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I think this article completely bypasses the root causes of the issue in order to paint Silicon Valley dominating businesses in the worst light possible. Look,
by magice 9y ago
I think this article completely bypasses the root causes of the issue in order to paint Silicon Valley dominating businesses in the worst light possible.
Look, the real issue is simple: all of these "web startups" are not very innovative. All of them are roughly the same: ever so slightly more novel way to deliver roughly the same set of data to users in exchange for app or token of money. How is that "ground breaking"?
Thing is, when everyone is doing roughly the same thing, which costs perhaps a few engineering months to build, how can startups ever compete with the big guys who are hell bent on ensuring their success? It's like trying to open supermarkets to compete with Walmart, or building gasoline car to compete with Toyota, except it's cheaper for the Big Five to copy than for Toyota, because the media (information) is inherently more traceable.
I remember when Windows 98, XP, Google, Gmail, Prime (and Uber, eBay, and paypal) came out. They blew everyone's mind. They changed how we work and live. What's so hot about SnapChat? I mean, it's probably ever so slightly more entertaining than, says, Hangout or WhatsApp, but it's just minor tricks on top of roughly the same set of features. Of course these competitors will drive it out of the marketplace. It holds no long term competitive advantages.
There are businesses that don't deserve to die. For example, a local store provides not just goods, but a community center and an identity for a small town; it gives more value than mere commerce. The decline of these should alarm us. On the other hand, some businesses do deserve to die. And lack of long term advantage, lack of innovation, lack of additional value sounds exactly "should die".
- radley 9y ago> All of them are roughly the same: ever so slightly more novel way to deliver roughly the same set of data to users in exchange for app or token of money. How is that "ground breaking"? What you describe is the justification for state-run media versus newspapers, magazines, TV shows, movies, and games. All of these could be considered the same set of data from the state's point of view.
- mattnewton 9y agoWhy is the state involved? He just means that it’s hard to run a buisiness without a moat and you should expect Goliath to win in that case.
- radley 9y agoI was trying to illustrate the cultural limitations of the big five. Just because an app has only a slight difference (for now) doesn't mean they should be ignored or excluded. The technology of social communication today is akin to the printing press of the 15th century. We have thousands of years forward to be social, buy things, and enchant users... so why limit it to the early, myopic giants?
- mattnewton 9y agoAs long as everyone plays by the rules of a free market, or close enough, then consumer choice is what ignores the players for the superior offerings. They win if they can make a better product, and the Giants often have an easier job of making a better product because of the advantages of being a tech giant.
- magice 9y agoIndependent news sources provide investigations critical to the state, which state run media do not. It's like GNU/Linux or Android to Windows or iOS. They provide excellent value as well as competitive advantages. SnapChat vs Whatsapp? well.....
- mbesto 9y ago> all of these "web startups" are not very innovative. So are you basically just lumping "SnapChat and Whatsapp" into "all of these web startups". That seems terribly myopic don't you think?
- anindha 9y agoWhatsApp and Instagram were innovative but were acquired. The only reason Instagram isn’t a $100B company in its own right is because Facebook had a better vision for it than investors. If Instagram were able to raise at a $5B valuation rather then be acquired, then Facebook would now have a serious competitor. Similarly, Facebook messenger wasn’t as popular as WhatsApp. Facebook could have been acquired by Yahoo or Microsoft but wasn’t.
- icebraining 9y agoWhat was innovative about Whatsapp?
- HeyLaughingBoy 9y agoSending SMS over the web. May not be particularly interesting in the US, but in countries where texting is expensive, being able to do it for "free" was a godsend.
- icebraining 9y agoYes, messaging over the Internet is useful, but we had that for a long time. Whatsapp was far from the first.
- plussed_reader 9y agoFor a lot of users it was their first SMS to Web interface.
- icebraining 9y agoRight, but that's not an innovation.
- ksk 9y agoOkay, maybe that's not YOUR definition of innovation. I personally like this one: http://www.businessdictionary.com/definition/innovation.html http://www.businessdictionary.com/definition/innovation.html
- no_wizard 9y agoI think consumer services, platforms, and software hit deep market saturation many years ago. All this to me sounds like consumer plays. Right now the innovation has again turned to business software and services. I see most of the intersecting things in tech playing out in corporate offices instead of on my phone or my home computer nowadays. I think it’s easier and definitely more headline grabbing for articles like his to focus on the consumer stuff. The real story now though I feel strongly is in the business space.
- eljimmy 9y agoYou're looking at the features rather than the true value of these apps, the users. Snapchat has the biggest reach into the most impressionable market, teenagers. That's why it is valuable.
- deleted 9y ago[deleted]
- azernik 9y agoThat's actually kind of grandparent's point - if your only "innovation" is managing to market to a slightly different set of users, you have no moat, and a big company with some engineer-hours to spend can duplicate what you've done for every market segment you haven't reached yet.
- code_sloth 9y agoThe same teenagers also don't have much spending power now. And besides, teen trends change pretty quickly, so their main targets are teens it does not bode well.
- eljimmy 9y agoWell, as these teenagers grow older, their market segment then becomes young adults.
- usrusr 9y agoThat is the key transition. Once they start greying, users will perceive any new platform as unwelcome change. But until then, you have to eventually give them better reasons for staying than just "this is younger and wilder than that other thing". Facebook's ticket for growing up in lockstep with their core user generation was coordination and communication for loosely coupled groups with some real life connection. People who move into a new development, the "parent cohort" around a daycare class, new hires who joined a company at roughly the same time and so on. All that is young adult stuff that fits well with what Facebook offers. Nonpermanent asynchronous video messaging? If interpersonal exchange is always a blend between information propagation and entertainment, Snapchat seems dangerously lopsided towards entertainment. That is good for getting people excited (quick growth), but probably not so good for long term retention. MySpace was similar.
- replicatorblog 9y agoWhat's missing from this piece is a broader historical perspective. This pattern of conglomeration happens in almost every industry, e.g. the "Big Three" automakers. It doesn't have to be bad. Seven of the top 10 pharma companies are over a hundred years old. They are highly concentrated. But there's never been a better time to be a biotech startup. Life science startups are going from founding to billion dollar IPO in <18 months. The near lock the big pharma companies have on distribution allows the startups to focus on innovation. It's hard to build a hundred billion dollar drug company today, not so hard to build a mere $1B company. The same is true in food. Kraft, Mondelez, etc. have huge market power, but are also active in the M&A market, paying $300M for Krave Jerky, $600M for RXBar, and $700M for Blue Bottle—all in the last 18 months or so. These patterns aren't that different than what we've seen with Facebook acquiring almost all upstart competitors. This isn't great for billion dollar VC funds, but it's not clear at all its bad for entrepreneurs.
- libertyEQ 9y agoIt's so common, it's called industry consolidation.
- URSpider94 9y agoRight, but in pharma and food brands, it’s an evergreen process. For the past 20 years, a lot of breakthrough drugs have come out of start-ups. When they get to a certain phase in FDA trials, the winners get bought up by the big players, because nobody in their right mind wants to carry the overhead to ship one drug. Meanwhile, new startups are always forming. Same with food brands - there are always new food companies shipping a single new product in a hot new market like kombucha, or kale chips, or iced coffee. They build a following and get bought, but new brands are incubating at the front of the trend curve. The point is, there’s a steady state in some industries where start-ups are better at capturing trends and moving fast, while big companies have the expertise to scale and meet regulatory requirements. One side needs the other.
- raverbashing 9y ago> What's so hot about SnapChat? The same can be said about a lot of companies in the 1st web bubble. pets.co for example Actually, a lot of 'experiments' in every technological wave have failed You remember Windows 98 but doesn't remember OS/2 or BeOS. Google but not Altavista. The PC survived but not the Amiga or other computer manufacturers besides Apple (and even then).
- numismatex 9y agoExcept that the tactics used in days gone by to stifle small businesses are being done now, by these companies. And when that doesn't seem like a viable option, they're bought outright. The market doesn't see deserve, and the market is driven by these companies. Their eyes are shareholder numbers, advancement at most costs, government pushes and trends. I disagree with you about Snapchat. It'll die, but it'll go the way of AOL or pivot. There's no "driving it out" when you have a youth adoption demographic as that demographic are now the shakers and movers in the future. In the past it was "convince the old to convince the young / allow the young", not it's "convince the young to convince the old". You're missing the point if you need to see a point, rather than seeing points within demographics and the adoption in those spaces. You're seeing the moves, but not the driving forces. Twitch has nothing but IRC components and video streams YouTube provides, but it's not going away either.
- KGIII 9y agoI am missing something, I think? Walmart and Toyota both have competition. Just yesterday, there was a good read about Dollar General. There are young automaking companies in China and India, though not really in the US market. I assume I'm missing something.
- sreenadh 9y agoExactly, innovation is dead. Now its a bunch of remix artist that are trying to make a quick buck. Whatsapp is purposely going stale (what is the deal with only being able to sync with gdrive or icloud, what if I want to switch my OS, how to get my data out?) in the hopes that people will move to messenger like how Google just killed gtalk in the hope that customers will move to one their many messenger. This is the case in hardware also. Every phone looks like an iphone & tablets are a larger phone, I miss the days when Nokia & Samsung used to release phones of various form factors.