[nickpp]

Any single Nx buyout results in N additional startups being funded. This is how VC culture operates and grows. It’s one of the main ingredients that build Silicon Valley’s success. Other countries are desperate to copy this model.

[fullarr]

I'm not arguing that it doesn't work and create a feedback loop

I'm arguing it's destructive long-term by creating a Goliath no one can compete with

Or several Goliaths in this case

Consolidation leads to stagnation

[nickpp]

Goliaths were and will always be around. But as long as there is an unregulated, free market - there will always be startups competing. It’s not easy, but it’s doable through innovation and creativity. The Goliaths are always more conservative, slower and less agile.

[JohnFen]

In the absence of regulation, goliaths will inevitably become monopolies and startups have no real chance to compete. The best a startup could be is to hope to be bought by the goliath.

[nickpp]

How exactly will startups will have “no real chance to compete”? What is the mechanism that will stop them?

Unless prevented by governmental regulation or similar (like patents) startups move faster and are more innovative and creative. They are not the cheapest but competing on price is not a good idea for a startup anyway, and the monopoly cannot be the cheapest possible since that would diminish profits - then what would be the advantage to be a monopoly?

A monopolised market is ripe for disruption and VC are dying to fund startups who can claim a chunk of that market. Any startup bought out by a Goliath will fund another 10 in its stead.

I know zero cases of unbeatable monopolies in a free market. All monopolies had government support. Do you have any examples?

[JohnFen]

> How exactly will startups will have “no real chance to compete”? What is the mechanism that will stop them?

The established monopoly company will, either by strong-arming suppliers, service providers, and marketplaces into not doing business with the startup, or by just buying them.

At least, that's how it's traditionally been done.

[nickpp]

> strong-arming [...] into not doing business with the startup

Isn't that illegal already?! I don't see how extra regulation can change anything. Any company is liable to try anti-competitive behavior and that is why it's illegal, monopoly or not.

And even if the government fails to stop Goliath from doing illegal stuff, a free market will route around it. See how Microsoft/Intel - monopolies in the 90s got out-innovated and made irrelevant by pure market forces while the anti-trust government action merely delivered a slap on the wrist.

Free markets work. Unless we regulate them to discourage startups.

Example of highly regulated markets: health care, energy, transport, education, telecoms. The result? It's almost impossible to compete, prices are high and products crappy.

> or by just buying them

Thus funding 10 new startups in the field since it's now known that the Goliath is exiting newcomers. Gold rush for any VC!

[gmerc]

That’s libertarian religious scripture that needs to be backed up by solid facts.

[seniorivn]

the only solid fact that you need is that tech giants of the past are not tech giants today, and the same way MS missed mobile market, Nokia failed with touchscreen smartphones, atnt and its parts failed to innovate, ibm lost and left pc/x86server etc, current giants are likely to loose. The only difference now is that the biggest competition today is from foreign companies that leads to them being able to get support of government and therefore compete not on the basis of merit, but in a political way.

[JohnFen]

> the only solid fact that you need is that tech giants of the past are not tech giants today

That's far from the only solid fact you need to know, though. You need to know the conditions and circumstances around it all.

[seniorivn]

well, there is an assumption, that the circumstances are a political/economical system which is the same one. But there is an argument to be made about deterioration of institutions