I was listening to an episode of Planet Money and, as one does, thought of a completely brand new and in no way derivative idea that would make many billions of dollars for myself and my future investors. It was a very exciting drive home. Of course, the prospects and originality of idea did not survive first contact with Google.
The episode in question, “Of Boxes and Boats” was characteristically delightful and informative. TL;DR: the supply chain is a disaster, ports are backed up, and the US is experiencing an especially acute shortage of warehouse space. A moment that especially caught my attention was warehouse manager expressing that there was, in fact, empty space in his warehouse, but that the firm currently leasing that space wasn’t using it, and the warehouse had no means of offering that space to another client.
That’s interesting. That’s a resource that, in the moment, is suboptimally allocated, even if only for the hour, day, or week. That’s an arbitrage opportunity. In fact, this is exactly what AirBnB did: found real estate that was more valuable to potential short-term renters than current lease holders that could be temporarily exchanged between parties, and as a facilitator for that exchange AirBnB could take a cut. Someone needs to make Warehouse AirBnB! I’m a genius.
No, I’m not.
Meet “The Airbnb of Warehouse Space”
Sigh. I wasn’t even first to the incredibly obvious one-line sales pitch. But my fanciful dreams of buying an English (or at least Belgian) soccer team asside, I honestly can’t decide if I should feel better or worse knowing this idea is already out there. On the one hand, it’s good to be reminded how dynamic and responsive entrpreneurs are in identifying problems and offering solutions.
On the other hand, the supply chain is still very much a mess, warehouses are still out of useable space, and I see no evidence that there is in fact a rich secondary market in warehouse space allocations. Clearly something is getting in the way of the market responding. Is the market over-regulated? The Department of Homeland Security apparently makes entry into the shipping and warehouse business pretty costly. Maybe it’s under-regulated? Perhaps firms are squatting on warehouse space rather than sell it to potential long-term competitors. Maybe the intermediaries, real and hypothesized, are so inefficient that their additional costs as a middlemen are prohibitive. Maybe it’s <Insert Politician You Don’t Like Here>‘s fault. That idiot screwed up everything they touched.
The fact remains though that the idea itself was not the limiting factor, and I suspect it rarely is. I thought of it in ten seconds after listening to a podcast. For the people working in such a field, they probably come up with similar ideas daily. No, the limiting factor isn’t inspiration, or likely even perspiration. It’s being able to identify a path from idea to execution. A path that includes sufficient time, energy, capital, and personnel to make it happen. It’s about resources and risk. All of which is obvious. I’m pretty sure the “It’s About Resources and Risk” banner and bunting gets used more than “Happy Birthday” at your modal MBA program.
But it’s good to be reminded of the obvious every now and then. There are great ideas everywhere. When we’re thinking about any prospective policy regarding an issue we care about, it never hurts to think about whether it will be an aid or hindrance to others when they’re trying to solve the problems upstream and downstream from yours. Sometimes the best idea is to just stay out of the way.
Economist Writing Every Day 