Silicon Valley is a blind search algorithm for novel scaling advantages from digitisation.
These advantages exist for mass retail. The medium-sized businesses who tried to compete with Walmart and Amazon had to adapt fast or fail. These advantages do not (EDIT: have not been shown to) exist for commercial real estate; WeWork was a dud. Most American commerce is, and should be, in the hands of these medium-sized businesses, if for nothing else than resilience and local optimisation.
My worry is the advantage of centralising customer data is too general. That lets a single entity exert broad scaling advantage, which is scary and inefficient. I increasingly think this should be a measure for antitrust enforcement: does a company possess an edge that gives it a competitive advantage in almost any market it tries to compete in. If so, it’s an economic nerve bundle and at the very least needs to be regulated.
Softbank raised a lot of money off early WeWork hype. The management fees on that cash alone will offset any loss WeWork can ever make. And it looks like WeWork will now turn around with spac $ and restructuring. They played the long game and did it well.
These advantages exist for mass retail. The medium-sized businesses who tried to compete with Walmart and Amazon had to adapt fast or fail. These advantages do not (EDIT: have not been shown to) exist for commercial real estate; WeWork was a dud. Most American commerce is, and should be, in the hands of these medium-sized businesses, if for nothing else than resilience and local optimisation.
My worry is the advantage of centralising customer data is too general. That lets a single entity exert broad scaling advantage, which is scary and inefficient. I increasingly think this should be a measure for antitrust enforcement: does a company possess an edge that gives it a competitive advantage in almost any market it tries to compete in. If so, it’s an economic nerve bundle and at the very least needs to be regulated.