The fact that anyone at Google wrote this memo tells you more about Google than it does about AI (or anything).
What’s the moat for Apple (after all, they’re all phones and computers)?
What’s the moat for Microsoft (after all Google and insert thousands of other competitors offer docs, sheets, etc)?
What’s the moat for Facebook (after all, it’s just a social network)?
What’s the moat for Google search (it’s just another search box)?
The moat isn’t the product, it’s the business. Every one of these companies built a business that served customers well (people who want the best phone, company IT departments, advertisers, and advertisers again). The moat is a business so good at serving its customers that you can afford to offer a better/cheaper/faster product than others because you serve a well paying customer the best. Done well, your moat is then the momentum of being the default option.
Long time back when Google first came about.. I remember reflexively switching from the default Yahoo browser to Google. It felt painful even trying out Yahoo Search Engine... I was just a kid back then and even I wondered why I was doing this.. Google's Page Rank algorithm was simply superior..
Paypal's moat was being able to handle cyber criminals/hacking.. their competitors were getting wiped out because they were losing millions of dollars due to attacks and they did not have the technical know how..
pg's viaweb's moat was being able to rapidly add features because pg grokked lisp pretty hard at that time..
Google search results were far superior.
Same thing with Apple.. I never had a mac/iphone crash on me ever.. they just worked..
For Facebook.. the killer feature was the wall.. that and the network effects..
Yep. You have to have a product to get in the game and win customers and these are all examples of a killer product. And then you build a business serving a customer around them that - even when your features are cloned - create a sustainable moat.
The wall was cloned, but the wall (ultimately moreso Newsfeed) enabled you to become one of the biggest sites on the internet - which turned out to be really valuable to advertisers. Which in turn, allowed you to invest in features, buy potential competitors and invest in AI research teams that open source models that make you competitive in AI. The sum of those things makes you a $671B company throwing off enormous sums of cash. That turns out to be a pretty sustainable moat for a while - long after your product becomes table stakes.
The problem with thinking that this is impossible in AI is because it ignores all of the other times it’s been done. Facebook was JUST a social network that would “be a fad” and “never take off”. It was “just another website” that “anyone could build”. The difference is they built it. And then they built on it.
Same thing will happen here. And now the question is, will it be one of the current incumbents that crack it or does a newcomer have a shot.
I hadn't heard of "viaweb" until now. Having just read the (tiny) wikipedia entry for it, I'm getting intense radio-on-internet vibes from it.
> Viaweb's example has been influential in Silicon Valley's entrepreneurial culture, largely due to Graham's widely read essays[11] and his subsequent career as a successful venture capitalist.[12]
Basically - rich guy tricked some other rich people early on in their career - attributes future success to this early "success" despite it probably being a bad idea and having less to do with innovation and more to do with big-dicking clueless investors.
Many things from those days were like that but there was no infrastructure for anything in the 90s at that time and viaweb added e-commerce. You had to write a bucket load of Perl cgi-bin horror to do this yourself.
PG should edit that Wikipedia entry and fix that last part to read less like what you imply. However, if you check the timeline, you can come to the same conclusion.
It’s monopoly and anti-competitive business practices all the way down. That’s Google’s moat and has been for a decade.
Under any sane regulatory regime they never would have been allowed to get to this point but that didn’t happen.
The only problem here is they aren’t going to be able to replicate that for the next big tech shift.
The moat isn’t “the product” the only great product they had was the search engine and that doesn’t make any money. The moat came when they were allowed to use it to dominate markets in advertising, mobile, email platforms, and so on.
What’s the moat for Apple (after all, they’re all phones and computers)?
What’s the moat for Microsoft (after all Google and insert thousands of other competitors offer docs, sheets, etc)?
What’s the moat for Facebook (after all, it’s just a social network)?
What’s the moat for Google search (it’s just another search box)?
The moat isn’t the product, it’s the business. Every one of these companies built a business that served customers well (people who want the best phone, company IT departments, advertisers, and advertisers again). The moat is a business so good at serving its customers that you can afford to offer a better/cheaper/faster product than others because you serve a well paying customer the best. Done well, your moat is then the momentum of being the default option.