Software IS famously eating the world (Marc Andreessen)
Why Software Is Eating The World
Every business is becoming a software business, and being disrupted in the process.
In regard to mobile specifically, it may well be eating the Universe.
Mobile is disrupting the disrupters.
Starting with Facebook.
The announcement that Facebook paid $19 billion for WhatsApp is a seminal event in the history of technology. I know that this sounds bold but it demonstrated just for starters that the days of purchasing a quickly built Instagram for $1 billion is far (very far, very very far) from a black swan event.
And it shows that Facebook, just recently considered the emergent dominant force in technology, is clearly on the defensive playing catch-up.
AND HIGHLY VULNERABLE.
You don't believe that? If mobile is eating the Universe, a lot of big companies who do not excel in mobile as a CORE COMPETENCY in the mobile space will die.
(Facebook's strengths in mobile will also be discussed)
Is the technology landscape starting to not only shift but explode?
Things could change, but how strong is Facebook in mobile compared to Google and Apple, for starters? (Think mobile operating system, detailed below)
Mobile competition is the defining factor. If Facebook cannot find a way to keep up with Google and Apple in the mobile space, they are (eventually) toast.
And at the prices that today's leading mobile apps are and will be selling for - no, WhatsApp will not be the higher water mark,and perhaps not by a longshot, Facebook, as rich as they may seem to be, could easily go broke in this arms race relatively quickly.
YOU READ IT HERE FIRST.
I read in one article that the WhatsApp purchase represented 9% of Facebook's stock. If accurate, (and I'm not sure or not whether it completely is as Facebook has a current market cap of $169 billion and change Page on google.com, but in any event the purchase represents a major major event for Facebook (and beyond)) I'm surprised that this huge bet on a single app by Facebook is not being more discussed specifically in regard to representing more than a moderate amount of risk for Facebook.
I don't know that this marks (pun intended) Facebook as being desperate, but clearly Facebook is highly vulnerable living on the buy side in a buy versus build mobile world.
Ok, you may not believe me, but listen to what Kara Swisher, who you love and respect, has to say about the WhatsApp purchase
Facebook Price for Having No Phone OS? $19 Billion. A Must-Have Apps Play? Priceless.
Kara writes in part:
"Translation: We have now established a price floor for what it costs not to have a mobile operating system in a world in which having a mobile operating system counts for an awful lot these days.
And that means, for all intents and purposes, Google’s Android operating system and Apple’s iOS. And not, despite various and sundry efforts, Facebook, which also has tried to create a mutated shell version of its own OS called Home. (Phone home, as it turned out, did not work as well as it did in the movie.)
But a mobile presence is a must-do in the current digital environment, and this massive acquisition makes it clear that Facebook has decided that its core strategy will be to create or buy up must-have apps that consumers demand to have on their mobile devices."
Facebook only has a finite amount of money for acquisitions of course, as big as it is, and there are and will be a lot of valuable apps out there.
$19 billion for one communication mobile app? $19 billion here, and $19 billion there. And pretty soon you're talking real money.
Bankruptcy money perhaps when you consider the terms of this purchase for Facebook and what it implies going forward in this mobile eats the Universe world (read till the very end to see what I mean, no spoiler provided).
And prices, obviously are hitting the stratosphere. Marissa Mayer has "bought in" on mobile as a core strategy
Google has huge pockets.
Facebook is truly vulnerable in this new world.
In Facebook's Defense
Of course I am not saying that Facebook is toast. That might be ludicrous. But it doesn't sound quite as ludicrous as it did two days ago before the WhatsApp purchase was announced.
Of course Facebook builds in addition to buys. Paper for example. And they have their own messaging service, which they are keeping.
For Facebook, a company famously known for growing to the top in such a short period by building feature after feature themselves (Zuckerberg as a coder himself is an iconic image) isn't it ironic that in the mobile world, which is eating the Universe, that Facebook, seen to be the up and coming company displacing Google and Apple overall, is now in danger of being destroyed by Google or Apple in this mobile transformed technology world.
Or by another company. We're only at the very very very beginning of the mobile landscape. What if the next groundbreaking mobile company, say 2-3 years from now, is at that point (again, remember all the competitive bidding among the technology giants) now worth $100 billion.
And what if it decides not to sell but compete with the giants on its own.
Maybe Snapchat was totally crazy to turn down Zuck's $3 billion
Snapchat Spurned $3 Billion Acquisition Offer from Facebook - Digits - WSJ (or possibly not). But maybe some future hotshot breakout mobile startup will not be.
And Snapchat, despite being today's media darling may still seem unimpressive to some, is not alone. Remember Twitter famously spurned Facebook, for example, as well.
When Twitter Met Facebook: The Acquisition Deal That Fail-Whaled
(Kara again, gosh darn it)
Deja Vu All Over Again
Look at Microsoft. The lost decade (and longer) famously involved Microsoft being very late to the Internet. And not understanding it well because it was invested so heavily in its legacy products.
Bill Gates' famous warnings have not been seriously enough heeded by the company. To. This. Day.
Goodbye Steve "Windows Mobile - Surface" Ballmer.
Apple and Google ate Microsoft (Microsoft is still in the game but clearly in "ketchup" mode). And Apple and Google (or somebody else) may destroy Facebook as well.
Zuckerburg Has Been Outvisioned by Larry Page and Jeff Bezos (and of course Steve Jobs as Well)
This headline might have seemed utterly absurd until recently.Mark Zuckerburg has long been viewed as a visionary, and an incredible one at taht. And he may well still be. But today, never moreso than after this acquisition, Facebook is looking rather small. Or more accurately, NARROW.
Not because of what Facebook is but because of what the world is, the Universe is, the landscape is in this post WhatsApp acquisition world.
Humpty Dumpty has fallen and cannot be put back together again.
Mark Zuckerburg, as incredible as he is, to survive much less prosper needs to take a lesson out of Larry Page's moonshots and Jeff Bezos' bringing together of convergent dominant technologies
Technology Convergence - How VC's and Larry Page are "Going Big or Going Home"
And fucking quickly as well.
Bill Gates I believe it was, was famously quoted as being most scared by two kids in a garage. These two kids, now funded by TechStars or Y Combinator and an initial seed round, now have, believe it or not, in the next few years the capability to morph quickly into a hundred billion dollar company.
For real. Most won't of course. But all it may take is one.
Every company is at risk. Including, for example, Amazon:
It is famously said that people overestimate the amount of change in the short term, but underestimate the amount of change in the long-term.
For Facebook today, and many others in the coming days, that long-term has arrived today.
Why The Future is Now
How much power do you have when you can command $19 billion, and you are predicated on a business model that might well be considered actually anti-monetization (and Facebook gives in to this anti-monetization model despite purchasing).
I know it sounds crazy. Don't believe it. It's all in the blog post announcing the purchase from WhatsApp investor Sequoia Capital
WhatsApp | CrunchBase Profile
which reads in part:
Four Numbers That Explain Why Facebook Acquired WhatsApp
"Jan keeps a note from Brian taped to his desk that reads “No Ads! No Games! No Gimmicks!” It serves as a daily reminder of their commitment to stay focused on building a pure messaging experience.
This discipline is reflected in WhatsApp’s unconventional approach to business. After one year of free use, the service costs $1 per year — with no SMS charges. This can save users trapped in expensive data plans up to $150 per year.....
There's more. Get ready, here is the money shot quote from the Sequoia post:
"Facebook has assured Jan and Brian that WhatsApp will remain ad free and they will not have to compromise on their principles. We know that Jan, as a new member of Facebook’s board, will continue to champion the rights of WhatsApp users."
$19 Billion for an essentially free service that will remain so and without ads? A purchase that represents, frankly, a very substantial chunk of your company's worth? For one app?
THE WORLD HAS FUCKING FOREVER AND UTTERLY CHANGED.
Believe it (or not at your own risk)
Why Software Is Eating The World
Every business is becoming a software business, and being disrupted in the process.
In regard to mobile specifically, it may well be eating the Universe.
Mobile is disrupting the disrupters.
Starting with Facebook.
The announcement that Facebook paid $19 billion for WhatsApp is a seminal event in the history of technology. I know that this sounds bold but it demonstrated just for starters that the days of purchasing a quickly built Instagram for $1 billion is far (very far, very very far) from a black swan event.
And it shows that Facebook, just recently considered the emergent dominant force in technology, is clearly on the defensive playing catch-up.
AND HIGHLY VULNERABLE.
You don't believe that? If mobile is eating the Universe, a lot of big companies who do not excel in mobile as a CORE COMPETENCY in the mobile space will die.
(Facebook's strengths in mobile will also be discussed)
Is the technology landscape starting to not only shift but explode?
Things could change, but how strong is Facebook in mobile compared to Google and Apple, for starters? (Think mobile operating system, detailed below)
Mobile competition is the defining factor. If Facebook cannot find a way to keep up with Google and Apple in the mobile space, they are (eventually) toast.
And at the prices that today's leading mobile apps are and will be selling for - no, WhatsApp will not be the higher water mark,and perhaps not by a longshot, Facebook, as rich as they may seem to be, could easily go broke in this arms race relatively quickly.
YOU READ IT HERE FIRST.
I read in one article that the WhatsApp purchase represented 9% of Facebook's stock. If accurate, (and I'm not sure or not whether it completely is as Facebook has a current market cap of $169 billion and change Page on google.com, but in any event the purchase represents a major major event for Facebook (and beyond)) I'm surprised that this huge bet on a single app by Facebook is not being more discussed specifically in regard to representing more than a moderate amount of risk for Facebook.
I don't know that this marks (pun intended) Facebook as being desperate, but clearly Facebook is highly vulnerable living on the buy side in a buy versus build mobile world.
Ok, you may not believe me, but listen to what Kara Swisher, who you love and respect, has to say about the WhatsApp purchase
Facebook Price for Having No Phone OS? $19 Billion. A Must-Have Apps Play? Priceless.
Kara writes in part:
"Translation: We have now established a price floor for what it costs not to have a mobile operating system in a world in which having a mobile operating system counts for an awful lot these days.
And that means, for all intents and purposes, Google’s Android operating system and Apple’s iOS. And not, despite various and sundry efforts, Facebook, which also has tried to create a mutated shell version of its own OS called Home. (Phone home, as it turned out, did not work as well as it did in the movie.)
But a mobile presence is a must-do in the current digital environment, and this massive acquisition makes it clear that Facebook has decided that its core strategy will be to create or buy up must-have apps that consumers demand to have on their mobile devices."
Facebook only has a finite amount of money for acquisitions of course, as big as it is, and there are and will be a lot of valuable apps out there.
$19 billion for one communication mobile app? $19 billion here, and $19 billion there. And pretty soon you're talking real money.
Bankruptcy money perhaps when you consider the terms of this purchase for Facebook and what it implies going forward in this mobile eats the Universe world (read till the very end to see what I mean, no spoiler provided).
And prices, obviously are hitting the stratosphere. Marissa Mayer has "bought in" on mobile as a core strategy
Google has huge pockets.
Facebook is truly vulnerable in this new world.
In Facebook's Defense
Of course I am not saying that Facebook is toast. That might be ludicrous. But it doesn't sound quite as ludicrous as it did two days ago before the WhatsApp purchase was announced.
Of course Facebook builds in addition to buys. Paper for example. And they have their own messaging service, which they are keeping.
For Facebook, a company famously known for growing to the top in such a short period by building feature after feature themselves (Zuckerberg as a coder himself is an iconic image) isn't it ironic that in the mobile world, which is eating the Universe, that Facebook, seen to be the up and coming company displacing Google and Apple overall, is now in danger of being destroyed by Google or Apple in this mobile transformed technology world.
Or by another company. We're only at the very very very beginning of the mobile landscape. What if the next groundbreaking mobile company, say 2-3 years from now, is at that point (again, remember all the competitive bidding among the technology giants) now worth $100 billion.
And what if it decides not to sell but compete with the giants on its own.
Maybe Snapchat was totally crazy to turn down Zuck's $3 billion
Snapchat Spurned $3 Billion Acquisition Offer from Facebook - Digits - WSJ (or possibly not). But maybe some future hotshot breakout mobile startup will not be.
And Snapchat, despite being today's media darling may still seem unimpressive to some, is not alone. Remember Twitter famously spurned Facebook, for example, as well.
When Twitter Met Facebook: The Acquisition Deal That Fail-Whaled
(Kara again, gosh darn it)
Deja Vu All Over Again
Look at Microsoft. The lost decade (and longer) famously involved Microsoft being very late to the Internet. And not understanding it well because it was invested so heavily in its legacy products.
Bill Gates' famous warnings have not been seriously enough heeded by the company. To. This. Day.
Goodbye Steve "Windows Mobile - Surface" Ballmer.
Apple and Google ate Microsoft (Microsoft is still in the game but clearly in "ketchup" mode). And Apple and Google (or somebody else) may destroy Facebook as well.
Zuckerburg Has Been Outvisioned by Larry Page and Jeff Bezos (and of course Steve Jobs as Well)
This headline might have seemed utterly absurd until recently.Mark Zuckerburg has long been viewed as a visionary, and an incredible one at taht. And he may well still be. But today, never moreso than after this acquisition, Facebook is looking rather small. Or more accurately, NARROW.
Not because of what Facebook is but because of what the world is, the Universe is, the landscape is in this post WhatsApp acquisition world.
Humpty Dumpty has fallen and cannot be put back together again.
Mark Zuckerburg, as incredible as he is, to survive much less prosper needs to take a lesson out of Larry Page's moonshots and Jeff Bezos' bringing together of convergent dominant technologies
Technology Convergence - How VC's and Larry Page are "Going Big or Going Home"
And fucking quickly as well.
Bill Gates I believe it was, was famously quoted as being most scared by two kids in a garage. These two kids, now funded by TechStars or Y Combinator and an initial seed round, now have, believe it or not, in the next few years the capability to morph quickly into a hundred billion dollar company.
For real. Most won't of course. But all it may take is one.
Every company is at risk. Including, for example, Amazon:
It is famously said that people overestimate the amount of change in the short term, but underestimate the amount of change in the long-term.
For Facebook today, and many others in the coming days, that long-term has arrived today.
Why The Future is Now
How much power do you have when you can command $19 billion, and you are predicated on a business model that might well be considered actually anti-monetization (and Facebook gives in to this anti-monetization model despite purchasing).
I know it sounds crazy. Don't believe it. It's all in the blog post announcing the purchase from WhatsApp investor Sequoia Capital
WhatsApp | CrunchBase Profile
which reads in part:
Four Numbers That Explain Why Facebook Acquired WhatsApp
"Jan keeps a note from Brian taped to his desk that reads “No Ads! No Games! No Gimmicks!” It serves as a daily reminder of their commitment to stay focused on building a pure messaging experience.
This discipline is reflected in WhatsApp’s unconventional approach to business. After one year of free use, the service costs $1 per year — with no SMS charges. This can save users trapped in expensive data plans up to $150 per year.....
There's more. Get ready, here is the money shot quote from the Sequoia post:
"Facebook has assured Jan and Brian that WhatsApp will remain ad free and they will not have to compromise on their principles. We know that Jan, as a new member of Facebook’s board, will continue to champion the rights of WhatsApp users."
$19 Billion for an essentially free service that will remain so and without ads? A purchase that represents, frankly, a very substantial chunk of your company's worth? For one app?
THE WORLD HAS FUCKING FOREVER AND UTTERLY CHANGED.
Believe it (or not at your own risk)
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