After On Podcast Episode #13
And no, I DON’T think Ev has lost his mind
Incumbents who dominate vast markets for decades and then lose their grip echo Hemingway’s depiction of sliding into bankruptcy: they do so gradually, then suddenly. Major network dominance of programming was an eternal fact of life when Netflix launched its first original show in 2013. But next year, the streaming leviathan’s $8 billion content budget will dwarf that of any broadcast network. Similarly, just a few years after launching in San Francisco, Uber eclipsed the revenues of the cab companies which had jointly monopolized that market for decades by a factor of 350%.
Shifts this big only happen when network effects are in play. Which is to say, that virtuous cycle in which more users make a platform more valuable, which draws more users, who make the platform more valuable still, which summons still more users, etc. In the digital era, we’ve seen network effects fuel the rise of messaging apps, social networks, and dating sites; as well as two-sided markets for Beanie Babies, handicrafts, and (of course) short-haul rides, to name but a few.
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