Mary Meeker is a legend in Silicon Valley. Why? Because every year, she comes out with what many think is the most complete and thorough analysis of the technology industry. Now, Mary and her team do impeccable work: her presentations are full of great graphs, her slides full of data...and you have to believe that her insights come from hours of researching the industry and listening to the thousands of entrepreneurs that come to Kleiner Perkins Caufield & Byers (Meeker’s employer) for investments.
There is one problem though. The research pack is long and dense. The presentation she shared at last week’s 2018 Code Conference is 294 slides long. The conference gave her a half an hour to go through her content. That’s almost criminal to the data.
So, whether you have 30 minutes to listen to the presentation, or a few hours to analyze her slides in depth, I thought you’d appreciate a few highlights.
The Cloud: Think Amazon's ruling the world?! Think again.
In the US, many of us revere Amazon’s business model. The company has proven incredible ability to execute at scale. But Amazon is not alone. Check out Alibaba’s metrics. In particular, Alibaba’s Gross Merchandise Value (GMV) in relationship to Revenue. Alibaba GMV is 3X Amazon's, despite the fact that Amazon's revenue is 5X Alibaba's. It's not a gross margin issue mind you: Alibaba matches Amazon's offer at each level of the stack and has a lot more free cash flow, it appears.
If you're not convinced that Voice could be one of A.I's killer apps, go ask Alexa or your Google Home. Even better, go watch one of Sundar Pichai's presentations at this month's Google I/O developer conference and you'll see what I mean. AI-powered voice applications are taking over the world. Google’s Machine Learning word accuracy looks to have surpassed the threshold for Human Accuracy. Amazon Echo (and the skills developed for the company’s platform) are on fire.
If you’re a CIO or an enterprise technology buyer, I’m sure you’re thinking you can compete here. Many of the technology buyers often believe they can out-innovate tech companies. Buy. Don’t Build. Unless of course, technology is part of your core competency.
If that’s the case, prepare to shell out large amounts of cash. Tech companies' R&D is high and it's growing: it was 13% of revenue 10 years ago. It is now 18%. (I think that the average enterprise R&D spend is right over 4% of revenue...).
There are a lot more insights to be gleaned out of Mary Meeker's report. For data related insights, see more here. For a view into some of our macroeconomic trends, you'll find more here.
