Online dating consumer preferences
Big data, and its effects on online markets, has been thrust into the center of the tech policy chattering class debate.In the last few weeks, events have been held on both sides of the Atlantic focusing on the concept of big data as an entry barrier.
In this post, I will address why startups and entrepreneurs should not be overly concerned.In other words, if Twitter knows that I am a male, in a relationship and like sports, Facebook can also know those things.In a stylized view of the Internet economy, as a platform (such as Google, Facebook, Amazon, Pinterest or Twitter) achieves scale and gains users, it acquires more data.This data leads to product improvement, which leads to more users and, subsequently, more data. According to proponents of the data as a barrier to entry theory, this leads to an unbreakable positive feedback loop that makes effective competition impossible.
However plausible this argument sounds, a review of the short history of the Internet economy, which has been characterized by intense competition and frequent disruption, seems to cast doubt on the soundness of the theory.(See Andres Lerner’s discussion of the User Scale – Service Quality feedback loop.) Besides the common examples of Facebook overtaking Myspace and Google overtaking prior search competitors (who, at the time, were predicted to be unassailable largely on account of the User Scale – Service Quality feedback loop discussed above), a casual look at online markets illustrates how competitive the market is.