Digitopoly

It's not about competition between products, it's about competition between distributors of the same product.

To use your app store example, you would need to imagine an alternate universe where there are two competing iOS App Stores: one run by, say, Apple and another by Amazon. You're Macmillr, one of the hottest startups in the valley, and you have a bunch of apps you want to get on the market.

In this world, you sell your apps "wholesale" to Apple and Amazon. Apple comes to you and says "I'll buy your apps for $0.50 per copy", and you forge a similar deal with Amazon. Then they compete with each other to on-sell them to the public. Obviously, that's pretty difficult for the two 'A's. How do they compete with someone selling an equally-priced product?

First they'd reduce their own margins as much as possible. Then maybe they do some clever discounting tricks, loss-leaders and promos and the like. Maybe they add some intangibles like a nice recommendation system or a pretty shop UI. Eventually, though, you just know one of them is going to come back to you and say "Forget your $0.50. I want it for $0.45."

So now you're in a tough spot, because Apple controls 90% of the app market. If they say "$0.45 or we walk", there's not much you can do about it. Bad times. As you see this happening, you realise something: Apple must have reached this dominant position by price gouging you and your fellow developers. At this rate, it'll only get more popular and more powerful, which…

The follow-up's better imho: https://digitopoly.org/2024/03/07/after-the-gold-rush/

E.g. On biases in LLM responses and lack of explainability:

> Believe it or not, there is a historical precedent in old industrial technologies for making progress in commercial products and services before experts understood the underlying determinants. At the start of the Bessemer process being used by the US steel industry, for example, steel mills produced high-grade steel at a large scale even though nobody knew the chemistry to explain why ore from some North American locations worked so well. The science of chemistry had not caught up with the industrial processes. As a result, workers needed to learn how to fine-tune performance by recognizing the errors without knowing the underlying causes. The early US steel industry did live for decades with such uncertainty – and furnaces blew up occasionally – but there was too much money to be made.

That's a really good analogy. The question is: in this modern era of higher regulation, will capitalistic drive and risk-appetite (for things blowing up) be able to outpace lawmakers?

"On the one hand information wants to be expensive, because it's so valuable. The right information in the right place just changes your life. On the other hand, information wants to be free, because the cost of getting it out is getting lower and lower all the time. So you have these two fighting against each other."—Stewart Brand, in a conversation with Steve Wozniak, recorded by Steven Levy at the first hackers conference in 1984. Source: https://digitopoly.org/2015/10/25/information-wants-to-be-free-the-history-of-that-quote/

Minor correction: it was Stewart Brand (of Whole Earth Catalog fame) who said "Information wants to be free". Paul Graham may have quoted it -- along with a multitude of others, since it was first uttered in 1984.

Actually turns out the original quote attributed to Brand is not quite right. There is a qualifier ("Information almost wants to be free"), but that qualifier dropped off along the way.

See http://www.digitopoly.org/2015/10/25/information-wants-to-be-free-the-history-of-that-quote/