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How to win competition when users have zero switching costs and code is forkable. On building moats in web3 🧵
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gilles
@gilles
1 Competition is the art of acquiring, managing and leveraging scarce resources to create advantage. Competition follows scarcity. And when new technology shifts what is scarce, the competition game changes.
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2 Industrial firms compete on scarce resources • oilfields, mines • intellectual property (Coke's formula) You win by getting resources, then building structural and legal moats around them.
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3 These defensibility principles carry over in web2: • Google search algorithm is a trade secret • Craigslist blasting cease-desists when Airbnb piggybacked their user base. But the new oil (scarce resource) is data.
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