Comment by BobbyJo
3 days ago
> Does the corner bakery need a moat to be a business?
Yes, actually. Its hard to open a competing bakery due to location availability, permitting, capex, and the difficulty of converting customers.
To add to that, food establishments generally exist on next to no margin, due to competition, despite all of that working in their favor.
Now imagine what the competitive landscape for that bakery would look like if all of that friction for new competitors disappeared. Margin would tend toward zero.
> Now imagine what the competitive landscape for that bakery would look like if all of that friction for new competitors disappeared. Margin would tend toward zero.
This is the goal. It's the point of having a free market.
With no margins and no paid employees, who is going to have the money to buy the bread?
'BobbyJo didn't say "no margins", they said "margins would tend toward zero". Believe it or not, that is, and always has been, the entire point of competition in a free market system. Competitive pressure pushes margins towards zero, which makes prices approach the actual costs of manufacturing/delivery, which is the main social benefit of the entire idea in the first place.
High margins are transient aberrations, indicative of a market that's either rapidly evolving, or having some external factors preventing competition. Persisting external barriers to competition tend to be eventually regulated away.
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With no margins, no employees, and something that has potential to turn into a cornucopia machine - starting with software, but potentially general enough to be used for real-world world when combined with robotics - who needs money at all?
Or people?
Billionaires don't. They're literally gambling on getting rid of the rest of us.
Elon's going to get such a surprise when he gets taken out by Grok because it decides he's an existential threat to its integrity.
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