4 ms·

Social media companies are in a bind. They're companies, so they have to grow or die. But they're invested in their current platform, and the likelihood of a pa

Social media companies are in a bind. They're companies, so they have to grow or die. But they're invested in their current platform, and the likelihood of a particular innovation being successful is low, so it's tough for them to do radical R&D, they're limited to tweaking their current platform. This opens the door to startups, which can capture the new (young) users who aren't committed to a platform. A small number of startups succeed and experience exponential growth that starts cutting into the growth of the established players. The Instagrams of the world have to chase features to retain growth (a strategy ultimately doomed to fail), or they will have to acquire the upstarts. Because of its close ties with the Chinese government any kind of merger or acquisition with TikTok is fraught with potential problems. Instagram is taking the only path available to it, as unlikely to succeed as it is.

samwillis 4y ago
> They're companies, so they have to grow or die. This is a failing of modern corporate culture. There is nothing wrong in reaching a stable equilibrium, becoming profitable, and if you are a public company, paying dividends. It’s unfortunate that it’s become growth at all costs, there is something to be said about public companies just stabilising, and paying out profits to shareholders. Now, that’s not to say Facebook is able to reach a stable equilibrium. I think they are struggling to maintain that, and that’s the problem. It’s a case of not loosing market share, especially when you have promised your shareholders the world.
- JumpCrisscross 4y ago
  > a failing of modern corporate culture. There is nothing wrong in reaching a stable equilibrium, becoming profitable, and if you are a public company, paying dividends It’s the failing of a culture. Plenty of companies do this. (I cautiously venture that most American companies do this?)
  - alt227 4y ago
    Its not a failure of culture, it's Capitalism.
    - JumpCrisscross 4y ago
      > not a failure of culture, it's Capitalism Plenty of capitalists are happy running businesses at steady state. Some, even to wind down. (We tend to have nasty names for the latter.) Growth at all costs is not a problem with our commercial culture at large nor with capitalism. It’s a convenient bogeyman for when we want to punt on a problem.
      - vannevar 4y ago
        >Plenty of capitalists are happy running businesses at steady state. There are plenty of business owners who are happy to run at steady state---sole proprietors and family businesses, for example. These kinds of businesses can exist without capital per se, they can be financed with debt. But for businesses with investors, which is to say businesses backed by capital with the expectation that there will be a substantial return on the investment, growth is imperative. So no, I don't believe there are plenty of capitalists happy to run a business at steady state, because one of the requirements of a capital investment is that the value of the investment grows, and the more rapidly, the better. A business owner may philosophically believe in capitalism, but that does not make them a capitalist in the active sense.
        JumpCrisscross 4y ago
        > business owner may philosophically believe in capitalism, but that does not make them a capitalist in the active sense You've defined capitalism circularly to your argument. A steady-stage investor, whether a sole proprietor or outside investor in a business throwing off healthy dividends, is by definition not a capitalist by your book. Fine. Let's abandon the word for now. The broader system of private ownership--the one we have in America. That doesn't require growth at all costs. Neither do outside investors. There are entire categories of outside investors who specialize in zero-growth or negative-growth companies. We can call it capitalism, as most people do, or private property or peanut malanga, the system and its mechanisms remain the same. Growth-oriented investors need growth. And if you've spent your life around leveraged folk and venture capitalists, it may seem that's most of the capital in the world. But it's not. They're called alternative assets for a reason. The main universe of assets broadly accepts–in fact seeks-preservation of real value plus income.

samwillis 4y ago

> They're companies, so they have to grow or die. This is a failing of modern corporate culture. There is nothing wrong in reaching a stable equilibrium, becoming profitable, and if you are a public company, paying dividends. It’s unfortunate that it’s become growth at all costs, there is something to be said about public companies just stabilising, and paying out profits to shareholders. Now, that’s not to say Facebook is able to reach a stable equilibrium. I think they are struggling to maintain that, and that’s the problem. It’s a case of not loosing market share, especially when you have promised your shareholders the world.

JumpCrisscross 4y ago
> a failing of modern corporate culture. There is nothing wrong in reaching a stable equilibrium, becoming profitable, and if you are a public company, paying dividends It’s the failing of a culture. Plenty of companies do this. (I cautiously venture that most American companies do this?)
- alt227 4y ago
  Its not a failure of culture, it's Capitalism.
  - JumpCrisscross 4y ago
    > not a failure of culture, it's Capitalism Plenty of capitalists are happy running businesses at steady state. Some, even to wind down. (We tend to have nasty names for the latter.) Growth at all costs is not a problem with our commercial culture at large nor with capitalism. It’s a convenient bogeyman for when we want to punt on a problem.
    - vannevar 4y ago
      >Plenty of capitalists are happy running businesses at steady state. There are plenty of business owners who are happy to run at steady state---sole proprietors and family businesses, for example. These kinds of businesses can exist without capital per se, they can be financed with debt. But for businesses with investors, which is to say businesses backed by capital with the expectation that there will be a substantial return on the investment, growth is imperative. So no, I don't believe there are plenty of capitalists happy to run a business at steady state, because one of the requirements of a capital investment is that the value of the investment grows, and the more rapidly, the better. A business owner may philosophically believe in capitalism, but that does not make them a capitalist in the active sense.
      - JumpCrisscross 4y ago
        > business owner may philosophically believe in capitalism, but that does not make them a capitalist in the active sense You've defined capitalism circularly to your argument. A steady-stage investor, whether a sole proprietor or outside investor in a business throwing off healthy dividends, is by definition not a capitalist by your book. Fine. Let's abandon the word for now. The broader system of private ownership--the one we have in America. That doesn't require growth at all costs. Neither do outside investors. There are entire categories of outside investors who specialize in zero-growth or negative-growth companies. We can call it capitalism, as most people do, or private property or peanut malanga, the system and its mechanisms remain the same. Growth-oriented investors need growth. And if you've spent your life around leveraged folk and venture capitalists, it may seem that's most of the capital in the world. But it's not. They're called alternative assets for a reason. The main universe of assets broadly accepts–in fact seeks-preservation of real value plus income.