Matt Mullenweg on Creative Destruction
In the quote below, WordPress founder Matt Mullenweg alludes to the ‘creative destruction’ phenomenon that is at the heart of a free market/capitalist system. Entrepreneurs will continue to disrupt the status quo, which has the positive effect of reallocating capital that — as demonstrated by this process — is currently misallocated. Mullenweg, however, misses a broader point that the reallocation of capital, while destroying wealth for some, creates somewhat more wealth for these entrepreneurs and consumers in total.
“The hackers and engineers of Y Combinator* are doing what hackers and engineers do to any industry, they’re efficiently and ruthlessly disrupting the traditional model of venture capital and are going to destroy far more more wealth for their contemporaries than they create for themselves, as broadband did to entertainment, Craigslist did to newspapers, and Amazon did to traditional retailers.”
>> Source: All Things D
* Y Combinator is a prestigious VC incubator program that has provided seed capital for 380 startups since 2005, including Reddit, Scribd and Dropbox.