O&A Innovation

Right... not sure where you ran off to... but to continue with my smoke exhalations on my couch with kool-aid.. I believe in perfect markets and the right of mankind to have perfect markets and perfect access to capital... I also acknowledge that the world is not built that way...

In the O&A space, I think there are three issues (listed as ones that I find happiness solving):
1. Markets are inefficient --> Selling costs
2. Capital is limited --> Finance costs
3. Governments --> Taxes...
and all O&A innovations are a result of trying to minimize these costs for a business (which again in my view is purely S meeting the needs of C), costs which lead to a loss of overall value...

So to move into my grey zone... someone needs to take the trouble to create a market, make it efficient etc... fine... I am willing to acknowledge that and let the 'Market' be a business in itself... The claim therefore is, that the C and the S 'need' (they do not have the fundamental right) a market, some person 'S-M' has provided this service... he is an S... he has a cost, the S, the C, and S-M agree on a price for the service and we are in the business of 2-sided markets.... Google, eBay, and related platforms, I don't want them... but I need them in todays world... badly.... hence I bow to them..

Consider drug development... say the Masai in Africa have a big problem with blindness... Merck has an idea and a way to find a cure... the Masai want the cure... they have cows, Merck wants $s. In the olden days, it would be easy... Merck gives the drug, takes the cows.... is there a cow-money-blindnessDrug market? If so, that is innovation... The Masai don't want this market, but they need it... I bow to the market maker...

Capital.... this is a tricky one. for me.. (1) access and (2) availability are the two issues here I think... Access I think is a fundamental right... availability is on merit... access is a market issue, discussed above...

Availability of capital, since it is limited, is based on return on invested capital... the assumption here (atleast in the beginning I am sure) is that the firm that meets the biggest need will get the biggest returns.. returns are used as a proxy for satisfied-needs... all good for me...

Next problem is the risk associated with the return...

Now, you never know if you are meeting a need perfectly... hence given perfect markets and no government, there is still that risk... but this is part of CSpace and Sspace... and understanding it better... this is business risk... when this is better I bow...

From a firm's point of view, many times the game is, how do I reduce the risk for 'myself' and get access to the capital... you either move the whole risk to a third party say a supplier... and claim that you have reduced risk... and gain access to capital... that is not innovation... that is cheating... investor ABC funding the firm will not lose their money... but investor XYZ who funded the supplier will..

and THIS is where I have the biggest problem... the risk has not gone anywhere... it has just been moved from one place to another -->obfuscation/cheating... or from the present to the future --> gambling... you want to show me innovation here... ELIMINATE this risk from the system completely... and THEN I will bow...

Taxes... don't even get me started... anyone who claims innovation or value creation here must be an investment banker :)...

Shyam.