Why Amazon (and probably MTurk) is Successful

Joseph Esposito wrote this blog for the Scholarly Kitchen as to why Amazon is so successful. He narrows it down to three things and I quote:

  • “Get in early. Amazon is obsessed with having a first-mover advantage. By getting in early, Amazon gets to define how the game is to be played. This leaves Amazon’s rivals to play catch-up.
  • Build a moat around the business. Amazon makes it very hard for anyone to compete with it because of the protections it builds in, most often in the form of very low pricing. This is an unusual strategy, but it has worked brilliantly for Amazon. The online bookstore itself is the best example of this. Surely one would have expected to see a great number of online bookstores by now selling both print and digital titles. But why would anyone enter the market against a competitor whose pricing makes it hard to make money?
  • Suppress innovation in others. Perhaps this is for a subsequent blog post, but Amazon’s willingness to makes its platforms available to third parties discourages others from building similar capabilities. This leaves Amazon as the leading innovator, absorbing both the risks and benefits of such a position.”

For MTurk we definitely see these three at play. What is interesting is the second one–is there a moat around crowdsourced research? Well kind of—pricing makes it hard to make money for workers and the only reason that Amazon makes any money off of MTurk is that it puts almost no resources to it (IMHO). Competitive platforms would need to pay workers more money to get any type of mass exodus there and that would raise prices to researchers–who might not go to a new service. A tangled web, yes?

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s