Value Speed – Book of the Week

The laws of physics must be obeyed.  Yet within them, speed may be harvested, if you value it enough.  Look for example at this week’s book recommendation: Michael Lewis’s Flash Boys.  There are several intriguing stories that unfold in this work via Lewis’s masterful writing.  But the one that caught the eye of The Agile Strategist was an early chapter about fiber optic cable paths. 

Electrical impulses, it turns out, are like everything else.  They obey the laws of physics and cover shorter distances faster.  What’s the shortest distance? A straight-line.  So a fiber optic cable between two markets (Chicago and New York) that was laid in an exactly straight line, would permit impulses (trading signals) to travel to a destination faster.  Faster than what? Faster than any path that wasn’t a straight line.  And, of course, there is financial advantage in getting information more quickly at the destination – even if the marginal difference is microseconds.   The reader can enjoy the maneuverings and nerve it took to obtain the rights of way for that straight-line cable path.  It’s a superb entrepreneurial tale.

Translate this idea to other strategic challenges.  How quickly can the world community move how much of what to West Africa to combat Ebola?  How rapidly can US Liquid Natural Gas port facilities be remodeled to permit large-scale export of product, instead of just the current import capability?  There are numerous other current examples.

Read Lewis this week, think about speed as a strategic factor, value and harvest rapidity.