“The nature of these companies is what’s changed.”

Jaron Lanier calls this nature "sirenic." Shrinking markets is the business of Siren Servers.

We mostly notice how these companies seem to do more with less (with automation) but Lanier argues that the shrinking of markets is more closely associated with incomplete accounting of value (and its origination).

Think about all the users of "fake free" systems contributing value without formal compensation.

It's not simply that automation is obviating human effort but rather humans are contributing value (e.g. by being monitored and tallied or uploading creative work) and absorbing most of the risk of the venture.

I thought this was obvious. Why else would they be worth so much unless they were more efficient than traditionally structured firms. Silicon Valley got rich through automation of previously manual processes. Automation is about removing people from previously man-hour heavy processes. Less man hours equals less jobs. Productivity is now almost totally decoupled from man hours. It's not rocket science.

That's a shame isn't it, if all they do is do existing things more efficiently?

One would hope there would be more startups that made entirely new things possible, things we couldn't do before.

We stand on the shoulders of giants. Everything is a iteration of something old. Sometimes a pretty big one, which we call innovation. That's not to say that they aren't on an order of magnitude better and more efficient than previously but that's exactly the point. We do way more with way less these days. I do believe new industries will emerge from the ashes of old ones but there will inevitably be a transition period where things will not work very well for those not working on the cutting edge of tech.