The tool room of Auto 1.0 start-up Mercer, circa 1910. Via Wikipedia Commons
In a post on his Redeye VC blog today, “Some more thoughts on innovation in e-commerce”, (HT: Fred Wilson), former Internet entrepreneur and current venture capitalist Josh Kopelman makes two interesting observations:
More than half of today’s top 15 most trafficked websites today did not exist back in 1999.
[O]f the top 15 most trafficked eCommerce websites today, just one of them did not exist back in 1999
So, for all the talk of Web 2.0, apparently it’s still the winners of Web 1.0 (including bricks & mortar companies with online presences) that are making the real money online. Kopelman’s conclusion from this is that there’s been a lack of “external innovation” and disruption. Fred Wilson, in his post on this today (“Commerce 2.0″), predicted that “social technologies” would revolutionize e-commerce in the next decade. Maybe. But Kopelman’s second insight — about how nearly all the top e-commerce sites were around back in 1999 — reminds me of a cautionary analogy from the late 1990s.
Back then, one of the star portfolio managers at the asset management company where I worked was occasionally asked about why he wasn’t investing in Internet companies. His answer was that it wasn’t that he didn’t recognize the significance of the Internet, but that it was tough figuring out who would be the winners early on. I’m sure he wasn’t the only one to make this analogy back then, but he compared the Internet to the early days of the auto industry (lets call that period Auto 1.0), when there were hundreds of start-up car companies, before they eventually consolidated into the Big 3 in the U.S. (Auto 2.0). I got a sense of the scope of Auto 1.0 back in the late ’90s, when I co-sponsored and attended an event one of my financial adviser clients was hosting for his clients at the Blackhawk Museum, in the East Bay town of Danville, CA. The museum featured all sorts of big, beautiful cars made by car companies that no longer exist. The name of one of the long-gone car companies represented there — Mercer — stuck in my head, because the sign in front of the car explained the company was named after the NJ county where it was based.
Today — after the bankruptcy of two of the big three, and the rise of apparently viable electric car companies such as Tesla and BYD — might be Auto 3.0. But Auto 2.0 had a hell of a run before it collapsed of its own weight. Perhaps the same will be true of the Web 1.0 survivors currently raking in coin online.
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