Alvin's Newsletter: No. 13
Weekly newsletter on what I saw interesting in tech, venture capital and business.
📰 News
Apple One and the great rebundling: In about a decade we have gone from the decline of cable/pay-tv bundles, to the various unbundled options (Netflix, Disney+, Amazon Prime Video, Apple TV - Ben Thomson called it ‘the great unbundling’) to what we are seeing now, a rebundling of sorts.
Amazon Prime Video is a great case in point. By itself - it likely does not merit subscribing to the service when there are much better options. Amazon still wants to compete in the space and has a nominal cost to acquiring customers for the service because it leverages it’s Amazon retail customer base. To compete with superior services they have taken a different approach - providing Prime video ‘free’ to their Amazon Prime customers. And here we get to the ‘lynch pin’ for Amazon - it’s delivery service. Everything on-top is an added bonus and further solidifies Amazon’s moat. It gives Amazon great flexibility in pricing, locking-in customers, competing and acquiring customers from many different customer pools and into the Amazon family.
Apple is in a similar position. It is looking to grow its service revenue and has many disparate services it offers - Cloud, Music, Arcade, TV. Most people will not sign up to more than 1 or 2 of these and providing the other services in an all-in-one bundle are a nominal cost to Apple. A bundled option makes great sense here given the advantages. Apple has less of lynch-pin to leverage than in Amazon’s case - its best performing unit in the above would be Music. It’s an excellent way to make the value of this service better and give people an entry point into the other services that Apple has to offer - especially as it gets deeper into the space and introduces more.
And the entry-point for this all-in-one bundle - the the purchase of an iPhone. Easy to sell, explain and setup. Genius.
Why would I sign-up for Spotify? Link
📚 Reading
Continuing another early theme in my newsletter, the passion economy. Here Martin Anqeutil goes into the question of ‘Why now?’. His first reason, ‘The Rise of Creators’ is by far the biggest - underlying that though is the explosion on the demand side and the development of distribution networks (Youtube, insta etc.). Link
IPO’ing options in todays day and age and the different incentives that are at play. Must read if you want to know the in’s and out’s of what makes this work. One item brushed over is the ‘greenshoe’ option that the underwriting investment bank(s) get - linked if you want to know more on it. [Paywall] Link
Valuation model for VC companies. This an in-depth 2018 paper - I haven’t gone through it yet but looks interesting. Link
More on venture capital - this time looking into how a VC portfolio is constructed. Link
🦖 Entertaining & Interesting things
In 2005, the US Government wanted Apple to make some modifications to some iPods - top secret. This is that story. Link
Goldman Sachs built an M&A app called Gemini. Interesting on how they are approaching it. Link
Flippy robot flipping burgers. We haven’t seen robotics in food yet - much (see SoftBank backed Zume). Very early days and we will see lots of failure before something emerges. Link
Unbricking a $2,000 bike with a $10 Raspberry Pi to work with Zwift. Link
🎧 Podcasts
The best podcast episodes last week according to Bosco Tan:
Inside the NBA Pandemic Bubble (The Daily) - 30 mins: Marc Stein has been an NBA insider for years. He is currently reporting inside the much publicised Orlando Disney Bubble - where the NBA basketball league, journalists and support staff have been quarantined in an attempt to finish their annual competition. While widely seen as hugely successful, his insider account reveals the huge cost and coordination involved. A microcosmic playbook for government policy. Link
The Cost of Remembering (Revisionist History) - 43 mins: The final episode of the latest season of Malcolm Gladwell’s podcast series where he goes back and revisits misunderstood stories in history. This is a tale of two lists of names. The first list is the list of names around the 9/11 memorial in downtown Manhattan, and the second, a list of the homeless in Jacksonville, Florida. Its a story of how symbolism changes the way we design these lists. Link
Inside the US Alt-Right (New Yorker Radio Hour) - 39 mins: While alt-right movements such as QAnon continue to push US mainstream, Andrew Marantz of the New Yorker has written a book that gets into the inside of the neo-Nazi organisation Identity Evropa. This is a chilling story from a woman named Samantha who was once in the group’s leadership but has since left the group. Link
The Economics of US Sports Gambling (Freakonomics Radio) - 56 mins: Sports gambling has long been outlawed in the US until very recently. This is an account that connects the dots as to how the legalisation unfolded. Interesting looking back at the history as well as the future of where the economic value would be captured. Link
📹 TikToks
Jeff Bezos doing the Star Wars Imperial march. Link
Flying on the engine of a jumbo jet. Link
Waking up the puppies. Link