2 ms·

That was a well thought and written out post. However, I don't think those examples have the same power of network effects that ebay leverages. By powers, I m

That was a well thought and written out post. However, I don't think those examples have the same power of network effects that ebay leverages. By powers, I mean that in the mathematical sense. For a network of N nodes, the examples above have some network effect of N^1.3 or N+log(N), but I think ebay is closer to N^2 or greater... The only way around ebay will be to somehow go around the edges (aggregation?) or fight a long hard battle against them with a superior product. I do think someone can take them out, but it will not be easy.

kingkongrevenge 19y ago
Ebay is dependent on their fat revenue stream. Free (or very cheap) and "good enough" will beat them. But I wonder if maybe market fragmentation and not a single competitor will beat them. The network value math above might be off. As ebay has grown the fraud and moron problems have become serious. The future may be in the direction of finer grained, more vetted communities. Sorta like usenet got ruined by morons and the discussions largely went to more private web forums.
- acgourley 19y ago
  I could see it. It's true that the math would be more accurate as a Sigma(autionGenreNodes^2) summed over each auctionGenre. So you could see a better import auto parts site, a better pez dispenser site, and a better clothing site crop up. It's more about consumer education at that point, since any one of those sites could add specialized features and services much better than ebay's generalized ones.
rzwitserloot 19y ago
You're vastly overrating the network effect, because you left out the considerable damping factor of scammers, criminals, and idiots. I DONT sell on eBay. I never do, because it takes me 10 hours+ just to sell something (re-list 5 times, eliminate 80 spam out of my inbox which is a laborious process, vainly try to notify ebay of a scammer and getting the FAQ thrown at me, get my hopes up 8 times only to be confronted with: Change in plans, please ship to nigeria... and then FINALLY I get a real sale going). I bet there are more people like me. I currently make do with local services like marktplaats.nl which works better for me, but the ability to buy or sell niche materials isn't good. (the network effect applies to idiots/scammers/spammers so there aren't nearly as many). In other words: There's this huge market that basically isn't being served.

kingkongrevenge 19y ago

Ebay is dependent on their fat revenue stream. Free (or very cheap) and "good enough" will beat them. But I wonder if maybe market fragmentation and not a single competitor will beat them. The network value math above might be off. As ebay has grown the fraud and moron problems have become serious. The future may be in the direction of finer grained, more vetted communities. Sorta like usenet got ruined by morons and the discussions largely went to more private web forums.

acgourley 19y ago
I could see it. It's true that the math would be more accurate as a Sigma(autionGenreNodes^2) summed over each auctionGenre. So you could see a better import auto parts site, a better pez dispenser site, and a better clothing site crop up. It's more about consumer education at that point, since any one of those sites could add specialized features and services much better than ebay's generalized ones.

rzwitserloot 19y ago

You're vastly overrating the network effect, because you left out the considerable damping factor of scammers, criminals, and idiots. I DONT sell on eBay. I never do, because it takes me 10 hours+ just to sell something (re-list 5 times, eliminate 80 spam out of my inbox which is a laborious process, vainly try to notify ebay of a scammer and getting the FAQ thrown at me, get my hopes up 8 times only to be confronted with: Change in plans, please ship to nigeria... and then FINALLY I get a real sale going). I bet there are more people like me. I currently make do with local services like marktplaats.nl which works better for me, but the ability to buy or sell niche materials isn't good. (the network effect applies to idiots/scammers/spammers so there aren't nearly as many). In other words: There's this huge market that basically isn't being served.