next day's obsolete.
If by "tech" you mean computer hardware, software, networking, and networked services, then sure, that's a pretty important driver of some other advances, but likewise advances in other fields help to drive this as well. Globalization, shipping, mining, energy, RF engineering, photonics, aerospace, and so on all play into this, and all both benefit from and contribute to the success of computer hardware, software, networking, and networked services. But just because this form of high tech can help with other fields, doesn't mean it's driving the economy. It may be increasing productivity to a certain degree, but there is an awful lot of the economy which is only minimally influenced by these kinds of things.
It's not all being "driven" per se from within the tech industry. For example, John Deere is making huge advances in agricultural equipment that's going somewhat unnoticed in Silicon Valley -- but these are combines that can leave a 3-inch overlap between passes rather than a 18-inch overlap, because they are GPS-guided, for example... this is adoption of technology, but it's being driven by John Deere, and will show up as growth in the industrial equipment sector, not the high-tech sector.
I'm in the tech industry, so I am sympathetic to your view, but you must realize this argument is silly. Energy requires technology? Yes. Technology also requires energy to power... well, everything. Manufacturing requires technology? Yes. Technology also requires manufacturing to build our phones, tablets, computers, Teslas, etc.
You can see where I'm going here. The economy is a network. No single node is the focal point around which everything else orbits.
so you're saying the iphone is made out of people? now it makes sense why they have nets around the manufacturing buildings... gotta recycle those suicides.
This right here. So what happens when AI becomes is in the focal length of simple adoption? AI isn't even affecting .0000000005% of the economy yet. But when it comes, it going to unleash of fury of change never before seen.
To go full circle, there's a reason that the "tech industry" carries a big weight. It's because the Information Age is coming to a close, and who knows what's next.
Well, I would say all those things have required technology of some sort or another since they all started. So saying they require technology is nothing new. Now saying they all require software technology of a specific sort from silicon valley is completely different. For example, if a bubble did exist and it burst so that all those software technologies from silicon valley disappeared, would those sectors of the economy suddenly disappear as well? I think not. You are elevating software technology to all technology.
Your article is from Q1/2015. Since then the energy sector has imploded in a catastrophic manner. Pretty amusing to think it is driving the US economy (directly) right now. It is by far causing the biggest loss in jobs and profits. Look at the market cap by sectors right now.
Tech. is second only to finance. Given finance is going through it's own troubles, fully expect tech to take over the top sector of the economy in the next five years.
That depends on what you consider "normalized rates". There's a very good argument to be made that ~0% (if not less) is the new "normalized rate", given the massive debt bubbles that saturate every segment of the economy, both public and private.
The data you cite is from 2009->2015 so it's just showing the recovery from the great recession. In reality Manufacturing hasn't created jobs since the 1970's.
>Healthcare
Their lobby wrote a bill and gave it to the GOP which ran it as Romney Care. Obama couldn't get anything passed so now we call it Obama Care. So yes legally requiring all people to have something does ensure more people buy that thing.
>Energy
Is having a turbulent time now that you can export US Oil/Gas. Renewables continue to grow at a steady pace tho.
And the micro-controllers operating sensors, using chemistry. The chemistry being better controlled by using new materials. The materials being better researched, using high-precision optics. The optics being more precise, using modern physics. Just a random walk around technologies.
Yes, computing technology has played a major role in helping us communicate our advances and better model the next iteration. However, it's myopic to regard it as the sole driver.
Energy, Manufacturing, Transportation, and Healthcare are all very heavily entrenched in technology.
I would Agriculture may be "not so tech" still, but look at the amazing advancements in GMOs and equipment that are helping us feed our growing population.
Plus, who runs the infrastructure? Tech companies. What do they use when they need stuff? Other tech companies, like Google (apps), Amazon (AWS). They build their solutions using products like Facebook's React...
Agriculture may be "not so tech"? My friend, let's go back to my hometown some weekend. I'll introduce you to the most technological people I know (they're farmers).
I'd have to point out that "driving the US economy" is not related to "growth".[1]
add in tech playing the MAJOR role in the MAJOR parts of growth in those industries, and you just look like a silly disagree monkey wasting everyones' time.
It's very misleading indeed. And regardless of what has grown the most lately, the top industry in the US by far is Finance (19% of GDP) followed by Government and Manufacturing (12% each). 'Tech' is scattered across various industries, I think for the most part is included in Business Services and in Information. It's simply not nearly as important as some seem to think it is. The data is available here
http://www.bea.gov/regional/index.htm
I think that every company is a tech company now in the sense that tech has fundamentally changed the way people do business. I think the old guard media is quick to cheer on a sense of impending doom for tech industry. This is worth a read even if it is from a SV insider:
Healthcare and Banking usually have huge IT departments. They don't just use typewriters and store customer data on paper just because they're not the software industry. Is there any company anymore that doesn't have at least an IT department?
Heck, most of them have their own software divisions. Let's not even get started on companies like Lockheed Martin/Honeywell - how many programmers do you think they employ?
Do some side work for a local business and you'll see how powerful code can be. I did 20 hours side work per week for four years and small projects were able to replace teams of employees that used to hand calculate and process work items. Those teams were able to be moved to other tasks saving companies millions of dollars per year while still growing rapidly.
Same--when you work for a large company you see that a ton of development is about large companies cutting cost through automation. Its unfortunate to be a hatchet man, but that work always exists in economical downtime.
While it certainly is more efficient to automate those employees away, in my experience they are rarely assigned to new work, they are simply let go. Whether or not that's good or bad morally or for the economy I won't speculate on.
Most companies are actually quite overstaffed for various reasons, freeing up X employees in department Y doesn't mean they slide over to department Z, Z already has more than enough employees usually.
my first paid coding work was at a wind energy company as an intern. I did a lot of manual input into a piece of software for 9/10s of my internship. The other 1/10th of my internship was writing a web-app that acted as a counter for each type of legal document category. They had created their own documentation system with project-Category-count schema. Each of the employee within the compliance group had to figure out the current doc-count for any new document's category, and there was no real gating mechanism before the document entered the hard-copy vault. This led to numerous duplicate items (ala, two documents labelled HR-1042-4).
My simple web app, which took virtually no mental effort to create other than learning the source code system and some vanilla Web App / SQL, was treated as a god-send to those employees. It was still being used 6 years later, though I've lost track relatively recently. Always interesting to hear interesting stories like that out there.
My brother's workplace (from my distant vantage point, keep in mind) could have saved millions upon millions of dollars had it had a dedicated technical engineer working on crafting automated reports that connected their massive databases of data to its operational scientists instead of spending 2-4 hours on building the report themselves during the worst time-crunches.
It's a lucrative business to be in. If you have niche technical competency there's a lot of funding to be had from companies that have problems to solve.
You're unlikely to hit millions like you would from a VC, but you can be solving very tangible problems rather than the stereotypical "Uber for X". And you would be amazed at how much companies are happy to spend on products that work.
I know regular custom software usually comes through the consulting channel, but i'm curious if machine learning and deep learning have gotten to the stage of maturity/simplicity that consulting companies offer them to their medium/small clients ?
I work in computer vision, so ML is kinda ubiquitous in the field and there are definitely startups that are selling deep learning as-a-service (canonical example is Clarifai).
The main issue with deep learning is that for a small/medium client, there isn't enough data to train on. Lot of clients want classification software of some kind, but often it's binary and you don't need anything as complex as a CNN.
There are a few big frameworks for vision, like Halcon, which include SVM and neural net implementations (and loads of other stuff). You can provide training examples and it'll do the rest for you. It's not cheap and you have to charge for licenses, but they even have their own little scripting language as well as hooks for C++. The idea is you can use any camera, drag and drop functions and get your solution out. I've never used it, but I've seen their sales demos and they're quite slick.
The success of technology companies isn't an all-or-nothing proposition. Google is about as different from any given startup as it is from John Deere. Even within the realm of "unicorns," there are those with actual business models (profitable or otherwise), and those without.
What we're really talking about here is the end of a half-decade of basically free capital, which has been funneled into startups willy nilly. As a result, a lot of startups that never should have been funded will fail. Other startups that probably deserved funding, but were massively overfunded and overvalued will also face difficulties. Some startups will survive.
Similarly, some big tech companies are struggling to right-size the investments they made when their effective cost of capital was radically different from where it is today. Some will be fine. Etc.
> 4 out of 5 of the largest companies on earth are tech firms, and none of them were even close to that position 10 years ago
There's an exception to that group. Microsoft was one of the largest companies by market cap ten years ago. They've been very consistently in that spot since 1998.
It's true. And others on the top ten are almost-tech companies:
Exxon
Johnson & Johnson
General Electric
AT&T
Exxon has a really large research arm, so do Johnson and Johnson. Maybe not tech as this forum traditionally thinks about it, but I'd consider it tech.
GE and AT&T have great research arms, as well, and they are much more tech: focused a lot on communications, storage, and hardware.
> 4 out of 5 of the largest companies on earth are tech firms
Tech isn't really an industry...
Amazon = Retail (and probably another 10-20% software and software services)
Google = Advertising (and probably another 10-20% non advertising)
Facebook = Advertising
Microsoft = Software / Services (but very diversified)
Also, companies like Bechtel and Saudi Aramco are not publicly traded but could be considered in the "largest" category. We just don't know what their market cap is because they're private.
These firms probably have software engineering as a core competency. I think any firm going forward that doesn't have software engineering as a core competency will get eaten by a "tech" company who does.
>and none of them were even close to that position 10 years ago
I think you are failing to see the overall picture. 10 years is not a long time, those companies could fall out of favor at any time. yes software runs the world, but is it facebook and twitter software or software that runs industrial services and backend systems? do you really think Uber is more important than something like general electric or dow chemical?
This is one of those articles that consists mainly of speculation, anecdotes, and quotes from phone interviews. It's hard to tell if Mimms ever left his office to do the foot-soldier work that serious journalism requires.
Gathering information online and by phone is probably not sufficient to find out all the facts and to develop leads. For example, insiders may be reluctant to reveal everything they know in phone calls and email. It's too easy to eavesdrop on electronic communications.
I think showing up to your local startup accelerator/startup space every month or two might be worth the time and cost of gas when you're trying to make a case for an entire industry being a bubble.
If the funding bubble for startups has burst, fine, look to crowdfund startups and projects that people actually want to use.
I wanted to validate ideas early and tighten the feedback loop for products I was building, so we built Baqqer in the hopes it would create transparent projects and companies that help grow community from day one. Less time floating around until launch going "I hope someone uses or pays me for this." and more time spent figuring out what people actually want.
Tip: If you copy and paste the title into Google and choose the first result, you can view the full article. The paywall only applies when the article is redirected from another website.
It´s all about singularity: How many services do you need that all do the same? Not too many, not too many - and this realisations will hit everybody, from ad-tech to server technologies to consumer services.
I have a feeling it's going to be a "soft-landing" in terms of the tech scene in SV. I was hoping for a burst and a bit of a fall-out, but unfortunately everything I'm seeing is that the bubble is deflating slowly which is allowing for another round of inflation in the subsequent year, without the cleansing effect of a true burst like 2000. That would be unfortunate because it will mean that the next burst 5 years from now will be all the more painful, and we don't currently get any relief from high housing/rent, traffic, etc.
I honestly think this constant talk of tech bubble is the best thing that can happen to this industry. It keeps people skeptical and allows the industry to make course corrections. It's a much needed regularization.
195 comments
[ 1.7 ms ] story [ 375 ms ] threadP.S: Also mixed messaging (http://www.wsj.com/articles/fidelity-in-reversal-raises-valu...). Maybe its not all sky-is-falling doom and gloom.
Most Uber drivers I ride with have at least one other ride share app open, none of them have a loyalty to the company. In fact, many actively dislike it. And riders I talk to aren't loyal either - they'll happily flip between Lyft, Uber, and whatever else is available, depending on who is offering a discount code that week. I don't doubt that Uber has a better investment in the future (self driving cars and the like) but it remains to be seen if they'll make it that far - that future is still a ways off.
By itself that wouldn't be so drastic, but Uber has taken on a lot of funding and obstinately refused to go public. It could put pressure on other companies that are currently quite happily staying private, too.
Imagine a new startup launches today offering ridesharing in NYC. Drivers - who already have Lyft running - add the app to their roster. After some advertising spend, so do users. What is Uber's strategy to stop them? Spend more money, usually - more advertising! More drivers! Is that sustainable?
What is Uber's moat?
Engineering for an app like this is non-trivial but hardly insurmountable.
The one advantage they do have is network effect, the more drivers and users they have the quicker it is to get a ride and more lucrative for drivers. That does matter, the question is how much.
Someone like Hertz or a General Motors already have fleets and know how to manage them. All they have to do is engineer an app.
What is easier? A nationwide vehicle fleet or an app that connects drivers to riders.
Maybe the party with biggest publicity budget wins, or maybe it's the one with lower overhead (in things like publicity), or maybe it's the one that pays better the drivers...
Or maybe there comes a company with a really open network, and destroys the entire market in exchange for a couple million (what is a good thing, by the way).
http://www.businessinsider.com/uber-says-its-profitable-in-t...
Nineteen cents per ride. Before tax!Does that $0.19 come from (total margins from US rides - total US operating expenses) / (total number of US rides), or is it (total user payment - total driver costs) / (total number of US rides). The former means that they're actually bringing in about 10m in total net profit per month, which isn't terrible. The latter means they're probably not doing so well.
In Uber's case it turns out "better than a yellow cab" is a pretty low bar to clear, and neither drivers nor consumers have much loyalty and are highly price sensitive, creating a race to the bottom.
In Square's case it turns out merchants will gladly use a slightly-worse iPad UI for payments if the fees are lower, and consumers don't really care regardless. Again, race to the bottom.
Right now it looks like Uber is engaged in an epic price war in many markets where the prices are unsustainably low - and these prices are sustained by a combination of setting VC cash on fire and squeezing driver pay. Having no insider information into Uber, I'm a bit skeptical that they're that close to be sustainably profitable.
https://twitter.com/neilanalien/status/627873374505562112
My mother drives in SF for Uber and Lyft. She makes about one quarter (with the same time/schedule) she did less than two years ago.
Some call this _market efficiency_ and point out this is functioning as designed.
My mother, she's moving back to Washington State.
Better than a yellow cab (UberX) isn't the interesting part of Uber's business, Pool (and a swarm of dynamically routed cars buzzing around a city, picking up and dropping off people and cargo) is. Further, that swarm becomes more cost-effective the larger it is.
People I talk to about this sort of thing USE online services, but we're also fully backed up and ready to move at a moment's notice. Probably a consequence of watching so many of these things go up in smoke.
I agree but not, I think, in the way you intend. If someone asks for a Kleenex and they get passed a non-Kleenex brand tissue, they rarely object. "Uber" could just become the 21st Century "Hoover".
Uber still has to compete on price, for sure. But there's certainly friction to A) download non-Uber ride sharing apps and (even greater IMO) B) open multiple apps to compare prices.
If Uber's price doesn't seem unreasonably high, what reason is there for people to compare?
that gives me an idea...
Some of these are still around but most are not. Not sure if the ride-sharing space will turn out the same or not. I feel at least Uber and Lyft are probably safe.
> that gives me an idea...
...for the ride service fare and time comparison feature in Google Maps?
Google Maps (on Android, at least, but I assume generally, I just haven't checked elsewhere) has that feature already, though when I've checked what it showed it only listed Uber. Even if it is currently Uber-only, the feature's UI makes very clear that its intended to be a ride service time & cost estimate comparison feature, so...
My friend wrote it. Includes other modes of transportation like buses and scooter-shares.
And so have customers. It's like grocery shopping. One store might be a little cleaner than another, have longer hours or feel safer, but, mostly, you go with the low-price leader.
It looks like they last raised money at a $62.5 billion valuation [1], which suggests that investors are expecting the company to operate at a global level. Unfortunately, Uber is facing extremely stiff competition in China [2] and India [3]. There's also the well-publicized tension between Uber and various European companies. And that's not even taking into account increased regulation in US cities like San Francisco [4].
So, while Uber is clearly a successful company - how successful will it be? $62.5 billion dollars successful? My guess would be no, which would drive a correction for the company.
[1] http://www.bloomberg.com/news/articles/2015-12-03/uber-raise... [2] http://fortune.com/2015/07/08/uber-didi-kuaidi-china-funding... [3] http://qz.com/645258/uber-sues-ola-for-allegedly-using-the-s... [4] http://www.sfgate.com/bayarea/article/SF-to-require-Lyft-Ube...
Yea--Uber has always rubbed me the wrong way, on so many levels.
This would be a win-win for many reasons, one of which would be that cities would keep the revenue from these services, or they could run it at cost and send more money to the drivers (thus stimulating the local economy and not VC valuations)
One challenge is that when things aren't going well companies are much quieter than when companies are going well.
[1]: http://www.nytimes.com/2016/01/15/technology/foursquare-rais...
At their HQ the bottom floor had astroturf and a lot of windows. This is where the pet day care was for all of the employees. You'd walk past and see how great it was to work there - just look at the pet day care!
When they shut down, they shut down so suddenly that nobody cleaned up that area.
I forget how long that space was vacant, but I want to say it was roughly a year. You'd walk by the space and you'd see little doggie turds in various forms of decay on the nearly-neon astroturf. The dot com boom in a nutshell!
https://www.google.com/#q=site://www.wsj.com/articles/this-t...
$30 a month for the 1~ article I read a week = $7.50 per article. I'd rather miss it and put the 7.50 in a retirement fund.
Sometimes the comments at foxnews.com are more civil than WSJ in my experience, but they're both pretty atrocious.
I guess "the high tech sector may experience a reasonably paced contraction" wouldn't get as many clicks.
https://www.google.com/trends/explore#q=tech%20bubble
I do see a slowdown but this is nothing like dot.com. Seems like a normal correction and is not really separate from the rest of the economy being uncertain. Nothing tech specific.
Bubble is an overused term. An inflated market is not a bubble, and a correction is not a bubble bursting. Markets go up and down all the time.
i.e. Not A Bubble.
Right now it looks like a gentler reversion to the mean in GDP growth from the peak of this 6-year business cycle, which was much less pronounced than previous business cycle peaks.
But who knows - the failure of a large firm that was generally thought to be solvent could set off another crash.
Someone invested in a mutual funds or index funds will have pretty little exposure. Sure Apple, Google, Twitter, and Facebook might lose some value, but those aren't a huge portion of a diversified portfolio.
Even the first web bubble only had modest real impact on the general economy. It put the country into a shallow recession for a few quarters but that was it.
Even worse was pouring money into things like Nortel after the crash was well under way. People just chased it to the bottom.
Edit: I thought I'd add that even in a bloodbath like 2001, not everything tanked. The (tiny) company I was with continued to grow in revenue. We weren't doing anything glamourous, just focusing on business value. No IPOs, although some folks were trying to push us that way in the late 90's.
I don't know what I'm saying I'm just saying it with data.
If interns are making $80k a year, I think most of us are safe (for the time being).
Lucrative internships are generally like $25/hr. 102k is twice that.
I personally wouldn't consider $25/hr to be particularly lucrative in the grand scheme of things considering how highly paid many interns in SV/SEA/NYC area. In my area, yes.
Energy, manufacturing, transportation, healthcare and agriculture have seen the most growth lately.
Of course tech can play a role in all of those industries, but overall tech is not that big a part of the US economy.
[1]http://www.investopedia.com/articles/investing/042915/5-indu...
There is surprisingly little tech going on in "tech" today.
Just like Ford's cars are made by factories, Facebook's products are made by programmers.
Even if you want to look at the "tech industry" as meaning "creates tech for use by other people" instead of just "develops tech-based products for consumers," Facebook still has some solid output (React Native, Nuclide, etc).
Warner Bros. makes plenty of money off of product placement, but it doesn't make them not a movie studio.
And what about Oculus? Are we writing off VR as a technology because Facebook might put advertising in it?
This stuff is all being driven from within the tech industry, even when it will benefit "other" industries.
Uber is a "tech company" because as they are providing a new business model for a livery service based on using an application to make a market that is distinct from the previous market.
Facebook is a "tech company" because they are providing a business model around sharing information between acquaintances (a social network) using an application and a web site.
Fedex is not a tech company as they are augmenting but not replacing their model or their processes. Foster Farms is not a tech company as they have not fundamentally changed the way in which they raise chicken.
I go back and forth on Tesla or SpaceX. Consider Tesla, they are a car company but electric cars have been around forever, their most successful incarnation, the Golf Cart, has dominated golf courses for decades. It wasn't the "idea" or the "product" that made the Roadster and then the Model S successful, it was the execution on the vision. Similarly SpaceX rockets are just rockets with better execution and better alignment with available technology.
Biggest example is Goldman Sachs. Their CEO came out and said "We're not an investment bank anymore, we're a tech company." Their rationale is that they have to use technology to defeat their competitors--before their competitors can use technology to defeat them.
Let's try a few examples: P&G: Not a tech company. They spend tons of money on advertising to get products on shelves and on TV that tons of Americans buy. They can innovate in packaging and distribution, but honestly not that much.
Tesla: tech company. Spending tons of R&D. I don't know how much, but it's a lot.
Pepsi: Not a tech company.
Your local grocery store: tight margins, probably not a tech company.
AmaGooFaceSoftPle: Billions/yr on new product development. Tech companies for sure.
https://www.google.com/search?q=procter+and+gamble+high+perf...
It's not just packaging and distribution. Now it's fair to point out that P&G spends less on R&D than tech companies, but it's not zero.
That's such a vague definition and one could seemingly fit every company into being a "tech" company if they wanted to. How do you unilaterally define something that is "completely new"? What precisely is a technological innovation? Isn't the iPhone not "completely new", since we had palm pilot and blackberry before it? Is a personal computer considered "completely new" even when mainframes existed before? How do you draw the line between a laptop that has a touch screen (but still has a keyboard) and one that is just a touch screen (iPad Pro for example)?
But I don't think that being arbitrary makes it invalid, the goal is simply to put a stake in the ground so that the conversation can move forward. One of the challenges of having discussions about tech bubbles or tech economies is agreeing on what companies are considered (by the speaker) to be tech companies, and which are not. Then the listener can translate that into their own set of companies and look past the definitional challenge and then on to the meatier question of the role of technology in the economy and the businesses that are currently considered valuable by that economy (or not).
But your other examples made a lot of sense to me.
Anyone that has worked in these industries knows how they usually don't care about whatever best practices are touted in tech conferences.
They only want something that delivers business value, regardless how the code looks like.
Companies that want to keep customers (in some cases keep customers alive [cars 'n shit]) are going to have to start caring about software as it becomes the conduit for every interaction their customers have with their products. It's not just social networks that are getting funded now—it's companies that build the previous poster's top five drivers of the US economy. I believe you have to call pretty much any company in those verticals tech companies to some degree.
Any Tech company, facebook and apple included, has a ton of accounting DNA when it comes down to the nuts and bolts - how to pay their employees, how their stock compensation is structured, and even how the founder keeps control of the company.
Accounting really is taking over the world - in every single industry, tech / high - tech included.
If by "tech", you mean "high tech", well, that encompasses an awful lot of different things, and of course the goalposts are constantly moving as today's high-tech becomes tomorrow's tech becomes the next day's obsolete.
If by "tech" you mean computer hardware, software, networking, and networked services, then sure, that's a pretty important driver of some other advances, but likewise advances in other fields help to drive this as well. Globalization, shipping, mining, energy, RF engineering, photonics, aerospace, and so on all play into this, and all both benefit from and contribute to the success of computer hardware, software, networking, and networked services. But just because this form of high tech can help with other fields, doesn't mean it's driving the economy. It may be increasing productivity to a certain degree, but there is an awful lot of the economy which is only minimally influenced by these kinds of things.
Requires technology
>manufacturing
Increasingly dependent on technology for the most basic of operations, such as managing inventory or customer orders.
>transportation
Automated driving, mandated auto breaking, hired drivers, bus schedules...
>healthcare
DHR, wireless pace makers, direct to pharmacy prescriptions
>agriculture
Indoor farms, pink LED's, automated nutrient systems
So I think it's quite the understatement
>Of course tech can play a role
Tech already plays a vital role and with out it we would not have the global economy and productivity levels that we currently enjoy.
You can see where I'm going here. The economy is a network. No single node is the focal point around which everything else orbits.
This right here. So what happens when AI becomes is in the focal length of simple adoption? AI isn't even affecting .0000000005% of the economy yet. But when it comes, it going to unleash of fury of change never before seen.
To go full circle, there's a reason that the "tech industry" carries a big weight. It's because the Information Age is coming to a close, and who knows what's next.
"The economy is us. We don't need a mechanic. Put away the wrenches—the economy's organic."
https://youtu.be/GTQnarzmTOc?t=5m4s
https://eresearch.fidelity.com/eresearch/markets_sectors/sec...
Tech. is second only to finance. Given finance is going through it's own troubles, fully expect tech to take over the top sector of the economy in the next five years.
The data you cite is from 2009->2015 so it's just showing the recovery from the great recession. In reality Manufacturing hasn't created jobs since the 1970's.
>Healthcare
Their lobby wrote a bill and gave it to the GOP which ran it as Romney Care. Obama couldn't get anything passed so now we call it Obama Care. So yes legally requiring all people to have something does ensure more people buy that thing.
>Energy
Is having a turbulent time now that you can export US Oil/Gas. Renewables continue to grow at a steady pace tho.
That's true, but output has steadily grown over those years.
None of that would be possible without Micro-controllers, programmers, or PC's to run their compilers/ladder logic programs on.
Yes, computing technology has played a major role in helping us communicate our advances and better model the next iteration. However, it's myopic to regard it as the sole driver.
Energy, Manufacturing, Transportation, and Healthcare are all very heavily entrenched in technology.
I would Agriculture may be "not so tech" still, but look at the amazing advancements in GMOs and equipment that are helping us feed our growing population.
Plus, who runs the infrastructure? Tech companies. What do they use when they need stuff? Other tech companies, like Google (apps), Amazon (AWS). They build their solutions using products like Facebook's React...
https://www.youtube.com/watch?v=WBmFH7fNxnA grape harvesting
https://www.youtube.com/watch?v=UlaNDm88yZo Autonomous harvesting robot for Sweet-pepper.
Highly recommend watching the cow milking one.
add in tech playing the MAJOR role in the MAJOR parts of growth in those industries, and you just look like a silly disagree monkey wasting everyones' time.
poo on you, shit monkey.
[1]http./duh
http://www.wsj.com/articles/SB100014240531119034809045765122...
Heck, most of them have their own software divisions. Let's not even get started on companies like Lockheed Martin/Honeywell - how many programmers do you think they employ?
Yes tech is the future - AI, VR, and etc. But most of us are writing web and mobile apps, and lots of those apps are not that useful.
Most companies are actually quite overstaffed for various reasons, freeing up X employees in department Y doesn't mean they slide over to department Z, Z already has more than enough employees usually.
Although in all likelihood, they were fired.
My simple web app, which took virtually no mental effort to create other than learning the source code system and some vanilla Web App / SQL, was treated as a god-send to those employees. It was still being used 6 years later, though I've lost track relatively recently. Always interesting to hear interesting stories like that out there.
My brother's workplace (from my distant vantage point, keep in mind) could have saved millions upon millions of dollars had it had a dedicated technical engineer working on crafting automated reports that connected their massive databases of data to its operational scientists instead of spending 2-4 hours on building the report themselves during the worst time-crunches.
You're unlikely to hit millions like you would from a VC, but you can be solving very tangible problems rather than the stereotypical "Uber for X". And you would be amazed at how much companies are happy to spend on products that work.
The main issue with deep learning is that for a small/medium client, there isn't enough data to train on. Lot of clients want classification software of some kind, but often it's binary and you don't need anything as complex as a CNN.
There are a few big frameworks for vision, like Halcon, which include SVM and neural net implementations (and loads of other stuff). You can provide training examples and it'll do the rest for you. It's not cheap and you have to charge for licenses, but they even have their own little scripting language as well as hooks for C++. The idea is you can use any camera, drag and drop functions and get your solution out. I've never used it, but I've seen their sales demos and they're quite slick.
What we're really talking about here is the end of a half-decade of basically free capital, which has been funneled into startups willy nilly. As a result, a lot of startups that never should have been funded will fail. Other startups that probably deserved funding, but were massively overfunded and overvalued will also face difficulties. Some startups will survive.
Similarly, some big tech companies are struggling to right-size the investments they made when their effective cost of capital was radically different from where it is today. Some will be fine. Etc.
There's an exception to that group. Microsoft was one of the largest companies by market cap ten years ago. They've been very consistently in that spot since 1998.
Exxon Johnson & Johnson General Electric AT&T
Exxon has a really large research arm, so do Johnson and Johnson. Maybe not tech as this forum traditionally thinks about it, but I'd consider it tech.
GE and AT&T have great research arms, as well, and they are much more tech: focused a lot on communications, storage, and hardware.
Tech isn't really an industry...
Amazon = Retail (and probably another 10-20% software and software services)
Google = Advertising (and probably another 10-20% non advertising)
Facebook = Advertising
Microsoft = Software / Services (but very diversified)
Also, companies like Bechtel and Saudi Aramco are not publicly traded but could be considered in the "largest" category. We just don't know what their market cap is because they're private.
I think you are failing to see the overall picture. 10 years is not a long time, those companies could fall out of favor at any time. yes software runs the world, but is it facebook and twitter software or software that runs industrial services and backend systems? do you really think Uber is more important than something like general electric or dow chemical?
Housing / real estate are the backbone of the economy. Everyone needs buildings. Does that mean it could never be in a bubble?
I wanted to validate ideas early and tighten the feedback loop for products I was building, so we built Baqqer in the hopes it would create transparent projects and companies that help grow community from day one. Less time floating around until launch going "I hope someone uses or pays me for this." and more time spent figuring out what people actually want.
https://medium.com/@tbsmartens/is-iot-the-end-of-rocket-inte...
It´s all about singularity: How many services do you need that all do the same? Not too many, not too many - and this realisations will hit everybody, from ad-tech to server technologies to consumer services.