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I don't quite buy the analogy. Manufacturing was a profitable business (particularly the auto industry) during the union heyday. The same can hardly be said f

I don't quite buy the analogy. Manufacturing was a profitable business (particularly the auto industry) during the union heyday. The same can hardly be said for most startups investing in infrastructure during the dot com bubble.

byrneseyeview 19y ago
Ventures have changed. During the Industrial Revolution, startups were started within a company -- Andrew Carnegie was a bond broker and speculator who got into a (very risky) sideline in steel; Du Pont was a gunpowder company before they started messing around with chemistry[1]. The auto business was enormously profitable for GM and Ford, but there were thousands of equally promising auto startups at the same time. Most of them built prototypes bespoke for rich people; none of them are still around. [1] And cars. They used to own about a fourth of GM, until they were forced to divest.
pg 19y ago
Actually there were a huge number of car companies, nearly all of which died. It was very much like happened with Internet startups. In fact during the Bubble Rupert Murdoch used the history of the car business as an example to explain why he wasn't in a rush to invest in Internet companies.
- especkman 19y ago
  I'm just not feeling it. I think it is better to think of labor unions themselves as startups that eventually consolidated. They gained control of a resource that was in demand by a growing industry, manufacturing. They grew by competition and consolidation (as did their most successful customers) They supplied that resource at a price negotiated with their customers. Manufacturing prospered, and so did it's suppliers, including the labor unions. The labor unions failed to adapt to a changing market (as did many of their customers), which is why they are on hard times. That they failed to adapt says little or nothing about the considerable, commitment and sacrifice it took to found them. I agree though, that the presence or absence of those attributes in modern day union organization and membership isn't the whole story about why they are throughly failing today.
  - byrneseyeview 19y ago
    "I think it is better to think of labor unions themselves as startups that eventually consolidated." They don't make something people want. They take something people want and jack up the price to make them pay more for it. They're as much of a startup as OPEC -- the only difference is that they're cartelizing labor instead of oil.
    - jason13 19y ago
      "They don't make something people want." So I guess YC.News has become a cult.
dfranke 19y ago
I don't understand how that damages the analogy. The point of the essay is that an environment where you have to grow fast or die makes it better to overspend on some things than to waste time trying to bring the price down. If that's valid logic for an unprofitable company, it seems it should make even more sense for a profitable one.

byrneseyeview 19y ago

Ventures have changed. During the Industrial Revolution, startups were started within a company -- Andrew Carnegie was a bond broker and speculator who got into a (very risky) sideline in steel; Du Pont was a gunpowder company before they started messing around with chemistry[1]. The auto business was enormously profitable for GM and Ford, but there were thousands of equally promising auto startups at the same time. Most of them built prototypes bespoke for rich people; none of them are still around. [1] And cars. They used to own about a fourth of GM, until they were forced to divest.

pg 19y ago

Actually there were a huge number of car companies, nearly all of which died. It was very much like happened with Internet startups. In fact during the Bubble Rupert Murdoch used the history of the car business as an example to explain why he wasn't in a rush to invest in Internet companies.

especkman 19y ago
I'm just not feeling it. I think it is better to think of labor unions themselves as startups that eventually consolidated. They gained control of a resource that was in demand by a growing industry, manufacturing. They grew by competition and consolidation (as did their most successful customers) They supplied that resource at a price negotiated with their customers. Manufacturing prospered, and so did it's suppliers, including the labor unions. The labor unions failed to adapt to a changing market (as did many of their customers), which is why they are on hard times. That they failed to adapt says little or nothing about the considerable, commitment and sacrifice it took to found them. I agree though, that the presence or absence of those attributes in modern day union organization and membership isn't the whole story about why they are throughly failing today.
- byrneseyeview 19y ago
  "I think it is better to think of labor unions themselves as startups that eventually consolidated." They don't make something people want. They take something people want and jack up the price to make them pay more for it. They're as much of a startup as OPEC -- the only difference is that they're cartelizing labor instead of oil.
  - jason13 19y ago
    "They don't make something people want." So I guess YC.News has become a cult.

dfranke 19y ago

I don't understand how that damages the analogy. The point of the essay is that an environment where you have to grow fast or die makes it better to overspend on some things than to waste time trying to bring the price down. If that's valid logic for an unprofitable company, it seems it should make even more sense for a profitable one.