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American Tech Giants Are Making Life Tough For Startups (economist.com)
An anonymous reader quotes a report from The Economist: Venture capitalists, such as Albert Wenger of Union Square Ventures, who was an early investor in Twitter, now talk of a "kill-zone" around the giants. Once a young firm enters, it can be extremely difficult to survive. Tech giants try to squash startups by copying them, or they pay to scoop them up early to eliminate a threat. The idea of a kill-zone may bring to mind Microsoft's long reign in the 1990s, as it embraced a strategy of "embrace, extend and extinguish" and tried to intimidate startups from entering its domain. But entrepreneurs' and venture capitalists' concerns are striking because for a long while afterwards, startups had free rein. [...] Venture capitalists are wary of backing startups in online search, social media, mobile and e-commerce. It has become harder for startups to secure a first financing round. According to Pitchbook, a research company, in 2017 the number of these rounds were down by around 22% from 2012 (see chart).
The wariness comes from seeing what happens to startups when they enter the kill-zone, either deliberately or accidentally. Snap is the most prominent example; after Snap rebuffed Facebook's attempts to buy the firm in 2013, for $3 billion, Facebook cloned many of its successful features and has put a damper on its growth. A less known example is Life on Air, which launched Meerkat, a live video-streaming app, in 2015. It was obliterated when Twitter acquired and promoted a competing app, Periscope. Life on Air shut Meerkat down and launched a different app, called Houseparty, which offered group video chats. This briefly gained prominence, but was then copied by Facebook, seizing users and attention away from the startup. The Economist goes on to state three reasons why the kill-zone is likely to stay: "First, the giants have tons of data to identify emerging rivals faster than ever before. Recruiting is a second tool the giants will use to enforce their kill zones. A third reason that startups may struggle to break through is that there is no sign of a new platform emerging which could disrupt the incumbents, even more than a decade after the rise of mobile."
The wariness comes from seeing what happens to startups when they enter the kill-zone, either deliberately or accidentally. Snap is the most prominent example; after Snap rebuffed Facebook's attempts to buy the firm in 2013, for $3 billion, Facebook cloned many of its successful features and has put a damper on its growth. A less known example is Life on Air, which launched Meerkat, a live video-streaming app, in 2015. It was obliterated when Twitter acquired and promoted a competing app, Periscope. Life on Air shut Meerkat down and launched a different app, called Houseparty, which offered group video chats. This briefly gained prominence, but was then copied by Facebook, seizing users and attention away from the startup. The Economist goes on to state three reasons why the kill-zone is likely to stay: "First, the giants have tons of data to identify emerging rivals faster than ever before. Recruiting is a second tool the giants will use to enforce their kill zones. A third reason that startups may struggle to break through is that there is no sign of a new platform emerging which could disrupt the incumbents, even more than a decade after the rise of mobile."
Well I'd say the bigger thing though is at least some features are lost. Look at say diaspora's social network. (admitted diaspora more likely can be credited with killing themselves, due to it's initial release being filled to the brim with security holes, leading to them basically losing all of the tech journalist support, that origionally had put them on the map). Diaspora's leading feature for the users, would have been Aspects. Which basically let you put people into groups, and chose which group you wanted to share which posts/photo's etc... with. Shortly after diaspora's demo's came out, google plus came out. Which looked almost identical to diaspora, and included "circles" which was basically aspects, and then of course facebook made groups to match both of them. The big thing is, stuff like privacy, reasonable monotization systems, non tracking etc... aren't big money makers. In order for a liberation from big data, It would take both an improved privacy system, and a practical feature to draw people away from the big companies. Also many of the companies selling their companies to big names like google etc... aren't doing so because they think their product will flourish there. If you look at the mass graveyard of companies google has bought up, it's pretty clear very few of them actually survived. At least some of the guys would rather have had their company take it's chances, but knew that refusing meant the big giants would kill their product in some other ways... so the choice was "collect a few million and let the company pick up and abandon the project", or "watch the company evicerate the product by either temporally making a competitor (that also will be abandoned), and go bankrupt in the process.
Additionally, people don't really care. Geek care, that's mostly it. Most everyone else doesn't care, and that matters, because if they don't come to this utopia of distributed privacy, then no one else will either.
This is the free market as it should be. Much better than in markets where government meddles, actually fucking things up.
Why are you against a properly working free marked? Because a working free marked requires low barriers to entry/exit, lack of cartel activity, etc, all of which needs govenment intervention. By all means, it is absolutely possible for governments to mess up with things they do (say like unwisely keeping a dying coal industry on life support instead of investing in renewable energy), but that is not an argument for them to do nothing.
And even with that, some government intervention by restricting what a properly working free marked could produce is good for society. For instance, do you think that companies should be able to 100% decide the safety of their products without any say from the government at all, or should the govenment be able to set some minimum requirements with regards to products? Will such safety requirements be perfect? Of course not. Will it make some products more expensive? Yes. But the world is undeniably a better place with such requirements in place.
When you are sure of something, you probably are wrong (search for "Unskilled and Unaware of It").
Additionally, people don't really care. Geek care, that's mostly it. Most everyone else doesn't care, and that matters, because if they don't come to this utopia of distributed privacy, then no one else will either.
People don't care about privacy but they are willing to switch for features. A distributed system like email or even android allows multiple products to exist in the same domain. That will be the only way to defeat the walled garden. Have a system of loosely connected platforms where one person can choose platform A and another person can choose platform B and they can still talk to each other.
Facebook is unlikely to do this voluntarily and it would be unlikely for a startup to be able to manage this either. The most likely scenerio at this point would be if google opened google+ to third party developers as a way to try to one up facebook.
Before AOL and CompuServe with had a distributed network of BBS's But this created some chaos with each BBS SysOp being their own little king, Some being too strict, others being too lax, some finding a good middle ground. Paid Services such as AOL, Prodigy and CompuServe. Combined the features of hundreds of BBS's to one site, and offered a consistent set of rules and liberties. Then the Web Came out, giving people access to information that these commercial sites deemed inappropriate, or just not interesting enough. So people went back on the distributed method again... However the Web is a dangerous place, to validation of information, that plugin needed to be installed will either be spyware, or just handle some vector graphics so you can play an online game. Altavista, Yahoo, AskJeves, Google, Myspace, Facebook, Wikipedia came in as a way to tame the web, so you can find information easily, try to block some dangerous information... So it then comes back to a few big companies managing all our data again.
The problem is that we ask accurate truthful information, but we want our world view to be validated, but every source has a bias and some sources take that bias to spread false information, as it will make money pandering to peoples world views. When we get too distributed we get a lot of dangerous data. when it gets too controlled to much important data is missing.
If something is so important that you feel the need to post it on the internet... It probably isn't that important.
Why are you against a properly working free marked?
Because government == always bad/inefficient. Free market == freedom/efficiency!
I really wish I was making that argument up. It's not the stance of every free market advocate, but there are a disturbingly high number in that blind faith camp posting on /. And I'm not sure it's worth trying to reach them.