The Gong Show

I had an interesting conversation recently with an analyst candidate at USV about the transport of bits (ie zeros and ones, coded information) vs atoms (ie physical goods, people, objects). It seems that the transfer of bits is largely a solved problem. But, we’re still figuring out the transfer of atoms…

Some big companies have been built by introducing innovative solutions to increasing the efficiency with which we can transport atoms. FedEx is a great example.

Other big companies have been built by replacing atoms with bits. For example, prior to PayPal, eBay users were mailing checks or money orders to each other. But, then PayPal figured out how to email money… they changed the dynamics of the problem from a transfer of atoms to a transfer of bits.

I think Amazon’s recent announcement regarding fulfillment services is big. It’s more FedEx than PayPal, and it’s another step in the evolution of transferring atoms. I’m excited to see what the implications will be for the long tail of retailers.