[nostrademons]

That's only if that distribution channel is your only access to the customer. If you have other alternatives, you can (and often will) still win.

Google Videos vs YouTube. Orkut vs Facebook vs Google+. Facebook status messages vs Twitter. Google Offers vs Groupon. Google Flights vs Kayak or Hipmunk. iMessage vs Whatsapp. Google Local vs Yelp.

There're plenty of examples where the big company came out with a competitor (often getting to market first, eg Google Video or Orkut), stuffed it through the distribution channel, but lost to a startup that nailed the user experience. Having a big channel doesn't matter if your conversion rate sucks.

[marincounty]

Google makes good products, but doesn't market them properly.

They can screw up great products too. I miss my old YouTube. I currently have videos up that I can't access.

It seems like tech companies are prone to an--I don't know the correct word/term, so I'll just say it. They remind me of a hiker on a mountian. At first, the company seems great. We all join. We all use their products. Then it's downhill. I honestly don't know what Yahoo even does now. I am embarrassed to use my yahoo email--for what reasons, I just don't want to hear some yahoo say, "Ah--you still use Yahoo. That brings back memories."

I don't use Yelp anymore. Why? I just don't want to be one of those people; Those whiny, picky people. See, it was once a good site. Now I cringe when ever I see their commercials. In my mind, they are going down the hill.

If I owned a big company, I would just prepare for the eventual day if goes down that sine wave.

I still think there are big opportunities in tech. I would open up my garage to the right people. I would hire Hackers. Guys with nothing to lose. I would keep a close eye on the legalities of what these "convicts" do though. I've never felt guys who take big chances, without a backup, are given enough business opportunities.

[eru]

I wonder whether Alphabet is a way to try and ride these waves.

[crdoconnor]

YouTube basically won against Google Video because they allowed pirated content. They took an enormous legal risk which Google Video didn't and it paid off. It almost didn't pay off.

Nothing to do with user experience.

[nostrademons]

It was a bit more than that: Google Video initially didn't allow user-generated content and when they did, the upload process was much more involved than YouTube's (largely because of fears of copyright infringement). They also had a much better embedded video player - I first ran across YouTube because all my friends were sharing it across LiveJournal, while Google Video embeds were awkward and ugly. And their whole experience was designed to get you to click through to another video - the YouTube founders themselves said that the site took off when they added the "related videos" feature.

But even assuming that it was all because of pirated content, that's a good example of an advantage that startups have over entrenched incumbents. If you're a 6-month-old startup and you get sued for a hundred billion dollars (and lose), you just go bankrupt and try again. If you're a 10-year-old company and you get sued for a hundred billion dollars, you lose a hundred billion dollars. The risk/reward tradeoffs are dramatically different.

[ssalazar]

Indeed, taking enormous legal risks is another advantage that isnt available to large corporations.