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Should we normalize ephemeral businesses?

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Re: Should we normalize ephemeral businesses?

#81

Post by gjsman-1000 »

pclmulqdq wrote: post #68

Pretty much all businesses used to be basically ephemeral until about 150 years ago. The whole idea of a business that is intended to run perpetually just didn't exist in the West, and anything that ran long was tied to a family that plied a trade. Businesses were also a lot easier to understand: a corporation might run a ship or a mine, and go out of business (still having made everyone a lot richer) when the captai…

> Most of the success stories here are businesses with modest ambitions under the tight control of a single family.

Companies that aren’t afraid to really shift gears whenever necessary also do well. Take Nintendo - founded in 1889 as a playing card company that later became an overly ambitious toy company…

During that era they also invented that classic scissors-mechanism extendable hand (“Ultra Hand”). That was a bestseller for years before the NES.

Re: Should we normalize ephemeral businesses?

#82

Post by groby_b »

vkou wrote: post #29
Swizec wrote: post #17

Earlier quoted context omitted.

> There's also a whole world of business outside of tech that most of HN is not familiar with I once read that the most reliably money-making business in America is a car wash. Comes with a built-in monopoly because people will only drive so far to wash their car and reliably generates low 7 figures in sales. Plenty of repeat customers and low churn if you meet a quality bar. But who wants a 70% chance at being a mil…

> But who wants a 70% chance at being a millionaire, when there's 0.01% chance at being a billionaire on offer? Literally anyone in the world will take the first deal.

Nope.

There's an entire income/asset range where the former isn't enough to justify passing up the latter. E.g. if you already have $3M+ in the bank, the marginal utility of that extra million is starting to diminish.

Now, a roll with a decent chance at $1B sounds much better.

And, flip side, if you have almost no money and almost no experience, you might also take the first one - because it leaves you with a 100% marketable set of skills that'll likely translate into much more than 1M.

Re: Should we normalize ephemeral businesses?

#83

Post by RobRivera »

munificent wrote: post #79
retrocryptid wrote: post #76

Earlier quoted context omitted.

So if you countered with a list of companies in the 1830s that lasted only 3 months, that would be great.

Surely you understand the obvious survivorship bias problem with that demand.

you mean you dont recall your stale shares in United Hay?

Re: Should we normalize ephemeral businesses?

#84

Post by pclmulqdq »

gjsman-1000 wrote: post #81
pclmulqdq wrote: post #68

Pretty much all businesses used to be basically ephemeral until about 150 years ago. The whole idea of a business that is intended to run perpetually just didn't exist in the West, and anything that ran long was tied to a family that plied a trade. Businesses were also a lot easier to understand: a corporation might run a ship or a mine, and go out of business (still having made everyone a lot richer) when the captai…

> Most of the success stories here are businesses with modest ambitions under the tight control of a single family. Companies that aren’t afraid to really shift gears whenever necessary also do well. Take Nintendo - founded in 1889 as a playing card company that later became an overly ambitious toy company… During that era they also invented that classic scissors-mechanism extendable hand (“Ultra Hand”). That was a b…

Nokia, a famous logging and paper company, is also a great example.

Re: Should we normalize ephemeral businesses?

#85

Post by dghlsakjg »

walleeee wrote: post #42
dghlsakjg wrote: post #36

Earlier quoted context omitted.

To be fair to theranos, there were very intelligent people trying to do something incredible and had an actual product they wanted to make. If they had been able to do accomplish even some of what Holmes claimed they could, they would have had a real impact. Unfortunately the business was run by a set of sociopaths supervised by a board of geriatrics with no experience in the industry.

agreed, and this > the business was run by a set of sociopaths supervised by a board of geriatrics with no experience in the industry ...is far too often the case, so if one is gifted and fortunate enough to choose who one works for, one lesson might be: put serious effort and consideration into the decision

Also, if Kissinger is involved, it’s a bad idea.

That’s been true for half a century

Re: Should we normalize ephemeral businesses?

#86

Post by burnished »

jonas21 wrote: post #73
Swizec wrote: post #64

Earlier quoted context omitted.

I believe the wealth is in the car wash itself, not the profit you keep. You have to sell when it’s time retire/exit. I am also not claiming that this wealth building process is anything close to fast.

How does one get a car wash in the first place? It seems to me that either: a. You start a new car wash which, given that the market for car washes is already saturated, probably has a much lower success rate than 70%. You also need to be able to afford the startup costs, which are substantial. b. You buy it, in which case you already have money, and you're probably better off investing in index funds. c. You inherit…

Or you borrow money from a bank.

Re: Should we normalize ephemeral businesses?

#87

Post by squeaky-clean »

phkahler wrote: post #59

Fidget spinners made a lot of money for about 3 months. Most were made in China, where everything is considered efemeral. That is the fundamental difference between them and a lot of US companies. Here everyone wants to set up a business for ROI or MRR, with the ultimate exit being IPO at which point a company is expected to never die, else the last purchasers of the stock are left holding the bag. Could your company…

I don't really know how it works over there, but were many of the Chinese companies producing fidget spinners specifically fidget spinner companies? I imagined they were generic factories that made spinners for other more ephemeral companies. But once the fidget spinner craze was over they could just retool for their next customer.

Re: Should we normalize ephemeral businesses?

#88

Post by rcme »

pclmulqdq wrote: post #74
retrocryptid wrote: post #70

Earlier quoted context omitted.

Yes. The East India Company was notoriously short lived.

I know this was intended to be sarcastic, but it is the exception that proves the rule. The big East India Companies (both the Dutch and English ones) only really lasted so long because of governmental charters that granted them valuable monopolies on trade, and they later became models for Standard Oil and other similar monopolistic businesses that really kicked off the era of the perpetual company. However, they we…

"Exception that proves the rule" requires the example to be notable specifically because the example violates the rule. In this case, the East India Company is not notable because it was long-lived.

Re: Should we normalize ephemeral businesses?

#89

Post by foolswisdom »

rcme wrote: post #88
pclmulqdq wrote: post #74

Earlier quoted context omitted.

I know this was intended to be sarcastic, but it is the exception that proves the rule. The big East India Companies (both the Dutch and English ones) only really lasted so long because of governmental charters that granted them valuable monopolies on trade, and they later became models for Standard Oil and other similar monopolistic businesses that really kicked off the era of the perpetual company. However, they we…

"Exception that proves the rule" requires the example to be notable specifically because the example violates the rule. In this case, the East India Company is not notable because it was long-lived.

I understood the point to be that they were exceptional because they were arms of governments.

Re: Should we normalize ephemeral businesses?

#90

Post by ehershey »

mlhpdx wrote: post #39

Around 2000 I was in Stanford’s executive education program and the discussion at hand was a case study about a company that faced a disruption with a large cash reserve on hand. The question was what the leadership team should do, and the answers were all variations of “spend the money”. Except one - a lone voice allowing that the company could return the funds to investors and call it a day. Pure heresy. Return the…

Why would it?
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