tech
The Myspace Dilemma Facing ChatGPT
Inventing a market is less important than perfecting one.
TL;DR
- First movers in various tech sectors, such as Kozmo.com, Friendster, Myspace, Treo, and BlackBerry, often failed despite their initial market presence.
- The AI market, currently led by OpenAI's ChatGPT, may follow a similar trajectory, with competitors like Anthropic's Claude rapidly advancing.
- Unlike previous tech markets, AI is quickly becoming embedded in corporate software suites, turning the AI models into utilities rather than standalone dominant platforms.
- The success of companies like Microsoft (MS-DOS/Windows) and JVC (VHS) demonstrates that strategic licensing, distribution, and network effects can be more crucial than being the initial inventor.
- Google, Facebook, and Apple became dominant not by being first, but by innovating and perfecting their offerings within established markets.
- AI is likely to become a commodity, similar to electricity or water, where the provider is less important than the reliable and competitively priced service.
- Switching costs in the AI marketplace are low, and user behavior appears 'promiscuous,' indicating that AI may not benefit from the same network effects that propelled earlier platform companies.