6 ms·

As impressive as it may sound, this is pretty shocking for the state of the industry. An innovative, new upshot getting sucked up/ blatantly ripped off by an e

As impressive as it may sound, this is pretty shocking for the state of the industry. An innovative, new upshot getting sucked up/ blatantly ripped off by an established player with more muscle, money (and in this case - users) to throw at the problem is not a great incentive for entrepreneurs. Consolidation at this level resembles communism more closely than the kind of free market innovation we should be seeing. http://avc.com/2017/02/the-end-of-the-level-playing-field/ http://avc.com/2017/02/the-end-of-the-level-playing-field/

aaronblohowiak 9y ago
Remember Microsoft?
look_lookatme 9y ago
Snap is a Camera Company, so I am sure that is where they will out-innovate everyone else... in the Camera Company space.
giarc 9y ago
I'd agree with the ripped off part (although I'm sure there are companies that did something similar in the past). However, I'm not sure what muscle and money has to do with it. It's not like Instagram/FB were advertising for Stories (at least I didn't see any).
- radiusvector 9y ago
  Muscle/money is also equivalent to rallying resources to quickly rip off features. Let's not forget that builder (engineering/design/product) resources in small/medium size companies come at a premium.
  - giarc 9y ago
    It doesn't take a large engineering team to add stickers to a picture. I'm being facetious here, but let's be honest, FB/IG/Snap are not building a space shuttle.
yeukhon 9y ago
But that's fair. Facebook started out as a startup and it grew over time and eventually become a tech giant. So should Facebook not respond to a business threat from competitors now? Is Snapchat the only one allowed to implement the feature? That's the tone I am hearing. Let's be fair. The product team and the developers working on the Stories product did an amazing job. Also, not every well-established players do well trying to replicate / model after its competitors. Google is known to be one of them, when it comes to her attempt to rip FB apart. Several times more massive than Facebook's size and money pool, but Google failed to make a real den in the market. Facebook is one of the few tech giants today capable of engineering execution that can bring business some values. Disclaimer: I have not seen anyone in my circle using Stories on Facebook yet, but on Instagram plenty. Innovation is competition. Think of the glory 50s - 80s of technical innovations. Something motivates somebody to do something different. Innovation does not necessarily equates to breakthrough. Diversify your product line and product features is innovative. Let's be real fair here.
- AndrewKemendo 9y ago
  Yes let's be fair. It's fair to say that Facebook did not threaten coercion on anyone, and simply responded to market demand for a certain type of service. It's also fair to say that Facebook is in a unique position to be able to use it's considerable platform to absorb mind share away from competing platforms. It's also fair to question if this is a good thing for the ecosystem of technology, and more specifically market technology from many different points of view - namely power distribution. The trend here is that no matter what you do in technology, or how successful you become - you'll never beat Google, Apple, Facebook, Microsoft or Amazon. So, is that good, neutral, bad? I think probably bad, but I'm not sure. Or maybe the answer is simply that Snapchat is really just a feature that got out of hand and is vastly overpriced.
  - yeukhon 9y ago
    I think it is absolutely fair to question. I thought it was not fair when OP stated big brother throwing fist at smaller company (and Snapchat isn't a startup / small player anymore). > you'll never beat Google, Apple, Facebook, Microsoft or Amazon But Facebook is the youngest. Apple did fail and almost vanish until Steve Jobs came back. Microsoft was sucking on its Windows license and losing so top talents, it came back with Azure and better Windows and Office product. Amazon diversified its product in 2005 and continued to do so now it has so much more capital to invest. But Google destroyed Yahoo, MSN and AOL, and other web directory websites out of business. MySpace is sold. Yahoo is sold. Tumblr's ability to make profit is questionable, and will likely fail eventually. Blackberry failed to come back. Sony Ericsson, Motorola, Nokia all sold after Android came along and too late to adopt (from Seamian to Android). Google's first smartphone was a big step up. Wii U sale wasn't good. I can go on with many examples. Sony's digital music products were doing well then Apple's iPod came along. But was Apple's success a pure luck? A pure technical ingenious coincidence? Sony was much bigger than Apple at the time. The business world is funny because the "too big to fail" will eventually fail one day, either through merge or complete bankruptcy. I predict Uber is too big to fail, but it might eventually pull back its main business back to NA. But that's my wild guess. So the question is fair, but I think there's a question on leadership. Why some big company fail and others strive? Pure luck? Luck is 30%, 70% is people. But I share the sentiment that Stories is not as exciting as hearing a robot can talk to me like a normal human. That would be a huge breakthrough, big innovation, and a whole new business venture. Was Facebook's AI messenger great? No, it was a poor experiment.
sigmar 9y ago
>An innovative, new upshot getting sucked up/ blatantly ripped off by an established player with more muscle, money (and in this case - users) to throw at the problem is not a great incentive for entrepreneurs. >Consolidation at this level resembles communism more closely than the kind of free market innovation we should be seeing. An established player pushing out a smaller startup sounds very much like capitalism, not communism. You could maybe argue it is consolidating into a monopoly, but not that it is communism.
- radiusvector 9y ago
  'Pushing out' by using superior innovation/market advantages? Or by currying favor with the governments of the world? In effect, creating that monopolistic structure. FB is very clearly in the latter camp. That is communism.
  - mattnewton 9y ago
    Communism implies government ownership. Crony capitalism, maybe. They still competed and this time Goliath won; we often forget what makes that story special, that David is not the favorite to win.
  - d3ad1ysp0rk 9y ago
    You don't understand communism.
    - radiusvector 9y ago
      Communism understands you.
deleted 9y ago
[deleted]
AndrewKemendo 9y ago
Totally in agreement here. I think this is actually a much bigger deal than anyone imagines. It shows that even if you create a HUGE new thing, you're probably going to get killed by the big ones. There is no competing anymore - you either assimilate through acquisition or get squeezed to death on the back end because the incumbents have the cash, data and talent. So what the hell is venture supposed to do in this landscape? I'm genuinely curious. If the goal of venture money is to build IPO level companies - not one off acquisitions - then what is the move here? I even remarked as such a few days ago: https://twitter.com/AndrewKemendo/status/851840701214208002 https://twitter.com/AndrewKemendo/status/851840701214208002
- meheleventyone 9y ago
  Innovate with something harder to copy or that you can gain genuine protection for? Snapchat seem to already be moving in that direction.
  - AndrewKemendo 9y ago
    Right, except those big companies are WAY ahead of everyone on that too. Their patent portfolios cover literally everything conceivable. It's quite astonishing really. I mean far future stuff like nanodrug delivery methods, brain computer interfaces etc... It's going to take tens or hundreds of millions in "seed" investment in the future to compete with one of these behemoths - and even then they all have venture arms so you better find money that is not associated with one of them - impossible probably.
    - meheleventyone 9y ago
      I don't think it changes really it's just the next huge successes will come from a direction that will blindside the current incumbents. Either that or the model is dead as the ladder gets pulled up behind the winners.
      - AndrewKemendo 9y ago
mbesto 9y ago
> An innovative, new upshot getting sucked up/ blatantly ripped off by an established player with more muscle, money (and in this case - users) to throw at the problem is not a great incentive for entrepreneurs. > http://avc.com/2017/02/the-end-of-the-level-playing-field/ http://avc.com/2017/02/the-end-of-the-level-playing-field/ These two things aren't the same. The former is complaining about larger companies copying features (where no legislation exists) and the latter is complaining about incurring legislation that impedes competition. So what do you want? Legislation or not? You can't have both. > is not a great incentive for entrepreneurs. There are plenty of opportunities for entrepreneurs to create new technologies, but the gold rush for creating the next big social app may indeed be over.
- mattnewton 9y ago
  Here's to hoping new entrepreneurs are motivated by something more than getting rich off the next hot walled social garden, where innovation is a gimmick like self "deleting" messages, 140 characters, or "micro-apps".
  - derefr 9y ago
    I think you're assuming a lot by saying "entrepreneurs" there. It's not like we pump "entrepreneurs" out of some sort of cadet school, and then some of them go on to join the Dark Side. People become entrepreneurs (i.e. found businesses) for a variety of reasons. One of those reasons is because they want to get rich quick. Social walled gardens are a good path to that, if you can manage to build one. The people who do so might pretend to be participating in the "hacker ethos"—but they're not members of our community able to be swayed by our social mores. They're just businessmen, of their own kind.
    - mattnewton 9y ago
      Of course, I only mean I wish that people starting new ventures are motivated to create new products that aren't walled social gardens, and hopefully have some better positive externalities of the kind we all hoped the internet would bring in the 90s. I don't care if that happens by social being not a way to get rich anymore, or by a class of entrepreneurs being inspired to make something else, as long as it happens.
patrickaljord 9y ago
Or maybe, you should not invest in products that could be a feature that could be easily added to an incumbent and companies who focus on these kinds of products tend to fail, just as intended by the free market.
zone411 9y ago
I agree that it seems unfair but maybe the lesson is that the innovation needs to be more than a feature that doesn't present any technical difficulties for larger players to copy?
bdrool 9y ago
Same reason why so many people hated Microsoft in the 90s.
MichaelGG 9y ago
Given how well the Snapchat guys have done, I'm curious as to how you can say there's not a great incentive.
theptip 9y ago
To me the thing that is shocking is that a buggy app with crap UX and only the network effect as their moat against competition could be valued at $29B. If you build a product that can be cloned trivially, you should expect others to clone it. If you are relying on the network effect to beat off competitors, you'd better not have competitors with a bigger network. The question is, can Snapchat use their newly obtained war chest to make a counterplay that differentiates them from Facebook/Insta. If I had cash to gamble I'd short Snapchat and bet no, but we'll see.
cbhl 9y ago
> An innovative, new upshot getting sucked up / blatantly ripped off by an established player If you're getting "ripped off by an established player", then you know you've made it. The challenge then is making sure you have a strategy for co-existing with the incumbent (e.g. being more nimble, expanding the market), being acquired by the incumbent, or building a moat (e.g. expanding into a vertical that the incumbent can't touch; innovating faster than the incumbent can copy you).
roymurdock 9y ago
I think you're being a tad dramatic here... Facebook offered to acquire Snapchat for $3B cash in 2014. [1] Snapchat declined the offer, then went on to have a successful IPO with NO VOTING RIGHTS for common shareholders (a first). Snapchat is a successful company, Evan Spiegel is a billionaire, and any entrepreneur would gladly follow in his footsteps. What happens now between Snapchat and Facebook is largely irrelevant, the original Snapchat team found a wildly successful exit. Sure, it might suck for the majority of Snapchat's employees if the company goes under due to competition from Facebook, but the lesson for entrepreneurs is pretty clear. Also, one company copying another's product with no government or legal protections would occur under a purely capitalist system. A move towards communism would entail the US gov. stepping in a nationalizing Facebook/Snapchat...which is way off base here... [1] http://mashable.com/2014/01/06/snapchat-facebook-acquisition-2/#mSz0PSOLuiqd http://mashable.com/2014/01/06/snapchat-facebook-acquisition...
- guelo 9y ago
  Which highlights a fundemantal problem with capitalism: it tends towards giant monopolies as industries mature. Capitalism only works with a strong government righting the ship. But even that eventually fails when the government gets captured by the most powerful companies.
josephruscio 9y ago
Facebook attempted to buy Snapchat for $3B 3 years ago (http://mashable.com/2014/01/06/snapchat-facebook-acquisition-2/#LXuxODhmqiqU http://mashable.com/2014/01/06/snapchat-facebook-acquisition...). Entrepreneurs should be plenty encouraged by that. Snapchat made the decision to compete with Facebook.
jforman 9y ago
Startups need moats to fend off existing market bigwigs, story at 10... (this dynamic dates back to the first startup...MSFT ate up an entire ecosystem of startups for a generation)
ClassyJacket 9y ago
Free market competition between two large corporations is communism now? I think you're very, very, VERY confused about what communism is.

aaronblohowiak 9y ago

Remember Microsoft?

look_lookatme 9y ago

Snap is a Camera Company, so I am sure that is where they will out-innovate everyone else... in the Camera Company space.

giarc 9y ago

I'd agree with the ripped off part (although I'm sure there are companies that did something similar in the past). However, I'm not sure what muscle and money has to do with it. It's not like Instagram/FB were advertising for Stories (at least I didn't see any).

radiusvector 9y ago
Muscle/money is also equivalent to rallying resources to quickly rip off features. Let's not forget that builder (engineering/design/product) resources in small/medium size companies come at a premium.
- giarc 9y ago
  It doesn't take a large engineering team to add stickers to a picture. I'm being facetious here, but let's be honest, FB/IG/Snap are not building a space shuttle.

yeukhon 9y ago

But that's fair. Facebook started out as a startup and it grew over time and eventually become a tech giant. So should Facebook not respond to a business threat from competitors now? Is Snapchat the only one allowed to implement the feature? That's the tone I am hearing. Let's be fair. The product team and the developers working on the Stories product did an amazing job. Also, not every well-established players do well trying to replicate / model after its competitors. Google is known to be one of them, when it comes to her attempt to rip FB apart. Several times more massive than Facebook's size and money pool, but Google failed to make a real den in the market. Facebook is one of the few tech giants today capable of engineering execution that can bring business some values. Disclaimer: I have not seen anyone in my circle using Stories on Facebook yet, but on Instagram plenty. Innovation is competition. Think of the glory 50s - 80s of technical innovations. Something motivates somebody to do something different. Innovation does not necessarily equates to breakthrough. Diversify your product line and product features is innovative. Let's be real fair here.

AndrewKemendo 9y ago
Yes let's be fair. It's fair to say that Facebook did not threaten coercion on anyone, and simply responded to market demand for a certain type of service. It's also fair to say that Facebook is in a unique position to be able to use it's considerable platform to absorb mind share away from competing platforms. It's also fair to question if this is a good thing for the ecosystem of technology, and more specifically market technology from many different points of view - namely power distribution. The trend here is that no matter what you do in technology, or how successful you become - you'll never beat Google, Apple, Facebook, Microsoft or Amazon. So, is that good, neutral, bad? I think probably bad, but I'm not sure. Or maybe the answer is simply that Snapchat is really just a feature that got out of hand and is vastly overpriced.
- yeukhon 9y ago
  I think it is absolutely fair to question. I thought it was not fair when OP stated big brother throwing fist at smaller company (and Snapchat isn't a startup / small player anymore). > you'll never beat Google, Apple, Facebook, Microsoft or Amazon But Facebook is the youngest. Apple did fail and almost vanish until Steve Jobs came back. Microsoft was sucking on its Windows license and losing so top talents, it came back with Azure and better Windows and Office product. Amazon diversified its product in 2005 and continued to do so now it has so much more capital to invest. But Google destroyed Yahoo, MSN and AOL, and other web directory websites out of business. MySpace is sold. Yahoo is sold. Tumblr's ability to make profit is questionable, and will likely fail eventually. Blackberry failed to come back. Sony Ericsson, Motorola, Nokia all sold after Android came along and too late to adopt (from Seamian to Android). Google's first smartphone was a big step up. Wii U sale wasn't good. I can go on with many examples. Sony's digital music products were doing well then Apple's iPod came along. But was Apple's success a pure luck? A pure technical ingenious coincidence? Sony was much bigger than Apple at the time. The business world is funny because the "too big to fail" will eventually fail one day, either through merge or complete bankruptcy. I predict Uber is too big to fail, but it might eventually pull back its main business back to NA. But that's my wild guess. So the question is fair, but I think there's a question on leadership. Why some big company fail and others strive? Pure luck? Luck is 30%, 70% is people. But I share the sentiment that Stories is not as exciting as hearing a robot can talk to me like a normal human. That would be a huge breakthrough, big innovation, and a whole new business venture. Was Facebook's AI messenger great? No, it was a poor experiment.

sigmar 9y ago

>An innovative, new upshot getting sucked up/ blatantly ripped off by an established player with more muscle, money (and in this case - users) to throw at the problem is not a great incentive for entrepreneurs. >Consolidation at this level resembles communism more closely than the kind of free market innovation we should be seeing. An established player pushing out a smaller startup sounds very much like capitalism, not communism. You could maybe argue it is consolidating into a monopoly, but not that it is communism.

radiusvector 9y ago
'Pushing out' by using superior innovation/market advantages? Or by currying favor with the governments of the world? In effect, creating that monopolistic structure. FB is very clearly in the latter camp. That is communism.
- mattnewton 9y ago
  Communism implies government ownership. Crony capitalism, maybe. They still competed and this time Goliath won; we often forget what makes that story special, that David is not the favorite to win.
- d3ad1ysp0rk 9y ago
  You don't understand communism.
  - radiusvector 9y ago
    Communism understands you.

deleted 9y ago

[deleted]

AndrewKemendo 9y ago

Totally in agreement here. I think this is actually a much bigger deal than anyone imagines. It shows that even if you create a HUGE new thing, you're probably going to get killed by the big ones. There is no competing anymore - you either assimilate through acquisition or get squeezed to death on the back end because the incumbents have the cash, data and talent. So what the hell is venture supposed to do in this landscape? I'm genuinely curious. If the goal of venture money is to build IPO level companies - not one off acquisitions - then what is the move here? I even remarked as such a few days ago: https://twitter.com/AndrewKemendo/status/851840701214208002 https://twitter.com/AndrewKemendo/status/851840701214208002

meheleventyone 9y ago
Innovate with something harder to copy or that you can gain genuine protection for? Snapchat seem to already be moving in that direction.
- AndrewKemendo 9y ago
  Right, except those big companies are WAY ahead of everyone on that too. Their patent portfolios cover literally everything conceivable. It's quite astonishing really. I mean far future stuff like nanodrug delivery methods, brain computer interfaces etc... It's going to take tens or hundreds of millions in "seed" investment in the future to compete with one of these behemoths - and even then they all have venture arms so you better find money that is not associated with one of them - impossible probably.
  - meheleventyone 9y ago
    I don't think it changes really it's just the next huge successes will come from a direction that will blindside the current incumbents. Either that or the model is dead as the ladder gets pulled up behind the winners.
    - AndrewKemendo 9y ago

mbesto 9y ago

> An innovative, new upshot getting sucked up/ blatantly ripped off by an established player with more muscle, money (and in this case - users) to throw at the problem is not a great incentive for entrepreneurs. > http://avc.com/2017/02/the-end-of-the-level-playing-field/ http://avc.com/2017/02/the-end-of-the-level-playing-field/ These two things aren't the same. The former is complaining about larger companies copying features (where no legislation exists) and the latter is complaining about incurring legislation that impedes competition. So what do you want? Legislation or not? You can't have both. > is not a great incentive for entrepreneurs. There are plenty of opportunities for entrepreneurs to create new technologies, but the gold rush for creating the next big social app may indeed be over.

mattnewton 9y ago
Here's to hoping new entrepreneurs are motivated by something more than getting rich off the next hot walled social garden, where innovation is a gimmick like self "deleting" messages, 140 characters, or "micro-apps".
- derefr 9y ago
  I think you're assuming a lot by saying "entrepreneurs" there. It's not like we pump "entrepreneurs" out of some sort of cadet school, and then some of them go on to join the Dark Side. People become entrepreneurs (i.e. found businesses) for a variety of reasons. One of those reasons is because they want to get rich quick. Social walled gardens are a good path to that, if you can manage to build one. The people who do so might pretend to be participating in the "hacker ethos"—but they're not members of our community able to be swayed by our social mores. They're just businessmen, of their own kind.
  - mattnewton 9y ago
    Of course, I only mean I wish that people starting new ventures are motivated to create new products that aren't walled social gardens, and hopefully have some better positive externalities of the kind we all hoped the internet would bring in the 90s. I don't care if that happens by social being not a way to get rich anymore, or by a class of entrepreneurs being inspired to make something else, as long as it happens.

patrickaljord 9y ago

Or maybe, you should not invest in products that could be a feature that could be easily added to an incumbent and companies who focus on these kinds of products tend to fail, just as intended by the free market.

zone411 9y ago

I agree that it seems unfair but maybe the lesson is that the innovation needs to be more than a feature that doesn't present any technical difficulties for larger players to copy?

bdrool 9y ago

Same reason why so many people hated Microsoft in the 90s.

MichaelGG 9y ago

Given how well the Snapchat guys have done, I'm curious as to how you can say there's not a great incentive.

theptip 9y ago

To me the thing that is shocking is that a buggy app with crap UX and only the network effect as their moat against competition could be valued at $29B. If you build a product that can be cloned trivially, you should expect others to clone it. If you are relying on the network effect to beat off competitors, you'd better not have competitors with a bigger network. The question is, can Snapchat use their newly obtained war chest to make a counterplay that differentiates them from Facebook/Insta. If I had cash to gamble I'd short Snapchat and bet no, but we'll see.

cbhl 9y ago

> An innovative, new upshot getting sucked up / blatantly ripped off by an established player If you're getting "ripped off by an established player", then you know you've made it. The challenge then is making sure you have a strategy for co-existing with the incumbent (e.g. being more nimble, expanding the market), being acquired by the incumbent, or building a moat (e.g. expanding into a vertical that the incumbent can't touch; innovating faster than the incumbent can copy you).

roymurdock 9y ago

I think you're being a tad dramatic here... Facebook offered to acquire Snapchat for $3B cash in 2014. [1] Snapchat declined the offer, then went on to have a successful IPO with NO VOTING RIGHTS for common shareholders (a first). Snapchat is a successful company, Evan Spiegel is a billionaire, and any entrepreneur would gladly follow in his footsteps. What happens now between Snapchat and Facebook is largely irrelevant, the original Snapchat team found a wildly successful exit. Sure, it might suck for the majority of Snapchat's employees if the company goes under due to competition from Facebook, but the lesson for entrepreneurs is pretty clear. Also, one company copying another's product with no government or legal protections would occur under a purely capitalist system. A move towards communism would entail the US gov. stepping in a nationalizing Facebook/Snapchat...which is way off base here... [1] http://mashable.com/2014/01/06/snapchat-facebook-acquisition-2/#mSz0PSOLuiqd http://mashable.com/2014/01/06/snapchat-facebook-acquisition...

guelo 9y ago
Which highlights a fundemantal problem with capitalism: it tends towards giant monopolies as industries mature. Capitalism only works with a strong government righting the ship. But even that eventually fails when the government gets captured by the most powerful companies.

josephruscio 9y ago

Facebook attempted to buy Snapchat for $3B 3 years ago (http://mashable.com/2014/01/06/snapchat-facebook-acquisition-2/#LXuxODhmqiqU http://mashable.com/2014/01/06/snapchat-facebook-acquisition...). Entrepreneurs should be plenty encouraged by that. Snapchat made the decision to compete with Facebook.

jforman 9y ago

Startups need moats to fend off existing market bigwigs, story at 10... (this dynamic dates back to the first startup...MSFT ate up an entire ecosystem of startups for a generation)

ClassyJacket 9y ago

Free market competition between two large corporations is communism now? I think you're very, very, VERY confused about what communism is.