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Fortune 500 is a cesspool of insane inefficiency balanced by equally insane rent seeking insanely secure revenue. The sooner everyone understands this, the

Fortune 500 is a cesspool of insane inefficiency balanced by equally ~~insane rent seeking~~ insanely secure revenue. The sooner everyone understands this, the better.

xpe 6y ago
First, care to define your terms? Second, inefficient relative to what? Third, so far, what you've written here looks like a rant, not a predictive theory nor a powerful explanatory theory. Would you like to quantify your claim? Or at least make it more precise? As it is, I don't think it advances your argument. I'm interested in strong logic, data, explanations, and persuasion. I see none yet.
- Ericson2314 6y ago
  > Second, inefficient relative to what? The sad thing is it's not inefficiency relative comparable things. But anyone that has worked at these places or sold B2B to them just knows it on intuitive level that they are garbage, and need a heavy sedative to think there are no alternative. > not a predictive theory nor a powerful explanatory theory It's not. It's about letting go of some efficient market ideal and then finding new ideas. We can look at Fortune 500 case-by-case to learn new things > Cola cola Sugar drug cartel. Despicable business with very stable revenue despite being a net drag on society. (At least "regular" drugs have a lot more upside!) > Proctor and Gamble Just as restaurants are reaching down market, and the inefficiency of everyone cooking and cleaning is starting to have market implications, we should see their reign finally dwindle. Wash-and-Fold should follow laundromats. The specialization means that stupid differentiation between products for uninformative consumers (c.f. https://en.wikipedia.org/wiki/Monopolistic_competition https://en.wikipedia.org/wiki/Monopolistic_competition) should go away and restaurants and laundromats optimize. Personal soaps and cosmetics (of course many soaps are cosmetics) however will stay as cultural reasons ensure people will continue to clean themselves and not contract that out for the foreseeable future.
  - xpe 6y ago
    Thanks for elaborating. I don't think I disagree with many or most of the points you've made. It might be interesting to define a systematic and testable definition of organizational efficiency relative to an ideal market. Just like combustion engines can be compared to their theoretical maximum efficiency, it would be interesting to compare a particular organization against its maximum potential. Here is another angle on the topic of relative efficiency. Consider a particular organization. Coca Cola will do as an example. Given its environment (financial incentives, regulations, cultural norms, etc), are we surprised by its behavior? This raises the question of how much an organization's particulars (e.g. leadership, history) affect its efficiency. I suppose I take a systems view of it. Many deplorable businesses survive in niches. But can you "blame" them? It is a matter of perspective: organizations, like life, adapt to their environment and modify it to their liking. Such organizations can stretch the environment to or past its breaking point for a relative long period of time before having to deal with the downstream consequences.
  - Miraste 6y ago
    > the inefficiency of everyone cooking and cleaning is starting to have market implications Elaborate on your reasoning here? While I can maybe imagine a more centralized food preparation system being more efficient, the currently growing market solutions (DoorDash, etc.) are certainly not, and I can't think of a system in which transporting clothing somewhere for someone else to clean would be more efficient than an in-home washing machine. The wasted energy alone would be colossal.
kortilla 6y ago
How is Coca Cola rent seeking? How about Apple? I suspect you aren’t using that term correctly but maybe I’m missing something.
- treis 6y ago
  Effectively every restaurant in the US has to pay either PepsiCo or Coca Cola. Similarly, if you want to buy a non-alcoholic beverage at the grocery store it's mostly down to those two (with Dr. Pepper having a much smaller but still significant stake). Any competitor that emerges just gets bought up by one of the three. Apple's half of the phone Duopoly. Either you pay them or pay Google if you want a phone and want to buy software for it.
  - deleted 6y ago
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  - deleted 6y ago
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  - Ericson2314 6y ago
    Yes. But in fairness I retracted rent sneaking as a combination of monopolization, bonafied rents, addiction, and just shear damn inertia contributes to the malaise. Calling it all "rent seeking" is not a hill I want to die one.
    - throwaway201103 6y ago
      "Rent sneaking" is an interesting typo. Going to have to give some thought to how to use that term in appropriate context.
  - ABeeSea 6y ago
    Restaurants only pay because consumers demand it and would not visit the restaurant otherwise. That’s not rent seeking. That’s market forces. And what they pay correlates with how much their customers demand coke/Pepsi.
jariel 6y ago
The answer is not complicated, and the logic on this board is strained by people I think that don't work in marketing. 1) Advertising works. 2) Coke, a sugary drink, is largely kept alive by smart marketing, that involves mostly advertising in the end. 3) Much of advertising is quite wasteful, because it is a fuzzy instrument - but on the whole, good marketing works. 4) There is a lot of self-awareness in the industry on this, and no doubt, a lot of borderline fraudulent actions by participants willingly spending money they know doesn't work. 5) Ad networks will happily sell you ads that don't work, and look the other way when there are shenanigans. The problem here in the thread, is that people are having a hard time grasping how all of these things can be true at the same time, but it's not that hard really. That some ad spending turned out to be 'not useful' is 'not news' when everyone knows that easily 50% of ad spending is probably wasted, we usually just don't know which 50%.
- ksec 6y ago
  Agree with most, >2) Coke, a sugary drink, is largely kept alive by smart marketing, that involves mostly advertising in the end. Not sure I agree. I haven't seen any Coke Cola Ads for years, not online digital Ads and I rarely consume any traditional media. But I will still buy Coke Cola every once in a while. They are also on all of the convenience store with decent positional shelf space or visual merchandising. Something I learned that no one on HN actually knows anything about during the discussions of App Store. Edit: All of my friends can taste the difference between Coke and Pepsi. It is just different. So I was surprised to read comments and youtube video about "blind tasting" on the two. No, I didn't drink Coke because of Ads, I drink it because it taste better. (And some people prefer Pepsi )
  - jariel 6y ago
    Your personal situation doesn't represent the market, moreover, you spent 20 years watching coke ads growing up and having coke, it's impossible to tell how that affected you. You saw 1000 'product placements' for coke without being aware of it in films other things. Taste is associated with familiarity and comfort.

Fortune 500 is a cesspool of insane inefficiency balanced by equally ~~insane rent seeking~~ insanely secure revenue. The sooner everyone understands this, the

Fortune 500 is a cesspool of insane inefficiency balanced by equally ~~insane rent seeking~~ insanely secure revenue. The sooner everyone understands this, the better.

xpe 6y ago

First, care to define your terms? Second, inefficient relative to what? Third, so far, what you've written here looks like a rant, not a predictive theory nor a powerful explanatory theory. Would you like to quantify your claim? Or at least make it more precise? As it is, I don't think it advances your argument. I'm interested in strong logic, data, explanations, and persuasion. I see none yet.

Ericson2314 6y ago
> Second, inefficient relative to what? The sad thing is it's not inefficiency relative comparable things. But anyone that has worked at these places or sold B2B to them just knows it on intuitive level that they are garbage, and need a heavy sedative to think there are no alternative. > not a predictive theory nor a powerful explanatory theory It's not. It's about letting go of some efficient market ideal and then finding new ideas. We can look at Fortune 500 case-by-case to learn new things > Cola cola Sugar drug cartel. Despicable business with very stable revenue despite being a net drag on society. (At least "regular" drugs have a lot more upside!) > Proctor and Gamble Just as restaurants are reaching down market, and the inefficiency of everyone cooking and cleaning is starting to have market implications, we should see their reign finally dwindle. Wash-and-Fold should follow laundromats. The specialization means that stupid differentiation between products for uninformative consumers (c.f. https://en.wikipedia.org/wiki/Monopolistic_competition https://en.wikipedia.org/wiki/Monopolistic_competition) should go away and restaurants and laundromats optimize. Personal soaps and cosmetics (of course many soaps are cosmetics) however will stay as cultural reasons ensure people will continue to clean themselves and not contract that out for the foreseeable future.
- xpe 6y ago
  Thanks for elaborating. I don't think I disagree with many or most of the points you've made. It might be interesting to define a systematic and testable definition of organizational efficiency relative to an ideal market. Just like combustion engines can be compared to their theoretical maximum efficiency, it would be interesting to compare a particular organization against its maximum potential. Here is another angle on the topic of relative efficiency. Consider a particular organization. Coca Cola will do as an example. Given its environment (financial incentives, regulations, cultural norms, etc), are we surprised by its behavior? This raises the question of how much an organization's particulars (e.g. leadership, history) affect its efficiency. I suppose I take a systems view of it. Many deplorable businesses survive in niches. But can you "blame" them? It is a matter of perspective: organizations, like life, adapt to their environment and modify it to their liking. Such organizations can stretch the environment to or past its breaking point for a relative long period of time before having to deal with the downstream consequences.
- Miraste 6y ago
  > the inefficiency of everyone cooking and cleaning is starting to have market implications Elaborate on your reasoning here? While I can maybe imagine a more centralized food preparation system being more efficient, the currently growing market solutions (DoorDash, etc.) are certainly not, and I can't think of a system in which transporting clothing somewhere for someone else to clean would be more efficient than an in-home washing machine. The wasted energy alone would be colossal.

kortilla 6y ago

How is Coca Cola rent seeking? How about Apple? I suspect you aren’t using that term correctly but maybe I’m missing something.

treis 6y ago
Effectively every restaurant in the US has to pay either PepsiCo or Coca Cola. Similarly, if you want to buy a non-alcoholic beverage at the grocery store it's mostly down to those two (with Dr. Pepper having a much smaller but still significant stake). Any competitor that emerges just gets bought up by one of the three. Apple's half of the phone Duopoly. Either you pay them or pay Google if you want a phone and want to buy software for it.
- deleted 6y ago
  [deleted]
- deleted 6y ago
  [deleted]
- Ericson2314 6y ago
  Yes. But in fairness I retracted rent sneaking as a combination of monopolization, bonafied rents, addiction, and just shear damn inertia contributes to the malaise. Calling it all "rent seeking" is not a hill I want to die one.
  - throwaway201103 6y ago
    "Rent sneaking" is an interesting typo. Going to have to give some thought to how to use that term in appropriate context.
- ABeeSea 6y ago
  Restaurants only pay because consumers demand it and would not visit the restaurant otherwise. That’s not rent seeking. That’s market forces. And what they pay correlates with how much their customers demand coke/Pepsi.

jariel 6y ago

The answer is not complicated, and the logic on this board is strained by people I think that don't work in marketing. 1) Advertising works. 2) Coke, a sugary drink, is largely kept alive by smart marketing, that involves mostly advertising in the end. 3) Much of advertising is quite wasteful, because it is a fuzzy instrument - but on the whole, good marketing works. 4) There is a lot of self-awareness in the industry on this, and no doubt, a lot of borderline fraudulent actions by participants willingly spending money they know doesn't work. 5) Ad networks will happily sell you ads that don't work, and look the other way when there are shenanigans. The problem here in the thread, is that people are having a hard time grasping how all of these things can be true at the same time, but it's not that hard really. That some ad spending turned out to be 'not useful' is 'not news' when everyone knows that easily 50% of ad spending is probably wasted, we usually just don't know which 50%.

ksec 6y ago
Agree with most, >2) Coke, a sugary drink, is largely kept alive by smart marketing, that involves mostly advertising in the end. Not sure I agree. I haven't seen any Coke Cola Ads for years, not online digital Ads and I rarely consume any traditional media. But I will still buy Coke Cola every once in a while. They are also on all of the convenience store with decent positional shelf space or visual merchandising. Something I learned that no one on HN actually knows anything about during the discussions of App Store. Edit: All of my friends can taste the difference between Coke and Pepsi. It is just different. So I was surprised to read comments and youtube video about "blind tasting" on the two. No, I didn't drink Coke because of Ads, I drink it because it taste better. (And some people prefer Pepsi )
- jariel 6y ago
  Your personal situation doesn't represent the market, moreover, you spent 20 years watching coke ads growing up and having coke, it's impossible to tell how that affected you. You saw 1000 'product placements' for coke without being aware of it in films other things. Taste is associated with familiarity and comfort.