Cloudy future for IPOs

Direct listings vs. IPOs gain traction

Using a direct listing to take a company public is a technique gaining momentum for companies that are less concerned about becoming public than raising additional money. Spotify and Slack employed the technique in 2019, and five or more companies are considering direct listings in 2020, including GitLab, AirBnB and DoorDash. The method is leading Wall Street banks to become far more flexible with traditional IPOs. CNBC

dis-rup-shun: Companies in general, and tech companies specifically, are savvy about communicating and reaching potential markets with current digital marketing tools. For companies flush with venture investments, Wall Street’s rigid rules for holding periods and over-sized fees are simply not needed and are being bypassed. Seeing the damage inflicted on the retail brokerage industry by Internet stock trading platforms, Wall Street will work fervently to not lose one of its biggest paydays — the IPO. The disruption has already begun, however, and the IPO fee structure will never be what it was.

The Irishman helps Netflix gain cred

Netflix is counting on giant blockbusters such as The Irishman, viewed by 26 million households in its first week, to attract the top film producers to make great movies and series. CNBC

dis-rup-shun: Netflix was amazing until others, namely Amazon, offered more new release content, albeit for an up-charge. Then there was everyone else — including Warner and Disney that control vast catalogs and have studios where the best of the industry are created. Differentiation is no longer about convenience or price, but about offering “must watch” content. Whatever streaming service is not required for participation in the all important water cooler conversation will be purged from the overtaxed credit card account. Netflix has declared that its production budget will secure its place in the must watch category.

What are smart glasses 2.0?

North brought its lighter, more-stylish Focals line of smart glasses to market in 2019. It is now turning its sights to Focals 2.0 — thinner, more powerful with better display. The second generation of smart glasses will likely remain priced at around $600, and will continue to be the leader in alternative ways to view smartphone generated images. TechCrunch

dis-rup-shun: It is rough be on the bleeding edge of a new product category and smart glasses seem to be a bit like the slow adoption of wearables — some good offerings but consumers took a few years to be convinced they needed the product. Apple is said to be working on AR glasses and, as soon as the company enters the market, North can expect to be acquired by Google, Facebook, Amazon, or some other large brand that wants to enjoy the benefits of Apple creating a new category while having to compete. North will have to continue to survive by serving early adopters until a big brand can generate viral demand for the category. Perhaps Warby Parker is that brand.

Rating cloud services on environmental responsibility

Cloud computing is the future of computing and is the economic engine fueling massive growth by Amazon, Microsoft, Google and others. These services consume massive amounts of computing power, and electricity. Wired has evaluated the practices of the biggest three cloud providers and rates them. Google received an overall score of B+, Microsoft a B, and Amazon Web Services was scored C+. Factors considered include use of renewable energy, use of efficiency algorithms to maximize cycles per watt, and creative ways to reduce emissions, such as Microsoft’s location of data centers on the ocean floor.

dis-rup-shun: Amazon, the largest cloud provider by far, appears to have grown so quickly that it has struggled to keep apace with zero carbon pledges made by its competition. The socially conscious tech giants, however, will drive creation of renewable energy production at large scale, helping to make energy storage more viable. Expect companies to make purchase decisions of cloud providers with environmental responsibility an important priority, behind price.

Make your own vinyl records

Phonocut for in home analog recordings

Phonocut is an in-home vinyl lathe that enables anyone to cut their own 10 inch records. An audio cable plugs input in from other devices including your own musical creation and can be controlled with an app. The device costs $1,100. Wired

dis-rup-shun: The nostalgic fascination with vinyl and the many great hours spinning records with friends in understandable, but this is stretching it. Do you really want to create a library of vinyl that will be based, most likely, on input from digital recordings? What’s next, cassette tape players with digital inputs, or even better, a return to 8 Track tape players. Will the new 8 Track version be as good at eating the tape after about 10 plays?

2019 IPOs will face internal price pressure in Q4

The class of 2019 IPOs, including Pinterest, Uber, and Zoom, face a rocky market in Q4 as some investors are convinced of recession, while trade war moves create constant unrest. On top of market volatility, lock up periods for employees and investors will expire, resulting in significant sell-offs by insiders during Q4. CNBC

dis-rup-shun: Expect a rising number of tech IPOs to be direct offerings, cutting out expensive banking firms. Market volatility, working against the critical need for an oversupply of venture capitalists to earn a return on a shrinking pool new companies, will require some cost cutting moves. In the age of everything-as-a-service and the rental economy, tech investors, of all people, will be more anxious to prove the benefits of DIY IPOs. Investment banking is in for a rough ride as the pool of new companies shrinks and the economic landscape shows many warning signs.

EyeQue Vision Check smartphone eye exam

Several companies are working on cutting out the ophthalmologist by creating DIY eye exams. 800 Contacts offers an online eye exam, and EyeQue Vision has won awards for its smartphone attachment that determines your prescription. Gizmodo’s reporter, however, warns people with significant vision problems to see a professional.

dis-rup-shun: The medical industry is in dire need of technology disruption, and many of these disruptions are very welcome changes. Technology will, fortunately, more efficiently allocate health care resources to specialty cases, requiring advanced expertise, while middle of the road cases will be processed by lower skilled workers, aided by artificial intelligence or by devices such as EyeQue. Doctors need to begin tailoring their practices to specialized, fringe cases, where they will be paid more for their deep expertise as the average medical procedure is already providing little financial reward for medical professionals.

Apple Watch versus Fitbit Versa 2

Apple Watch Series 5 is an amazing device. Fitbit’s Versa 2 holds its own at half the price and longer battery life. Apple Watch functionality is expanded though use of the iPhone, but can provide a host of connected services without the phone. Versa 2 works with Android or iOS, includes Alexa support, and is well designed for workouts. Both watches have always on displays, and a wide variety of style choices. CNET

dis-rup-shun: How to survive in a market when your primary competitor is Apple? Specialize and differentiate. If Fitbit tries to be a nearly-as-good Apple watch at half the price, it will struggle. The company should dig deep and create a rich content library of workout classes that make the experience very unique — forming a cult like following of loyalists. Fitbit should take some lessons from Peloton, and create content that is more valued than the hardware.