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by caster_cp
4268 days ago
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Peter Thiel's advice about monopoly is hugely similar to the point Porter makes in his first book, Competitive Strategy. On the first chapter of his book, Porter clearly states that a business located in an industry with strong competitive forces will have lower margins. He even uses the airline industry example on his HBR article, in the 80's (actually, I'm not sure if it is in his first article, or the one from 2008 in which he revisits the topic 20 years later. Either way, is an old idea in the business world)
It is, in a way, a very old idea in the business world.
The value of Thiel's way of stating it (very, very boldly and controversially) is that it makes people in the startup world actually listen to it. And that's a very good thing
The only problem I see, on the other hand, is the unnecessary bashing of economists. Economists, normally, analyse a market from the point of view of the "public interest". With this perspective in mind, self-perpetuating monopolies are almost always a bad thing (unless you believe in such things as centralized planning and dictatorships). |
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Okay, but the more famous economists are usually at the more famous universities which tend to have large endowments and tend to want to get high returns and often do this by investing in VCs who look for monopolies that can return money enough to pay for the professors of economics!
Actually, whatever gets taught or suggested in the classrooms, it's both common and easy enough for the high end universities to look for and like students who are wealthy or relatively likely to become wealthy and make significant donations back to the university -- no joke. Or, universities are not against monopolies everywhere on campus!