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This is like asking, remember when Mercedes Benz was the largest car company in the world? The 1880s were a magical time! Every industry goes through a period of experimentation. In his 1985 book, Innovation And Entrepreneurship, on page 121, the great business guru Peter Drucker offered this: In the 1920s, literally hundreds of companies were making radio sets and hundreds more were going into radio stations. By 1935, the control of broadcasting had moved into the hands of three "networks" and there were only a dozen manufacturers of radio sets left. Again, there was an explosion in the number of newspapers founded between 1880 and 1900. In fact, newspapers were among the "growth industries" of the time. Since World War I, the number of newspapers in every major country has been going downhill steadily. And the same is true of banking. After the founders -- the Morgans, the Siemenses, the Shibusawas -- there was an almost explosive growth of new banks in the United States as well as in Europe. But around 1890, only twenty years later, consolidation set in. Banking firms began to go out of business or to merge. By the end of World War II in every major country only a handful of banks were left that had more than local importance, whether as commercial or private banks. ...But each time without exception the survivor has been a company that was started during the early explosive period. After that period is over, entry into the industry is foreclosed for all practical purposes. There is a "window" of a few years during which a new venture must establish itself in any new knowledge-based industry. The open period for the Internet appears to have been the 20 years from 1990 to 2010, give or take a year. The biggest surprise about this is that there was a constant public rhetoric about the Internet that argued that it would be the most naturally competitive ecosystem ever invented, the one most resistant to monopoly, but in fact the opposite happened -- it consolidated much more quickly than any other major industry, certainly much faster than the examples that Drucker gives. |
This is a great great point!