Yea, Amazon and Bezos aren't rich so much because they were first, but because they have remained dominant in that field over a long period of time.
I think this is actually a significant problem w/ Scott's last argument - the founders of Friendster and Myspace aren't infamously super-rich, because unlike Zuck, they were not able to keep their thing going strong, in the face of competition, over a long period of time. Getting in first is a huge advantage - but then competition comes in and challenges you. If you don't rise to that challenge, you may walk away with some I-did-it-first money, but the competition will wind up getting the big pot. If you consistently whoop the competition, it's either because you're providing better value, or because you're shrewder at business (this latter part is something the left can perhaps legit complain about, but it's a hard thing to correct accurately). To the extent you're providing better value than all the other competitors who come along over the years, you should reap proportionate rewards. So it is w/ amazon - no one else has 2 day shipping afaik. This accords w/ a general statement about profit margins and competition - low competition should naturally lead to high profit margins, because you're apparently doing something so hard or risky that hardly anyone else can manage to pull it off (this argument falls apart completely when you have low competition because you're exploiting regulation, e.g. IP laws, or when you have a true monopoly).
Speaking of monopolies, they're the big exception to all this - true monopolies can win forever against any competition despite having a mediocre product. FB has a true monopoly because of network effects (a social network has no value unless everyone is on it, so it's hard for there to be two dominant social networks in the same space, winner takes all), but I dont think any of the other big tech companies have that. Amazon has a lot of competitors, they just haven't made themselves as attractive to customers as amazon has. And FB faces the Thielian issue of serial monopoly, where the true monopoly gets free cash for a long time but eventually gets beat out by a new monopoly in an adjacent, but different space (e.g. snapchat or tiktok).
Yea, Amazon and Bezos aren't rich so much because they were first, but because they have remained dominant in that field over a long period of time.
I think this is actually a significant problem w/ Scott's last argument - the founders of Friendster and Myspace aren't infamously super-rich, because unlike Zuck, they were not able to keep their thing going strong, in the face of competition, over a long period of time. Getting in first is a huge advantage - but then competition comes in and challenges you. If you don't rise to that challenge, you may walk away with some I-did-it-first money, but the competition will wind up getting the big pot. If you consistently whoop the competition, it's either because you're providing better value, or because you're shrewder at business (this latter part is something the left can perhaps legit complain about, but it's a hard thing to correct accurately). To the extent you're providing better value than all the other competitors who come along over the years, you should reap proportionate rewards. So it is w/ amazon - no one else has 2 day shipping afaik. This accords w/ a general statement about profit margins and competition - low competition should naturally lead to high profit margins, because you're apparently doing something so hard or risky that hardly anyone else can manage to pull it off (this argument falls apart completely when you have low competition because you're exploiting regulation, e.g. IP laws, or when you have a true monopoly).
Speaking of monopolies, they're the big exception to all this - true monopolies can win forever against any competition despite having a mediocre product. FB has a true monopoly because of network effects (a social network has no value unless everyone is on it, so it's hard for there to be two dominant social networks in the same space, winner takes all), but I dont think any of the other big tech companies have that. Amazon has a lot of competitors, they just haven't made themselves as attractive to customers as amazon has. And FB faces the Thielian issue of serial monopoly, where the true monopoly gets free cash for a long time but eventually gets beat out by a new monopoly in an adjacent, but different space (e.g. snapchat or tiktok).