Sublime

With a universe of companies seeking profitable opportunities for investment, the returns in an unprotected industry will be driven down to levels where there is no “economic profit,” that is, no returns above the costs of the invested capital. If demand conditions enable any single firm to earn unusually high returns, other companies will notice t

For instance, whenever an industry has a steadily growing market but falling profit margins—as say, in the steel industries of developed countries between 1950 and 1970—an incongruity exists. The innovative response: minimills.

Bundling drives innovation and creates industries.

a parsimonious way of understanding the islands of central planning that we know as firms is to search for the point at which the cost of transactions taking place internally within the firm equals the cost of market transactions. When the external transactions become less costly than the internal transactions, firms stop growing, since it is bette

While competition usually does drive down prices, it does not always lead to an outcome that is best for consumers.

Importantly, not all advantage is competitive.

Analyze recent and likely future changes for each force.

Brand, scale, network effects, and technology in some combination define a monopoly;

In essence there is a scarcity of talented labor relative to capital, as evidenced by the relative plenty of venture capital and what economists call “the savings glut.”