Monday, May 30, 2011

A couple of links/quotes on the relationship between perceived value and technology [tied to a business model]:

The first one is about new methods for squeezing oil out of stone:

What makes the new fields more remarkable is that they were thought to be virtually valueless only five years ago. “Everyone said the oil molecules are too large to flow in commercial quantities through these low-quality rocks,” said Mark G. Papa, chief executive of EOG Resources.

EOG began quietly buying the rights to thousands of acres in the Bakken and Eagle Ford after an EOG engineer concluded that the techniques used to extract natural gas from shale — fracking, combined with drilling horizontally through layers of rocks — could be used for oil. Chesapeake and a few other independents quickly followed. Now the biggest multinational oil companies, as well as Chinese and Norwegian firms, are investing billions of dollars in the fields.

The second is about missing out on the McDonald's franchise opportunity:

An older brother had promised to finance his first restaurant when Mr. Langerman was ready -- and if the brother approved the venture.

Mr. Langerman studied his trade. He read restaurant magazines. And in 1949 or 1950, he says, he read an article about a restaurant in California called McDonald's.

He wrote to the McDonald brothers about opening a franchise. They advised him that he would need $35,000 to $50,000 to buy their very first franchise and to make a down payment on the equipment he would need.

Mr. Langerman went to his brother Charley and told him he was ready to open his own place -- a hamburger operation.

"Who eats hamburgers?" he recalls his brother as saying.

Exit Mr. Langerman. Enter Ray Kroc, to earn a fortune and a page in history as the driving force behind the McDonald's empire.

tags: technology, system, business, model, high value

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