A weekly(-ish) newsletter on commerce, media, science, tech, investing, & internet culture by Alex Taussig of Lightspeed.

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A weekly(-ish) newsletter on commerce, media, science, tech, investing, & internet culture by Alex Taussig. I am a partner at Lightspeed in Silicon Valley.

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Drinking from the Firehose #116


In Silicon Valley, no aphorism is more widely parroted than "everyone should learn to code."

According to the Bureau of Labor Statistics, the U.S has 1.3 million people employed in software development, earning median pay of $103K annually. The country is expected to add another 302K of these jobs over the next 8 years. For workers with a Bachelor's degree, the only two other occupations that are expected to add more than 50K jobs over that time period with salaries over $75K are financial managers ($125K salary) and medical/health service managers ($98K salary). In this salary and education tier, software development is the highest growth job category in the country.

To quasi-quote another venture capitalist (!), software is eating the public markets. The largest five global companies by market cap in 1980 were IBM, AT&T, Exxon, Standard Oil, and Schlumberger. In 2018, they were Apple, Amazon, Microsoft, Alphabet/Google, and Berkshire Hathaway. Because Berkshire is a holding company of much smaller companies, the #5 slot should really belong to #6 on the list, which is Facebook. 

More importantly, software is transforming industries that themselves are not in the software business. We can see that transformation occur suddenly through the blunt instrument of M&A. General Motors bought a self driving car startup for $1 billion. IKEA bought a labor marketplace and rolled it out globally. Even McDonalds bought an AI company for $300 million.

And yet, when it comes to building new things, knowledge of how to build software is becoming less necessary every year.

Amazing new tools have made many useful applications trivial to build with little to no code at all. I share the below tweet, which provides examples of products that enable applications like e-commerce, websites, newsletters (!), and podcasts. Even technical categories like middleware and databases now have accessible toolkits. Top tier software developers will always drive the cutting edge of technology (those cars won't self-drive themselves!), but more software does not necessarily mean more software developers.

All in all, human creativity is the only constrained resource we have. The best use of talent is focusing on unlocking that creativity. For some, it means developing software tools that others can use. But, for most of us, it will mean consuming those tools to build fantastic and useful applications.



Family finances.

Last week, I shared my frustration in finding simple tools for GAAP-like personal financial management. Unfortunately, I still affirm my position that nothing out there satisfies this condition, but Ben Collins shared an article he wrote on Tiller, which may be one of the most interesting services I uncovered.

Private parts.

A recent analysis of Amazon's private label brands yielded a surprising conclusion: most of them aren't selling. The top 10 constituted 81% of Amazon private label sales. Moreover, Amazon added 100 new brands in 2018, but none of these are category leaders. Analysts believe that total Amazon private label sales are under $1 billion, less than 1% of its total e-commerce sales.

Where private label does seem to be working is Amazon's Basics line. That's because nearly 70% of searches on Amazon are for generic goods. When you don't care about brand, you'll buy Amazon's brand! That's why Basics dominates in categories like batteries and iPhone chargers. Many of Amazon's private label products that imitate branded hits (e.g. mattresses, yoga mats) get worse reviews and cost more than the competition. Blame that on the difficulty of executing across so many categories simultaneously. 

Big food is hungry for M&A.

CPG companies, especially those in food & beverage, have a big appetite for M&A, with over $300 billion in value transacted annually. While small compared to the several trillion each year in technology, over 80% of CEOs of CPG companies believe the trend will accelerate in the near term. Landmark deals recently include Cambell's/Snyder-Lance ($5 billion), Hershey/Amplify Snack Brands ($1.6 billion), General Mills/Blue Buffalo ($8 billion), and Conagra/Pinnacle Foods ($11 billion).


Howdy, partner.

Turner Novak wrote some thoughtful takeaways from Snap's first Partner Summit. It announced a bunch of new products, mostly focused on turning 1st party features into development kits for 3rd parties. I like Turner's take on this:

"If you believe consumer social is entering an era of fragmentation (and even if you don't), Snap Kit is important because it’s a decentralized social network with usage attribution and monetization opportunities for Snap, developers and publishers."

Masters of the universe.

Matthew Ball at REDEF shared box office gross charts for releases in the Marvel Character Universe. If we look at first releases by movies with new characters (Ant-Man, Dr Strange, "new" Spiderman, Black Panther, and Captain Marvel), you can see the more recent ones driving more immediate revenues. That's an uncanny sign of the network effects of a character universe -- each new character launches off a larger platform.


Alexa will see you now.

Amazon has completed a milestone in its quest to enter the healthcare market. Its Alexa voice platform is now HIPPA compliant. Alexa could now, for example, respond with your blood glucose level, or help you contact a doctor via your favorite telemedicine service.


Ready for your close up.

Supermassive black holes have long been imagined in popular media. The most recent defining take came from Christopher Nolan's masterpiece Interstellar. Researchers are expected to show off the first actual picture of one of these next week! Expect to be underwhelmed relative to Nolan's CGI. 


Rick and Morty is for grown ups too.

Ok, prepare an eye roll, because this one's about the deep, philosophical brilliance of Rick & Morty. Luckily it has lots of YouTube clips to illustrate points. The author puts it best: 

"At the heart of Rick and Morty is a choice: Will you crumple in despair knowing the terrifying truth that life is totally meaningless or will you saddle up the universe and strike out for a life of fun and adventure? It’s a classic question at the root of all great stories throughout all time."

Disclaimer: * indicates a Lightspeed portfolio company, or other company in which I have economic interest. I also own stock directly in AAPL, ADBE, AMZN, CRM, FB, FTCH, GOOG/GOOGL, NFLX, SPOT, SQ, TSLA, and TWLO.

Lightspeed Venture Partners, 2200 Sand Hill Rd, Ste 100, Menlo Park, CA 94025 USA Sent to — Unsubscribe