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Businesses should try to be the best, not the biggest

joanwestenberg.medium.com

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Re: Businesses should try to be the best, not the biggest

#171

Post by ubermonkey »

He's not wrong. Growth above all else is just toxic.

In the dot-com era, I worked for a custom software shop. This was a time when you could quote $1MM for a dynamic web site, and get it. We built fancy marketing sites and then moved into other bespoke systems using mostly Java and a little Cold Fusion, and we did well in this niche in our region.

But the C-suite got the growth bug, and I didn't have enough stock to stop it, and so we did this crazy land grab thing with outside investment and mergers with other smaller shops elsewhere (NYC, inevitably SF), and all of a sudden instead of a profitable regional player we were on a treadmill race with others (like Agency.com, etc) that really only had room for a couple "winners."

If we'd stopped at 100-150 people, we could have been a very successful profitable player in Texas. And we'd probably either still be in business, or would have been acquired by somebody who wanted our client base (heavy O&G, obviously), and I'd have seen some upside.

None of that happened because c-suite wanted to get big and go public and cash out with $20MM each or whatever. It was a dumb plan.

Re: Businesses should try to be the best, not the biggest

#172

Post by wizzwizz4 »

RivieraKid wrote: post #27
wizzwizz4 wrote: post #11

Earlier quoted context omitted.

Yes – until you bring the stock market and investors into the picture. Oftentimes, companies will have a legal obligation to their stockholders to (attempt to) maximise profit…

Maximizing profit is a good thing.

Assuming “profit” in the philosophical sense, yes. But human values are not Mammon.

Re: Businesses should try to be the best, not the biggest

#174

Post by heymijo »

belval wrote: post #134
hh3k0 wrote: post #118

Earlier 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

That quote always bugged me because it disregards that our economic growth is not really tethered to natural resources. Sure a company like Coca-Cola can only grow so much before it effectively covers the entire planet, but they can still reduce costs to improve their profit margins and displace existing drinks from other companies with a new product. The cloud as a business is mostly about building products that add…

“There are no environmental restrictions here.”

Cloud is still computing. Computers with a finite life that need to be produced, from natural resources.

Computing that needs to be powered and cooled.

Those have environmental impacts and very much align with OPs quote.

Re: Businesses should try to be the best, not the biggest

#175

Post by baron_harkonnen »

belval wrote: post #134
hh3k0 wrote: post #118

Earlier 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

That quote always bugged me because it disregards that our economic growth is not really tethered to natural resources. Sure a company like Coca-Cola can only grow so much before it effectively covers the entire planet, but they can still reduce costs to improve their profit margins and displace existing drinks from other companies with a new product. The cloud as a business is mostly about building products that add…

This is a wildly out of touch view of how economic growth works.

First off, where do you think "the cloud" comes from? Even if we assume 100% renewable grid (which is currently impossible) the computers that run the cloud require an enormous amount raw materials and labor to manufacture.

But far more importantly, where does your clients capital come from?

The greatest accounting trick capitalism every pulled was to get people to think of individual parts of a system rather then the entire thing.

There's real magical thinking involved to think that capital just appears in these clients at now real cost. At some point labor and resource exploitation is required to create economic value which is then passed around throughout the system. Just because you can skim off some surplus value selling some SaaS product in the cloud doesn't mean that the value you are paid with doesn't come from the exploitation of resources.

Finally, you can easily dispel this myth by looking at the current state of our global environment. Show me any period of economic growth that isn't also tied to increased energy and resource usage.

Re: Businesses should try to be the best, not the biggest

#176

Post by RivieraKid »

kevincox wrote: post #48
RivieraKid wrote: post #27

Earlier quoted context omitted.

Maximizing profit is a good thing.

Why? The only answer I see is that you make more money. But it is well understood that money doesn't lead to happiness. What if your company was making enough money that you could pay everyone worked there generous salaries and your customers are happy. If you product is complete I don't see the need to add more. Why not let everyone work half time, and continue to deliver an excellent and focused product. Slowly add…

In a perfectly competitive market, it leads to optimal allocation of resources - i.e. capital and human labour is used a way that is most beneficial to consumers.

The less competitive the market is, the less this is true But profit maximization = good should be the baseline.

I'm really confused that sometimes HN is full of libertarian comments but sometimes it suddenly turns to populist left. Mainstream economics is underrepresented on the internet despite it being most correct (imho obviously).

Re: Businesses should try to be the best, not the biggest

#177

Post by A12-B »

bregma wrote: post #58

I 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…

I don't like invoking the word 'rent-seeking' because it's highly subjective. The formal definition is extracting value without providing any. One could easily make the argument that all business investors are like this. Why act like it's just a case of a few people then?

Re: Businesses should try to be the best, not the biggest

#178

Post by vidarh »

jariel wrote: post #61
howaboutnope wrote: post #4

> The so-called accumulation of capital which gave birth to the bourgeoisie changed the very conception of property and wealth: they were no longer considered to be the results of accumulation and acquisition but their beginnings; wealth became a never-ending process of getting wealthier. The classification of the bourgeoisie as an owning class is only superficially correct, for a characteristic of this class has bee…

"a Commonwealth based on the accumulated and monopolized power of all its individual members necessarily leaves each person powerless," ? It was like that way before the 'bourgeois' ever even existed. Roman Empire? Charlemagne? Louis XIV? Habsburgs? The problem with these Enlightenment era definitions is they fail to take into consideration that the quest for power has been there since the start, it was just never ge…

> ? It was like that way before the 'bourgeois' ever even existed.

None of the examples you gave had the means to wield "the accumulated and monopolized power of all its individual members", not least because technological limits alone introduced massive logistical challenges to central control that made any empire of the time very much decentralised and dependent on the extent to which local representatives had their own agendas.

> The problem with these Enlightenment era definitions

Arendts book was published in 1951.

> it was just never generally available to the merchant class.

It's much bigger a distinction than that. The big change brought by the growth of capitalism was disconnecting responsibility for the population from the accumulation of capital. A feudal lord could squeeze his population hard, sure, but cause them to die of starvation and his output would drop - his power and ability to accumulate it was tied to land and tied to keeping the population living on them able to produce. With capitalism accumulation was disconnected from that feedback loop - the capitalist can optimise away the workers in a way those dependent on at least the survival of the workers can't, and that is real reason why the nobility was beaten:

The only way to beat the Merchants was to become one, and ditch the liability that having a notional responsibility for your workers provided.

But that also changed the nature of accumulation for those at the top from one naturally limited by being tied to a scarce resource (land) to being a near unlimited thread-mill. It's natural to then look at the side effects of that. They're all bad, but they're also not all good.

Re: Businesses should try to be the best, not the biggest

#179

Post by A12-B »

lnsru wrote: post #16

There are 2 states in the forest: growing trees and rotting trees. Nothing in between. So this cancer analogy is a bit absurd. The same with business: business is growing or dying, I am not buying “we don’t want grow” argument.

This isn't really biologically true though? Trees can be in a state of stasis where they are neither growing nor dying.

source: http://scienceline.ucsb.edu/getkey.php?key=642#:~:text=The%2....

Re: Businesses should try to be the best, not the biggest

#180

Post by rapnie »

qazpot wrote: post #122
hh3k0 wrote: post #118

Earlier 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.

Given the timescale of building an endurable self-sustaining civilization on another planet, and the speed with which we are destructing our own environment for humans to live in (and capability to provide high-tech support for this space adventure), my guess is that this is a pipe dream. And that the Mars thing is a nice rich man's hobby, scientists playground, and bread-and-games diversion tactic for the rest of mankind.
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