Efficiency Beats Legacy

The reason entrepreneurship is so successful is because it’s made up of people searching for opportunities in the market trying to make things more efficient. Startups fall into this category too. Even the unicorns. Stripe, Uber, Box, etc. are all entrepreneurial endeavors that became billion plus dollar companies. They figured something out that the legacy firms were failing at; efficiency. 

Based on R.H. Coase’s paper “The Nature of the Firm”, the larger a company gets, the harder it is to control costs. The startups will eventually fail (see Facebook). And in their place a more efficient company will arise. The world economy is a constantly shifting world of rising and falling efficiencies. But at the end of the day, in a capitalist society, the most efficient always win. 

Even if Uber is to fail, it made it clear the world is better off with a car sharing app as opposed to the outdated medallion system taxi drivers had to utilize. Even if Spotify fails at becoming the world leader in music streaming, it has set a course of action on how to share music while compensating artists. The world is constantly evolving and becoming a better place because of the market. We are living in a time where entrepreneurs have boundless chances to create a more efficient system and they are despite the existence of legacy firms and laws.