Online Marketplaces and the Democratization of Commerce

David Haber of Spark Capital writes in The Magic of Liquidity:

The Internet provides the perfect medium to aggregate the long tail of fragmented and illiquid markets. This dynamic has made the opportunity for creating online marketplaces so compelling.

The post includes an update to an earlier popular graphic by his colleague Andrew Parker that shows emergence and growth of (and need for) a range of focused marketplaces from what used to be aggregated in Craigslist (or managed by various intermediaries):
marketplaces_ibg98QhH9AALlU

Summarizing a similar thesis, Chi-Hua Chien of Kleiner Perkins said in a TechCrunch NYC Disrupt interview:

We’re now entering an era around the democratization of commerce

The interview also puts this in the context of the last two decades of tech innovation:

The mid- to late-90′s saw the democratization of information — companies such as Google made data available to everyone, no matter where or who they were. After that came the democratization of distribution, with services such as Twitter and Facebook allowing anyone to broadcast their content and potentially attract an audience. The democratization of computing has occurred as well, with billions of people in the world now having access to computers because of the availability of low-cost mobile devices…

The past, he said, has been about “mass aggregation,” with companies such as Safeway and Wal-Mart rising to the top of the commerce space by simply being the best at aggregating a suite of products into one space. These big companies also built up their own brand names to make shoppers feel secure in buying things from them. Today, though, we are starting to “see an unwinding of aggregation of commerce as technology starts to disrupt” the industry, Chien said.

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  1. Pingback: Harvesting the Consumer Tech Dividend | Reflections

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