Picking Winners & Losers
Cheeky:
It's obvious that all these companies are not going to succeed, but the ones that do, are going to make the investors a pile of money.
Agreed. The trick is to correctly pick the winners and losers. For every profitable, well-run, "airline industry survivor" like Southwest Airlines, there are numerous un-profitable, poorly-managed, "plane crashes" along the way: e.g., Eastern Airlines, Continental Airlines, Pan Am, TWA, Western Pacific, Kiwi International.
Remember any of those guys? Every one of them went Chapter 11. Some did so more than once (i.e., TWA, twice already and potentially heading for a third). ;-)
I could produce similar lists of winners and losers in the railroad industry, the automotive industry, and the biotech industries, each of which were viewed as undergoing paradigm-shifting transformations in their heyday, just like the internet industry today.
The fact is that there were many more losers than winners in each of those industries. IMO, the same result will occur in the internet industry going forward.
Capitalism is very Darwinistic. It's all about creative destruction and survival of the fittest. The key success factor over time has been, and will continue to be, profitability, regardless of the paradigm-shifting nature of the changes affecting any particular industry.
Razor |
