| I like this post, but we should contextualize it properly, and look at where it doesn't work. Things have developed over the past forty years which don't allow the "start small, stay small" to always be a possibility: the increase in winner-take-all markets and the Superstar effect. We see it everywhere when it comes to today's job markets, and we also see it (and potentially worry about it being the case, and this is critical) in industries themselves. This latter belief means that if you decide to start something, you may need to consider whether you should bother at all if you aren't going to go big. Is Uber in a winner take all market? If so, they have no choice but to operate the way they do: http://www.vox.com/2014/12/4/7336433/uber-worth- We see it in regular job markets more generally (where we call it job polarization): http://economics.mit.edu/files/5554 We see it in "art, sports and culture" markets (where we call it the Superstar effect): http://www.nytimes.com/2014/02/23/business/winners-take-all-... http://marginalrevolution.com/marginalrevolution/2010/09/win... http://www.nytimes.com/2010/12/26/business/26excerpt.html We see it in newspapers: http://thinkprogress.org/yglesias/2010/09/10/198480/technolo... We see it in attention more generally (which has second order effects, like everyone
use just one or a handful of large platforms(!) and where we call it variations of "winning in the Attention Economy"): https://en.wikipedia.org/wiki/Attention_economy So the choice is sometimes (perhaps even often today) not between "get big" or "stay small/medium", but get big (where big may represent firm size, level of knowledge/skill, fame, or a number of other attributes depending on the area) or "get (almost) nothing." When the distribution of customers/eyeballs/rewards are as lopsided as they are in many areas, the only choice IS "get big or go home." More: http://www.slate.com/articles/business/moneybox/2011/12/how_... http://marginalrevolution.com/marginalrevolution/2010/09/win... http://prospect.org/article/talent-and-winner-take-all-socie... I don't knock dhh, and this is one of those posts I actually want to agree with, but it doesn't neatly comport with extant realities. I think even this advice, just like the advice to "get big" needs to be taken very carefully. All of these roads entail risk (obviously), but the choice of big versus small isn't as simple as implied. |
From where I'm sitting, I see the exact opposite. There are very few businesses that have few competitors.