What’s so striking about these examples is the discrepancy between market cap and NPS score. It would be amazing if we lived in a world where companies with terrible UX did badly in the stock market, but that is clearly not the case. The fact that you can build a successful business without a truly great product is a real testament to how strong of... See more

Because of their marginal costs, atom-based businesses have a greater lock-in effect and thus defensibility.

I’m not arguing that Facebook and Google aren’t extremely powerful companies. They clearly are. But I’m not convinced that their power is really based on network effects. Network effects might have helped them to get to where they are today, but their defensibility lies somewhere else.

The base layer is the final interface between the stack and the end user – which is typically an operating system tied to a piece of hardware. This is why atom-based network effects are so powerful: They help companies gain control of the most powerful layer of the stack.

Decentralized protocols would make very interesting base layers and I’m particularly excited about web3 in the context of identity. Does crypto solve the problem of suboptimal defaults? Well, that’s a different question and I’m honestly not sure. Just because you have decentralized base layers doesn’t mean you won’t see centralization, aggregation... See more

Becoming the default browser homepage became Google’s actual moat. There can only be one homepage (no multihoming) and users are typically too lazy to change it (friction = switching costs).

The fascinating thing about identity is that it’s kind of a stack of its own. When you sign up to a new app or service, you almost always use an existing identity. Until recently, that identity was typically your email address or phone number. Both email and phone numbers are great base layers for online identity because they are (sort of open)... See more

Apple is an interesting case study because its stack strategy has been so reciprocal to Google’s. It started with the base layer and then worked its way up the stack.

If Google wants to become a default on the layer below the search engine, it must find and occupy limited real estate on the browser layer. There are billions of websites out there … but only one default: Your browser homepage.