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Some businesses are just a tax
Winners and losers
The old line is that it's a stock picker's market, meaning there will be winners and losers and a lot of dispersion. In a post-AGI world the gains to the winners could be extraordinary. High-quality service businesses that preserve their place in the ecosystem and expand it can become orders of magnitude more valuable.
Businesses that act like a tax
Lower-quality businesses are easier to disintermediate. They provide no enduring, value-added service and work more like a tax. Some of those will simply go away, and less friction is good for the economy.
Asking why five times
Telling the two apart means asking why a business is good, then asking why again. John Malone was a first-principles thinker who asked why five times to reach the root cause, as the book Cable Cowboy describes. Working out which businesses will still be great in twenty or thirty years is maybe the most important task in capital allocation right now.
How did technology squeeze travel agents?
In 1995, Delta Air Lines capped the commission it paid agents on domestic tickets, and other major US airlines followed. Airlines then steered customers toward booking directly on their own websites. Online agencies took part of the leisure market, and Expedia launched in 1996 as a Microsoft division. Economists call the removal of a middleman from a transaction disintermediation.
How does asking why five times work?
The Five Whys technique comes from Sakichi Toyoda, the founder of Toyota Industries, and was popularized by Taiichi Ohno in the Toyota Production System. Each answer becomes the subject of the next question, which pushes past the first visible symptom toward the underlying cause. Ohno's standard example traced a stopped machine back through a blown fuse to a missing strainer on an oil pump.
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