1/ Thoughts on the Myth of the "First Mover"

This thread by @danrose stirred something I've been thinking about for a while - the myth of first mover advantage

To this day, most people assume Amazon Web Services was the first cloud computing service. This isn't quite true

2/ At its March 2006 launch, AWS was probably the 4th or 5th cloud service run by a Fortune 500 firm

HP launched its Flexible Computing Service in Nov 2005
Sun Grid went into beta in 2004
IBM launched "Linux Virtual Services" in 2002!

But AWS is the only one anybody remembers
3/ I'll focus on IBM here -

From the WSJ in *2002*: "Linux Virtual Services allows customers to run their own software on mainframes in IBM data centers and pay rates based largely on the amount of computing power they use"

https://t.co/mnKH8dF6IL

Sounds like the cloud to me!
4/ Origin stories of AWS often cite how Bezo's uncanny prediction of computing becoming a utility, like an electric grid

But Bezos didn't invent this analogy - it was widespread by the early 2000s. Here's Lou Gerstner saying the same thing in 2003
5/ So why did AWS succeed while IBM did not?

IMO there are no good explanations online. IBM LVS was quietly shut down in 2005-06. The exact date is unclear

Answering this became a personal project for me at Bernstein. I ended up cold-calling multiple former IBM product managers
6/ The short answer: the innovator's dilemma

IBM LVS never achieved product market fit. IBM tried selling it to existing corporate customers. They didn't want it

And IBM's own incentives were misaligned - salespeople didn't want to cannibalize existing accounts
7/ In contrast, Amazon had no existing IT customers to cannibalize. They had to sell AWS to someone, or they wouldn't get paid

That's how to found their first best customers: independent software devs and startups, paying by credit card
8/ The cloud was ultimately adopted bottoms up, not top down. AWS laddered up to enterprise customers from there

The result is 14 years later, AWS is a $50B business growing 30% a year, while IBM is a $70B business shrinking 3% a year
9/ What's the lesson here?

Being a first mover is overrated. Predicting the future is easy - plenty of people understood the future of cloud computing, even in 2003

The hard part was everything else. Timing matters. Execution matters. Incentives matter. Luck too!

More from Finance

The Dutch regulator and DNB as financial supervisor are a tough cookie to deal with. In essence they hyperregulate EU-rules into goldplated Dutch rules which go beyond what is prescribed in Europe.

All NL-customers at British banks may thus be kicked out on brexit.

Thread

/1

If we start with the capital requirements directive, it says attracting deposits is forbidden. In article 9.

https://t.co/RYl7SXligC


Now the translation of that rule into Dutch law is slightly expanded to not only prohibit attracting deposits, but to also prohibit, having those deposits under custody ('ter beschikking hebben').

That's not in EU law, but it is in our Dutch law.

https://t.co/PsbWfNY3PA


So if you wonder how this would work out for UK banks and Payment institutions servicing Dutch customers. Have a read at the technical explanation of DNB, the financial supervisor and their summarising table.

https://t.co/LL0fAnYkRJ

Passive servicing of Dutch is not allowed!


Any bank or PSP in the UK that continues to serve Dutch customers (as in retail customers, professional players are excepted) can thus be subject to fines and policing under Dutch law.

Meaning we not only have Accidental American issues in payments, but also Accidental Dutchies
I'm lucky to attain financial freedom before 30.

I credit Fintwit for my learnings.

Here's 10 key concepts every investor must know:

1. $$ needed to retire
2. Researching a business
3. Reading annual reports
4. Reading earnings calls
5. Criteria of a multi bagger

(Read on...)

6. Holding a multi bagger
7. Economic moats
8. When to buy a stock
9. Earnings vs cashflow
10. Traits of quality companies

Here's my 10 favourite threads on these concepts:

1. How much $$ do you need to retire

Before you start, you must know the end game.

To meet your retirement goals...

How much $$ do you need in your portfolio?

10-K Diver does a good job explaining what's a safe withdrawl rate.

Hint: It's NOT


2. Research a business

Your investment returns are a lagging indicator.

Instead, your research skills are the leading predictor of your results.

Conclusion?

To be a good investor, you must be a great business researcher.

Start with


3. Reading annual reports

This is the bread and butter of a good business analyst.

You cannot just listen to opinions from others.

You must learn to deep dive a business and make your own judgments.

Start with the 10k.

Ming Zhao explains it

You May Also Like