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The Creative Monopoly

nytimes.com

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Re: The Creative Monopoly

#11

Post by davemel37 »

This article is backwards. As humans, we crave competition. As Humans we crave to be unique. Same concept, two different ways of saying it.

Both mean, "We want to stand out. Be appreciated and recoginized."

We will always seek ways to stand out. Whether its through one upsmanship, or through differentiation.

We see this in marketing. When you are first in a new category in peoples minds. They consider you the best.

Everyone wants to be considered the best. Its up to you how you get there.

Re: The Creative Monopoly

#14

Post by adgar »

spodek wrote: post #7

"Thiel argues, we often shouldn’t seek to be really good competitors. We should seek to be really good monopolists." A better way to put this is to say that the starting point of competitive strategy is to start with a sustainable competitive advantage. "Competition Demystified" by value investing guru Bruce Greenwald covers this point in its first chapter (available free on Google Books -- http://books.google.com/bo…

> sustainable competitive advantage

I think this is what so many commenters struggle with when it comes to "the bubble" so many of us speak of now. We see so many companies' births and deaths without ever having seen a clear "sustainable competitive advantage" and wonder why these companies existed in the first place.

Re: The Creative Monopoly

#15

Post by ryannielsen »

adgar wrote: post #14
spodek wrote: post #7

"Thiel argues, we often shouldn’t seek to be really good competitors. We should seek to be really good monopolists." A better way to put this is to say that the starting point of competitive strategy is to start with a sustainable competitive advantage. "Competition Demystified" by value investing guru Bruce Greenwald covers this point in its first chapter (available free on Google Books -- http://books.google.com/bo…

> sustainable competitive advantage I think this is what so many commenters struggle with when it comes to "the bubble" so many of us speak of now. We see so many companies' births and deaths without ever having seen a clear "sustainable competitive advantage" and wonder why these companies existed in the first place.

Well, from one perspective, each of these failed companies could have been testing their own "sustainable competitive advantage" thesis. A thesis that turned out to be incorrect. After all, you don't know your sustainable competitive advantage really is in fact sustainable and and a competitive advantage until you win. (e.g. Google. They were just another search company, and one that could have failed like so many others.)

From another perspective, each of these companies is wandering through, as the author puts it, the "wildernesses nobody knows" looking for opportunities and either didn't find one or weren't able to grow that opportunity quickly enough.

Some say we're in a bubble. Others say we aren't. Frankly, I don't give a damn. I just see that there's tons of innovation being funded. Some innovations may be evolutionary, others may be revolutionary. Funny thing is: you often don't know what will be evolutionary or revolutionary until you try.

I'm glad many people are trying.

Re: The Creative Monopoly

#16

Post by jordanb »

knowtheory wrote: post #2

What an awful way to phrase a simple concept. Rather than compete in someone else's market, create your own market. Manufacture, or identify a need that has not been met, and, having been first mover, use that to build an insurmountable lead over any possible competitors. Whether it's mint toothpaste, or portable digital music players, this has been done for generations. "Creative Monopoly" is a bizarre term for it.

Yeah, and economists have had a better word for it since 1933: http://en.wikipedia.org/wiki/Product_differentiation

Re: The Creative Monopoly

#17

Post by maukdaddy »

What he's talking about has already been written about and is taught in many MBA programs.

Blue Ocean Strategy

http://en.wikipedia.org/wiki/Blue_Ocean_Strategy

Edit for the tl;dr crowd:

The blue ocean strategy is about creating your own market/niche/space in an new or uncontested area (blue ocean) vs. competing directly with established players in an existing market (red ocean).

The metaphor is the red ocean is full of blood from the sharks fighting over the same profits/market share while the blue ocean is open water full of opportunity.

Re: The Creative Monopoly

#18

Post by cageface »

knowtheory wrote: post #2

What an awful way to phrase a simple concept. Rather than compete in someone else's market, create your own market. Manufacture, or identify a need that has not been met, and, having been first mover, use that to build an insurmountable lead over any possible competitors. Whether it's mint toothpaste, or portable digital music players, this has been done for generations. "Creative Monopoly" is a bizarre term for it.

His point is a little broader because he also questions the shared assumptions that underly our educational systems.

I often hear that American and European schools are produce better students than Asian schools because they place less emphasis on rote learning and more on independent thinking but my impression is that's much less true now than it might have been 20 years ago.

Re: The Creative Monopoly

#19

Post by adgar »

ryannielsen wrote: post #15
adgar wrote: post #14

Earlier quoted context omitted.

> sustainable competitive advantage I think this is what so many commenters struggle with when it comes to "the bubble" so many of us speak of now. We see so many companies' births and deaths without ever having seen a clear "sustainable competitive advantage" and wonder why these companies existed in the first place.

Well, from one perspective, each of these failed companies could have been testing their own "sustainable competitive advantage" thesis. A thesis that turned out to be incorrect. After all, you don't know your sustainable competitive advantage really is in fact sustainable and and a competitive advantage until you win. (e.g. Google. They were just another search company, and one that could have failed like so many ot…

I'm sorry, I feel I came across as making a broader point than I was. Probably because of the "birth and death" bit which really isn't what I meant to focus on.

I'm talking about a few specific examples that are astonishingly easy to clone yet are being assigned enormous value. Groupon is what I was thinking of especially, but I didn't want to "name names"... which is probably why I came across as making a broad point. Dropbox is now being challenged in this way, and many have been talking a lot about their sustainable competitive advantage since the whole Steve Jobs "feature" quote. Instagram.

I wasn't making a direct comment about tech startups in general, many of which are carving out real markets they want to crush.

Re: The Creative Monopoly

#20

Post by nadam »

I had the luck to understand this very early (being 17 years old). I've gone to math and physics competitions, and while I had good results I could see that there are the top level guys who are above my level: there is no point in directly competing with them. So I thought I should do something different and I became a programmer. Nowadays I also see this in programming. There are markets where competition amongst smart people is too high. Too much smart people want to work for the most famous companies, too much smart people create programming languages and frameworks, too much smart people want to start their indie game studios, too much extremely smart people wanted to win the Netflix prize... While I love these topics, so I sometimes compete in these very competitive markets, I know that it is/(would be) wiser to do someting different where competition/(expected value) ratio is not so high.
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