Great New Yorker article on the winner-takes-all dynamic that characterises innovative new tech-driven markets. Two escalatory dynamics drive this: the increasing competitive advantage of having better infrastructure and the increasing value of the platform as more users join. Add in the over-eagre venture capital seeking to back the eventual winner in the market and you have an incredibly potent recipe for monopolisation:
In the course of nearly two decades of closely following (and writing about) Silicon Valley, I have seen products and markets go through three distinct phases. The first is when there is a new idea, product, service, or technology dreamed up by a clever person or group of people. For a brief while, that idea becomes popular, which leads to the emergence of dozens of imitators, funded in part by the venture community. Most of these companies die. When the dust settles, there are one or two or three players left standing. Rarely do you end up with true competition.
http://www.newyorker.com/tech/elements/in-silicon-valley-now-its-almost-always-winner-takes-all
Mark Carrigan 