Wednesday, March 05, 2008

History Repeats Itself

Every time a new technology arises there seems to be a common pattern. A technology is created or adapted to solve a problem, but at first, the public fails to realize its potential. Then, the people behind the technology do whatever is necessary to get it accepted by the public, followed by an understanding by the public, and finally an explosion of ideas by the public on how to profit greatly from the new technology.

“Between 1847 and 1852, there was an explosion of entrepreneurial activity” Starr P.171

“As of the early1850’s, however, the telegraph industry was so fragmented that the competition on many routes prevented any firm from making a profit.” Starr P.172

Today we can make an interesting comparison between the oldest and newest technologies. In the 1850’s so many companies got involved in the business that no one was making any profit. This started the selection process where only the companies with the correct infrastructure and business sense survived, making the technology later better and stronger.

Back in the 1990’s we had the exact same scenario with our new technology the internet. At first, many failed to realize the massive potential the internet had to offer, followed by an understanding by the public. Finally, we had the same explosion of ideas on how to profit greatly from the new technology. Anybody and everybody could be a business owner. You did not need an office, inventory, employees or anything related to the “old” business system all you needed was your computer and your “.com” address.

The exact same scenario as before occurred with too many businesses offering the exact same products. Companies that had invested millions of dollars to join the information revolution had less than 100 dollars of sales per month. Eventually the same natural selection occurred and in the end, the technology was stronger and better and it will only continue to succeed at a logical pace or until a new technology arises and history repeats itself.


At 6:27 PM, Blogger A. Mattson said...

A very good post.

This is not a simply a matter of "natural selection" or survival of the fittest technology.

Yes, innovative technology and clever businessmen will sometimes win the competition, but we also need to take into account the role of governmental legislation and regulation of markets as well as cultural factors and the demands of the economy and political society. Markets are not always fair or efficient judges of media technology.


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