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There is not really anything wrong with having a family business. Many of the German automobile makers are run that way. In this day and age where pump-and-dump

There is not really anything wrong with having a family business. Many of the German automobile makers are run that way. In this day and age where pump-and-dump short term trading often prevails, the security benefits of limiting the power of public shares often seem worth considering. Indeed the market has spoken on Wework, as it always does, but it had little to do with this. It had to do with him flying around in things the company could not afford.

deelly 7y ago
Same goes for politic, yes? Because "in this day and age where pump-and-dump short term trading often prevails, the security benefits of limiting the power of public shares often seem worth considering."
- zelly 7y ago
  Monarchy is really underrated.
  - humanrebar 7y ago
    Once you get past the fact that murder is the primary way to change monarchical leadership, it's quite smart.
- anoncake 7y ago
  I certainly would prefer to live under a heritable monarch than a bunch of anonymous external shareholders. Of course any kind of autocracy is a gross violation of the rights of everyone living under it. But this is capitalism so democracy isn't even an option.
meshr 7y ago
Yes. Ford provided good automobiles for Nazis. Family business works if money is your only value. Human values are not inherited by genes.
- throwaway744678 7y ago
  Wow, that escalated quickly.
- flaviojuvenal 7y ago
  What this has to do with a business being family-owned or not?
  - meshr 7y ago
    Your (grand-)children can’t guarantee you to preserve your values. Only policy maker can.
throwaway744678 7y ago
Well it's a bit like trying to "have your cake and eat it": if you want to run a family company, fine, but you can't ask the markets for capital and yet keep the control! Those dual class of shares have always seem odd to me; I mean, I kind of understand the point for your average young startup - where the voting power somehow represents the risk everyone took, and you don't want to destabilize the company. For a mature company, the justification is less clear.
- prebrov 7y ago
  Why not? Markets are interested in capital gains and profit sharing, not necessarily steering the wheel directly. How is it wrong for a founder to take a smaller cut of the profit in exchange for more power? Founders (individuals) want a voice in their companies, and how much money does one need anyway? Investors (usually institutions) want to make money, and they need lots of it. Seems like a fair trade.
  - michaelt 7y ago
    If a dual-class share structure allows the CEO to divert 100% of dividends into his personal bonus, and prevents investors from having him removed even if he does, why wouldn't he? Does an investment with those properties sound like a good investment to you?
    - adventured 7y ago
      > If a dual-class share structure allows the CEO to divert 100% of dividends into his personal bonus > Does an investment with those properties sound like a good investment to you? It's plainly obvious you don't hold an investment in a public company that does that. Your setup has a self-correcting action: the investors sell if they can't derive the expected benefit from owning the stock because the CEO is sending all the profit into their own bank account. Why doesn't Zuckerberg do it for example? Because the stock would implode by 90%+ overnight and the best employees would immediately flee as they see their stock become worthless and future stock compensation goes to zero. Then the rest of the corporation would collapse in time without the employees required to keep it operating at a high level. Even monopolies can easily lose their position. Just downgrading your average employee by one grade, eg from a B to a C, will collapse elite tech companies over time. History is littered with examples (from HP to IBM) of what happens to companies when they can no longer attract the best.
bronz 7y ago
well there is something wrong if you want the company to be run well. if leaders of a company are selected by any other trait than merit, then the company will under-perform. if the company has a monopoly, that means a long and drawn out period of that particular market not achieving what it could or maybe even damaging peoples lives if the market is important.
- luckylion 7y ago
  That's not the point of control. Think of it as the company selecting their CEOs as any other company would, but the family that owns the company setting guidelines, like, even if we could use our tech in military projects as well, we're not going to get involved in military projects. They don't run the day to day business, but give them guidelines.
  - heyoni 7y ago
    Right, so hedge your bets on unborn spawn. That’s the best we can do to steer a ship in the right direction for future generations.
navigatesol 7y ago
>There is not really anything wrong with having a family business. Shouldn't building a business be step one, though? Neuman didn't do that; he gambled a bunch of VC money on real estate.

deelly 7y ago

Same goes for politic, yes? Because "in this day and age where pump-and-dump short term trading often prevails, the security benefits of limiting the power of public shares often seem worth considering."

zelly 7y ago
Monarchy is really underrated.
- humanrebar 7y ago
  Once you get past the fact that murder is the primary way to change monarchical leadership, it's quite smart.
anoncake 7y ago
I certainly would prefer to live under a heritable monarch than a bunch of anonymous external shareholders. Of course any kind of autocracy is a gross violation of the rights of everyone living under it. But this is capitalism so democracy isn't even an option.

meshr 7y ago

Yes. Ford provided good automobiles for Nazis. Family business works if money is your only value. Human values are not inherited by genes.

throwaway744678 7y ago
Wow, that escalated quickly.
flaviojuvenal 7y ago
What this has to do with a business being family-owned or not?
- meshr 7y ago
  Your (grand-)children can’t guarantee you to preserve your values. Only policy maker can.

throwaway744678 7y ago

Well it's a bit like trying to "have your cake and eat it": if you want to run a family company, fine, but you can't ask the markets for capital and yet keep the control! Those dual class of shares have always seem odd to me; I mean, I kind of understand the point for your average young startup - where the voting power somehow represents the risk everyone took, and you don't want to destabilize the company. For a mature company, the justification is less clear.

prebrov 7y ago
Why not? Markets are interested in capital gains and profit sharing, not necessarily steering the wheel directly. How is it wrong for a founder to take a smaller cut of the profit in exchange for more power? Founders (individuals) want a voice in their companies, and how much money does one need anyway? Investors (usually institutions) want to make money, and they need lots of it. Seems like a fair trade.
- michaelt 7y ago
  If a dual-class share structure allows the CEO to divert 100% of dividends into his personal bonus, and prevents investors from having him removed even if he does, why wouldn't he? Does an investment with those properties sound like a good investment to you?
  - adventured 7y ago
    > If a dual-class share structure allows the CEO to divert 100% of dividends into his personal bonus > Does an investment with those properties sound like a good investment to you? It's plainly obvious you don't hold an investment in a public company that does that. Your setup has a self-correcting action: the investors sell if they can't derive the expected benefit from owning the stock because the CEO is sending all the profit into their own bank account. Why doesn't Zuckerberg do it for example? Because the stock would implode by 90%+ overnight and the best employees would immediately flee as they see their stock become worthless and future stock compensation goes to zero. Then the rest of the corporation would collapse in time without the employees required to keep it operating at a high level. Even monopolies can easily lose their position. Just downgrading your average employee by one grade, eg from a B to a C, will collapse elite tech companies over time. History is littered with examples (from HP to IBM) of what happens to companies when they can no longer attract the best.

bronz 7y ago

well there is something wrong if you want the company to be run well. if leaders of a company are selected by any other trait than merit, then the company will under-perform. if the company has a monopoly, that means a long and drawn out period of that particular market not achieving what it could or maybe even damaging peoples lives if the market is important.

luckylion 7y ago
That's not the point of control. Think of it as the company selecting their CEOs as any other company would, but the family that owns the company setting guidelines, like, even if we could use our tech in military projects as well, we're not going to get involved in military projects. They don't run the day to day business, but give them guidelines.
- heyoni 7y ago
  Right, so hedge your bets on unborn spawn. That’s the best we can do to steer a ship in the right direction for future generations.

navigatesol 7y ago

>There is not really anything wrong with having a family business. Shouldn't building a business be step one, though? Neuman didn't do that; he gambled a bunch of VC money on real estate.