DailyPost 148


 Monopolies, by conventional wisdom, economic thought and practice, in a state regulated atmosphere, state run public enterprises provide goods and services in the interest of subservient public good,  as the underpinning to the welfare state.  Even private companies got into the same rigmarole in a regulated and protectionist regime. We are all familiar with the Ambassadors and Fiats which ruled the roost in this country, only to be wound up with the first waves of liberalisation.

 Global leaders entered the Indian marketplace to provide a competition unseen till then, making the market a battlefield till it reached equilibrium.  Amuls of the day still surged ahead and low end IT companies held the sway in their low end areas of work, redefining the Indian marketplace.   They were monopolies of their own kind.  The age of the  creative monopolies was yet to be ushered in.  In a true sense  Microsoft with its operating system and MS Office marks the beginning of creative monopolies , which will define the market place in the days to come.

 Instead of fighting a cut throat competition, they are out it invent the future . Their market capitalisation generally in unrelated the present day market space and the earnings reflected in their account books.  Twitters and LinkedIns get valued way beyond what we can even imagine  and this new concept gets its impetus with the business entities  ability to generate cash flows in the future.   Peter Thiel says that value of the business today is the sum of all the money it will make in the future.

As per him the differentiators at a generic level are  1.  Proprietary technology ; either completely brand new, new market space and value or capability to make a 10x improvement in business, 2.  Network Effects , 3.  Economies of Scale  – very easy for an IT technology company and 4.  Branding.

New creative monopolies will keep getting created to invent our future.


    Sanjay Sahay

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