I always imagined that one day my ass kicked by a crude tattoo shaved her head in a dark alley wandered by accident.
I do not know what people thought Autotrader.com a kick in the ass, but is a sweet man, bearded, with a penchant for berets and vests.
Craig Newmark, founder of Craigslist, put a capital D disintermediation. It is a bold reminder of the greatest fear every company must have: someone who thinks very differently.
Not only the lack Autotrader ass, however. He stood on the ashes of a burned house in a poor neighborhood, nursing a bottle of Clamato.
Worst: not even do it on purpose.
I see Dead Companies
Autotrader value proposition, such as advertisements in the newspapers that came before them (also killed by Craigslist), it really can be summarized in one thing: the distribution.
distribution business models attempt to provide value to both sides of the equation: Added enough sellers to offer buyers a wide range of products to choose, and attract buyers and sellers are an efficient market.
Once in scale, these business models are indestructible through direct competition. Good luck creating a better business than eBay auction (Amazon and others tried), a high degree of Craigslist (eBay tried), or a better system of Skype chat (both Microsoft's acquisition of $ 8,000,000,000.)
The reason these models are so hard to break, is that they all share a network effect. The concept of a network effect was created in 1908, and popularized by Bob Metcalfe in 1980. It's a bit indicates that the value of a network is the square of the number of users connected to it. More recently, companies like Facebook, Twitter and LinkedIn have benefited from this approach.
It's an interesting question unanswered, however: What happens when network effects are broken and the wheels begin to spin in reverse?
one last favor, turn off the lights
There are a number of new social networking companies died there - firms that built a field of dreams, only to discover that many users love. I know, I used to be chairman of one of them.
The company was run by a young director very intelligent and ambitious. It was a great coach, had his finger on the pulse of its users, and has created several successful products before. For some reason, however, did not stay. Sometimes all the planning and money in the world can not predict what users taken.
The same can be said of the move.
It is also difficult to predict the fate of firms altering the foundations of an existing service. Who would have imagined that a service like Netflix that are created have become Blockbuster "brick and mortar advantage" a disadvantage? Who in the hotel business have predicted the success of competition from private homes and sofas Airbnb shreds?
One thing is certain: when a company tries to move, the damage occurs so quickly that often can not be undone.
I just saw this happen firsthand. When I moved from New York to San Francisco last month, I decided I wanted to bring one of my cars with me, and by custom quoted on Autotrader. Six weeks and $ 80 later, he had not received a single investigation. So what you see on Craigslist and sold it in less than a week.
Not the Autotrader. They are on the extreme deterioration of a network effect.
This is a new phenomenon, I think we'll see much more of, as intrepid entrepreneurs (and berets children) how to move to the giants of the industry today.
I hope to see the collapse of rock solid business overnight, apparently scared the hell out of you. That fear is the only thing that gives a shot at survival when they put their sights on the publication.
I do not know what people thought Autotrader.com a kick in the ass, but is a sweet man, bearded, with a penchant for berets and vests.
Craig Newmark, founder of Craigslist, put a capital D disintermediation. It is a bold reminder of the greatest fear every company must have: someone who thinks very differently.
Not only the lack Autotrader ass, however. He stood on the ashes of a burned house in a poor neighborhood, nursing a bottle of Clamato.
Worst: not even do it on purpose.
I see Dead Companies
Autotrader value proposition, such as advertisements in the newspapers that came before them (also killed by Craigslist), it really can be summarized in one thing: the distribution.
distribution business models attempt to provide value to both sides of the equation: Added enough sellers to offer buyers a wide range of products to choose, and attract buyers and sellers are an efficient market.
Once in scale, these business models are indestructible through direct competition. Good luck creating a better business than eBay auction (Amazon and others tried), a high degree of Craigslist (eBay tried), or a better system of Skype chat (both Microsoft's acquisition of $ 8,000,000,000.)
The reason these models are so hard to break, is that they all share a network effect. The concept of a network effect was created in 1908, and popularized by Bob Metcalfe in 1980. It's a bit indicates that the value of a network is the square of the number of users connected to it. More recently, companies like Facebook, Twitter and LinkedIn have benefited from this approach.
It's an interesting question unanswered, however: What happens when network effects are broken and the wheels begin to spin in reverse?
one last favor, turn off the lights
There are a number of new social networking companies died there - firms that built a field of dreams, only to discover that many users love. I know, I used to be chairman of one of them.
The company was run by a young director very intelligent and ambitious. It was a great coach, had his finger on the pulse of its users, and has created several successful products before. For some reason, however, did not stay. Sometimes all the planning and money in the world can not predict what users taken.
The same can be said of the move.
It is also difficult to predict the fate of firms altering the foundations of an existing service. Who would have imagined that a service like Netflix that are created have become Blockbuster "brick and mortar advantage" a disadvantage? Who in the hotel business have predicted the success of competition from private homes and sofas Airbnb shreds?
One thing is certain: when a company tries to move, the damage occurs so quickly that often can not be undone.
I just saw this happen firsthand. When I moved from New York to San Francisco last month, I decided I wanted to bring one of my cars with me, and by custom quoted on Autotrader. Six weeks and $ 80 later, he had not received a single investigation. So what you see on Craigslist and sold it in less than a week.
Not the Autotrader. They are on the extreme deterioration of a network effect.
This is a new phenomenon, I think we'll see much more of, as intrepid entrepreneurs (and berets children) how to move to the giants of the industry today.
I hope to see the collapse of rock solid business overnight, apparently scared the hell out of you. That fear is the only thing that gives a shot at survival when they put their sights on the publication.
