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'The End Of The Level Playing Field' (avc.com)

Venture Capitalist Fred Wilson writes in a blog post: When the Internet came along in the early 90s, we saw something completely different. Here was a level playing field where anyone could launch a business without permission from anyone. We had a great run over the last 25 years but I fear it's coming to an end, brought on by the growing consolidation of market power in the big consumer facing tech companies like Google, Apple, Facebook, Amazon, etc, by the constricted distribution mechanisms on mobile devices, and by new leadership at the FCC that is going to tear down the notion that mobile carriers can't play the same game cable companies played. It is certainly true that consumers, particularly low-income consumers, like getting free or subsidized data plans. There is no doubt about that. But when the subsidies are coming from the big tech companies, who can easily pay them, to buy competitive advantage over that nimble startup that is scaring them, well we know how that movie ends.

4 of 108 comments (clear)

  1. Re:this happens in most mature markets by Archtech · · Score: 4, Interesting

    As soon as you start thinking in terms of "winners" and "losers", you are passively accepting the picture of the Internet as a commercial marketplace in which corporations compete for profit. There are already far too many aspects of modern life of which this is true.

    Regardless of its commercial excrescences (which we are free to ignore if we wish) the Internet continues to be of huge value as a common medium of communication. It's all too easy to overlook the enormous amount of learning and discussion that goes on every day, without anyone paying much notice becuase there is little or no money involved.

    Rather like FOSS, in fact, the true extent of whose adoption is very hard to establish because there is little or no money involved. (How big is the "market" for Linux distributions? N times zero equals zero for all values of N).

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    I am sure that there are many other solipsists out there.
  2. Just scratching the surface here. by 140Mandak262Jamuna · · Score: 5, Interesting
    The article talks only about start-ups vs established players, comparing it to the cable TV operations in 1980s to the current situation in internet companies.

    But there is a more insidious, a more disconcerting tilting of the playing field is happening. Before big-data and this level of data consolidation, commerce/trade happened between large mass of anonymous consumers and service/goods providers. The price information was public, and a few diligent consumers who compare prices, the informed consumers were mixed up with general public. Now the companies are able to cherry pick diligent informed consumers and give them special coupons, special deals and then raise the rack rate, the posted prices. So much of the consumer behavior is being captured, analyzed and the power of the general consumer is getting increasingly diluted.

    So the established big companies are not only able to keep competition away by giving away most common services people want, they are also able to find the consumers who are likely to look for alternatives and keep them in the fold too.

    This kind of power is not similar to cable tv operator vs giants in 1980s. It is more like 19th century London traders who had information about rainfall and estimated harvests from all over the world, and were dealing with uninformed local farmers in various parts of the world. Especially cotton and sugarcane. Say a bumper crop of cotton in South India might be happening while Egypt and south USA were hit by drought. But the Indian farmers might be selling to the agents of London traders at pennies instead of pounds. Today the companies can price products knowing exactly how much they can push you individually not as part of a large collective mass. The implications should frighten people.

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    sed -e 's/Chuck Norris/Rajnikant/g' joke > fact
  3. Re:Local problem? by interkin3tic · · Score: 3, Interesting

    The rest of the world seems to have benefitted from some of the upstarts that came from silicon valley and elsewhere in the US that arguably existed only because of the more level playing field. That can likely work in a bad way too now. Giant media conglomerates, facebook, google face no real threats in their home which is the biggest market in the world, I have to believe they'll reach their tentacles everywhere else and entrench themselves there too.

    So no, I think allowing an infection in the US could cause a worldwide problem.

  4. Mom and pop example for you by Anonymous Coward · · Score: 2, Interesting

    Like around 1999 I sold stuff on eBay. All sorts of stuff. I sold Electronics, designer sunglasses that I got "gray market," shoes (brand name and otherwise), soaps, and basically every piece of plastic garbage made by humans you can imagine. I had over 100,000 feedback at one point and revenues of like $3.7 million per year. I had 4 employees. It was a nice little gig. But around 2006 you saw Chinese fakes start abounding, and they changed their fee model, and it really wasn't even the fakes that were so much the problem as just Chinese sellers happy to take a 5 cent profit per transaction where even if I moved my warehouse to the lowest cost hell hole in the US I still couldn't compete. So I got out of that business entirely because my margins were down to like 3% and for 3% I could just but a rental building, rent out apartments and not bother having to wake up at 8am anymore. When your competition is happy to make $700 in an entire month you have no choice but to leave the business and do something else. I was old enough and rich enough by that point to not care anymore but I feel really bad for your average AMERICAN person today because efficiencies have killed not just the mom and pop store but even mom and pop online sales. It is impossible today to get into online sales unless you have $100k a month to gift to Google/Amazon to get you to the top of the search and a very unique product on top of that. Selling commodity goods is just impossible since you will be on page 25,975 somewhere where no one will ever see you. On Amazon you have to give up insane amounts of freebies to "reviewers" just because the freebies (not so much the reviews since they eliminated reviews from non-buyers) bump your search rank since they count as sales. Basically -- show you have $250k in inventory to give away or don't bother selling on Amazon because they only want large sellers. They don't want to deal with mom and pops. For about a decade you really could make a lot of money just selling online. Now - forget it.