Google, Private Credit, Moon
Google getting competitive
I’ve wondered for years why Google didn’t continue to add basic features to their most popular products like Google Docs, Calendar or Chat systems. It could be to avoid feature bloat or to focus only on the highest-priority opportunities. It’s not like they didn’t have the capital or the talent to add features. Still, they ignored particular low-hanging fruit, allowing niche software companies to pursue a specific market.
Calend.ly is a great example. They bring in over $100m in annual revenue by providing a simple scheduling link function that connects to their calendar, often Google’s. Google finally released a scheduling tool that effectively replaces all but the most advanced Calend.ly features.
I’ve always assumed that Google kept a low profile by not building obvious and easily competitive tools to take the market share from Slack, various CRM companies, MailChimp, Grammarly, etc. Google is currently on trial specifically for search-related anti-competitive practices. With the pressure to continuously grow earnings in a stressful economic environment, Google may not be so friendly to its smaller neighbors.
Apple seems to have no problem continuously adding niche features. A dive computer watch typically costs a few hundred dollars, but the latest Apple watch now also functions as a dive watch. That doesn’t kill the existing dive watch market entirely, but it’s not good for the incumbents.
Private credit milestones
The largest-ever private credit loan was issued this summer. Oak Hill Advisors led a $5.3 billion loan to Finastra, a Vista Equity Partners portfolio company. Most (75%) private non-bank loans are made to private equity backed companies. The idea is that private equity owned businesses are safer thanks to sophistication and owner incentives.
Oaktree is in the process of raising an $18 billion private credit fund, the largest ever. Oaktree is owned by Brookfield, which manages roughly $600b. Some interesting issues will play out in the debt markets as debt rolls over. Loans maturing next year initially financed at 7% must now refinance at rates closer to 12%. 12% is an excellent yield for investors. Companies that come up for refinancing can pay the new 12% rate or potentially face defaulting and bankruptcy.
The last moon race introduced many new technological advancements like GPS, solar cells, camera technology, water filtration, materials science, new telecommunications technology, and various defense technologies.
The motivations for a new space race range from national pride to scientific curiosity and will almost certainly bring another series of breakthroughs. A few contemporary examples include LiDAR improvements, autonomous driving applications, satellite-based climate and supply chain monitoring, miniaturized sensors, in-orbit manufacturing and, of course, reusable rockets. China, Japan, South Korea, Israel, Russia and the US have various plans to land objects on the moon.
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