Closed Platforms & Proprietary Formats Kill Market Opportunity

Jun 30th

This is a free flowing post based on interesting links of interest I recently came across. It compares online markets to offline markets. Those who preach free market virtues rarely follow through on them:

The misfortune, of course, is ours since the Fed also sold gold. We have to guess at that of course because transparency in capital markets, preached from on high, is merely pretence. ...

The answer to market direction lies with the Fed, which today reports on their decision and statement as to policy. The policy statement is, for the most part, useless as a guide to the market, and something I call a sham. Regretably, the Fed is not required to release their strategy and tactical plan, which is released to the banks via buy and sell orders from the FOMC trading desk.

The public is not privy to this Fed-HB&B insider trading, and so we have to wait for (i) the market action, and (ii) the spin from the bankers, to try to figure out for ourselves what’s happening. This juvenile process makes for difficult decision-making by the independent owners and managers of capital, and leads to accusations that the system is rigged.

Countries (and their laws) act as walled gardens around markets, representing and protecting those currently in a position of power. One day everything is fine then the next fish is bad. You should eat more cow. Mooooooooo.

I am guessing the prices of drugs in the legal drug market are nearly as divergent as they are in illegal markets, where cocaine has a 350X differential.

Search marketing in even some of the largest markets is behind the curve. Arbitrage opportunities that died in leading markets still might be wide open in lagging markets. Why else would Google kill Answers in November of last year and then open up a Russian version 7 months later.

On the web some platforms act as walled gardens while others pay developers for marketshare. New devices, new software, and new distribution channels open daily. Develop around the idea of an open and liquid market and go with the natural trends of the web.

Steer clear of the proprietary crap that loses money on every user if you want to build something lasting of value. Rely too heavily on any single partner, format, or platform and die.

Published: June 30, 2007

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Comments

Leo
July 5, 2007 - 9:14pm

I think that all of us IMers have a natural disdain for monolithic organizations/institutions. It is how we got here in the first place...

Even though I totally agree that in business "1" is the worst number, the issue that I deriving from this post is that we inherently view freedom to intellectual rights/information as critical to our society's success as all of the other freedoms listed in the BOR.

Knowing this, we are all now obligated to protect and advance those freedoms with the same tenacity and passion all previous generations have protected our other freedoms from oppression.

[Leo has just stepped-off the soap box]

Paris
July 1, 2007 - 12:58am

Yes, few people realized that the Fed is about as Federal as Federal Express yet it is a protected walled garden. The Fed preaches free market economics yet is a cartel.

"Rely too heavily on any single partner, format, or platform and die." True in the web, also true in economics. For this reason local cities should be encouraged to create barter economics as a protection against currency collapse. The same is true in food supply. In the city, most of us are a 3 day truck strike away from empty grocery shelves. This too has become literally our walled "garden".

Curious to hear your thoughts about Google Answers.

Damien
July 2, 2007 - 2:38am

Great post - does this mean that the end is nigh for Apple any time soon? Does this mean that people might seek to shift from a reliance on the Fed? I doubt it.

As for the drug market, it is probably one of the freest markets out there where the dollar value is accurately reflected and there is no regulation or barriers to entry.

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