The Stack Fallacy

Why Big Companies Keep Failing: The Stack Fallacy

Stack fallacy has caused many companies to attempt to capture new markets and fail spectacularly. When you see a database company thinking apps are easy, or a VM company thinking big data is easy  — they are suffering from stack fallacy.

Stack fallacy is the mistaken belief that it is trivial to build the layer above yours.

And:

Apple continues to successfully integrate vertically down  — building chips, programming languages, etc., but again has found it very hard to go up the stack and build those simple apps — things like photo sharing apps and maps.

The same could be said for Samsung and Sony.

A thought-provoking argument but I’m not entirely convinced that it’s the entire argument. Amazon is in so many things and dominates so many things. Is it because they’re more horizontal than vertical?

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One Response to The Stack Fallacy

  1. Ric Day says:

    Yes, I would argue that Amazon is essentially a horizontal online retailer. They acquire companies which either supply goods suitable for sale online, or which produce things to speed up/automate the sorting and shipping process. They do have a web services division providing “elastic space” to site builders, but that again is just an extension of their own internal growth needs.

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