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At the risk of ending the week on a down note, I highly encourage you to read Geoff Colvin’s great cover story in the current issue of Fortune, “The End is Near.”
In clear, interesting, unemotional, apolitical language, Colvin methodically marches down the long laundry list of reasons why, despite how good things feels right now, the long economic expansion soon will be coming to an end. Maybe not next quarter or even the three or four after that, Colvin argues. But sooner rather than later.
A word about Geoff, who once held the “executive editor” title at Fortune that I have now: He has seen it all. He has covered good companies and bad, up economies and down, heavy industry and tech. And with grace and professionalism, he has called it like he sees it for years. (He was one of the first to ask if Jeffrey Immelt’s GE was all that, for example.) Ignore his wisdom at your peril.
Among the many arguments Geoff makes in this deeply reported article, two stand out. First, all economic cycles end, and this one is incredibly long in tooth (a.k.a. old). Second, and this one surprised me, U.S. corporations are over-leveraged in a way that financial institutions were before the financial crisis of 2008. That’s fine in a low-interest-rate environment. But rates are rising, and those bills will come due.
What’s all this got to do with tech? In 2000 or so it was popular to pretend that tech was so special that it was disconnected from the real economy. That didn’t save tech from cratering when capital dried up. Now it’s not even true. Tech is an integral part of the economy, and it will suffer mightily in a downturn.
Again, I apologize for ending the week with bummer. But you’ll be glad you were warned, which is what you’ll be after you read this article.
I’m off for a bit to put my toes in the sand, spend time with my family, and not pay attention to the tech industry. You’ll be in good hands with my colleagues in my absence.
Start spreading the news. Did you hear? It finally happened. Apple hit the $1 trillion mark in stock market value. In a memo to employees, CEO Tim Cook called the news “a significant milestone” but “not the most important measure of our success.” Now the parlor guessing game may proceed to who will be next. Google Finance lists Amazon’s market cap as $885 billion, parent Alphabet at $854 billion, and Satya Nadella’s ship at $825 billion.
Rocket man. After seven years of depending on the Russians to ferry American astronauts to the International Space Station, NASA published a schedule on Thursday indicating that Elon Musk’s SpaceX and Boeing are near ready to take over. SpaceX will test a crew flight in April 2019 and Boeing in mid-2019.
Pole vaulting. Wireless carriers were ecstatic that the Federal Communication Commission on Thursday passed rules to speed up and simplify the process of adding more wires and 5G radios to telephone poles. The package, known as the “one touch make ready” rules, could also aid Google Fiber, which had complained that incumbents were making it too hard to add its fiber to poles. The move may be too late, though, as Google Fiber has been pulling back from new city deployments.
Mainstreaming money. The parent company of the New York Stock Exchange is opening a federally regulated market for trading bitcoin. Dubbed Bakkt, the Intercontinental Exchange‘s new venture is expected to launch in November, Fortune reports.
Turn up the volume. Shares of smart home speaker maker Sonos started trading on Thursday and finished with a healthy 33% gain. The shares were initially priced at $15, below the planned range of $17 to $19, but CEO Patrick Spence told Fortune to pay no heed to the shortfall. “We found that people were nervous given the state of the market,” Spence said. “It doesn’t really matter where it trades today, it matters where it’s going to be in a year, five years, 50 years.”
Turn down the volume. Sales of tablet computers are not so healthy. Shipments declined almost 14% in the second quarter from a year earlier, International Data Corp. reported on Thursday. Apple led the market and saw flat sales, while #2 Samsung suffered a 16% drop and Amazon suffering a 34% plunge. I guess sales of the Fire tablet weren’t…on fire. Meanwhile, in the smart speaker market, a consumer survey by CIRP found Amazon’s Echo products in the lead with a 70% share, Google next at 24% and Apple’s HomePod trailing with 6%.
Uncertain future. Speaking of tablets that may not be so healthy, the new, low-end tablet from Microsoft, the $400 Surface Go, went on sale and the reviews were decidedly mixed. Ars Technica had a compilation of what most reviewers liked (the keyboard cover, the display) and did not (laggy performance, mediocre battery life).
Pedaling as hard as I can. Internet-connected stationary bikes are a thing and leading manufacturer Peloton Interactive is raising $550 million of venture capital in a deal that will value the company at over $4 billion, the Wall Street Journal reports. That’s more than triple Peloton’s value at last year’s fundraising, though revenue is expected to double this year to $700 million. An IPO is likely next year.
FOR YOUR WEEKEND READING PLEASURE
A few longer reads that I came across this week that may be appealing for your weekend reading pleasure:
How an Ex-Cop Rigged McDonald’s Monopoly Game and Stole Millions (The Daily Beast)
Jerome Jacobson and his network of mobsters, psychics, strip-club owners, and drug traffickers won almost every prize for 12 years, until the FBI launched Operation “Final Answer.”
The Quest of Laurene Powell Jobs (Washington Post Magazine)
She’s inventing a new brand of philanthropic power. What is her vision and where is it taking us?
The World’s Most Peculiar Company (Chicago Magazine)
How does catalog-loving retailer Hammacher Schlemmer, famous for such eccentric and extravagant products as the Navigable Water Park, continue to survive in the age of Amazon?
Liz Parrish Wants to Live Forever (Outside)
Liz Parrish, the creator of a longevity company called BioViva, believes that science is on the cusp of delivering radically longer lifespans—and she wants to help bring on the revolution.
FOOD FOR THOUGHT
The increasing complexity of the modern world sometimes seems like an intentional feature, rather than a bug. But as Stripe engineer Brandur Leach notes in his blog post called “In Pursuit of Production Minimalism,” society and the economy would likely be better off if we concentrated more on simplifying. Leach quotes Buckminster Fuller’s idea of ephemeralization: “Do more and more with less and less until eventually you can do everything with nothing.” That leads to a series of recommendations for techies and tech companies including:
Don’t use new technology the day, or even the year, that it’s initially released. Save yourself time and energy by letting others vet it, find bugs, and do the work to stabilize it. Avoid it permanently if it doesn’t pick up a significant community that will help support it well into the future.
Avoid custom technology. Software that you write is software that you have to maintain. Forever. Don’t succumb to [not invented here] when there’s a well supported public solution that fits just as well (or even almost as well).
Use services. Software that you install is software that you have to operate. From the moment it’s activated, someone will be taking regular time out of their schedule to perform maintenance, troubleshoot problems, and install upgrades. Don’t succumb to NHH (not hosted here) when there’s a public service available that will do the job better.
IN CASE YOU MISSED IT
Microsoft Pours Millions Into Startup That Nails Cybercriminals By Robert Hackett
Amazon Has Finally Agreed to Stop Selling Neo-Nazi Products By David Meyer
Verizon and Motorola Unveil the First U.S. 5G Smartphone—Sort Of By Aaron Pressman
Amazon Prime Video Is Coming to Comcast’s Xfinity X1 Cable Boxes By Kevin Kelleher
BEFORE YOU GO
The saying “reduce, reuse, recycle,” is supposed to emphasize that recycling is only the third-best way to protect the environment. Now with China accepting fewer and fewer American recyclables, we may need to reemphasize the first two prongs again.