This is the 4th (and final – for now) in a series of interviews I’ve done recently with, in my view, the top independent tech bloggers.
The first three were with Horace Dediu, Ben Evans and Ben Thompson. You can find links to each of these interviews on the sidebar of this one.
My final discussion was with Steve Cheney and it’s another stellar one. Enjoy.
Q: You’re a newer and really exciting tech blogger on the mobile internet space today at stevecheney.com. I’ve discovered you only in the last few months and love your stuff. So I wanted to ask you how this happened? Can you tell us about your background before you started blogging?
A: Thanks for reading, it’s always humbling. I’ll try to frame my blog, which is pretty tech heavy, in relation to my background. I grew up in the Silicon Valley and started coding when I was a teenager, selling software to small businesses and paying my way through college where I studied electrical engineering and computer science.
After school I spent my early days in the Valley as an engineer at a chip company. The thing that magnetized me the most was understanding our customers and my job evolved to marketing and selling, which allowed me to travel worldwide to places like Foxconn in Taiwan and Nokia in Finland pushing our chips and Linux software. This was pre-iPhone, but I spent a lot of time at Apple’s headquarters. I’d meet with engineers for hours and try to glean what they were going to build with our chips. Then I’d literally drive over to Cisco or Google and do the same. Seeing engineers build things was always a magical feeling.
In 2007 I decided to move to NYC for business school, and peered into tangential areas of tech. I spent a short time at Morgan Stanley as an M&A banker at the technology group that did Google and Facebook’s IPOs, which was eye opening. It didn’t take me much time to learn that advising businesses is not nearly as satisfying as building them. This was 2010 and New York was on fire as a technology hub for startups. I started to get really involved with some companies and joined a mobile startup named Groupme to build out the business team, and a year later we were acquired by Skype.
Q: And when did you start the blog and did you have a goal for what you wanted to get out of blogging when you started?
A: I actually started blogging because of Chris Dixon. Chris was becoming pretty well known as a blogger, and at the time he was in NYC building out his own startup. I reached out cold for advice. His blog is amazing, but more influential to me was how immensely generous he was with his time. Bouncing ideas off him gave me a boost in the direction of writing and the rest was history. Blogging has a context of sharing over the internet, but the real magic happens when you can take that offline and meet people like Chris. He’s going to do great things as a VC and it was not surprising to me when Andreessen Horowitz, basically the best VC firm in the world right now, hired him.
Q: When was the moment you thought blogging could end up being a bigger deal for you and why?
A: It came immediately from making relationships that were priceless. In the few months after I started writing I created more key relationships with people like Chris than I had during the prior few years, a time during which I worked on Sand Hill Road, marketed to Google and Apple and went to business school. Amazing things happen when you give back and share.
Q: You’re based in New York City. How does your geographic location affect your analysis if at all?
A: New York is so special. It gives you a holistic perspective. Tech is a minority industry here. You’re constantly running into smart people from different walks of life in media, marketing, fashion, etc. The thing that started to mentally exhaust me about living in San Francisco and the Valley was the group-think around technology. If you put 10 random people into a room, it’s a good bet more than 5 work in tech. It’s not bad per se but can be stifling for expanding your mind. NYC has made me smarter, but also edgier and more willing to take risks, which is usually synonymous with the Valley.
The key for NYC was – can it become one of the hubs – and it did. Now Ebay, Facebook, Google and a lot of other big companies are here. Sure, there are some things you can’t do here, which is why I am thankful for having the network and experiences on both coasts.
Q: You have an MBA (from a great school). That’s not always the case working within tech companies or for tech bloggers. What do you think that experience brings to your perspective of what’s going on right now in the mobile internet?
A: I’m 2x smarter from my MBA experience. But the network has been useless to me. Everyone I’m close with in tech I met on my own either before or after Columbia. The perception about an MBA is that alumni will band together, and will help propel you higher in your career. This is simply not the case in technology. Sure, if I meet an alumni, great. But after 5 seconds neither person cares—it’s really about who you are and what you do.
What I did get from the MBA, and few people talk about this these days, is incredibly smart around strategy, marketing and finance. Yes this is academic. But if you can bridge that back into what you do, the foundational skills you get in business school can make you dangerous. I have always been obsessed with business strategy, but now sometimes I feel like I can see something happening in the future, and I would not have this skill without the academic part.
Q: Your blog is independent. You don’t write a column for a traditional tech media company. Was that a conscious choice?
A: I think I was lucky. After my writing got picked up it continued. I did write on TechCrunch for a while too, which was a lot of fun. The magic of Twitter and sites like Techmeme are that anything can get shared and read. Not being a full time blogger or an analyst, I don’t care about making money from writing, and it doesn’t really matter where I publish ideas. In fact all the older content on my site had to be imported after Posterous was shut down by Twitter. That’s why I think it’s better to own stuff on your own site.
But what’s absolutely critical is writing with a differentiated viewpoint. In tech people beat to death topics until no one wants to read another post. Taking a “fact based reporting” approach was my main goal when I started writing and I’ve always stuck to that.
Q: Where is Apple at right now as a company in this post-Steve Jobs period?
A: They’re at an interesting juncture, no doubt. I think there is more magic left.
Q: Was Tim Cook the right CEO for the company?
A: Without a sliver of doubt, yes. Tim Cook is one of a small handful of people who had Apple’s culture so ingrained in his DNA that he could preserve it. Everyone knows losing this is the biggest risk for Apple. But Tim Cook is the only person, in my view, who also had an understanding of Apple’s customer on a deeper, almost primal, level. Above anyone else at the company. His empathy for people is unmatched and you can see it in his eyes when he talks. And I think this will help him steer the ship. It’s not easy on your stomach when your share price drops $300 in less than a year and everyone in the industry waits with bated breath for you to fail. Steve Jobs deflected that based on his own reality distortion field. But the successor to Steve, man what a tough job… I think Tim Cook’s genius is only becoming more evident over time. It’s clear he’s the right person to connect Apple’s customer with Apple’s cultural DNA. You saw it in not releasing a cheap phone. But the real excitement will come when Apple builds new things.
Q: What’s going to be the “next big thing” for Apple? Watches, TVs, something else?
A: For Apple, the challenge is what markets are going to be very big. They are simply too big a company to enter markets that aren’t many billions of dollars. Is television that big? Yes. The problem with TV is when I turn on my crappy Time Warner set top box it takes 10 seconds to get started. Changing channels is an arcane and horrendous experience. Converged software / hardware is Apple’s specialty. Can they change the market? Absolutely. Apple will get more transactional as a company and more adept at weaving content, advertising and media into the user experience. Tomorrow, everything is a computer, but nothing looks like a computer. This is good for Apple.
Q: What’s your take on how they’re handling their expansion into China, India, and other emerging markets? Their recent 5C pricing decision seemed to be a commitment to the high-end of the market while leaving the low to mid end of the market to Android which you discussed recently in an August post.
A: My take is different than some people’s. The size of the mobile market is absolutely astonishing. It’s much bigger than personal computing ever was. Why is everyone so caught up on Apple needing to take a majority of worldwide share in order to be successful? Can’t they just accept that international fragmentation in other industries is the norm and that mobile and PCs have little in common?
Take cars. If you go to France you’ll see French people drive Renaults and Peugeots. Sometimes when you look around that’s all you can see. Somebody might say but wait, they have partnerships with Nissan and there’s ownership elsewhere like Daimler. Fine. But you see it across industries. Take fashion. If you go to Italy and walk around you’ll see Italian women wearing Gucci and Prada. But just across the way in France you just won’t see that. They’re wearing Louis Vitton and French brands, and they don’t want to be seen with an Italian brand.
Smartphones are an extension of us. Apple gets that at its core. They weren’t successful with colored iPods and iMacs randomly. People are unique and like to stylize how they act and what they wear. And I think you are starting to really see that in the smartphone market. Not in the way Nokia did a decade ago with 200 different phones, but a couple core platforms that can be extended and made to feel unique. Apple may never be successful in India. But does that mean smartphones are evolving like PCs and that Android is going to take over? Couldn’t be further from the truth.
The reason is because the PC market was a monopoly worldwide. You sat in front of a desk and put an ugly box underneath and tried to hide it. Two companies controlled the entire market and there was no choice in the industry. Smartphones have few parallels to PCs. People that keep talking about smartphones evolving like PCs are just so clueless. The supply chain is fragmented even for the most expensive components like baseband chips and processors. The software is free, and money is made on selling “experiences”, which are really integrated platforms running apps and services.
Q: You wrote about vertical integration as a big trend in tech over 3 years ago. How does this trend continue to play out in the next 5 years?
A: I don’t know how deep it will go. I recently wrote about Apple’s silicon strategy and why vertical integration at Apple runs much deeper the other tech giants who are “vertically integrated”. All the big guys have hardware now but no one else has a pedigreed chip design team that can plan 5 years out. In my opinion you may see some integration here. But it’s exceptionally difficult to run a successful chip team. I mean what Apple did with the A7 is simply unbelievable. For them to eclipse companies that specialize just in silicon like Broadcom and Qualcomm is very hard. Meanwhile Intel is a slow moving train wreck and has literally zero share in smartphones and tablets. There is a certain changing of the guard that foretells changing levels of modularity. The future that’s visible and gets discussed a lot is the service layer, but the part that’s invisible is components and chips. Each company will have some modularity, it just depends where in the stack the integration points will exist.
Q: Do you still think Groupon’s going to be a $25 billion company soon?
A: Ha, you’re referring to a post I wrote before they IPO’d. Titles sell. The market I was predicating that valuation on, real time local, just never materialized. No one in the local space is yet profitable. But local is still a trillion dollar market. The thing I am most excited about in tech right now is Apple’s iBeacon, which is going to create waves in the local commerce space in the next year.
Q: Where do services like Twitter, Facebook, SnapChat, and WhatsApp end up as the mobile internet continues to evolve?
A: Twitter will be a massive company. Doubling to $40-50B market cap within a year after IPO. Facebook is boring to me, I think you could see them acquire SnapChat. Buying Instagram was genius and they know they dodged a bullet. WhatsApp is the most successful ugly product ever. From a user experience point of view, it’s shameful WhatsApp is so successful and is a testament to how much better apps are than legacy telecom / SMS.
Q: What did you think of Hugo Barra joining Xiaomi? Is there something larger we can infer from that move or not?
A: What an exciting time for Chinese companies. Not only did mobile change all the rules for the incumbents, China benefits from being the biggest mobile market worldwide. I think it was an inevitability that you had a Chinese company like Xiaomi arrive that made the Western world really perk up their ears. I’d love to play with one, and would trade my HTC One for one of their newer models. I think again, it’s an integrated mindset. In the PC industry all the OEMs had an artificial ceiling because of the market monopoly at play. That caused innovation at places like Lenovo and HP to cease. In reality these companies were just system integrators making junk. In mobile, the junk makers exist as well. Slap components together, run a forked version of Android, throw it in a box and make a tiny margin. So there’s going to be a long tail there, but there is room for more of what Apple does. Someone will be the Apple of Android, and it would be very interesting if it’s Xiaomi and not a US company like Motorola. In terms of style and design, they’ve polarized some folks and it’s working.
Q: What tech writers (or general writers) push you the most in your thinking?
A: Ben Evans has produced some superb pieces lately and is good at piecing disparate ideas together. I read a lot of tech heavy blogs and try to stay close to the what the engineers are actually building. Then go meet them offline.
Q: As you look at the rest of the mobile internet competitive landscape, do you expect any other big surprises in the next 5 years you haven’t mentioned?
A: The next 5 years will blow us away. Humans are now a living, breathing network. They used to say the network intelligence existed at the edge. Cisco leveraged this to become a massive company, making half their revenue off Ethernet switches. But back then the web only extended to your desk. Now human beings are the new edge, and you’re infinitely more connected, even as you walk around and interact with the environment.
But I love technology because outside of mobile, the most satisfying things will be breakthroughs that happen at the intersection of data science and software in industries like healthcare where we’ll see technology make the world a better place for everyone, regardless of what mobile platforms win.
This is the 4th (and final – for now) in a series of interviews I’ve done recently with, in my view, the top independent tech bloggers.