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WeWork and Counterfeit Capitalism

mattstoller.substack.com

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Re: WeWork and Counterfeit Capitalism

#261

Post by Wowfunhappy »

baddox wrote: post #256
Wowfunhappy wrote: post #253

Earlier quoted context omitted.

Starbucks has caused a lot of coffee shops to close. Boutique coffee shops have a significant advantage however—people like variety in their café's. This exists in some industries more than others.

> Starbucks has caused a lot of coffee shops to close. Sure, but normal legitimate competition causes worse-performing competitors to close, so some distinction should be made between this supposed "predatory pricing until competitors shut down" strategy and the normal "cause competitors to shut down by simply being better than them" strategy.

...to my knowledge, Starbucks has never engaged in predatory pricing to begin with, so at this point I'm legitimately not sure what we're discussing here.

If the question is, given a willingness to blatantly violate anti-trust law, and lose immense amounts of short-term for long-term gains, could Starbucks drive out all competition? And... I actually don't think they could, because (A) coffee shop patrons like variety and (B) I'm not clear that Starbucks could necessarily outlast e.g. Dunkin' Donuts.

Starbucks is just a poor example. Walmart would be a much better example.

Re: WeWork and Counterfeit Capitalism

#262

Post by short_sells_poo »

rossdavidh wrote: post #243
short_sells_poo wrote: post #234

Earlier quoted context omitted.

I think it also shows the stunning level of mass delusion in the SV VC space. To this day I don't know whether the people who throw around and parrot the valuations actually mean it. I mean, take the price of a small portion of an asset that is illiquid and in short supply, and assume the same price would apply for valuing the whole? This sort of crap wouldn't fly amongst kids in kindergarten, so I'm astounded that i…

Two possibilities: 1) Jamie Dimon and Softbank/Saudi Arabia are the only idiots here, and everybody else just chipped in relatively small amounts; neither could be considered classically "SV VC". 2) Similar to many people deciding to all buy the same stock at the same time, bidding it up far beyond it's real value but hoping to sell before everyone else realizes it, the VC money was thinking that the sheer size of th…

Sorry I should've been more specific. I didn't mean this valuation specifically. We is really looney bin category. I mean the industry as a whole.

Re: WeWork and Counterfeit Capitalism

#263

Post by marnett »

munk-a wrote: post #224
WalterBright wrote: post #204

Earlier quoted context omitted.

I'm pretty sure Amazon was profitable all along - it's just that the profit was all spent on expanding the business. Hence, there was no taxable profit. Amazon was also able to make money selling products at little or no markup by taking advantage of the float. They'd collect money from the purchaser immediately, and would pay the vendor after 90 days. Then, Amazon would make interest on that money for the 90 days. I…

Bookstores provide a lot of service value, a decent bookstore will allow you to find similar material, allow you to browse as you please (instead of the skimpy sample pages), usually contain an expert that can offer advice and allow you to walk out with your purchase. Additionally it's common to see a heavy effort at investing in the atmosphere. Amazon has succeeded at beating bookstores in none of these categories -…

I'd consult goodreads.com (ownded by Amazon) to meet your criteria of matching experience with respect to genuine reviews, similar book recommendations, etc.

It's not a flashy service by all means and has definitely been neglected by Amazon since the acquisition; the community makes it what it is, and it is a very high quality community!

Re: WeWork and Counterfeit Capitalism

#264

Post by buboard »

theflyinghorse wrote: post #177
empath75 wrote: post #158

Earlier quoted context omitted.

Everyone in this thread is nodding sagely along with this while not thinking about how this insanity drives up their own tech salaries to insane levels which will collapse soon after the vision fund collapses.

Would software salaries (in the US that is, we here in Canada get paid nowhere close to American levels) collapse though? There's practically unlimited amount of work that needs to be done and practically unlimited amount of good ideas left in the world to exploit. One fund going out won't do anything to change that.

They would. The actual value that developers make is only a fraction of what they re paid in US. Look at wages in Europe, eastern europe or china which dont have a bubbly market and get paid the market fair price. Its very difficult for internet companies to make actual profit value when everything is locked down by behemoths sucking all the revenues. Besides , VC subsidies is what attracts developers to SV

Re: WeWork and Counterfeit Capitalism

#265

Post by jboy55 »

munk-a wrote: post #224
WalterBright wrote: post #204

Earlier quoted context omitted.

I'm pretty sure Amazon was profitable all along - it's just that the profit was all spent on expanding the business. Hence, there was no taxable profit. Amazon was also able to make money selling products at little or no markup by taking advantage of the float. They'd collect money from the purchaser immediately, and would pay the vendor after 90 days. Then, Amazon would make interest on that money for the 90 days. I…

Bookstores provide a lot of service value, a decent bookstore will allow you to find similar material, allow you to browse as you please (instead of the skimpy sample pages), usually contain an expert that can offer advice and allow you to walk out with your purchase. Additionally it's common to see a heavy effort at investing in the atmosphere. Amazon has succeeded at beating bookstores in none of these categories -…

If I try to build up a history of bookstores as I remember them as a consumer, at one point there were many small stores. A mall may have 3-4 book stores, all taking around the same space as any other retail store. There were also 'used' book stores and some niche stores around. When you didn't know what to buy, you browsed the generic stores and pretty much they all had the same content, if you sought out a niche/used store, you'd often get a personalized set of recommendations.

However, the Barns and Nobles and Chapters found out that if you knew what you wanted, and gambled on going to a small generic or even niche bookstore, you often had to put the book on order or get something you didn't want. They capitalized on this by stocking much more books than a smaller place could hope to hold. They still could on the surface handle the browsing public, so they quickly put the smaller generic stores out of business, and forced many niche stores out too.

They still have the issue though, that while a small generic may be able to stock the selection for around 80% of requests, and the larger stores 95%, Amazon immediately would sell you the book, either sending it out to you quickly or seemlessly putting them on back order. Also, in the early days, the unfiltered reviews and recommendations based on the other buyers of the books were great in identifying if you really wanted to buy the book anyways.

While Amazon now is facing issues with recommendations, 10-15 years ago it was hugely different, and provided a seriously better customer experience. What I've actually noticed, is that if any small niche bookstore has survived until now, they actually are starting to provide a real differentiated experience. A small, curated selection of books, that I feel easy to browse and I feel they've been filtered already. I also don't know off hand without leaving this and searching, wether barns and noble is still in business.

Re: WeWork and Counterfeit Capitalism

#266

Post by lliamander »

munk-a wrote: post #251
lliamander wrote: post #236

Earlier quoted context omitted.

My favorite Pratchett book is probably Men at Arms, though he has many greats (and I have not even read all of them yet).

The Vimes series is amazing... I think it's a bit above the Moist series but I absolutely love Raising Steam and, to a lesser extent, Making Money - because both characters are coming together. Still, I think my top pitch is somewhere within Night's Watch, Men at Arms & Jingo - I think Guards! Guards! is also quite good but Night's Watch did nearly everything Guards! Guards! did... but did it better. Honestly, his bo…

The movie was reasonably entertaining, and a stellar cast. I agree about skipping the first couple books were not as well polished - I'm glad I did not start there.

Re: WeWork and Counterfeit Capitalism

#267

Post by nobiz »

legitster wrote: post #35

> WeWork then used this cash to underprice competitors in the co-working space market, hoping to be able to profit later once it had a strong market position in real estate subletting or ancillary businesses. > This is of course Amazon’s model, which underpriced competitors in retail and eventually came to control the whole market. This is wrong, wrong, wrong. The difference is Amazon saw what the marginal costs coul…

In a remarkable coincidence, someone will post the exact same comment in 2039:

>The difference is wework saw what the marginal costs could be, and had a specific roadmap to drive investment into bringing them down. FutureTechCo fundamentally has no way to drive down the margin on its business in any meaningful way. Especially without being the owners of their infrastructure.

What I'm telling you is, how do you know what Wework's roadmap is? You don't.

Re: WeWork and Counterfeit Capitalism

#268

Post by bduerst »

rchaud wrote: post #200
dehrmann wrote: post #186

I got halfway through, but I'm stopping. There's some valid points in here, but I don't find the author credible. > If you know Dimon’s actual reputation, him getting suckered isn’t surprising. Jamaie "doesn't give a shit about Bitcoin" Dimon. So he won't just hop on any bandwagon. > [Masayoshi Son is] an owner of Sprint, and he’s currently trying to force an illegal merger of Sprint with T-Mobile Not sure how it's "…

What the rich and powerful say in public is often different from what they do in private. People at Dimon's level are absolutely invested in crypto, they're just quiet about it so they don't spook the markets. Warren Buffet often spouts folksy sounding wisdom like "I don't like businesses I don't understand", and then talks about Heinz Ketchup or General Mills. But at the end of the day, he extended Goldman Sachs a $…

Do you have any proof of that? Because your article about Buffet is neither about Dimon, crypto, or rich people investing in the latter.

In fact, I'd say Buffet understood Goldman was undervalued when it plummeted during the height of the housing crisis, because Buffet understands financial operations. That behavior is not contradictory to anything Buffet has said, nor is it proof Dimon invests in crypto.

Re: WeWork and Counterfeit Capitalism

#269

Post by vl »

buboard wrote: post #260
crumpets wrote: post #228

Earlier quoted context omitted.

No, long before AWS, Amazon intentionally re-invested all of the excess revenue that would be reported as profit back into the business instead (expanding capex and opex).

I thought aws sprung out of investment in their own infrastructure. A happy accident of sorts, not some preplanned mammoth investment in building AWS from the ground up

Not at all.

AWS, or rather S3 was a pet project of one of the very early Amazon employees who wanted to do something fun. It wasn't really taken seriously or had deep strategy at first. Once it's started to gain traction, Bezos realized the enormous potential and full-steamed-ahead AWS.

Then it took many years for Amazon retail to actually start using AWS products in any meaningful way.

Re: WeWork and Counterfeit Capitalism

#270

Post by buboard »

braythwayt wrote: post #180
empath75 wrote: post #158

Earlier quoted context omitted.

Everyone in this thread is nodding sagely along with this while not thinking about how this insanity drives up their own tech salaries to insane levels which will collapse soon after the vision fund collapses.

I understand your concern, but the author’s conjecture is that if we drive this “counterfeit capitalism” out, then instead of a few companies being run by and for financiers, there will be more companies and more startups and more competition. I suggest that would lead to more tech jobs and higher salaries, because businesses would be based on creating value, not on using an ocean of cash to drive everybody else into…

They may even create value, but creating cash has become much more difficult in the 2010s.
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