Tuesday, December 2, 2008

The economics of free, the net, and public services ...

This article outlines some of the factors that have kept ideas like
- internet via power cables
- laser powered net to your home
- muni-wifi
and why most of these continue to quintessentially be, "just around the corner".

Essentially, Tim Wu argues that providing a new service that does not provide either

  • a significant cost advantage, or

  • a superior service, and

  • a way to address the economics of sunk cost leveraged by existing players


is SOL.

He also alludes that, in general, you need to have all the above factors addressed - as most early movers are generally over-hyped, under-qualified and have limited understanding of the market they are looking to dominate.

If you build it, people, generally, will not come.  Econ - 101.

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