The marginal value of new art1 decreases as content accumulates over time because new works compete2 with all prior art. Conversely, the value of curation increases exponentially. This predicts the wealth of several discovery startups:
- Products: Product Hunt, Gdgt (now Engadget)
- Startups: AngelList, MatterMark
- Places: Yelp, TripAdvisor, NomadList
- Answers: StackOverflow
- Music: Rdio, Spotify, Soundcloud and Shazam
- Video: YouTube, Netflix, Vimeo
- Cat Pictures: Reddit, Imgur & 9Gag
- People: Tinder, LinkedIn
- Activities: Meetup.com, etc.
- News: Twitter, Facebook Signal (verdict still out)
These companies are built on network effects, but each has a mechanism for filtering signal from noise, such as liking, sharing, voting or swiping. The ubiquity of a curation mechanism seems undervalued and suggests a higher abstraction for thinking about search as on-demand topic curation.
Both the curation pivot and the interface seem important. Any service that can effectively distinguish between good or bad options in a vertical representing a human need should do well.
Which new startups will generate wealth by curating new or existing kinds of data? I suspect you could pick winners by investing in new sources of data like genomics and its supporting databases without applying any complex algorithms.
A Recipe
- Identify a human need with a growing set of options
- Collect and classify new or existing data
- Pivot that data on an under-serviced metric that people care about, like "agony" for air travel
Some Spins On Existing Data
- Jobs by culture, perks or co-worker personalities, instead of by role or brand.
- Real estate by cost of surrounding areas instead of by rent, or a combination of the two.
- Mind-altering drugs by subjective effects - marijuana being the obvious choice.
Viewed through this lens, a successful team is a curated group of the right people. Whoever can predict fruitful cooperation, will prosper.