Paul Kedrosky

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Google, Microsoft, Stall Points, and Growth

April 7, 2015

When might Google have its Microsoft moment? That is, when will it begin its inexorable decline – as most aging tech companies do when their growth stalls, and as Microsoft did – largely unbeknownst to (and even denied by) most observers? How might we know?

I have a few things I look for when thinking about inflection points in aging technology companies. Not all of these conditions need to be satisfied, but at least some of them do.

There are five major parts of the argument:

1. Stock compensation loses its luster

2. Declining growth

3. No longer hiring for innovation

4. Price & margin pressure in core business

5. Government action


Let’s start:

1) Stock compensation loses its luster

Generally speaking, technology companies retain their best employees with equity compensation more so than with salary. And when that equity...

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Pi Play: Tracking Home Broadband Speed

I’ve been messing about with our Raspberry Pi 2 here in recent weeks. My first project was an SSH honeypot, built around the open-source honeypot kippo. I’ll post something on it in the next week or so. It was … entertaining.

The second, ongoing project is tracking and analyzing home broadband speed. I pay for Time Warner Ultimate Max XL Something Or Another, which is supposed to be 30 mbps down, and 5 mbps up. About 70% of the time that seems to be the case when I check, but at least 30% of the time it feel like it tests lower.

I generally use Ookla to test speeds, but that’s only when I remember, so I have no good data. Is it as bad as I think? Or am I just testing at bad times? Or am I only remembering the poor speeds? I really have no sense how bandwidth trends over the course of the day here – Time-Warner sure doesn’t provide it.

Enter my Raspberry Pi. I had long ago written a...

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Tech Bubbles, FOMO & Revenge Effects

What are we missing in all the chatter about fear of missing out (FOMO), scarcity, and the current technology bubble among late-stage private companies? I’ll posit a few things, some obvious, some less so, and a couple deranged and hypothetical:

  1. Lots of people took this 2001 bumper sticker very seriously: please give me one more bubble bumper sticker - Google Search.jpg Knowing that most of the money is made by being early to prominent tech IPOs, they did the rational thing: They bought earlier. In this case, not just early, but pre-IPO – in late-stage, private markets. One reason we are seeing this incredible rush to buy overpriced companies in private markets is fear of missing out on the appreciation when the companies come public. As a result, the post-IPO price appreciation is happening pre-IPO, making private companies back-door public – except, as Bill Gurley has written, in the ways that matter most, like liquidity, quality of financials...

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Music and Innovation and Teams

The following tweet after the Grammy music awards got me thinking:

Producers, writers, and teams

Granted, I know zero about music. And I know even less about the Grammys. But the idea that albums up for record of the year had such dramatic differences in the number of people behind them was striking.

Leaving aside the sniping about whether larger producer/writing teams is somehow discrediting – some argued that Beck was a more legitimate winner because he was the auteur, unlike with Beyoncé – I was curious whether this was new. Innovation has become a team activity in many areas of economic and artistic life, so is that also the case with music?

I decided to look at the annual list of top-selling albums back to the 1960s. How many writers & producers were behind them? Sadly, it wasn’t easy to find how many songwriters were involved, but it was fairly straightforward to scrape Wikipedia data on the number of...

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