Who Are the Next Disruptors?

Some of the largest companies in the world are disruptors that introduced new business models and changed established industries to create entirely new ones. Prominent examples are Amazon ( AMZN 

Disruption is a subcategory of thematic investing, and there are emerging opportunities to gain exposure to these types of innovative companies and themes—if it aligns with your strategy and objectives. Thematic investing can enable you to invest in long-term trends or themes that you believe in, and thematic funds can allow you to find opportunities that may cut across countries, sectors, and market capitalization.

If investing in a specific theme meets your objectives, disruption might be a thematic category to consider.

Disruptors are companies that have the potential to change or entirely displace existing companies and industries. These companies can have innovative technologies or operations that are more efficient or make the old way of doing business obsolete—cloud computing, mobile payments, and autonomous driving to name a few.

“Disruptive companies have changed a range of traditional industries, bringing innovative approaches, often enabled by technology and internet platforms, to deliver products and services to customers,” says Chris Lee, managing director of research and co-portfolio manager of the Fidelity Disruptors Fund (FGDFX 

“Take what we’ve seen with shifts in how people watch movies at home,” Lee notes as an example. “As preferences and technologies have changed from VHS and DVDs to streaming services, this has created investment opportunities amid disruption. Consider the divergent paths of Netflix and Blockbuster. Looking forward, the rollout of 5G could create further disruptive opportunities in this space. The same movie that might take several minutes to download on a 4G network may take just a few seconds on a 5G network.”

In the ninth annual Disruptor 50 list, CNBC highlights the private companies leading out of the pandemic with business models and growth rates aligned with a rapid pace of technological change. 

Investors have taken notice that the companies on the 2021 Disruptor 50 list have become critical players in fundamental economic and consumer transformations. A majority of the CNBC Disruptor 50 are already billion-dollar businesses. Thirty-four disruptors are unicorns that have already reached or passed (in some cases far surpassed) the $1 billion valuation mark — 10 of the companies on this year’s list are worth at least $10 billion. 

The 50 companies selected using the proprietary Disruptor 50 methodology have raised over $72 billion in venture capital, according to PitchBook, at an implied Disruptor 50 valuation of more than $388 billion. While technologies including AI, 5G, cloud computing and the Internet of Things are key to many companies making the 2021 Disruptor 50 list, the sectors they are upending are widespread, from financial services to health care, biotech, education, food, media, agriculture and transportation.

A record 1,565 start-ups were nominated for the 2021 CNBC Disruptor 50. Here’s the criteria that ultimately set the list-makers apart from the field.

When AT&T swooped up WarnerMedia three years ago, there was consternation among television fans and critics. WarnerMedia was the home of HBO, after all; what horrors would the telecom company’s functionaries visit on the crown jewel of prestige television? John Stankey, the AT&T veteran who was to lead WarnerMedia, opened by telling HBO employees, “I want more hours of engagement” in order to monetize data and information—not exactly the kind of reassurance employees or HBO aficionados wanted to hear.

Under AT&T’s auspices, HBO nevertheless continued to turn out critically acclaimed series like Watchmen, I May Destroy You, and Succession. The company also successfully launched the HBOMax platform into an increasingly jam-packed streaming scene a few months into the pandemic. Yet there was no question that behind the scenes, a culture clash brewed.

“AT&T’s ham-handed approach to strategy over the last decade when it comes to media has just been a disaster,” Tim Hanlon, CEO of consulting company The Vertere Group, told Vanity Fair this week. The marriage of AT&T and WarnerMedia was a match made in hell. “It’s a completely different mindset, skillset, and imagination set,” he said, “collision of art and commerce. Telcos are the ultimate domination of spreadsheets and revenue streams where the movies and television [business] is very hit-driven, and much more qualitative in its success.”

Discovery and WarnerMedia have very different auras; the former company and its offshoots, including TLC, Food Network, and HGTV, are known for unpretentious and unscripted content, ranging from 90-Day Fiancé to Dr. Pimple Popper to Deadliest Catch. Still, Hanlon sees Discovery—which, as announced this week, will soon merge with WarnerMedia to create a brand-new venture—as a more harmonious partner for WarnerMedia than AT&T. “In essence,” he said, “these are folks who understand how to create television, how to create video, how to create content and maximize its distribution.”

By Kara Swisher

On Monday, the wireless-telephone behemoth AT&T gave up the ghost in its pricey and ambitious plans to transform itself into a media giant by announcing that it was spinning off WarnerMedia into a merger with Discovery.

It was a complete about-face from its once-touted strategy to take on Big Tech and dominate the next phase of the information age. AT&T’s top executive tried mightily this week to make the deal look like a win for his company by painting a picture of vast sums of money well spent. It was anything but that.

What AT&T is getting back in the deal is well below the more than $85 billion that AT&T paid only three years ago to purchase Time Warner, which included media gems like CNN and HBO. That’s why some analysts have made a persuasive case that the AT&T chief executive, John Stankey — who spearheaded the 2018 deal, as well as AT&T’s disastrous acquisition of DirecTV three years before that — is the worst media strategist in recent memory.

“I FOUNDED AMAZON 26 years ago with the long-term mission of making it Earth’s most customer-centric company,” Jeff Bezos testified before the House Antitrust Subcommittee last summer. “Not every business takes this customer-first approach, but we do, and it’s our greatest strength.”

Bezos’ obsession with customer satisfaction is at the center of Amazon’s self-mythology. Every move the company makes, in this account, is designed with only one goal in mind: making the customer happy. If Amazon has become an economic juggernaut, the king of ecommerce, that’s not because of any unfair practices or sharp elbows; it’s simply because customers love it so much.

The antitrust lawsuit filed against Amazon on Tuesday directly challenges that narrative. The suit, brought by Karl Racine, the Washington, DC, attorney general, focuses on Amazon’s use of a so-called most-favored-nation clause in its contracts with third-party sellers, who account for most of the sales volume on Amazon. A most-favored-nation clause requires sellers not to offer their products at a lower price on any other website, even their own. According to the lawsuit, this harms consumers by artificially inflating prices across the entire internet, while preventing other ecommerce sites from competing against Amazon on price. “I filed this antitrust lawsuit to put an end to Amazon’s ability to control prices across the online retail market,” Racine said in a press conference announcing the case.

Amazon CEO Jeff Bezos testified before the House Judiciary Subcommittee on Antitrust, Commercial and Administrative Law on July 29, 2020. | Mandel Ngan/AFP via Getty Images

DC’s attorney general is suing Amazon over a controversial policy.

Another attorney general is boarding the Big Tech antitrust lawsuit train: Washington, DC, Attorney General Karl Racine is suing Amazon for engaging in anticompetitive acts that he says have raised prices and stifled innovation.

The complaint accuses Amazon of abusing its market position by requiring, in practice, that third-party sellers offer their products for the same price that they sell them elsewhere. This has raised the price of goods overall, the complaint says, which means DC residents are paying more than they otherwise would.

.

Emily Wilder, a journalist and 2020 graduate of Stanford University, started a new job as an Associated Press news associate based in Maricopa County, Arizona, on May 3.

Two weeks later, she was unceremoniously fired by the news outlet after conservatives resurfaced old social media posts that drew attention from Republicans as prominent as Arkansas Sen. Tom Cotton. In Wilder’s eyes, her firing is the latest example of right-wing cancel culture.

Tiger Global: what happens when ‘normal’ returns?  Sifted

Not a day goes by without a new European startup announcing a large fundraising round co-led by US hedge fund Tiger Global. Some say it’s a radical change of approach in the venture capital industry, while others suggest that it’s a fad. But how can we explain the rise of Tiger Global in the VC landscape? And what difference will it make from a European perspective?

In truth, it was only a matter of time before hedge fund managers turned their attention to tech startups. By definition, hedge funds (or rather “alternative asset management firms”) have the most flexible approach to allocating capital across asset classes, and those who manage them are constantly chasing the highest returns possible. Therefore in a world that is becoming more digital by the day, hedge funds had to set their eyes on tech at some point.

The issue with tech startups and tech companies is that relatively few of them are listed. This arguably is a challenge for hedge funds, which are used to making bets on public markets where they enjoy abundant information, a broad range of potential targets and liquidity.

The approach that Tiger Global has embraced to deploy capital in tech is best understood through this lens.

It has to renounce the liquidity because we’re talking about companies that are still mostly private; but it can still diversify with a large portfolio and use the information that’s available to make fast and sound decisions. In this case, the information is not the detailed figures that you can find in a public company’s quarterly report or the alternative data sets you can buy from a broker (the occupancy rate of supermarket parking lots as measured by satellite imagery is a classic example), but rather the information revealed by what tier-1 VC firms are investing in. As soon as a founding team enters advanced discussion with one of these firms, it is time for Tiger Global to use that information (which they typically learn from the founders themselves), step in and make an offer. 

At least a few times a week, I am sent a deck or exec summary that includes an “Exit Strategy”. The slide sometimes references a nice acquisition by an adjacent company, or a prior competitor or player in the space. It’s all fine and good, though I recommend just passing on making one of these slides. They often suggest you aren’t really Going Big. Which is OK … but it’s not what VCs and investors want to see.

But there’s a more important point here. Exits are rare in general. Big acquisitions don’t happen every day, no matter how it may seem on TechCrunch.

For a particularly visceral summary of that, looks at Dan Primack’s summary of Apple’s top acquisitions from a while back. There ain’t many big ones for a company as big as Apple:

The post The Only Exit “Strategy” Is IPO appeared first on SaaStr.

Silicon Valley and the media industry that surrounds it values youth. The culture is driven by the 20-something irreverent founder with huge technical chops who in a “David vs. Goliath” mythology take on the titans of industry and wins. It has historically been the case that VCs would rather fund the promise of 100x in a company with almost no revenue than the reality of a company growing at 50% but doing $20+ million in sales.

The Valley has obsessed with a quick up-and-to-right momentum story because we were thought to live in “winner take most” markets. Since funds were driven by extreme successes in their portfolios where just one deal could return 5x the entire fund while 95% of the fund may have done well but not amazing, not missing out on deals was critical. It literally drove FOMO.

But markets have changed and I think investors, founders and experienced executives who want to join later-stage startups can all benefit from playing the long game. Think about how much more value was created for all these constituencies (and society) by Snap staying independent vs. Instagram selling to Facebook.

Photo by Aaron Andrew Ang on Unsplash

Playing the Long Game in Venture Capital was originally published in Both Sides of the Table on Medium, where people are continuing the conversation by highlighting and responding to this story.

The data analytics giant said it no longer has a corporate headquarters during Wednesday’s earnings call. Instead, Bozeman will be its “principal executive office,” a disclosure that is required by SEC rules. Snowflake previously listed San Mateo as its headquarters.

Other tech companies, like Tesla and Oracle, moved their headquarters from California during the pandemic, but made the relocations more permanent by formally establishing new main offices.

Snowflake still intends to keep its San Mateo office, but no one location will serve as its central hub, a spokesperson told CNBC. The company opted for Bozeman because its where both the CEO and CFO reside, according to an SEC filing.

Venture capital investment in Africa predicted to reach a record high this year  TechCrunch

Investments in African startups keep growing at a healthy pace ever since reports started keeping count in 2015. That year, publications Disrupt Africa and Partech released independently researched and contrasting figures showing that venture capital investments hit $186 million and $277 million, respectively. Those are ridiculously low figures for a continent when you consider that four-year-old Snapchat raised more than $500 million in one round that same year. However, while the disparity in funding between Africa and a single high-growth U.S. startup continues, the good news is that more money is coming into the continent.

In 2019, Africa’s venture capital investments rose to an all-time high, per Partech’s report. According to Partech, 234 African tech companies raised $2.02 billion in 250 equity rounds. This indicated a 74% increase from 2018’s figure of $1.163 billion raised by 146 startups in 164 rounds.  

I want to say something unpopular and provocative: I am grateful for the internet, especially this year, most especially amid the pandemic that still engulfs the world. In media’s telling — according to my sampling from just one newspaper’s and one magazine’s coverage of late — the net is singularly to blame for the polarization […]

The post A thank-you note to the net appeared first on BuzzMachine.

Greg Kumparak / TechCrunch: Whatnot, a livestreaming service for buying and selling collectibles, raises $50M Series B led by Y Combinator Continuity, after its $20M Series A in March  —  Whatnot exists with one primary goal in mind: to give people a place to buy and sell collectibles (like Pokémon cards …

Propy, the real estate transaction platform, will soon auction a real estate-backed non-fungible token (NFT), as per a release to CryptoSlate.

The post TechCrunch founder’s Kiev apartment becomes first real estate NFT appeared first on CryptoSlate.