In Silicon Valley Now, It’s Almost Always Winner Takes All
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Re: In Silicon Valley Now, It’s Almost Always Winner Takes All
#2like the time of the robber barons and telecom monopolies
Re: In Silicon Valley Now, It’s Almost Always Winner Takes All
#3The 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.
Re: In Silicon Valley Now, It’s Almost Always Winner Takes All
#4I think this gets down to the network effect (aka Metcalfe's Law).
Like the author notes, Coke isn't going to drive Pepsi out of business. Because fundamentally if either gets an additional point in market share, that doesn't compound into larger and larger gains.
But in marketplaces (Uber, Lyft, Ebay) or pure network plays (Skype, Facebook), having one additional user creates N new potential connections. Out of those potential connections, a handful are made which encourages more and more.
A 1% gain can compound over time to huge advantages that the next group can't overcome.
Re: In Silicon Valley Now, It’s Almost Always Winner Takes All
#5I didn't expect SideCar to shut down just hours before the most difficult night of the year to get a ride. I hope their users install an alternative and get it working before they go out for NYE.
Re: In Silicon Valley Now, It’s Almost Always Winner Takes All
#6I didn't expect SideCar to shut down just hours before the most difficult night of the year to get a ride. I hope their users install an alternative and get it working before they go out for NYE.
End of tax year
Re: In Silicon Valley Now, It’s Almost Always Winner Takes All
#7I didn't expect SideCar to shut down just hours before the most difficult night of the year to get a ride. I hope their users install an alternative and get it working before they go out for NYE.
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Re: In Silicon Valley Now, It’s Almost Always Winner Takes All
#8I 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 connections exist and themselves have value.
Re: In Silicon Valley Now, It’s Almost Always Winner Takes All
#9I 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.
Re: In Silicon Valley Now, It’s Almost Always Winner Takes All
#10A decentralized ride solicitation tool with a reputation system, maybe blockchain-based, could kill off Uber and Lyft almost overnight. Especially if existing taxi companies embraced it. I want to know if a driver is licensed, insured, etc. Uber doesn't provide that, and I don't like the rent-seeking aspect of their service.
If it's winner-takes-all, it's only a matter of time until another winner takes all. I don't think we've seen the end of this market yet...
EDIT: Wow, two down votes in 10 minutes. Care to say why? There are a lot of incumbent players losing market share to Uber - how do they compete? It seems like the perfect opportunity for more of a SaaS business model built around selling integration with an open network. There are already reputation-based blockchain implementations. Why would a decentralized model not work?