hottakes

Network effects are obsolete but practically no one realizes it

Identity mixologist

Co-founder at @icebreaker

icbk.me/web3pm.fc

Principal at Cobalt Ventures. Write @ TheItinerant.io ; BenErsing.com Host: /venturecapital /finance /adventures

I’m assuming he means that authentic content is more valuable than who you know. Recommendation engines are way more disruptive.

Most network effects businesses are predicated on the assumption of closed data 

True in 2000s and 2010s. 

Now it’s possible to generally liberate closed data thru coops, data takeout, TLS.

As data acquires interoperability, network dynamics invert where closed networks are increasingly stranded fighting solo while open networks can ingest everything. 

The result is competition based on value delivered vs lock in. Fundamental shift in power that counterpositions against incumbents for whom it’s irrational to open up until it’s too late. 

Thus the era of traditional closed data network effects is over. Tho it’ll take 2 decades to play out.

Agree with point that recommendation engines can be highly disruptive *when data is open*

And we are transitioning from an era where data was closed to one where data is open. 

In addition to tech and regulatory unlocks, the moat of trust that used to protect closed platforms has eroded.

building /outpaint | ex-coinbase ex-bisontrails | OSS noob

Agree with point that recommendation engines can be highly disruptive *when data is open*

And we are transitioning from an era where data was closed to one where data is open. 

In addition to tech and regulatory unlocks, the moat of trust that used to protect closed platforms has eroded.

https://warpcast.com/web3pm/0x5356ea75