The life of the startup company is shortened due to the influence of the Internet giant such as Google and Amazon

In the Internet world, companies such as Google, Amazon, Facebook are reigning in the top position. As of 2018, due to the influence of these huge enterprises, the possibility of a start-up company to succeed has been significantly lowered, and it is said that soil which is rather difficult to succeed is made. In fact what kind of situation is it?EconomistA reporter explains it.

American tech giants are making making tough for startups - Into the danger zone
https://www.economist.com/business/2018/06/02/american-tech-giants-are-making-life-tough-for-startups

EasyEmail is the most popular example of a startup company's failure. A company launched by three students studying at the Massachusetts Institute of Technology in 2016 aimed at realizing an algorithm to predict the reply contents of e-mail. And in May of the same year we will raise funds, but Google's developer event "Google I / O 2016"Google announced a tool similar to EasyEmail. Investors tend not to invest in fields where big companies such as Google enters, so EasyEmail was forced to switch direction quickly.

Investor Mike Driscoll sees new tools, features and acquisitions from the viewpoint of "Which company will be crushed next" events held by IT industry giants such as Google, Apple, Amazon, etc. It is said that it is. According to Albert Wenger, who supported Twitter's start-up, "There are things called" murderous zones "in the vicinity of gigantic enterprises, and if a start-up company enters into a crisis, it is copied to a huge enterprise and threats There is a high possibility that the company will be acquired quickly to eliminate it, and there are present circumstances where it is difficult for companies to survive. "It is said that startup companies are hard to survive.

ByJason Cartwright

As of 2018, trends in Amazon, Facebook, Google, which are recognized as Internet service for consumers, are aware of investors. For this reason, investors tend to be cautious about investing in start-up companies trying to get into the same field as these giant companies. Reflecting this, in recent years in the United States, startup companies have become difficult to break through the first round of financing rounds, and the number of companies that broke through in 2017 has declined by 22% since 2012.

Snapchat, a photo sharing service, is mentioned as a typical example of a company that has entered the homicide area of ​​a giant company. In 2013 Snapchat's operating company Snap received a $ 3.0 billion takeover proposal from Facebook, but Snap refused it. Then Facebook imitated many of Snapchat's successful systems using the $ 3 billion planned to be used for acquisitions. As a result, Snap, which has lost its superiority, has been forced into a situation where it is difficult to grow profits as a company.

In addition to this threat, startup companies sometimes receive the influence that huge enterprises do not anticipate. In 2017Amazon acquired Whole Foods for $ 13.7 billion (about 1.5 trillion yen)
When I did it, the expectation that Amazon will embark on the field of food delivery increased, so the evaluation of Blue Apron, a startup company that was aiming for listing shares in the same field at the time, dropped considerably. This kind of impact can be seen by non-startup companies, and in 2018Announced that Facebook will start dating servicesThen, there is also a situation where the stock price of companies that had been developing business in this field declined greatly.


Reporters of Economist cite three reasons why these giants are forming what is called a murder zone that plagues startup companies. The first is an information asset held by a huge enterprise. In the case of Google, it is sometimes possible to examine the interests of a large number of users in mobile services and search services, far exceeding the amount of information available to startup companies. For this reason, startup companies are in a disadvantageous position in information warfare.

The second is human resources. A huge company can pay high salaries for members other than its mainstay members as well as general employees, so that both outflow of talent and securing of excellent talent can be achieved at the same time. For this reason, start-up companies are required to make innovative ideas that can not be imagined even when a large number of talented people belonging to a huge enterprise gather.

The third reason is that no new platform will appear that far exceeds the imagination of a giant company. Due to the rise of mobile in recent years, Microsoft and Microsoft, who has dominated the personal computer as a terminal connected to the Internet until then, have been damaged, so Google and Amazon came to bear power instead. As of 2018, no platform to hurt these companies has appeared, and many startup companies have to fight on the same ring as big companies.


For this reason, in order for the start-up company to succeed, we have to find a field that points to the blind spot of a huge company and there is a very difficult situation. Some investors have said that entrepreneurs who are not ambitious in recent years have occupied the majority and startup companies that do not intend to fight from the beginning are increasing, and there are also companies that can confront big companies more and more It is getting lost.