Notes

[MUSIC]
So back now to our discussion about
the virtual world and the real world
interacting.
we spoke earlier about search friction
being
reduced and also geographic friction being
reduced.
Now, I want to add one additional layer to
this, and I want us to get us, get
us to think about goods and also
information,
and I'm going to relate them to those two
concepts.
So historically, way back when before the
virtual world of the
Internet came along, all markets were
fairly local, meaning if we wanted
products: jeans, diapers, whatever those
things were.
We wanted to watch movies, we had to go to
local theaters.
We wanted to buy products, we had to go to
local stores.
So, the first thing that the Internet has
really done
for us is it's opened up the possibilities
of big markets,
bringing people together from various
parts of the country, or even
parts of the world, pulling them together
into one big market.
And one big set of people that we can
therefore serve as diapers.com,
yelp, or any other number of businesses.
Now, again, if we focus more specifically
on content versus product, there's
an interesting difference there, depending
on the location that you live in.
So, if you live in a small town, as I
mentioned earlier, like Iowa City, the
Internet is a great liberator.
The Internet therefore offers a substitute
or an alternative way for you
to get goods that you might not otherwise
be able to get.
Let's imagine the nearest supermarket is
ten miles away.
What you can do is you can go on to
diapers.com
or soap.com and have everything just
delivered direct to the door.
So the Internet in a small town becomes a
substitute for
the lack of variety that you might have in
your local market.
Information's a little bit different.
If you live in New York City, perhaps you
need the Internet less for purchasing
things, but where the Internet becomes
very important
for you is in the provision of
information.
So there's so much to do in
New York City.
It's very hard to keep track of that, of
it all So you may need to have apps.
You may need to have different
websites explaining various plays,
theaters, restaurants,
bars, nightclubs, activities, comedy shows
that you might want to avail yourself of.
So in a big populous place, the internet
becomes a complement for information.
Okay, so just to recap those two points,
the virtual world substitutes for the real
world in very small places where we're
somewhat starved for
product, and the inter, the Internet
becomes a complement in
larger places where we need to be able to
figure
out what we're going to do with our free
time.
[MUSIC]