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I don't understand what's being said here. I think what's confusing to me is that this post appears to express that dethroning the very largest companies isn't

I don't understand what's being said here. I think what's confusing to me is that this post appears to express that dethroning the very largest companies isn't prioritizing efficient management or innovation. I would think regularly churning incumbents at the very minimum prioritizes innovation.

zepto 6y ago
No innovation needed. If you ban the incumbent from using a business practice that other still-big companies can use, those other companies will just use that same practice to scale up to the threshold size. This is exactly the opposite of innovation. Innovation would mean someone coming up with a new business of some kind that could actually displace the incumbent on its merits.
- Dylan16807 6y ago
  A soft cap on company size is at worst orthogonal to innovation, not "the opposite".
  - zepto 6y ago
    First of all, there is no soft cap on company size being proposed. Just the use of a certain strategy. But a cap on how big you can get using that strategy, prolongs the usefulness of the strategy indefinitely. Using legislation to prolong the life of a strategy that would otherwise be vulnerable to innovation is exactly the opposite of innovation.
    - Dylan16807 6y ago
      I don't understand. If it's legal for some companies to use a strategy, that prolongs the usefulness compared to a world where it's legal for every company to use the strategy?
      - zepto 6y ago
        Yes. In what you just said: Some = everyone who hasn’t already made it to the a higher tier. This removes the incentive for anyone to work out how to defeat an incumbent who is using the strategy, since they are forced to stop using it by law and not because a better alternative has emerged. Indeed you might even expect it to become more virulent. Imagine if Apple knew in advance that at some particular arbitrary revenue level, they would no longer be allowed to operate a store. That would create an even stronger incentive to lock in their advantages through other means. It might well have tilted the playing field in a direction where Apple chose to adopt Facebook style addiction dynamics as a strategy or risk being outcompeted by someone who did. The way out of the Apple walled garden is for someone to build an alternative that is better. There are many promising ways to do this.
        Dylan16807 6y ago
        > This removes the incentive for anyone to work out how to defeat an incumbent who is using the strategy, since they are forced to stop using it by law and not because a better alternative has emerged. If my goal is to win through innovation, I would rather fight against multiple smaller non-innovating incumbents than one big one that can crush me with money. > That would create an even stronger incentive to lock in their advantages through other means. > It might well have tilted the playing field in a direction where Apple chose to adopt Facebook style addiction dynamics as a strategy or risk being outcompeted by someone who did. > The way out of the Apple walled garden is for someone to build an alternative that is better. Or they make an alternative that's Facebook style addictive... It seems to me like one consequence of your argument is that encouraging innovation is dangerous because Apple might innovate in a bad way. That makes most of this irrelevant to deciding whether market caps are good or bad. You came up with a scenario where caps lead to something bad, but the same kind of scenario could apply to a world without them. And remember that if someone actually does start taking market share from Apple under the current laws, they still have the option to do the bad things you listed, and they'll be just as effective.
        zepto 6y ago

zepto 6y ago

No innovation needed. If you ban the incumbent from using a business practice that other still-big companies can use, those other companies will just use that same practice to scale up to the threshold size. This is exactly the opposite of innovation. Innovation would mean someone coming up with a new business of some kind that could actually displace the incumbent on its merits.

Dylan16807 6y ago
A soft cap on company size is at worst orthogonal to innovation, not "the opposite".
- zepto 6y ago
  First of all, there is no soft cap on company size being proposed. Just the use of a certain strategy. But a cap on how big you can get using that strategy, prolongs the usefulness of the strategy indefinitely. Using legislation to prolong the life of a strategy that would otherwise be vulnerable to innovation is exactly the opposite of innovation.
  - Dylan16807 6y ago
    I don't understand. If it's legal for some companies to use a strategy, that prolongs the usefulness compared to a world where it's legal for every company to use the strategy?
    - zepto 6y ago
      Yes. In what you just said: Some = everyone who hasn’t already made it to the a higher tier. This removes the incentive for anyone to work out how to defeat an incumbent who is using the strategy, since they are forced to stop using it by law and not because a better alternative has emerged. Indeed you might even expect it to become more virulent. Imagine if Apple knew in advance that at some particular arbitrary revenue level, they would no longer be allowed to operate a store. That would create an even stronger incentive to lock in their advantages through other means. It might well have tilted the playing field in a direction where Apple chose to adopt Facebook style addiction dynamics as a strategy or risk being outcompeted by someone who did. The way out of the Apple walled garden is for someone to build an alternative that is better. There are many promising ways to do this.
      - Dylan16807 6y ago
        > This removes the incentive for anyone to work out how to defeat an incumbent who is using the strategy, since they are forced to stop using it by law and not because a better alternative has emerged. If my goal is to win through innovation, I would rather fight against multiple smaller non-innovating incumbents than one big one that can crush me with money. > That would create an even stronger incentive to lock in their advantages through other means. > It might well have tilted the playing field in a direction where Apple chose to adopt Facebook style addiction dynamics as a strategy or risk being outcompeted by someone who did. > The way out of the Apple walled garden is for someone to build an alternative that is better. Or they make an alternative that's Facebook style addictive... It seems to me like one consequence of your argument is that encouraging innovation is dangerous because Apple might innovate in a bad way. That makes most of this irrelevant to deciding whether market caps are good or bad. You came up with a scenario where caps lead to something bad, but the same kind of scenario could apply to a world without them. And remember that if someone actually does start taking market share from Apple under the current laws, they still have the option to do the bad things you listed, and they'll be just as effective.
        zepto 6y ago