Union Square Ventures’ (USV) Fred Wilson, an early investor in ventures like Twitter and Tumblr, believes the blockchain may be that elusive thing that can finally break the “winner takes most” trend in technology.
In a blog post, he points to the prevailing pattern of technology giants becoming the de facto choice for users by virtue of their domination of market share. Google for search, Facebook for social, Amazon for e-commerce, and Uber for ridesharing.
Users tend to gravitate toward the same few services for lengthy periods, which is convenient and keeps life simple. They sporadically try out new things, but the steady state market condition is one where the “winner takes most.”
One may argue that the tech giants, with a stranglehold on the market, can passively operate in cruise control. With little fiscal pressure to try radically new things- it may in fact be ill-advised to do so- innovation stagnates, and the steady, almost predictable pattern continues.
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“Lately, we’ve been wondering if there is an end to this pattern on the Internet and mobile. We think it is possible that an open data platform, in which users ultimately control their data and the networks they choose to participate in, could be the thing that undoes this pattern of winner takes most.”
But the notion of a blockchain, whose major value-add is the distribution of record keeping is distributed among multiple network participants, may break the vicious cycle. He continues:
“The blockchain is the closest thing to emerge that looks something like that. But the blockchain hasn’t (yet?) shown that it can produce something important like Google’s search or Facebook’s social graph and until it does, we are just waiting.”
He concludes by noting that this is something society will have to ponder. He also mentions that the question of whether countries with the most innovative startups will win the economic race is on their minds at USV and is a common topic of discussion.