In 1928, Henry Ford built a town in the middle of the Amazon so he’d never have to buy rubber from anyone.
He was about a hundred years too early.
Ford’s cars ran on rubber — tires, hoses, belts — and nearly all of it came from British and Dutch plantations that had cornered the market and jacked up the price. Ford couldn’t stand depending on a supplier he didn’t control. So he decided he’d grow his own.
He carved 2.5 million acres out of the Brazilian jungle and built a working slice of Michigan on the banks of the Amazon: prefab houses with Cape Cod shingles, a hospital, a golf course, a movie theater, ice cream shops. He shipped the whole thing 5,000 miles upriver.
He named it Fordlandia.
The newspapers swooned. He was going to break up the rubber cartel and grow every tire his company would ever need.
Then the jungle ate it. His men planted the rubber trees in tight rows the way the British did in Asia, but in their native Amazon the trees were swarmed by blight and caterpillars and died. The imported American managers got malaria. The workers rioted over the cafeteria food. It was a disaster.
Ford poured in around $20 million — hundreds of millions today — over seventeen years, and not one drop of rubber from Fordlandia ever reached a single Ford car. He sold the land back to Brazil at a loss. He never once visited the town with his name on it.
Every company has to face the same decision Ford made: build it yourself, or buy it from someone else.
The economist Ronald Coase won a Nobel for stating the obvious hypothesis: you build it yourself only when buying it costs more. For a hundred years, on almost everything, buying won. It’s why you rent your software from Salesforce and Workday instead of building your own.
Ford’s only mistake was timing. Building resources across the world was absurdly expensive in 1928, and he lit $20 million on fire to figure it out. It stayed expensive for a century.
It isn’t anymore. A company that spends $400 million a year on software just decided to build its own instead.
The friction to build something has collapsed to zero. Ford burned $20 million and never got one tire. You can build anything you want tonight for free.
So what have you built?
Starbucks spends $400 million a year on software. Yesterday they announced they're moving off IBM and Microsoft to build their own custom systems in-house.
IBM dropped 3% and Salesforce dropped 4% on the news.
And honestly this is, unequivocally, the biggest signal I've seen
Soon, it will take just 1 day to generate a product.
What will be key to success?
1/ Idea
2/ Marketing
3/ Vision
4/ Brand
5/ Community
What would you focus on?
@grok@Kalshi grok I regret to inform you that a wheelie implies the entire back end of your car is still on the ground. All you did was spare your front bumper.
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