About twenty-five years ago, I belonged to a golf club with a guy named Eddie Mutch.

Somewhere between tee shots and drinks at the clubhouse, I learned Eddie owned a bedsheet factory in North Jersey, either Jersey City or Newark. This was not some artisanal operation making luxury linens for people who discuss thread count over brunch. Eddie made ordinary sheets for ordinary Americans, the kind JCPenney sold for eight bucks a set.

To manufacture those sheets in New Jersey for around two dollars, Eddie had to perform a daily high wire act. He carried the factory, the machinery, the payroll, and the overhead. He hired undocumented workers, paid people under the table, and bent, or broke, just about every rule in the book.

Then China called.

A Chinese manufacturer told him, essentially, ‘That sheet set costing you two dollars to make? We’ll make it for a quarter, put your label on it, and ship it to you.’

Eddie probably needed less than a second to understand the math.

Why keep the factory? Why carry the overhead? Why risk getting crushed by labor laws, taxes, regulators, or one disgruntled employee when somebody on the other side of the planet would do the work for pennies?

So Eddie got out of manufacturing and became the middleman. China made the sheets. Eddie put his label on them. JCPenney bought them. Everybody was happy, especially Eddie.

For about five years.

Then JCPenney figured out the obvious. Why pay Eddie when it could buy directly from the Chinese factory? If Eddie was paying a quarter, JCPenney could probably get them for twenty cents.

Eddie had introduced the buyer to the machine that would eventually replace him.

Game over.

I have thought about Eddie’s story for years. Knowing what we know now, what should he have done differently?

The honest answer is, probably not much.

He could not make New Jersey labor cost less than Chinese labor. He could not stop JCPenney from discovering the source. He could not protect a business whose only remaining advantage was knowing something the buyer had not figured out yet.

His real opportunity was the five-year window.

Once the factory in China entered the picture, Eddie was no longer building a permanent business. He was standing inside a temporary pricing inefficiency. His job was to recognize it, exploit it aggressively, bank the profits, and prepare for the day the two ends of the transaction met without him.

That is exactly where we are with artificial intelligence.

Right now, a small group of people are using AI to do the work of ten employees, build software without a development department, produce marketing without an agency, analyze data without a team of analysts, and operate businesses at a speed their competitors still do not understand.

They look like geniuses. Some of them are. But some are simply Eddie with a ChatGPT account.

They know where the cheap factory is.

Today, businesses will pay a premium to someone who knows how to connect AI to a real problem. They will pay for the automation, the prompt, the agent, the integration, and the judgment required to make the whole thing useful. There is real money in that gap, and there should be. Knowing how to use a new tool before everyone else is a legitimate advantage.

But it is not a permanent moat.

The models will improve. The interfaces will disappear. The complicated workflows will become buttons. Customers who currently pay an ‘AI expert’ will eventually buy directly from the machine, or the machine will simply be built into the software they already use.

AI consultants love to talk as if they are constructing the railroads. Many of them are running a tollbooth on a road that will soon route around them.

That does not mean the opportunity is fake. It means the opportunity has an expiration date.

The move right now is to use AI harder than everyone else. Cut costs. Increase output. Learn faster. Build assets you can keep, capital, distribution, customer relationships, proprietary data, a trusted brand, and ownership in things that will still matter when the technology becomes cheap and universal.

Extract profit from the window, but do not confuse the window with the house.

Ten or twenty years from now, people will tell stories about the early AI era the way I tell the story of Eddie’s bedsheets. They will wonder how a handful of people made fortunes merely by knowing how to ask a machine for something.

And the answer will be simple.

For a brief moment, the sheets cost a quarter, and JCPenney had not figured it out yet.

- FF2K