Full transcription: may contain unintentionally confusing, inaccurate and/or amusing transcription errors

Intro (01:24)

Bertrand: Hi Nuno, how are you today?

Nuno: I’m well and you Bertrand, how are you?

Bertrand: I’m doing good. I’m doing good, enjoying shelter in place. 

In today’s episode we’re going to discuss, the 2010s, the past decade. A lot happened in that past decade in tech. So it will be a pretty, pretty high density episode. We will talk first about a more higher level, macro view of what has been happening in tech. We will deep dive into the underlying of the technology industry, operating systems, devices, technologies, platforms, and then we will talk about the dramatic changes we also saw in business models.

It’s actually pretty amazing when we think about everything that changed there. It’s not just the technology. And finally, we will conclude around the switch in funding landscape and how much has changed as well. We will be splitting this episode in two. So that it’s more digestible. 

Section 1 – When did the 2010s really start?

So Nuno, I will start with a question. When can we say that the 2010s really started?

Nuno:  Well in my opinion, the 2010s start with the 2008 crisis that prolonged itself well into 2009 and to the beginning of the 2010s. And in some ways that’s a really good timing to choose because 2008 was also the year in which the Apple app store launched for the iPhone. It’s also the year where, in effect, Android became a real threat to iOS and Apple, and it really defined a lot of what was going to come into 2010s so we start with a crisis, as we’ll see, we might end with a crisis as well, which will be interesting. So maybe decades actually do get defined by crisis, but for the purposes of this episode, we will go back a little bit in 2007, 2008 to give us more context into what the decade really looked like.

Bertrand: Yes, it’s might be sad to start and end with crisis, but at least it’s pretty clearcut, and crises definitely generate very strong inflection points. 

Nuno: And  we had the 2000/2001 already with the bubble. So  in effect, beware of  end of decades.

Bertrand: Indeed, indeed. If we make a full comparison, the decades themselves are pretty good. It’s the ending and the starting.

Section 2 – The backdrop: Macro-trends and overall context  

So let’s talk about the more macro trends that we saw in tech. And I feel the first big macro trend was really how in the 2010s, technology started to insert itself right in the middle of society, in the middle of us.

It has been pretty amazing, to see technology scope, enlarging, growing  into our daily interactions. Nuno, what’s your perspective on that?

Nuno: Yes. If we talk about IT or tech in some ways, we sometimes use them interchangeably. Tech is definitely in the middle of all society. We all use different technologies. Software based technologies, Internet based technologies, mobile based technologies, and the 2010s were really the years where these changes happened most dramatically.

Where to your point, technology definitely got in the midst of us. Everyone uses today, smartphones, everyone uses today the Internet. And that was not a given in 2008, 2009, as we said, the beginning of our journey into the 2010s. But today it is true. So definitely a huge shift in this decade. I would say a real significant emergence of technology around the world in developed markets and emerging markets alike.

Bertrand: Yes, for me, what’s been amazing is as you say, it’s not just developed markets, but also developing economies, where technology has been more and more important, more and more visible, and you could argue more and more transformational for people’s life. As much as our life has changed in the US, in Asia, in Europe,  life thanks to technology has probably changed even more in developing markets.

You suddenly move from no smartphone, no Internet, maybe sometimes a feature phone, to suddenly discovering the Internet. There has been no PC or Mac or laptop,  stop gap like we had during the 90s or 2000s, it was suddenly move to discovering, the Internet and all its connected services.

And we’ll talk more about some of the ways that technology inserted itself. But it’s pretty exciting to see how our daily life has been changed from, ordering taxis, ordering food. 

We could talk about the digitalization of society at large. Who remembers  using a paper plane ticket, for instance, we have all gladly transformed to using our phone for that,  in the past decade  where we could still travel.

So it’s really for me, that part that has been exciting and we already talked in a previous episode how, COVID is a big impact. So I think that digitalization of societies that really happened in 2010s is only going to accelerate,  in a way, thanks to COVID.  

Nuno: Yes. And with effectively a new decade with a tremendous shift towards technology, we see the emergence of winners and new players that dominate the market. There’s always these classic charts on who’s the largest market cap in the world, and it’s very interesting in how they changed through the years.

And obviously if we look at what happened in the last decade, we see really the emergence of companies that were somehow a little bit significant already, but not definitely as significant as they are right now. And we obviously talk about Apple, which obviously with the iPhone became a significant player in the late 2000s and then 2010s. 

Google, that was already very significant player. That only became a  stronger player in particular with Android and YouTube becoming of age. Amazon becoming a household name to all of us, and a dominant force in e-commerce, but also in infrastructure, which we’ll talk about in a second, and Facebook becoming the real win around social.

We obviously can’t forget Microsoft, which had its resuscitation in some ways and found its groove again in particular in the late 2010s. 

But obviously, you know these five big, I would be very specific about it, these five big Western dominant players really leading the world in terms of market cap and really showing us how, how much tech has taken over the world and eaten the world in some ways.

Bertrand: Yes, you  to highlight Nuno, that it’s really the Western players, but in Asia there are some very strong players in that space. We can talk about a Rakuten in Japan, we can talk about an Alibaba and a Tencent in China, and some new players like Xiaomi as well during that period in China.

So indeed, it’s an emergence of some very strong players, that are scaling from devices, to cloud computing, to web to mobile, to IT infrastructure,  whose scope of operations,  have really grown in the past 10 years.  Some of them were pretty specialized players. Take a Google, much more specialized in search, at the time and you could argue they still monetize very well search. But it is a much bigger and very different company today.

Facebook, multiple acquisitions, well done, actually. Acquisitions over the past 10 years,   they have you could argue an amazing track record. Some would say “too” amazing track record in acquisition.  But we cannot, not acknowledge this.  And talking about the Asian players, I think there’s one theme, is that there’s has been the emergence of China as a tech superpower and overall global superpower.

But if we focus on tech for a moment, it’s clear that 10 years ago in the eyes of many, China in term of business model had a focus on serving Chinese market and in many ways of copying more what was existing in the West in term of business model. And I think it’s fair to say is that China is emerging the 2010s some of the biggest tech giants of the world. With giants, who are not just focus on the China markets, but are now global giants themselves.

And these very large Chinese players, like in the West, are not just focusing anymore, on one region or one product. They’ve really become companies that span across products and that ultimately have actually created new business models. We keep talking about Tencent, with WeChat that has built an app that is bigger than some other apps, the super app.

We have seen, the fastest penetration of e-commerce and payments in China, that the world has ever seen.  And China is now leading the way in e-commerce, in digital payments. That might come as a surprise  to some. So China, Asia, definitely, in a very different place than it was. 

Unfortunately, sadly, so for Europe we cannot say that there has been, there’s similar level of transformation. I think there has been a positive transformation, a better ecosystem for startups, but we have not seen as much in term of grownups over the past decade in Europe. 

Nuno: And in China to untangle it, obviously we’re talking about Alibaba and Tencent, certainly Baidu to a certain extent, but I would allege that Baidu, was in some ways a surprise winner. I remember when Google exited China,  in some ways that Google was already gaining market share. It was becoming a significant search player in China.

So Baidu, I do think got slightly lucky in that play. But if we look in particular to Alibaba and Tencent, incredible companies, Tencent really becoming a conglomerate that has huge extension into social, gaming. Tencent investments, the investments they’ve made have been phenomenal. Many wishing they were actually a venture capital firm or a private equity firm.  and Alibaba, as you said, dominating the eCommerce space and leapfrogging the rest of the world. There was a lot of times this notion in the West that China really was a copycat phenomenon. And in some ways that the emergence of the Baidu, Alibaba and Tencent were really because of that copycatting. And while that was really true at the beginning, I don’t think that held true  in the last five years of the decade for sure. Not only the innovations in terms of business model, the innovations in terms of logistics, supply chain, the way of going to market, the innovations in terms of how you would charge and price your products, but actually products innovation.

To your point, you know, apps like WeChat that have become super apps. That really serve not only the social aspect of play, but also payments and others have totally leapfrogged the West. You go to China today and you see people of any demography consuming using their phones. They don’t need a credit card, they don’t have cash with them anymore.

They just consume with their mobile phones. And so there’s something really special about what happened to China.  Without going into too much of the geopolitical aspect of China becoming a power.  There is a tale of two China’s during this decade, in my opinion, and that obviously has to do with the changes that happened around 2012 and the change of the leadership of the country.

But it is very clear that China, not only from a tech standpoint, but also from a digital political standpoint, has emerged as the second power of the world. The superpower that in some ways, we had not had, for a couple of decades.

Bertrand: Yes and on that topic in term of tech, there has been definitely one player that has been at the flashpoint of the relationship between the US and China. It’s Huawei that has become the biggest provider in the world of telecom equipment from a backend, systems, datacenters, telecom equipments in the field, as well as, incredible success in building, some of the best  smartphones. Incredibly successful company, vertical integrated, building their own components, like an Apple, been doing. So another one of the big giants that we have to talk about when we talk about tech in China and tech in the world. 

Nuno: And for me, it’s an interesting aspect. I moved to the US after spending quite a bit of time back and forth between Silicon Valley and China. I moved to the US late 2011 and in some ways it was a tale of, you know, young men go West. 

But Silicon Valley’s position as the Mecca for tech and startups that was really reassured through most of the 2010s. In the late 2010s has become really questionable. And there is definitely a question mark in everyone’s mind where Silicon Valley’s position as the Mecca of tech and startups will sustain itself to the 2020s. At this stage, it’s become weakened.

At this stage, places like Beijing, Shenzhen in China have emerged as significant startup ecosystems in their own right with significant capital being deployed. And so the advent of this new superpower of China as a tech superpower and also as a global superpower gets even more crystallized with the ecosystems that we see emerging there.

Bertrand: And I think we also saw, another trend in parallel is the high cost of Silicon Valley, of the Bay Area that are becoming more and more difficult to create a positive environment for innovation. How do you start a business? How do you hire people when they all cost you such a high cost to start your company? You simply cannot. So we have seen more and more companies  started outside the Bay area coming at some point to the Bay.

But now guess what, with what’s happening with COVID, there is definitely a pressure point where cost have become even higher. But now there has always been a general acceptance of  remote work in the US, more than in some other place like China , but now this acceptance of remote work is going to skyrocket and at a perfect point where costs were becoming more and more unbearable in the Bay Area.

So  as you say, the position of Silicon Valley as a mecca for tech is under threat from two sides, at least. One is China, one is around the high cost of a place where you cannot build, you cannot construct a new office space, you cannot build new homes. This is a political decision wherever we want to call that or not. That’s the reality.

And ultimately, what does it mean for the future? That’s true that there are some reason, to be, pessimistic. Yes. Is there incredible talent in the Bay, there are some fantastic companies, but as a place to start a company and develop a young company, it’s becoming and more more difficult. So we will see.

Nuno: The Bay Area has become a victim of its own success.  It is self-inflicted in some ways because there’s really two Bay Areas. There’s the Bay Area of gigantic corporations, many of them in tech, Google, Facebook, and many others, and there’s the Bay Area of startups of ramen eating,  sleeping on couches and getting away with whatever you can.

And the problem is the coexistence of those two Bay areas has been very difficult and has becoming increasingly difficult over the last five years of the decade. The reason for that, in some ways, as I said it is basically because it has been a victim of its own success. A lot of these large corporations have a lot of cash, which allows them to pay incredible paychecks to people that come onboard, engineers, business development people, product managers. And so what’s happened in the market is it’s incredibly difficult to hire. It’s very expensive to hire. And you do have this bridge between the two worlds, which are very different worlds. And in some ways the difference between these two worlds is just amplified.

It’s a bridge that now is very difficult to cross because if you’re a director or senior director at one of these top players like Facebook and Google, and you make let’s say, a million a year, which is not unheard of, or even more, why would you go to a startup because you’re taking a huge amount of risk, why would you do that?

And that in some ways is something that I don’t feel the Bay area and the companies here have been able to deal with very positively, and it will be difficult. I have a lot of difficulty in seeing how that will get sorted over the next five to 10 years.

Bertrand:  Totally, agree Nuno, I think this has been creating a lot of issues. It’s in a way the biggest tech companies are creating a golden handcuff type of situation trying to keep all the talents for themselves.

Nuno: Hoarding Bertrand. I mean, we’ve had analysis, we’d need to see how reputable it is that specifies that some of these companies have 50% more engineering capacity and engineering resources, then they need. 50% just think about that. That’s mind boggling. 50% that’s literally hoarding engineers.

And paying them incredible salaries. Incredible salaries.

Bertrand: And maybe to conclude on that macro trends section. The regulatory side, as we started, we talked about how tech inserted itself in the middle of society.  Guess what happens when you insert yourself in the middle of society?  Politicians, politicians suddenly wake up and smell the gold. And basically what’s happening is a big increase in the regulatory environment worldwide.

Obviously, specifically in Europe, in the US. We have all heard about GDPR in Europe, there has been CCPA in the US in California.  And there are a plethora of new regulations happening. And obviously you cannot talk about the gig economy without talking about regulations

Nuno: Yes, and I would defend that a lot of this regulation was warranted. In some ways I came from an industry, which is the telecom industry at the beginning of my career that was very heavily regulated, and for a long time I believe tech companies, some of the Internet companies have gotten away with some practices that one would argue are not always beneficial, we’ll come back to that later, are not always beneficial to end users and companies that are their customers, et cetera. At some point they had to be regulated. At some point, there needs to be at least a discussion that these companies will be regulated. So I do think it’s warranted in some cases, we’ll see more of that than in the 2020s than we’ve seen in 2010s but definitely the trend is there.

Section 3 – The Tech Stack: Operating Systems, Devices & Platforms

Bertrand: So let’s move to our next section around platforms, from operating systems, devices, tech, products. The whole tech stack in a way, that we build, our services on. 

Let’s start with operating system and devices. That has been an incredible decade. If we again start, our decade with 2008, what happened?  2007, that was the launch of the iPhone. 2008, that was the launch of the app store. 2007, that was the launch of Android. The iPad is just 10 years, this year, launched in 2010.

During that time we saw Blackberry rise and fall. Nokia the same direction mostly fall, at least on the Nokia phone side of course. Nokia keeps some,    some good success as a telecom provider.  We saw the rise of the Chinese smartphone makers, Huawei, Xiaomi, OPPO and others.  

We saw also the implosion of Samsung in China, there was definitely no space beyond local Chinese smartphone manufacturers and Apple. But overall Samsung managed to weather the storm pretty well, actually very well. 

And we’re ending a decade where mostly… everyone from 15 to 70 has a smartphone and high speed internet access always on, always available in their pocket, everywhere in the world. 

Nuno: And this fascinating piece of how we all went mobile and it was just a number of things that came together at the same time. It’s like a perfect storm, but a very positive, perfect storm. It was the fact that we had these great devices that had great cameras, feature phones, high-end feature phones, but somehow we knew there was something else to come.

There was this, I will have a computer in my pocket and we’d this promise for a long time,  and the iPhone launches. The iPhone launches in 2007 and I remember I was in Seoul the day of the launch  in Korea, and it’s just all of a sudden I was working with a consumer electronics firm, everyone was like, this is going to change everything.

The iPhone changes everything, but we were very lucky that Google had started working on Android already.

Bertrand:   Acquired Android.

Nuno: The story has to be properly told. The acquisition of Android was an acquisition that was very, very early. What they acquired was very, very, very, very basic. Andy and the entire team with Android that sold it to Google and then went to Google to build it, I give them a lot of credit, but it was a Google engineering effort. And what they did with Android was incredible. And so having these two operating systems growing alongside with very different views on the world, where iOS really is linked to this very verticalized ecosystem that Apple built. At the same time that Android started becoming this open sort of profusion of forks and deployments in the market was what led to what we have today.

The revolution was because of these two things, because of iOS and Android. And that for me is absolutely fascinating. 

I remember a lot of the discussions that were happening around then where, could we use other operating systems? Windows phone was still in the market. Could we use it? Obviously we know where that ended. 

Could we use web OS? Obviously Palm had WebOS, and you know WebOS ended up actually getting acquired and turned into an open operating system effort as well. 

So all of that stuff  happened around those years. The 2007 to 2009 to 2010 that really led us through this mobile revolution, a mobile revolution that I don’t think many could have anticipated.

One of the most incredible tech revolutions that we’ve ever had in history, certainly in terms of speed.

Bertrand: And in terms of infrastructure, let’s not forget about 4G. 4G was definitely the backbone to a truly useful mobile internet. 3G being barely good enough to do emails and stuff, but with 4G suddenly everything was also becoming possible. 

As you say, it’s a tale of very different ecosystems. It’s amazing to see how Apple is ending that decade as vertically integrated as they are, now seeing themselves as a services company in some ways.

It has been amazing to be able to witness and actually participate in the development of this industry. 

Apps, we will talk more later. Came in a way out of nowhere. Apple first resisted for a year, the idea of having native apps on their phone and suddenly went full speed building an app store, finding new ways to distribute software,  and the rest has been history.

What has been also interesting has been during that same period, Chrome. Chrome the web browser from Google was launched in September 2008, and suddenly it took over the world, by storm, it completely destroyed the competition, from Internet Explorer, which got renamed to Edge, at some point with a new version, which end up actually this year, making a switch to Chromium technology.

The death of flash, the rise of HTML 5. It has been amazing and we have seen Chrome becoming… actually that operating system for desktops, for laptops. and in a way, Windows came into some level of irrelevance. Windows 7 was launched,  just during the decade, and it was really needed. Vista was really bad, if you remember. But after that it became more and more irrelevant.

We got the usual, next version, not working that well, with Windows 8. Then a Windows 10 launching. But it’s definitely not where, some would have thought,  Windows could have been. And my take is that it has been not just the smartphones that made Windows less relevant, but Chrome winning in a way the desktop war, being a layer on top of the OS.

Nuno: I would not forget that  the person that in some ways pushed a lot of what led to Chrome’s dominance, which is interesting, was Steve jobs and his absolute, you know, lack of interest, let me put it in a different way, his absolute opposition to things like Flash, that in some ways led the way for a new world order  to start. And probably in his view, you wanted Safari to be the winner, but in the end, Chrome really took over and leverage well, sort of this movement towards a more open source development type ecosystem, and really benefited very strongly for it. I agree with you, Windows became very irrelevant, that doesn’t mean that Microsoft is not a relevant company.

We obviously know Microsoft, incredibly relevant company firm, but from an operating system perspective. You know, mobile was won by others and then people didn’t really care anymore about what was happening. I would step back a little bit to one point, which is the point around the devices that make up for our most significant ecosystems, the devices we always carry with us.

You mentioned,  very rapidly how players like Huawei, OPPO, Vivo, and others, the Chinese players have really taken over the world leveraging Android and forks on Android be the counterpunch to Apple in some ways. Certainly in terms of volume, but it wasn’t a given. Again, it wasn’t a given that these words are going to be the brands that would be the household names today.

Samsung had definitely a strong play. It probably still does, but that is incredible what happened around the world, during the decade with these players becoming household names, around significant regions like the far East, Southeast Asia, Africa, India,  and Europe is absolutely incredible. And the level of innovation we’ve benefited from because of that shouldn’t be underplayed in any way.

Bertrand: Yes, I think Chinese tech companies benefit from one specific thing, is that China is a tale of two countries. You have the very developed China, very industrial China, specially the main East coast. And then you have the less developed China, the developing China. The tier 3, tier 4 cities. And what does that mean is that most Chinese companies, in order to be successful, have had to learn to win on both markets.

And what it means is that, when they spread beyond China, they cannot just be strong in developed economies like Western Europe. But it can be very strong in developing markets. Their competitors coming from the US, from Europe, from, Japan, have a lot of trouble to compete against them in developing economies. They compete well in developed markets, but in developing economies much harder because everything the Chinese tech companies do, have been based on an intimate knowledge of how work developing markets.

Of course, all markets are different, but you have that ability to understand more what it means to build a phone that is good enough at 200 bucks. What it means not to have a great cellular coverage, what it means, this and that. 

Nuno: But that was a mistake, Bertrand, that was made very often. By Western companies looking into China. Certainly from a device standpoint and a roadmap standpoint. I remember even when I was at GSM association, that mistake was made, which is, well China they’ll consume basic phones.

China was always a very aspirational market for the consumption of devices. Actually, in some ways, very different from parts of India. China was always very aspirational. People always wanted the best devices. They always wanted the iPhone. Once the iPhone came out. And we remember all these phones that were floating somehow magically jailbreaked into China because of that.

It was always a very aspirational market. And to your point that you made earlier, which is a really important point, they wanted to consume these incredibly high end devices, but they obviously couldn’t afford a thousand dollars for an unlocked device. And so the market had to step in. The device manufacturers had to step in and they had to find a way to reduce the cost of these devices while producing really very high end devices, flagship devices for that market.

That was the revolution. That was the beginning of the revolution in my mind.

Bertrand: Yes. And to your point about China being a place where people are very aspirational in term of what they buy, not forget China is the biggest Luxury  market in the world. So, it’s definitely very different from a lot of developing markets. I have seen people spending the equivalent of one month’s salary on a phone. No problem. That was perfectly reasonable in their mind.

No one in Europe or US would consider doing something like this. No one. So  it’s very interesting how China has developed their unique culture and approach to technology. And to go back to your point because, to see how Google Chrome was actually started on Apple technology. They started with  WebKit which was the rendering engine from Safari, at some point they switched over to their own, five years after.

 But, we see these technologies, and we’ll talk more about the rise of open-source, have really impacted how even the biggest companies are developing software.

Nuno: Yes. And maybe a good segue to talk about the upper part of the stack, the technology infrastructure that’s shifted so dramatically in the 2010s and let’s start with the cloud.

Bertrand: Yes. It’s amazing. When you think about what has been happening with the Cloud, and I’ve been a big believer and a user of Amazon AWS since around, 2008 if I’m not mistaken.  

The financial crisis in 2008 was a big inflection point for the Cloud because suddenly you have a lot more appetence, of course for startups, but even companies, at least tech companies, to stop investing one off in hardware, to be able to buy, piece by piece what they need in term of components and not just buy but actually truly rent.

And there was no point anymore in having your own data center. And that has been amazing. And for me, another piece with Cloud is that it has been tightly connected to the rise of smartphones and tablets and new devices, because you couldn’t be in a situation where suddenly you have not just a laptop, but a phone and a tablet. And you are working from home and all of this, and you keep the same old approach to technology? With a bunch of proprietary data center and VPNs and stuff. Of course not. At some point it changed.

So Amazon has been incredible. Their ability to leverage their own internally developed technologies, first for their own needs, and to then expand and to open up and sell that to others. And it was very surprising to see that from an e-commerce player.  To Amazon credit, very few companies have been able to open up such a big, separate market, very different from their original market and be widely successful at it.  

Nuno: And there’s the computer engineer in me always likes this historical discussion. There has always been this shift in architecture  between client server,  more power to the edge, back to client server.  And if you look back at the beginning of the whole thing with mainframes, with mini-computers, with microcomputers, these big boxes and furniture looking big boxes with terminals accessing it.

We shifted really to the desktop PC, the vision that Gates / Intel had, that we would all have a computer with power on our desks. And then we shift back to this world of, you know, now we have data centers and there’s a lot more distribution and we shift back to mobile and we have a computer in our pocket and we don’t know where we go next.

But this fascinating thing for me is almost, you could have anticipated there was going to be a Cloud movement, that we were going to shift back to a world that there’s distribution where you don’t own your own servers, where you’re basically accessing them at some point. And it’s fascinating also to me that the company that seemingly won that world, the infrastructure in that world was not by definition a tech company.

Certainly not a tech infrastructure company. It was Amazon. and that is incredible. That is absolutely incredible.

Bertrand: It’s incredible because when you see the level of technologies that Google had for instance, to run their own service at scale,  it was way beyond what everybody had. Even, Amazon with AWS. But strangely, Google decided not to go into that space, not to open up, not to provide their technologies.

And that has been probably the biggest miss of Google. They did incredibly great opening up to mobile, to YouTube, to different things. I guess you can have some misses. And probably it’s a culture issue. It’s very different to deal with B2B     .  Microsoft has been slow to it, but step by step with Satya Nadella they managed to become a clear second player in that space. And an interesting point because I agree with you, there has always been this trend between centralizing, decentralizing, this back and forth.

If we talk about our second technology, that has had a big impact in the 2010s, it’s machine learning, deep learning, AI, however you want to call it. It has been an incredible transformation for something that was kind of forgotten, in the lab, kept experiencing, some summer, but some very long winter, suddenly everything, exploded. Probably around 2012, was a big competition, done every year, and suddenly incredible increase in   accuracy of the system way beyond what was ever expected, by using a new approach, by leveraging deep learning, by leveraging GPUs, and suddenly it opened up a brand new space.

And what’s interesting with machine learning as we just talk about, is that it’s something that’s sitting on both sides, because right now you have, deep training system on the cloud, but inference system  on the Edge, on your smartphone, in your IOT system . So we see a new tech that is spanning both, the device level to the cloud level. 

Nuno: And the interesting piece around AI, is on the one hand with the development of all these pervasive platforms that are out there, like Google TensorFlow, the several verticals of IBM Watson. It’s become almost like an app economy like we had in the mobile app space where you can start building stuff on top, where you just need to have some algorithmic capabilities you actually don’t need to do the platform yourself, you just can run on top of other platforms. And the exciting piece of what happened during the decade really is what I’d call brute force AI. It’s the fact that we have a lot more compute, that computer’s readily available for very low cost. We have better networks with lower latencies, a lot more bandwidth.

We have a lot more data that’s readily available for processing, and in some ways it has been a triumph of brute force. It’s been really exciting. We will see a lot more things going on. In some ways, AI will be like energy, maybe lack of a better analogy. So it will be embedded in a lot of the things that many of the companies do around enterprise software, business to consumer, direct consumer, et cetera.

But at the end of the day, I do think there’s going to be a new age of AI. This age of AI was interesting. It’s exciting, but there will be a new age of AI that will come after this.

Bertrand: And in terms of AI some of the winners, obviously Nvidia,  who really started this revolution on the hardware side. Google has done very strongly on the software side with their framework. We saw others like Facebook that also did pretty well. 

And maybe a last piece of technology that started in that decade. It’s a new approach to crypto with the blockchain, with bitcoins that were started mysteriously in the depths of the financial crisis in 2008. 

Nuno: Yes, the blockchains, as I call them, have been incredible developments. It’s in some ways, I’m going to use, maybe a powerful statement that some people would object to, but it’s a solution in search still of a problem. As a tech stack piece, it is fascinating what it can do. The fact that you can have a distributed ledger, the fact that in some ways the protocol itself embeds a business model where a part of the extension of that business model is the compensation of the different parts that are basically introduced into it.

So it’s a really fascinating technological advancement.  What we saw in the late 2010s, particularly in 2017/2018 was just silly, with highly speculative plays around crypto assets that were emanating from these technologies. So as I always said, I was bearish on blockchain and crypto in the short term, and I was very bullish in the longterm, I believe we are going to see the big revolution of what these technology stacks allow for and protocols in the next decade and the 2020s that we’re now in, rather than the 2010s but it’s still fascinating to me that we had this amazing piece of technology that got developed in this seer almost of mysticism, and nobody knows who created the first thing.

But at the end of the day, I do think this is going to be a technology that will be incredibly powerful, and we will hear a lot about in the next decade, but maybe too speculative in the late 2010s.

Bertrand: Yes, I have rarely seen, as you say, a technology more in search of a problem, than any other piece of technology. Maybe you could argue AI 50 years ago was in a similar situation. I hope for Crypto, it won’t be 50 years, before we find a use for it, but maybe another point on Crypto is regulation.

This is your regulatory nightmare on steroids, regulated even before it makes any sense as a product. And I was not surprised to be frank because the minute you talk about money, about currency, then all governments wake up. They know they have to keep printing money. They need to keep control of the printing press look at what’s happening these days governments are printing, printing like crazy and, this is how they control, the economy.  So I don’t see governments accepting to lose any control. They realize again, these days they absolutely have no choice.  They will authorize some experiments, they will authorize some solution that doesn’t put into jeopardy their monopoly on money. But beyond that, I’m definitely suspicious and we can see how an initiative like Libra, which on the tech side is very interesting and can can have a of benefit is getting hit nearly as fast as it was announced the world. 

Section 4 – Products & Applications

Nuno: So switching gears to the upper part of the technology stack into products and applications, a couple of very significant revolutions happened in the 2010s and if we start with consumer, a good one to start with is social and communication. This decade has been marked by the very strong popularization of Facebook, the advent of new tools around 2012, like Snapchat , that basically allow for ephemeral communication, WhatsApp,  forms of messaging that almost totally obliterated the relevance of SMS and MMS that were controlled by the telecom stack. So a total revolution of times, not only with the advent of new generations, like the millennials, but also with the advent of new use cases.

A lot more virtual interaction, sharing of images, sharing of news,  some of which not so positive effects, later down the decade, but certainly a revolution that was very significant.

Bertrand: Yes, totally, and not just SMS messages, but audio, video, that has been the big difference. I still remember working on some, 3G video projects in 2004 in France. Wow. That was so bad, when you compare to what we built in the 2010s finally, something that work. Of course, it could not just work on one,  network like 3G. It had to work across the Internet, across the world.  It had to work with better codecs.

So that has been quite amazing. I’m so glad to have put SMS behind me, that was such a weird of mix of carriers regulation, limitation on message size, you could not send images properly MMS was a total mess. Wow. What a change all these apps have given us. 

But as you know, it’s very regional, it has created also a balkanization in a way of our messaging.

Nuno: And the interesting thing to me is as I referred to earlier, I started my career in telecom. And this was up to the telcos to lose and they still managed to lose it. If there is a service that telcos should have owned, was person to person communication. It was theirs to own voice, SMS, MMS with all its flaws they were in the driver’s seat. 

And I fought that fight, when I was back at GSM association, I led the personal instant messaging campaign, which was the precursor to the rich communication suite campaign. And still they managed to lose it. And in some ways it was this lack of focus on their audience, on their user base. What did they actually want to do and how did they want to do it?

I agree with you Bertrand with the balkanization and the regionalization and now there’s a new level of balkanization happening as well, which is related to privacy and encryption. Where we have services like WhatsApp, Facebook messenger, which they say are encrypted end to end, but where they do use your information for meta reasons so that they can serve you best ads, where you’re sort of like, maybe there’s some eavesdropping going on here, and you have the advent of new things like Signal, that really promise end to end encryption and that really promise a privacy, that we sort of took for granted early on.

But now we can’t anymore. Because there is evidence to the contrary. 

Bertrand: And maybe to finish, I will tell you a little anecdote and I won’t give names, but I remember some carriers having strategic discussion,   their work and strategic plan was how do I block the rise of Voice over IP? So that was part of the discussion of some top telcos in the world, how do you block the rise of new technologies?

When you have that mindset of not moving the world forward, but actually doing everything you can to slow down the inevitable rise of the best technologies, of course you are doomed, you are doomed. And that’s exactly what happened. I mean these guys are great at some things. No question. The Telcos are great are building infrastructure, connecting systems, no question. But that top level, top, last layer, the ones that really consumers consume, they are so bad at this part of the game. And that’s in a way  probably by design. 

Nuno: Switching gears to the entertainment part of the stack and the changes that we’ve had. Also the disruption of some players in this case with cord cutting and cable players and IP TV being subjugated to the win of over the top with video streaming  many other tools that we’ve had with the YouTube and Netflix’s of the world really winning that game. We’ve talked about it in a previous episode around the media streaming wars and how the whole ecosystem around television and movies has fundamentally shifted. The rise of gaming, we will spend an entire episode on that I am sure. Everything that’s happened around entertainment, TV, movies, gaming in the last decade has been incredible. We are at the golden age. This is the new golden age, and we all look forward to what’s to come.

Bertrand: Yes. And if you look at gaming, I mean especially what has been huge in that decade in the 2010s has been the rise of mobile gaming. It went from nowhere, zero to as big as the rest of gaming if not bigger actually than PC, console gaming . So it has been absolutely amazing. And if we look at video streaming, interestingly enough, some similar things are happening. We just talked about how carriers lost, voice communication and messaging communication.

Here in a way we’re seeing the same as well. It’s carriers are losing video streaming wars you don’t go to your carrier to see shows, you go to Netflix, you go to YouTube, you go to Disney Plus, you go to Apple TV. So there is also here a similar shift.

And one of the stories that, you know, we talk about balkanization. Yes, there is some happening in communication, even in entertainment, but actually it’s better than before. Because it’s just a few top players, that are rising to the top. But then suddenly there is no more of these dozens of players    who did not have the scale to, truly compete on them and deliver content. 

And maybe one last point, the rise of YouTube has been amazing. So we need to talk about a bit, about user generated content. It has been amazing that rise of the user generated content in video, and it’s YouTube, but in China it will be another platform. In Japan it would be another one. So different markets have different platforms, but letting everybody become a creator, being able to control his own destiny for singing, for video, for all of this has been for me, pretty amazing to see. No more middle men, on your regular TV station, radio station, to control who wins or who loses. Now it’s a general public. everyone can contribute. And, ultimately of course it’s the platform who wins.

Nuno: And this also shifted the social dynamics. We were just talking about the social and communication part of the layer. With Tik Tok and many other ways of really socially interacting, that have given  rise to exactly what I was saying before, this golden age where on the one hand, you have highly produced shows from all around the world.

It is truly a global phenomenon. Highly scripted, amazingly acted, pieces of work and content. But at the same time, as you said, user generated as well. And you have the advent of the celebrities of YouTube, the PewDiePies. You have the advent of the celebrity gamers on Twitch, you have the advent of all these people that have become celebrities in their own right because they are entertaining because they are great at what they do as gamers.

It is truly a new age.

Bertrand: Yes. And when you think about the Netflix for instance, it’s not just that it’s a new way to distribute content, at some point content is changing. We didn’t have these TV shows 10 years ago.  I mean very very few where you had a  complex story that keep going on episode after episode. Before that, it was more your TV shows where, “Hey, you know, if you miss one out of two that’s okay. You can still follow up a bit. That’s probably good enough.” ‘ Because on regular TV you couldn’t guarantee  people had seen every episode. Where here you can guarantee people have seen your previous episodes because they are available, they’re online, they’re always on. So you create content in a different way, thanks to that.

And Netflix was definitely one of the first to have understood when you change the communication layer, the medium itself is changing. 

But let’s move to e-commerce.

Nuno: Yes. So the way we shop has also fundamentally shifted, in more ways than one. We already alluded to some of the large platforms that dominate, at least significant parts of the world. Amazon, Alibaba. We should obviously refer other core enablers to what’s happening in the eCommerce space.

Shopify, of course, very much in the news these days. We should talk about the fact that there is eCommerce, has changed the way that supply chains behave,  that we need to buy things because we no longer need to go to a shop to buy things, we can just buy online. The bar to buy online as lowered dramatically, as trust and payment methods in brands has basically gone through the roof.  We’ve seen the rise and fall of DTC 1.0, which we talked about at a previous episode.  We’re now in the advent of DTC 2.0 where there is product differentiation, it’s not just about marketing innovation, search engine optimization, and how to do marketing cheaper and better.

So there’s a lot of exceptionally interesting things happening in e-commerce that, in some ways have prepared us for now, the crisis that we’re in of COVID. But more than that, for the ability to really buy products from all over the world, products that we want to have, in some cases that we might actually need to have, not just nice to have.

Bertrand: Yes. For me, in e-commerce, what has been, amazing to see  is a shift in model, and maybe we’ll talk more later in our business model section but the change in model has been that, Amazon was started with that first party approach: I am doing everything from the website, to finding the product, to selling them,  maybe not distribution initially.

And then step by step they actually copied, what was done in China by Alibaba, which is to enable a  “third party model” with 3rd party merchants, and you become an enabler. You become truly a platform. And we have seen that again started by Alibaba, but expanded by Amazon, done by others like Rakuten in Japan  and obviously some like eBay have always been around your 3rd party sellers.

But , that for me has been a very impressive shift , that’s probably what has unlocked the growth of eCommerce as we know today. And it has been, amazing to see what a Shopify did, because they are just one of the many building blocks you need, they’re not even trying to provide you a unified front end for consumers.

Nuno: And we always discuss when we’re looking at trends around specific spaces on what the benchmark, what the golden example, is for us to look at when we’re looking at potential investments and potential markets in venture capital. And certainly in eCommerce and commerce. I would say the best examples are in China, in Korea, in India, and they’ve leapfrogged, but they leapfrog so dramatically that now it’s some of the Western players that are copycatting like Amazon precisely. 

If you want to see the future of a lot of what’s happening in retail, in grocery distribution and grocery shopping. You look at China, you look at India, you no longer look at the US which is to me, an incredible change and absolutely fascinating.

Bertrand: And at the same time you could argue the US have some issues, some scale issues actually. Because compared to Europe, compared to Asia, it’s not very dense except a few, metropolitan areas like New York city, like Los Angeles. The US is not very dense. So, it works against some ability to do some e-commerce activities at good scale. Be it groceries delivery, food delivery or e-commerce deliveries.

Nuno:  Indeed. Switching gears to the business to business revolution and what’s happened over the last decade.  

Bertrand: Remote work. I mean it’s absolutely amazing to see what has changed with remote work in the past decade. I remember, starting my business App Annie in 2010 actually, and the tools were really limited. You were still using, Skype actually.   

Github was just starting. The different tools were really just starting to happen. And then at some point it accelerated.

Suddenly mid 2010s, you have Zoom, you have Slack at the same time appearing, we talked about GitHub at the beginning of that decade. So suddenly the remote work environment, step by step, started to get better.  And that has been very exciting. And to be frank, that’s really how we’re all able to still do remote work these days with COVID, is that we have this fantastic infrastructure in place. Of course there’s still way to go, but definitely we’re in such a better place. And obviously all these tools are not just, PC or Mac compatible,  they all work on your smartphone, which is a huge difference. 

Nuno: And let’s not forget that the beginning of the decade, it was all about being always on, on email. The late days of Blackberry dominance into the early days of the advent of things that were relatively corporate email friendly, obviously the iPhone wasn’t one of them early on, but it soon became one.

But from there, to where we are at the end of the decade is an absolute miracle almost, where today we can communicate, we can be always on for all the good and bad that that brings with it. And I also agree with you, this is just the beginning, that remote working and the future of working from a remote standpoint in a virtual manner, is just at its start with the big box mentality of the Cisco’s and Polycoms of the world in the late 2000s, all the way to where we are today, where everything’s democratized.

I can just go on Zoom, Google Meet, Microsoft Teams, Slack for free if I don’t want the history and a bunch of other features. And we’ve just seen the beginning, there’s new tools coming out every day, they’re changing the way we interact and that we share information within a work environment.

Bertrand: Yes, absolutely, it’s a fantastic evolution and there’s so much more to come. The way I think about remote work these days is really that we’re like we were with smart phones 10 years ago. I see so much upside in term of improving the quality of the audio, the video of the overall experience, to such a dramatic different level. That would be, pretty amazing. And it’s not just that, it’s also learning how to go to the next level. I truly believe that right now most companies are just adjusting, are just translating their current practice of how they work to online. They are not truly being online native for business. And there is truly a difference there when you change your process truly, completely, based on not just being digital, but being remote work first. 

Nuno: And on that note, we conclude the first part of episode 10, please look out for the second part of episode 10, episode 10 B. Where we will continue talking about the 2010s decade, and specifically we will be discussing dramatic changes in business models, and the switch in funding landscape.

See you next time.