Its high time for Amazon to fix its devices strategy, the window is closing.
Amazon Devices Strategy Failure, Secondary Valuations Make no Sense & Chicken in the U.S if overengineered to our detriment.
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1/ Will Amazon get disciplined about its devices strategy?
I have long argued that Amazon Alexa devices ecosystem was more hype and less substance and this last week proved my point again. In the last 3 weeks Google, Microsoft, Amazon & Apple all had events showcasing different updates. While all events had something interesting to present the most underwhelming was Amazon’s event.
They have continued to iterate on products that no-one uses without any change in strategy. The poster-child for this is the Amazon Echo Frames. They launched another version of this product that no one uses. It came from the 5 year old idea that Amazon had that they have push Alexa voice assistant in every device that they see.
But Meta launched newer version of its collaboration with RayBan and looks like they are on the right track. The product has meaningful improvements and has cleverly used AI to solve user problems that are hard to solve before. While all echo frames is just Alexa on your head. How is that different from having any voice assistant in your wireless earbuds. What is the advantage echo frames is offering?
I think the Amazon leadership finally realized that they are not going in the right direction and their recent hiring of Panos Panay who led Surface devices at Microsoft seems to be a step in right direction.
For god sakes, I am hoping we don’t get another version of Echo Frames.
2/ Don’t take secondary valuations at face value:
Its rumored that Open AI secondary share sales are happening at $90B a 3x increase from its last round at $30B only a few months back. This got me thinking not about whether OPEN AI is this generation’s iconic tech company or not. But it got me thinking about secondary valuations. I have invested in a late stage secondary company and have closely followed how this market functions.
My takeaways are as follows:
Secondary market is not liquid like public market making the dynamics skewed towards either the seller (in most cases) or the buying (very rarely).
Almost all secondary deals in last 5 years are under water when these companies go IPO.
VCs are not the right people to invest in secondary shares, even though on the face it might seem like they would be in the best position to leverage the fall in secondary share prices.
Investing in one-off secondary share sale is a recipe for disaster. It doesn’t make sense unless you are a founder or early employee or someone with extremely high conviction. And like investing in early stage you should not invest in one-off secondary shares with out a plan to build a portfolio.
3/ Do you know why Chicken farming in the U.S is not sustainable?
Check out my conversation with the founder of Crowd Cow to understand how the Chicken farming in the U.S failed all of us.