Medieval-Renaissance Italy had four significant maritime republics: Genoa, Venice, Pisa and Amalfi. On a 2019 trip I visited Venice and Amalfi, with a quick stop in Pisa. It’s really striking how small these places are, considering they each served as the wealthy heart of a powerful mercantile state. Amalfi, for example, crawls up steep hillsides with almost no flat land, but it sustained a busy port filled with, as Longfellow put it, “freighted barks from the marts of east and west”. As a key stopping point between Western Europe and the Holy Land, Amalfi was filled with both “merchants with their wares” and “pilgrims with their prayers”.

The story is similar in Venice, which at its height dominated the eastern Mediterranean despite being a cramped city in a lagoon. Roger Crowley’s book City of Fortune describes how Venice’s small size and lack of arable land influenced its power dynamics. Wealth and aristocratic status did not come from owning large agricultural estates, as in most places, but instead from entrepreneurship like financing trading expeditions.

City of Fortune: How Venice Won and Lost a Naval Empire

This dynamic – with a small centre managing to amass significant wealth, as opposed to a more traditional land empire – reminded me of modern marketplace juggernauts like Airbnb and Uber. These companies have famously been able to stay asset-light, avoiding the expense of owning their own hotel rooms or cars and instead generating wealth by providing valuable marketplace infrastructure. Similarly, rather than go to the effort of conquering and governing huge areas of land, the maritime republics focused on trade, providing the literal marketplaces as well as ancillary services like naval security. Airbnb is to Amalfi as, say, Hilton is to the Roman Empire.

But perhaps it’s also worth noting that Amalfi fell quite quickly once it came under serious attack, whereas the Roman Empire went through a gradual decline. If you go to the effort of amassing the empire, then you have some strategic depth to fall back on. Hilton’s asset base is worth a lot even if its star is gradually fading. Airbnb and Uber, being relatively ephemeral, are more vulnerable to being rapidly devalued by a superior competitor – a bit like Venice was cut out of the lucrative spice trade when the Portuguese discovered new routes that went direct to the sources in India and Southeast Asia.

This vulnerability is perhaps why the marketplace startups have spent so heavily on rapid growth to build the network effects that lock in customers and suppliers. It’s their only defence against the fate that Longfellow described for Amalfi: Vanished like a fleet of cloud / Like a passing trumpet-blast / Are those splendours of the past / And the commerce and the crowd