Competition is the Mother of Innovation

Virginia Postrel:

The LAT’s David Colker tells the story of how the last soap factory in town has managed to survive despite low-cost competition from China. It’s clear that soap-making doesn’t have a big future in Los Angeles, but the story also a tribute to the ingenuity that has allowed the company to find new markets and new operating methods.

Hoping to trim one of his biggest remaining expenses, electricity, he contacted the Department of Water and Power. “They told me if I could shut down by 1 p.m., they could give me a much better rate,” Shugar said. He moved the plant’s starting time back to 5 a.m. to meet the cutoff time, resulting in 40% savings.

One of his most valuable assets was his mechanical engineer, Cheng Lim, who came to Shugar from Jergens when that company closed its Burbank plant in 1992. Lim could have stayed with the giant company, based in Cincinnati, but “my wife did not want to go,” he said. “Too cold there.”

Lim adapted the Shugar production line for use by fewer employees.

Anderson on “We Media”

Chris Anderson correctly analyzes the “we media” bubble. Change is certainly underway in the media world, but it will not, clearly be linear:

First, let’s agree that “media” is anything that people want to read, watch or listen to, amateur or professional. The difference between the “old” media and the “new” is that old media packages content and new media atomizes it. Old media is all about building businesses around content. New media is about the content, period. Old media is about platforms. New media is about individual people. (Note: “old” does not mean bad and “new” good–I do, after all, run a very nicely growing magazine/old media business.)

The problem with most of the companies Skrenta lists is that they were/are trying to be a “news aggregators”. Just as one size of news doesn’t fit all, one size of news aggregator doesn’t either.