So far, I have discussed a handful of characteristics that create structural advantages or risks for marketplaces. This includes the geographic range of network effects, supply differentiation, SaaS integration and market fragmentation. Fragmentation is most useful as a first level filter to assess the viability of any marketplace, while the rest are second and third-level screening frameworks to evaluate defensibility and scalability. Another factor that influences the potential of marketplaces is the nature of engagement, i.e. the size and frequency of transactions. While this is less influential than other structural characteristics, it can become a major risk factor for some types of marketplaces.

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My writing has been inconsistent (at best) lately, but Uber's IPO seems as good a time as any to come out of hibernation. I have written about Uber's business model numerous times in the past and more often than not, I have defended its financial performance. My argument was that Uber's losses were caused by large investments into logistics infrastructure (largely fixed) that would then result in long-term revenue growth (and overtake costs). Uber seems to be using that exact same argument to position itself to investors. Uber's IPO prospectus finally shed some more light on its progress, but I was concerned by what I saw. It showed the scale of investments, but it also showed that Uber is no longer a high growth company.

Continuing our last discussion, we analysed changing alliances in the transportation and gaming industries. In particular, we focused on two interesting cases that transition from co-operation to rivalry: 1) Google vs. Uber in ride-sharing and autonomous vehicles, and 2) Niantic vs. Nintendo in the mobile gaming space. Will these companies continue to co-operate, or will their rivalries drive them apart?

Today, Apple announced a $1 billion investment into China's leading ridesharing service, Didi Chuxing. While this makes Apple a minority investor in Didi (with an ownership stake well below 5%), this investment is notable for a few reasons. For one, it is Apple's largest strategic investment since their $3 billion acquisition of Beats two years ago. It also comes at a time when VC money has been moving away from companies with high burn rates and excessively reliance on subsidies (a fairly accurate description of Didi's business). However, understanding Apple's rationale for this deal is tricky.

Last week, I came across an interesting piece by Jan Dawson about self-driving cars. In it, he argued that Tesla's (and possibly Apple's) approach of incremental improvements in automation was vastly superior to Google's goal of achieving full automation. His primary argument is that consumers need to purchase and experience semi-autonomous vehicles before they can trust the technology enough to purchase fully autonomous vehicles (especially given the likely cost of purchase). While this does appear to make some sense, there is a key flaw in this argument. The goals and business models of companies following these two approaches are dramatically different.

In part 1 of our year-end episode, we discuss five major events in Asia that occurred in 2015: (a) the surge of venture capital financing in Asia and its implications, (b) SoftBank’s Pepper with Alibaba and Foxconn, (c) the Nintendo-DeNA deal, (d) Xiaomi’s challenging year and (e) global recognition of Wechat’s messaging platform. We also added a short discussion on the upcoming dawn of self-driving cars and examine its implications for on-demand taxi-hailing apps, investors and car makers.

Uber's leaked financial reports from 2012 to 2014 have spurred a polarized debate on late stage valuations. Optimists have pointed to Uber's strong revenue growth as a sign of business model validation. Meanwhile, skeptics latched onto the fact that the company's losses ballooned to hundreds of millions of dollars even as its valuation exploded. Both are strong, but incomplete, arguments because they lack a frame of reference. Uber's revenue growth does appear strong, but how does it compare with those of previous IPO stars? Are Uber's steep operating losses consistent with successful companies that preceded it? And what do these comparisons mean? These are the questions I hope to tackle in this post.