What’s it like to have Google and Amazon try to kill your startup?
fusion.net
fusion.net
The payment system is getting there (e.g. Bitcoin). The consensus algorithms are being worked out, the distributed trust systems are coming into place (e.g. Stellar). The scalable p2p discovery and mesh is pretty much already working (e.g. BitTorrent).
Why do we need to pay a 10% tax to companies to do this? I mean, as a civilization. To think the algorithms could never exist that would let me find a professional ______ near me which is, a) an actual person, b) someone who actually does this work for a living, and c) has real-life honest reviews from people who have actually paid that person to provide that service... it just doesn't seem like an intractable problem.
If you add up all the expert help, trusted reviews, on-demand this, cloud assistant that, we're talking what, at least 100 billion dollars of rent seeking?
Whether or not such a system has an optional secure anonymity layer (a la OpenBazaar) is just a matter of how you want to boot-strap the initial user base. Needless to say, "50% of the world's drug trade also happens to be conducted on the same code-base" may or may not be a great answer to the "how did you hack this system" question.
I think the "1099 Economy" is actually a great thing, I just think we could do without the gatekeepers.
Not saying I entirely agree with you -- calling it a "tax" is incendiary and no more accurate than saying "why do we need to pay a 10% tax to grocery stores or Amazon?" -- but your broader point is an interesting one.
I'm pessimistic about this application of p2p discovery in the short term, but in the longer term (>7 years) you may well be right. The short/medium-term problem, and this goes back to 1990s discussions among cypherpunks about anonymous reputation systems, is that those "honest reviews" are attractive targets for gaming.
Rent-seeking is probably a better description than tax, in that while it certainly costs a lot to build and maintain these systems, and they do provide some measure of value, the goal here is to build scale, build monopoly, and then extract profit.
The alternative is building the technology in a open / decentralized fashion which doesn't grant any level of centralized control. Open source software provides such incredible economy of scale that I do think such a system could one day reasonably compete with the best a multi-billion-dollar corporation could offer.
Craigslist has a lot of things going for it, but the "rent seekers" are able to create other advantages that Craigslist can't. They can staff people to bring businesses onboard, get everyone's metadata formatted in the right way, take business photos, handle payment disputes, etc., that they wouldn't have the resources to do without charging a fee on the transaction.
For some, Craigslist is better, for others, the Thumbtack experience is better.
The software will eventually exist to properly format the meta-data automatically for the vast majority of cases. Also things like providing pluggable viewports / templates so it doesn't have to be one-size fits all.
There's nothing to prevent add-on services being used in a decentralized market. For example, payment escrow is absolutely essential for many purchases, and payment escrow services themselves would be discovered and ranked through the same code base. But if you don't need it, you shouldn't have to pay for it. Discovery, search, storage, connectivity, etc. is all done using the local compute and storage resources and leveraging network neutrality.
This is an absolutely huge problem space, I've been thinking about it for years, and am hoping to start working on it at least part time later this year. For example, my dad had to move a car last month. He didn't know at the time, but the guy he hired was actually a broker who took 30% of the cost as a finder fee. "Car Transport" is just a simple category in a vast field of services, but you can imagine the interface to collect leads is trivial, and the interface to select vendors, agree on a contract, and commit to the service would be mostly common platform code.
Obviously the biggest problem is getting people to use it. The advantage of an open source and distributed p2p approach is the burn rate is basically zero. I can afford to work on it pretty much for the rest of my life at this point, and it would be reward enough to see people using it and benefiting it. Well, we'll see how it goes. :-)
And yes, paying an extra 10% is ABSOLUTELY. FUCKING. WORTH IT.
It's exactly like paying for insurance. Insurance is peace of mind.
Taking Craigslist as an example, Craigslist isn't trustworthy to me precisely because its trust system is distributed. It doesn't police the interactions, moving trust into the realm of peer-to-peer, where definitions of trustworthiness tend to vary greatly. Craigslist in effect has built a well-known brand with overtones of "buyer beware!" because of this distribution of trust.
And by no means do I avoid Craigslist. I've purchased plenty of things off of it ranging from coffee tables to what I lovingly call my "man couch" to the occasional video game.
But whereas with Amazon I just purchase with the assumption of quality and SAFETY, with Craigslist I do due diligence first. There's a good reason why I buy things locally that I either go pick up or they deliver. It allows me to inspect the goods before completing the transaction.
Now, I think in general people selling on Craigslist aren't out to specifically hurt you, but they're not out to do right by you either. It's just a completely different arena.
I recently purchased a brand new PS4 off of Amazon. No way would I do that off of Craigslist. Do you know that PS4 died within 5 hours of me having it? Amazon replaced it no questions asked. There's a reason why I would never dream of purchasing something like that through Craigslist, even if many people do it successfully, the cost savings isn't worth the risk (for me personally).
Amazon happens to achieve their consistent experience through top-down hegemony. I believe that in time a distributed software system will provide an even more reliable and consistent experience in many cases.
For example, Amazon's warehouses and level of automation are often regarded as a key competitive advantage. But when you're buying a good or service from a neighbor who lives within a couple square miles, distribution doesn't get much more local (and scalable) than that!
Craiglist pushes the problem under the rug, they wash their hands of it and say "buyer beware". That was the only possible solution in 1995. 20 years later we are starting to figure out, you can actually do a heck of a lot better, even without a central authority or billions of dollars of infrastructure.
I think that's the hidden message in the nascent "sharing economy". Not only can individuals successfully monetize their assets or go to work for themselves, but once the tech catches up, they can do it directly and in fact way more efficiently than any centralized system could ever dream of.
By the way, I'm not saying there's no place in the world for Amazon. But in particular making connections to qualified service providers are low-hanging fruit for a p2p distributed system, and longer term much, much more.
I'm having a hard time following your argument about the sharing economy showing us that distributed trust systems work more efficiently. Many of the major players in the sharing economy I've seen (Uber [0], AirBnB[1]) have all moved from open-ended, less regulated distributed trust systems to tightening and more strongly imposing rules as a centralized authority to rebuild damage to their trust due to bad actors.
To avoid thoughts that I'm cherry-picking companies with controversies, my broader point is that the sharing economy isn't really built differently than Amazon or any other marketplace model. Central authorities (TaskRabbit, Exec, AirBnB, Homejoy, etc) inject trust into p2p marketplaces because without their centralized authority, p2p marketplaces wind up like Craigslist or, even worse, Silk Road.
[0] http://money.cnn.com/2014/12/18/technology/uber-background-c... [1] http://www.sfgate.com/business/article/Airbnb-hosts-must-app...
edit: minor wording correction
20% + card processing fees is not worth it. I think we'll see market forces push down the rates of return on these companies.
But 10% is not real. These sites charge 15-30% on top of card processing fees. That's too much.
Coz it's working here on my desktop and I have Ad Block installed on the machine
I shouldn't need browser extensions to read an article without getting harassed. this kind of user hostile behavior is like a throw back to the bad old days of javascript popup hell.
It isn't like the big guys can just jump into the market and undercut everybody on price. Most people who hire service professionals are looking for a high quality experience at a good value. Actually finding those high quality professionals and facilitating the experience with a customer is really really hard. You can't just underprice everybody, you can't just find the cheapest service providers.
And having previously worked at Google, local services is like 10x higher touch than any other business Google has. Maybe they bite the bullet and try to do it, but this isn't a very Google-like business.
Edit: Yikes, just saw the thread on EU antitrust accusations which got me thinking about the concept of a decentralized search engine. I found this: http://yacy.net/en/index.html
Once you are big enough you don't need to worry about Google anymore. When I want to buy a product, I don't search on Google and then go to Amazon; I go to Amazon directly. Whoever "wins" the local services space is likely to be similar. People will just go to that site and skip Google completely.
I've learned to understand Google's actions by how such actions affect its ability to sell Ads.
Bing and DDG show it even lower. I doubt Microsoft or DDG would cooperate with Google on that.
For me I get three ads on the top, but then I get two regular search links to LA house cleaning on yelp before you get to the Google places block.
And even then, the second Google place in that block is Homejoy, and all the links for the places go to direct sites...you have to click the explicit link below each for the "Google+ page" to get to those pages.
I ran a similar company in Germany and when Rocket Internet decided to pump €44m or whatever ridiculous number it was into their own version it was game over. They were charging less than we paid our cleaners. Even with those resources (and tagging it off the back of their airbnb ripoff) I don't think they will succeed. I know we made a lot of mistakes like bootstrapping too long but having done the business for long enough I came to realise that high staff turnover is inevitable which adds another extra cost which in turn makes the business cost structure unsustainable. Hiring and training is expensive and time consuming and people just don't want to be cleaners long term.
Google has the worst customer service ever. When they come into your market, all you have to is hammer their customer service, in advertising if necessary. If you have great customer service, nobody will take a chance with them because their track record of customer service is so horrendous and well documented.
With Amazon, as stated in the article, it's not their niche. As soon as they started in your market, start running promotions for discounts for Amazon Prime customers. Pretty sure once they can't sustain their growth, they'll bail out of your markets.
Both companies have fatal flaws and are just being opportunistic. If this guy hangs in there, it won't take much to deal with them properly.
They have the platform and the browser.
Much worse than either of them blocking your competing app from their store, is them providing a half assed version of your product by default on their OS.
just see how many people installed firefox, or a contact manager, or email client.
even in this crowd, i'd bet the numbers are very low.
Edit: See comments. IE is still going strong.
http://arstechnica.com/information-technology/2014/11/window...
Same story with IE. I use chrome exclusively. My friends, coworkers and family members do the same. People in conferences use chrome too. So I believe IE is "dead." Catch my drift?
but regardless, it is offtopic.
google sued, had more money, leverage, and won.
but it now being on the other side, also means they know how to not let anybody else win like they did.
The only way it might succeed is if Google or Amazon can squeeze people harder than Homejoy or whoever already does. And that's a recipe for disaster, no matter if they're employees or independent contractors. If people can't make a living through your service, they simply won't participate.
Then I told him that my stuff is all OSS and he was welcome to crib from it.
At a robotics society meeting in Palo Alto in 2010, he told me that I was just a hobbyist and my project didn't exist. My 'bot had just run circles round his when his stopped working, in front of people.
So I put one of my production logic boards in his hands. It had through-hole parts and was spiky. Then I squeezed his hand around it. Hard.
"So, if it doesn't exist, how is it making you bleed?"
(My American friends told me that I did not handle that well. My Italian friends told me that I handled that masterfully. I tell this story to highlight differences in culture.)
Your Italian friends are likely afraid that the asshole will get away with his stupid behavior and it will be reinforced, rightfully so.
I think both groups were right, given the correct context. Being an American myself, I read your story and think what you did was awesome, but know that I couldn't bring myself to do it for fear of legal retribution.
I have a tendency to take things very literally when I am agitated.
> (My American friends told me that I did not handle that well. My Italian friends told me that I handled that masterfully.)
That's a great story, and thank you for sharing it. Though at the risk of getting downvoted, I think I know why your [American] friends were telling you that you didn't handle it well.
Aside from the lawsuit potential (which is real), it doesn't really advance the situation in a way that helps anybody - either you or him. Clearly he feels intimidated by you, and that's why he's mentally unwilling to acknowledge you and/or your project. But after you assaulting him[0], he's not going to suddenly change his mind and acknowledge that you beat him. Rather, he's going to double-down, and now have even more reason to believe that you're unstable/immature/unprofessional, or whatever he needs in order to convince himself that you're not worth paying attention to.
As for you, it makes you feel better, but it also doesn't really get you what you ultimately want (him admitting that he was wrong). You win the battle, but the "war" goes on, with both sides even more emotionally entrenched in their existing positions.
[0] yes, this would qualify as assault
You just beat the crap out of his robot. I don't see how trying to stab him with solder spikes is handling anything "masterfully".
I am not a violent person by Mediterranean standards - maybe by Anglosaxon standards. The last time I started a fight, I was nine years old. I got such a thrashing by my old man that I never did again. But he always said, hit second, hit last.
Sorry, I meant in terms of the competition, not physically.
That's WHY they're passive aggressive pricks.
Perhaps if I had been a more gracious winner, we could've done business together, as it stands we didn't.
However, he was an extremely sore loser.
What would you have done?
Physically hurting someone because they hurt your fee-fees makes you an "extremely sore loser" too, just in a different way.
That said, I tend to take things extremely literally when agitated. He might have meant "You're unimportant, this might as well not exist".