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Tech Boom – Beginning or the End? 30 Oct 2013

War Room. Tech Boom – Beginning or the End? 30 Oct 2013. HiddenLevers War Room. CE Credit. Macro Coaching. Idea Generation. Archived webinars. Open Q + A. P resentation deck. Product Updates. Scenario Updates. War Room. Technology = Disruption Technology Sector Activity Scenarios

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Tech Boom – Beginning or the End? 30 Oct 2013

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  1. War Room Tech Boom – Beginning or the End? 30 Oct 2013

  2. HiddenLevers War Room CE Credit Macro Coaching Idea Generation Archived webinars Open Q + A Presentation deck Product Updates Scenario Updates

  3. War Room • Technology = Disruption • Technology Sector Activity • Scenarios • - Historical – 1990s Tech Boom + Bust • - Forward Looking

  4. HiddenLevers Technology = Disruption

  5. Disruption An innovation process where cheap, low-quality products ultimately displacing expensive, high-quality products. Disruption typically ruins the prospects of organizations caught on the losing side. Qualities of Disruptive technology much cheaper + easier to use improve at a rate much faster than the competition performance satisfies most demanding uses New technology dominates

  6. Disruption transforming all industries DESTROYED AUTOMATED CREATED Hotels + Travel 3d Printing Gene Sequencing Printing Brick n Mortar Video Industrial + Manufacturing Big Data Wired Telecom Floor Trading Professional Services Mobile Apps Meter Reading

  7. Moore’s Law, and its Long-Term Implications • Moore’s Law: number of transistors on a chip doubles every 18 months • Implications: • Your phone is more powerful than a 70’s supercomputer • Computers are steadily acquiring human capabilities

  8. Does Tech Enable Job-Free Growth? Productivity grows, but not employment Unemployment drops, but no one rejoins work force

  9. Where are displaced workers going? % of workers on SS Disability doubled since 1980 Low wage jobs growing fastest

  10. Goodbye Middle Class. Hello Tech Left Lower wage jobs dominate the recovery, though higher wage jobs are holding their own Right The middle class is shrinking steadily, with job automation playing a key role source: NELP, Alan Krueger via Huffington Post

  11. Tech = Disruption – Recap automation = C U L8R middle class successful tech = disruption structural unemployment income disparity will only worsen

  12. HiddenLevers Technology sector activity

  13. VC Market Overview – Where and What? VC deals still dominated by software, followed by biotech California dominates - 46% of all VC funding in 2013 sources: PWC Moneytree, Steve Blank

  14. VC Market Overview – How Much Money? VC funding actually higher in 2011-2012 than today Could VC trends be front-running public markets? sources: PWC Moneytree, Steve Blank

  15. VC Market Overview – Mark to Mystery Twitter, Pinterest, and Snapchat command huge user bases – challenge is monetization Snapchat specializes in disappearing content – makes advertising more difficult All of the above rely on digital ads as business model – can the advertising business sustain GOOG and all the rest? source: Wall Street Journal

  16. Winners - Four Horsemen Tesla disrupts automotive and dealership models. Netflix threatens cable with original content & streaming. Facebook and LinkedIn show strength of large social networks. YTD, over $80B has been added in market capitalization.

  17. Winner - 3D Printing DDD and SSYS major players. VJET & XONE had 2013 IPO. Key patents expiring February 2014 –More growth? Hewlett-Packard announced 2014 entry into 3D printing. Source: LA Times 8 March 2013

  18. Winner - Cloud Computing Players: Dropbox, Evernote, Drive, iCloud. Here to stay long-term. 36% annual growth. $200B market Network security & NSA monitoring are concerns now.

  19. Loser - Brick and Mortar Borders gone, Barnes & Noble shrinking. Online shoppers killing big box stores Office Max Office Depot desperation merger Source: USA Today Business Insider

  20. HiddenLevers Tech boom or Bust – Scenarios

  21. Tech Boom or Bust – Historical Scenarios • 90s Tech Boom • 1995-99 • Dot Com Bust • 2000-02

  22. 90s Tech Boom Fed hiked rates 6 times in 1999-2000. Target rate 6.5% No rise in defensive equities (soap, food) S&P up 26% annually, for last 50 months of bubble 550% 200% source: HiddenLevers Four Horsemen–high flyers, ushered in end of days +4000% +1200% +8000% +1400%

  23. Dot Com Bust Priceline went from 1000 to 7 Nasdaq came back in line with S&P Yahoo bought Geocities for 5b Markets followed in 2001 Brutal landing in Four Horseman source: HiddenLevers CSCO -88%MSFT -63% DELL -69%INTL -74%

  24. Scenario: Tech consumes the world

  25. Scenario: Tech consumes the world 2013: Reasons it’s different serious tech dynamism being unleashed, not just dot coms organizational overhauls involve digital innovation Defensive equities best start in 2 decades private market runs most of the money flow angels succeeding now came from 90s IPO boom global dimensions, not just US no spillover effect between tech + telecom source: MSN

  26. Scenario: Tech consumes the world Hints of 1996 Facebook rebound Netflix rebound Amazon Web Services paradigm shifts smartphones photos analytics Autotrader.com 2001: 47m loss 2013: 62m profit Apple rebound Priceline dominance in hotels Priceline first S&P 500 company at 1000/share source: Marketwatch, Moscow News

  27. Scenario: Dot Com Déjà Vu Facebook IPO. (enough said) FB Instagram purchase was done in 1 day Elon Musk says Tesla overvalued 1 car on fire showed Tesla speculation source: HiddenLevers, NY Times, ValueWalk, CNN Money, SeekingAlpha Four Horsemen– current Nasdaq outperformers, leading way to hell? 2013 Nasdaq +20% 4HRSMN +230%

  28. Scenario: Dot Com Déjà Vu 2013: Reasons it’s the same Lackluster due diligence Big companies buying their way into relevancy Bungled IPOs leading to disappointment Increasing size of early funding rounds major tech innovations end in speculative frenzies Doubts about economic returns of innovation source:

  29. Scenario: Dot Com Déjà Vu Hints of 2000 Groupon hijinksturning down 6b Repositioning Firing founder Color – 43m in first funding round, now bust Class actions against Zynga S&P annual gains since March 09 match dot com era SquareversusMasterCard Solyndra= Fraud tainting green tech altogether Corporate profits up 20%/year since 2009 Pinterest 1/3 valuation of Twitter with no revenue Priceline double top at $1000/share Yahoo buying Tumblr for 1b, no rev for years source: NY Times

  30. Tech Boom or Bust – Future Scenarios • Jury’s Out • Tech Consumes the World • Bad • Dot Com • Déjà Vu

  31. Product Update • Support for SMA + managed products • Scenario Modeling to Reports – improved workflow • War Room – updated interface • Performance + Speed improvements • Coming soon: • Notifications + Alerts • New Levers - Technology

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