The Four Horsemen of Silicon Valley

Four companies have infiltrated every corner of our lives and are very hard to avoid (or boycott)

It started when I listened to the Masters in Business podcast with Scott Galloway where he was talking his book “The Four” about the four horsemen of technology i.e. Facebook, Amazon, Apple and Google and how these companies are taking over lives. These had already taken over the financial and business press (before Bitcoin arrived and unseated them), remember #FAANG stocks at the beginning of 2016 (the N in FAANG stands for Netflix.) The author posits that Netflix could very well be the fifth horsemen but the book is mainly about the FAAG_Facebook, Apple, Amazon and Google_ the four horsemen. For those who can’t be bothered to read the book, I recommend the below podcast as in it, the author pretty much distills his book into an hour long conversation.

The podcast got me interested in the book and I placed a hold on it at Toronto Public Library website. This post is also a paean to Toronto Public Library system which has allowed me to road so many books that I otherwise wouldn’t have been able to.

I checked out the book in late November. It is a quick read__could have been shorter as in some places author rambles. If he had taken his meanderings out, the book would have been reduced by one third and could have been a quicker read. Nevertheless, it is a good book. I have read 50+ books so far this year (fiction and non-fiction included) in addition to reading long form articles as well as listening to podcasts. However, very few have given me that “a-ha” insight or compelled me to change my opinion or at least look at an issue from a different point of view. As we grow older, we become entrenched in our views despite thinking of ourselves as open to new ideas and perspectives. But this book forced me to alter some of my views and that in my opinion, makes it a good book.

Rather than summarizing the contents of the book, I will put a few snapshots of the different pages of the book.

Acquisition of Disruptive Companies

On acquiring “disruptive” companies by old economy firms, think Walmart’s acquisition of Jet.com, the author summarized it pithily in the following manner.

On the podcast, author was humble enough to admit that when Walmart announced Jet.com acquisition, he deemed it one of the stupidest mistakes by a dying old-economy dinosaur but time has proved him wrong and Walmart right.

Apple

He had a a lot to say about Apple which made me see Apple in a different light i.e., in a world where “software is eating the world” and when everything is moving from “bricks and mortar” to “click and order”or” clickbait”, Apple is holding its own and hitting it out the park despite being in an old world industry of “hardware manufacturing” and “bricks and mortar” retailing. Manufacturing and retail is deemed uncool from Silicon Valley perspective, yet Apple has made it sexy. Author uses this is an opportunity to rant about our search to satisfy our innate need of worshiping a higher authority and calls it a sad state of affairs that we have decided that tech leaders are our new gods.

Amazon

Amazon is taking over the world. We all know it. The insight for me was Amazon is moving into bricks and mortar though it is not obvious right away. I know about Amazon Go (prototypical cashier less store) or “physical” bookstores opened by Amazon in certain US cities or even acquisition of Whole Foods, which most pundits think Amazon will use as drop box location for its deliveries. But Amazon is also making significant investment in warehouses and fulfillment centers. If Amazon continues to promise deliveries in two days, it needs to have those warehouses next to every major city and metropolitan area. Delivery is becoming a major expense line, and to have some control over it, Amazon is increasing its investment in transport sector.

Needless to mention, this additional growth is coming with increased customer acquisition costs and that Amazon is trying to push consumers towards Amazon Prime subscription model.

I wished I had taken a snapshot of the next page in the book before I returned it to the library where the author highlighted a very import research conducted by him. According to him, when you ask Alexa to place an order say AA batteries for you, Alexa only recommends Amazon’s store brand Amazon Basics batteries and says other types not available. But if you log on to the website, it shows that other brands are available. So as we move from “one click” world to “zero click” world of Alexa and Home pods and Siri, we will be handing more and more decision making power to these horsemen.

Google

With respect to Google, there wasn’t anything snapshot worthy. Google knows more about us then our closest friend, parents, spouse or even ourselves. To wit, if someone is searching for a divorce lawyer on Google, or inquiring about symptoms of a particular disease, Google now knows that she is looking for a way out her marriage or may be afflicted with a particular disease that she wants to keep hidden.

What if someone hacks into Google database and publishes the stuff that you have been searching next to your email and profile. This is like putting all your private interests, fetishes, diseases and fears etc. for all the world to see. Scary.

Facebook

Finally the elephant in the room — Facebook. Facebook has already taken over people’s lives before Farmville and Candycrush came along. More recently, we have the Russians allegedly using it to manipulate the US elections. In addition to being a way to stay in touch with friends, Facebook is also a platform for launching new businesses. I log on to Facebook occasionally once or twice a month mainly if I come across a fantastic Pakistani political meme and want to share it with my network. Every time I log in, Facebook tells me that I have 10+ notifications outstanding. When I click on them, only one or two are from my friends and rest of them are about people in my circle, neighborhood, or some other area that Facebook has determined some how are linked to me, selling goods and services. Facebook has become a big platform for people for sales, launching new businesses and reaching out to new customers. That was my perception of Facebook. Till I read this about how when it comes to news feeds and other stuff, Facebook ignores the moderates and goes for the extremists.

There is more to this book than just what I excerpted above. The book mentioned two more books “Different” by Youngme Moon and “If you are in a dog fight, become a cat” by Leonard Sherman both of which I then requested from the library and have since read but you will have to read about them some other time if I ever get around to writing it.