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The problem with starting another Ebay is Metcalfes law that states that the value of a network is proportional to the square of the number of users of the syst
by mixmax 19y ago
The problem with starting another Ebay is Metcalfes law that states that the value of a network is proportional to the square of the number of users of the system. They have a lot of users, and thus their network is valuable - even if you try to sell Nigerian stamps from 1800 there will probably be a bidder. A startup will have big trouble getting the first million users, simply because there aren't already a million users. It's a catch 22 situation.
The same is btw. true for facebook, etc. Their value is not in their technology but in their size.
- dpapathanasiou 19y agoTrue, attracting enough buyers and sellers will be a challenge, even if a scam-free model is invented. This actually reminds me of the story of the Arizona Stock Exchange, which was technically a better model for selling stocks, but couldn't convince enough traders from NYSE and Nasdaq to give it a try (http://www.businessweek.com/1997/09/b3516129.htm http://www.businessweek.com/1997/09/b3516129.htm).