Start up advice

Startups disrupt incumbents by creating new pro-consumer business models (cheaper products), better user experiences (easier products), and more agile processes (faster evolving products). But this will get much more difficult going forward.

Future business models and user experiences will be driven largely by Artificial Intelligence and deep Personalization. Since data is the fuel of AI and Personalization, the companies that own massive amounts of data have a massive advantage.

Google, Facebook, Amazon (and maybe Apple) get ever-more powerful with the more data they obtain from people using their products… and the more data they get, the more useful and valuable their products and services become… thus generating more usage and ever more data. This virtuous cycle is incredibly powerful, even more powerful than the network effects that propelled Facebook and social media overall.

It’s hard to see how a startup, with little unique user data of their own, will be able to unseat the increasingly AI-driven products of Google, Amazon, Facebook (and maybe Apple). The data dynamic at play now unfairly advantages these incumbents to the point where they become exponentially more powerful each year, making them exponentially more difficult to compete against.

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