Fortnite and the Lindy Effect
Fortnite’s reactivation of its player base has been quite extraordinary and reminded everyone just how big the platform still is. It seems to be a good examples of the Lindy Effect which broadly states that the longer something has survived, the longer its remaining life expectancy. While this has all sorts of fairly obvious exceptions, as a probabilistic model it’s increasingly helpful to think about what the next ten years of consumer digital platforms might look like.
Consider the challenge for any startup trying to replicate a consumer creation platform like Roblox, Fortnite, TikTok, Youtube or Instagram. Historically this might have been possible if you had the right capital (Bytedance threw billions in UA at TikTok and YouTube had Google underwriting legal action and scaling for years), the extremely rare time/place/capability (Instagram and Fortnite built on the photo-sharing and battle royale genres respectively) or if you were willing to build over a decade and then get lucky with a pandemic (Roblox was developed over 14 years before Covid’s acceleration).
How should founders think about this?
Is capital still a sufficient advantage? I defer to Eric Seufert on all things UA but it appears that post-App Tracking Transparency (ATT), throwing capital at user acquisition is not impossible, but certainly much more difficult. You also have to out-compete a) the existing platforms which are there and b) all of the growing content noise (which generative AI will 10x) while also dealing with the fact that the EU might not let you run a free (ad-supported) platform:
Well, as hard as it might’ve been, it (GDPR) makes it completely impossible for there ever to be another challenger to any established company. Maybe you’ll pay because you want Instagram and there’s a network there and you already have a follower base. You’ve been writing about and I’ve been writing all this for years, the idea of a paid social network from scratch is an utter and complete non-starter.
(Ben Thompson in conversation with Eric Seufert (again) about the impact of GDPR on ad-funded social startups in Europe.)
Can you manufacture time/place/capability? The serendipitous intersection of time, place, and (new) platform has birthed the giants of our digital landscape but with the exception of Meta (who appears to be building for every version of the future in an attempt to dominate it) this feels like a low-probability strategy. Perhaps I’m just not being imaginative enough.
Can you build global scale slowly? This is probably the last remaining viable option for startups trying to build a consumer platform at real scale. Building slowly may not capture headlines (or VC dollars, should you wish to go that path), but it will embed resilience and adaptability into the platform’s DNA. It’s interesting to reflect on the fact that Epic Games and Roblox have been around for a combined 51 years11.
I think the reality will be that in ten years time the biggest consumer platforms will likely be the same ten biggest consumer platforms today (assuming some basics like competent management etc). I feel that a lot of people confuse this scenario with a winner-takes-most theory when in reality it seems like the by-product of a global attention economy: by definition it’s more difficult to create new outlier successes the larger it becomes.
All of that terribly encouraging analysis aside, in an environment that’s now dominated by EBITDA-seeking investors, we are still going to see spikes of ungodly levels of capital going towards the consumer platform breakout hits22. You’ve been warned.
“My status one of the greats/my stats maxed out” Casisdead
Their respective platforms have existed for a combined (and still not shabby) 23yrs.
Probably with blog posts that suggest ‘betting heavily on your winners’ is exactly what Charlie Munger would do if he was in VC.