Quote:
Originally Posted by SteveEisenberg
You may be underestimating economies of scale.
To provide a web experience similar to that of Amazon, you theoretically have to write almost as many lines of code as Amazon has for its web site, despite having a tiny proportion of the market. This isn't quite true, but the number of lines of code you need to write to provide an Amazon-quality experience is enormous. Plus, Amazon has warehouses in the hinterlands of most major US cities, greatly reducing their shipping costs compared with someone starting out from one or two locations.
As for Google, to really compete there, you need not just to walk the whole internet for fewer customers, but, and I think this is bigger, duplicate their massive bidding system infrastructure for selling ads. A startup would have to pay human advertising salespeople.
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I meant that it's easy to reach certain
smaller amount of customers and not overly costly. Thousands or tens of thousands customers with smaller feature set isn't impossible to set up and doesn't need overly specialized hardware and software. On other hand things get costly when you try to be next Amazon.
To be huge you need to spend millions or hundreds of millions. Still on other end of scale you could probably run a business with a few thousands in revenue, not full time, but as extra income. This is why the monopoly is unlikely. Barrier of entry and to upkeep is much smaller than outside internet.