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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

#281

Post by oseityphelysiol »

lazide wrote: post #273
MarkusWandel wrote: post #202

"Go big or go home". This seems to be a uniquely north-American attitude. Germany, or maybe Europe, is full of so-called "Mittelstand" companies that are good in what they do, have 500-ish employees, have been in the same family ownership for generations and provide a good solid living for everyone involved. What is wrong with that? It goes without saying that staying mid-sized doesn't mean staying complacent, but yo…

Per my comment above - those industries tend to be government protected in a variety of different ways, and with all the fundamentals (sustainable company culture, most capital expenditures done, capital available as needed). It's essentially a sheltered niche. Germany is also quite 'stodgy' and not adopting many of the changes (social, technical, etc.) until things have been worked out. Which just isn't the way the…

I get the argument, but what’s the upside of the US approach? Germany is on par or better in society happiness (couldn’t find a metric to confirm that). Why do so many people feel the empty need for soulless growth of these monster companies?

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

#282

Post by munificent »

MarkusWandel wrote: post #202

"Go big or go home". This seems to be a uniquely north-American attitude. Germany, or maybe Europe, is full of so-called "Mittelstand" companies that are good in what they do, have 500-ish employees, have been in the same family ownership for generations and provide a good solid living for everyone involved. What is wrong with that? It goes without saying that staying mid-sized doesn't mean staying complacent, but yo…

> What is wrong with that? It goes without saying that staying mid-sized doesn't mean staying complacent, but you can innovate without growing huge.

There is nothing morally wrong with this and I think most Americans are entirely in support of this ethos. In fact it is a truism that politicians are always talking about how important "small businesses" are.

But the emergent property of our corporate finance system is that those businesses get swallowed up or crushed by huge conglomerates over time. We have a pretty toothless anti-trust regulation system these days and big corporations have enough economies of scale, regulatory capture, and other practices to destroy any business below a certain size.

It's as if there is no protected shallow water in the business ecosystem. You're always in a place where a shark can get you, so if you aren't as big as a shark, you're bait.

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

#283

Post by draw_down »

jspash wrote: post #36

I 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…

Just because someone won't say the reason doesn't mean there is no reason.

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

#284

Post by edmundsauto »

aynyc wrote: post #138
zpeti wrote: post #116

Earlier quoted context omitted.

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.…

> But management and shareholders certainly would like the business to be around for as long as possible. And for that you always need to develop and change. I agree with everything you said except this part. Maybe I'm jaded, everything I've read and seen on the market and job shows investors/management only really care about the next quarter, maybe a year the most. Only a few companies who are capable of looking at…

Be careful drawing conclusions from what you read on business. There are significant selection biases about what stories you hear. Anecdotally - whenever I have read about a company I work for (F500), the outside perspective gets a lot of very basic facts wrong. Often they take small incidences and turn them into broad generalizations. Sometimes their sources have agendas. Etc.

This is one case where it's important to tag information that comes in. The spectrum extremes, IMO, range from "did I observe this fact" to "is this someone else's conclusion". The more from the latter you have, the less faith you should put in your own conclusions drawn from it.

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

#285

Post by Doctor_Fegg »

One of my all-time favourite quotes:

> Jim Buckmaster, the chief executive of Craigslist, caused lots of head-scratching Thursday as he tried to explain to a bunch of Wall Street types why his company is not interested in “monetizing” his ridiculously popular Web operation. Appearing at the UBS global media conference in New York, Mr. Buckmaster took questions from the bemused audience, which apparently could not get its collective mind around the notion that Craigslist exists to help Web users find jobs, cars, apartments and dates — and not so much to make money.

> Wendy Davis of MediaPost describes the presentation as a “a culture clash of near-epic proportions.” She recounts how UBS analyst Ben Schachter wanted to know how Craigslist plans to maximize revenue. It doesn’t, Mr. Buckmaster replied (perhaps wondering how Mr. Schachter could possibly not already know this). “That definitely is not part of the equation,” he said, according to MediaPost. “It’s not part of the goal.”

https://dealbook.nytimes.com/2006/12/08/craigslist-meets-the...

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

#286

Post by vorpalhex »

eternalban wrote: post #260
vorpalhex wrote: post #250

Earlier quoted context omitted.

Historically, even societies that disallowed usary still needed financiers - they would just hunt them down and kill them when it came time to pay the piper. Not even attempts at communism have survived removing dynamic markets.

Market =/= Usury. Two entirely distinct concepts, with distinct names.

Usury in a basic definition means lending money with interest, and the collection of that interest. [1]

Lending money involves risk. The only way to offset risk is with potential gain - ie, interest. You're not going to loan someone a few million, knowing you might lose it all, and having no expected gain.

If you don't have loans of any kind, you basically don't have a market. You can't form most kinds of businesses, you can't invest in equipment, etc etc. Even in strict communism where the government owns the things that allows businesses to run you need capital to buy materials and perform research before you can sell products.

If you can't buy and you can't sell, you don't have any modern conception of a market.

[1]: It can also mean to charge exorbitant interest

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

#287

Post by lazide »

oseityphelysiol wrote: post #281
lazide wrote: post #273

Earlier quoted context omitted.

Per my comment above - those industries tend to be government protected in a variety of different ways, and with all the fundamentals (sustainable company culture, most capital expenditures done, capital available as needed). It's essentially a sheltered niche. Germany is also quite 'stodgy' and not adopting many of the changes (social, technical, etc.) until things have been worked out. Which just isn't the way the…

I get the argument, but what’s the upside of the US approach? Germany is on par or better in society happiness (couldn’t find a metric to confirm that). Why do so many people feel the empty need for soulless growth of these monster companies?

Those companies provide the foundation of pensions (including German ones in many cases), give opportunity for people to move social ladders, provide jobs, etc.

Money also is the most universal proxy for value you're going to find anywhere, and for those seeking to maximize their chances to get the most of it - the US is the place to be right now.

Which is also why there is so much demand immigration wise (along with not terrible schools, reasonable social discourse, stable govern't comparatively, etc.) - if you're an up and coming, ambitious person looking to make it big, there is no better place in the world right now, with some notable edge cases. (China for instance, but only if you're Chinese).

Germans (and most Western Europeans, but definitely not Eastern Europeans from what I've seen!) currently prioritize social stability and a base level of comfort and care over over the possibility of getting (individually) filthy rich.

There are pros and cons to this, obviously, and different people will weight them differently based on their backgrounds.

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

#288

Post by aynyc »

edmundsauto wrote: post #284
aynyc wrote: post #138

Earlier quoted context omitted.

> But management and shareholders certainly would like the business to be around for as long as possible. And for that you always need to develop and change. I agree with everything you said except this part. Maybe I'm jaded, everything I've read and seen on the market and job shows investors/management only really care about the next quarter, maybe a year the most. Only a few companies who are capable of looking at…

Be careful drawing conclusions from what you read on business. There are significant selection biases about what stories you hear. Anecdotally - whenever I have read about a company I work for (F500), the outside perspective gets a lot of very basic facts wrong. Often they take small incidences and turn them into broad generalizations. Sometimes their sources have agendas. Etc. This is one case where it's important t…

Agree. I don't pretend to know everything that's going on within a business. However, long term strategy/direction of a company is fairly easily observable.

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

#289

Post by stainforth »

oseityphelysiol wrote: post #281
lazide wrote: post #273

Earlier quoted context omitted.

Per my comment above - those industries tend to be government protected in a variety of different ways, and with all the fundamentals (sustainable company culture, most capital expenditures done, capital available as needed). It's essentially a sheltered niche. Germany is also quite 'stodgy' and not adopting many of the changes (social, technical, etc.) until things have been worked out. Which just isn't the way the…

I get the argument, but what’s the upside of the US approach? Germany is on par or better in society happiness (couldn’t find a metric to confirm that). Why do so many people feel the empty need for soulless growth of these monster companies?

"Socialism never took root in America because the poor see themselves not as an exploited proletariat but as temporarily embarrassed millionaires." - Steinbeck

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

#290

Post by eternalban »

vorpalhex wrote: post #286
eternalban wrote: post #260

Earlier quoted context omitted.

Market =/= Usury. Two entirely distinct concepts, with distinct names.

Usury in a basic definition means lending money with interest, and the collection of that interest. [1] Lending money involves risk. The only way to offset risk is with potential gain - ie, interest. You're not going to loan someone a few million, knowing you might lose it all, and having no expected gain. If you don't have loans of any kind, you basically don't have a market. You can't form most kinds of businesses,…

> Usury in a basic definition means lending money with interest, and the collection of that interest. [1]

Good. This is fine.

So we strike various other non-sequitors from your original reply:

> Not even attempts at communism have survived removing dynamic markets.

Free markets, profit making, private property, incorporation for making profit (by providing goods and services) are all entirely orthogonal to the very specific 'debt instrument' of "lending money at interest". Even the broad concept of 'debt' itself is not limited to a specialized form of debt that involves usury.

The solution space of financilizing an economic system is not limited to interest bearing debt instruments. And to insist that any alternative is "communism" does not bear scrutiny.

> Historically, even societies that disallowed usary still needed financiers - they would just hunt them down and kill them when it came time to pay the piper.

I assume you refer to the stormy relations between medieval European kings and their bankers. A gentle reminder that European history is not the entirety of human history. (Just as an aside, who besides the Templars got killed over defaulted debt?)

You mentioned "markets" also known as "bazaars". Did you know that while European kings were allegedly killing their bankers there was an entire thriving civilization next door that disallowed interest bearing debt instruments?

-

https://www.jstor.org/stable/3632489

There have been suggestions that usury was instrumental in the social dislocation that significantly contributed to the collapse of food supplies in Mesopotamia. (I can't find the link atm). Regardless, it is an intriguing fact that the 3 Semitic religions that arose in succession in the same "cradle of civilization" after the demise of Mesopotamia and neighboring bronze age civilizations -- that is Judaism, Christianity, and Islam -- all felt it necessary to put the injunction against usury in the proverbial mouth of God in primary scripture. Rather curious, don't you think?

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