GAFA Hearings: the Learnings

💡JCNews #62

Dear friends, 

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In JCNews, I share the articles, documentaries and books that I enjoyed the most in the last week, including a must-read. 

Let’s talk about this together on LinkedIn or on Twitter. Enjoy!

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💡The weekly must-read

Each week, I share with you a must-read which you chose.

👉The Learnings from the GAFA Hearings

Resource Allocation:

Interesting to see the allocation of resources of Google on Search still.

Reinvention and change:

• I really like that notion of commitment to reinvention. 

• “Don’t let the perfect become the enemy of the good” [...] “the team must focus on initial launch and then iterate”

• I love “We have to be comfortable with reinvention and change for changes sake.”

It is hard to assess the price of a company (the Youtube example): 

Google said no to acquiring Youtube $10-15m, then $500m, and ended up paying more than $1.5bn:

The best companies are not afraid saying they have the best product:

How to value a company from Mark Zuckerberg: 

There is a lesson for us on how we think about valuation of the company we acquire (and focus more on the right targets).

What is interesting about it is that David Ebersman is against those acquisitions (we will always have competition, acquisitions most often fail, it is expensive for talents).

Facebook about copying:

Amazon on Pricing wars to acquire a company:

In 2009-2010, Amazon wanted to strengthen its position in the parent’s community, and one of their biggest competitors was Quidsi, the company that operated Diaper.com and Soap.com. They ultimately acquired it for $500 million in cash.

Doug Herrington, VP Consumables at the time, wrote to his team to reassess Diapers were Amazon’s n°1 competitor and that they need to match prices whatever the cost:

The team followed up to suggest: 

1. Beating Diaper at their own game in terms of cost allocation and supply chain management (Procter & Gamble being the provider, and Diaper being a bigger customer of P&G at the time)

2. Matching the prices at a X% discount to account for the free two day shipping from Diaper (better than Amazon, at the time)

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🏯Building a company

In addition to selected articles, I share one of Alan's leadership principles each week - the same one I share internally and with our investors every Wednesday.

👉 At Alan, we are not looking for perfection, but for personal growth (Healthy Business)

• We are NOT looking for perfection for Alaners. We look for personal growth. Alaners are not supposed to grow in every area at a time, and some areas might not apply to you. It is great to have one or two growth areas maximum at a time.

• We know that having a growth mindset is hard. Personally, as co-founder and CEO, I experience it all the time. The complexity and the challenges for a hyper-growth company force me to try to hyper-grow myself and the bar is always moving. I know that many of us are feeling the same. My advice to my fellow Alaners is: don’t try to be perfect, focus on a few things at a time. It is going to be a lot easier to grow with the company, and to be happy about it!

👉 Standard mistakes about probabilities (FS)

• Assuming events are independent when they are not: “The probability of flipping heads with a fair coin is 1/2. The probability of flipping two heads in a row is (1/2)^2 or 1/4 since the likelihood of two independent events both happening is the product of their individual probabilities.” When an event is interconnected with another event, the former happening increases or decreases the probability of the latter happening. 

• Not understanding when events are independent: “A different kind of mistake occurs when events that are independent are not treated as such . . . If you flip a fair coin 1,000,000 times and get 1,000,000 heads in a row, the probability of getting heads on the next flip is still 1/2. The very definition of statistical independence between two events is that the outcome of one has no effect on the outcome of another.”

• Clusters happen: Yes, the probability that five people in the same school or church or workplace will contract the same rare form of leukemia may be one in a million, but there are millions of schools and churches and workplaces. [...] An important lesson of probability is that while particular improbable events are, well, improbable, the chance of any improbable event happening at all is highly probable. [...] We’re all pattern-matching creatures. We find randomness hard to process and look for meaning in chaotic events. So it’s no surprise that clusters often fool us. 

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🗞In the news

📱Technologies

👉  Twitter’s Analyst Day (Stratechery)

• Jack Dorsey: “We agree we haven’t been innovative. This is very closely related to the critique of our slowness. If we can’t ship code fast, we can’t experiment and iterate, and every launch comes with massive expectation and cost.”

Very important about tempo & innovation

• Topics and interests are good for businesses on Twitter too, especially for local small businesses, as they provide stronger signals around intent, and the ability to serve more relevant ads.

• The real money in digital advertising comes from direct-response marketing (like App Install Ads), where you see an ad and can act on it in an immediate, measurable way. 

Interesting analysis on Ads. 

🏥 Healthcare

👉 Aviva to sell French unit for €3.2bn (Financial Times)

• Aviva said it would sell the unit to French insurer Aéma Groupe for €3.2bn.

• With the Aviva acquisition, Aéma had become “one of the top five players in the French market”.

• The new group will take in €16bn in revenues and guarantee the 4,200 jobs at Aviva France.

💚 Alan

👉 [French] Ces stratèges qui disruptent leur secteur (Les Décideurs). Incredible to appear next to Philippe Corrot (Mirakl) and Elon Musk (!) to discuss how we are trying to revolutionize the healthcare industry. 

👉 [French] AppStore Press Release (Apple). Alan is mentioned in the Apple FR Press Release regarding our growth in 2020. 

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🙍 Featured in this newsletter

• Ben Thompson 🇺🇸 Author/Founder, Stratechery | Twitter | LinkedIn

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Let’s talk about this together on LinkedIn or on Twitter. Have a good week!