Hey Everyone,
Welcome back to The Chomp—your weekly dose of the best strategic thinking content and top emerging business trends from the internet and beyond. If you’ve been sent this email and you’re not a subscriber, you can join by clicking on the blue button below. With that, let’s dive into it.
Quick Bite
The End of the American Internet: 80-90% of internet users are now outside the USA, there are more smartphone users in China than in the USA and western Europe combined, and the creation of venture-based startups has gone global. Meanwhile, of course, the internet became vastly more important. In the last decade, it has gone from being interesting and exciting but not really an important part of most people’s lives to being a central part of society.
Throughout the 90’s and the 2000’s, America dominated the internet. While both computers and the web were invented outside of the US, the internet was born in and of America. It was American companies that set the course for the internet and provided the world with new products and services. This, in turn, led American culture and regulation to become the backbone of the internet.
Fast forward a decade to our current reality of 2020, and American domination of the internet isn’t quite what it used to be. As Benedict Evans points out in this recent essay, 80-90% of internet users now reside outside of the US. This dispersion of internet users has also led to a dispersion of capital and company creation. No longer are the websites and apps we use only built by American companies.
For millennials like myself, we grew up on AOL and AIM. We were first introduced to social media with Myspace, and eventually got sucked into the vortex of Facebook, Instagram, Twitter, and Snapchat. Regardless of whether you lived in the US, or somewhere else in the world, you relied on an internet built and governed by American companies.
For Gen Z—and generations to follow—this won’t be the same. We’re seeing it unfold now before our eyes with the rise of TikTok. For the first time, the most popular social media app in the United States isn’t from the United States—it’s from China. And unless we see a stark reversion towards nationalism across the world over the next decade, TikTok won't be the only non-American platform rising to the top of the App Store.
With capital now freely flowing into startup ecosystems outside of Silcon Valley, we’ll see a new generation of global companies created outside of the US. Recently, Daniel Ek of Spotify earmarked a billion dollars of his own capital for European tech. With this type of capital up for grabs, its clear that you don’t need to be in the Bay Area (or NYC) to build the next big thing. We’ve reached the point where America no longer dominates the internet.
As a consequence of this, American regulation of the internet will no longer be the default. China, the EU, Australia, and many other jurisdictions now want a seat at the table. For the past 25 years, most of the world has been living in a place where the tools and services they use on the internet have been built by companies in a country that didn’t necessarily have their laws or cultural attitudes in mind.
I'd feel pretty confident making a bet that the next 25 years won't look the same.
Deeper Dive
The Metaverse of Health: The emerging age of Precision Wellness, powered by the demands of the wellness-driven consumer, is fundamentally reshaping addressable markets, spurring innovation at the intersection of traditional industries, and creating massive opportunities for emerging companies building hyperpersonlized technology, communities, and experiences that improve human health, happiness, and opportunity.
I haven’t written anything new on the world of fitness recently, but it hasn’t escaped my mind. It’s still an area I’m super excited about and have continued to spend time reading and thinking on. The more I explore the space, the more work I come across from Brett Bivens. Brett is a VC at TechNexus out of Paris, and has led his firm’s investments in health and fitness companies like Tonal.
While Brett’s writing on the space covers topics a bit broader than those I’ve written on to date, we share a number of similar views on the future of fitness. In this fantastic article Brett put out in June, he explores a concept dubbed the ‘Metaverse of Health’. For those uninitiated with the term Metaverse, Matthew Ball is the resident expert and wrote this excellent primer on what it is and what it means.
In the context of health & fitness, the metaverse Brett refers to has emerged from the rise of precision wellness. As fitness has moved from a one size fits all type model to a hyper-personalized and curated experience, total wellness spend has increased to over 5% of global economic activity. Consumer attention on fitness has moved far beyond the hour or so people set aside for a workout. With the advent of the Apple Watch and other fitness trackers, as well as fitness on social media, both fitness and general wellness are taking up more consumer attention than ever before.
If my views on the coming third wave of fitness are correct, this trend will only accelerate. This means that companies like Peloton, which have already captured significant consumer attention, are well poised to expand into additional channels outside of their core focus. As Brett highlights, this could be areas like sleep, nutrition, or ever direct to consumer healthcare. In the second wave of fitness companies expanded horizontally to capture various segments of wellness. In the third wave, and with the rise of the metaverse, companies will focus on going vertical.
By going vertical, companies are able to expand their reach of consumer attention. With a suite of offerings encompassing multiple facets of health and wellness, successfull companies will become more interconnected with a consumer’s daily life. This interconnection is what will ultimately lead us towards the metaverse.
Give Brett’s article a read to dive deeper into what the metaverse ultimately entails, and to learn how we can expect to see it unfold. The metaverse of health is a fascinating concept that will be continue to be on my mind going forward.
Chum Bucket
Audience and Wealth, Part I (The Generalist)
The Inside Story of MacKenzie Scott, the Mysterious 60-Billion-Dollar Woman (Marker)
A Hard-Headed Case for More Covid Stimulus (Bloomberg)
Generation Agoraphobia (NY Times)
Tweet of the Week
Song of the Week
Apple Music Link
Books
Currently Reading
Recently Read
The Book of Five Rings was mentioned frequently throughout Certain to Win (which I recently read) as one of John Boyd’s favorite books. Miyamoto Musashi’s writing had a large influence in how John Boyd approached his own strategic thinking. While the book is singularly focused on the way of the sword, it’s lessons expand to cover all aspects of life. If you give Musahi’s words the attention they deserve, this is the type of book that can have a profound impact on your thinking. (5/5)
When Morgan Housel released his new book, The Psychology of Money, I couldn’t wait to get started. Despite generally avoiding the hype of new releases to focus on books that have stood some test of time, I figured diving into Housel’s new work would be worth it. And it certainly was. Housel has the unique ability to take dry and complex topics and turn them into thoughtful and digestible stories. The Psychology of Money is filled with practical takeaways and is worth a read for anyone interested in being better with their money. My guess is that’s most of us. (4/5)
Parting Thoughts
This Week in History
On October 13, 1983, Bob Barnett of Ameritech Mobile Communications made a phone call from a car near Soldier Field in Chicago. This call officially launched the first cellular network in the US. (Source)
“We don't abandon our pursuits because we despair of ever perfecting them."
— Epictetus
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-CM
This newsletter is created and authored by Cody McCauley and is published and provided for informational purposes only. The information in the newsletter solely constitutes Cody’s own opinions. None of the information contained in the newsletter constitutes—or should be construed as—investment advice.