A VC - Latest Comments in The Declining Power Of The Firm

Re: The Declining Power Of The Firm

Web 2.0 Skeptic — Sun, 18 May 2008 15:25:28 -0000

You were a consultant before this gig, and a not a very good one. You take great delight in pointing out how right you are after the fact, but are unable to deliver the goods up front, and that is why you failed as consultant.

Re: The Declining Power Of The Firm

slowblogger — Sun, 13 Apr 2008 13:42:00 -0000

I agree a lot (BTW, I disagree with you in 'Free' issues). I have a related topic called Mass Niche, on which I have a book in writing (forever).

"Mass Production": 20th century - corporate strategy - large company - large consulting firms as thought leaders - "You can have any color, as long as it is black."
"Mass Niche": now and forever - innovation - small business and individuals - individual bloggers as thought leaders - "Mr. Ford, Let me paint my car."

Re: The Declining Power Of The Firm

slowblogger — Sun, 13 Apr 2008 13:27:27 -0000

You may not like it, but that is why I like cocomment. I get to keep my comment log, which you can see at my blog. But Cocomment cannot copy comments made on Disqus. Maybe due to competition? But these are different models, which means both can exist together.

Re: The Declining Power Of The Firm

Abe Murray — Fri, 11 Apr 2008 15:01:05 -0000

I've been thinking a lot about this recently - why do cities exist, if not because they suit the requirements of firms? What would the world look like if people actually did work from their homes or local communities, coming together online in more ad-hoc fashions. This is the world I want to be building in my daily life - to me the drudgery and unpleasantness of commuting to NYC every day just seems so backwards - millions of people have terribly structured lives simply because it has been more efficient to compete as groups in firms.

I love the Coase reference - I appreciate his theories, but have always felt they were more problems to be solved than immutable forces of nature.

Re: The Declining Power Of The Firm

Prokofy — Fri, 11 Apr 2008 00:23:33 -0000

Here's the problem with Umair's idea: A Murdoch values a Myspace and buys it, or Yahoo values Flickr and buys it, or Google values Feedburner and buys it, and buys the aggregated end users that are supposed to be the new black here. Except, what they buy at that level isn't an aggregate of end users, but a database that behaves as a kind of already merged dumb beast. And the dumb beast, half the time, flees or tanks because end users don't like the feeling of being bought, and the managers of their dbase records imagine them to be an aggregate they can manipulate.

I always marvel when I see that article being flogged (Philip Rosedale, maker of Second Life flogged it in 2005, too). 1937 was not a good year -- look at the world ideologies of the time. This one was a mild version of the same problem: romanticizing about the collective, the firm as a hippie commune with a food co-op...

I don't need Yahoo to break up. I need Yahoo to charge for email accounts, and then there will be less spam and its search will be down less. That's all. It should also revenue-share with me if I run ads at the bottom of all my emails.

Prokofy Neva

Re: The Declining Power Of The Firm

Amadou M. Sall — Thu, 10 Apr 2008 18:32:14 -0000

Umair, I think Fred and phbradley actually mean "abstruse", instead of "obtuse" :-)

Re: The Declining Power Of The Firm

Ethan Bauley — Thu, 10 Apr 2008 16:56:29 -0000

oops, typo: logistics have economies of "scale", not scope, but ya'll knew that already ;-)

Re: The Declining Power Of The Firm

Jake — Wed, 09 Apr 2008 15:27:37 -0000

Thanks for sharing something that has truly opened my eyes. I agree that this could be big, but of course, it's the details of this transition that matter. Like you indicate: "Great, now that I understand this, what do I do now?" Also, people are fans of binary thinking when reality is so much more distributed across outcomes. Understanding where this occurs first and when is critical.
Lastly, the mortgage finance industry blew up not just because of unknown risks (some people knew it: see Paulson Capital), but also because of politics. The reality in any company is that those with revenue growth dominate the strategic agenda, which is why you see disruption and corporate disaster. I am very interested to understand how companies that are able to maintain their portfolio in the face of dominant revenue generating BUs (i.e. Goldman Sachs) do it.

Re: The Declining Power Of The Firm

fredwilson — Wed, 09 Apr 2008 06:56:02 -0000

Or the faint of mind

Re: The Declining Power Of The Firm

fredwilson — Wed, 09 Apr 2008 06:55:02 -0000

No harm no foul. But I couldn't resist the reply!

Re: The Declining Power Of The Firm

Eric Hellweg — Tue, 08 Apr 2008 21:55:34 -0000

Hi all
I'm the Editor of HarvardBusiness.org and a long-time fan of Fred's blog. I only wanted to jump in to reiterate that we don't mod comments other than to use Captcha for anti-spam. Sometimes legit comments get flagged, but we trawl the "junk" folder multiple times a day to make sure legit comments make it through.
Thanks
Eric

Re: The Declining Power Of The Firm

BillSeitz — Tue, 08 Apr 2008 17:13:30 -0000

I think that rather than make huge profits which they plow into acquisitions which they can't integrate, the big players like Google should keep a smaller piece of the ad-revenue pie, so that players in their eco-system (hello AppEngine) can build a sustainable model...

Re: The Declining Power Of The Firm

gregory — Tue, 08 Apr 2008 07:37:45 -0000

profit will come from what you give, not from what you get ... it is the way love works ... the rise of the new way is simply a closer external, organizational, approximation to the internal structures of consciousness, mediums becoming more transparent, more fluid, more invisible

qualities of character will be far more crucial, immediate...

structures have always been an effect, not a cause... this will continue of course ... new structures will arise out of higher consciousness is the short way to say it

Re: The Declining Power Of The Firm

TMC2K — Tue, 08 Apr 2008 02:57:17 -0000

Outstanding Post. This thinking is dead on. I totally agree with connecting this thinking to the Yahoo deal. By the time MS would absorb Yahoo! the landscape will shift beneath them and then they will realize it was wrong. Yahoo is doing the best thing for MS right now by refusing, (although they are doing the worst thing for themselves - they'll never get the chance to monitize their properties at this level again).

Re: The Declining Power Of The Firm

GlennKelman — Tue, 08 Apr 2008 00:35:04 -0000

I am not sure I agree with your contention that The Firm is irrelevant, just because so many of the technology and media companies we see today are built to be acquired by The Firm.

What does it mean for VC if scale is not longer a desirable goal? Who needs that much capital to stay agile and small?

Re: The Declining Power Of The Firm

William I — Tue, 08 Apr 2008 00:24:07 -0000

I originally became aware of these market by my good friend Houman Shabab, who currently works at the Mercatus Center in Washington DC. I sent a link to his piece in Regulation on the subject. I also sent a WSJ Article on just the GS True platform.

Hope it helps
- William

http://www.mercatus.org/rep...

http://online.wsj.com/publi...

Re: The Declining Power Of The Firm

qwang — Mon, 07 Apr 2008 23:01:19 -0000

Certain economies of scale will always exist. What mega-firms should be thinking about is how to spin-off the innovation process to small players, then bring semi-mature products back into the fold where there are meaningful synergies.

The trick is how to define the relationship between innovator and integrator and find the proper trade off between control and innovative freedom. Big pharma is moving in this direction as they look more and more to start-ups as an alternative to their traditional pipeline, but no one else can commercialize products like big pharma can.

PS - my first time using Disqus, my god the the signup process took a whooping 5 seconds! Now if only micro-payments could be this easy...

Re: The Declining Power Of The Firm

Don Jones — Mon, 07 Apr 2008 19:29:53 -0000

vruz - "not worth their salt" is just an expression in passing, not literal or personal...I subscribe to ethical, fair practices, but entrepreneurial capitalism is not for the faint of heart...

Re: The Declining Power Of The Firm

joshyoung — Mon, 07 Apr 2008 19:23:54 -0000

I can't seem to find the discussion of visualizations of blog relationships at http://www.technologyreview.... Is it there?

Re: The Declining Power Of The Firm

Guest — Mon, 07 Apr 2008 19:21:50 -0000

Oops - I was playing fast and loose with the salt...

Re: The Declining Power Of The Firm

Devin Dawson — Mon, 07 Apr 2008 18:51:39 -0000

Thanks for the link trail. It always disturbs me when delicious is blind on a topic. http://del.icio.us/tag/gstrue has only two links.

Re: The Declining Power Of The Firm

vruz — Mon, 07 Apr 2008 18:37:28 -0000

by the way, there are signs it's beginning to happen in other parts of the world as well

http://www.itnews.com.au/Ne...

Re: The Declining Power Of The Firm

vruz — Mon, 07 Apr 2008 18:02:52 -0000

the Dean and Obama campaigns on the internet have given a hint of some things the future may bring to politics.

Re: The Declining Power Of The Firm

fredwilson — Mon, 07 Apr 2008 17:51:03 -0000

I don't think its necessarily optimal but its what the law would allow right now

Fred

Re: The Declining Power Of The Firm

Alberto Molina — Mon, 07 Apr 2008 15:52:54 -0000

We're a long way from Firms becoming not powerful. The fact that power flows to the center and the reach of an existing power base and known channels of distribution are not going to evaporate.

So News of the demise of the Firm is clearly premature. But the part that is obvious, and is not new, is that there is something antisocial about Firms, especially in their incarnations as pure captialist phenomenon.

I read today, for example, the Yahoo! board's response to the latest takeover push from Microsoft. The language focuses on the Microsoft offer not being in the best interests of stock holders. Traditionally this simply means the price isn't the best. But there's a huge question of whats best for the business, it's people and the world? Stock holders need to be rewarded of course, but there is so much more than price that matters to society and the fundamental assumtion that the rest is irrelevant leads to antisocial behavior.

There's no point going into how and why, it's been done from Karl Marx to GreenPeace to any normal observer feeling oppressed in a fluorescent cubicle.

What is most interesting is the liquidity that the internet and technology have brought to transactions of all types and the effect that has had on destabilizing monolithic Firms based on narrow concepts of capitalistic value. Humanistic values continue to be exercised at the expense to a never before degree of monoliths.