Valley Nordic

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We discuss five tech business themes from 2019: 

1. IPO market
2. Crypto market 
3. Facebook - regulatory issues and Libra plan 
4. Big tech (mainly Google and Apple) going fintech 
5. Trade war roller coaster affecting tech (semiconductor, big tech, etc.)

In addition, we share 19 observations and trends from 2019 on how technology is affecting society. 

Happy Holidays! 

See you next year! 

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How does a company keep growing when it is big? There is a growth framework used by big corporations. The framework has seven growth strategies and most of them are pursued in parallel. We discuss pros and cons of each. Furthermore, we talk about he Magnet Strategy which is used by tech companies to get into non-tech businesses.

Useful links:

1. The Magnet Strategy 

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How do you put a dollar value on an idea? Venture Capitalists have to do that regularly. The startup valuation becomes relatively easier starting with Series A funding round when the idea has become a product and it is in the market. How do founders negotiate valuation and other terms with Venture Capitalists?

Useful links:

1. Startup Tools (for Nordic Startups)

2. Startup document templates (for US startups) 

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Google [Nasdaq: GOOGL] announced its third quarter 2019 earnings a few days ago. We review the quarterly earnings. And, we discuss Google's R&D (Research and Development), its culture, and Google Cloud business. We debate the difference between a platform and a product. How Google is good at building platforms and not so good at building products.

Useful Links:

1. The Magnet Strategy

2. Google 3Q2019 earnings release

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Apple [Nasdaq: AAPL] announced its fourth quarter 2019 earnings last week. We review the FY 2019 earnings. And, we discuss what is Apple doing well to scale so fast. In FY 2019, Apple generated revenues of over $260B. Twenty years ago, Apple FY1999 revenue was $6.1B.  And, iPhone, which generates more than half of Apple's revenue today and is mainly responsible for ~47B in services revenue, did not exist until 2007.

Useful Links

1. Apple Watch: A giant leap for Apple and a small step for wearables

2. The phone we love

3. Apple 4Q2019 earnings press release

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Amazon [Nasdaq: AMZN] announced its third quarter 2019 earnings earlier this week. We review the earnings. And, we discuss what is Amazon doing well to scale so fast. In the trailing twelve months, Amazon generated revenues of over $265B and their revenues are still growing ~20% YoY. And, Amazon has successfully diversified from eCommerce to Cloud to advertising.

Useful Links

1. Nature of business

2. Amazon CTO on IT infrastructure

3. Amazon 3Q2019 earnings press release 

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Arne and Chander discuss an important and unpopular topic i.e. how do markets behave differently in an economic downturn, how do startups prepare for a downturn, and how do startups have to operate in a downturn. How the KPIs (Key Performance Indicators) change from growth to cash. We also talk about how startup operations differ in early and late stage during downturn. Finally, we talk about downrounds (when the fundraising round values the company lower than the previous fundraising round valuation).

Useful links:

1. Zero-Based Budgeting 

2. State of the Cloud 

3. Pivot and its Challenges 

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We try something new in this episode i.e. look into a market where we don't have expertise. And, that market is Food Tech. How we think about it? Also, we analyze Beyond Meat's business and discuss what are the parallels and differences between a tech startup and Beyond Meat (and Impossible Foods).

Useful Links:

1. Environmental Impact of Meat Production

2. Beyond Meat S1

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We define the Direct To Consumer (D2C) category and discuss the value chain of Consumer Packaged Goods (CPG) companies and how D2C startups are disrupting that value chain. Also, how D2C category includes products beyond CPG. What made it possible for D2C companies to come to life and differences between US and European D2C markets.

Useful links:

1. D2C landscape (2017)

2. Analysis of 14 D2C Companies 

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In this episode we discuss market segmentation, business model innovation, and scaling. How and why Customer Lifetime Value (CLV) focus is the best way to build sustainable businesses. We also discuss, after a startup has achieved Product Market Fit (PMF), how you scale a business and  what do you do differently in the post PMF phase.  

Useful links:

1. Customer Facing Devices 

2. Why do we buy things?

3. Decision making for startups