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I tend to believe that business isn't difficult, but modern business is difficult. If by business we mean "selling goods or services at a profit", then the type

• streetcat1 7y ago
  I do not see cut-throat competition (I wish since that would lead to innovation). I see only monopolies.
  • tomrod 7y ago
    Monopolies are the entities that can afford R&D, dynamically, outside of government. Citizen science is cool, but doesn't extend outside of incremental value add domains. Fusion and more will almost certainly be from monopolies or monopolistic competitors.
    • defterGoose 7y ago
      No. Groundbreaking innovations like that have and will continue to come from basic research; the type that's really only done at universities.
      • giovannibonetti 7y ago
        So, say, the iPhone was not a groundbreaking innovation since it didn't come from an university?
        • rjyoungling 7y ago
          I think the point they were making is that universities often create big breakthroughs and then companies put it together in a way such that it has commercial value. At least that's how I interpreted that comment. But Xerox PARC immediately came to mind, which was a breeding ground of innovation.
        • chongli 7y ago
          The iPhone is not a groundbreaking innovation, it's a product. Like many modern products, it is extremely complicated with thousands of different components. Did Apple invent all of those components from scratch? No. Did Apple invent the key components that made the iPhone different from its competitors at the time? No. The capacitive touch screen was invented by Bent Stumpe at CERN [1]. The software technology that arguably made the iPhone possible, multi-touch, was developed by U of T, Bell Labs, and CMU. Steve Jobs visited CMU in 1985, though that obviously didn't translate into much back then. The actual multi-touch software that went into the iPhone was developed by FingerWorks founders John Elias and Wayne Westerman at the University of Delaware [2]. Apple bought FingerWorks and incorporated the technology into the iPhone. [1] https://en.wikipedia.org/wiki/Multi-touch#History https://en.wikipedia.org/wiki/Multi-touch#History [2] https://en.wikipedia.org/wiki/FingerWorks https://en.wikipedia.org/wiki/FingerWorks
          • agumonkey 7y ago
            I think it's too strict of a definition. Assembling a tons of known knowledge into something that wipes a market (and zero history in it..) is not a normal event either. Maybe it's innovation at the consumerism layer.
      • grenoire 7y ago
        I'm pretty sure fellow commenters can expand the list, but Bell (private) and CERN (public) are neither universities nor exceptions.
        • defterGoose 7y ago
          Where do you think all the researchers at CERN come from?
  • oceanghost 7y ago
    What product can you invent that won't be counterfited by the Chinese, then sold alongside your product on Amazon?
    • rjyoungling 7y ago
      Exactly. The more commoditized you are, the harder it is to escape the competition.
      • oceanghost 7y ago
        I completely agree, but even then, there is the issue of quality. I had a product idea recently, researched it, and found a couple Chinese type products that did what my idea would do on paper... One was priced at 6$, another, $15.99. The problem is, they'll all set your house on fire. No isolation, bad circuit design, globs solder everywhere, not rated for the right amperage. A proper design would probably cost $75 for the consumer.
        • rjyoungling 7y ago
          Then you'd have to find out (should you be interested) if the consumer cares about that. People assumed consumers wanted a cheap vacuum. (That's not an unreasonable assumption.) Dyson then showed that there are other dimensions consumers are willing to judge a vacuum on than just price alone. One category (out of 4) in Pragmatic Behavioral Psychology (or Dutch School of Marketing) is context changing. By creating a $75 product, consumers have nothing to compare it too and might judge solely on price if they view it as a commodity. Should you use context changing, you can shift the conversation from price to safety by educating them. Perhaps throwing it in the shape of a story about a couple who's house burned down, and why it's so important not to think you can skimp on this stuff. In that context, you're no longer competing on price but on quality because you've messed with the context frame. These are all things that will need to be tested. The only way to know for certain is by talking to users and seeing if you can sell the product.
          • 7y ago
  • rjyoungling 7y ago
    I guess that might depend on the kind of circles one operates in. E.g. if one is in SF, one might get the impression that there's no cut-throat competition, only innovation. But the vast majority of companies aren't of that disruptive kind. They're just normal mom and pop shops, and FBA/Shopify businesses. Pretty much all those monopolies support small business. Think of Google, Facebook, YouTube, Etsy, Yelp, etc. Also, I'd push back on the implication that cut-throat competition leads to innovation. I think that's rarely the case. It absolutely leads to incremental innovation but rarely to disruptive innovation. That is almost always a function of an outsider, who's willing to challenge existing assumptions. (More often than not out of sheer ignorance of the existence of those assumptions. I can't even count the number of founders who've told me something along the lines of 'We didn't know we weren't supposed to do it this way.' Or, 'Had we known it would've been so hard, we'd have never even started.'
• rramadass 7y ago
  Good insight, I agree with you. The modern "Business Corporation" with emphasis on Shareholders is an anomaly. It has increased the complexity of Business allowing a whole industry to thrive without domain knowledge i.e. "Management" which messes up everything for everybody. We need a fundamental rethink and "back to basics" to setup a simple interface between a Producer(including their Supply Chain) and a Consumer with absence of all unnecessary middlemen.
  • rjyoungling 7y ago
    Not a big fan of The Friedman Doctrine either. I think a company needs to fulfill two roles: be profitable, and have a positive impact on the planet. I don't believe it's ethical to externalize that responsibility in pursuit of more profit and growth. That's why I included what Andrew Mason said about Groupon. Is Groupon really a better company simply because it makes more revenue? I don't think so, but if you're only using 1 dimension to measure, then that's the conclusion you'll come to.
    • bryanrasmussen 7y ago
      It seems to me that the only news stories I've read about Groupon for the last 7 years or so is about how they're on the verge of bankruptcy, so I'm not sure if Friedman would think they were good either. Did they ever go bankrupt, I tried to search groupon bankruptcy on DDG but there were so many stories about how they were going to go bankrupt I couldn't figure out if they ever did.
      • rjyoungling 7y ago
        Yeah but Friedman wouldn't have had the info we have now. According to his thesis of shareholder value above all else, Groupon did exactly what they were supposed to. I wonder how it would've turned out had Andrew been able to stick to his guns. But that was never an option since it was structured to IPO from the very beginning because of all that crap with thepoint . com Don't believe they ever went bankrupt. Those stories you found might be the result of the dealsites not living up to the hype. There was a significant period of time where many investors believed those sites were gonna create the next Google. Their market cap is still around a billion I believe.
• trentnix 7y ago
  All business is difficult. Modern business is impossibly unpredictable, while traditional markets, as scarcity decreases, become commoditized. Lots and lots and lots of grocers, butchers, book binders, farmers, and blacksmiths went out of business 300 years ago. And even the successful ones were all poor as were any employees in their employ.
  • hliyan 7y ago
    > Lots and lots and lots of grocers, butchers, book binders, farmers, and blacksmiths went out of business 300 years ago. We may need a historian to chime in here, but definitely not at the rate they go out of business today, is my thinking.
    • CaptArmchair 7y ago
      It's... not that simple. The well known narrative is that the Industrial Revolution at the start of the 1800's profoundly reformed society over the past 200 years. Events such as the Civil War, World War 1 and 2 accelerated that evolution. At its heart, it's a very complex story though. Depending on the region, continent, culture, technological advances,... different areas and domains of the economy would experience changes. And it's not like one day people woke up thinking "Oh, we've entered the era of the Industrial Revolution, let's head to the factory now!" Looking at larger timescales, economic change is above all a gradual change. For instance, some of the issues you'd see in urban centers - poverty, unemployment, sustenance living - did already exist long before modern industry established itself. What you do see is that industrialization - establishing factories, infrastructure,... - such as it happened in London or New York, exacerbated existing societal tensions, and created new ones. At the same time, society organically adapted to those challenges through the gradual adoption of technologies such as trains, metro/tram lines, bridges, sewers and so on. Organically, because at time nobody new how things would pan out, much like we don't know how modern technology is going to affect society in the next decades. At the same time, none of that suddenly pushed existing industries out of business from one day to the next. Farmers, butchers and grocers were very much an intrinsic part of society and they didn't simply went out of business in a few short years. Over the past 200 years, as - among other things - mobility increased, you do see a change in how an entire economy evolves from local activity towards regional interconnected networks of trade and exchange. And that created increasing pressure on traditional modes of living up to the point where they were no longer viable. We should be aware that the modern concept of a small business doesn't necessarily apply to historic professions and trades, and how those tie in societies that were very much different 200 years ago from where we are today. The trades and professions back in the day weren't so much "jobs", they were specialists who learned the trade from father to son. That ties into the fact that local economies were heavily based on how families were connected. Social connections pretty defined with whom you'd trade. The people that came to you to get their horse new shoes, or with whom you'd trade a few hats of grain, well, your families very likely knew each other going back several generations. Trust was essential in order to make this all work. Let's also not forget that people avoided travel if possible. It was simply a proposition which was too expensive and too risky, given that modes of transportation were extremely limited. Mass migration never happened because people wanted to, but because they were forced too. (Irish Potato Famine of the 1840's is a great example). Most people lived their entire lives within the same 20 to 25 mile radius. Hence why local communities at the time were close knit. When a local community - village, hamlet,... - lost a blacksmith or a master carpenter, that wasn't just a loss of a worker, it had a profound impact on that community. So, that then ties into the fact why people were so adamant on their kids to follow in their trail and were apprehensive towards newcomers who hoped to compete. World War 1 and - certainly - World War 2 with the advent of modern transportation as cars, trains, airplanes, boats, mass production and so on changed all of that. In fact, it's an evolution that happened in subsequent waves where parts of the economy and society altered in a snowball like fashion. Supermarkets and retail chains, for instance, didn't exist in the 19th century. The earliest forms date back to the 1910's. And they only started to pick up in the 1930's. But the real change happened after World War II when suburban development boomed and automobile ownership saw a sharp increase. Smaller and larger communities had already evolved massively between 1800 - 1945. But 1945, that's the point where the modern changes we still enjoy start to fundamentally alter them: television, telephone, modern media, roads & freeways,... became essential parts of society as a whole, even though those were already established in urban centers by a couple of decades already. So, we are talking about changes that happen at different speeds depending on where you lived and who'd you talk to. I think that still rings very much true today. The problems we see today in smaller, rural communities today - unemployment, emigration, downturn - still tie into an evolution that started in the 19th century and still is fully underway. A historian 300 years from now will likely look at our era and interpret that as a continuation rooted in dynamics that originated further in the past. If I have to make an apt analogy, then the coal mine industry of Appalachia would be a great one. It's a poster child of how an industry first established itself as a front runner and supported entire local communities as it tied into a regional and national economy, and then began a decline as that same larger economy moved on. That's the point where you see a domino / chain effect. As the industry that supported the majority of a community through salaried jobs declined, unemployed inevitably stalls local business for local traders: washers, grocers, bars, woodwork, car repair,... Meanwhile, retail chains survive because of network effects and distribution. Don't let the title fool you but this video does a great job at showing the impact of that dynamic: https://www.youtube.com/watch?v=EJZmr7E2M_U https://www.youtube.com/watch?v=EJZmr7E2M_U If butchers, farmers, book binders and grocers didn't survive, that's mostly because society has fundamentally altered over the past 70 years and moved from communities where close connections and traditions were essential for survival of the community, into groups with a far greater social and geographical mobility. In a way, it's still possible to open a butcher or book binder business and be successful at it (If you know how to diversify), but your trade wouldn't be essential to the functioning a close knit local community such as it was even 100 years ago.
• deleted 7y ago
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• rjyoungling 7y ago
  Yeah, I think that's a very good point. It's fascinating how certain things have changed. E.g. How companies used to be a crucial part of the local culture. If you know all your customers by name, and your son goes to school with the son of some other customer, you have skin in the game in a way certain companies don't anymore. You're incentivized to do a terrific job.