I came across this blog post that cites Peter Thiel’s thesis of monopoly power in his book Zero to One as one of the root causes of the dominance of Big Tech:
Thiel made the case for monopoly as the ultimate goal of capitalism. Indeed, “monopoly is the condition of every successful business,” he asserted. With it, you’re free to set your own prices, think long-term, innovate, and pursue goals other than mere survival. Without it, you’re replaceable, and your profits will eventually converge on zero.
… it’s not hard to imagine how Thiel’s outlook [on monopoly] has helped to justify behavior by tech titans that routinely crosses the line from aggressive to anticompetitive, including Facebook’s policy of cutting off access to its platform from any company it deems a direct competitor. Like Gordon Gekko in Wall Street proclaiming that “greed … is good,” Thiel’s full-throated defense of monopoly gave tech leaders such as Zuckerberg philosophical cover to ruthlessly pursue their own self-interest while patting themselves on the back for it.
I think the writer misses an important point: the definition of a market that a business looks to monopolise. With sharp positioning, brands divide a market into a number of micro-markets that they look to dominate. See this good explanation of what great positioning looks like:
Harley-Davidson publicly shared their positioning statement:
The only motorcycle manufacturer
That makes big, loud motorcycles
For macho guys (and “macho wannabes”)
Mostly in the United States
Who want to join a gang of cowboys
In an era of decreasing personal freedom.
In tech, the barriers to entry in most spaces have trended downwards. Funding has, in general, been plentiful, including during a year as unusual as 2020. Every creator wants to be monopolist for their increasingly narrowly defined market.
Facebook, the target of an antitrust case as of this writing, understands this well. Facebook leadership understands that people tomorrow may look to something completely different to stay ‘open and connected’. It could be visual – hence their acquisition of Instagram. It could be text-oriented, group and chat based – see Whatsapp. Could be VR – Oculus. Could be audio or even video, hence their description of Tiktok as an existential thread and their building of stories into every product, including Whatsapp statuses. But it could also be something that looks like Slack or Discord. It could be something built on top of boring old email, unrecognisable from today’s traditional email clients. But more than anything it could be all of them. It could be – and is likely to be – multiple startups of each such type optimised for different narrow audiences.
Everyone may still have a Facebook account, they may still be tracked all over the web, and it wouldn’t matter because they’re no longer logging into Facebook that often to be served ads.
To come full circle on the issue of monopolies – one could imagine a future in which Facebook could technically be a monopoly: they could be the number one social network by far. Their MAUs could be in the billions. But their Big Tent positioning would also be irrelevant in a world where tens of thousands of brands have successfully created microniches such that not a single one of them holds a candle to Facebook’s numbers but taken together they have taken away all of the attention that Facebook used to capture.