Today I’d like to explain why a cult technology expert is so revered in the world of investing.
Basically the guy has made five huge, left field predictions about the future of technology. And unlike most armchair speculators, he’s gone out and built huge companies based on his predictions.
I’d like to talk about his third big idea, from 1999.
Creating the future
Here’s how he described it:
“Technology is like water; it wants to find its level. So if you hook up your computer to billion other computers, it just makes sense that a tremendous share of the resources you want to use – not only text or media but processing power too – will be located remotely.”
Now, I know that in 2016 there’s nothing remotely interesting about a statement like that – it’s so obviously true. But the reason it’s true is because someone made it a reality.
Here’s what he meant by remote computing: when you fire up your computer you might check directions on Google maps, send an email on Gmail or watch a TV show on Netflix or Youtube. That’s remote computing.
Outside the house, you use your smartphone. Almost all the applications on a smartphone work remotely. If you’ve ever tried to use your phone in a place with no internet connection, you’ll know what I mean – your shiny glassy mobile computer turns into a shiny glassy brick.
At work, you save your documents onto the internet, so that you can retrieve them later on when you’re at a meeting out of the office or back at home. These are all examples of remote computing.
As the man himself said,
“When electricity first came to factories [in the 1920s], every factory had its own power generator. But eventually that didn’t make any sense, because everyone could draw electricity off the grid.
At the height of the first dotcom boom, we saw the exact same thing happening in [the technology industry]. You’d raise $20 million of venture capital, and then you’d have to turn around and write $5 million cheques to Oracle, Sun, EMC and Cisco just to build out your server farm. It was literally like everybody building their own electrical generator over and over again.”
So what did he do? He built the internet equivalent of a power company, of course. The first remote computing company – he even coined a new term for it, “cloud computing”. He launched it in 1999 – which was about the worst possible time to start a technology business – and sold it on to HP for $1.6 billion in 2007.
The rise of the cloud was the third of his big predictions. But the reason I’ve spent the last month researching and writing about him is his fifth and latest prediction.
He’s predicting that certain companies, with very specific characteristics, are going to “eat the world”. They’re going to colonise industries and make their early backers rich.
I’ve been strongly influenced by this idea – and I’ve found three tiny companies which fit the bill. To learn about the three companies whose share price could be set to grow by as much as 500% from his latest prediction, click here.
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