Consumer Web is Binary

Posted on: July 29, 2013
Posted in Strategy

Below I’ve listed the #1 and #2 companies in a sampling of consumer web markets.

No #2 – Myspace effectively died. Google+ has been laughable.

No #2 – Posterous acquired & shut down (can count WordPress though blogging / microblogging had different origins and compete indirectly).

No #2 – FB Poke failed

Bing (burning hundreds of millions a year, bought Yahoo audience to be #2)

No #2

No #2

No #2 though video will surely play a role for Instagram and it’s early… But there’s no one else in the running (Viddy, Socialcam, etc)

No independent #2 left out of dozens of copycats (however FB’s succeeding in local and Yelp has shifted from web to mobile during time 4sq has grown up)

No #2, though in theory Lyft and Sidecar are pursuing same market in different way (rideshare vs dedicated drivers)

Rdio is a distant #2

No #2

No#2, even the sum of the long tail is almost insignificant, which is crazy.

No #2

No #2

No #2

No #2

All these demonstrate a very provocative and clear drop off between #1 and everybody else – consumer web really does hold as winner-take-all markets. In each of these markets there were dozens of well-funded (sometimes hundreds) competitors.

The main rationale is undoubtedly network effects and demand-side economies of scale – a connected user benefits more when others are on the service.

Mobile is certainly the biggest inflection point for new upstarts to dethrone the #’1’s (and create new markets) and we are seeing it happen in cases. But interestingly, these mobile-first markets also seem to be growing into winner-take-all.

60 responses to “Consumer Web is Binary”

  1. Joel Andren says:

    Aren’t these all competing against each other? They shouldn’t be worried so much about a #2 as they should something new coming along. Agree though that in new markets it is winner-take-all.

  2. mdudas says:

    The Amazon example isn’t accurate, as established retailers like Walmart, Target and many others take significant collective share…and their web+ mobile offerings are definitely consumer internet at this point.

    • steve cheney says:

      Amazon is a funny one. They are so dominant in e-tail with and have done very well bringing the long tail on to their marketplace product, I think of them winning vs the “e-commerce first” folks. But yeah Target and Walmart are super progressive and have done well transitioning. In e-comm only (if you exclude b&m) any idea what the share breakdown is?

      Keep in mind – important point – the capital markets would suggest they think differently than you lay out, Amazon is worth more than Target + Cosco combined (and almost half of Walmart) and they are obviously valuing growth based on online going forward.

    • Greg Lomow says:

      Isn’t Apple on track to sell $20B via its online channel?

  3. aweissman says:

    One theory (which we subscribe to generally) is that network effects in the Internet era lead to winner take all, or most. I am wondering if, or how, that still holds going forward. For example, does mobile fragmentation weaken this?

    • steve cheney says:

      Thanks for reading Andy. Good question.

      I think mobile fragmentation could definitely impact the way a network takes hold. Instagram won the mobile photo sharing market when iOS-only with just 20M users before they supported Android (even though it was Android which quickly accelerated them to 80M).

      Consider iOS only services like vertical marketplaces that aren’t value driven. e.g. say for a price insensitive convenience driven marketplace, most users will initially be affluent (iPhone), so the company may purposely skip android. If a mobile service runs away on one platform, then it could dominate before affected by fragmentation?

      Many others (games? messaging?) will certainly be all flavors of android + iOS at launch – may be some correlation with why these aren’t winner take all on mobile.

      Just riffing off your question… Interesting to think about it

  4. Ryan Fujiu says:

    What about messaging? Seems like there’s a 2 and 3, no?

  5. Interesting
    I wonder how this plays out in B2B enterprise SaaS in those cases where two-sided network effects will be significant.

    A case in point is the niche for virtual energy surveys (read smart meter data and diagnose / influence performance) – there are few players, it is a highly differentiated niche in a massive market, that leverages up-selling (eg commodities on the back of advisory services – competitive utilities are headed this way) and cross-selling into eg building refurbishments.

    I suppose there will be a few oligopolies that mature out of this – but will they be the utility companies (who supply but don’t know energy use cases), construction who build, FM or controls companies (Honeywell Siemens etc).
    Or will some super-hybrid companies emerge (eg controls companies that offers energy buying support, or utilities that provide building service support)

  6. While correct, I’d argue MOST categories are binary.

    Taco Bell >>> Del Taco
    Walmart >>> Target

    And so on. It may not be quite as extreme as in Tech, but I believe most business trends this way.

  7. […] Consumer Web is Binary | steve cheney – technology, business … Go to this article […]

  8. … [Trackback]

    […] Find More Informations here: […]

  9. Green Roofs says:

    … [Trackback]

    […] There you will find 59587 more Infos: […]

  10. Amazing internet sites

    we arrived across a wonderful online site that you simply can savor. Get a look if you’d like

  11. Great web pages

    consistently a giant enthusiast of linking to bloggers that I love but don’t get a lot of backlink adore from

  12. Take a look at this out

    that could be the stop of this short article. Below you will unearth some internet websites that we think that you will appreciate, just click on the one-way links about

  13. Neat web pages

    we came across a neat site that you simply might possibly have fun with. Consider a look if you want

  14. Web sites we Like

    Any at the time inside of a even when we pick out blogs that we check out. Outlined under would be the most recently released websites that we go for

  15. Awesome web site

    some time to read or have a look at the articles or sites we have related to under the

  16. Internet websites we think that make sure you pay a visit to

    even if web sites we backlink to beneath are noticeably not linked to ours, we experience these are truly price a go through, so have a very look

  17. Weblogs ou must be studying

    Right here is really a Terrific Blog You could possibly Identify Engaging that we Inspire You

  18. Examine was useful, remain in touch

    make sure you go to the internet websites we adopt, consisting of this one, since it represents our picks with the internet

  19. Our site says:

    Speediest process to burn stomach fat rapid

    Each the moment inside a after we choose for blogs that we look at. Outlined beneath will be the most present websites that we decide for

  20. More Support says:

    On-line Write-up

    The knowledge outlined from the posting are a few of the greatest to choose from

  21. Wonderful web page

    the time to study or explore the material or webpages we’ve got connected to down below the

  22. Gems from your on-line

    pretty very few sites that take place to be comprehensive underneath, from our perspective are certainly very well price checking out

  23. Wonderful blog

    the time to look at or have a look at the information or internet sites we’ve got connected to down below the

  24. Browse was engaging, continue to be in contact

    please head to the online websites we stick to, as well as this 1, while it signifies our picks within the web

  25. Recommeneded website pages

    Below are a few in the websites we advise for our prospects

  26. Awesome internet websites

    we arrived throughout a wonderful web site that you simply would possibly take pleasure in. Get a look if you need

  27. Fantastic sites

    we arrived throughout a great webpage which you may possibly appreciate. Acquire a glance if you need

  28. Gems with the word wide web

    highly handful of websites that come about to generally be in depth under, from our point of view are definitely well worthy of checking out

  29. Weblogs ou must be reading

    The following is definitely a Superb Blog You could Unearth Interesting that we Promote You

  30. Salvador Cochrum

    we arrived throughout a nice webpage which you could consider joy in. Take a research if you want

  31. source says:

    Websites we Like

    Almost every once in a very even while we decide upon blogs that we look over. Detailed below are the most current internet websites that we pick

  32. Wonderful web page

    the time to study or explore the material or webpages we’ve got connected to down below the

  33. Dreary Day

    It absolutely was a dreary day listed here at present, so I just took to messing about on the internet and located

  34. stay with me says:

    Fantastic web-site

    enough time to examine or explore the subject matter or online websites we’ve got linked to below the

  35. Gems with the world wide web

    rather couple internet sites that occur to become comprehensive down below, from our perspective are definitely effectively definitely worth checking out

  36. Sites we believe that you should head over to

    although online websites we backlink to down below are significantly not associated to ours, we truly feel they can be genuinely definitely worth a experience, so possess a look

  37. Test this out

    which is the end of the content. Right here you will get some sites that we imagine you are going to take pleasure in, just just click the back links around

  38. Websites worthy of checking out

    the following are some backlinks to web sites that we backlink to considering the fact that we think that there’re worthy of going to

  39. Gems in the online world

    very couple of website pages that happen to be comprehensive underneath, from our viewpoint are definitely effectively really worth looking at

  40. Gems form the online world

    really handful of web pages that occur to become precise down below, from our standpoint are unquestionably nicely price trying out

  41. Web sites you ought to visit

    under you’ll discover the link to some online sites that we imagine it is advisable to check out

  42. Learn was intriguing, remain in touch

    you should see the internet sites we comply with, such as this one, while it represents our picks with the web site

  43. Amazing internet sites

    we arrived across a wonderful online site that you simply can savor. Get a look if you’d like

  44. Amazing blog

    enough time to examine or see the material or internet sites we’ve linked to under the

  45. Learn More says:

    Wonderful web sites

    we arrived across a awesome resource site that you just may delight in. Consider a glance if you would like

  46. Examine was attention-grabbing, continue to be in contact

    remember to explore the web pages we follow, this includes this an individual, due to the fact it represents our picks from your internet

  47. Customer suggestions

    among our website visitors not long ago encouraged the next blog

  48. Swiftest option to burn off stomach fats fast

    Nearly every once within a whenever we opt for blogs that we look at. Detailed underneath are the most recent websites that we opt for

  49. more says:

    Amazing websites

    we came throughout a fascinating website that you simply could have fun with. Take a look if you want

  50. More Tips says:

    On the internet Guide

    The information talked about within the post are some of the greatest to choose from

  51. Wonderful web sites

    we arrived across a interesting webpage which you could possibly take pleasure in. Consider a look if you want

  52. Vlad Ciurca says:

    For Uber i would definitely say that Hailo is it’s #2.

  53. While the binary nature of these verticals may be true, it doesn’t mean that the company currently #1 gets to remain there. Myspace -> Facebook, Yahoo -> Google, and Typepad -> WordPress are just a few examples of the clear leader being passed.

    So yes, it may be winner-take-all but the winners can be beaten.

    Also, any reason you didn’t include Pandora in the Spotify/Rdio category?

Tweet or Like this post.