Curated Insights 2017.6.25

Conglomerates didn’t die. They look like Amazon

Amazon’s role as both a distributor and cloud provider for many of its competitors gives it an unfair advantage. This dual role also enables a platform to exploit information collected on companies using its services to undermine them as competitors.

…it has the potential to become so dominant in so many areas that its impact could be more than simply lowering prices for consumers; it could put large companies out of business…Were that to happen, this new breed of Silicon Valley conglomerates may become more powerful — and resilient — than the 20th-century conglomerates of yore.


Amazon’s new customer

Apple’s goal was not to build a phone but to build an even more personal computer; their strategy was not to add on functionality to a phone but to reduce the phone to an app; and their tactics were not to duplicate the carriers but to leverage their connection with customers to gain concessions from them.

Amazon’s goal is to take a cut of all economic activity.

Amazon is building out a delivery network with itself as the first-and-best customer; in the long run it seems obvious said logistics services will be exposed as a platform.

…transform the Whole Foods supply chain into a service architecture based on primitives: meat, fruit, vegetables, baked goods, non-perishables.


Hubert Sagnières, Essilor CEO, on an eyewear megamerger

Essilor, alongside non-governmental organisations, trains locals to do simple eye tests. They can then order cheap lenses costing between $3 to $4 from their mobile phones. In the long term, Essilor wants to tap into the 2.5bn people around the world who need corrective vision but do not have it because they cannot yet afford it.

“We are not meeting the demand, we are creating it.”


Wall Street blames shale, but shale points the finger right back

“The biggest problem our industry faces today is you guys. You don’t reward capital efficiency, you reward growth.

“So just think about trying to look at situations where capital efficiency actually can be rewarded and that’s not a company-specific comment, it’s more of a generic, because the more the capital-efficient companies are rewarded in the marketplace and growth is not, then you guys will help us help ourselves and we’ll be in a better place, but if you keep rewarding growth without return, you’re just going to help compound the problem that we have today, where I think a lot of us feel very much in need of showing growth because if you’re a growth and value investor, you need to see little bit of both.”

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