Courseware & Insight at the Intersection of Tech & Strategy by Prof. John Gallaugher, Carroll School of Management, Boston College

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IoT Intruders, Unicorns, Moore’s Wall, Netflix Growth, #BCventures: The Week in Geek™ – April 18, 2015

‘Internet of Things’ Carries Privacy Risks
WakeUpBabyA Cincinnati couple reported their baby’s webcam was hacked after they raced into their child’s room to follow the voice of a creepy dude screaming ‘wake up, baby’.  The camera then swiveled to point at the couple while the cyber-intruder shouted obscenities at them.  Shudder.

Security for the Internet of Things (IoT), devices with computing smarts, is getting better, but each connected device is a potential path for attack.  A recent report showed several major manufacturers that could allow hackers to detect when garage doors were opened, allow for the listening and recording of in-home conversations, and potentially gain control of locks or other devices connected to a smart hub. A reminder to be vigilant with product choices, configuration, and setup.

What Did Billion Dollar Companies Look Like at Series A?
A recent BC on-campus talk by Google Marketing Director, BC alum Marvin Chow pointed students to this great article in Medium.  Many of the “Unicorns” (current tech industry term for “startups” valued at $1B+) sported many of the same characteristics: Easy-to-dismiss ideas (rent space in your home to strangers, hotel style?), Competitive markets (who’d use SnapChat & WhatsApp when we have Facebook & SMS?), Reinventing existing consumer behavior (pie-growing Uber makes many drop car ownership, car rental, and public transit), Untested founders (know the world’s youngest self-made billionaire? It’s Stanford dropout Elizabeth Holms of med testing firm Theranos!). And Zero monetization (Twitter, Pinterest, WhatsApp, Instagram, Waze, among many others).

The “Unicorn” term was coined by Aileen Lee, founder of Cowboy Ventures.  Lee’s original post had 39 Unicorns identified over the past decade, but Fortune has a list of over 80 current firms fitting the “unicorn” criteria.  Be cautious. Fab had raised over $300M and was thought by many to be worth over $1B.  Today the firm’s on the edge of dissolution. Real value and crystal-ball prospects aren’t the same thing. By the way, those looking to refine their ‘Valley Speak” might hear Decacorns (firms valued at $10B pre-exit) and “Dragons” referred to as those firms that return an entire fund at exit.

Moore’s Law Hits 50 but May Not Make 60
In 1965, roughly three years before launching what would become Intel Corporation, Gordon Moore wrote a 4 page paper in Electronics Magazine, noting that microprocessors, the calculating brain of computers, get faster and cheaper – roughly doubling in speed or halving in cost every two years (subsequent managerial definitions estimate 18 months).  This principle, which has become known as “Moore’s Law” works because each new generation packs transistors into increasingly smaller spaces.  Moore’s Law is simply the result of persistent advancement in the equipment used to manufacture chips, and early observations have held roughly true for half a century. But at some point Moore’s Law will run into the unyielding hand of God (Moore’s Wall) – there is a point at which transistors can’t be made any smaller.  We’re getting close.  In Q1 ‘15, more than half of the Intel chips sold used 14-nanometer manufacturing process, the generation following 22-nanometer tech. For reference, 14 nanometers is smaller than a typical virus cell, and about as thick as the outer cell wall of a germ. Intel officials think they’ve got two more generations of shrinkage with current technologies, but beyond that, no one is committing.  What will the world be like when our devices don’t get faster and cheaper? Will more computing power shift to cloud-based distributed computing? And will this expedite the need for higher-bandwidth?

Replacing Silicon with new materials (including germanium and graphene) may help. Lab work from an Aussie team showed a single-atom transistor. Diamonds and quantum computing are among many lab-based tech that also show promise, although proof of commercialization is no where in sight.  Intel is clearly looking to the future.  The firm spent $11.5 billion on R&D last year and another $10 billion on capital expenditures.  And while Intel makes mostly their own chips, the number of leading chip manufacturers cranking out brains for smartphones, tablets, and other devices has shrunk from 18 a decade ago, to only four today: Intel, Samsung, GlobalFoundries, and TSMC (Taiwan Semiconductor Manufacturing Corp). Bonus: The end of the article above includes video of Moore discussing his paper and technology advancement.

Netflix Subscriber Numbers Soar
A short note for those using the Netflix chapter in our textbook. Netflix stock is once again in nosebleed territory.  So much for the enduring punishment of Qwikster.  While a foreign exchange hit hurt the firm last quarter, if currencies hadn’t quirked earnings, Netflix would have crushed expectations. The firm now has over 41 million US subscribers and about 21 million in the rest of the world. Hello, Cuba!

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