Longreads + Open Thread

Coase; Xi; Mr. Beast; AI; Monzo; Trader Joe



Open Thread

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In last week's Longreads, Calvin McCarter asks how much of US's tech industry dominance is driven by demand rather than supply:

Even in the early days of the PC, the US had a large community of techie consumer hobbyists eager to spend money on a Mac 128K or IBM PS/2. This community also was happy to give feedback, and magazines like BYTE and PCMag also represented the "voice of the customer," enabling and forcing PC makers to respond to consumer desires and complaints. In contrast, while Japan was a leading market the latest electronic hardware, neither Japan nor Europe had such a large number of early PC adopters.

This seems true for a lot of tech growth areas. In the early Internet-era, websites were generally able to extract more ad revenue (per impression and per click) from America than elsewhere, which meant the customer base of a web startup was concentrated in the US. Much of the demand for crypto coins and web3 products has come from libertarians, also a disproportionately-American population. The demand for enterprise software, SaaS, and cloud computing is disproportionately from tech startups which are setting up their tech stack and operations from a clean slate, and tech startups are also disproportionately American. And even big, established American companies (many of them grown-up-startups themselves) are disproportionately more open to trying out new enterprise systems.

This is a great question. And as some of the examples show, it has feedback loops: we have lots of demand for enterprise software because the kind of company that probably spends the most of its incremental revenue on additional enterprise software is other enterprise software companies: every new sales representative means a new Salesforce, Docusign, and Zoom license, not to mention more Uber/Lyft and Brex/Ramp spending. This is a point raised more than once in The Power Law: once an investment category has been established as hot, there's more money in figuring out what new categories will emerge as a consequence.

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