Thread by @TaylorPearsonMe

Here's an example of how crazy the platform risk for FBA sellers is: I know someone with an Amazon FBA Seller Account that has ~50 products.

A supplier of one input into one product issued a recall for a totally separate input that did not ever touch this Amazone Seller

https://twitter.com/TaylorPearsonMe/status/1374450946751700993

Amazon not only delisted this product for sale, but delisted EVERY product in the Seller's account.

Probably the most valuable part of an Amazon account is the SEO of their listings - if you rank number 1 for "protein powder" that is worth a lot.

A key input to Amazon's rankings is trailing sales volume.

So if you have a product delisted, it immediately starts to lose it's ranking because it's sales volume goes to zero.

The recourse is you basically have to call a call center where the employees have almost no power and are heavily penalized if they reactive a listing that is then later removed.

This is basically akin to if you invested in a building in the center of downtown and the city could arbitrarily move the building 20 miles out of town, effectively destroying the entire value of the building.

There are many stories of multi-million dollar Amazon business going to zero from similar instances.

I think the stronger case for regulating platforms is not b/c they harm consumers, but because they cause many businesses to never start.

In a lot of ways, these platforms operate as little nation states with their own rule of law.

In effect, they are dictatorships with weak property laws where the dictator can seize whatever they want.

There's a fairly robust literature on the correlation between property rights and economic development (stronger property rights generally correlates with higher GDP per capita) and I expect the same is true with these platforms.

The idea of having some sort of decentralized marketplace with stronger property rights based on a public blockchain is compelling for this reason, it would likely unlock more economic growth.

I'm not an expert on the status of these initiatives but there do seem to be a lot of problems so we'll see, but it's a compelling idea

(though I am somewhat skeptical as I do think think that technology generally progresses in the form of emergent new use cases, not just improving what exists.

E.g. Google was not a replacement for libraries but a qualitatively different thing)

Szabo's essay on social scalability gets at this and it is to me still the best and most important idea in the public blockchain space: unenumerated.blogspot.com/2017/02/money-…

I am not sure how it will play out but I think he is directionally correct and we end up something closer to the blockchain man: ribbonfarm.com/2017/10/10/the…

Note that none of this in any way should be construed as commentary on whether present valuations in the space are justified, merely that there is some interesting underlying technology (that also has plenty of downsides as I mention in the above essay).