Balaji & Benedict Evans: When Tech Breaks Industries

Benedict Evans (0:00)

I feel like AI has almost become like the word metaverse, where like you don't know what somebody means when they say it. Could you explain it to another human being? Can you actually kind of shut your eyes and conceptualize, how is it that I'm going to explain what it is that I want this thing to do?

Balaji Srinivasan (0:17)

Blockchains are, in a sense, one of the frontiers of operating system research. Like in the same way like there's operating system like Windows, there's a browser, which is itself an operating system because you can run apps in it, it's got a full programming language.

Benedict Evans (0:30)

Mark Zuckerberg bought Oculus because he thinks this is the next milestone. He didn't buy it to be a games device or to have 100 million people using it, he bought it because he thinks this is the next milestone.

SPEAKER_3 (0:39)

The moment you finally understand a technology is often the moment you should stop paying attention to it. What matters isn't the absolute level of adoption, but the rate of change. We talk about a technology most during the transition, then forget it exists.

Today, that transition is happening simultaneously in AI, crypto, smart glasses and robotics. The conversation about each is at maximum volume, which means the interesting question isn't whether they matter, but what each one actually disrupts and what it leaves standing. Today we're bringing you a conversation from the Network State Podcast. Host Balaji Srinivasan speaks with Benedict Evans, independent technology analyst and one of Tech's most read newsletter authors.

Balaji Srinivasan (1:32)

I'm here with Benedict Evans. We worked together at a16z more than 10 years ago. Benedict is a well-known newsletter author, probably needs no introduction for people watching this. We're here in Singapore. We just came here for an AI conference. You do about one-fourth newsletter, three-fourths conference nowadays. You guys are speaking. That's what brought you out here, right?

Benedict Evans (1:50)

Pretty much, yeah.

Balaji Srinivasan (1:52)

And newsletter is now like 175, something like that you said?

Benedict Evans (1:55)

Yeah, something like that. It wobbles a bit from day to day.

Balaji Srinivasan (1:58)

And it started out, you started as a mobile analyst and you became like a broader tech analyst. Is that the evolution?

Benedict Evans (2:04)

Yeah, that's one way to put it. I mean, I think...

Balaji Srinivasan (2:07)

You're at Orange, is that right?

Benedict Evans (2:08)

A long time ago, yes.

Balaji Srinivasan (2:09)

A long time ago, yes.

Benedict Evans (2:10)

Just when it was all becoming horribly French. There's like, as we were chatting before this, and I said like, the thing in tech is at the point that you understand something is often the point that you should be moving on to pay attention to something else. I started my career in the.com bubble as an equity analyst, and I was covering mobile stocks, and at that time, mobile was kind of dynamic and exciting and sexy and disruptive, and they turned into water companies.

Balaji Srinivasan (2:34)

Into water companies?

Benedict Evans (2:35)

Utilities.

Balaji Srinivasan (2:36)

Oh, utilities, yeah, okay.

Benedict Evans (2:37)

They were going to connect everybody in the world, and then they did, and like, now what? They were like, Mark Andreessen's phrase, they were like, the dog that caught the truck.

Balaji Srinivasan (2:43)

Right.

Benedict Evans (2:44)

And I went and worked in strategy and a bunch of media and telecom things, and yeah, I was analyzing looking at smartphones, because that was suddenly become the center of the industry, and no one understood it. Now, like it happened, time to look for different questions.

Balaji Srinivasan (2:59)

Well, it's funny, because I think when we were overlapping, it was right in the middle of the smartphone dividend, the smartphone explosion, and just to, you know, we actually, there's a few things. One is, the smartphone dividend, that's a useful concept, right? Like, that the rise of a billion smartphones meant that everything that went into them became cheaper, and that enabled VR headsets, that enabled drones, right? All this stuff.

Benedict Evans (3:21)

Yeah, all the components that came out of it. Yeah, so smartphone sales are now, from memory, like one and a quarter, one and a half billion units a year. And all the supply chain from that, all of those components, is then available off the shelf if you want to buy 5,000 of them or 10,000 of them. All the Wi-Fi chips and the batteries and the cameras and all the other bits. And before, if you wanted to put computer into something, you basically need to use PC components. So ATMs and so on are all basically PCs. Like elevators are basically PCs.