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There are also other things beyond vendor lock-in which facilitate rent-seeking: - Cronyism. The only way to get a big B2B customer for you SaaS product is if
by cryptica 5y ago
There are also other things beyond vendor lock-in which facilitate rent-seeking:
- Cronyism. The only way to get a big B2B customer for you SaaS product is if you are friends with an executive at a big tech corporation. Otherwise your chances are nil - No matter how good your product is.
- Regulatory capture. Big corporations have an advantage because they can use their connections to politicians to change the regulatory environment in their favor.
- Monetary capture. The monetary system reinforces the dominance of big corporations because they and their customers (from which their revenue is derived) have access to easy money from huge government contracts and banks (since they can borrow at lower interest rates than others).
- Limited liability. Corporations are legal constructs which are not liable for crimes (especially negligence) in the same was as people are. Corporations don't go to jail for example; they can always replace executives who have been committing crimes on their behalf, pay a small fine and keep going as if nothing happened. This creates an incentive for executives to commit crimes on behalf of corporate shareholders and then shareholders have an incentive to use their aggregate political connections to shield executives as much as possible from personal liability... They will throw them under the bus in extreme cases but then repeat and keep trying to normalize misconduct.
So with vendor lock-in, there are 5 factors which rig the markets - Each one is very powerful on its own but apparently still insufficient to keep the economy running as it is...