Sometimes, you have to take a step back to leap forward. Over the past couple of years, Meta, Amazon, Block and Shopify are among the growth companies to have made efficiency cuts following the pandemic. Gary Robinson, an investor in Baillie Gifford’s US Equity Team, says that’s made them more agile and resilient – qualities that will let them take advantage of artificial intelligence and other opportunities to drive long-term growth.
Background:
Gary Robinson is joint manager of the Baillie Gifford US Growth Trust, a manager of the American Fund and a partner in our firm. In this episode of Short Briefings on Long Term Thinking, he explores how four leading internet-focused firms have streamlined their operations and reallocated resources to become more adaptable during a period of rapid change.
Robinson draws a parallel with companies that made cutbacks after the global financial crisis to suggest that the markets may have underestimated how much growth can be unlocked by leaders taking a hard look at their firm’s spending, organisational structure and business priorities.
Robinson suggests that recent efficiency drives will help Shopify, Meta and Amazon pursue AI-related opportunities that could meaningfully increase their earnings. And at Block, efforts to bring two products closer together could help the firm challenge Visa, Mastercard and American Express.
Resources:
Behind The Tech: Tobi Lütke: CEO and Founder, Shopify
Dwarkesh Podcast: Mark Zuckerberg – Llama 3, Open Sourcing $10b Models & Caesar Augustus
Bent Flyvberg: How Big Things Get Done
Cyril Northcote Parkinson: Parkinson’s Law, and Other Studies in Administration
More from Gary Robinson:
Lessons from evolutionary biology
Why companies should embrace chaos
Companies mentioned include:
Timecodes:
00:00 Introduction
01:40 A background in biochemistry
02:55 The appeal of American companies
03:30 Parallels with the global financial crisis
04:40 Post-Covid efficiency efforts
06:25 Addressing overhiring and patched-together processes
07:40 Future-proofed businesses
08:00 The potential of AI
08:10 Shopify and the distraction of side quests
10:45 Shopify’s Sidekick assistant
12:50 Engineering Shopify’s internal operations
14:20 The authority of founder-leaders
16:00 Meta’s ‘year of efficiency’
18:00 How AI can drive further growth at Facebook and Instagram
20:10 Business chatbots on WhatsApp and Messenger
21:15 Investing in Block
22:30 Capping employee numbers without compromising growth
24:40 Square and Cash
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