Information Flow is the Key

Information flow

A wise person once told me that information flow is the key to everything. Rest are simply details. Everyone knows that in the context of supply and demand. For example, a product that is cheap in Tanzania but expensive in Australia is bound to attract merchants who establish a trade route from Tanzania to Australia. The apparent flow observable from outside is of that particular product but in the background this is actually the information that moves the trade and profits.

The same can be said about expertise. When a particular company offers its product, it is the knowledge gained from learning plus doing that is packaged in the form of that product. Otherwise, everyone would be doing the same if that was lucrative enough.

New information not only establishes such routes but also opens up unexplored markets with huge profits. Consider as an example a team of mathematical biologists who study the behavior of human taste buds as well as food chemistry. They might come up with precise dynamic equations governing the functioning of taste sensors in a particular community or country. Building on that knowledge, they can simulate in computers the precise reactions as a result of different mixtures of food chemicals. Imagine how this route leads to optimal pleasure sensations of the tongue to a variety of foods. This can easily lead to edible products or specific dishes leading to restaurant chains that can conquer the market in no time. While others will be experimenting through trial and error, they will know the exact range of products to offer to each population. The competition will be weak if any.

On the surface, the name of that company or restaurant will make waves but behind the scene it will be the information that prevailed. This is not a hypothetical scenario. This is how Google and Microsoft have maintained their competitive advantage. The higher the gradient of information, the higher the profits. This is what Peter Thiel advocates in his book Zero to One.

Information is the key. Rest are simply details.

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