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Ferocious Growth Mindset

Ferocious Growth Mindset

By Thursday, 03 September 2020 07:59 AM Current | Bio | Archive

From a company standpoint, Amazon is obviously a great example of having a ferocious growth mindset stemming from its approach that every day is Day One at the company.

The company is obsessively focused on improving the customer experience through faster shipping by having the most extensive and efficient supply chain and logistics of any company with the possible exception of Wal-Mart, an enormous selection, competitive prices, and a very easy user interface to purchase goods.

The stock price has clearly reflected the extraordinary barriers to entry it has created and how ubiquitous it has become in the United States and increasingly throughout the world.

And when it comes to companies that are almost entirely web-based like Facebook and Google they are always changing with success through continuous updating of their services through code enhancement and testing for reliability and effectiveness.

Here are two excerpts from the article that blew my mind and confirmed why these companies have market power and scale that cannot be superseded. The network effects they have created and the reinvestment in their infrastructure is so extensive that I can’t think of any companies that can displace them anytime soon.

For instance, in the year 2018, Google revealed at the JFrog SwampUp conference in Napa that over 500 million tests are being run per day inside Google’s systems. That’s to accommodate over 4 million builds/day.

Facebook, for instance, releases 100 million lines of code daily. By 2015, Amazon developers were doing a production deployment every 1 second.

Market Power & Secular Trends 

Wow, wow, wow. The market power of these companies and their increasing market value and corresponding explosive increase in the wealth of their founders has clearly put a spotlight on them as the poster children for inequality.

While some may believe that this is sour grapes among their competitors or from a mass of envious people, the Federal Reserve has weighed in with recent research asserting that four key negative secular trends can be attributed to the increasing concentration of market power in firms like Amazon and Apple, Facebook, Microsoft, Salesforce, and Google, just to name some of the most significant ones.

The four negative secular trends are:

  • Declining labor share
  • Rising profit share
  • Rising income and wealth inequalities
  • Rising household sector leverage, and associated financial instability

The profitability of these firms has driven their stock prices higher and generated tremendous wealth for their owners and this has also spilled over to real estate as well.

Workers have not benefited nearly to the same degree as those with capital and to keep up they have been borrowing more money, thereby creating more risk for the financial system. This chart shows the share of labor compensation as a percentage of GDP over time. And while it’s been rising a bit over the last few years, it is still bumping along the bottom and is at historically low levels.

Gary Carmell is the president of CWS Capital Partners, a real estate investment management firm based in California and Texas.

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From a company standpoint, Amazon is obviously a great example of having a ferocious growth mindset stemming from its approach that every day is Day One at the company.
ferocious, growth, mindset
Thursday, 03 September 2020 07:59 AM
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