Thanks for your post, Don. Parts of it inspire me to ask a couple of questions of others.
Bruce,
As Moore noted, after the pyramidal shakeout of the dominant company from the pretenders, the market itself can recognize the competitor who is left standing, the so-called 800 lb gorilla-as-dominant-market-share-leader. This "gorilla" may or may not be Moore's gorilla. On the one hand, if it is not, then its competitive advantage will be less deep and long lived. On the other hand, if it is, then the distinctive combinatorial and exponential power of its competitive advantages still may not be recognized.
In the context of Don's comments about that, where does i2 fit?
In the infancy of the supply-chain software business, you'll remember that my concern was that the product category might be subsumed. As the product category matured, I came to the conclusion that my concerns weren't realized. Now I'm wondering if I didn't come to that conclusion too soon, but don't follow the industry enough to have any opinions about it. Do you believe that i2's more recent problems are an indication that, indeed, the category is finally being subsumed?
To the people who don't believe valuation can be helpful ...
Valuation of the gorilla matters because its intrinsic value is a function of your estimates of the size of the double dose of under pricing. And this valuation is likely to be qualitative because increasing returns and leverage innovation often extends beyond our foresight and ability to quantify. Still, it is likely that using inexact measures is better than using no measures at all
My follow-up: Does it not matter whether the price of a stock is $10 or $1000, and if not, why not? (Depending on all the relative factors, I realize $10 might be expensive and $1000 might be cheap. But I sincerely wonder why anyone would choose not to care about determining whether $10 or $1000 is cheap or expensive?.)
--Mike Buckley |
