Video games have come a long way in the past twenty-five years!
The inimitable Peter Huber has this noteworthy post on Forbes online, dated yesterday.
It is worth a read on several levels, but one of the most important is the "entrepreneurial" level. Huber is describing the possibilities raised by "two woeful deficiencies" in digital life, and opening up vistas for the reader to see what is possible when the opportunities these deficiencies create begin to become reality.
To an entrepreneur, every frustration in life is a potential business model waiting to happen. Huber points out some areas of frustration in the computing world that most of us don't even notice -- we're ready to "settle" and accommodate ourselves to life's little frustrations. Even if we spend a larger percentage of our waking hours looking at a computer screen, we don't even notice that it is largely a two-dimensional display of information and we are beings that live in three dimensions most of the time.
But, as Huber points out, computer games have been three-dimensional for a long time now (in fact, Atari's Battle Zone was basically 3-D in many ways back in the early 80s, when many other games like Asteroids or Defender were still 2-D). And individuals with an entrepreneurial mindset are not standing still -- they will find ways to add value to the world where it doesn't exist now, by applying technologies in ways that Huber imagines in his article, for example, or in ways that he can't even imagine.
The value that it is possible to add in the world is literally unlimited. As Austrian-school economist George Reisman notes in Capitalism, "Considered abstractly, man's possession of reason gives him the potential for a limitless range of knowledge and awareness and thus for a limitless range of action and experience. [. . .] The potential of a limitless range of action and experience implies a limitless need for wealth as the means of achieving this potential" (43). In other words, no matter how much value he is able to add, his mind is able to race ahead and conceive the possibility of improvement. At all times, there is always a potential for the creation of more value.
When a company (whether owned by one person or by a group in the form of a corporation) is adding value, it creates wealth. The greater the value it adds, the greater the wealth it can create. It isn't just technology companies or new companies which add value -- if a company stops adding value, eventually people will no longer buy its goods or services. Finding companies with the potential to continue to add value faster than the average company is a critical aspect of growth stock investing.
It is by aligning with companies who are adding value that investors can become wealthy (in addition to creating value themselves in the company they work for). As Huber states at the end of his article, "never fall into the trap of believing that things are slowing down and the dominant companies are settling in."
There is limitless potential for value addition. This fact is a key concept for the entrepreneur and for the investor.
For later blog posts dealing with this same subject, see also:
- "Look for paradigm shifts" 01/03/2008.
- "Must-read: 'Unleashing the Exaflood' by Brett Swanson and George Gilder" 02/22/2008.
- "Yahoo, Microsoft, and Cloud Computing" 05/09/2008.
- "Big changes coming" 05/28/2008.
- "Big changes coming, part II" 07/08/2008.
- "The unstoppable wave" 01/12/2009.
- "The Unstoppable Wave: Revisited" 12/22/2009.
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