"The Riff" with Byrne Hobart and Erik Torenberg E48: Facebook vs MySpace, Why Peter Thiel is Wrong About Competition, and OpenAI Corporate Structure
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Oct 3, 2024 The discussion kicks off with a deep dive into the historic rivalry between Facebook and MySpace, analyzing what led to Facebook's ascendancy. The hosts then tackle the evolving landscape of OpenAI, debating its transition from nonprofit to for-profit and the ethical ramifications. They also explore China's economic challenges, focusing on its bond market and the shift towards real estate. Lastly, they scrutinize corporate practices like stock buybacks, emphasizing the need for a fresh perspective on long-term value in the age of AI.
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Competition in Tech
- In tech, direct competition is less important than understanding the true nature of the competition.
- Winners often correctly identify the customer need while losers misinterpret it, like Facebook vs. MySpace.
Facebook vs. MySpace
- MySpace prioritized profiles for page views, while Facebook saw them as digital extensions of real lives.
- This difference, combined with Facebook's strategic expansion from elite colleges downwards, led to its victory.
Music Streaming Competition
- ByteDance's music app shutdown minimally impacted Spotify because differentiation matters more than direct competition.
- Music services often bundle, leverage distribution, or expand into other audio formats like podcasts for advantage.