Tuesday, May 29, 2012

You say you want network effects?

In their 2010 paper How the Lock-In Movement Went off the Tracks, Steve Margolis and Stan Liebowitz had a prescient warning;
...for those still seeking harmful lock-in, we offer this. You‘ve been looking in the wrong places. You‘ve been looking at markets. Look elsewhere. Look where competition is not particularly effective, where there is no possibility of bankruptcy, where there are no investors who can pull the plug on losing battles. Look where the rewards for successful innovation are unspectacular or nonexistent. Look where concentrated interests face off against unconcentrated counterparts. Look at government. Cultivate that garden.
Thanks to Time Magazine we don't have to look very far;

  1. “God save the district.” The sentiment is easy to understand, for these are good times in Washington and the seven counties that surround it. Even as the nation struggles, the capital has prospered, making it a magnet for young hipsters but leaving its residents with only a tentative understanding of how the rest of the country lives. “It’s nice,” goes the old joke about Miami, “because it’s so close to the United States.” Well, Washington is very nice these days.

    Every week brings fresh evidence of continuing prosperity: a new restaurant, a new nightclub, another restored 19th century townhouse in a previously dodgy neighborhood selling for $1 million or more. Start-ups are hiring through Craigs­list, and just opened lobbying firms have no trouble collaring clients. Storefronts that stood abandoned five years ago fill with pricey gourmet-food shops like Cowgirl Creamery, a cheese­monger that has opened its only store outside Northern California on F Street downtown. Its Mt. Tam cheese goes for more than $25 per pound. It’s organic.

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