Distribution and Transaction Costs
The key economic change introduced by the Internet is the effective elimination of marginal distribution and transaction costs.
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Facebook is in trouble — again — for Russian ads about the election; figuring out how to deal with them requires first understanding that Facebook, like Google, is a Super-Aggregator. It faces zero transaction costs…
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The history of technology is of two distinct eras: information technology enhanced existing business. The Internet revolution is destroying them.
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Clayton Christensen claims that Uber is not disruptive, and he’s exactly right. In fact, disruption theory often doesn’t make sense when it comes to understanding how companies succeed in the age of the Internet.
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Microsoft and Software Survival
Microsoft got hammered on Wall Street for capacity allocation decisions that were the right ones: the software that wins will use AI to usurp other software.
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AI and the Human Condition
AI might replace all of the jobs; that’s only a problem if you think that humans will care, but if they care, they will create new jobs.
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Netflix and the Hollywood End Game
Netflix is driving the Hollywood end game, likely confident it can increase the value of IP, and fend off YouTube.
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Robotaxis and Suburbia
Robotaxis are poised to further close the delta between suburbs and the city; the city (and Uber) might never recover.
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American Disruption
A new take on Trump’s tariffs, including using a disruption lens to understand the U.S.’s manufacturing problem, and why a better plan would leverage demand, not kill it.
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The OpenAI Critique, Comparative Advantage and Infrastructure, Aggregation Theory and Cheap AI
Further grappling with DeepSeek implications, including the lack of focus in U.S. tech companies, the problem with comparative advantage, and the possibility of zero marginal cost AI.
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Rapidus, The End of Economic Rationality, AI Disruption
Rapidus, Japan’s new foundry on the leading edge, doesn’t make economic sense; it is one of many examples in that regard, as the world enters a new age of uncertainty and AI.
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A Chance to Build
Silicon Valley has always been deeply integrated with Asia; Trump’s attempt to change trade could hurt Silicon Valley more than expected, and also present opportunities to build something new.