‘Winner take all’ is the idea that markets are becoming less competitive, and more likely to be dominated by a single company… like Amazon in e-commerce, Google in search, or Facebook in social networking.
Story: The Apex Predators Of Business.
‘Apex predators’ are animals so powerful that they’re completely dominant in their ecosystems. They do whatever they want, and no other animal will take them on. You know their names: T-Rex, killer whales, grizzly bears, lions and tigers, and great white sharks.
‘Winner take all’ is a similar idea: that a small group of technology-powered companies are becoming apex predators, who rule their markets globally because no other companies can match their size and power.
Nobody can match the massive amounts of data that Google, Apple, Amazon and Facebook have, for example. Nor their efficiency and cost advantages due to their size. Nor the amount of cash they have, or their ability to identify and crush (or acquire) potential competitors early on.
The real reason people talk about ‘winner take all’ is that they think this same thing might happen in every business category.
Instead of having a dozen major car companies, for example, we might just have one or two (think Tesla). Instead of having dozens of healthcare companies, we’ll just have one. And so on.
Even ‘winner take half’ would still be a huge change when you’re talking about global markets which are used to having dozens of competitors. Spotify and Apple Music currently share domination of the global music industry. Facebook and Google share control of the world’s advertising. Netflix and YouTube increasingly dominate the global market for video.
Is ‘winner take all’ inevitable? It’s hard to know. The world is big, and consumers want choice. Think about ride sharing (Uber, Lyft, Didi, etc). Or communications apps (Instagram, Twitter, Snapchat, Tiktok). Or gaming (Sony, Epic, Nintendo, Microsoft, Twitch, etc).
Even the fiercest apex predators don’t stay dominant forever (sorry, T-Rex). In the short history of software, the most invincible-seeming companies (like IBM and Microsoft) have been shoved aside and forced to share their thrones by smaller upstarts like Apple and Google.
So don’t be too sure about winner take all. But don’t ever bet against an apex predator, either.