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We don't need startups, we need Digital-Mittelstand

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Re: We don't need startups, we need Digital-Mittelstand

#141

Post by jsiepkes »

pembrook wrote: post #74

The authors examples of “Digital Mittelstand” companies are not businesses at all but tiny “creator economy” side projects. These do not scale to 30% of GDP in the same way high value B2B industrial equipment does (in manufacturing you happily pay $100,000 for a piece of machinery because it can turn inputs into more valuable outputs at scale). Instead of coming up with incorrect ideas about what the government shoul…

It's probably more of cultural difference. It's common in the US to build companies like a lot of houses are build in the US.

In the US houses are often build from wood and plaster and have a high chance of being knocked down by a storm. Companies in the US are often build on a ton of dept (and never making a profit is not considered "weird") and have a high chance of being knocked down by a storm.

In Europe people like to build houses from brick and concrete. Companies in Europe are often expected to be profitable at some point and be able to wither a storm.

Re: We don't need startups, we need Digital-Mittelstand

#142

Post by tonyedgecombe »

autonomousErwin wrote: post #90

This is a great read and exactly where I think the global economy is going - instead of large companies you'll have millions of medium sized businesses run by small teams still making a bit of a dent in their own niche universe. I do disagree with the work-life balance part, I struggle to see how you can build something (and maintain it at such a high level) without intense focus and commitment.

>This is a great read and exactly where I think the global economy is going - instead of large companies you'll have millions of medium sized businesses run by small teams still making a bit of a dent in their own niche universe.

I'd love to see that but the trend is in the opposite direction. It's not just technology either, there has been consolidation across most industries.

Re: We don't need startups, we need Digital-Mittelstand

#143

Post by impossiblefork »

milesrout wrote: post #133
impossiblefork wrote: post #126

Earlier quoted context omitted.

Yes, but what if the big-software type economy isn't actually that useful? Maybe you can grow it to 30% of GDP if you start doing a bunch of bad stuff, but if it can be replaced by open source local stuff-- if it's possible to simply kill facebook, Microsoft etc. and replace them with Linux together with a couple of not incredibly expensive software packages developed to provide a substitute, then why should we have…

Firstly, Linux isn't made for free by hobbyists. The biggest contributors are profitable, largely American tech companies. Intel, AMD, even Microsoft is now a contributor. Secondly, the idea that you can just replace the entire software industry with Linux is... Are there even words to describe this? Linux is just an operating system. You can't replace a whole industry with "a couple of cheap packages."

I'm not saying that you can replace the entire software industry by Linux, but you can replace Windows with Linux, you can build simple locally run software to replace many of the well-known services, you can put some efforts into creating local clones with greater adaptability to match the biggest SaaS services, etc.

Basically, to go after the easy 90%. Then we go from a world with data in the cloud, massive advertisement statistics gathering etc., to a world where people mostly use computers to solve concrete physical problems in their environment and where networks are distributed, e-mail like or like a facebook where every participant stores a substantial amount of information locally in plaintext and has it interpreted by a desktop app, where he has no feed with the content decided by others, but chooses what he has the computer show him, etc.

Just look at telecom. How much complexity in the protocols isn't there just because people have to have their resource usage monitored so they can be billed for it, and for this to be settled between telecom companies?

The software to kill SaaS and Facebook might be so simple that a couple of people could write it by themselves. It's like that local government 'if you have regional govt they decide it all in Nottingham probably in a couple of meetings. Complete amateurs.' That's where I think we could go, but with software instead of the UK civil service.

It also fits really with with the coming of LLMs etc. You can just store of a lot stuff in plain text and have this super-fast reader process it all. Instead of lots of software, just huge amounts of plaintext that the machine can understand.

Re: We don't need startups, we need Digital-Mittelstand

#144

Post by milesrout »

hresvelgr wrote: post #97

I think Mittelstand is perhaps misdirecting away from a more interesting conversation. Reading between the lines, this highlights an inherent bias in the majority of American companies to provide service to extract value as opposed to providing service for public benefit. Simply put, it's "move fast and break things" versus "WE DO NOT BREAK USERSPACE." If you want to dig deeper, this is a consequence of America begin…

>Reading between the lines, this highlights an inherent bias in the majority of American companies to provide service to extract value as opposed to providing service for public benefit.

American businesses do the same thing businesses do anywhere: try to generate more valuable products and services than they consume. It really is as simple as that. No value is "extracted" when you sell bread for more than it cost to buy flour, yeast, water, labour, and space to work. The idea that it is "extractive" screams to me of the lump of labour/labour theory of value idea, which is not just wrong but incoherent. Maybe that is not what you meant, but it is common for communists to claim that "all profit is extracted from workers' labour" and similar silly rubbish.

Re: We don't need startups, we need Digital-Mittelstand

#145

Post by pembrook »

TFYS wrote: post #130
pembrook wrote: post #122

Earlier quoted context omitted.

The vast vast vast majority of companies do not sell a product below-cost. And if the customers are not willing to pay more, it sounds like they're actually happy with the current offering and that's not an area that your fellow humans would find useful for you to work on. Yes, one of the responsibilities of a founder is fundraising. If you can't sell people on investing in your vision that is...a somewhat bad sign.

> And if the customers are not willing to pay more, it sounds like they're actually happy with the current offering and that's not an area that your fellow humans would find useful for you to work on. People would need to have perfect information about all the products they buy in order to truly know if they're happy with them. If they knew and saw first hand all the effects that a product has (poor working condition…

If people would actually be happier with your solution that's simply a marketing problem, which is entirely solvable.

But I think more often people delude themselves into thinking their thing is better (since it's their baby) when it actually is not, which no amount of marketing dollars can solve.

Re: We don't need startups, we need Digital-Mittelstand

#146

Post by tonyedgecombe »

FirmwareBurner wrote: post #19
camillomiller wrote: post #7

Ulysses (the Mac/iOS writing app) is made by a German company that's a good example of this.

Was curious until I saw it's subscription based! Seriously? For a writing app? They can politely gtfo with that, I already got burned before by subscription-ware before. I want to own my purchases thank you very much.

I doubt those sort of apps would be viable as a one off purchase.

Re: We don't need startups, we need Digital-Mittelstand

#147

Post by johannes1234321 »

pembrook wrote: post #122
Zanfa wrote: post #117

Earlier quoted context omitted.

That’s a bit naive. There are a lot of markets that are effectively impossible to enter without massive amounts of capital and current players are selling below cost.

The vast vast vast majority of companies do not sell a product below-cost. And if the customers are not willing to pay more, it sounds like they're actually happy with the current offering and that's not an area that your fellow humans would find useful for you to work on. Yes, one of the responsibilities of a founder is fundraising. If you can't sell people on investing in your vision that is...a somewhat bad sign.

> The vast vast vast majority of companies do not sell a product below-cost.

Tha tis true, as they won't survive.

However an established company often has the ability to go on a price war, including selling under cost temporarily, to fight off an up starting competitor and preventing it from entering the market in any serious way. Once they give up, one can go back to higher prices.

Thus only one who can compete is somebody who can use profits from other area, thus some already well established player in a related market.

Re: We don't need startups, we need Digital-Mittelstand

#148

Post by flanked-evergl »

impossiblefork wrote: post #126
pembrook wrote: post #74

The authors examples of “Digital Mittelstand” companies are not businesses at all but tiny “creator economy” side projects. These do not scale to 30% of GDP in the same way high value B2B industrial equipment does (in manufacturing you happily pay $100,000 for a piece of machinery because it can turn inputs into more valuable outputs at scale). Instead of coming up with incorrect ideas about what the government shoul…

Yes, but what if the big-software type economy isn't actually that useful? Maybe you can grow it to 30% of GDP if you start doing a bunch of bad stuff, but if it can be replaced by open source local stuff-- if it's possible to simply kill facebook, Microsoft etc. and replace them with Linux together with a couple of not incredibly expensive software packages developed to provide a substitute, then why should we have…

Germany has a big-nothing economy right now. Compared to that, even a small-software economy is useful. Germany can't live on everyone else's money indefinitely, at some point everyone else is going to get fed up that they have to be paying more tax and higher energy prices because Germany can't sustain itself.

Re: We don't need startups, we need Digital-Mittelstand

#149

Post by TFYS »

pembrook wrote: post #145
TFYS wrote: post #130

Earlier quoted context omitted.

> And if the customers are not willing to pay more, it sounds like they're actually happy with the current offering and that's not an area that your fellow humans would find useful for you to work on. People would need to have perfect information about all the products they buy in order to truly know if they're happy with them. If they knew and saw first hand all the effects that a product has (poor working condition…

If people would actually be happier with your solution that's simply a marketing problem, which is entirely solvable. But I think more often people delude themselves into thinking their thing is better (since it's their baby) when it actually is not, which no amount of marketing dollars can solve.

It's not just a marketing problem, because the amount of information you'd have to have in order to make a truly rational decision is beyond any simple marketing campaign. Your competitors would also be creating campaigns against yours, so how would a consumer be able to figure out the truth without impossible amounts of work?

Re: We don't need startups, we need Digital-Mittelstand

#150

Post by cjfd »

milesrout wrote: post #136
ForHackernews wrote: post #132

Earlier quoted context omitted.

> If Europeans can’t figure out new valuable areas where they can contribute to the world, than their system isn’t as clever or morally righteous or fantastic as they think it is. I don't think it follows that unprofitable things are by definition not clever, righteous, or fantastic. This seems like a blinkered, American-capitalist viewpoint.

Profitable and valuable are synonymous. If something is more valuable than the inputs used to make it, then it is profitable to make it. Things being clever, or righteous, or "fantastic" (whatever that means) doesn't mean that people actually value them. That isn't what value means. Something is more valuable if you would give up more to have it. It is less valuable if you would give up less to have it. Basically, no…

You are right. My partner and I often provide each other sex for free. We should stop that and both become sex workers in order to be valuable.
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