The 2019 Stratechery Year in Review

2019 was a transition year for me personally, and by extension, Stratechery. The nadir was an Article I regret — The WeWork IPO — where, despite not believing in the company, I wrote the contrarian take because it seemed more interesting (my full mea culpa is here). It was not a healthy approach, but, six years after starting Stratechery, and five years of it being my full-time job, it was perhaps an understandable one.

The turning point was The China Cultural Clash; writing about the crisis surrounding the NBA in China and the implications for the technology industry reminded me of something I had started to forget in my attempt to be even-handed and dispassionate in my analysis: values matter, and there is a freedom that comes from recognizing and articulating those values. Indeed, honesty about values makes analysis better, because underlying assumptions are pushed to the forefront, instead of fading to the background — and, I’d add, it is invigorating! On to 2020!

A drawing of Teams and The Enterprise Growth Framework

This year I wrote 139 Daily Updates (including tomorrow) and 36 Weekly Articles, and, as per tradition, today I summarize the most popular and most important posts of the year.

You can find previous Stratechery Years in Review here: 2018 | 2017 | 2016 | 2015 | 2014 | 2013

A drawing of The Three-Way Market of a Super-Aggregator

Here is the 2019 list.

The Five Most-Viewed Articles

  1. The WeWork IPO — This, to be perfectly frank, is brutal: I not only regret this article for being insufficiently negative (although, for the record, I was clear I would not invest in WeWork), but now also have to face the fact it was my most popular post of the year. Related: Uber Questions, which took the boring skeptical approach to an S-1 I should have repeated.
  2. The Google Squeeze — Google, the real Aggregator, is squeezing OTAs, which acted like Aggregators while depending on Google for demand. It’s easy to say Google is being unfair, but this may be better for consumers.
  3. Shopify and the Power of Platforms — It is all but impossible to beat an Aggregator head-on, as Walmart is trying to do with Amazon. The solution instead is to build a platform like Shopify.
  4. Disney and the Future of TV — TV is moving from a world where distribution dictates business models to one where business models need to fit the jobs consumers want done. That is the best way to understand Disney’s latest announcement.
  5. AWS, MongoDB, and the Economic Realities of Open Source — Amazon’s latest offering highlights the economic challenges facing open source companies — and Amazon should pay attention.
A drawing of The Shopify Ecosystem

Lessons Learned

The good thing about making mistakes is that it is an opportunity to learn; two of these articles are directly connected to WeWork.

  • Neither, and New: Lessons from Uber and Vision Fund — Uber represents something new: a company that is different than incumbents because of technology, yet not itself a tech company — just like the Vision Fund is not a VC.
  • What is a Tech Company? — The question of “What is a tech company” comes down to how much software and its unique characteristics affects the company’s core business.
  • The Value Chain Constraint — Companies succeed or fail not based on technology but rather according to their ability to integrate within their value chains.
A drawing of Amazon's Value Chain

Values and Society

Almost all decisions involve trade-offs; the most difficult are those that require understanding and prioritizing our values.

  • The Internet and the Third Estate — Mark Zuckerberg suggested that social media is a “Fifth Estate”; in fact, social media is a means by which the Third Estate — commoners — can seize political power. Here history matters. Related: Tech and Liberty and the policing of political speech.
  • The China Cultural Clash — The NBA controversy in China highlights a culture clash that both tech companies and the U.S. government need to take to heart. Plus, why Tiktok being Chinese is increasingly a problem. Related: China, Leverage, and Values, about the trade war.
  • Privacy Fundamentalism — The current privacy debate is making things worse by not considering trade-offs, the inherent nature of digital, or the far bigger problems that come with digitizing the offline world.
A drawing of The Synergy Between Tech Companies and Venture Capitalists

Regulation and Antitrust

While regulation was also a theme in 2018, this year I tried to get much more specific about how to think about the challenges presented by the Internet.

  • Where Warren’s Wrong — Senator Warren’s proposal about how to regulate tech is wrong about history, the source of tech giant’s power, and the fundamental nature of technology itself. That doesn’t mean there aren’t real problems — and potential solutions — though.
  • Tech and Antitrust — A review of the potential antitrust cases against Google, Apple, Facebook, and Amazon suggests that only Google is vulnerable.
  • Three Frameworks:
A drawing of The Regulatory Framework for the Internet

The Big Tech Companies

Tech’s continued centralization means that the biggest companies — Microsoft, Apple, Google, Amazon, and Facebook — receive the largest scrutiny.

A drawing of Google's Ambient Computing

Media and Technology

The most important development of the year in media was the launch of Disney+; I already linked to Disney and the Future of TV. Also:

  • Netflix Flexes — Netflix is an Aggregator, with a value chain that lets it drive demand, raise prices, and dismiss competition.
  • Spotify’s Podcast Aggregation Play — Spotify is making a major move into podcasts, where it appears to have clear designs to be the sort of Aggregator it cannot be when it comes to music.
  • The BuzzFeed Lesson — The lesson of BuzzFeed is that dominant Aggregators like Facebook have no incentive to act against their self interest and support suppliers. Related: The Cost of Apple News.
A drawing of The Music Value Chain Versus the Podcast Value Chain

The Year in Daily Updates

This year the Daily Update not only continued the trend towards single topics, but often became the place where new ideas and future Weekly Articles were first presented and fleshed out. I’m really proud of this evolution — this was a hard list to cull. Some of my favorites:

A drawing of Facebook and Amazon's Approach To Take On Apple and Google

I also conducted six interviews for The Daily Update:

Netflix' value chain

I can’t say it enough: I am so grateful to Stratechery’s readers and especially subscribers for making all of these posts possible. I wish all of you a Merry Christmas and Happy New Year, and I’m looking forward to a great 2020!