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Uber didn't get lost. It simply was never the kind of company that could acquire a monopoly big enough and fast enough to justify a multi-billion dollar valuati

Uber didn't get lost. It simply was never the kind of company that could acquire a monopoly big enough and fast enough to justify a multi-billion dollar valuation. I'm starting to think that many of the most successful tech companies of the past decade are not real monopolies but succeeded purely because the centralization of capital made it difficult for alternative projects to compete for a limited period of time. Even projects with strong network effects are unlikely to last forever. The reason why all these dominant companies won't last forever is simply because every new generation of ambitious workers needs a way to legally take ownership of the capital which was accumulated by the previous generation. People who inherit free capital from their parents or relatives will never be as smart, hard working, determined or as capable as those who've had to struggle all their lives; especially now with an internet where essentially all knowledge is in the public domain. As monopolies get bigger and stronger, smart and ambitious people will adapt to the environment in extreme ways and find legal ways to subvert them. When you see extremely high valuations which assume that the company will have a monopoly in 20 years, it's a red flag because in 20 years' time, political and economic control will have already been passed on to the next generation; a generation which will have no skin in the game and 0 interest in seeing that company succeed.

H8crilA 7y ago
Billionaire half life is around 20 years. From 1995 till 2015 around 50% of billionaires dropped out of the league: https://www.cnbc.com/2015/12/21/most-billionaires-lost-a-comma-over-20-years.html https://www.cnbc.com/2015/12/21/most-billionaires-lost-a-com... Big money doesn't equate smart money.
- kshacker 7y ago
  This is quite a mis-representation. The total number of billionaires in 1995 = 289. Of them, 66 died. 24 of them diluted their holdings to family. This is 31% of them. Of the remaining, 126 are still billionaires. That is 43% of them. I rounded it down, but if you add them together, you see only 25% dropped out. Still a big number, but maybe some of them were spiky nasdaq 5000 of the 90s : very temporary wealth due to some reason. It seems like the odds are 80% or higher of retaining your billion dollar wealth over 2 decades. But now that the dollar is cheap (by 1995 standards) and the billionaires aplenty, maybe we should look at 5 or 10-billionaires for our next study. [ Edited to add: Actually you do not even need to downsize 25% to 20%. Take a 1% erosion per year and you get there anyways. So basically the odds of someone losing billionaire status were about 1% per year. Quite a low chance of failure. And quite a high chance of death in comparison.]
  - H8crilA 7y ago
    Thank you for the fix!
- whenanother 7y ago
  this is related to the fallacy of the top 1%. the fact of the matter is only celebrities or people who had a financial windfall makes up most of the so-called 1%. the reality is that the wealthy do not populate the top 1%. they are more likely to be found at the bottom 25% of earners as they are doing all they can to lower their tax burdens which primarily centers around eliminating their taxable income. a better label for your stats is that it takes 20 years for a family to figure out how to hide their wealth.
xiaolingxiao 7y ago
Agree 100%. Capitalism is about seizing the means of production
jeremyjh 7y ago
The whole premise of a monopoly was never sound. There is no cost to drivers to run multiple apps, and no cost to users to use multiple apps. You don't care who is on your network, you only care who can get me the fastest and cheapest ride right now.
- markbnj 7y ago
  I agree. A ride in a car is clearly a commodity, and having slick tech to make accessing that commodity easier can only be a differentiating factor for so long.
human20190310 7y ago
I agree with your assessment of Uber, and the manner in which its massive funding deters possibly-better competition. But your inter-generational theory has a major contradiction. You're asserting that each generation of ambitious workers takes ownership of the capital of previous generations, and that this same capital is inherited by incompetent heirs. They can't both be true.
- edoceo 7y ago
  No contradiction. Some people want to take ownership of capital, some people have inherited capital - two groups.
  - human20190310 7y ago
    His theory is that the ambitious workers prevail, not that two groups will continue to compete. If the heirs of capital continued to exist from one generation to the next, then there would be a vested interest in Uber's success across generations, undermining the argument the poster is making.
ec109685 7y ago
This is so pessimistic. There is no realistic scenario where they won’t be worth many billions of dollars. They are a technology company where the marginal cost of services performed is essentially 0. While their valuation might be too high now, it is really good business that doesn’t require a monopoly to be successful.

H8crilA 7y ago

Billionaire half life is around 20 years. From 1995 till 2015 around 50% of billionaires dropped out of the league: https://www.cnbc.com/2015/12/21/most-billionaires-lost-a-comma-over-20-years.html https://www.cnbc.com/2015/12/21/most-billionaires-lost-a-com... Big money doesn't equate smart money.

kshacker 7y ago
This is quite a mis-representation. The total number of billionaires in 1995 = 289. Of them, 66 died. 24 of them diluted their holdings to family. This is 31% of them. Of the remaining, 126 are still billionaires. That is 43% of them. I rounded it down, but if you add them together, you see only 25% dropped out. Still a big number, but maybe some of them were spiky nasdaq 5000 of the 90s : very temporary wealth due to some reason. It seems like the odds are 80% or higher of retaining your billion dollar wealth over 2 decades. But now that the dollar is cheap (by 1995 standards) and the billionaires aplenty, maybe we should look at 5 or 10-billionaires for our next study. [ Edited to add: Actually you do not even need to downsize 25% to 20%. Take a 1% erosion per year and you get there anyways. So basically the odds of someone losing billionaire status were about 1% per year. Quite a low chance of failure. And quite a high chance of death in comparison.]
- H8crilA 7y ago
  Thank you for the fix!
whenanother 7y ago
this is related to the fallacy of the top 1%. the fact of the matter is only celebrities or people who had a financial windfall makes up most of the so-called 1%. the reality is that the wealthy do not populate the top 1%. they are more likely to be found at the bottom 25% of earners as they are doing all they can to lower their tax burdens which primarily centers around eliminating their taxable income. a better label for your stats is that it takes 20 years for a family to figure out how to hide their wealth.

xiaolingxiao 7y ago

Agree 100%. Capitalism is about seizing the means of production

jeremyjh 7y ago

The whole premise of a monopoly was never sound. There is no cost to drivers to run multiple apps, and no cost to users to use multiple apps. You don't care who is on your network, you only care who can get me the fastest and cheapest ride right now.

markbnj 7y ago
I agree. A ride in a car is clearly a commodity, and having slick tech to make accessing that commodity easier can only be a differentiating factor for so long.

human20190310 7y ago

I agree with your assessment of Uber, and the manner in which its massive funding deters possibly-better competition. But your inter-generational theory has a major contradiction. You're asserting that each generation of ambitious workers takes ownership of the capital of previous generations, and that this same capital is inherited by incompetent heirs. They can't both be true.

edoceo 7y ago
No contradiction. Some people want to take ownership of capital, some people have inherited capital - two groups.
- human20190310 7y ago
  His theory is that the ambitious workers prevail, not that two groups will continue to compete. If the heirs of capital continued to exist from one generation to the next, then there would be a vested interest in Uber's success across generations, undermining the argument the poster is making.

ec109685 7y ago

This is so pessimistic. There is no realistic scenario where they won’t be worth many billions of dollars. They are a technology company where the marginal cost of services performed is essentially 0. While their valuation might be too high now, it is really good business that doesn’t require a monopoly to be successful.