Hi again, it’s Steven Levy, WIRED’s editor at large, with edition two of the Plaintext newsletter. Thanks for all your great comments about last week’s debut.
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Which is a particularly tiny piece of change compared to this week’s topic…
I have never watched the TV series Billions, though I hear it’s pretty good. The showrunners might consider changing the name, however, as billions no longer lands with the resonance it once had. Maybe it’s fine for those pikers in hedge funds, but in tech it’s as dated as the joke of Austin Powers holding out his pinky and invoking a sum that time has belittled.
Trillion is the new billion.
In August 2018, Apple became the first trillion-dollar tech company. A month later Amazon joined it. In April 2019, Microsoft crossed the threshold, and last month, Alphabet/Google slid into T-land. The only other entrants in this rarefied club are a couple of oil companies (boring!).
Though fluctuations have taken some of these tech firms back and forth across that line, they’re all still in trillion territory. (As I write this, Apple and Microsoft are each around $300 billion over the line.) And while Facebook is valued at a measly $620 billion or so, prognosticators, admiring the wide moat around its social media semi-monopoly, have it pegged as the next trillion-dollar baby.
Trillion. The single change in consonant doesn’t begin to encompass the transformation. Typing all the zeros will stress my fragile MacBook Pro keyboard, but here it is.
Let’s try to figure out what it means when companies change their B’s to T’s, soaring past the GDP of Norway. I’d argue that reaching that pinnacle is a mixed blessing. When quantitative standards pass certain thresholds, they become qualitative distinctions as well. I’m familiar with the founders of all four of those trillion-dollar companies, as well as the one in waiting, and not one of them in the early days ever dared to think of such a shockingly high corporate worth. (Well, maybe Bezos.) They all cherished their underdog mentalities. There are no underdogs worth a trillion dollars.
When you reach such a Brobdingnagian pinnacle, size itself becomes your greatest problem. You don’t disrupt—you get disrupted. Protecting the revenue stream that made you the trillion dollars is critical. But doing so only translates into success in the current marketplace. Whatever the future marketplace is, you’re not making your money there.
It winds up to be weirdly difficult for the giants to begin a new business, because the early returns for such an effort seem so paltry. Look at all the great products, such as Reader and Blogger, that Google killed because they were small potatoes. In normal companies, the idea of a new billion-dollar business is met with excitement. But for the trillionaires, creating a product that adds one-thousandth of the firm’s net worth doesn’t even evoke a meh. Such ideas, though, might wind up becoming the next generation’s dominant product.
One workaround for a huge company is to use its cash to buy upstart competitors. With antitrust scrutiny on the rise, that approach might lose some luster. Regulators and legislators are accusing the big tech companies of abusing their power, and the Department of Justice and Federal Trade Commission are actively investigating. Experts note that bigness alone does not constitute an antitrust violation, but it’s a hell of a start. Even if the investigations don’t break up any companies, the Trillion Club may find it harder to get big acquisitions approved.
So while attaining the trillion level means big riches, further growth will be a struggle. That’s a good thing. A worst-case scenario is these powerful behemoths lock their legacy products into our lives, while deploying their wealth to crush competitors and influence regulators and politicians.
In the best case, the trillionaires will be lumbering dinosaurs—slow-moving targets for rising innovators. Innovators who aren’t worried about maintaining a constant waterfall of revenues just to prop up a gargantuan stock price. Innovators who will eventually usurp the Trillion Dollar Club. Not to make their own trillion bucks, but to make our lives better.
That was the way the founders of the current trillionaire club started out. And then they accumulated all those zeros.
When Apple went public in December 1980, the market valued the three-year-old company at $1.7 billion. The largest shareholder, cofounder Steve Jobs, was suddenly worth $217 million. In late 1983, a few weeks before releasing the first Macintosh, Steve Jobs met me for a pizza dinner and invoked the biggest number he could think of while sharing his hopes for the company and the upcoming Mac launch.
“I’m not doing this for the money,” he said. “I have more money than I can ever, hopefully, even give away in my lifetime. And I’m certainly not doing it for my ego. I’m doing it because I love it. And I’m doing it because I love the people. And I’m doing it because I love the idea of making a 10 billion-dollar company.”
Ten billion? Chickenfeed.
Molly asks, “I would like to know what you think about bitcoin.”
Pull up a chair, Molly! I feel connected to this innovative cryptocurrency because I was deep into the original Cypherpunks circle. Its mailing list is where “Satoshi Nakamoto,” bitcoin’s still-unidentified creator, first published their foundational paper on the idea. My people! I was also an early fan of digital money. But while bitcoin is, pardon the expression, the gold standard of cryptobucks, I have concerns. Its price fluctuations have made it an investment vehicle, which makes it tough to use as a market currency. If the value of bitcoin goes up by a factor of 100 in a year, that pair of shoes you just bought with your virtual wallet cost you thousands of dollars! Also, I’m unhappy that mining bitcoins requires a huge amount of energy. Isn’t climate change bad enough already? That said, I do believe that at some point—10 years from now? Twenty?—we will all be using some form of cryptocurrency.
You can submit questions to email@example.com. Write ASK LEVY in the subject line.
I’m going to try to avoid politics in my weekly sign of the apocalypse, but really, giving Rush Limbaugh the Medal of Freedom?
Google Maps is 15! The app “transformed both the way we think about maps and the way we move around in the world,” notes WIRED’s Lauren Goode in her intro to a thoughtful interview with Google’s Jen Fitzpatrick, who heads the team.
Speaking of Google Maps, here’s how a German artist hacked the system to create a virtual traffic jam.
Who can resist a good explainer on locust plagues?
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