1/ I always joke that predicting the future of tech is way easier than most people think... the hard part is making any money off those predictions
This 2001 paper ("Big in Japan: iMode and the Mobile Internet") is one of the best examples I've ever seen- core.ac.uk/download/pdf/3…
2/ Looking back, the modern smartphone era didn't begin until the launch of the iPhone in 2007
But this paper makes it clear: even in 2001, it was obvious to pretty much everyone that the future of the internet was going to be mobile
3/ Moreover, all eyes pointed to Japan as a template for the rest of the world: in 1999, the Japanese telco NTT DoCoMo had launched "iMode," the world's first mass-adopted mobile internet service. By 2001 it had over 20 million users (15% of the Japanese population)
4/ iMode was vertically-integrated: NTT DoCoMo bundled 2G internet connectivity with its own proto-smartphone hardware (in partnership with OEMs), custom web browser, proprietary web standard (a modified version of HTML), and in-house index (a portal of 1480 'approved' websites)
5/ In case it's not clear, this is super weird by today's standards! The telcos didn't just control internet service - they basically controlled the INTERNET
To get your website on iMode, you had to pay DoCoMo an upfront fee + a *9% take rate*. This was $3.4B business in 2001
6/ Imagine you're a tech executive or investor looking at Japan in 2001. What's the takeaway?
You should be getting into the telecom business! After all, who wouldn't want to get their very own 9% cut of what is obviously going to be a trillion dollar mobile internet TAM?
7/ Of course, that's not what happened. Instead, Japan proves to be a dead end
6 years later, Apple launches the iPhone... and turns the tables on the telcos by seizing full control over the hardware, the OS, the browser, and the app store. Telcos remain a dumb pipe to this day
8/ What's the lesson here?
Predicting the general contours of the future is easy ('people will browse the internet on their phones'). However, it's the details that ultimately matter, ie who / when / where / why?
Case studies can give false comfort. Precedent is not destiny!
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1/ In 1968, former ARPA director J. C. R. Licklider published "The Computer As A Communication Device"
Given it was written right before the launch of the ARPANET, this is basically the founding document of the internet
And its predictions hold up remarkably well!
2/ For context: Mitchell Waldrop has called JCR Licklider "computing's Johnny Appleseed." As an ARPA director in the 60s, he basically funded half of the projects that became the internet
This paper was the brainchild of him & protege Bob Taylor, who later led Xerox PARC
3/ Licklider opens straight to the point:
"In a few years, men will be able to communicate more effectively through a machine than face to face."
"The programmed digital computer can change communication more profoundly than did the printing press and the picture tube"
1/ A fun piece of tech history that I came across today: an online copy of Microsoft's 1986 IPO prospectus. At just 52 pages, a light piece of weekend reading!
2/ Most investors know 1980s-era Coke was an example of untapped pricing power - but *why* was this the case?
Turns out Coke was subject to a 100-year-old bottling agreement that had fixed its syrup pricing at $1 per gallon... in perpetuity! (+ later adjustments for inflation)
3/ The turning point was 1986: that's when Doug Ivester invented the "49% solution," a scheme to acquire Coke's old US bottlers and install discretionary pricing for the first time ever
Not coincidentally, Buffett starts buying stock a year later
2/ At its March 2006 launch, AWS was probably the 4th or 5th cloud service run by a Fortune 500 firm
HP launched its Flexible Computing Service in Nov 2005
Sun Grid went into beta in 2004
IBM launched "Linux Virtual Services" in 2002!
But AWS is the only one anybody remembers
3/ I'll focus on IBM here -
From the WSJ in *2002*: "Linux Virtual Services allows customers to run their own software on mainframes in IBM data centers and pay rates based largely on the amount of computing power they use"
Last year, I spent my winter holiday reading hundreds of pages of equity research from the 1999/2000 era, to try to understand what it was like investing during the bubble
A few people recently asked me for my takeaways. Here they are -
2/ Every document hereon comes from my former employer Bernstein Research's internal research archive, which extend back to 1994
Unfortunately, they're not available to the public (even Bernstein's client website cuts off at 2003), but happy to give more details if necessary
3/ LESSON #1: Everybody knew it was a bubble
Unfortunately, the quip "it's not a bubble if everyone says it is" just isn't true
Investors were comparing the internet sector to tulip mania as early as mid-98. Bernstein held an entire conference on it in June 99!
1/ In September 1993, then-Microsoft exec Nathan Myhrvold wrote his landmark memo "Road Kill on the Information Highway", laying out a dozen-ish predictions on the rise of the internet
27 years later, I think it's a super interesting case study. Let's evaluate the predictions -
2/ PREDICTION #1: The rise of a surveillance society - police bodycams, CCTV, 24/7 personal recording, and deepfakes
GRADE: A-
Pretty close!
3/ PREDICTION #2: Telecommuting, an end to the "tyranny of geography" and gerrymandering
GRADE: B-
Alas, the electoral college still matters today. The WFH prediction hits closer, but turns out it took two and a half decades + a pandemic to get things going