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2020 | Buch

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Turning Silicon into Gold

The Strategies, Failures, and Evolution of the Tech Industry

verfasst von: Griffin Kao, Jessica Hong, Michael Perusse, Weizhen Sheng

Verlag: Apress

Enthalten in: Springer Professional "Wirtschaft+Technik" , Springer Professional "Technik" , Springer Professional "Wirtschaft"

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Über dieses Buch

A few square miles of Northern California contain some of the world’s largest companies whose products affect billions of people every single day. What made these giants of Silicon Valley as impactful as they are? What do their paths to success have in common?

Turning Silicon into Gold is a sharp analysis of 25 case studies examining just that. Authors Griffin Kao, Jessica Hong, Michael Perusse, and Weizhen Sheng provide relevant commentary as they explore the stories behind companies such as Apple, Amazon, OpenTable, and many more. These organizations used unique problem-solving strategies to forever change the face of tech—whether it was Facebook’s second mover advantage over MySpace or Nintendo’s leap of faith in the 1980s to revitalize the video game industry.

Learn by example as Turning Silicon into Gold divulges the inner workings behind some of the most significant business decisions in tech history. The nuanced ways these companies tackled emerging markets and generated growth in uncertain times is essential knowledge for modern business leaders, innovators, and aspiring founders. Whether you are simply curious about the origins of the world’s tech giants or you are an entrepreneur looking for inspiration, the thoughtful, comprehensive case study collection that is Turning Silicon into Gold belongs on your bookshelf.

What You Will LearnUnderstand why companies like Amazon, Facebook, OpenTable and more have made some controversial and strategic decisionsRealize how Big Data is driving the success of many new and mature venturesSee how tech companies are tackling emerging markets and generating growthExamine how capital flows through the tech industry

Who This Book is For

The book is for people currently in or interested in exploring a career in the intersection of technology and business, such as product management, entrepreneurship, or non-coding positions at a tech company—it’s also great for people generally curious about how the tech industry operates. The book offers case studies in an engaging and approachable way, while still providing important takeaways and probing questions—perfect for the casual reader or even someone trying to prepare for interviews.

Inhaltsverzeichnis

Frontmatter

Getting Started

Frontmatter

Chapter 1. The Second Mover Advantage

What Facebook, the iPhone, and Airbnb All Have in Common

Abstract

Like that of the Roman Empire many years before, the meteoric rise of MySpace beginning in 2003 was sweeping and absolute. Although MySpace was preceded by several smaller social networking sites like Friendster and SixDegrees, none could match the user base, the press coverage, and the valuation given to MySpace by investors. For all intents and purposes, MySpace was the forefather of our modern-day notion of the “social media” platform—the behemoth with over 100 million monthly active users and millions, if not billions, of dollars in ad revenue. In fact, MySpace was purchased after a huge bidding war by the renowned News Corporation (parent company of Fox Broadcasting) for $580 million in 2005, one of the largest acquisitions of the time. And in 2006, the social networking site surpassed Google as the most visited web site, then continued to dominate the social network space for the next couple of years.

Griffin Kao, Jessica Hong, Michael Perusse, Weizhen Sheng

Chapter 2. Election Meddling

How One Man Changed an Election

Abstract

In a vast world, we’re often confronted with the reality that any individual action or set of actions we take is insignificant in the grand scheme of things. This idea affects decisions we make on a daily basis. At times, it hands us the courage to proceed without shame, like the many cases of What difference does it make if I throw this wrapper on the ground? At other times, it gives us pause and impresses upon us inaction. Why does it matter that I drive an SUV gas-guzzler when millions of other Americans do? Why should I speak out for what is right when my voice is one in a billion? Our inaction in the face of transgression is what enables the tragedy of the commons—the tragic depletion and destruction of a resource because individuals act independently, according to self-interest, and in contradiction to the common good. The feeling of insignificance nourishes evil and kills dreams; it causes environmental damage and widespread poverty. Indeed, this is the very basis of voter apathy. Contrary to all this, one man was able to expose the fallacy behind the thought by single-handedly influencing the outcome of the hotly contested 2017 special Senate election in Alabama. This is David Goldstein’s story.

Griffin Kao, Jessica Hong, Michael Perusse, Weizhen Sheng

Chapter 3. Cashless Cash

M-Pesa and the Rise of E-Currency in Africa

Abstract

Dominated by vast swaths of savannah, lakelands, and mountain highlands, Kenya’s landscape is beautiful. These ecosystems support a wide range of flora and fauna that create a backdrop juxtaposed against a much less prosperous economic climate plagued by issues arising from widespread poverty and political instability. Indeed, a profusion of child labor, the lack of access to education, and rampant prostitution are all largely related to the fact that 42% of the Kenyan population lives below the poverty line according to UNICEF. And at a higher level, the financial institutions and tech industry of the African nation are consequently outmatched by those of the United States by nearly every relevant metric—from investment volume to rates of adoption for new technologies. It’s no surprise then that we tend to think of “Silicon Valley” or Wall Street before Kenya as financial or innovation hubs.

Griffin Kao, Jessica Hong, Michael Perusse, Weizhen Sheng

Chapter 4. Pivot to Perfection

How YouTube, Groupon, and Instagram Can Help You Pull Off a Successful Pivot

Abstract

When YouTube was first founded in 2005, it was meant to be a dating platform. Though it is now a video-sharing platform with over two billion monthly active users, it started off as a dating site with zero users at all. In fact, when it first launched with the slogan “Tune in, Hook up,” the platform could not get a single person to upload a dating profile video onto the site. Even after the founders posted ads on Craigslist offering $20 to women who uploaded videos of themselves onto the site, no one would. So, in order to make it seem like YouTube had some semblance of a user base, one of the founders, Jawed Karim, resorted to posting a truly random assortment of videos, including footage of Boeing 747 airplanes and the now infamous video “Me at the zoo.” After these uploads, the platform began to take on a new form. People began to use the site not for dating but to share and watch tons of different videos: ones of their pets, vacations, seemingly anything. In response, the YouTube team worked to completely revamp the web site to facilitate much more general content. A mere five months later, YouTube fully pivoted to the general video-sharing platform we know and love today.

Griffin Kao, Jessica Hong, Michael Perusse, Weizhen Sheng

Chapter 5. The Chicken or the Egg

How OpenTable and Amazon Use Single-Player Mode to Solve a Classic Marketplace Problem

Abstract

When OpenTable was founded in 1998, it promised to revolutionize the excruciating process of making restaurant reservations. Founder Chuck Templeton first had the idea for this product after his wife spent “three and a half hours calling restaurant after restaurant” trying to make reservations for an upcoming visit from her parents. After this grueling experience, he decided enough was enough, thus creating OpenTable. Thanks to OpenTable, you can book a table at some of the hottest restaurants in the country with the click of a button. It makes life much easier for the restaurants as well—they no longer have to manually juggle tables in an archaic reservation book, as OpenTable does it for them. OpenTable successfully created a marketplace to connect millions of hungry customers with thousands of restaurants. In 2014, the company was acquired by the Priceline Group (now Booking Holdings) for a whopping $2.6 billion, and as of now, the platform boasts over 123 million monthly users. To date, users have spent over $69 billion at the restaurants on its platform.

Griffin Kao, Jessica Hong, Michael Perusse, Weizhen Sheng

Gaining the Edge

Frontmatter

Chapter 6. The Secondary Market

Don’t Wait to Cash Out on Your Venture

Abstract

So you’re a cunning and resourceful start-up founder, a younger Jeff Bezos, who has grown your company from two people working out of your parents’ basement to a venture capital-backed major disruptor of X industry. Life is moving smoothly, except for one thing—it’ll be years before you can IPO (performing an initial public offering, the event in which a company begins selling its shares on the stock market). You’re not sure what company would be willing to acquire your fledgling company, but you want cash now. You want to see the fruit of your hard labor. What do you do? Turn to the secondary market!

Griffin Kao, Jessica Hong, Michael Perusse, Weizhen Sheng

Chapter 7. Cutting Out the Middleman

How Data Is Driving Netflix Originals

Abstract

You’re cuddled up on your bed, nice and toasty, having just finished the third season of The Office for the second time, when the inevitable “Continue watching” box appears. You sigh, knowing that as the countdown bar slowly dwindles, so does your will to do anything productive for the rest of the night. Season 4 is just as good as you remembered.

Griffin Kao, Jessica Hong, Michael Perusse, Weizhen Sheng

Chapter 8. Innovating an Industry

How Nintendo Single-Handedly Saved the Video Game Industry

Abstract

You speed forward, deftly navigating around evil mushrooms and turtles that are coming to attack you. With a jump, you land on one of these mushrooms and manage to defeat it. You're currently traveling through the Mushroom Kingdom to rescue the Princess from an evil turtle, and the journey is taking you through several lands. Along the way, you find coins to collect and, if you're lucky, rare items like a Super Mushroom that double your size.

Griffin Kao, Jessica Hong, Michael Perusse, Weizhen Sheng

Chapter 9. Flourishing Freemium

How Slack Managed to Create One of the Highest Paid Conversion Rates in the Industry

Abstract

When Slack came onto the scene in 2014, it promised to kill email once and for all. This collaborative instant communication platform was envisioned with the extremely lofty goal of completely revolutionizing workplace culture. Yet, while ambitious, it is hard to say that this goal has not been met. Used by 77% of Fortune 100 companies, Slack is the fastest-growing enterprise software ever created, reaching 10 million daily active users and a 13.2 billion dollar valuation in only 5 years. Users also just love the product, as is documented by the many thousands of notes of appreciation on Slack’s Wall of Love and the 3 million users who put their money where their mouth is by actively paying for the service. In fact, this 30% conversion rate soars high above the industry standard, with Dropbox having a “really good” conversion rate of 4% and most normal conversion rates sitting around 1%. With these mind-boggling statistics, you have to wonder, how did Slack manage to take on the Goliath that is email and become so successful?

Griffin Kao, Jessica Hong, Michael Perusse, Weizhen Sheng

Chapter 10. Fake It ‘Til You Make It

PayPal and Reddit’s Unconventional Approach to Growth Hacking

Abstract

When Max Levchin, Peter Thiel, and Luke Nosek cofounded PayPal, then named Confinity, in 1998, they were fighting against Goliath. PayPal, an online payment and money transfer system, was entering a deeply competitive market dominated by Billpoint, a joint venture between eBay and Wells Fargo. With such steep competition, PayPal needed to take a nontraditional approach. Where Billpoint had the credibility that came with the Wells Fargo brand and a focus on combating fraud, PayPal took a completely opposite approach, instead focusing on ease of use and using one other tactic—creating fake demand.

Griffin Kao, Jessica Hong, Michael Perusse, Weizhen Sheng

Extending the Lead

Frontmatter

Chapter 11. Online to Offline (O2O)

Amazon’s Dominance On and Off the Web

Abstract

As we increasingly transition our lives onto the Internet, the line between the online and offline worlds is blurring. Activities that were originally done purely in person, such as education or gambling, are now transitioning online; perhaps the most prevalent example is shopping, which takes place in a hybrid of physical retail locations and retailer web sites. Nowadays, many direct-to-consumer (D2C) companies even sell exclusively online. O2O is an acronym used in digital marketing that simultaneously stands for “online to offline” and “offline to online,” describing how retail and e-commerce manage their customers both on the Internet and in the physical world. While the acronym has dual meanings, it is more commonly used to describe “online-to-offline” strategies that entice consumers in a digital environment to make purchases of goods/services from physical businesses. Though there are numerous variations of the O2O model, such as online ads that drive consumers to visit physical stores, or QR code marketing efforts, one of the most interesting O2O trends is the opening of brick-and-mortar stores by e-commerce companies.

Griffin Kao, Jessica Hong, Michael Perusse, Weizhen Sheng

Chapter 12. The Last Mile Problem

The Biggest Thorn in Amazon’s Side

Abstract

Slow and steady, the box-shaped vehicle chugs along on a well-paved sidewalk, passing well-manicured suburban homes, one after the other. It’s the size of a large dog and doesn’t look like it could fit any normal-sized human, but on six rugged wheels, it looks determined to overcome any obstacles that could get in its way. At the same time, the baby blue shell and the Amazon smiley face logo slapped onto its side give it the appearance of a friendly, loyal companion—Fido reincarnated to match our increasingly tech-dependent world. While its purpose is unclear, the vehicle seems to suggest an impending utopia where human and automaton coexist in peaceful harmony. When it finally stops at a beautiful house and immediately lifts open its top to reveal a package marked with the unmistakable blue and black Amazon Prime packaging, the mission of the autonomous vehicle is also revealed. The home’s resident meanders out from the front entrance to retrieve her package, smiling at how quickly and conveniently her Amazon ordered has been delivered.

Griffin Kao, Jessica Hong, Michael Perusse, Weizhen Sheng

Chapter 13. Tech IPO Flops

Why It Seems Like Tech Companies Fall Hardest in the Public Market

Abstract

In the Spring of 2019, the world’s eyes were on Uber as the ride-hailing giant geared up to debut on the open market at $45 a share. Investors, on the edge of their seats, were simultaneously nervous and hopeful that the shares offered in the initial public offering (IPO) would experience that first day jump in value caused by a rush of individual investors trying to get in on the action. They hoped that public perception would match that of the private investors that had gorged Uber with so much venture capital in the years prior. But alas, it was not meant to be—a debacle erupted as the value of the company’s shares plummeted from the opening price on that first day.

Griffin Kao, Jessica Hong, Michael Perusse, Weizhen Sheng

Chapter 14. Apples to Apples

How Market Cannibalization Makes Apple One of Its Biggest Competitors

Abstract

If you currently own an iPhone, you’ve probably owned many iPhones. Whether it’s the intuitive design, sleek body, or ability to send blue texts that keeps you hooked, you’ve chosen Apple for your phone—and maybe your laptop, desktop, tablet, and watch, too. But in many Apple users’ experiences with the company, there comes a tipping point where you decide that the next, shiniest model of the iSomething 20 is simply not worth the upgrade; your old iSomething 19 will do. In fact, your iSomething 19 is still so good at its job that you don’t see the need to buy any new Apple products for quite some time.

Griffin Kao, Jessica Hong, Michael Perusse, Weizhen Sheng

Chapter 15. Memes As Marketing

How Wendy’s and WeChat Went Viral

Abstract

How many fast-food restaurants have released a chart-topping mixtape? The answer is exactly one—Wendy’s. Their mixtape, We Beefin?, tears down competitors like McDonald’s and Burger King while also managing to reach the number one spot on Spotify’s Global Viral 50 and garnering almost 800 million impressions. But, Wendy’s isn’t just a one-hit wonder. Their Twitter account is also a hit, managing to achieve a 113% jump in Twitter mentions. Through consistently clever tweets, Wendy’s brands themselves as "the sassy friend you want to go to lunch with". These marketing wins have also demonstrated a major business impact. After Wendy’s began this unique social media approach in 2017, they experienced a 49.7% growth in profit that year. Using the power of Internet memes, Wendy’s was able to vitalize its brand even as an already successful company.

Griffin Kao, Jessica Hong, Michael Perusse, Weizhen Sheng

Failing

Frontmatter

Chapter 16. Un-assistive Voice Assistants

Lessons Learned in History

Abstract

Amazon introduced eight new Echo devices in 2019, including Echo Buds (wireless earbuds), Echo Frames (smart glasses), and the Echo Loop (a smart ring). All variations of Echo offer hands-free access to Alexa, Amazon’s virtual assistant who can assist users with anything from playing music to controlling your smart home to buying other products from Amazon. In the same year, Amazon also launched the "Voice Interoperability Initiative" to integrate numerous virtual assistants in one single device and provide consumers easy access to their multitude of assistants (though notably missing some of its top competitors, such as Google’s Assistant, Apple’s Siri, and Samsung’s Bixby). Many other tech giants, including Google, Apple, Samsung, and more, are also frequently making the headlines with new assistant technologies.

Griffin Kao, Jessica Hong, Michael Perusse, Weizhen Sheng

Chapter 17. Too Much of a Good Thing

Why Are There So Many Social Messaging Apps?

Abstract

“Text me.”

Griffin Kao, Jessica Hong, Michael Perusse, Weizhen Sheng

Chapter 18. print(“No.”)

Why Tech Employees Are Able to Dictate Company Direction

Abstract

“Don’t be evil.”

Griffin Kao, Jessica Hong, Michael Perusse, Weizhen Sheng

Chapter 19. The Rise and Fall of Virtual Reality

What It Takes to Create Technological Disruption

Abstract

In Pygmalion’s Spectacles, Stanley G. Weinbaum describes “a movie that gives one sight and sound. Suppose now I add taste, smell, even touch ... Suppose I make it so that you are in the story, you speak to the shadows, and the shadows reply, and instead of being on a screen, the story is all about you, and you are in it. Would that be to make real a dream?” Such a fantastical description may sound familiar. Virtual reality (VR) describes technology that allows a user to experience an entirely virtual world. Though VR is often seen as a cutting-edge technology of the modern day, its core concepts originated much earlier. In fact, Pygmalion’s Spectacles was written in 1935, and some of the foundational VR technology was created even earlier. With VR existing for decades, what has prevented it from fully catching on? To answer this, we’ll have to start at the very beginning.

Griffin Kao, Jessica Hong, Michael Perusse, Weizhen Sheng

Society

Frontmatter

Chapter 20. Chinese Women in Tech

Finding More Success Than Their American Counterparts

Abstract

“Women hold up half the sky,” Mao Zedong famously declared in 1968, a diamond in the rough and violent legacy he left behind. Two decades prior to Mao’s declaration, the Communist Party had assumed power in China and began the process of reshaping the country’s ideological consensus on economic production and cultural development. Complete with a new name (the People’s Republic of China), this reformed nation was to be a more balanced, more equal society lead by a dictatorship that would impress this creed on the Chinese people, no matter the cost.

Griffin Kao, Jessica Hong, Michael Perusse, Weizhen Sheng

Chapter 21. Mental Health Algorithms

How Posting Facebook Statuses Today Might One Day Save Your Life

Abstract

The moment you uploaded your first Facebook profile picture, you took a critical leap in establishing an online version of your identity, telling the world, “this is what I look like” (at least, from your most flattering angle). As the years went by, your pictures would rack up more likes—and eventually, heart reacts—as that digital representation of you grew to take up more and more storage on Facebook’s massive servers. Your profile quickly became an online repository of everything you’ve commented and posted, all the things you’ve liked, and all of the messages you’ve sent and received, providing a fuller picture of who you are as a person and how you’d like your immediate world (and advertisers) to see you. But beyond the binary and targeted advertising, your Facebook profile has morphed into something even more special—a digital representation of your psyche. As we’ve we all afforded social platforms like Facebook more and more significance to our actual person and the way we live our lives, we’ve grown their ability to provide mental snapshots of ourselves through time.

Griffin Kao, Jessica Hong, Michael Perusse, Weizhen Sheng

Chapter 22. I Made It; It’s Mine

Why Tech Founders Have an Irregular Amount of Control Over Their Public Companies

Abstract

Zuckerberg, Gates, Jobs—all founders that have been given celebrity status as the face of companies that have changed the world with technology. Gaining traction as household names and growing their visions and companies took considerable outside financial and operational investment; despite this, these founders and others like them have managed to maintain a massive amount of control over their companies through a variety of methods.

Griffin Kao, Jessica Hong, Michael Perusse, Weizhen Sheng

Chapter 23. What to Expect When You’re Expecting a Billion New Users

How Tech Companies Are Preparing for Users from Emerging Markets

Abstract

Can you think back to a time when you didn’t have the Internet? Not because you were on a camping trip or there was a power outage but because it just didn’t exist where you lived? It’s probably been decades since you’ve had those memories (if you’re old enough to even have them), but in the coming decades, one billion new people from around the world—give or take—will be leaving those memories behind and joining the Internet.

Griffin Kao, Jessica Hong, Michael Perusse, Weizhen Sheng

Chapter 24. Wisdom of the Crowd

Harnessing the Power of the Public

Abstract

How many times has a teacher told you that Wikipedia is not a reliable source of information?

Griffin Kao, Jessica Hong, Michael Perusse, Weizhen Sheng

Chapter 25. Dataism and Transhumanism

Religion in the New Age

Abstract

“God is Dead”—one of the most famous lines in philosophy, declared in 1882 by German philosopher Friedrich Nietzsche, first introduced the idea that society no longer needed a God. Though some interpret this quote as meaning the literal death of God, the phrase was used by Nietzsche to point out that the Age of Enlightenment had displaced the role of religion with science and philosophy. We, as a human society, had outgrown religion.

Griffin Kao, Jessica Hong, Michael Perusse, Weizhen Sheng

Backmatter

Titel: Turning Silicon into Gold
verfasst von: Griffin Kao
Jessica Hong
Michael Perusse
Weizhen Sheng
Verlag: Apress
Electronic ISBN: 978-1-4842-5629-9
Print ISBN: 978-1-4842-5628-2
DOI: https://doi.org/10.1007/978-1-4842-5629-9