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More legal effort should be put into big companies coming in and crushing start ups. They usually build something and price it at a loss, because big companies

More legal effort should be put into big companies coming in and crushing start ups. They usually build something and price it at a loss, because big companies can afford that till start ups go under. Or unfairly using their services to hinder competiton. Amazon is a big prepetrator of this. There was a smart oven, sold on Amazon. Amazon was also an investor, who made their own into a basics product at a loss.

franga2000 4y ago
Many startups do the same thing to established industries. They burn VC money to "disrupt" a field, then when it's time to make money, they hike prices. But by then, there's no competition left.
- echelon 4y ago
  That is in theory better. - the actual innovators are rewarded - innovators have more skin in the game - innovators live or die by their execution Not so with the monopolies.
  - TeMPOraL 4y ago
    Yeah, but we're now seeing the same problem with "innovation" as we've been suffering from wrt. "profit" for the past several decades - that is, neither "profit" nor "innovation" are a function of being nice and good for the customers, the society or the world. They are at best somewhat aligned - but once all those profitable/innovative and also good ideas were picked, we're left with pursuing profit/innovation that has negative impact on the world. And so, the main innovation of the most successful startups in the last ~decade was in ways of breaking into and destroying (er, "disrupting") markets that before were just fine - not perfect, but at least sustainable.
    - echelon 4y ago
      Uber, for all the hate it receives, is significantly better than taxi service. AirBNB, by the same argument, put offline-only vacation rental services on check. Neither of these is models is going to go away now. The companies may have to deal with debt, may need to increase unit costs, and may have to conduct layoffs, but they fundamentally changed their markets and will remain the dominant players.
      - fxtentacle 4y ago
        I know AirBNB mostly as a convenient trick for people to illegally rent out "residential" apartments to tourists (or desperate students) for way above market rate. And maybe as a utility for laundering the cash flow to aid with tax evasion. Can't comment on Uber, because in my local market they lost against a community of taxi companies who have an excellent app.
- grantsch 4y ago
  What about 6 months later when competitors arrive? Not all markets are winner takes all or even close to it
  - TeMPOraL 4y ago
    You mean competition by more VC subsidized startups? The competition (or sometimes faux-competition) lasts until investors get bored, then the unsustainable startups slowly go away (often extracting more money from the public on their way out, by means of an IPO), leaving a broken market that needs to be rebuilt, if it's possible at all.
    - grantsch 4y ago
      that's only true for unprofitable activity
- TeMPOraL 4y ago
  I started to use the term "fracking" for this[0], because that's more-less what the likes of Uber, AirBnB, Doordash, etc. do to their respective markets: they pump billions of VC money like it was a fracking fluid, in order to crack the market, pump out all the value, and leave behind a toxic mess for the locals to deal with. While I agree that startups can disrupt the big monopolies, past Uber, I now find them just as dangerous as big companies to the customers and the societies they live in. Perhaps more so, because big companies don't have to disrupt anything to extract their rents. I feel startups are not like they used to be. Or maybe they always were what they were, and I became disillusioned only recently. Either way, today, this is a well-developed process of wealth transfer. In a sense, startups aren't something opposite to big companies - they're the means big companies use to frack an existing market and pump out all value. Startups are an integral part of the market ecosystem now, and from the POV of those at the top, it's arguably a symbiotic, not parasitic relationship. -- [0] - I used to call it "strip-mining a market for all its worth", pointing at fast extraction of value with no concerns about sustainability, but I think "fracking" is better, as it also evokes the image of first cracking the market by a sudden, focused infusion of seemingly infinite free money.
  - b1zguy 4y ago
    I did the term 'fracking' in this context. I'll start using it.
  - cudgy 4y ago
    One could also call it a “cash bonfire”
    - TeMPOraL 4y ago
      I'd wish. If all that happened was some people setting billions on fire, it wouldn't be that bad. The fracking analogy highlights that 1) those billions are used to eviscerate markets and industries, 2) it's a dirty process leaving a lot of collateral damage, and 3) the parties doing it are actually making a profit, so this process is self-sustaining (as long as there still are markets to frack).
lkrubner 4y ago
Perhaps this happens on a diversity of time frames and in a diversity of contexts? The French historian Fernand Braudel says that during the 1600s the European merchants in India deliberately bought more than they sold, so that Europe was running a trade deficit with India for all of the 1600s. But offering so much money to India meant that India opened up to European merchants, who were then able to turn the situation around during the 1700s. Once they had been invited into every city and every kingdom in the sub-continent, the European merchants were then able to use their international networks gain an advantage over the local merchants. And then they added even more pressure by hiring local mercenaries to enforce their will with military power, thus beginning the conquest of India. But the pattern seems to repeat on so many levels, and at so many different time frames: pump in money in a manner that seems generous, so as to gain control of a market. Then use that control to maximize one's own profits. history from Perspective Of The World: https://www.amazon.com/Perspective-World-Civilization-Capitalism-15Th-18th/dp/0520081161/ https://www.amazon.com/Perspective-World-Civilization-Capita...
- fallingknife 4y ago
  A trade deficit is not the same as a loss. It means that the UK ended up with more goods and the Indians ended up with more currency. If the goods are more valuable than the currency, it's still an economic gain for the UK. The US runs a trade deficit every year, and is far from going broke.
  - HPsquared 4y ago
    And if you count the currency as an "export", it's not really a deficit at all - just exporting currency.

franga2000 4y ago

Many startups do the same thing to established industries. They burn VC money to "disrupt" a field, then when it's time to make money, they hike prices. But by then, there's no competition left.

echelon 4y ago
That is in theory better. - the actual innovators are rewarded - innovators have more skin in the game - innovators live or die by their execution Not so with the monopolies.
- TeMPOraL 4y ago
  Yeah, but we're now seeing the same problem with "innovation" as we've been suffering from wrt. "profit" for the past several decades - that is, neither "profit" nor "innovation" are a function of being nice and good for the customers, the society or the world. They are at best somewhat aligned - but once all those profitable/innovative and also good ideas were picked, we're left with pursuing profit/innovation that has negative impact on the world. And so, the main innovation of the most successful startups in the last ~decade was in ways of breaking into and destroying (er, "disrupting") markets that before were just fine - not perfect, but at least sustainable.
  - echelon 4y ago
    Uber, for all the hate it receives, is significantly better than taxi service. AirBNB, by the same argument, put offline-only vacation rental services on check. Neither of these is models is going to go away now. The companies may have to deal with debt, may need to increase unit costs, and may have to conduct layoffs, but they fundamentally changed their markets and will remain the dominant players.
    - fxtentacle 4y ago
      I know AirBNB mostly as a convenient trick for people to illegally rent out "residential" apartments to tourists (or desperate students) for way above market rate. And maybe as a utility for laundering the cash flow to aid with tax evasion. Can't comment on Uber, because in my local market they lost against a community of taxi companies who have an excellent app.
grantsch 4y ago
What about 6 months later when competitors arrive? Not all markets are winner takes all or even close to it
- TeMPOraL 4y ago
  You mean competition by more VC subsidized startups? The competition (or sometimes faux-competition) lasts until investors get bored, then the unsustainable startups slowly go away (often extracting more money from the public on their way out, by means of an IPO), leaving a broken market that needs to be rebuilt, if it's possible at all.
  - grantsch 4y ago
    that's only true for unprofitable activity
TeMPOraL 4y ago
I started to use the term "fracking" for this[0], because that's more-less what the likes of Uber, AirBnB, Doordash, etc. do to their respective markets: they pump billions of VC money like it was a fracking fluid, in order to crack the market, pump out all the value, and leave behind a toxic mess for the locals to deal with. While I agree that startups can disrupt the big monopolies, past Uber, I now find them just as dangerous as big companies to the customers and the societies they live in. Perhaps more so, because big companies don't have to disrupt anything to extract their rents. I feel startups are not like they used to be. Or maybe they always were what they were, and I became disillusioned only recently. Either way, today, this is a well-developed process of wealth transfer. In a sense, startups aren't something opposite to big companies - they're the means big companies use to frack an existing market and pump out all value. Startups are an integral part of the market ecosystem now, and from the POV of those at the top, it's arguably a symbiotic, not parasitic relationship. -- [0] - I used to call it "strip-mining a market for all its worth", pointing at fast extraction of value with no concerns about sustainability, but I think "fracking" is better, as it also evokes the image of first cracking the market by a sudden, focused infusion of seemingly infinite free money.
- b1zguy 4y ago
  I did the term 'fracking' in this context. I'll start using it.
- cudgy 4y ago
  One could also call it a “cash bonfire”
  - TeMPOraL 4y ago
    I'd wish. If all that happened was some people setting billions on fire, it wouldn't be that bad. The fracking analogy highlights that 1) those billions are used to eviscerate markets and industries, 2) it's a dirty process leaving a lot of collateral damage, and 3) the parties doing it are actually making a profit, so this process is self-sustaining (as long as there still are markets to frack).

lkrubner 4y ago

Perhaps this happens on a diversity of time frames and in a diversity of contexts? The French historian Fernand Braudel says that during the 1600s the European merchants in India deliberately bought more than they sold, so that Europe was running a trade deficit with India for all of the 1600s. But offering so much money to India meant that India opened up to European merchants, who were then able to turn the situation around during the 1700s. Once they had been invited into every city and every kingdom in the sub-continent, the European merchants were then able to use their international networks gain an advantage over the local merchants. And then they added even more pressure by hiring local mercenaries to enforce their will with military power, thus beginning the conquest of India. But the pattern seems to repeat on so many levels, and at so many different time frames: pump in money in a manner that seems generous, so as to gain control of a market. Then use that control to maximize one's own profits. history from Perspective Of The World: https://www.amazon.com/Perspective-World-Civilization-Capitalism-15Th-18th/dp/0520081161/ https://www.amazon.com/Perspective-World-Civilization-Capita...

fallingknife 4y ago
A trade deficit is not the same as a loss. It means that the UK ended up with more goods and the Indians ended up with more currency. If the goods are more valuable than the currency, it's still an economic gain for the UK. The US runs a trade deficit every year, and is far from going broke.
- HPsquared 4y ago
  And if you count the currency as an "export", it's not really a deficit at all - just exporting currency.