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Pretty much all businesses used to be basically ephemeral until about 150 years ago. The whole idea of a business that is intended to run perpetually just didn
by pclmulqdq 3y ago
Pretty much all businesses used to be basically ephemeral until about 150 years ago. The whole idea of a business that is intended to run perpetually just didn't exist in the West, and anything that ran long was tied to a family that plied a trade. Businesses were also a lot easier to understand: a corporation might run a ship or a mine, and go out of business (still having made everyone a lot richer) when the captain of the ship retires or the mine dries up. In fact, the way we value businesses today still somewhat applies that model.
Most attempts at perpetual businesses today fail after less than 100 years, too, so it looks like we haven't figured out how to actually make a perpetual business - aside from a few notable examples like Zildjian (the cymbal company). Most of the success stories here are businesses with modest ambitions under the tight control of a single family.
I think you could argue that the idea that a business has to be a long-lasting perpetual enterprise comes from an increase in the power of business managers, at the expense of both investors and employees. These long-lasting businesses give managers a chance to build empires and personally enrich themselves without worrying about anything so pedestrian as figuring out when to return cash to shareholders ("they can have a tiny dividend if they whine too much, but don't get in the way of the expansion of my empire").
- retrocryptid 3y agoYes. The East India Company was notoriously short lived.
- pclmulqdq 3y agoI know this was intended to be sarcastic, but it is the exception that proves the rule. The big East India Companies (both the Dutch and English ones) only really lasted so long because of governmental charters that granted them valuable monopolies on trade, and they later became models for Standard Oil and other similar monopolistic businesses that really kicked off the era of the perpetual company. However, they were basically arms of their respective imperial governments.
- retrocryptid 3y agoSo if you countered with a list of companies in the 1830s that lasted only 3 months, that would be great.
- munificent 3y agoSurely you understand the obvious survivorship bias problem with that demand.
- RobRivera 3y agoyou mean you dont recall your stale shares in United Hay?
- retrocryptid 3y agoBut if your assertion is "we used to have a lot of business in the past that failed quickly," I would hope you would offer some data to backup that assertion.
- munificent 3y agoThat is not my assertion, because I'm not user pclmulqdq.
- retrocryptid 3y agoThat's how conditionals work.
- syntheweave 3y agoYou can definitely find diaries from the Gold Rushes of the 1800's where the author will write something to the effect of "me and twelve other men formed a company last night", matter-of-factly. This is among reports of various threats to life and limb that were normal to that time and place. The companies usually failed within a few weeks because of infighting.
- gjsman-1000 3y ago> Most of the success stories here are businesses with modest ambitions under the tight control of a single family. Companies that aren’t afraid to really shift gears whenever necessary also do well. Take Nintendo - founded in 1889 as a playing card company that later became an overly ambitious toy company… During that era they also invented that classic scissors-mechanism extendable hand (“Ultra Hand”). That was a bestseller for years before the NES.
- pclmulqdq 3y agoNokia, a famous logging and paper company, is also a great example.
- antipotoad 3y agoFor anyone else wondering, Zildjian was founded in 1623 in Constantinople.