Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

The Only Way to Grow Huge

blog.samaltman.com

Post reply on HN
Print view View original

51–60 of 110 posts

Re: The Only Way to Grow Huge

#51

Post by larrys »

pg wrote: post #34
smoyer wrote: post #32

Earlier quoted context omitted.

I'm an almost 25-year veteran of the cable industry and I can tell you that Comcast and Time-Warner didn't grow huge via word-of-mouth. The benefits of cable service grew community systems by word-of-mouth, then Comcast and Time-Warner grew by acquiring and consolidating systems. For example, Time Warner Cable Oceania now provides cable service to the entire Hawai'ian island chain, but they had just bought out the la…

Most of the companies you mention are not counterexamples, because they were already big when they started acquiring and merging with other companies.

At Wharton I interviewed the founder of Jerrold electronics.

Iirc (this was a long long time ago) his Philadelphia connection to Ralph Roberts (comcast) was how he built Jerrold (they made cable boxes).

Comcast of course grew large by starting and getting it's first cable franchise in a small town in Mississippi. Nobody chooses their cable company the cable company chooses you.

(I actually have an audio tape of that interview that I made.)

Re: The Only Way to Grow Huge

#52

Post by smoyer »

pg wrote: post #34
smoyer wrote: post #32

Earlier quoted context omitted.

I'm an almost 25-year veteran of the cable industry and I can tell you that Comcast and Time-Warner didn't grow huge via word-of-mouth. The benefits of cable service grew community systems by word-of-mouth, then Comcast and Time-Warner grew by acquiring and consolidating systems. For example, Time Warner Cable Oceania now provides cable service to the entire Hawai'ian island chain, but they had just bought out the la…

Most of the companies you mention are not counterexamples, because they were already big when they started acquiring and merging with other companies.

Big but I wouldn't say "huge" ... and they did tend to be bigger than the companies they were acquiring (Time-Warner was huge in other businesses before the acquisition spree really started). I mentioned "aggression" in your market as a requirement for becoming huge, but was it also something that led to them being big in the first place? I think there are people who act convincingly larger than they are, and the world grows to fit them.

There are a whole host of business requirements that can sink the process of becoming big. Adelphia failed because the Rigas family aggressively expanded the company, took it public but continued to treat it as though it was still family owned (I shouldn't say more). So the business acumen to run an enterprise at different sizes is important - I've seen leaders fail to hire appropriately, then delegate kill promising companies too. I think we could make a long list of reasons for failure.

larrys:

I'd love to hear your audio ... Jerrold was purchased by General Instruments who was in turn purchased by Motorola. Motorola added Jerrold's set-top boxes, to GI's trunk amplifier and line extenders (and other head-end equipment), then Motorola added both to their cable modem business and that conglomerate was ultimately bought by Google. Cisco purchased Scientific Atlanta who was the main competitor.

Re: The Only Way to Grow Huge

#53

Post by lnanek2 »

pg wrote: post #36

Note to Sam: It's possible to anticipate ways HN readers will misunderstand you, and tweak what you write to pre-empt them. It takes some practice, but I'd guess I'm now able to do it maybe 3/4 of the time. In this case the most common misunderstanding seems to be not to realize that present day big companies were once small. You could have pre-empted that by reminding readers that once companies reach a certain size…

Your footnote isn't even right. There are large companies that are large just because they were the only player, got a government contract, funded because someone wanted a visa or had family connections, etc.. Anyone who brings up the exception will usually have interesting anecdotes, if not data to bring it up, or experience making them say it. So your comment is kind of a waste of space whereas theirs will actually be useful. I consider your comment the same as adding sometimes to the end of every sentence. Maybe true, but useless.

Re: The Only Way to Grow Huge

#54

Post by larrys »

pak wrote: post #49
pg wrote: post #36

Note to Sam: It's possible to anticipate ways HN readers will misunderstand you, and tweak what you write to pre-empt them. It takes some practice, but I'd guess I'm now able to do it maybe 3/4 of the time. In this case the most common misunderstanding seems to be not to realize that present day big companies were once small. You could have pre-empted that by reminding readers that once companies reach a certain size…

> In this case the most common misunderstanding seems to be not to realize that present day big companies were once small. You could have pre-empted that by reminding readers that once companies reach a certain size they don't have to rely on making something great to grow bigger, but that if you look back at the earliest history of those companies, you'll find most did. (emphasis mine) It's hard to call it a misunde…

With all due respect to Sam I have no idea what qualifies Sam to even be opining on this subject without a bit more of a circumspect attitude.

If he was a professor of business or had a long standing knowledge of business that would be one thing. The word "most" would certainly be better but even that goes a bit to far with a subject as large as "business" and "companies".

Re: The Only Way to Grow Huge

#56

Post by arbuge »

"When you are still small, you can spend a lot of money marketing or advertising and have a big impact on usage growth. But eventually, you get so big you simply can't spend enough money to move the needle..."

Well, that depends. Specifically, it depends on how scalable your advertising channel is. If your customer acquisition cost through that channel remains below your customer lifetime value, the only limit on your scaling is the working capital you have available to spend on advertising.

Advertising can take you a very long way in some cases.

Re: The Only Way to Grow Huge

#57

Post by adwf »

jacques_chester wrote: post #45
adwf wrote: post #42

Earlier quoted context omitted.

Now put it in an algorithm that detects any mention of "only, always, never" or any other absolute. Then insert a boilerplate at the top of such discussions, saying there are always exceptions, but the gist of the argument is still valid ;)

I can't help but feel that if fuzzy logic was taught more widely in computer science courses, people would be more sanguine about "only, always, never" as linguistic qualifiers. ... not that I am without guilt on this ...

The funny thing is that I come from a physics degree background and hence have a tendency to stick with the more scientifically accurate "I think, maybe, probably, possibly, almost always", rather than going for absolutes. However, when you enter into the business world, you tend to find that this kind of language comes across as weak and uncertain. Even though you are merely trying to be correct and not give false impressions!

So now I actually appreciate more confident, strong language, because when I read a blog post or article like this, I can take the caveats as being there, but unsaid.

I sometimes think that if everyone took this assumption, Hacker News would decimate its comment count!

Re: The Only Way to Grow Huge

#58

Post by CCs »

jmduke wrote: post #10

This is a great article, but really only applies to a small subset of companies for whom organic growth is the only way to grow huge. An abbreviated list of counterarguments: Epic, CenturyLink, NBC, Waste Management, Honda, Vanguard.

Epic still keeps winning "Best in Klas"[1] which is based on user vote.

[1] http://www.klasresearch.com/Vendor/54

Re: The Only Way to Grow Huge

#59

Post by larrys »

smoyer wrote: post #52
pg wrote: post #34

Earlier quoted context omitted.

Most of the companies you mention are not counterexamples, because they were already big when they started acquiring and merging with other companies.

Big but I wouldn't say "huge" ... and they did tend to be bigger than the companies they were acquiring (Time-Warner was huge in other businesses before the acquisition spree really started). I mentioned "aggression" in your market as a requirement for becoming huge, but was it also something that led to them being big in the first place? I think there are people who act convincingly larger than they are, and the wor…

I will try to dig it up. Another person I interviewed was Ed Moldt who ended up years later being the head of the Wharton Entrepreneurial Center. At the time he was working on telemedicine a way that doctors could remotely diagnose patients by video.

Re: The Only Way to Grow Huge

#60

Post by dredmorbius »

bananacurve wrote: post #20
lwf wrote: post #12

Earlier quoted context omitted.

He explicitly excludes monopolies, like TW and Comcast.

You cannot become a monopoly without having a better product at one point, unless you are friends with a dictator.

Or you can take the route of Standard Oil: negotiate special rates with railroads (through rebates, a process later made illegal), force out your competition, and where that failed, literally blow them up.

Microsoft got itself lucky with an exclusive licensing arrangement then played that hand for all it was worth. Court documents largely from the Novell lawsuit (though there were numerous others) reveal just how cut-throat the company was.

In general, finding some initial advantage and leveraging it is what has tended to work. Government contract, sweetheart deal with an existing major player (Google's search deal with Yahoo early on, for example), patents, strategic lawsuits, FUD, and others.

Altman's premise really doesn't hold water.

Post reply on HN