# Sunday, 11 May 2008

About 13 years ago, Microsoft ruled the Earth. Windows 95 shipped to much fanfare and people were talking about a "monopoly" and how nobody could remove Microsoft from their top position- ever. Then came Netscape and the Internet, then the .com boom and then Google. Now everyone counts Microsoft out. (Mary Jo Foley and I don't agree, but that is a topic for another day.)

There was a time when GM ruled the Earth. Their market share was so dominate we could not envision a world without them. Their profits were larger than most European countries' GDP. First came the Japanese, then the Koreans (and soon the Chinese will come.) But the real death kill was the environment. Now everyone (including non-car owner me!) wants a Tesla. Now everyone counts GM out and they are probably right to do so. They will survive but struggle for relevance.

There was a time when AT&T ruled the Earth. They even had a real monopoly, but I am talking about post monopoly. They were big and had infrastructure and controlled a large portion of the long distance market. Then came Voice Over IP. Vonage was the early trend setter, then cable/fiber companies, then Skype. People keep asking me what my "work" or "home" phone number is and I say either call my cell or Skype me since I don't pay long distance or have a land line. Companies like VOIPo are just killing AT&T and other telcos. (Congratz to VOIPo for hiring such a smart CTO!) The telcos are now irrelevant. 

It has long been argued that this is all good. It is "Creative Destruction"  or the process of something new killing something old. The term was coined by Joseph Schumpeter in his 1942 book called Capitalism, Socialism and Democracy to be a "process of industrial mutation that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one."

The role technology plays in the process of creative destruction is simply amazing. I can list ten more examples but you get the point. I watch with sheer excitement when Microsoft feels that it has to "bet the farm" on some new technology or Google has to buy YouTube to stay relevant, or how they all bow to the Facebook alter (and Facebook will be made irrelevant by someone new just like Friendster and MySpace before it.) I love how 13 years go Yahoo was predicted to take over the world (along with Excite and others that have gone away) and now it is struggling for survival. My old employer Zagat is struggling to stay alive (I only half like that with my unexpired stock options still on the line <g>).

Technology is the most powerful creative destruction force and will continue to be so. The reason why I am not on the Al Gore bandwagon (despite my insistence of taking the subway everywhere) is because I have faith that the problems we are facing here in 2008 of the environment or health care will be solved with technology, motivated by the powerful market force of creative destruction. We now have a Tesla, the sexiest car on the planet. We now have targeted chemo-therapy based on your DNA, making it far more effective. What is next? I don't know but I sure what to watch it all play out.

Monday, 12 May 2008 06:59:12 (Eastern Daylight Time, UTC-04:00)
I mostly agree with you Steve, with one exception. Though technology is rapidly changing, turning former threats into current curiosities --remember smallpox?, the fact is that the planet has its limits, and a geometrically increasing human ingenuity may not be enough to ensure we don't cross the line. I, like you, have enormous faith in both capitalism and technology; they, however, must be complemented with political will and proper market regulation to face issues such as global warming.
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