Looking back at the history of the Internet and successful categories emerging, we have always seen a parallel commoditization of pieces in the ecosystem in each of those emerging categories.
Instant access to information and ubiquitous connectivity has helped to drive innovation on top of new categories like e-commerce, social networking and within these major categories allowed to establish niche plays.
Early entrants in new categories sometimes fail to recognize the power of a network and hold on for too long on the early mover advantages. Trying to defend the inevitable; the democratization through networks, which leads to the building of a level playing field, where connectivity and access is a utility and innovation utilizing the connectivity and the delivery of problem solving solutions become the value drivers.
The first phase of retail commerce disruption 1995 - 2009
For the last 15 years you can go online and purchase a book. The book is boxed by the online retailer, shipped via UPS to your home and arrives a couple of days later.
Over the last years these models have evolved, offline retailers have joined and today Walmart, Target & other national retailers rather than being squeezed out of the commerce transaction have build multi channel, well integrated commerce funnels to serve the consumer where they are, online or in the store.
These years have been phenomenal and the percent of total retail sales for ecommerce has steadily grown to 5.8% in 2010 according to the US Department of Commerce and according to Forrester will grow further to over 8% by 2014.
Amazon is the leader in Ecommerce with a 36% growth rate in 2010 and is outperforming any traditional retailer.
Democratization in early stage investments, thanks to amazing new networks like Angel List, is a fantastic and empowering development for entrepreneurs.
Qualified and specialized investors have knowledge about market developments, business development deals and traction, and can assess an investment with this insight better than somebody who is simply following others.
This active involvement and diligence is good for the entrepreneur!
Social proof-based participation in an investment round is a passive behavior, similar to Yuri Millner’s latest strategy to simply invest in all YC companies.