Interesting concept

[amanda_lodden]

Seth Godin on what to do about the failing auto industry

It's an interesting idea. It'd fail completely over the long term, because that's what happened to all those companies he mentioned. But it would be very innovative in the short term.

And hey, it couldn't be any worse than the dot-com meltdown last decade, could it?

Comments

[backrubbear.livejournal.com]

The long-term failures have to do with the factors that push things toward consolidation: If you have too many of something, you have inefficiencies. The inefficiencies get pushed out of the system at the high population end of things at the cost of failures of others. At this point of the system, you tend to have low to moderate cost of entry and low to moderate cost of failures.

After a certain point in the system, consolidation tends to come not by increasing desire for efficiencies but because of a desire to squelch competition. This happens in a mature industry. The same tools used to encourage competition become turned to ones that squelch it. The cost of entry is high and the likelihood of failure is high due to barriers to entry across all segments that make up the market. Truly disruptive changes are required to enter at this point.

You may enjoy the book, The Innovator's Dilemma which covers some of these things.