The Competition Conundrum

by Ben Perreira

In accounting, an asset has to be balanced to equal the liability or equity one gives up to get that asset. The same could be said for competitors.

Competitors (similar businesses, friends at a bar when trying to meet members of the desired sex, other surfers in the water, etc.) are certainly a liability. They get in the way of most easily getting what you want. The end up costing us more in the beginning. However, they also offer lessons. They force us to be better and innovate.

In the case of business, this has the potential to benefit society. Some monopolies or pseudo-monopolies have contributed to the greater good – 1920’s AT&T is an example from “The Master Switch” – though the AT&T of today has had a significant impact on the slightly-more-competitive mobile network market. (That is, of course, notwithstanding its failed acquisition of T-Mobile and questionable cellular reception.)

So the question is, is it better to be in a competitive market for say, social photo sharing, or a monopolized one? Instagram‘s shareholders would probably offer a resounding “competitive!”