<story><title>How the Frightful Five Put Startups in a Lose-Lose Situation</title><url>https://www.nytimes.com/2017/10/18/technology/frightful-five-start-ups.html</url></story><parent_chain><item><author>magice</author><text>I think this article completely bypasses the root causes of the issue in order to paint Silicon Valley dominating businesses in the worst light possible.&lt;p&gt;Look, the real issue is simple: all of these &amp;quot;web startups&amp;quot; are not very innovative. All of them are roughly the same: ever so slightly more novel way to deliver roughly the same set of data to users in exchange for app or token of money. How is &lt;i&gt;that&lt;/i&gt; &amp;quot;ground breaking&amp;quot;?&lt;p&gt;Thing is, when everyone is doing roughly the same thing, which costs perhaps a few engineering months to build, how can startups ever compete with the big guys who are hell bent on ensuring their success? It&amp;#x27;s like trying to open supermarkets to compete with Walmart, or building gasoline car to compete with Toyota, except it&amp;#x27;s cheaper for the Big Five to copy than for Toyota, because the media (information) is inherently more traceable.&lt;p&gt;I remember when Windows 98, XP, Google, Gmail, Prime (and Uber, eBay, and paypal) came out. They blew everyone&amp;#x27;s mind. They changed how we work and live. What&amp;#x27;s so hot about SnapChat? I mean, it&amp;#x27;s probably ever so slightly more entertaining than, says, Hangout or WhatsApp, but it&amp;#x27;s just minor tricks on top of roughly the same set of features. Of course these competitors will drive it out of the marketplace. It holds no long term competitive advantages.&lt;p&gt;There are businesses that don&amp;#x27;t deserve to die. For example, a local store provides not just goods, but a community center and an identity for a small town; it gives more value than mere commerce. The decline of these should alarm us. On the other hand, some businesses do deserve to die. And lack of long term advantage, lack of innovation, lack of additional value sounds exactly &amp;quot;should die&amp;quot;.</text></item></parent_chain><comment><author>replicatorblog</author><text>What&amp;#x27;s missing from this piece is a broader historical perspective. This pattern of conglomeration happens in almost every industry, e.g. the &amp;quot;Big Three&amp;quot; automakers.&lt;p&gt;It doesn&amp;#x27;t have to be bad. Seven of the top 10 pharma companies are over a hundred years old. They are highly concentrated. But there&amp;#x27;s never been a better time to be a biotech startup. Life science startups are going from founding to billion dollar IPO in &amp;lt;18 months. The near lock the big pharma companies have on distribution allows the startups to focus on innovation. It&amp;#x27;s hard to build a hundred billion dollar drug company today, not so hard to build a mere $1B company.&lt;p&gt;The same is true in food. Kraft, Mondelez, etc. have huge market power, but are also active in the M&amp;amp;A market, paying $300M for Krave Jerky, $600M for RXBar, and $700M for Blue Bottle—all in the last 18 months or so.&lt;p&gt;These patterns aren&amp;#x27;t that different than what we&amp;#x27;ve seen with Facebook acquiring almost all upstart competitors. This isn&amp;#x27;t great for billion dollar VC funds, but it&amp;#x27;s not clear at all its bad for entrepreneurs.</text></comment>
<story><title>How the Frightful Five Put Startups in a Lose-Lose Situation</title><url>https://www.nytimes.com/2017/10/18/technology/frightful-five-start-ups.html</url></story><parent_chain><item><author>magice</author><text>I think this article completely bypasses the root causes of the issue in order to paint Silicon Valley dominating businesses in the worst light possible.&lt;p&gt;Look, the real issue is simple: all of these &amp;quot;web startups&amp;quot; are not very innovative. All of them are roughly the same: ever so slightly more novel way to deliver roughly the same set of data to users in exchange for app or token of money. How is &lt;i&gt;that&lt;/i&gt; &amp;quot;ground breaking&amp;quot;?&lt;p&gt;Thing is, when everyone is doing roughly the same thing, which costs perhaps a few engineering months to build, how can startups ever compete with the big guys who are hell bent on ensuring their success? It&amp;#x27;s like trying to open supermarkets to compete with Walmart, or building gasoline car to compete with Toyota, except it&amp;#x27;s cheaper for the Big Five to copy than for Toyota, because the media (information) is inherently more traceable.&lt;p&gt;I remember when Windows 98, XP, Google, Gmail, Prime (and Uber, eBay, and paypal) came out. They blew everyone&amp;#x27;s mind. They changed how we work and live. What&amp;#x27;s so hot about SnapChat? I mean, it&amp;#x27;s probably ever so slightly more entertaining than, says, Hangout or WhatsApp, but it&amp;#x27;s just minor tricks on top of roughly the same set of features. Of course these competitors will drive it out of the marketplace. It holds no long term competitive advantages.&lt;p&gt;There are businesses that don&amp;#x27;t deserve to die. For example, a local store provides not just goods, but a community center and an identity for a small town; it gives more value than mere commerce. The decline of these should alarm us. On the other hand, some businesses do deserve to die. And lack of long term advantage, lack of innovation, lack of additional value sounds exactly &amp;quot;should die&amp;quot;.</text></item></parent_chain><comment><author>no_wizard</author><text>I think consumer services, platforms, and software hit deep market saturation many years ago. All this to me sounds like consumer plays.&lt;p&gt;Right now the innovation has again turned to business software and services. I see most of the intersecting things in tech playing out in corporate offices instead of on my phone or my home computer nowadays.&lt;p&gt;I think it’s easier and definitely more headline grabbing for articles like his to focus on the consumer stuff. The real story now though I feel strongly is in the business space.</text></comment>