Big E versus Little e entrepreneurship: the death of the hot dog stand
In geographical space, you can open a hot dog stand with a relatively undifferentiated product, at least compared to other hot dog stands, and have a geographic monopoly.
But on the internet, that hot dog stand isn’t going to stand a chance. On one end, you have Amazon selling very normal hot dogs, at a very good price. They’re what most people are going to buy.
And then you have the really great organic hot dogs, from that speciality online store in Portland. They sell the best hot dogs, they have the best authentic hot dog brand; you’re not going to make better hot dogs than them.
Geographic monopoly used to be a way for local entrepreneurs (little e) to create something of their own, protected by distance’s friction. You could set the rules, and your customers were the ones who decided whether you were right. This wasn’t always great for the customer; those hot dogs might have to be very bad for you to walk a bit further.
But in a more networked world, little e entrepreneurship dwindles. Geography doesn’t create a moat to protect undifferentiated businesses, you are stuck in the difficult spot between Portland and Amazon.
So instead, little e entrepreneurs drive for Uber. Big E entrepreneurs creates Uber, you drive for Uber. Amazon creates a marketplace, and you sell within the marketplace. The Big E entrepreneur creates platforms with rules, and you play within these rules to win the platform’s game. Little e entrepreneur’s customer isn’t the ‘customer’, it’s the platform.
This is great, at first, for the consumer. Uber competes against Lyft in a way that little e entrepreneurs never did or could. The question is what happens next, for you, as a consumer, but also for those would-be little e entrepreneurs who are driving for Uber instead.