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The Four

the Hidden DNA of Amazon, Apple, Facebook, and Google
Dec 07, 2017gaetanlion rated this title 5 out of 5 stars
The Big Four is a lot of fun and is really interesting. The Four are fairly cryptic companies (especially Amazon). They are like octopussies growing stealthy tentacles that are increasingly grabbing and disrupting every service industries. They are creating and expanding new services (cloud computing) that the retail consumer is not aware off at all. And, their respective tentacles are starting to battle each other. And, Galloway is the perfect guide to better understand and explain the business DNA of those four giant land-based sea monsters. Galloway advances several business and social science models that are insightful. He indicates that a companies targeting consumers can aim at three different physiological response centers: 1) the brain (rational value based decision making); 2) the heart (emotion, impulse purchases); and sex (urge to show off, demonstrate status through expensive acquisition to enhance mating potential). He indicates as you move down the torso, your profit margins go up. And, Apple has achieved that big time. He developed a thinking model capturing what it takes for a company to become a dominant force in its industry. This model relies on 8 factors: 1) product differentiation (superior design like Apple, Tesla, etc.); 2) visionary capital (long term capital not encumbered by short-termism); 3) global reach (the Four derive from 32% to 65% of their revenues overseas); 4) likeability (Amazon and Google have it, Uber does not) ; 5) vertical integration; 6) Artificial Intelligence; 7) Accelerant (being perceived as the most attractive place to work for the smartest individuals. Google has it. WalMart does not); and 8) Geography (being headquartered within a major city with a combination of great human capital (leading universities), financial capital (venture capitalists, banks, etc.), a major airport) . Regarding geography and human capital, his insights remind one very much of the work of Richard Florida (author of The Rise of the Creative Class). The book has a couple of weaknesses that do not detract from the overall quality of the book. Nevertheless, his chapter on who are the main candidates to become the fifth major player was the weakest in the book. I felt his choices included a bunch of also-ran (WalMart, IBM) or upstarts that are in too narrow a domain (Uber, Airbnb, Tesla). By the same token, I think he ignored other formidable Chinese technology companies that represent a greater threat on a worldwide basis than Uber or Tesla. Such companies include Baidu (equivalent of Google), Tencent (like Facebook, Spotify, Pandora, Apple Music wrapped into a single company), and JD.com (a serious competitor to Amazon just as Alibaba is too). Also, he mentions that 36 US cities accounted for 89% of worldwide GDP growth and 92% of worldwide job creation in 2012. In that same year the overall US economy grew slower than the whole World (2.2% vs. 2.4%) and much slower than India (5.5%) and China (7.9%). Given that, Galloway’s statistics regarding US cities are unlikely.