The Empire Strikes Back

September 16, 2018

Asset-light business models have been in vogue for the past few years. "Uber for X", "Airbnb for Y", etc. I guess it's "clever" to build a hotel chain without the hotels, or a taxi company without the taxis…just modularize and create a platform, and take a skim off the top.

I'm temperamentally skeptical of shortcuts; perhaps MoviePass's failure will show just how far the own-nothing-but-customers model can go.

Data and software are really strong moats, but they aren't magic. Incumbents will figure that stuff out given enough time and investment. They move slowly but they aren't completely stupid.

Other places where I see this dynamic:

  • Autonomous cars/tractors. Autonomy adds a lot of value but manufacturing is pretty hard; John Deere might figure out (or acquire) autonomy before a startup figures out how to make tractors.
  • Banking. Your startup can model credit better, but banks still have the cheapest capital, because they have the deposit base; this is why nobody's managed to really change mortgage lending, even though it's awful.