In general I agree with Marc Andreessen’s thesis that software is ‘eating' the world. More and more large network effects based businesses seem to be displacing existing offline businesses (Yellow Pages->Yelp, Tower Records->Spotify, Addison Lee->Hailo etc). One of the most successful venture capital firms only invests in ‘large networks of engaged users’.
But if that is happening what’s the equivalent of a small mom & pop business online? If you just want a little corner of independence and a decent living what are your options?
I guess one option is just to be a supplier to these mega-marketplaces - make stuff for Etsy, drive cars for Uber, rent properties on Airbnb. But what if you want a bit more independence than that?
Competing with network effects or web enabled economies of scale seems like a dead end - it’s going to be hard to start a small independent online bookstore with the ‘Everything Store' as competition.
I think the answer might be to build a small utility that a decent number of people find useful and charge them for it. You’ll probably be safer if there are no obvious network effects to exploit. That could be an iPhone app to read articles later like Instapaper, it could be a way for bands to put their music on iTunes and YouTube more easily like Distrokid.
Those two services seem like unfair examples in some ways because the creators are two of the most effective solo-entrepreneurs in the world. But as tech literacy increases, maybe there are more Marco Arments and Philip Kaplans carving out an independent niche online, immune to the rich get richer trajectories of network based businesses like Amazon, Google, Apple etc.