Tuesday, January 11, 2005

Paul Graham - Value and Productivity in the New Economy

internet :: techology :: economics

In Paul Graham's essay What the Bubble Got
, he makes mention of several things that many people are
discussing all over the net in technological, political and economic
circles. Of particular interest are his discussions on value and
productivity. Of particular interest to me is how these insights mesh
with the visions that others are having of economics, business,
management and society in the coming decades.

The following bears greater reflection:

Recognizing an important trend turns out to be easier than figuring out
how to profit from it. The mistake investors always seem to make is to
take the trend too literally. Since the Internet was the big new thing,
investors supposed that the more Internettish the company, the better.

In fact most of the money to be made from big trends is made
indirectly. It was not the railroads themselves that made the most
money during the railroad boom, but the companies on either side, like
Carnegie's steelworks, which made the rails, and Standard Oil, which
used railroads to get oil to the East Coast, where it could be shipped
to Europe.

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