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Oh, sure - I'll spend extravagantly on their education, take them travelling around the world, do everything I can to set them up for success - but if I can't l

Oh, sure - I'll spend extravagantly on their education, take them travelling around the world, do everything I can to set them up for success - but if I can't leave them my company, there's no reason not to run it into the ground for short-term gains before I die. Stock market "only cares about next quarter" anyways, after all...

ianleeclark 6y ago
I see you're taking the Toys R Us strategy. Or is it the Sears strategy? Or the we work strategy? Huh, I'm starting to notice that people already do incredibly stupid things with their companies for short term gain already. Now, I'm naturally willing to be proven wrong, but it looks like (from a cursory googling) that most firms only last about 10 years. https://time.com/3768559/company-mortality-rate-survival-study/ https://time.com/3768559/company-mortality-rate-survival-stu... You may think you're building an empire, but you're probably not.
- AnthonyMouse 6y ago
  Starbucks, founded 1971, fifty years old next year. Caterpillar Inc., founded 1925. Ford, 1903. 3M, 1902. Kroger, 1883. Campbell Soup, 1869. Pfizer, 1849. Proctor & Gamble, 1837. Colgate-Palmolive, 1806. Some people already do incredibly stupid things with their companies for short term gain already. Do we need more of them to?
  - lowmemcpu 6y ago
    > Starbucks, founded 1971, fifty years old next year. Caterpillar Inc., founded 1925. Ford, 1903. 3M, 1902. Kroger, 1883. Campbell Soup, 1869. Pfizer, 1849. Proctor & Gamble, 1837. Colgate-Palmolive, 1806. Choosing a handful of successful winners in comparison to "most firms only last about 10 years" is a selection bias. All of the original members of the DOW Jones industrial average have declared bankruptcy or been absorbed into other companies -- except General Electric! Oh wait, they were just removed from the index
    - AnthonyMouse 6y ago
      > Choosing a handful of successful winners in comparison to "most firms only last about 10 years" is a selection bias. "Most firms only last about 10 years" is selection bias because most firms don't even last 10 years. Infant mortality is very high. The firms that do last 10 years usually last 20 or more. Meanwhile you're ignoring my point -- it isn't a question of how many companies are destroyed, it's a question of destroying even more of them. Some evidence that maintaining a stable company is hard is not an argument for making it even harder.
      - lowmemcpu 6y ago
        > "Most firms only last about 10 years" is selection bias because most firms don't even last 10 years. How is that selection bias? > Meanwhile you're ignoring my point -- it isn't a question of how many companies are destroyed, it's a question of destroying even more of them. Some evidence that maintaining a stable company is hard is not an argument for making it even harder. Sure. I'm not proposing we should make it harder
throwawaygh 6y ago
> my company... Stock market... If you're publicly listed, it's not your company anymore. > there's no reason not to run it into the ground for short-term gains before I die Or, you could sell the business to the person most qualified to run it well instead of installing the boss's kid as the new boss. Nepotism is gross. Or, you could distribute more ownership in the business over time to the employees that help build your wealth. But no. If you can't pass the wealth to your kid, then there's literally no reason to do anything other than burn everything down.
- DuskStar 6y ago
  > If you're publicly listed, it's not your company anymore. Well, maybe. Something can be publicly listed while being majority owned by one person. But the "short-term vs long-term" dichotomy was meant more as a commentary on valuations and discount rates in general. > Or, you could sell the business to the person most qualified to run it well instead of installing the boss's kid as the new CEO. Nepotism is gross. This is completely unrelated to ownership.
  - throwawaygh 6y ago
    >> Or, you could sell the business to the person most qualified to run it well instead of installing the boss's kid as the new CEO. Nepotism is gross. > This is completely unrelated to ownership. So if the kid's going to sit back and not interfere then it's kind of irrelevant that it's your business. Might was well be a portfolio.
- mickelsen 6y ago
  I take it that you don't have children? Are family business gross? Sure, you could argue on a bigger level because of the power concentration, but you are applying the same thought to a small biz. Usually when the kids are not so bright, and you notice it as a father and company-owner, you just promote someone qualified -that you trust- to manage it and own some shares, but the control stays in your network. If you don't like it, go build something yourself.
  - 6y ago

ianleeclark 6y ago

I see you're taking the Toys R Us strategy. Or is it the Sears strategy? Or the we work strategy? Huh, I'm starting to notice that people already do incredibly stupid things with their companies for short term gain already. Now, I'm naturally willing to be proven wrong, but it looks like (from a cursory googling) that most firms only last about 10 years. https://time.com/3768559/company-mortality-rate-survival-study/ https://time.com/3768559/company-mortality-rate-survival-stu... You may think you're building an empire, but you're probably not.

AnthonyMouse 6y ago
Starbucks, founded 1971, fifty years old next year. Caterpillar Inc., founded 1925. Ford, 1903. 3M, 1902. Kroger, 1883. Campbell Soup, 1869. Pfizer, 1849. Proctor & Gamble, 1837. Colgate-Palmolive, 1806. Some people already do incredibly stupid things with their companies for short term gain already. Do we need more of them to?
- lowmemcpu 6y ago
  > Starbucks, founded 1971, fifty years old next year. Caterpillar Inc., founded 1925. Ford, 1903. 3M, 1902. Kroger, 1883. Campbell Soup, 1869. Pfizer, 1849. Proctor & Gamble, 1837. Colgate-Palmolive, 1806. Choosing a handful of successful winners in comparison to "most firms only last about 10 years" is a selection bias. All of the original members of the DOW Jones industrial average have declared bankruptcy or been absorbed into other companies -- except General Electric! Oh wait, they were just removed from the index
  - AnthonyMouse 6y ago
    > Choosing a handful of successful winners in comparison to "most firms only last about 10 years" is a selection bias. "Most firms only last about 10 years" is selection bias because most firms don't even last 10 years. Infant mortality is very high. The firms that do last 10 years usually last 20 or more. Meanwhile you're ignoring my point -- it isn't a question of how many companies are destroyed, it's a question of destroying even more of them. Some evidence that maintaining a stable company is hard is not an argument for making it even harder.
    - lowmemcpu 6y ago
      > "Most firms only last about 10 years" is selection bias because most firms don't even last 10 years. How is that selection bias? > Meanwhile you're ignoring my point -- it isn't a question of how many companies are destroyed, it's a question of destroying even more of them. Some evidence that maintaining a stable company is hard is not an argument for making it even harder. Sure. I'm not proposing we should make it harder

throwawaygh 6y ago

> my company... Stock market... If you're publicly listed, it's not your company anymore. > there's no reason not to run it into the ground for short-term gains before I die Or, you could sell the business to the person most qualified to run it well instead of installing the boss's kid as the new boss. Nepotism is gross. Or, you could distribute more ownership in the business over time to the employees that help build your wealth. But no. If you can't pass the wealth to your kid, then there's literally no reason to do anything other than burn everything down.

DuskStar 6y ago
> If you're publicly listed, it's not your company anymore. Well, maybe. Something can be publicly listed while being majority owned by one person. But the "short-term vs long-term" dichotomy was meant more as a commentary on valuations and discount rates in general. > Or, you could sell the business to the person most qualified to run it well instead of installing the boss's kid as the new CEO. Nepotism is gross. This is completely unrelated to ownership.
- throwawaygh 6y ago
  >> Or, you could sell the business to the person most qualified to run it well instead of installing the boss's kid as the new CEO. Nepotism is gross. > This is completely unrelated to ownership. So if the kid's going to sit back and not interfere then it's kind of irrelevant that it's your business. Might was well be a portfolio.
mickelsen 6y ago
I take it that you don't have children? Are family business gross? Sure, you could argue on a bigger level because of the power concentration, but you are applying the same thought to a small biz. Usually when the kids are not so bright, and you notice it as a father and company-owner, you just promote someone qualified -that you trust- to manage it and own some shares, but the control stays in your network. If you don't like it, go build something yourself.
- 6y ago