King of the Hill: Can Established Tech Companies Be Bested? - Knowledge@Wharton
Eric Barker stashed this in Winner take all.
"It has always been easy for businesses to go toe-to-toe on product features. "The significant thing on the Internet is ecosystem lock-in," according to Wharton operations and information management professor Eric Clemons. "Everyone can have the same features. [But] the guy who wins first is difficult to depose."
First movers don't have advantage forever. They have to keep moving.
In the 1990s, companies like AOL, Yahoo, Excite, and Lycos dominated. Now they're all dying or dead.
Friendster and MySpace at one time dominated. Now they are nowhere. The market keeps shifting.
Whether Facebook's acquisition of Instagram is ultimately viewed as defensive remains to be seen, but the deal is likely to encourage more competition, says Hsu. "What's spurring entrepreneurial behavior is the smartphone," Hsu notes. "Instagram's acquisition will result in more start-ups. There will be a mobile app land grab."
One or two of those start-ups may one day upend today's web giants, but many will fail.
Facebook has won a Winner-Take-All game. For now.