One Step Up Issue #22
This week, we look at Roblox and the rise of low code/no code, Peter Kaufman on multidisciplinary thinking, why physical retailers will benefit most post Covid, building new things, Apple & Amazon
Apologies for the delay in getting this out over the weekend. Better late than never. Never forget:
Consistency is king.
Experimenting with a different format this time - do share your thoughts below.
Feature article:
As someone who has never written a line of code in his life and always found the idea of building a software/application as complex as rocket science, I found this article extremely insightful.
With developments in technology, people are getting the ability to sell anything they want, practically to anyone, anywhere - the question then becomes, how do you build what you want without having the traditional skillset? Low code/No code consumer enterprise companies are helping solve that for thousands of people.
This article highlights Roblox (an underrated example of this trend), a look at how the low-code / no-code movement evolved to today (from Wix, to Shopify to Airtable and more), and a view on where the movement is going and the startups leading the way (along side big tech).
Historically, problems that can be solved with technology have been bounded by the number of people able to code.
In the 1950s, kids grew up playing with Legos; this was a fit for a world centered around manufacturing and industrial work. In the 1970s, kids grew up tinkering with personal computers like the Commodore 64; this lay the foundation for a generation of entrepreneurs like Bill Gates and Steve Jobs.
Today’s kids grow up building in Roblox, mirroring the rise of low code / no code in the startup ecosystem and signaling how everyone is now able to manipulate and create software.Roblox isn’t a game. It’s a game-creation platform. Roblox has never published a single game; rather, its users create games using Lego-like building blocks in Roblox Studio.
Traditional app development is riddled with problems. It’s done by the engineering team, which makes it expensive; there’s usually a shortage of good engineers; and there’s often communication breakdown between engineers and the business side. Low code / no code solves this problem by freeing up engineering talent and letting non-technical people create their own software.
Other interesting articles I read this week:
Why category leading brick and mortar retailers are likely the biggest long term Covid beneficiaries
If most e-commerce companies have been pulled 1–3 years into the future in terms of their revenue, then the e-commerce businesses of most category leading brick and mortar retailers have been pulled 5–10 years into the future. Covid has permanently changed their destiny and driven significantly higher long term steady state FCF outcomes for them. I sometimes think that investors do not appreciate how large and rapidly growing the e-commerce businesses at some of these category leading retailers are. Wal-Mart’s digital revenue in Q2 was an annualized $42 billion, growing 94% — faster than Amazon. Best Buy’s digital revenue in Q2 was an annualized $19.4 billion, growing 242% — faster than Amazon.
Perhaps the simplest way to express what has happened during Covid is to note that Amazon has actually lost share in e-commerce during Covid. The largest e-commerce share gainers in most categories have been category leading physical retailers as well as the DTC businesses of most brands. Amazon is still growing really fast, but this is due to growth in the market for e-commerce. They are factually losing share of e-commerce which is a significant change, albeit one that had been in process for several years. There were years pre 2016 when Amazon was taking roughly 100% incremental share of e-commerce and well over 100% incremental share of total retail sales. While Amazon is gaining share of retail spending, they are losing e-commerce share and this is manifested in the fact that they are growing slower than the overall market for e-commerce.
The right way to deal with new ideas is to treat them as a challenge to your imagination — not just to have lower standards, but to switch polarity entirely, from listing the reasons an idea won't work to trying to think of ways it could.
I’ve revisited this article a couple of times since initially reading it and it just feels apt - both, for anyone who is looking to build - and for anyone who wants to support those who wat to make something new.
How Apple Is Organized for Innovation
Business history and organizational theory make the case that as entrepreneurial firms grow large and complex, they must shift from a functional to a multidivisional structure to align accountability and control and prevent the congestion that occurs when countless decisions flow up the org chart to the very top. Giving business unit leaders full control over key functions allows them to do what is best to meet the needs of their individual units’ customers and maximize their results, and it enables the executives overseeing them to assess their performance.
The adoption of a functional structure may have been unsurprising for a company of Apple’s size at the time. What is surprising—in fact, remarkable—is that Apple retains it today, even though the company is nearly 40 times as large in terms of revenue and far more complex than it was in 1998.
Great post to understand how Amazon came to dominate, lessons it borrowed from Walmart and more.
Till next time.
