Barriers to entry are what capitalism is all about. (Real world capitalism, not the utopian capitalism from Econ 101.)
Patents, R&D, trade secrets, network effects, natural monopolies... all of these are competitive advantages that capitalistic companies want to have. It's the reason that "nobody else can provide what we do". Otherwise you're just trading commodities and you won't realize economic profits.
Now I'm not ascribing any morality to this. You can call it evil if you like. Just know that this definition makes 90% of businesses "evil".
Don't forget regulation. Complex regulation with a large compliance department to dot the i's and cross the t's is a great way to keep new entrants out. Why do you think there are so few new banks?
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No, what you write down is just one implementation of the idea outlined in the article. The general case is closer to:
BAD: counting on the intrisic quality of your software to keep competitors at bay
GOOD: using switching costs / network effects as barriers to entry
That's not GOOD, that's profitable EVIL.
Barriers to entry are what capitalism is all about. (Real world capitalism, not the utopian capitalism from Econ 101.)
Patents, R&D, trade secrets, network effects, natural monopolies... all of these are competitive advantages that capitalistic companies want to have. It's the reason that "nobody else can provide what we do". Otherwise you're just trading commodities and you won't realize economic profits.
Now I'm not ascribing any morality to this. You can call it evil if you like. Just know that this definition makes 90% of businesses "evil".
Don't forget regulation. Complex regulation with a large compliance department to dot the i's and cross the t's is a great way to keep new entrants out. Why do you think there are so few new banks?
That's why this is a nice parable. The moral of the story is different depending on how you look at it.
(not being sarcastic)