Benedict Evans wants you to know that Google is a tiny company

Listen to his sage words.
Listen to his sage words.
Image: Andreessen Horowitz
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Benedict Evans is not your typical Silicon Valley figure. Looking something like Dustin Hoffman from The Graduate wearing Harry Potter’s glasses and speaking with an English public school lisp, Evans talks so rapidly he can often cover both sides of an argument within one extended, multi-clause sentence.

A formerly little known telecom analyst and consultant who joined VC-firm-of-the-moment Andreessen Horowitz, or a16z as everyone calls it, about a year ago, no one has done more to articulate the new reality of mobile computing and the enormity of its implications for the growth of technology driven businesses than he.

Where earlier soothsayers made their arguments in books, articles, newspaper columns, television appearances or investment bank research, Evans has been most effective on Twitter, using a16z’s podcasting platform, and in his growing weekly email newsletter—all three channels owning more than a little of their popularity and effectiveness to same smartphone-led transformation that Evans articulates to the rest of us—that has an open rate that is an astonishing three times the average.

That open rate is a function of the broad curiosity among readers in a wide range of industries who feel themselves, their jobs, and their industries being sucked into the mobile vortex. “It always surprises me how many normal people read Benedict’s blog,” says Frank Chen, the a16z partner tasked with running Investing and Research who hired Evans to help articulate the firm’s views to the broader world. “It’s not just the nerds of Silicon Valley.”

Evans’s newsletter (archive here), blog and Twitter feed feature an endless stream of charts. “Shock and awe charts,” Chen calls them. “You put Benedict on anything and insight will come out—mostly in chart form.”

Those charts touch on a variety of topics ranging from why Amazon makes no profits—its somebody’s job to manage their cash flow to zero profit—to WhatsApp versus SMS text usage to Apple’s quarterly numbers. But what really brings the civilians in, and keeps them coming back again and again, is the running commentary on not on mobile or technology but how the world is being permeated by mobile.

Evans’s most momentous ideas were summed up in a presentation and slide deck. The presentation is called “Mobile Is Eating the World,” an obvious play on Marc Andreessen’s now-famous dictum that software is eating the world.

But Evans made that joke before he joined a16z. The first version of “Mobile Is Eating the World“ has been viewed on Slide Share a good 400,000 times. Evans tightened the deck and updated the charts for a16z’s own Tech Summit conference, the Wall Street Journal’s WSJD Conference and Bloomberg’s The Year Ahead conference.

The presentation, “Mobile eats the world,” is succinct (13 minutes), and worth devoting a quarter hour to viewing. But to boil it down even further for you, Evans makes two big world-view shattering points: 1) the digital processing power—the number of chips multiplied by the number of transistors on those chips—abroad in the world today is several orders of magnitude greater than during the pre-Web era of computing. 2) The ubiquity of technology—robust processing power in the compact, individualized-but-always-connected form of a phone—has made technology no longer a separate industry but an integral element of every industry.

The first implication of Evans’s point of view—which he sometimes expresses as ‘time for new questions’—is that monster valuations of the so-called unicorns can no longer be seen as the sign of a bubble. If you were to simply swivel your point of view upon Evans’s axis—from computing’s past to mobile’s future—you would see the looming magnitude of inserting software (via smartphones, now, and wearable sensors and controls, later) into nearly every human endeavor.

Charts may be the way Evans presents his ideas but Twitter has been his preferred mode of delivery. On any given tech subject, Evans’s Twitter feed is a steady beat of upending aperçus. Take these recent randomly chosen tweets that appeared just after the news broke that Apple might be working on a car-related project of some size.

Previously, Evans surmised that Apple’s car-focused project might be more oriented toward Apple’s providing dashboards and tech-integrating equipment to car manufacturers. Which is a trenchant Evansism to begin with. But then folks started speculating that Apple would use its massive cash hoard to buy Tesla “within 18 months.”

Evans is funny, challenging and even gnostic on the messaging service, but never casual. He takes Twitter seriously.

“Twitter is a global networking platform that never ends,” Evans says. “If you remember being someone very junior at an industry event, you go and stand at the edge of a circle of important people and if you could think of something interesting to say, you’d say it. If not, you could just stand and listen.”

Twitter is what got him from the tech hinterlands to the heart of the heart of the new economy. Evans’s career began as an investment banking analyst in London during the twilight of the dotcom era. From there he bounced around a series of corporate jobs doing strategy and developing an expertise on mobile. He wrote a lot of corporate research reports.

“The thing about Twitter is you can just stand there for six months,” he explains. “I don’t think I consciously sought out people from Andreessen Horowitz to follow me but by the time I came out to San Francisco to ask for a job, quite a lot of them did.

“There were a bunch of twitter groupies at the firm,” Frank Chen confirms, “even before we reached out to him.”

The folks at a16z were following him. And they were talking about his tweets and the charts he attached too. “We were amazed about how much insight he could glean sitting all the way out there, very far from Silicon Valley, without a lot of special access to what was happening inside companies.”

The VCs could see what he was doing—sifting through public filings about companies, pulling out nuggets, then smelting that raw ore into gleaming rivers of molten . . . charts. That gave Chen, who Marc Andreessen charged with the simple task of “knowing everything,” an idea.

“From the outside in, he was able to tell the world a lot of what was happening,” Chen says. “What if we could give that guy a fly-on-the-wall seat of the most interesting conversations happening in Silicon Valley. What would happen then?”

“That’s essentially the experiment we’re running,” Chen declares. Like many firms, a16z is obsessive about recording the information the firm sees collectively on a daily basis. (“Gee what did company x tell us when they were raising their series A?” Chen says by way of example.) Sand Hill Road is a hive of endless conversation. a16z is capturing the data in those conversations, inscribing it in a searchable archive.

“We have that and we can find it,” Chen says. “We’re constantly putting data points together to see the trends and that we’re explaining it to ourselves and the world. So we can create the narrative of how the future will unfold. Benedict is a key part of that.”

So what does Benedict Evans see? “Technology has outgrown the tech industry,’ he says. “You’re going from companies that sell technology to companies that are using technology to build entirely new businesses.” Another way to think about it, and this is one of Evans’s central skills—the illuminating analogy—is to think about McDonald’s or Walmart as corporations that were not trucking companies but would not have been possible without the growth and sophistication of the logistics and trucking industries.

In that sense, Uber is not a technology company. Neither is Amazon. Although there remains a great deal of work to be done on the tech side, the future, massive 10-bagger businesses that a16z will invest in won’t be technology companies either.

In the middle of this, Evans is trying to reorient people’s thinking from “Hey, Apple sold a lot of phones this quarter” to understanding that “you’ve gone from middle class families having a computer to a farmer in rural Myanmar having” a smartphone that’s just as powerful—more so—than a computer.

As successful as the internet is as an industry, it is a speck in relation to the rest of the world. Chen and the folks at a16z recognize that mobile is a market ten times bigger than the internet. But Evans is the one who can put that into real numbers. “The revenue of the mobile telecom industry is $1.2 trillion,” Evans reels off. “And the revenue of all of online advertising is about $120 billion.”

Turning the tech industry’s attention toward the next opportunities requires putting a dent in the Valley’s self-importance. “People are running around saying Google is going to build a telecom business,” Evans says. “They don’t understand that annual mobile CapEx is about $220 billion a year. In that context, Google is small company.”