Subsea cable projects have historically been financed by a consortium of global telecommunications firms but Big Tech has jumped into the fray in the past decade to ensure internet access for its various services, per The Economist:
- GOOGLE invested in 25 cables (and owns 12 outright), with its first sea cable program going back to 2008.
- META invested in 15 cables (owns 1 outright).
- MICROSOFT partly owns 4 cable.
The importance of internet access also means that governments are very involved. There are two main companies laying the cables and their competition for contracts has become a geopolitical flashpoint. One is based in the USA (SubCon) while the other is in China (HMN Tech). HMN was formerly “Huawei Marine Networks” and “Huawei” is — as you news hounds probably remember — the Chinese telecom and networking giant that was slapped with massive sanctions and fines by the US government in recent years.
A recent example of this high-stakes beef is the South East Asia–Middle East–Western Europe 6 (SeaMeWe-6) undersea cable. HMN Tech was set to win the bid for a 12,000 mile project that connects 12 countries between France and Singapore. However, the US government intervened and SubCon won the bid with a $600m proposal (which was more expensive than HMN’s bid of $500m HMN).
The SeaMeWe-6 is an extension of a global system that has already laid 1.4km of underwater internet cables. Of the 540+ cables, one gets cut every three days and the most common causes are shark bites, anchor drops and deep-sea fish trawlers. If you’re into dorky technical stuff, watch this dope subsea repair video.
Even with all the redundancies in 2024, we can’t take access for granted.
Large parts of West and Central Africa has been without cable for the past two weeks after several subsea cables failed.
Meanwhile, remote locations are always at risk. Example: a volcano erupted near Tonga in 2022 and a mudslide damaged the only nearby cable. It took 5 weeks for the cable to be fixed. My internet-addicted brain would have melted after 5 hours of no online access…or I would be lifted to a peaceful state of Nirvana. Who knows? Fortunately, Starlink was able to provide internet access with free terminals (situations like Tonga are a prime example of the usefulness of SpaceX's global satellite internet system).
In 1996, author Neal Stephenson wrote a classic 42,000-word article for Wired magazine on the multi-billion dollar gold rush to lay cable for the internet (“Mother Earth, Mother Board”). Stephenson travelled around the world for a year on the project and delved deep into the history of undersea cables which highlights the technological achievement:
“Wires warp cyberspace in the same way wormholes warp physical space: the two points at opposite ends of a wire are, for informational purposes, the same point, even if they are on opposite sides of the planet. The cyberspace-warping power of wires, therefore, changes the geometry of the world of commerce and politics and ideas that we live in. The financial districts of New York, London, and Tokyo, linked by thousands of wires, are much closer to each other than, say, the Bronx is to Manhattan.
Today this is all quite familiar, but in the 19th century, when the first feeble bits struggled down the first undersea cable joining the Old World to the New, it must have made people's hair stand up on end in more than just the purely electrical sense—it must have seemed supernatural. Perhaps this sort of feeling explains why when Samuel Morse stretched a wire between Washington and Baltimore in 1844, the first message he sent with his code was "What hath God wrought!” […]
“[In the 2nd half of the 1800s] undersea cables, and long-distance communications in general, became the highest of high tech, with many of the same connotations as rocket science or nuclear physics or brain surgery would acquire in later decades.” […]
“[Laying undersea cables] probably looked like it was going to be easy. Insulated telegraph wires strung from pole to pole worked just as one might expect, and so, assuming that watertight insulation could be found, similar wires laid under the ocean should work just as well. The insulation was soon found in the form of gutta-percha. Very long gutta-percha-insulated wires were built. They worked fine when laid out on the factory floor and tested. But when immersed in water they worked poorly, if at all. The problem was that water, unlike air, is an electrical conductor, which is to say that charged particles are free to move around in it. When a pulse of electrons moves down an immersed cable, it repels electrons in the surrounding seawater, creating a positively charged pulse in the water outside. These two charged regions interact with each other in such a way as to smear out the original pulse moving down the wire”
AT&T’s famed research arm — Bell Labs — had to crack physics, chemistry, materials science, electrical engineering and countless other difficult challenges to transport telegraph, voice, images and data over long distances.
It’s honestly a miracle (one that I use everyday to make absolutely useless memes).
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Monster Beverage = Top Stock Since 1994
Monster Beverage has been the top-performing stock in the past 30 years.
What started as a California juice company in the 1930s has now become the second largest energy drink seller in the world, after a company that rhymes with "Bed Pull".
The beverage company launched its first energy drink in the mid-1990s and changed its name from Hansen's Natural to Monster Beverage in 2012 after the energy drink became its top-revenue generator (Monster's positioning relative to Red Bull is very solid: it is priced the same but with twice the liquid volume).
In 2015, Monster entered into a smart partnership with Coca-Cola:
- Coca-Cola acquired a 16.67% stake for $2B
- They exchanged drink portfolios: Monster received Coca-Cola’s energy drinks (Nos, Relentless etc) while Coca-Cola received Monster’s juices (Hansen, Peace Tea etc)
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Monster became the exclusive energy drink sold through Coca-Cola’s global distribution
Per this 9-minute video breakdown from CNBC, Coca-Cola now owns 20% of the ~$60B energy drink company (worth $12B, for a gain of $10B on its initial investment).
A $1,000 investment in Monster in 1994 would be worth ~$2,000,000 today.
Here are the top 5 stock performers over that span (ballpark figures):
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Monster Beverage (+200,509%)
- NVR (+71, 598%)
- Apple (+55, 912%)
- Cooper Companies (+48, 925%)
- Ross Stores (+32, 736%)
While I much prefer sugar-free Red Bull, I have settled for Monster on so many occasions in desperate need of that caffeine hit (damn you Coca-Cola and your distribution monopoly in certain gas station chains).
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Why Asian Business Folk Rely on Alcohol
Speaking of drinking, I used to imbibe regularly for work while living in Vietnam.
Drinking at dinners and bars after work is a commonality in the country and other parts of East Asia (China, South Korea, Japan, Taiwan). This is objectively unhealthy but was always a “thing people did”.
Why is it part of the culture? Alice Evans wrote an interesting piece on how East Asia’s societal structure — which values nuance in communication and avoids confrontation (compared to the West) — leads to regular alcohol consumption for business:
Collective harmony and hierarchy are strongly idealised across East Asia. Communication is thus implicit and indirect. Conflict aversion and emotional suppression make it harder to learn what someone else really thinks. So what’s the solution?
Alcohol reduces people’s inhibitions. This promotes social bonding and information-sharing. As argued in Edward Slingerland’s book “Drunk”, it benefits businesses!
The work norm is unfair to female employees, many of whom understandably opt out of “guy co-workers night out”. Every part of the article seems plausible and it has a lot of interesting tables like this one explaining how different countries deal with confrontation and debate.