Once you enter, you are an incumbent

October 18, 2005

A nice articulation from Peter Rip of why many entrepreneurs will face the same problems in Web 2.0 that investors faced in Web 1.0:

The root causes are the same:

  1. It is very easy to make the initial commitment (founding or funding).
  2. Underestimation of how many had the same conclusion.
  3. Underestimation of survival requirements for the ‘too many competitors’ case.

Reduced barriers to entry always look attractive to the entrants. But once you enter, you are an incumbent.