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Good morning.
David made a nod to Fortune’s Fastest Growing Companies list yesterday, but I want to return to it today, because I think it illustrates a couple of important points about today’s economy.
First, while a tech company—AppFolio—topped the list this year, tech no longer dominates. There were only 20 from the technology sector on this year’s 100, down from 32 both last year and the year before. There were more from finance (24) and industrials (21) than tech.
But don’t misread that. Tech’s effect on business continues to grow at exponential rates. It’s just that “tech” has moved from being an industry to being a competency… of pretty much any successful business today. Most of the companies on the list rely heavily on technology as a differentiator.
Second, but related, while the San Francisco Bay Area continues to lead the way in blitz-scaling, only 17 of the fastest growing companies this year were based there—and that includes only one of the top ten: Netflix (#5). The companies hailed from 24 different states of the U.S., and six countries outside the U.S. That includes companies like Brooklyn-based Etsy (#8) and Illinois-based Paylocity (#9). Alibaba (#14), based in Hangzhou, China, was the top-ranked company outside the U.S.
This year’s endurance record goes to a company you may never have heard of: Patrick Industries, which was founded in 1959 and is headquartered in Elkhart, Ind. The company makes products and materials for manufactured housing and recreational vehicles and has been on the list for seven straight years. It expanded its sales at an annual average of 25% over the last three years.
The biggest company on the list is Amazon. It’s not easy to grow so fast when you are as big as Amazon. But the company averaged 28% revenue growth for the past three years, and has made the list for four years. It will undoubtedly do so again next year, given yesterday’s earnings report, which showed revenues up 37% and profits tripled.
A word about methodology: You have to be traded on a U.S. stock exchange to make this list, and the ranking is based on three years of revenue and earnings growth in the quarters ended on or before April 30, 2020. So largely pre-pandemic.
More news below.
Alan Murray
@alansmurray
alan.murray@fortune.com
TOP NEWS
Futures down
U.S. futures are down after Apple and Amazon's shares fell. Apple's quarterly iPhone sales were down 16% (note: just before the release of new models) and, more worryingly, it wouldn't give guidance for the current quarter. So down went Apple's share price in extended trading, by 4%. Meanwhile Amazon's share price fell 1.87% despite stellar results for its Q3. Asian markets were all red today, and Europe is flat at best. CNBC
Safe flying
U.S. transportation officials and airlines would like to establish safe-travel corridors with countries like the U.K., and to that end they would like to see a system of pre-departure testing and contact tracing that obviates the need for quarantining on arrival in the U.S. But the CDC still wants arriving passengers to go into quarantine for five days to a week, then take another test. The two sides are trying to come to some sort of compromise. Wall Street Journal
Act faster
German Chancellor Angela Merkel thinks Europe's leaders (presumably including herself) need to move to lockdown more quickly in future, when numbers start to go up. Germany, France and some other EU countries are only now moving to lockdown some weeks after an exponential rise became apparent. Merkel reportedly said this was because of political realities, and next time round leaders need to learn from their current mistakes. Bloomberg
German economy
The German economy grew by 8.2% in Q3. That's a record, and better than the 7.3% economists expected—but obviously it follows a record 10% drop the preceding quarter. The growth in Q3 was largely driven by private consumption, strong exports, and rebounding investments in equipment. Reuters
AROUND THE WATER COOLER
Unrest fears
Walmart is so worried about election-related unrest that it pulled all guns and ammo from its U.S. sales floors. Customers can still buy the items on request but, said a spokesman: "We have seen some isolated civil unrest and as we have done on several occasions over the last few years, we have moved our firearms and ammunition off the sales floor as a precaution for the safety of our associates and customers." WSJ
Netflix news
1) Netflix has raised its prices, by a buck for the standard plan and $2 for the premium plan. The change affects only U.S. subscribers, who haven't seen a price rise since the start of 2019. 2) Netflix is testing a new feature that would let users listen to videos without watching them, in order to save on battery or data. That could mean people are tempted to continue using Netflix rather than switching to a rival service that offers podcasts, if their eyes are needed elsewhere.
Trump hopes
President Trump will need to carry both Pennsylvania and Arizona if he has any hope of reelection, experts say. As Fortune's Shawn Tully writes: "Closing the substantial gap with Joe Biden in either the Keystone or Grand Canyon state poses a big challenge in itself. More than any other factor, it’s the heroics needed to score a twofer that’s holding Trump’s odds for victory as low as one in five." Fortune
Hey BER
Berlin's new international airport will open tomorrow, a mere eight years behind schedule. The delays and their causes have become the stuff of legend—Non-functioning fire-prevention systems! Electricity that isn't there, or can't be turned off! Trees planted in the wrong place!—but now the planned hub is ready for business. Only problem is, there's a pandemic—and therefore not many passengers around. Financial Times
This edition of CEO Daily was edited by David Meyer.
