this post was submitted on 07 Jul 2023
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It's hard to ethically compete with those who break the law.
Not really. Do you have any idea the margins they have, and how much of those cover what will end up being unnecessary overhead in about two years?
Do you think companies trying to appease quarterly focused investors are going to make wise long term competitive decisions?
Do you think companies focused on maximizing net revenue for executives and shareholders are going to be more competitive to shoppers than ones that pass on savings? Do you think they'll be more attractive to suppliers than ones that pass on revenue?
Thin intermediaries are going to be much more competitive as transactional costs decrease. The reasons why the other has historically been more advantageous is predicated on factors that are quickly changing.
I often see lay people online offer up an almost learned helplessness worship of corporations and executives as if some powerful and majestic creatures like they are dragons from fantasy. And having consulted for many of them, there's way more ineptitude than you'd realize, it's just insulated within high transactional costs in operations and marketing (and why I'm recommending the essay from nearly a century ago which effectively won its author the Nobel in economics outlining the direct relationship between those costs and the need for large corporations).
What do you mean by the transactional cost is not zero yet? The literal price of a bank transfer in my country is already zero (and near-instanteneous). And you can initiate one with a QR code or text message, both of which are very common.
But people still primarily go to aggregators for food delivery. Why? Because network effect: 80% of restaurants are there, so if you're not 100% sure where you want to buy you're food, you go there. Even if that ends up being 20% more expensive than going to www.websiteofrestaurant.com
Transactional costs in the 1930s Nobel recognized paper is different from a bank fee.
It's things like searching for where to buy food from or finding an employee or training them up, etc.
I see, thanks for the explainer.
So what you are saying is some software developer needs to make a slightly different copy of all these food apps that passes the money to the restaurant and the driver while only keeping a fair amount for themselves rather than ripping off everybody along the way to pay the shareholders.
Pretty much. Especially if by "some software developer" you mean "multiple layers of coding AI leveraging more generalized open source projects serving as a foundation for more tailored domain specific software."
Is there a name for that way of thinking?