Is the artisan trend a precursor to a Big Tech backlash?

In the Economist’s 1843 magazine, Ryan Avent writes about the resurgence of the “artisan” culture in Crafting a life:

Before the Industrial Revolution, the craft economy was simply the economy. Clothing, processed food, furniture, wood and iron tools were all made by hand, using simple equipment, one unique batch at a time. Artisans learned their trade through years of observing experts, within the family or in a structured apprenticeship. The quality of both the instruction and the finished products was highly variable. There was virtually no opportunity for mass education in trades, nor a chance for better producers to capture increased market share by scaling up production.

The Atlantic ran a similar piece recently Craft Beer Is the Strangest, Happiest Economic Story in America.

At the same time, the number of public companies has decreased and the “Big 4” tech companies make up 24% of the market cap of $SPY. Some amazing numbers, per Scott Galloway in Esquire:

Over the past decade, Amazon, Apple, Facebook, and Google—or, as I call them, “the Four”—have aggregated more economic value and influence than nearly any other commercial entity in history. Together, they have a market capitalization of $2.8 trillion (the GDP of France), a staggering 24 percent share of the S&P 500 Top 50, close to the value of every stock traded on the Nasdaq in 2001.

How big are they? Consider that Amazon, with a market cap of $591 billion, is worth more to the stock market than Walmart, Costco, T. J. Maxx, Target, Ross, Best Buy, Ulta, Kohl’s, Nordstrom, Macy’s, Bed Bath & Beyond, Saks/Lord & Taylor, Dillard’s, JCPenney, and Sears combined.

Meanwhile, Facebook and Google (now known as Alphabet) are together worth $1.3 trillion. You could merge the world’s top five advertising agencies (WPP, Omnicom, Publicis, IPG, and Dentsu) with five major media companies (Disney, Time Warner, 21st Century Fox, CBS, and Viacom) and still need to add five major communications companies (AT&T, Verizon, Comcast, Charter, and Dish) to get only 90 percent of what Google and Facebook are worth together.

And what of Apple? With a market cap of nearly $900 billion, Apple is the most valuable public company. Even more remarkable is that the company registers profit margins of 32 percent, closer to luxury brands Hermès (35 percent) and Ferrari (29 percent) than peers in electronics. In 2016, Apple brought in $46 billion in profits, a haul larger than that of any other American company, including JPMorgan Chase, Johnson & Johnson, and Wells Fargo. What’s more, Apple’s profits were greater than the revenues of either Coca- Cola or Facebook. This quarter, it will clock nearly twice the profits that Amazon has produced in its history.

Will the trend of the big getting bigger continue? Or is there enough of a Big Tech backlash to make things start regressing to more normalized levels?

We’re certainly not making a call and will continue to look for further evidence.


Fashion, Maslow and Facebook’s control of social

Benedict Evan’s post, Fashion, Maslow and Facebook’s control of social:

You can optimise a product, and measure it, but people still have to want it. Facebook can fill the home page with a feature, and a retailer can fill a shop with a look, but that doesn’t mean you can make people take it. You can only propose.

For the most part, I agree that Facebook is merely a platform and ultimately the final decision is up to the individual. His analogy is apt, and perhaps sticks out to me due my own retail experience. However, he loses me a bit at the end with this:

But I think we attribute vastly too much power to a handful of product managers in Menlo Park, and vastly too little power to the billions of people who look at their phone screen and wonder which app to open. Facebook writes algorithms, and designers cut the cloth, but that doesn’t mean they control what people look at or what people wear.

Facebook designs their platform to be incredibly addicting and they have vast resources to make that happen. That is real power and shouldn’t be dismissed. There are projects looking to create new decentralized projects, though it’s unlikely a true competing project has been launched yet and general public is certainly nowhere close to adopt.