The biggest problem in the world is solutions. There’s an app for everything, a vendor for everything, so why isn’t everything perfect yet?
The answer is that solutions have costs. First among these is that you don’t have time to use all of these apps: You only have 24 hours in a day, but every year, there is more and more technology for you to use.
The most overlooked economist of the 20th century, Ronald Coase, focused on friction. He noticed that friction between supply and demand — discovery costs, transaction costs, integration costs, switching costs, delegation costs, and usage costs — defined the shape of the economy. Like a physical law, these frictions explain why one company doesn’t do all things, why there’s an app for everything, and why everything still isn’t perfect.
What results from usage costs is a ruthless competition to out-use technology, that forces everyone to
This article was originally published on on VentureBeat.
Click here to read the rest of the article.