

Starting vs. Building a Company - relation
http://daslee.me/starting-v-building-a-company

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arbuge
Durable companies are one thing.

There's also the art form of catching some wave and building a company
designed to be flipped in a few years' time. After that, the company (now
division) in question invariably crashes and burns and the founders blame the
whole fiasco on the acquirer. Happens...

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mlchild
I think the key dichotomy here is between creating a successful _product_ at
the core of a company and creating a successful _system_ that is able to
repeatedly generate, select, and distribute products that fill market needs.
Disney, 3M, and Apple are all great examples of "blockbuster factories" that
are able to repeatedly innovate into the next field of play.

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daslee1969
great point. better said than my articulation of continuing to innovate
through tech cycles.

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mlchild
Thanks! Great piece, by the way — my goal is to be a successful starter _and_
builder. And I agree that many seem to focus only on the former.

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programminggeek
To be perfectly honest, there are a few companies that exist because the build
and sell something fairly remarkable as a product or a service, but there are
literally millions of companies that survive off of the inefficiencies in
existing markets. Many/most businesses operate off of a form of arbitrage, not
unique product creation.

For example, look at retail, it exists on the arbitrage opportunity of buying
things in bulk and transporting them to local markets to sell them. However,
if transportation costs were cheaper or people did a better job of planning
ahead, most retail need not exist.

Even online retail has the same problem, at a certain level Amazon woudln't
need to exist if manufacturers could sell and deliver direct to you.

My point is that most businesses don't _need_ to exist, but there is
opportunity in both short and long term arbitrage that isn't durable or
sustainable, but many times can be quite profitable.

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eldavido
What you call "arbitrage", many call distribution. And it can get pretty
complicated.

Take the simplistic example of a local grocery store. In no particular order,
the store must:

\- Determine what to carry

\- Determine how much to buy, taking into account seasonal variances, local
tastes and preferences (is there a sporting game in town? Buy more beer)

\- Arrange for financing to cover everything; a good-sized grocery store has
millions of dollars of inventory sitting on the shelves

\- Ensure the hot things stay hot, and the cold things cold

\- Loss prevention: reduce theft, breakage, spillage, spoilage as much as
possible

\- Handle vast amounts of cash, exposing the store to all manner of theft (by
employees), counterfeiting, fraud, and robbery

All I'm saying is, don't dismiss something because it isn't "unique product
creation".

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programminggeek
Sure, I didn't mean to imply that those aren't real businesses. I just meant
to imply that in the "startup world", a lot of these businesses are totally
overlooked because they aren't doing the minimum viable product lean startup
thing.

I don't dismiss those businesses at all, I think there are a lot of great
opportunities in arbitrage based businesses, but a lot of startups ignore the
opportunities that aren't the next big mobile/social thing.

