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Cory Doctorow calls this "Enshittification": > Here is how platforms die: first, they are good to their users; then they abuse their users to make things bette

Cory Doctorow calls this "Enshittification": > Here is how platforms die: first, they are good to their users; then they abuse their users to make things better for their business customers; finally, they abuse those business customers to claw back all the value for themselves. Then, they die. https://pluralistic.net/2023/01/21/potemkin-ai/ https://pluralistic.net/2023/01/21/potemkin-ai/ I think your idea of this happening in a cycle, with the company switching back to diverting its surplus back to its customers at the end before going back around again is an interesting one. I don't doubt it's possible, and that some companies have pulled it off from time to time. But the ability to win back trust from customers are you've spent two phases of the cycle abusing them seems like a tough hill to climb, and I think it's likely a lot of companies will fail there. It's probably easiest for a company at the end of the cycle, to be acquired by a new up-and-comer who is still on its first round of diverting surpluses to its customers, to best leave its toxic reputation behind.

cjbgkagh 4y ago
You make a good point, I do think having a dysfunctional financial industry makes the build -> exploit -> sell/dump such an attractive option that it would be crazy not to chose it. The problem is that people are buying these companies at overvalued prices. Probably a side effect of low interest rates among other things. In theory those who keep buying overvalued companies would long term lose money and will be less able to keep doing so. That doesn't work with negative real interest rates. I think in software the exploit phase negatively impacts the culture of the developers in a way that is difficult to recover from. The best have left and the most of those who remain probably should be fired. Probably easier to start a new company from scratch, "Don't boil the ocean". Maybe a good example could be in chip manufacturing where hiring someone like Jim Keller sends a signal that the company is entering a build phase. Lacoste is a brand that was exploited to near death and explicitly went through a build phase a few years ago and revived itself. Huge marketing spend, lowered prices to target younger people, and I have no idea if they changed quality - not my field. I think it's more obvious trend in fashion where the underlying product doesn't fundamentally change. Then there are B2B markets which have high volumes and low margins and in these industries reputations would be paramount and the customers more savvy and less exploitable. It would make sense to try to find a profitable steady state as soon as possible and only make minor changes. So I guess the build-exploit cycle makes sense if assuming an efficient markets devoid of people with money willing to over pay for things they shouldn't.

cjbgkagh 4y ago

You make a good point, I do think having a dysfunctional financial industry makes the build -> exploit -> sell/dump such an attractive option that it would be crazy not to chose it. The problem is that people are buying these companies at overvalued prices. Probably a side effect of low interest rates among other things. In theory those who keep buying overvalued companies would long term lose money and will be less able to keep doing so. That doesn't work with negative real interest rates. I think in software the exploit phase negatively impacts the culture of the developers in a way that is difficult to recover from. The best have left and the most of those who remain probably should be fired. Probably easier to start a new company from scratch, "Don't boil the ocean". Maybe a good example could be in chip manufacturing where hiring someone like Jim Keller sends a signal that the company is entering a build phase. Lacoste is a brand that was exploited to near death and explicitly went through a build phase a few years ago and revived itself. Huge marketing spend, lowered prices to target younger people, and I have no idea if they changed quality - not my field. I think it's more obvious trend in fashion where the underlying product doesn't fundamentally change. Then there are B2B markets which have high volumes and low margins and in these industries reputations would be paramount and the customers more savvy and less exploitable. It would make sense to try to find a profitable steady state as soon as possible and only make minor changes. So I guess the build-exploit cycle makes sense if assuming an efficient markets devoid of people with money willing to over pay for things they shouldn't.