11–20 of 80 posts
Google got lucky because AltaVista was run by Digital Equipment Corporation, whose marketing was legendarily bad (slogan: "DEC has it now, but you can't have it.")
Not sure SideCar is a good example. Investors are pouring billions of dollars into Uber and Lyft in an attempt to get the monopoly position. That doesn't sound much like a natural "winner take all". Google got lucky because AltaVista was run by Digital Equipment Corporation, whose marketing was legendarily bad (slogan: "DEC has it now, but you can't have it.")
The article is not convincing that these are natural monopolies. What happened to AOL and AIM? What happened to MySpace? There is also this recent article about Chinese innovation: https://news.ycombinator.com/item?id=10806386 Natural monopoly in the Information Age may turn out to have been natural, but it feels unnatural. There are explanations, but I, personally, do not find them to be convincing.
Utilities don’t need to be monopolies, necessarily. It’s just that they were designed that way at a point in time. It’s a path of history, but not a natural law.
Wintel too. Which was a monopoly, until it wasn’t. It’s not that their position in the market changed, but the definition of the market itself (i.e., computing became mobile).
Google (a monopoly) is (or was) terrified by both Facebook and Amazon. Neither of which is a search engine, but each of which is a path toward determining what product to buy. The market itself changes.
I don’t see much network effect with Uber. I see a liquidity effect, to a degree, but the barriers of entry are low on both supply and demand side. To the extent Uber has a network effect it’s O(n) at best. I don’t have a connection to other Uber users. I like that there are enough users to make it worth the drivers’ while – again, liquidity, not network. On Facebook, network effect is probably O(n^2). The connection…
I don’t see much network effect with Uber. I see a liquidity effect, to a degree, but the barriers of entry are low on both supply and demand side. To the extent Uber has a network effect it’s O(n) at best. I don’t have a connection to other Uber users. I like that there are enough users to make it worth the drivers’ while – again, liquidity, not network. On Facebook, network effect is probably O(n^2). The connection…
The article is not convincing that these are natural monopolies. What happened to AOL and AIM? What happened to MySpace? There is also this recent article about Chinese innovation: https://news.ycombinator.com/item?id=10806386 Natural monopoly in the Information Age may turn out to have been natural, but it feels unnatural. There are explanations, but I, personally, do not find them to be convincing.
Agree. “Natural monopoly” is a very lazy term. It’s mostly about looking around at a moment and declaring that it must be so. Utilities don’t need to be monopolies, necessarily. It’s just that they were designed that way at a point in time. It’s a path of history, but not a natural law. Wintel too. Which was a monopoly, until it wasn’t. It’s not that their position in the market changed, but the definition of the mar…
I don’t see much network effect with Uber. I see a liquidity effect, to a degree, but the barriers of entry are low on both supply and demand side. To the extent Uber has a network effect it’s O(n) at best. I don’t have a connection to other Uber users. I like that there are enough users to make it worth the drivers’ while – again, liquidity, not network. On Facebook, network effect is probably O(n^2). The connection…
Uber Pool and Lyft Line are now the majority of rides in SF, not sure about other cities - but there is definitely a network affect there
I don’t see much network effect with Uber. I see a liquidity effect, to a degree, but the barriers of entry are low on both supply and demand side. To the extent Uber has a network effect it’s O(n) at best. I don’t have a connection to other Uber users. I like that there are enough users to make it worth the drivers’ while – again, liquidity, not network. On Facebook, network effect is probably O(n^2). The connection…
I guess I don't see how liquidity effect and network effect are different here. If there aren't enough riders then there aren't enough drivers. If there aren't enough drivers then pickup times are too high and the service dies. It really comes down to how important pickup times are.
I would argue that with perfect unregulated competition, having more than one firm with a stable market share is a sign of INefficiency. Small differences will get magnified, and whoever has the small edge will completely dominate, assuming rational behavior.
Earlier quoted context omitted.
Agree. “Natural monopoly” is a very lazy term. It’s mostly about looking around at a moment and declaring that it must be so. Utilities don’t need to be monopolies, necessarily. It’s just that they were designed that way at a point in time. It’s a path of history, but not a natural law. Wintel too. Which was a monopoly, until it wasn’t. It’s not that their position in the market changed, but the definition of the mar…
Good point about utilities. Plus, with decentralized (solar) power generation, utility companies are really starting to show some cracks too. As soon as distributed energy storage is economically viable, they're going to need to adapt even further.