Summary: With great power comes great profit, and then even the innovative get fat and lazy. This was the paradigm pre 2000s. Rome rose and fell. Microsoft’s monopoly was cracked. Kodak created the digital camera and kept it from customers.<br> The bigger they are, the harder they fall and the harder they fight. But historically failure was inevitable — no man, country or company ever reigned supreme in perpetuity. Chaos and innovation simply would not allow it.<br> Fast forward to today. We are entering a world where this may no longer be the case. The companies of today are infinitely more powerful and resourceful than the empires and industry moguls of old.<br> Established, valuable networks are nearly impossible to create, replicate or overcome. A 10% upgrade isn’t enough, you need 10x.<br> Historically this was hard but inevitable. New changes and technologies propelled era after era out of existence at rapidly increasing rates (recently much in relation to Moore’s Law).<br> Today is different<br> Unlike even 10–15 years ago, tech giants are creating the bulk of the wealth and innovation in the economy. Companies like Facebook, Google and Amazon have more money than most small nations and more control than any one government, should they so choose.<br> These giants don’t just fight competition, they destroy it. The leaders of today have learned the lessons of old and acquire promising startups often and early to protect their own ass. They have the most talent, the most money, the most data and no moral quandries with flat out copying competitors.<br> <br> Copy and paste<br> In an era where user experience is everything and data is king, how can startups compete? US Anti Trust laws are dated. They define monopolies not by their power and control, but by negative impacts (specifically price gouging) experienced by customers.<br> When you search for dinner and Google shows you your favorite restaurants, knows your preferences, suggests a great vegan cafe and books you a table, how can consumers complain. It is seamless, “Google just gets me.”<br> But Google scraped Yelp’s database, showed reviews, cloned an OpenTable and booked a place, all without leaving your search browser. And guess what, the government does not care.<br> Let’s not even start on Snapchat and Instagram. Snap’s growth has flatlined and Instagram appears unstoppable.<br> Source: Recode<br> Try it before you buy it<br> Almost all giants have all been accused of Microsoft like monopolistic tendencies. They lure startups in with talks of acquisition, pick apart the tech, pass on the deal and build it in-house. Then thanks to network effects and enormous, engaged user bases, Facebook, Amazon and Google can deploy and dominate the market — just ask Dave Morin.<br> And when Google and Facebook control the channels where startups acquire customers, a small tweak to the algorithm ensures their competitors drift in obscurity.<br> Sounds like anti-trust is in order. But…<br> More powerful than govt<br> And this is why we find ourselves attending congressional hearings on the alarming power of tech and its ability to influence elections (on a sidenote, America has aggressively influenced dozens if not 100s of elections worldwide so it is hard to really whine about being on the receiving side).<br> <br> <br> But these hearings and debates are a joke. The regulators assigned do not understand the underlying issue — network effects and user experience.<br> Amazon’s a great example of this. Amazon aims to kill all 3rd party sellers, yet brands CANNOT afford not to sell on Amazon (<a href="https://thesyndicate.vc/the-amazon-apocalypse-of-ecommerce/" data-href="https://hackernoon.com/the-amazon-apocalypse-of-ecommerce-7096ce3c6aa5" class="markup--anchor markup--p-anchor" rel="noopener" target="_blank">more on this here</a>). The rewards are too great. Like eating fastfood, it is great in the short term and deadly in the long run.
