in which i get too snarky by half on the web

Last night I got up nervous about my interview for yet another Kauffman Fellow position, this time up in Canada.

To kill some time I cleaned out my rss reader and caught an interesting post by Fred Wilson here, regarding a rather poor (I believe) HBS post here.

I sleepily banged out a snarky message regarding what I thought of the HBS posting and posted it to twitter. It read:

apologies to @fredwilson but does anyone understand the economics of this post? http://tinyurl.com/333y9c seems naive, lacking perspective

By which I was referring to the HBS post. I think that got lost because when I arrived in Toronto I got these tweets:

@jandersen the way I use my blog is to 'think outloud' and have other correct me. It works like a charm.
@jandersen the post may be naive but the comments are great

Whoops. That wasn't what I meant. But at least someone was listening.

What I actually think is that Fred pulls out the only salient points in the HBS post and draws out an interesting forward looking thesis. I'm just not clear on what in the HBS article warrants all that attention. I'm of the opinion that the post isn't novel or particularly correct.

It's not novel in that its essentially a restatement of creative destruction. Things work until profits get competed away and you exist because you make just enough to exceed your liquidation value. It's a common phenomena that has nothing to with creating competitive advantage and everything to do with losing it. The industries that Umair Haque mentions are very mature industries that have undergone economically predictable consolidation and margin reduction phases that have nothing to do with their strategic choices and everything to do with competitive entry.

It's not correct because there's almost nothing you could do over a 100 year period to maintain the sort of margins that avoid the situation he's describing. It's inevitable. You don't have IP protection, other industries are churning to create entrant opportunities, and, frankly, its far too long of a timespan for anyone to care about anyway.

It's entirely possible that technology is speeding things up a bit, but even so, I'm not sure that it's the same effect.

In a nutshell, Fred's right, there's something disruptive going on and there's very likely to be some interesting investment theses there, but it seems to me to be a natural business cycle disruption, and not a new movement. This seems like its going to work out a lot like the oil shock effects in the very early 80's begetting many numerous startups, and it's up to someone to make the next Staples that will cater to all of their needs.

Also, for the record, Fred's commenters are smart. No doubt.