A ‘Next-10-Years’ Disruption Portfolio — The Digital Disruption

The Internet has a rep as being the greatest digital disruption ever.

But that title should go to something that happened a lot earlier, in 1959.

Tuesday, 24 March 1959, to be exact.

On that day, the Institute of Radio Engineers held its annual trade show in the New York Coliseum.

Texas Instruments, one of the US’ biggest electronics firms, introduced a remarkable new device. It had just been patented before the big public launch.

US patent #3,138,743.

A seven-digit number that would alter everything.

US patent #3,138,743 would rock the world on its axis as profoundly as any invention since the printing press.

Patent #3,138,743 was the solid integrated circuit.

Or, as it was later called, the microchip.

Almost overnight it was a technology that, in its inventor’s words, ‘reduced the cost of electronic functions by a million-to-one.

Without this moment, you wouldn’t be reading this on a computer or mobile device right now.

Your alarm clock, your washing machine, your TV, your car (provided it’s less than 20 years old)…

…None of it would exist without US patent #3,138,743.

At the time though, no one cared about it.

Remember…this was a time when Silicon Valley was still called the Santa Clara Valley. A sleepy place with a few orchards and nothing much else…

But the first ever digital disruption changed everything

You don’t need me to outline how the world was forever altered by the microchip.

Or the wealth that went to the people who saw the power of this trend early on. Before almost everyone else.

In the 1950s, computers were already a big deal. The technology had actually been in development for five decades.

Computers were making big strides in taking great amounts of data and making calculations. Far faster and more accurate than any human could.

But the trajectory to where we are now?

A world COMPLETELY RULED by mass electronics?

Well, that was very far from a done deal.

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Here’s what the President of IBM, Thomas Watson, had to say in 1943:

I think there is a world market for maybe five computers.

After all, when IBM’s Thomas Watson said ‘computer’, he meant ‘vacuum tube-powered adding machine that’s as big as a house.’

It’s fair to say that few people ever wanted one of those, regardless of the size of their desk.

So, we had the computing megatrend.

We knew it was useful.

But didn’t imagine how useful.

Elsewhere, a newer trend was developing.

The trend in transistors.

In 1947 at Bell Laboratories, the first transistor was demonstrated.


The First Transistor Demonstrated

Source: Wired magazine

[Click to open in a new window]

Circuits based on individual transistors became too large and too difficult to assemble.

There were simply too many electronic components to deal with.

To make the circuits even faster, you needed to pack the transistors closer and closer together.

If only that could be done…

BOOM!

The first great digital disruption of
1959 came with the invention of the microchip

A single chip consisting of the equivalent of many transistors.

Every two years the power and speed of these chips doubled. A feature noted in 1965 by Gordon Moore — Moore’s Law.

Moore estimated this effect would taper out by 1975 as you couldn’t fit any more information on the chips.

In fact, it kept on going at this rate till around 2012.

An example of truly exponential growth.

The digital disruption of microchips and computers created the consumer electronics boom.

A boom that’s now the foundation of your everyday life.

At the time this boom gave birth to some absolute, long-lasting behemoths.

Think IBM, Intel, Microsoft, General Electric, Apple…

The early investors in those companies made gains to rival anything seen in cryptocurrency markets today.

And I believe there is at least the potential for those astronomical heights with a THIRD great digital disruption that has only just gotten underway.

First there were microchips. Then the Internet.

Now this…

Suffice to say: these disruptions don’t come along often.

But one is here.

Few people see it.

But it’s unstoppable. The ramifications will last decades.

And here’s what’s got us really interested here at Port Phillip Publishing.

There will of course be new ‘legacy companies of tomorrow’ doing the work and laying the groundwork to ride this disruption right now.

Some will, inevitably, burst forth and then disappear. That’s how these disruptions work.

But some of these companies will also likely rise to become new household names. And quickly. Possibly within the next 10 years.

Who are these companies? Where are they operating? Is it even possible to identify them?

And if it is possible, how do you put yourself in the running to own a new rising generation of legacy stocks?

Well, stay tuned to this station, reader.

Later this week there will be new project announcement centring around this third digital disruption.

More later this week…

Cheers,

James Woodburn Signature

James Woodburn,
Group Publisher, The Rum Rebellion

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