The Stratechery 2014 Year in Review

2014 was Stratechery’s second year, and what a momentous one it was! In April Stratechery became my full-time job, and although I made some quick changes to the model, it’s been a big success. It has certainly kept me busy: in 2014 I wrote 88 free articles, 169 Daily Updates, and recorded 41 podcasts (29 of them were Exponent episodes).

Here are the highlights (the 2013 edition is here):

Brand advertising is worth a lot more than search advertising; if it moves to the Internet, .Google's share of digital advertising would be dwarfed
Peak Google

The Five Most-Viewed Articles:

  1. Peak Google – Google owns search, and will continue to do so. But the online ad market is about to get a lot bigger, and it’s not clear that Google will win. They may be eclipsed like Microsoft before them
  2. Apple Watch: Asking Why and Saying No – Apple Watch is beautiful and has many compelling features, but Apple never said why it exists. Has that led them to do too much? (Note that I later changed my mind: see What I Got Wrong About Apple Watch and Why Now for Apple Watch)
  3. Smartphone Truths and Samsung’s Inevitable Decline – All of the reasons to buy high-end Samsung phones are disappearing; Apple, meanwhile, will always have software-based differentiation and a big market to address
  4. It’s Time to Kill Surface – It’s important to evaluate products – like the Xbox and Surface – in the light of their original goals. If you do that, then it’s clear Surface has failed
  5. Two Microsofts – Making Mobile Office (nearly) free bring a lot of clarity to MIcrosoft’s business: it’s actually two different ones – consumer and enterprise
When a successful company seeks to address a new problem, they are often handicapped by their old incentive structure, leaving them susceptible to a startup able to fashion problem-specific incentives
PayPal’s Incentive Problem, and Why Startups Win

Five Big Ideas

Apple's focus on creating a great user experience builds consumer loyalty. Consumers then put market pressure on Apple's potential partners, which result in concessions to Apple, further enhancing the user experience
How Apple Creates Leverage and the Future of Apple Pay

Five Company-Specific Posts

  • Twitter’s Marketing Problem – Twitter’s initial product was so good that they never went to the trouble of understanding their market, and now they are paying the price.
  • It’s Time to Split Up Microsoft – Satya Nadella is saying all of the right things, but Microsoft’s culture has always been Windows first. The solution is to get rid of Windows
  • How Apple Creates Leverage, and the Future of Apple Pay – How Apple Creates Leverage, and the Future of Apple Pay
  • Best – Apple avoids disruption by creating a superior user experience. That requires focus, and any advice to the contrary doesn’t make sense
  • Why Uber Fights – Big business is brutally competitive, and a very big business is exactly what Uber is fighting for. Their potential is absolutely massive
Publishers and the Smiling Curve
Publishers and the Smiling Curve

Five Daily Updates

(Please note that these are subscriber-only links – you can sign-up here)

  • August 5 – Xiaomi Wins on More than Price, Micromax and Local Taste, Local Brands and Scale
  • October 22 – The Disruption of IBM, An Alternate View of IBM’s 2015 Profit Goal, IMB Sells Fabs to Global Foundries
  • November 12 – Taylor Swift vs Daniel Elk, What Swift Gets Right, The Problem with Spotify
  • December 1 – Why Vox (and BuzzFeed) are Valuable, Outbrain Files for IPO
  • December 2 – The Solo Selfie and its Cool Factor, The Donut Selfie and its Creator
App stores take 30% of in-app purchases; the remainder goes to free-to-play publishers like King. These publishers, in turn, drive the majority of Facebook mobile advertising, as that is the best channel to find more digital whales. And now, 3rd-party developers can get their piece.
Dependent on Digital Whales

Five Podcasts

Happy New Year. I’m looking forward to a great 2015.