The promised land of the singing frog

After a few decades in which giant aggregators have become the dominant marketplaces while original media companies often seem relatively small, this framework is a reminder that the most successful marketplaces are always media marketplaces.

Monogamous, non-fungible marketplaces are terrible business propositions: users will find a specific option that they like and leave the platform to continue with that individual forever. Promiscuous, non-fungible marketplaces, however, are the best business propositions: users will need to continue returning to the platform both to fulfill their i... See more

Promiscuous marketplaces like OpenTable are ones that users need to keep returning to for more options; monogamous marketplaces like Zocdoc and Wyzant are ones that users often try once to find a long term option whom they’ll quickly take off-platform.

Marketplaces that create entire new experiences for happiness, however, like Airbnb and Twitter and TikTok, can make users happier than any substitute simply because they can’t be cloned. These platforms aren’t merely letting users fix pain points with an interchangeable solution but offering up content that itself will give their lives added meeti... See more

Marketplaces that eliminate pain points—like Coinbase or Uber—can make users meaningfully happier than the incumbent hackable exchange and medallion cabs, but they struggle to make users meaningfully happier than their own clones, the Krakens and the Lyfts.

Another way of seeing the fungibility spectrum, then, is as a measure of how difficult it is to transfer service from one platform to another. As Max Glassman put it in reviewing this argument, “it's all about switching costs… It would be difficult to find our favorite leaders' thoughts in 280 characters elsewhere.”

Content, however, is not fungible; it is unique not only to a content-creator but to the medium they use. Marketplaces that become content marketplaces win the market because it is impossible to get their individuated content anywhere else.

Let’s start with some twins: Coinbase and Kraken, if you like, or Uber and Lyft. The buyers and sellers on the exchanges are interchangeable for users, as are the taxi drivers and riders. Supply and demand in both cases is fungible: it doesn’t matter who you’re trading with, just that there is someone to complete the transaction.

My own explanation, though, is that it's a question of fungibility. To have a truly winner-takes-all marketplace requires non-fungible supply and, especially, demand.