1/ Most tech companies are horizontal platform companies, but a few exceptions stand out—Apple, Tesla and Netflix are all vertically integrated.
2/ Apple integrates hardware, SoC, OS, applications, services, and retail. Key advantage: ability to move in lockstep. New hardware capabilities are translated to sw and use cases immediately. No need to wait for 'adoption'. eg. 64-bit SoC/OS/sw.
3/ Tesla integrates manufacturing, battery pack design, hardware, OS, apps, AI chip, software, retail, supercharging. Key advantage: go-to-market speed, differentiation on 'use case' rather than specs. eg. long distance trips via supercharger.
4/ Netflix integrates content creation, content distribution, and software. Notably, Netflix almost integrated hardware (Roku) but decided to spin it out. Key advantage: differentiation, cost reduction, less reliance on suppliers. eg. Stranger Things
5/ Vertical integration is especially hard to imitate. Your competitors can't just copy one aspect of your business, they have to copy the whole stack. This may help explain why there's only one Apple, one Tesla, one Netflix.
• • •
Missing some Tweet in this thread? You can try to
force a refresh
ETH, with a little help from @LidoFinance and @CurveFinance, can generate 12% yield. But where does this yield come from?
Let's break down the ponzu recipe. 🧫👇
The Ethereum blockchain gives rewards to computers that validate transactions. If you hold ETH, you can validate transactions. The easiest way to do this is to use a service like Lido. The yield is currently ~6%. lido.fi
Normally when you stake your ETH, your ETH is locked up. Lido gives you staked ETH (stETH) tokens in return. This makes you ETH liquid and allows you to do stuff with them.
The public cloud makes it easy for anyone to start a software company—but at a cost—your margins now belong to AWS. Thread:👇
There are three ways of paying for software infrastructure: 1. have your customer pay for it (cheap) 2. build your own data center (somewhat costly) 3. rent from a public cloud (very costly)
The cheapest infra is no infra. This is the classic enterprise software model: the customer buys your sw to run on their own hw. Selling pure sw yields the highest margins in industry: 90%+.
1/ How James Cameron’s Terminator 2 predicted modern AI chips and sparked the debate on AI safety. An appreciation thread.👇
2/ This is the chip that powers the T-800. Based on its appearance and commentary from chief architect Miles Dyson, the movie makes three predictions about future processors: 1) neural net acceleration 2) multi-core design 3) 3D fabrication.
Let’s look at these claims.
3/ Among the many technologies Cameron could have picked for Terminator, neural network processor was spot on. Neural net is the breakout technology of the past decade. As of 2020, there are ~100 companies building neural net processors with annual revenues exceeding $5 billion.
1/ Apple's upcoming ARM MacBooks isn't just going to save them some money and run a bit faster. It marks the beginning of the end of the x86 era and Intel's four decade empire.
Thread⬇️
2/ In the computer industry, victories are won through standards and scale. Intel invented the x86 standard. And by winning in the largest market of the 90s—PCs, it moved upmarket and eclipsed all server CPU vendors in a decade.
3/ Today smartphones are by far the largest computer market. At $600B, it’s larger than PCs and servers combined. Smartphones use ARM CPUs while PCs and servers use x86. Through the forces of standards and scale, it ought to displace x86 CPUs in PCs and servers. Why hasn’t it?