I recently shot a podcast with Mike Koenigs about taking your ideas and transforming them not just into products but into platforms. It was also featured on Forbes.
Many of the most valuable companies (like Tesla, Apple, and Amazon) leverage platforms to scale past their initial products and create profitable ecosystems.
The video is 50+ minutes – but covers the topic in great depth, and Mike adds a lot of significant distinctions. I think you will like it.
Since recording this podcast, I've continued to make finer distinctions.
One such distinction, to help businesses plan around new technologies, was to ask two key questions.
What technologies that already exist are going to impact your industry the most in the next 3-5 years?
What technologies that you expect to exist are going to impact your industry the most in the next 5-10 years?
I ask these questions because adopting new technologies doesn't mean you have to invent something new. It can mean capitalizing on existing technologies and finding new ways to use them. Understanding what is "likely" lets you lean in the right direction and helps you visualize the most likely paths forward.
This helps you figure out where to spend focus, time, energy, and other resources. Remember, it is easier to follow and leverage a trend, rather than to fight it.
Since the beginning of time, humans have been confronted with disruptive new technologies. While technologies continue to change, human nature has remained relatively stable. As a result, predicting human nature is often easier than predicting technology.
So, rather than trying to predict what technologies will win, you can focus on which needs and capabilities are most likely to attract attention and resources. Innovation and technology will follow to satisfy the desire.
Knowing that, the question is what can you build that leverages your unique abilities and the likely path of your chosen market.
It sounds simple, but it's a powerful distinction and potential differentiator between you and your competitors.
The S&P 500 Index had another bad week and ended the month down 4.8%. It was the sharpest monthly decline since March 2020 – and finished a seven-month streak of gains. Here is a heat map chart showing how widely spread the pullback was last week.
It will be interesting to see how the S&P 500 Index fairs in October as the Delta variant continues to linger, the Federal Reserve plans to slow its purchase of government-backed bonds, and fear continues around the U.S.'s cash reserves and debt limit. Adding further pressure are the continuing shortages of many retail goods and computer chips.
But, for all the times we've expected a contraction, the market has shown remarkable resiliency in the past year and a half.
On a more lighthearted note, here are two charts I thought were interesting and worth sharing.
First, here's a chart from A Wealth Of Common Sense that shows the top 10 stocks in the S&P 500 in 5-year increments.
There are a lot of interesting takeaways you can glean from this chart. But I was surprised to see how much turnover there is. Also, in the 1980s, the top 10 companies were almost all energy companies, while today they're almost all tech companies.
Here's a bonus chart that shows the top 10 companies at the end of 2020.
With the McRib coming back on November 1st, you might want to invest now. Seems like a solid bet.
Perhaps the correlation exists because McDonald's only offers the McRib when pork prices are low enough? If so, McD's is reacting to the market (and not the other way around).
There are many ways to make money in fast food (including food sales, real estate, and commodities trading).
Talking about wealth distribution can lead to contentious discussions.
The fact that one group has "more" of something literally means it is not equal to what someone else has … but does it imply that it isn't fair or just? The arguments get nuanced fast.
Even how you look at the statistics can be confusing. You can focus on which group has what percentage of the pie. Or you could focus on which groups are gaining or losing based on the share they used to have of the pie. With that said, remember that the pie can grow or shrink, and the percentage of a population in a demographic can change as well. What you choose to focus on, and what you decide it means, impacts your stance on the meritocracy or unfairness of what is happening (and what we should do about what is happening).
So, while many people point to the increasing wealth of the 1%, it's worth discussing whether this represents inequality or simply the asymmetric distribution of wealth.
Today, the top 1% of the U.S. owns about 31.2% of the total wealth. That's up from 28.6% in 2010.
However, the total wealth pool has increased from $60 trillion to $112 trillion in that same period.
In other words, each demographic has seen an increase in wealth over the past ten years. A larger percentage of the pie has gone to the 1%, but each demographic has benefitted and our collective economic pie has grown.
So, what drives the asymmetric distribution of wealth?
There are multiple factors, but to name just a few:
The longest bull market in history benefits the top 1% more because they own a much higher percentage of corporate equities and mutual funds
The minimum wage hasn't increased since 2009, despite rising costs of living and other goods.
Technological changes influence both more menial jobs as well as creating more opportunities for tech giants
When you ask children what they want to be, many likely say YouTuber, Influencer, or some other variant of that theme.
Influence is a complicated thing. From an abstract perspective, it's the ability to affect someone else's behavior. A high schooler can influence their classmates. As entrepreneurs, we can influence our employees, our industry, and more. You can have immense influence over a small number of people or a little bit of influence over many people – both still count as "influence."
But, in this case, many of the most popular influencers aren't famous for changing the world; they are celebrities or just famous for being famous.
Below is a chart of the top 50 "influencers" by social media platform.
In the digital age, it's worth acknowledging social reach as power. People with a large platform have the opportunity to exert enormous influence – and it's why you often see the spread of misinformation reach far, fast.
It would be interesting to see how many of these people use their platforms to be a beacon to their followers (rather than a beacon to attract followers).
It would also be interesting to see how much (or little) engagement many of these "influencers" actually have with their followers (and how that level of engagement relates to the growth or decay of their followings).
While I assume that the readers of this post aren't in the business of being "Influencers," Most of us recognize the value of influence – and getting more of it.
As a result, it is probably worth thinking about influence as an asset. And now is time to think strategically about how to grow and use that asset better.
The top 100 companies account for over $31.7 trillion in market cap. Unsurprisingly the U.S. takes the largest portion of the pie, but China continues to make headway. Though, the U.S. still accounts for 65% of the total market cap value of the top 100 companies.
A lot of the staying power of the U.S. (and the fading of much of Europe) can be attributed to Tech and Retail giants like Apple and Walmart.
I'll be interested to see how the numbers change as both Tech and Retail continue to grow as industries. Will other countries find a way to compete, or will the U.S. extend their lead?
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