Simple Rules of Capitalism

You can’t accurately describe how complicated the global economy is.

There are more than 200,000,000 businesses in the world. Three-hundred trillion dollars of financial assets. Eighty trillion dollars of GDP. Almost 200 countries, thousands of cultures and norms.

Via Collaborative Fund


Crisis Means a New Business Era

“Finally, I asked the man himself, Rod Berens, whom he’d high-five today. He says that the past 30 year’s tech abundance means the developing world’s billions will finally see productivity improvements and attract an increasing share of investment. That’s probably right.”

Via Andy Kessler


Crisis Means a New Business Era

I didn’t see it at the time, but he was dead right. Eras change, sometimes overnight. Over the next decade, the stock market shifted from junk-bond-fueled buyouts, a dominant Japan and the Cold War to highly valued emerging technology companies, ending with the dot-com blowout.

The current market turmoil tells me a new era is breaking, so question everything. Will cable, energy, mobile and social media ever come back? And if not, what’s next?

via Andy Kessler Crisis Means a New Business Era – WSJ

Businesses that don’t seem to be about technology also solve hard technical problems

It’s obvious that biotech or software startups exist to solve hard technical problems, but I think it will also be found to be true in businesses that don’t seem to be about technology. McDonald’s, for example, grew big by designing a system, the McDonald’s franchise, that could then be reproduced at will all over the face of the earth. A McDonald’s franchise is controlled by rules so precise that it is practically a piece of software. Write once, run everywhere. Ditto for Wal-Mart. Sam Walton got rich not by being a retailer, but by designing a new kind of store.

via How to Make Wealth

Most people who got rich by creating wealth did it by developing new technology

If you look at history, it seems that most people who got rich by creating wealth did it by developing new technology. You just can’t fry eggs or cut hair fast enough. What made the Florentines rich in 1200 was the discovery of new techniques for making the high-tech product of the time, fine woven cloth. What made the Dutch rich in 1600 was the discovery of shipbuilding and navigation techniques that enabled them to dominate the seas of the Far East.

via How to Make Wealth

Measurement and Leverage means the possibility of failure

I think everyone who gets rich by their own efforts will be found to be in a situation with measurement and leverage. Everyone I can think of does: CEOs, movie stars, hedge fund managers, professional athletes. A good hint to the presence of leverage is the possibility of failure. Upside must be balanced by downside, so if there is big potential for gain there must also be a terrifying possibility of loss.

via How to Make Wealth

Technology = Leverage

What is technology? It’s technique. It’s the way we all do things. And when you discover a new way to do things, its value is multiplied by all the people who use it. It is the proverbial fishing rod, rather than the fish. That’s the difference between a startup and a restaurant or a barber shop. You fry eggs or cut hair one customer at a time. Whereas if you solve a technical problem that a lot of people care about, you help everyone who uses your solution. That’s leverage.

via How to Make Wealth