Why Internet Startups are No Longer the Same

internet startups, entrepreneurship, google, facebook, business

In the past couple of decades, we’ve seen many small Internet startups grow their platforms to become Internet giants that they are today. Facebook is a prime example of this. However, after Facebook was created, we began seeing a decline in small startups becoming large contenders in the market today. While many would argue that this is the result of older startups grabbing what is essentially low-hanging fruit, or early discovery of niche markets such as social networks, searches, and e-commerce, others beg to differ. What we have here is more complicated than just discovery, it’s a market that is dominated by few conglomerates at the top of the food chain.

The End of An Era

One of the largest reasons emerging startups have not become dominating factors in the market is largely due to Internet giants protecting their markets. In Facebook’s case, buying out trending or emerging competitors is a largely popular method of controlling their market. Pioneered by the guys at Google, this method was also used by Mark Zuckerberg when he acquired Instagram and WhatsApp in their growing stages. Today, these social media platforms are a large part of the market. Google, on the other hand, picked up Youtube. Today, the video streaming service boasts upwards of 5 billion videos viewed every day. With the money and resources at their disposal, these large companies make it hard for startups to refuse their offers. Even if they do,it’s easy for tech giants to find ways to stymmie their growth anyway.

Tough Competition

When you say no to these large corporations, competition tends to get fierce. This is especially true if you begin posing a competitive threat in a market dominated by oligarchies. Yelp’s CEO learned that the hard way when it went public in 2012 and refused any acquisition offers from the likes of Google and Yahoo. In retaliation, Google launched its own online review service and propelled it to the top of Google’s search rankings through their dominance in the search market. Subsequently, Yelp began experiencing a dip in their rankings, meaning Google’s service appeared much higher on the search list than Yelp’s.

The point is, the large corporations aren’t going anywhere anytime soon and will use any means necessary to keep their market dominance. If you refuse to cooperate and strike a deal, you will more or less be shot down through sheer power and influence.

A New Dawn

While it’s true that these businesses hold a large portion of influence in what is currently considered the innovative industry, that doesn’t mean it will stay that way. Eventually, we will see new innovative markets take over, and niche markets being explored. Dominance is great and all, but it never lasts. If anything, we could see the trend shifting in the next decade to the next “big” thing, and it will bring about its own problems. Right now, we see the end of an era that kickstarted companies like Google, Amazon, and Facebook. Right now, they remain the leaders of technological innovation but with the end of one era, begins the next.

 

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