As Kris and I set sail with the Creative Destruction Fund blog, I thought it would be useful to illuminate the spirit behind what we are doing. Joseph Schumpeter described it best back in 1942. In his book, Capitalism, Socialism and Democracy, Schumpeter observes:
“The problem that is usually being visualized is how capitalism administers existing structures, whereas the relevant problem is how it creates and destroys them… This process of Creative Destruction is the essential fact about capitalism. It is what capitalism consists in and what every capitalist concern has got to live in… The fundamental impulse that sets and keeps the capitalist engine in motion comes from the new consumers’ goods, the new methods of production or transportation, the new markets, the new forms of industrial organization that capitalist enterprise creates… In capitalist reality as distinguished from its textbook picture, it is not that kind of competition which counts but the competition from the new commodity, the new technology, the new source of supply, the new type of organization – competition which commands a decisive cost or quality advantage and which strikes not at the margins of the profits and the outputs of the existing firms but at their foundations and their very lives.”
In my book, Quantum Investing (Thomson/Texere, 2002, 2004), I discussed in detail the coming gale of creative destruction that we would likely experience in the global economy as quantum-based technology penetrated more deeply into the way we live, work and play. I noted that technological innovation was expected to accelerate sharply in coming months and years.
With this blog, Kris and I seek to identify, illuminate and discuss the curves and contours of the creative destruction process, and along the way, generate some “fat pitch” investment ideas for our clients. We both believe it is a worthy endeavor and are excited about teaming up to produce what we hope are some high-valued added insights and commentary for clients.
