4 ms·

There are tons of examples of this. Basically any company with a real competitive advantage is very expensive to unseat once established. Try to unseat Amazon,

There are tons of examples of this. Basically any company with a real competitive advantage is very expensive to unseat once established. Try to unseat Amazon, Google, Facebook, or Apple with the capital that launched those companies.

gridlockd 7y ago
Google unseated Altavista and Yahoo, Facebook unseated MySpace and Friendster, each with less capital than its predecessor had available. It might seem inconceivable today that these giants could fall, but they absolutely can. Even if these giants don't fall, they can't just act as they wish, just because they have a dominant market position. They're kept in check by the fact that their products are easily replaced if they raise prices well beyond cost of replacement. As a result, they don't raise prices and the potential competition never emerges - which in terms of the social outcome is just about as good as active competition. There's an exception to this which the article mentions: Companies that sell themselves as "too big to fail" or "socially important" to gullible or corrupt politicians. The market can't fix this, only politics can.
- booleandilemma 7y ago
  Isn’t it different though? A lot of people are reading your comment on an OS developed by Google, and mostly everyone they know is a user of Facebook, a company working on creating its own currency. Altavista, MySpace, and Friendster were never so powerful. They felt less like companies and more just like websites, if you know what I mean.
  - gridlockd 7y ago
    > Altavista, MySpace, and Friendster were never so powerful. They weren't that "powerful" because the web wasn't used as much. It took a while for us to adopt the digital lifestyle. Ultimately, they're just platforms though. Of course they have a lot of inertia, but user habits can change. Younger users in particular aren't engaging with Facebook that much anymore: https://www.theguardian.com/technology/2018/jun/01/facebook-teens-leaving-instagram-snapchat-study-user-numbers https://www.theguardian.com/technology/2018/jun/01/facebook-... > They felt less like companies and more just like websites, if you know what I mean. Google certainly has moved beyond being a website by creating many products. However, I feel that a lot of these products are rather crappy and wouldn't be competitive if they weren't given away. How dominant of a player can you really be, if you must give your product away for free? Most companies aren't in the business of giving away free stuff, so in that sense it is hard to compete. That's not necessarily a bad thing for the consumer though, they get all the free stuff after all.
- ineedasername 7y ago
  Those companies, and Google and Facebook themselves were all miniscule compare to what Google and Facebook are now. Once you get that big, no scrappy startup is going to take you down. It would take dozens of smaller companies chipping away for years or decades. And plenty of times they would just get purchased by the big huys. Just Like what happened with IBM, and even then IBM is both still around, very big, and very entrenched within some areas of industry and Enterprise. And generally not because they out compete with better products.
  - gridlockd 7y ago
    No scrappy startup is going to take them down at every level of their business at once, but they can still create competition, even if they're just out there to be acquired. For instance, Facebook is losing engagement to Snapchat, Snapchat is losing engagement to TikTok, and so on. As a result, there is constant pressure to evolve. IBM may still be around, but it's a totally different company now. Nobody uses "IBM PCs" anymore. Remember, back in the day those were very expensive, relatively speaking. IBM was as big as it ever was, relatively speaking. Yet, cheap clones by smaller companies drove down profits to make IBM give up on the market. Also, IBM may still be a big company, but you'd be hard pressed to find a segment where they are absolutely dominating, unlike back in the day. I never said small guys will bankrupt and annihilate the giants, I'm saying competitive pressure from below is there at all times, no matter how big you are.
    - stallmanite 7y ago
      You say that one would be "hardpressed to find a segment where IBM still dominates" but do they not still dominate mainframes?
    - ineedasername 7y ago
      not "at every level of their business all at once" This is pretty much exactly what I said in saying it would take many companies a very long time to chip away. And sure, competitive pressure is there, but it can be at such a low level as to be nominally meaningless. Whether or not IBM dominates any segment, they are still around, despite being in many products and use cases, not at all the best option. That says to me the idea that competition will results in the best products at the lowest price points (the great-great etc comment that started this) is simply not the case except in a sort of platonic idealization of capitalistic competition that only imperfectly, when at all, plays out in reality. I'm not even saying we should ditch that model of capitalist competition, though I clearly think it should be subject to regulation & oversight that a pure free-market libertarian wouldn't like. I don't know that there's a better alternative than a hybrid competition-with-oversight model. I just think we should keep our eyes open. We shouldn't blindly act from a position of philosophical assumptions that such competition will solve all problems. Or when it might solve them, that it will do so in an acceptable time frame, e.g., more than a century of industrial pollution without a competitive solution until the (less than perfect, better than nothing) implementation of the EPA. Heck the entire concept of path dependency in economics exists to help explain why inferior choices may persist despite the possibility of better alternatives in a way that defies the "competition will provide" mantra. [0] [0] https://en.wikipedia.org/wiki/Path_dependence#Illustration https://en.wikipedia.org/wiki/Path_dependence#Illustration
WalterBright 7y ago
Giants Kodak, Sears, IBM, etc., were all unseated.
- teambayleaf 7y ago
  ... Xerox, DEC, Compaq, Polaroid and Avon. They were bright stars that never set.

gridlockd 7y ago

Google unseated Altavista and Yahoo, Facebook unseated MySpace and Friendster, each with less capital than its predecessor had available. It might seem inconceivable today that these giants could fall, but they absolutely can. Even if these giants don't fall, they can't just act as they wish, just because they have a dominant market position. They're kept in check by the fact that their products are easily replaced if they raise prices well beyond cost of replacement. As a result, they don't raise prices and the potential competition never emerges - which in terms of the social outcome is just about as good as active competition. There's an exception to this which the article mentions: Companies that sell themselves as "too big to fail" or "socially important" to gullible or corrupt politicians. The market can't fix this, only politics can.

booleandilemma 7y ago
Isn’t it different though? A lot of people are reading your comment on an OS developed by Google, and mostly everyone they know is a user of Facebook, a company working on creating its own currency. Altavista, MySpace, and Friendster were never so powerful. They felt less like companies and more just like websites, if you know what I mean.
- gridlockd 7y ago
  > Altavista, MySpace, and Friendster were never so powerful. They weren't that "powerful" because the web wasn't used as much. It took a while for us to adopt the digital lifestyle. Ultimately, they're just platforms though. Of course they have a lot of inertia, but user habits can change. Younger users in particular aren't engaging with Facebook that much anymore: https://www.theguardian.com/technology/2018/jun/01/facebook-teens-leaving-instagram-snapchat-study-user-numbers https://www.theguardian.com/technology/2018/jun/01/facebook-... > They felt less like companies and more just like websites, if you know what I mean. Google certainly has moved beyond being a website by creating many products. However, I feel that a lot of these products are rather crappy and wouldn't be competitive if they weren't given away. How dominant of a player can you really be, if you must give your product away for free? Most companies aren't in the business of giving away free stuff, so in that sense it is hard to compete. That's not necessarily a bad thing for the consumer though, they get all the free stuff after all.
ineedasername 7y ago
Those companies, and Google and Facebook themselves were all miniscule compare to what Google and Facebook are now. Once you get that big, no scrappy startup is going to take you down. It would take dozens of smaller companies chipping away for years or decades. And plenty of times they would just get purchased by the big huys. Just Like what happened with IBM, and even then IBM is both still around, very big, and very entrenched within some areas of industry and Enterprise. And generally not because they out compete with better products.
- gridlockd 7y ago
  No scrappy startup is going to take them down at every level of their business at once, but they can still create competition, even if they're just out there to be acquired. For instance, Facebook is losing engagement to Snapchat, Snapchat is losing engagement to TikTok, and so on. As a result, there is constant pressure to evolve. IBM may still be around, but it's a totally different company now. Nobody uses "IBM PCs" anymore. Remember, back in the day those were very expensive, relatively speaking. IBM was as big as it ever was, relatively speaking. Yet, cheap clones by smaller companies drove down profits to make IBM give up on the market. Also, IBM may still be a big company, but you'd be hard pressed to find a segment where they are absolutely dominating, unlike back in the day. I never said small guys will bankrupt and annihilate the giants, I'm saying competitive pressure from below is there at all times, no matter how big you are.
  - stallmanite 7y ago
    You say that one would be "hardpressed to find a segment where IBM still dominates" but do they not still dominate mainframes?
  - ineedasername 7y ago
    not "at every level of their business all at once" This is pretty much exactly what I said in saying it would take many companies a very long time to chip away. And sure, competitive pressure is there, but it can be at such a low level as to be nominally meaningless. Whether or not IBM dominates any segment, they are still around, despite being in many products and use cases, not at all the best option. That says to me the idea that competition will results in the best products at the lowest price points (the great-great etc comment that started this) is simply not the case except in a sort of platonic idealization of capitalistic competition that only imperfectly, when at all, plays out in reality. I'm not even saying we should ditch that model of capitalist competition, though I clearly think it should be subject to regulation & oversight that a pure free-market libertarian wouldn't like. I don't know that there's a better alternative than a hybrid competition-with-oversight model. I just think we should keep our eyes open. We shouldn't blindly act from a position of philosophical assumptions that such competition will solve all problems. Or when it might solve them, that it will do so in an acceptable time frame, e.g., more than a century of industrial pollution without a competitive solution until the (less than perfect, better than nothing) implementation of the EPA. Heck the entire concept of path dependency in economics exists to help explain why inferior choices may persist despite the possibility of better alternatives in a way that defies the "competition will provide" mantra. [0] [0] https://en.wikipedia.org/wiki/Path_dependence#Illustration https://en.wikipedia.org/wiki/Path_dependence#Illustration

WalterBright 7y ago

Giants Kodak, Sears, IBM, etc., were all unseated.

teambayleaf 7y ago
... Xerox, DEC, Compaq, Polaroid and Avon. They were bright stars that never set.