Hey👋,
I'm Giacomo

Global minimum corporate tax has finally gone live and it's a big deal!

The minimum 15% rate, now active in the EU, Norway, Switzerland, the UK, and other countries, surpasses the previous lower rates in tax havens like Ireland, where it was 12.5% until recently.

I lived in Ireland for several years and the topic of a possible bubble ready to burst at the first tax rate increase, was a frequent subject among expats.

In fact, Dublin is home to many multinational corporations' EMEA HQs, that employ thousands of European expats. Foreign direct investment is worth a staggering 285% of the country's GDP!

I believe this new rate will change nothing. If anything, it will increase tax revenues and further aid the country's development.

The appeal of Ireland for multinational companies extends way beyond its low corporate taxes:

1. Only English-speaking country in the EU post-Brexit.
2. Proximity to the US, with Dublin being the EU's closest capital by flight time.
3. An exceptionally welcoming culture.
4. This makes Ireland a welcoming home for many European expats/immigrants.
5. Therefore, a wealth of multilingual, skilled talent.
6. A stable political environment.
7. A stable climate (yes it rains all the time, but at least you know and it never changes 😁).
8. Even at 15%, it remains the lowest possible rate, lol :)

Bonus point: With global warming, Ireland will become an amazingly beautiful seaside destination! 😅

I created my first public GPT! Find it here.

It's called "Improve Text" and well, what it does is improving text 😁

I specifically designed it for professional online content like #blog articles or #Linkedin posts.

It uses advanced vocabulary, but it ensures the text is always to the point and easy to read for everyone.

Simply copy and paste a paragraph with no additional prompting to get started!

Oh, and let me know how you like it!

Breaking News: The SEC has finally approved Bitcoin spot ETFs in the US, but is it really a cause for celebration?‍

The Irony

‍The essence of Bitcoin was to sidestep traditional banking and financial systems. Yet now, it's embraced and sold by the world's largest financial institutions.‍

The Reality

The move doesn't symbolise an institutional endorsement of Bitcoin's philosophy. Instead, it represents a simple business and marketing strategy aimed at capitalising on the ongoing craze.‍

The Financials

According to the Financial Times, big players like BlackRock and Greyscale will charge 0.5% and 1.5% fees respectively. Their goal is to generate real US dollar revenue 💵 and upsell other high-margin products to new young clients.‍

The Impact

For Bitcoin believers, this is bad news. The philosophy of Bitcoin as an alternative to traditional finance has essentially failed.

For speculators and Wall Street, this is a win. Bitcoin price will likely go up, while institutions will cash-in large fees in the meantime.‍

The risks

‍Dennis Kelleher, speaking to the Financial Times, said the approval “is a historic mistake that will not only unleash crypto predators on tens of millions of investors and retirees but will also likely undermine financial stability”.

So what's left of Bitcoin other than speculation?

💡 Any thoughts?

We live in a world where social media users and fans believe they know more than industry experts and lawyers, often ignoring facts and legal principles.‍

Here's the situation

Taylor Swift's decision to re-record her first six albums to reclaim the rights to her music has inspired her global fanbase. They are now urging other artists to follow suit.‍

The facts

When discussing "music ownership," we're referring to the rights to the "masters" - the original recordings of songs. In the past, masters were tangible, typically stored as tapes in record label warehouses, making physical ownership clear. Today, these masters exist as digital files, but the concept of ownership remains unchanged.

Recording an album to a professional standard is costly, often amounting to tens of thousands of dollars. Collaborating with top-tier engineers and musicians, and using high-quality equipment doesn't come cheap.

This raises a critical question:

Who pays?

Whoever pays the bill gets ownership of the "masters". This is because the financier aims to recoup their investment - the music industry is not a charity.

Traditionally, record labels have born the cost of album production and promotion, acting like today's VCs in the tech industry.

Taylor Swift's case is unique, as her masters were re-sold to a third party she disapproved of, who refused to sell them back. Her frustration is understandable.

But it doesn't have to be this way: Paul McGuinness, the legendary manager of U2, used to negotiate reduced investment from record labels to retain masters' ownership.

The value of a recording is easy to determine in retrospect. But when a record label invests in a debut album, the financial risk is extremely high, and it's only logical for the label to expect something substantial in return.

It was a pleasure presenting our latest Ai marketing projects to SMG Swiss Marketplace Group last week.

Ai is disrupting almost every industry, but I am a firm believer that marketing is one of the most impacted.

From operational work to data analysis, ChatGPT and Ai in general enhance our work unlocking creativity and making us save hundreds of thousands of euro/francs and countless hours.

But again... this is just the beginning!

Technology has become a commodity.

I've always been under the impression that great brands don't need advertising, as their products or technology alone secure a competitive advantage.

Is it still the case?

Jeff Bezos mentioned in 2009 that advertising was just for “unremarkable” products. 10 years later, Amazon is by far the largest advertiser in the world.

Do they offer an “unremarkable” product, then? May be.

Or more likely, Jeff Bezos was wrong.

I was reading the latest presentation by Benedict Evans when a slide about ad spend by Expedia Group and Booking.com caught my attention.

Despite already being leaders in the travel industry, they spend almost 50% of their revenue on advertising and marketing. How come?

Well, the reality is that their strongest asset is their brand, not their technology!

At the end of the day, they just bundle together someone else's products, (same as Amazon, by the way). Anybody could replicate their platform, in theory.

But what nobody could replicate is their name in the market, both in the consumer and in the B2B space.

How to build a name in the market? marketing & advertising, of course!

With the advent of AI, technology has truly become a commodity. Even very complex tasks are now easily solvable for a relatively low cost. With some exceptions, of course.

Also, technology is evolving at an extremely fast pace. The likelihood that your product will become obsolete next year is high.

So…

➡ ➡ You can no longer rely solely on your product or technology as your value proposition.

Now more than ever, you need to keep fostering your brand!

Will TikTok be banned in the US?

Hint: probably not...

However, something is definitely happening, as Shou Zi Chew, CEO of TikTok, was asked to testify before the US Congress last week.

Who is Shou Zi Chew and why haven't we heard of him before? 🤔

He's a very different type from his Silicon Valley peers. His personality is one of the factors that will prevent the US Congress from banning the short-video app.

Class 1983, he was born and raised in Singapore, of Chinese ancestry like many of his compatriots.

He's always been a high achiever.

At age 12, he managed to get into an elite high-school thanks to his high marks. Not long after, he was put on the officer track of the Singaporean military. He then succeeded in an extreme survival course in Brunei’s jungles, when he had to kill and eat a live quail (not clear whether he actually ate her).

While still being a reservist in the army, he moved to London to study business and went on to work as a banker for Goldman Sachs. After that, he even interned at Facebook, when the company was little more than a promising scale-up.

But the real deal was joining the venture-capital firm DST Global, in the US. He quickly became the go-to person for key investments in China, also thanks to his Mandarin skills.

After investing in Xiaomi Technology, a Chinese smartphone giant, he was asked to join in as CFO and later as director of international business. He stood out for his deep understanding of both Chinese and Western business cultures.

At the time of DST Global, he had the chance to be among the first investors of ByteDance, which later went on to create TikTok.

It is its founder, Zhang Yiming, who personally called Chew to join TikTok as its new CEO in 2021, based in Singapore.

Literally a "hero of two worlds", he's now the connection between the western and Chinese tech industries.

He speaks Mandarin, but he's native in English. He's worked in China, but has a Taiwanese-American wife, met in America. He studied in Britain and worked for Goldman Sachs, the temple of American capitalism.

He now claims that data of American citizens is carefully kept on American and Singaporean soil, shielded from Chinese authorities.

Why would the congress not believe a Goldman alumni?

More importantly, who is brave enough to stop 150mln American citizens from using their favourite app?

TikTok generates significantly less revenue per user than its rivals. I’m not surprised.

It took Facebook years to even start monetising its platform, or make new products like Instagram Stories profitable.

But what is interesting to learn is that video formats in general are harder to monetise.

In 2022, Instagram's worldwide average revenue per user (ARPU) was $22.43, compared to YouTube's $11.49 and TikTok's $3.83.

Even within the same app, video formats, particularly short-form, are struggling.

Mark Zuckerberg, CEO of Meta, recently stated that “the monetisation efficiency of Instagram Reels is much lower than Feed”.

In fact, the CPM (cost per thousand impressions) of ads on Reels is about half that of ads on the news feed.

I can see a couple of reasons for this:

1. Video ad auctions are less competitive.
   Over the past decade, social media platforms have benefited from a long-tail of small businesses that could finally afford to run profitable ad campaigns. Now, this same long-tail is struggling with video ads, as video production costs drive down their ROI.
   It will change soon, thanks to AI video editors or similar tools, but for now the competition remains low.
2. Video content consumption is more passive and drives lower click-through rate.
   This is why social media marketing is about to change forever.
   Social media has shifted from being a social place where our friends are, to a place where we passively entertain ourselves while killing some time.
   Users on TikTok or Reels are not as engaged as those looking at friends’ feed, ready to comment, like (or hate) and send direct messages.

It is clearly the right time to be on Reels and TikTok, while the competition is still low. However, advertisers can’t expect the same direct return they used to get in the old days of the Facebook Feed.

All of this while we wait for the next big-thing in online advertising, which will inevitably involve Ai!

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User growth is not a business model. Netflix learnt it the hard way.

For the first time in 10 years (possibly for the first time ever) its user growth plateaued.

Revenue grew by just a single digit in 2022, for the first time since at least 2018. Net income also decreased for the first time. Q1 2023 followed the same trend, with many YoY metrics in the red.

But Netflix is not alone in this. Most tech companies are in a similar situation.

The market has saturated.

What's happening?

Consumers were spoiled by 15 years of (almost) free internet. Now the party is over. It is time to monetise.

Netflix plans its next phase of profit growth with three main initiatives:

1. Double down on advertising:
   A cheaper ad-supported tier was introduced in 2022. By now it counts 1mln subscribers (out of over 200mln in total), but it's growing fast. The company plans to offer more features and increase the streaming quality of this tier to make it more appealing. Long-live online advertising!
2. Crack down on password sharing:
   Netflix estimates around 100mln free loaders on its platform. Soon, subscribers will pay extra to add new users to their accounts. Ideally, free loaders should be converted to the ad-supported tier.This could be key to further subscribers' growth!
3. Reduce spend on content creation:
   This is the largest expense line at Netflix. In 2022, for the first time, less money was put into content creation than the year before.

Instead of fighting for subscribers, streaming platforms will likely specialise in specific genres of content, to retain and monetise loyal customers and save on content production. User growth will not be on their agenda no more.

This is a turning point in the internet how we know it!

The world's largest sea shipping company is based in Switzerland, one of the few European countries without access to the sea.

It is MSC Mediterranean Shipping Company, based in Geneva and founded by Italian entrepreneur Gianluigi Aponte.

It is now the largest container shipping company in the world in terms of transport capacity, with over 750 boats and 150,000 employees.

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MSC emerged as a surprise winner during the pandemic.

Due to the high demand for electronics and other goods related to lockdowns, the shipping business experienced a peak in activity over the past three years.

Tight supply, caused by covid restrictions, led prices and profits to skyrocket during the same period.

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We don't know much about the numbers of MSC, since it's always been secretive about its financials. However, John D. McCown's report shows that the shipping industry as a whole achieved net (after tax) margins of over 40% in 2022.

This is higher than most tech companies!

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But why Geneva??

As every great story, MSC's starts with a love story.‍

Rafaela Diamant Pinas, a young Swiss girl touring Italy, met Gianluigi Aponte while on a ferry cruising between Naples and Capri in the 60s. Aponte was the captain of the ship.

Rafaela's father was a well-known banker in Geneva. He quickly helped Gianluigi find a new job in finance in the city, and likely lent him the seed money to buy his first vessel. This was a dream Aponte couldn't give up on, despite his new life in mountainous Switzerland.

Gianluigi and Rafaela have owned the company fifty-fifty since then, making them among the top 3 richest people in the country.

The future of the shipping industry appears less rosy as the pandemic peak fades. However, while competitors pursue a strategy of vertical integration, effectively competing with their own clients, MSC is still betting on its core business.

The company plans to make huge investments, including purchasing new ships, improving ports' logistical infrastructure, and even breaking into the cargo aviation sector.

The moral of this story?

We're distracted by the latest technological trends, unicorns, and other mythical creatures, that we often overlook more traditional businesses that made Europe the great place it is today!

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To know more: NZZ.