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>> 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 gr

• npalli 13y ago
  It 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.