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Steve Harmon - The McData Era Is Ending

Would you like Fry's with that?

Steve Harmon

November 2 · Issue #21 · View online
Beyond the hype, inside the world of venture capital, tech, stocks and trends, from Silicon Valley to Shanghai, from veteran investor and entrepreneur Steve Harmon - followed by many leaders in finance and tech, see more:

Would you like Fry’s with that?

Data Wars: A New Hope
Around about 1994 when I first jumped into the then pond called the ‘Internet’ (more accurately, the web) you could literally send an email through any server in the world. And I did.
My newsletter which began with 50 or so of the world’s unknown but brilliant entrepreneurs back then became a 10,000+ email list and rather than rely on my local ISP I just pointed my email program SMTP to whichever server I wanted: they were all open… I usually selected UUNET or another large provider to send it through.
Back then I had to BCC: all 10,000+ subscribers and make the TO: line to myself. Yes, early times. And freedom times also. There weren’t any spammers since there was nothing to sell online. No credit card processing online. No PayPal. Just real pals.
In that environment trust and sharing were two keys. A foundation of the early web. If nobody shared links there would be no Google today. That trust led to being able to type in your credit card on a web page and believe it would be ok…that the HTTPS:// meant something (and it does).
Keep in mind that in those days web companies had market caps under $500 million… of many stock picks I made back then, for example, Amazon (AMZN) debuted under that…
And today AMZN is valued at about $1 TRILLION.
Such numbers belie the underlying factors in a digital environment as it interacts with people. In the early web the focus was personalization. Netscape, Yahoo and others raced to make a home page for just you. With news and email right there, easy to click.
Amazon and others continue this tradition in a way but it isn’t the focus. The 'collective you’ is the focus now. What do large data sets say about a demographic slice? AI also takes this vein, letting data create data about us rather than solely for us.

The Empire Stikes Flack
You may recall the popular book “Who Moved My Cheese?” A bestseller that discussed jobs and where they were headed. Today’s world is based on making your data a product that can be combined with other product to make something like Velvet cheese…which is generously described as a ‘cheese product’ because it’s not cheese.
Now the organic food buffs among you will instinctively know that a by-product is inherently not as good as the natural thing. Aged gruyere beats Velvet every time.
Even so, in this fast food data era, this McData era we’re in, the mice are beginning to fight back. In the title above I reference Fry’s and it’s not the potato kind, it’s the geeky store found all over Silicon Valley. The place where you can walk in and buy components and make your own computer, modem, or whatever. A small way you can fight back against the packaged goods delivered at Best Buy, Amazon or Dell.
Scale and laziness drive the McData expansion. Nobody has time to assemble their own PC these days. Nobody has time to review and even comprehend their data that’s collected by the large web companies.
At the end of the day, Amazon is a credit card storing company that displays a bunch of products that FedEx ships to you. That single convenience – storing a credit card – is the secret sauce. The illusion is that the name 'Amazon’ means something beyond the convenience of that core asset. Your asset you share for convenience sake.
Whether AMZN gets to $500 TRILLION market cap or not is not my concern here. I could care less.
The point is that your laziness and scale create barriers to you owning and controlling your data, which is actually YOUR asset. Even though you may not yet know it or realize it. You are basically giving Amazon, Google, Facebook and Apple valuable data. Would you give them your car? Home? Dog? Of course not. These are obvious assets.
The non-obvious asset is your data.

Return Of The Next Guy
Since nobody is going to walk into Fry’s and mass-produce PCs the same holds true for the idea that’s coming: Tech fighting tech. What do I mean?
The idea that your data is free is coming to an end. Just like the idea of sending an email through any server in the world came to an end.
But it will be entirely new companies that emerge that fight against the lazy scale of the big boys who, though nothing other than the laziness of the masses, have become outsized giants.
I am involved in one such venture (coming soon). I’m not going to go into all the details here since I am not trying to promote it. Just the opposite at this point. And I’m seeing stirrings in other companies that break the stranglehold of the giants.
The one thing that the behemoths don’t understand and even if they do is this: their weakest point is the ankle. The achilles. What do I mean? The seemingly small stuff. Like storing a credit card was to Amazon early on. A small thing that became a glue trap.
Only now the smaller things – key features of a service – will be shifting the data landscape away from the McData oozed out burger effluent into handmade, private experiences… away from the glare of Ronald McDonald and the creepy clowns of today’s tech giants.
Tech will be fighting tech in this new era…and that means a lot of opportunities from new companies to obliterate the landscape of current incumbents.
The homogenized web is fading. Like a stale french fry.
Five Guys burger and fries anyone?

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