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The problem is that a tech company like Google is incredibly valuable for a simple reason- their marginal cost is ~$0. They have a fixed cost to run the service
by Traster 7y ago
The problem is that a tech company like Google is incredibly valuable for a simple reason- their marginal cost is ~$0. They have a fixed cost to run the service, relatively tiny marginal costs and massively higher marginal revenue so it scales fantastically.
If you want a curated recommendation site then your marginal cost is going to be high - every geographic location you want to be in you're going to need to find every single business and invest significant time to investigate them. That time investigating all the coffee shops in Boston isn't going to help you win customers in Minnesota. That's a perfectly fine business, but it's not going to scale well and when you do finally review every coffee shop in Minnesota, Google is going to crawl all the data on your website and stick a card on its search results with all the information killing your site overnight. This has happened before.
Because the high-value method doesn't have a nice business model, the companies that attempt it all either die due to being ripped off, being unable to scale, or get seduced by the easy growth of automated & user-generated content.
- rocqua 7y agoThe scaling is when you are big enough that businesses want to be listed on your site. Then, rather than letting them put up whatever, you start curating submissions. If you can break the maps moat of 'everyone uses it' then it doesn't matter if the marginals of maps are better, because people won't use the inferior product.