Right now the Internet is our greatest weapon. Look no further than the TurboCASH project for an example. Our competititors are public listed companies that employ hundreds. We are no more than a loose collection of users, developers and consultants, yet we are able to do what no other Accounting Software company is able to do - deliver regularly and instantly to over 80 simultaneous markets, and to do it with a quality and price that defies logic. Right now they are reviewing their personnel requirements downwards, we are looking for new markets and applications. This is Creative Destruction.
You can be part of this process. If you are running TurboCASH you are halfway there. Members of the TurboCASH communtiy can help you connect your TurboCASH Data to the Web in an integrated business offering.
Amazon.com has produced yet another record holiday season. But it's Paul Kedrosky who discerns the significance:
The right way to think about these figures is in
Schumpeterian terms: With retail sales down across the board, whose
businesses are being destroyed here, and what is the future of physical
retail? Amazon is merely goosing this process along, of course, and may
not even end up being a survivor.
Such is the nature of business: some people lose while others win.
It's not exactly a zero-sum game, but it can sure feel that way at
times.
While the Web lobotomizes traditional retail, it's doing the same to software: open source, SaaS, and Web 2.0. I've been complaining lately about Web 2.0's effects on the media industry, but my concerns are probably overblown...in the long run.
The common denominator in all this creative destruction is the
Web. It's not source code, data, or really anything else. When you
analyze open source, Web 2.0, Amazon, etc., the real game-changer is
the ease of access and distribution via the Web. Everything else is
largely frosting.
What's the one big thing that Microsoft struggles to replicate? Not
data lock-in. It has had that in spades with Microsoft Office file
formats. Ditto with the positive (for Microsoft) network effects
deriving from everyone using its tools/applications. Heck, Microsoft
even arguably has some of the Web 2.0 benefits of self-improving
applications as more and more people use its software, reporting
crashes, bugs, etc.
But what Microsoft and the 1.0 world don't have is free distribution, free access. That
is the thing that is roiling old-world businesses and replacing them
with new-world businesses, ones that, for the most part, still haven't
figured out how to make much money--with exceptions such as Google,
Amazon, eBay, etc.
But if you take a close look at these companies, you notice that
while they absolutely do display some of the hallmarks of the 2.0
world, their money comes in distinctively 1.0 ways: selling goods for
lower cost, higher volumes, and at greater efficiencies--efficiencies
enabled by effective use of the Web for cheap access and distribution.
Going forward, I think we're going to see more of the same:
open-source companies using the Web to efficiently seed the market and
distribute software, but with largely traditional 1.0 value on the
other end of the phone. SaaS providers doing the same, but providing
even greater 1.0 lock-in via centralized distribution over the Web. Web
services companies using the Internet to aggregate and orchestrate
content but ultimately paying or otherwise centralizing the best
authors (Wikipedia, anyone?).
The Web has changed the economics of business, just not as
completely as we had assumed. It has a dramatic effect on the price of
distribution and customer discovery. As for actually delivering the
goods, well, that's still mostly a 1.0 affair, which is a testament to
the model's power. It can borrow from the Web while still monetizing
off the Web.
Creative Destruction is the juice that drives the free market. By adopting new technologies, we are able to produce and deliver using alternatives that out compete the older heavier industries. It is the way that small business rises up and takes away from the bigger less flexible competitors. In recent memory there has never been a better time.
