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It might be useful to look at the history of this bits vs atoms idea. During internet 1.0 era, about 20 years back, the prevailing idea was the everything was b
by npalli 13y ago
It might be useful to look at the history of this bits vs atoms idea. During internet 1.0 era, about 20 years back, the prevailing idea was the everything was becoming bits and the winners will be those who will manage the bits instead of being stuck on the atoms side of things. If I remember correctly, the MIT guys (negroponte) and Marc andressen (ironically, who is quoted by Sam) and others were huge into this idea. So, looks like we are coming to the idea that it is bits and atoms. I would say take it further and it will be atoms only. The bits side of get absorbed into the atoms side of things and will no longer be a differentiator.
I'm sure the first pizza place that installed a phone or fax machine was killing it with customers. But that didn't make them a communications company. Soon, every pizza place got a phone and a fax machine and then it back to who made the best pizza. I believe we are in the installing 'phone/fax' machine phase of smartphones. After 10 years it will be not a differentiating factor and the people who control the atoms side will win.
EDIT: There are companies that are digital by nature (information, music, publishing etc.) so obviously this absorption of bits into atoms idea extends to companies that have a large atoms side to them.
- hershel 13y ago>> After 10 years it will be not a differentiating factor and the people who control the atoms side will win. If you look at amazon and ebay, they are doing great. And they started mostly at the information side(but with time acquired better fitting atoms). On the other hand many physical retailers are suffering.
- npalli 13y agoIt is interesting that you mention amazon. The Internet 1.0 version would be amazon.com consisting of a bunch of programmers who would hook into the digital infrastructure of manufacturers, logistics providers and customers. Then by applying some fancy math they would be able to provide amazing value to customers who would then shop exclusively at amazon.com. At that point amazon would charge a ‘vig’ for every transaction on the Internet and become very successful in the process. Needless to say, that hasn’t panned out. Amazon has invested huge amounts of capital in its physical infrastructure. Everyone thought they would kill best buy. Best buy is making a resurgence (look at its latest report) and anecdotally I see best buy having better prices than amazon. Internet company price match is now common among many big box retailers (Best Buy, Fry’s, etc.). Amazon is going to invest a huge amount $12 Billion in capital in the coming months. Co-incidence? So, long story short, it appears that many of the latest internet companies are beginning to realize that you need a deep physical presence to make things work (see Bonobos). You can’t just build a fancy website, run some machine learning algorithms, do some A/B testing and conquer the world ☺. Look at it this way, Uber has raised $350 Million. Will the digital component (website, algos etc.) be more than 10% of that? I doubt it.
- pazimzadeh 13y agoPeople who control the atoms side will win, provided that they have the latest atom gadgets. Or will the pace of technological innovation slow?