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It's a prisoner's dilemma. If a company like GrubHub decides they're going to build a demand aggregation platform for a certain market segment, part of that is
by donmcronald 6y ago
It's a prisoner's dilemma. If a company like GrubHub decides they're going to build a demand aggregation platform for a certain market segment, part of that is going to include significant advertising to acquire users (demand). They'll also offer a good (or great) looking deal to vendors (supply).
So, if you're a vendor, the appeal of early adoption is huge. You get access to a platform with a bunch of free advertising and a built in set of potential customers. The platform might let you reduce costs (shut down your website) and, as an early adopter, a lot of those potential customers become your customers in the short term.
Then, as vendors keep joining the platform, it becomes de facto market for those goods. That's the point where the demand aggregation has succeeded and the vendors get converted into a commodity. Customers want a class of product, not a specific product.
So now, you _must_ be on the platform to succeed even if you hate it and you're just another cog in supply side of the system, The company (like GrubHub) that successfully aggregated demand can rent seek for as long as they maintain the demand monopoly and there's nothing a single vendor can do about it.
Get used to it because every industry susceptible to demand aggregation is going to look like the food industry soon IMO.