| IMO there is a limited market for mature ideas that is often much smaller than the previous prediction. When startups start meeting this boundary, instead of reigning in expectations and become an efficient tool serving a small market, it's "go big or go bust" with desperate attempts to validate the previous market size predictions. Sooner or later, you're bumping into the markets of other companies and it's impossible to compete against them b/c you're using your weaknesses against their strengths. There is only so much money and attention (time) in the world for people to spend on things. The low hanging fruit in developed countries has already been plucked clean so it's quite hard to 'grow' new markets. Your new tv series better be REALLY good if you're competing with game-of-thrones and breaking-bad. Interestingly enough, the Chinese companies actually have many more features and are often better (for their users) than the american counterparts. The population is more homogenous and has more of a crowd mentality. Network effects are huge. Monopoly-like companies also prevent too much fragmentation meaning technology as a tool becomes standardized. Rather than 20 different things competing for the attention of everyone, there is one big company with apps that do everything that is trusted and reliable and thus the 'best'. While american companies compete for slices of a certain size of pie, one chinese company owns the entire huge pie. As long as the users have pie, they are happy. In allocation of limited resources, this usually fails as equal distribution of resources leaves everyone poor which creates huge incentive for corruption and hoarding. For abundant resources that can be duplicated infinitely and have network effects to boot this is perhaps a better strategy. After all, it's all about everyone having an abundance of pie, not who has more or less pie. |