Reminds of this discussion between a physicist and an economist:
https://dothemath.ucsd.edu/2012/04/economist-meets-physicist...
Businesses should try to be the best, not the biggest
141–150 of 313 posts
Re: Businesses should try to be the best, not the biggest
#142Exactly. And this is why our economy (?? society) is terminally ill. It is full of tumors.
Re: Businesses should try to be the best, not the biggest
#143A young baby thats purpose is to grow is similar to cancer. Reductionist enuf?
Exactly. The title is one of those statements that sounds smart at first, but then you realize is kind of silly in a “i’m 12 and this is profound” way.
Re: Businesses should try to be the best, not the biggest
#144An example of post-growth entrepreneurship in the Netherlands is Radically Open Security, the world's first not-for-profit computer security consultancy company:
https://www.radicallyopensecurity.com/business-model.htm
An interview with CEO Melanie Rieback: https://www.codemotion.com/magazine/video/radically-open-sec...
Of course, a TEDx-talk: https://www.youtube.com/watch?v=uW8umQWXFIM
A longer video: https://www.youtube.com/watch?v=WkkyNG0IRd8
Re: Businesses should try to be the best, not the biggest
#145I often question the motives of my company. It has only 100 or so employees. Has been in business for 25+ years. But we are on a continual drive to increase sales, hire new people, add size to the facilities. But it wasn't always this way. It only happened once it went public. Now we are working for the investors. They need to see an increasing return on their investment. Management choices are no longer about the cu…
Then your management aren't very good. The reason is that every business, or system gets worse if you don't improve it. Call it entropy in physics. If you don't try and improve, pay attention to the market, adapt, move, change, or at least maintain or build a moat, competition will inevitably want to have what you've got. It's why capitalism works. If you get old, and don't satisfy your customers, someone else will.…
I have the impression that businesses that are not publicly traded are in a better position to plan for the long run instead of having to cater to the quartely whims of shareholders. As an example, see the family-owned businesses in Germany which are often doing quite well over generations in competitive international markets, despite only growing slowly or not at all. Innovation is the key factor to survival, but why should innovation be linked to growth? Why is "growth" even an indicator for success, isn't a big organization almost by definition much less efficient than a small one?
Re: Businesses should try to be the best, not the biggest
#146Earlier quoted context omitted.
Maybe those companies don't have net growth, but they still need some sort of growth. Regardless of what industry you're in, every business will face inevitable losses—customers will decide to leave, inflation will occur, equipment will need to be repaired/replaced, etc. Those losses need to be offset by growth. While net positive growth isn't necessary, it is a major motivator for launching your own business. If you…
I wouldn't consider "replacing" a lost client or a broken tool as growing. A company with good finances should already have planned for that. Either way I highly doubt that's the "cancer" the article is talking about.
Right, the article is talking about a different sort of growth, but I'm responding to your assertion that there are companies that are neither growing nor dying. I agree that some companies may be sustainable while having net zero growth, as you stated. I disagree that these companies do absolutely nothing to attempt to grow their businesses and don't even think about growth. At minimum, these net zero growth companies must at least grow enough to offset their losses at a sustainable pace. That means these companies do have to participate in traditional growth activities.
Specifically, I'm responding to:
> I'm kind of scared that people can't even imagine this is a possibility to be honest...
From the outside looking in, a net zero growth company appears to be living happily as you stated, but I don't think this reflects reality on closer inspection. All net zero growth businesses exist in a dynamic equilibrium in which they're constantly facing losses and constantly finding ways to grow to (at minimum) offset those losses. And these are just considerations for your own business. What about the competition? If your competitor is willing to build a net positive growth company, what are your odds of survival in the long-term?
Re: Businesses should try to be the best, not the biggest
#147I suspect the initial premise is incorrect. The purpose of a company that makes widgets is to make widgets. Nothing more. Some rent seekers realized that they could extract some of the wealth created by the company making widgets, and that they could manipulate various people involved in other enterprise to enhance and enforce their rent-seeking abilities. To that end, they have manipulated the various controls on th…
The purpose for who?
When you run the company you yourself own, it hardly matters whether you are rewarded through salary, a dividend or stock appreciation, and presumably you care a lot about the actual product and not just about making money.
When you invest in a company you are not otherwise involved in, on the other hand, there's just no point to it unless you get back more than your initial investment, so either the company must grow or at the very least if it doesn't, it should be reliably profitable and share those profits with shareholders. Same thing when you lend out money. This isn't rent seeking: capital is crucial to any business and to provide it is to provide a valuable service. Which is not to say that there's not a lot of rent-seeking behavior in the stock market, or that modern capitalism is entirely sane, but that's a different topic.
Re: Businesses should try to be the best, not the biggest
#148I often question the motives of my company. It has only 100 or so employees. Has been in business for 25+ years. But we are on a continual drive to increase sales, hire new people, add size to the facilities. But it wasn't always this way. It only happened once it went public. Now we are working for the investors. They need to see an increasing return on their investment. Management choices are no longer about the cu…
There is a growing body of thought that capitalism and, more specifically, continued growth, is unsustainable. A lot of the literature focuses around the environment [1], but we should also think about businesses that perform a useful community service or product to their community - must they always grow? If not, must their competitor? [1] https://www.tandfonline.com/doi/pdf/10.1558/jocr.v5i2.197
Continued growth: absolutely. Capitalism itself only exists because resources are finite though. It's the most practical method we have right now for efficiently allocating those resources.
Allocating resources is a hard problem to solve. If we had infinite resources we would not need to solve it.
Re: Businesses should try to be the best, not the biggest
#149Clearly the purpose of a company is to provide value to customers that they are willing to pay for. Any company where the sole purpose is to grow will find itself out of business quickly.
Re: Businesses should try to be the best, not the biggest
#150Earlier quoted context omitted.
"We have a finite environment—the planet. Anyone who thinks that you can have infinite growth in a finite environment is either a madman or an economist." David Attenborough
SpaceX is trying to solve the finite environment problem.
Is it? Earth is, or was, extremely hospitable to humans. Mars is, and will be for a very long time, extremely inhospitable to humans. If we can't even take care of the Earth, what hope is there of taking care of Mars? The more likely scenario is that greedy Martians destroy their own Martian environment very quickly and make themselves extinct. It's much easier to destroy Mars (for human life) than it is to destroy Earth.
We need to focus on sustainability, otherwise Mars will also be unsustainable.
Just wait until oxygen itself becomes a commodity, like in the film "Total Recall". Except unlike in film, there's no deus ex machina native ancient technology to suddenly make the entire atmosphere breathable.