Ever since high school I have been fascinated with technology and the potential of the internet, but I could never put that knowledge to use when it came to personal financial gain. I'd poke my dad, "Hey, Buy Apple!, Buy Google!, Buy Tesla!". Anything over $30 per share seemed risky to throw a few thousand at, and I had no more than $3000 to my name. Even with minimal knowledge of how the stock market worked, the price of these shares rose and I continued to miss out.
Now that I have a steady income and the 2012 JOBS Act has paved the way for companies like Twitter and Box to go public, things have changed. My investment in Twitter and other technology stocks has proved a 21% gain in just the first two months. Although neutrul on Box Inc, emerging players like Twilio and investing group GSV Capital have caught my eye. There is something all these tech companies share in common, they have a growing platform.
When I say platform, I'm referring to the open source software offering that companies have learned to scale and pivot for high capability. Just how apps like Uber utilizes Apple Maps or Instagram sits on Facebook's platform, I'm gung ho on investing in the technology upon which new opportunity relies on. The open nature of a company's platform can allow it to grow quickly as new apps are built upon it and demand grows for more features. It is incredible how years ago the internet is what flipped the booming technology business, but the open offerings of Google, Twitter, Facebook, and more are now just as important. Twilio is shaping up to be the next major platform player, and fortunately this is just the beginning.
The winning formula of these large platforms looks something like this, and note not all of these companies fit into the social media matrix:
Software is:
- Open
- Scalable
- Swift to change upon needs of user
- Secure
- Owns a social or front-facing offering
The correlation of companies with emerging platforms and their stock price is striking. It is not to say a company built on one of these platforms is a bad stock, but to highlight why the underlying technology may always be king. Vision of these companies is what continues to impress me year after year. Their flexibility and ability to adapt to the needs of their users, clients, and constantly changing internet landscape keeps them successful.
Happy Trading.
