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If you follow the money instead of the marketing services sector’s own narratives, change on a scale far larger than anything Google or Facebook have brought is on the way. That’s the conclusion we can draw when we listen to Silicon Valley’s smartest money talking about what’s next for them.

Benedict Evans is a Partner at Andreessen Horowitz (aka A16Z). His presentation a few days ago (November 2018)  is — like the slower, more slide heavy Mary Meeker rival at Kleiner Perkins — billed as an annual fact fest and market proclamation. his theme this year was “the end of the beginning”.

Why is Evans worth listening to? Well, partly because he’s not speaking to you, he’s speaking to the money — his firm has US$2.6 billion of venture capital under management, and is ambitious to grow more. Its biggest successes since it started in 2012 have been backing firms like Instagram, Dollar Shave Club and Skype. It is the smartest money on the web. They are driven by the key insight articulated by founder Marc Andreessen that “software is eating the world” — everything that can be made to run better with digital technology will be disrupted and changed by the web.

There are three main points he makes that are worth looking at more closely — and then a torrent of industry-specific insights for CPG, retail, automotive, healthcare and financial services. First, When it comes to digital transformation, we are at the beginning of decades of change. Second, the past 20 years of the web have been about access — a wave of connecting up all of the people in the world — the next 20 years will be about usage, how we rethink almost every aspect of human activity using this network and the digital tools connected to it. Third, the current wave of change is being driven by machine learning and crypto (i.e. blockchain and related technologies). 

A concept that leaders in every field need to grasp is that the digital revolution — the number of things that software and connected technology will change dramatically — has only just begun. Benedict Evans’s presentation will give a valuable return on the investment of your time and attention if it only helps bring that one concept to life a little more. 

Watch the video of the full talk below — and a fillet of the points that I found most interesting (quotes are all from Benedict Evans, edited for clarity).

Key points from Benedict Evans The End of the Beginning

The forces at work

Access to the web — the number of people connected — has been growing the past 20 years at an exponential rate, but the usage is only just beginning to grow and there is a massive addressable opportunity. 

The next wave of disruptive innovation will be of a different order of magnitude — harder problems, but bigger opportunities (and bigger disruption for established companies).

We will tackle harder markets and we probably change those markets far more than we changed things before

Social media and search were an organising layer over the web, but crypto and machine learning will allow much more profound changes to how we access and use the massive amounts of data, people and resources the internet has connected. 

The upshot of these changes is that the markets that VC-backed disruptor companies will be much, much bigger. A comment by Evans as he talks about a graph gives us a sense of the scale of this:

“I used to charts in billions of dollars, now they are trillions of dollars”

Marketing disruption will be enormous

Evans characterises the disruption of marketing so far as having been mainly about advertising. For those of us working in the non-advertising areas of digital marketing we might think of this as a slight, but it’s not. From the point of view of the money, for whom we can think of Evans as the guide/spokesman, the game in digital marketing has been all about the advertising. Just look at the money that went into advertising leaders like Doubleclick vs. leaders in content and inbound marketing, or however we wish to characterise it these days. Brandwatch, Percolate and Sprinklr are worth hundreds of millions right now, but that is partly because they service relatively under-prioritised, disconnected and under-operationalised parts of marketing.  

And even thinking of marketing isn’t thinking big enough, says Evans — the opportunity is more about thinking of the total cost of reaching a customer.

As I mentioned in the main post above there’s a lot more in the presentation — although it is only 24 minutes, Evans speaks at the speed of an Aaron Sorkin character, so there’s about an hour’s worth of content in there. I paused it frequently and took notes — and then wrote this post to make sure I’d had time to think through some of the profoundly interesting and challenging things he was talking about.