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The title is sort of a reverse-application of the broken window fallacy. The truth is that seven billion dollars is not being destroyed; it's now available for

The title is sort of a reverse-application of the broken window fallacy. The truth is that seven billion dollars is not being destroyed; it's now available for new innovation by smaller companies, instead of going to major players like Cisco.

Prrometheus 19y ago
Destroying industries is a good thing for society. We don't need to spend our resources on producing those goods and services anymore. 90% of Americans used to be farmers. Think of where we'd be if agricultural machinery hadn't destroyed the farming industry.
- ivankirigin 19y ago
  A better description of this might be "destroys a $7B market"
  - reitzensteinm 19y ago
    What about "creates $7b of wealth, then gives it away for free"?
    - serhei 19y ago
      I think about it, and I realize that Cisco et al. were essentially making money without producing corresponding wealth - a sort of bubble waiting for someone to come along and pop it.
      - pchristensen 19y ago
        They produced wealth - they turned raw materials, people, and money into telecom. They just charge a price very close to the total value they create, so they capture a large part of the wealth they create. Asterisk creates the wealth, captures none (or very little) of the value, so it's there for the taking.
wanorris 19y ago
Stories like this are kind of an entrepreneurism Rorschach test. To people who are excited about opportunities and want to build new things themselves, things like this look like opportunities. To people who just want to get a good job they don't have to stress over unduly so that they can put a roof over their heads and spend time with their wife and kids, they think of things like this in terms of wiping out existing businesses and in terms of the poor folks that get displaced from their jobs.
- abstractbill 19y ago
  I don't want to read too much into what you said, but it sounds a little like you're writing-off the second kind of people. Actually I've found that some of those people have simply grown up believing certain things about the world. When you suggest things don't work quite the way they believe, I've found they often become excited by the possibilities.
  - wanorris 19y ago
    I didn't mean to imply anything bad about the second kind of people. My first cut swung too much the other way, so I revised it -- apparently a bit too far. I like those folks. Trying to be a really good parent and provide enough for your family are perfectly admirable goals in life.
    - apathy 19y ago
      Trying to be a really good parent and provide enough for your family are perfectly admirable goals in life. This is equally true for (eg.) the 2 billion people in India and China, many well-educated, many of whom are valiantly striving to match the Western standard of living (seen on Western teevee programs and in movies) by earning enough to provide it for their own families. Would you deny them their opportunity by foreclosing new markets? Compete, adapt, or be swept aside in due course -- if you really care about your family, you will put a little thought into how best to support them as the world changes. Americans will experience a decline in average real income, but those who provide globally competitive value of interest to the rising middle class in other countries should do quite well. I'm sure a great many stenographers, buggy-whip makers, and hand-launderers provided well for their families, in their day. But I submit to you that, overall, mankind is better off, even though change may have made their lives worse for a spell. Someone else put it thus -- competition is a discovery process: discovering better ways to do things. If you do not participate, your value to society may decline as a result of that abstinence. It may not make you a bad person, but it will likely reduce your ability to comfortably support those you care about. Do the right thing. ;-)

Prrometheus 19y ago

Destroying industries is a good thing for society. We don't need to spend our resources on producing those goods and services anymore. 90% of Americans used to be farmers. Think of where we'd be if agricultural machinery hadn't destroyed the farming industry.

ivankirigin 19y ago
A better description of this might be "destroys a $7B market"
- reitzensteinm 19y ago
  What about "creates $7b of wealth, then gives it away for free"?
  - serhei 19y ago
    I think about it, and I realize that Cisco et al. were essentially making money without producing corresponding wealth - a sort of bubble waiting for someone to come along and pop it.
    - pchristensen 19y ago
      They produced wealth - they turned raw materials, people, and money into telecom. They just charge a price very close to the total value they create, so they capture a large part of the wealth they create. Asterisk creates the wealth, captures none (or very little) of the value, so it's there for the taking.

wanorris 19y ago

Stories like this are kind of an entrepreneurism Rorschach test. To people who are excited about opportunities and want to build new things themselves, things like this look like opportunities. To people who just want to get a good job they don't have to stress over unduly so that they can put a roof over their heads and spend time with their wife and kids, they think of things like this in terms of wiping out existing businesses and in terms of the poor folks that get displaced from their jobs.

abstractbill 19y ago
I don't want to read too much into what you said, but it sounds a little like you're writing-off the second kind of people. Actually I've found that some of those people have simply grown up believing certain things about the world. When you suggest things don't work quite the way they believe, I've found they often become excited by the possibilities.
- wanorris 19y ago
  I didn't mean to imply anything bad about the second kind of people. My first cut swung too much the other way, so I revised it -- apparently a bit too far. I like those folks. Trying to be a really good parent and provide enough for your family are perfectly admirable goals in life.
  - apathy 19y ago
    Trying to be a really good parent and provide enough for your family are perfectly admirable goals in life. This is equally true for (eg.) the 2 billion people in India and China, many well-educated, many of whom are valiantly striving to match the Western standard of living (seen on Western teevee programs and in movies) by earning enough to provide it for their own families. Would you deny them their opportunity by foreclosing new markets? Compete, adapt, or be swept aside in due course -- if you really care about your family, you will put a little thought into how best to support them as the world changes. Americans will experience a decline in average real income, but those who provide globally competitive value of interest to the rising middle class in other countries should do quite well. I'm sure a great many stenographers, buggy-whip makers, and hand-launderers provided well for their families, in their day. But I submit to you that, overall, mankind is better off, even though change may have made their lives worse for a spell. Someone else put it thus -- competition is a discovery process: discovering better ways to do things. If you do not participate, your value to society may decline as a result of that abstinence. It may not make you a bad person, but it will likely reduce your ability to comfortably support those you care about. Do the right thing. ;-)