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Couldn't Google be an example of this? Search is a hard problem, even if you've got MSFT-level resources. There are definitely economies of scale and some weak

Couldn't Google be an example of this? Search is a hard problem, even if you've got MSFT-level resources. There are definitely economies of scale and some weak network effects that help companies like Google, but I'd argue it's most because they do something hard better than anyone else.

jdquey 6y ago
Search is a hard problem, which increases the barriers to entry. But once a competitor has a method to crawl the Internet, that particular defensibility is gone. I'd argue the data network effect is what gives them most of their defense. Now that they have a corner on what creates better search results, this is harder for others to defend against.
simonh 6y ago
They're not dominant because it's hard though. Bing is similarly capable, but even if it gained a clear edge would it really win out over Google? Market dominance has little to do with hardness. Making a new cola isn't hard, but brand recognition and ubiquity are huge advantages on a different axis.
- zippy5 6y ago
  At least in Coke’s case, defensibility comes from the fact that making cola is hard due to regulation and supply chains. Coke is grandfathered into being allowed to import coca leaves (they now remove the cocaine) and buys up alot of the worlds vanilla supply. There is a reason even Pepsi can't replicate the flavor. You still have a great point about the value of Coke’s branding / marketing.
- patmorgan23 6y ago
  Habit is also massively important in what products /brands people use. Even if there is a superior, cheaper product many people will continue using the same product because that's what they always done.
microtherion 6y ago
One product that seems bodybuilding-hard is Google maps. When Apple maps had its calamitous introduction, I remember claims (by Google itself, I think), that Google was a decade ahead, and would remain ahead for the foreseeable future. But for several years now, it seems to me that Apple maps has been more or less on par technically, and the case for rolling their own maps instead of relying on a third party has, if anything, gotten stronger.

jdquey 6y ago

Search is a hard problem, which increases the barriers to entry. But once a competitor has a method to crawl the Internet, that particular defensibility is gone. I'd argue the data network effect is what gives them most of their defense. Now that they have a corner on what creates better search results, this is harder for others to defend against.

simonh 6y ago

They're not dominant because it's hard though. Bing is similarly capable, but even if it gained a clear edge would it really win out over Google? Market dominance has little to do with hardness. Making a new cola isn't hard, but brand recognition and ubiquity are huge advantages on a different axis.

zippy5 6y ago
At least in Coke’s case, defensibility comes from the fact that making cola is hard due to regulation and supply chains. Coke is grandfathered into being allowed to import coca leaves (they now remove the cocaine) and buys up alot of the worlds vanilla supply. There is a reason even Pepsi can't replicate the flavor. You still have a great point about the value of Coke’s branding / marketing.
patmorgan23 6y ago
Habit is also massively important in what products /brands people use. Even if there is a superior, cheaper product many people will continue using the same product because that's what they always done.

microtherion 6y ago

One product that seems bodybuilding-hard is Google maps. When Apple maps had its calamitous introduction, I remember claims (by Google itself, I think), that Google was a decade ahead, and would remain ahead for the foreseeable future. But for several years now, it seems to me that Apple maps has been more or less on par technically, and the case for rolling their own maps instead of relying on a third party has, if anything, gotten stronger.