Welcome to the first edition of TMT Weekly, which weaves quotes from the best transcripts of the past week into a semi-coherent story about what’s happening in TMT. You can think of it like Money Stuff with better source content and worse jokes. Matt Levine said it took him ten years writing online to become a god, but I plan to do it in nine.
I’ll cover companies in the news, notable acquisitions, and the top TMT transcripts published last week. Each transcript has a link for clients and a link for prospects. If you’re in the latter category, sign up for a free trial of Stream by AlphaSense for the full experience.
In the News – DKNG, AAPL, Edward & Gronk
In June, we hosted the legendary Dan McMurtrie, BIll Brewster and Jamie Catherwood for a discussion on casino stocks – MGM, CZR, & DKNG. Our new social media manager, Edward, was keen: his DKNG position was down about 70% and he wanted good news. He didn’t get any from Dan, but he did get some last Friday: DKNG beat Q2 consensus earnings, and is up about 10% as of this writing (though still down 67% for Edward). None of this is investment advice!
I mention DKNG not only to make fun of Edward and pump our webinar, but as an excuse to mention a great DKNG transcript published on Stream last week. It didn’t quite make the top TMT lists, but it’s still a great read.
DKNG (DraftKings Inc) – Former DKNG Sr. Manager Thinks AAPL’s iOS Policy Changes Had Significant Implications on the Mechanics of Casino Apps
When the DKNG app crashes, you can blame AAPL and… Rob Gronkowski.
“Apple had a major policy crackdown that demanded that games logic not actually be served up remotely. The technology effort to facilitate that and maintain a large library of games was enormous. Throughput is a big concern. Transactions happen really fast in iGaming. Keeping up with that rate is critical and really challenging without the benefit of some of the freely scaling features that you might get in AWS cloud because you are on actual physical hardware provision somewhere on-site, on a server rack somewhere: you have finite resources.
There was a term jokingly and lovingly referred to as Gronk Spikes at DraftKings. Rob Gronkowski spikes footballs when he scores and traffic would spike on him scoring a touchdown. Everyone goes and opens up their phone: ‘Did my bet come through? Did I win? Did I have a wager that the next drive was going to score? At the end of the quarter, I had the right score,’ whatever it is. Traffic bursts in huge quantities in major scoring actions [could crash the app].”
-Sr. Software Engineering Manager, DraftKings (Prior)
So… Gronk’s retirement is bullish for DKNG. Not investment advice!
Notable Acquisitions – AMZN & IRBT
IRBT (iRobot Corp) – Competitor Sees Modularity in Devices as Particularly Important in the Future
I love an expert who can explain technology and acquisition rationale to me in a way that I can understand.
“Maybe iRobot might be stronger when it comes to cleaning. In terms of functionality, you will see more functionality in the ECOVACS or in the Roborock than iRobot. If you take the iRobot, it’s just an AI application that can detect your pet’s poops.
At the end of the day the AI trend is more the human interaction than the cleaning itself. [The cleaning] you can just do it without any AI. AI makes your product more human interactive. There is a lot of uncertainty in building your products starting from AI perspective because there is no open dataset.”
-Lead AI Engineer, ILIFE Robotics (Current)
Top Transcripts Last Week – Aug 1-7, 2022
Last week I shared the top July transcripts based on three metrics:
- Unique users
- Average pages read per unique user
- Engagement per unique user
There’s overlap in the last two, arithmetically in that “pages read” is part of the engagement calculation, and literally in that the same transcript showed up in both lists. We’re dropping #2 for the moment (more on this in a future post).
Top TMT Transcripts Last Week – Unique Users
I think of this stat as popularity.
#1) GOOGL (Alphabet Inc) – Former Sales Consultant Believes GOOGL Has the Technological Advantage in Both the Cloud and Advertising Environment
I have heard plenty about the amazing AWS cloud, but I’ve never heard of GOOGL’s “tensor processing units.” Are TPUs a competitive advantage? Do I need one for my PC? I can’t find any TPUs on Newegg, so for the moment I’m skeptical.
“When you have the quantum leap that 5G represents… that’s definitely a way where Google’s technical superiority can really come to bear… They’re designing TPUs. It’s in the Pixel phones these days. The new Pixel Buds headset has a custom-designed Google chip on it. Tensor processing units, TPUs, are able to outsmart or outstrip some of the GPUs that are in traditional data centers. If Google makes their TPUs even more narrowly configured to the task at hand, I can see them pulling ahead [of GPUs].”
-Sales Consultant & Partner Engagement: Executive Summits Briefing Center, Google (Prior)
#2) WDAY (Workday Inc) – Former Competitor Thinks WDAY Has Earned Its Position in the Marketplace as the Leader
I love an expert who uses words like “decrement” when explaining the benefits of the tech.
“One [major value of Infor] is when you have something coming on the dock, as an example: we’ve ordered it. The order of inventory, the receipt of inventory, and the decrement of using an inventory, that’s a big deal. If you have a patient coming in for a procedure in the surgery and you’re missing an implant that you need for that, you’ve wasted the opportunity to use that space to make money and you’ve upset the patient…
I think Workday’s probably well-earned their position in the marketplace as the leader. The knee-jerk is going to be going that way and you’re going to have to prove why you should use Oracle and Infor. All I think Infor can do at this point is beat them back with the cost probably because their services are awful. Unless they put something in writing that guarantees somebody on site. Oracle’s got a different approach, I think, and that may take a couple of years to fully bake.”
-Executive Partner, Infor (Prior)
#3) META (Meta Platforms Inc) – Former Partner Sees a Sea Change in Digital Media Even Absent Macro Uncertainties
I’m pretty sure declining online ROAS is good for corporate bloggers, but I’m not that sure, so I’m still working on that screenplay.
“We are seeing a decrease in ROAS. Facebook is definitely one that we’ve seen a little bit of a decline mostly because of these privacy issues. I think if we look at those D2C players, Warby Parker, for example, Casper, a lot of them are expanding into more of an omnichannel scenario where they’re not purely online.
As long as it was a positive ROAS, the more money you put in, the better your growth numbers are going to look. If that’s not necessarily a guarantee anymore, it pushes people back into a more traditional, holistic, multi-channel, omnichannel approach to marketing and looking at all of the various touch points that you’ve got with consumers and finding a way to connect with them in other ways.”
-CMO, Vice President of Global Marketing, Smartly.io (Prior)
Top TMT Transcripts Last Week – Engagement Per User
I think of this stat as a mix of relevance and quality.
#1) AMZN (Amazon.com Inc) – Former Partner Is Bullish on AMZN Due to AWS’s Strength in Markets
Here we go again with the amazing AWS cloud. This transcript is mostly focused on the Australia and Southeast Asia markets.
“I think it’s probably two main ones [for AMZN to target]. The financial industry is still lagging behind even though a lot of them are doing cloud migration programs. The other one is large mining operations. There is a ton of value to be had from leveraging cloud, especially from a data analytics perspective.”
-Senior Expert, Associate Partner, McKinsey & Company (Prior)
#2) ASML (ASML Holding NV) – Former Government Affairs VP Believes Lithography Semi Equipment Is Much Harder to Replicate Than Deposition or Etch Equipment
If you want to say that industry consolidation reduces business cyclicality, and you don’t want to use the word collusion, then may I suggest “responsible.”
“Yeah, I think this cycle is different, especially in the memory space. Most of the cycles were supply-driven downturns where an abundance of memory manufacturers were all looking for 50% market share. They were building big fabs in an attempt to supply more product to more customers but there was a finite demand, so we got overbuilt on more than one occasion on the memory front. We’ve seen significant consolidation in the memory space over the last 20 years. I would say that the memory makers are more, I’ll use the term is probably not exactly appropriate, but they’re more responsible. They understand the dynamics now.”
-VP U.S. Government Affairs, ASML (Prior)
This is a great transcript end to end. Highly recommended.
#3) MSFT (Microsoft Corp) – Former Competitor Sees GitHub Actions Best Positioned in the CI Space
Another expert singing Github’s praises. I think we’ve caught the scent of an analyst on a deepdive in CI.
“I had lost more than one deal at CircleCI because of the fact that when we integrate with version control like when CircleCI integrates with their GitHub repositories, we require read-write permission of all of your GitHub repository.
That’s a very big security vulnerability because if we have read-write access to your GitHub repos and CircleCI gets compromised, the attackers can subsequently compromise your GitHub repository.”
-Enterprise Account Executive, CircleCI (Prior)
Losing deals to a competitor is a decent indication that their tech is better, which reminds me: you should take Stream by AlphaSense for a spin. The tech rips.
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Austin’s primary experience is in consulting and private equity, though he’s also a published author.
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