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Why is this so common with tech companies? I'm not an economist by any means, but I never hear of McDonald's, Honda, Home Depot, etc. etc. pulling these kinds o

by rahidz 3y ago

Why is this so common with tech companies? I'm not an economist by any means, but I never hear of McDonald's, Honda, Home Depot, etc. etc. pulling these kinds of stunts. They're perfectly happy being large companies that pull a constant year-over-year profit. Meanwhile tech companies seem to deliberately have a lifespan of years, not decades, with rugpulls like this being accepted as the norm.

moomoo11 3y ago
Washing
- rahidz 3y ago
  Can you clarify/expand on this please? Like money laundering or something else?
paxys 3y ago
This happens pretty frequently with all kinds of companies. Look at anything touched by private equity, for example.
bluedino 3y ago
Look at what Lowe's did with the Craftsman brand.
Aurornis 3y ago
You won’t read about the boring, sustainable companies in the headlines. These stories are common in headlines because it’s newsworthy, not because it’s common in general.
M2Ys4U 3y ago
>Why is this so common with tech companies? Venture capital.
- malfist 3y ago
  Vulture captial
donatj 3y ago
McDonald’s is an interesting company to mention. McDonalds corporate isn’t even really in the fast food business, they’re a real estate company. Franchisees have to rent land from corporate, that’s how they make almost all their money. Individual McDonald’s Restaurants are barely profitable, most stores bringing in less than $100k profit per year. For how widespread they are, the restaurants themselves really aren’t a great business to be in.
- Rapzid 3y ago
  Franchise owner makes 150k average on a store. Everything is purchased through corp so a tremendous amount of store revenue flows through them. The money for any land leasing comes from the fast food revenue. That is to say, it's an overly reductive assessment that McDonald's is not in the fast food business.
  - deleted 3y ago
    [deleted]
- tracker1 3y ago
  Not only that, but their Board seems to make much of their money on adjacent business as well (such as required equipment).
whynotmaybe 3y ago
Because long term companies in tech are seen as "not innovating" or "evil". Ex : Microsoft (evil), Oracle (not innovating and evil), IBM (not innovating), Apple (evil) Being a startup is seen as "good" by many people because you're seen as "trying", if you stay long and raise your prices, you're seen as "milking". Microsoft is creating a lot of innovation by trying and failing (Windows phone) or succeeding (Office 365) but many people here see them as evil because they ask for money.
- feoren 3y ago
  Ehh ... is Wikipedia seen as "not innovating" or "evil"? Craigslist? They haven't really changed their core model (except for Wikipedia's recent more minimal look, I guess, but that's a pretty small change in the last decade). Wikipedia went the direction that once they had more money than they needed to run it, they started to do other stuff. I think that's great. Once your killer app is hugely successful, stop messing with it. Focus on running it efficiently and reliably with a small crew, and take the ongoing income from that to try other things. Yes, the companies you listed are viewed negatively, but that's not because they have a sustainable business model. Don't underestimate the many perfectly valid reasons those companies earned their reputations.
  - gottorf 3y ago
    > Craigslist? They haven't really changed their core model For what it's worth, in my local (smaller city, not a tech hub) market, Craigslist is basically dead, killed by Facebook Marketplace; and I'm assuming my market isn't the only such one. So it's possible that they will need to change their model, or at least how they execute upon it. Funny: Craigslist isn't even loading for me at the moment, and DownDetector shows it's not just me.

by rahidz 3y ago

moomoo11 3y ago

Washing

rahidz 3y ago
Can you clarify/expand on this please? Like money laundering or something else?

paxys 3y ago

This happens pretty frequently with all kinds of companies. Look at anything touched by private equity, for example.

bluedino 3y ago

Look at what Lowe's did with the Craftsman brand.

Aurornis 3y ago

You won’t read about the boring, sustainable companies in the headlines. These stories are common in headlines because it’s newsworthy, not because it’s common in general.

M2Ys4U 3y ago

>Why is this so common with tech companies? Venture capital.

malfist 3y ago
Vulture captial

donatj 3y ago

McDonald’s is an interesting company to mention. McDonalds corporate isn’t even really in the fast food business, they’re a real estate company. Franchisees have to rent land from corporate, that’s how they make almost all their money. Individual McDonald’s Restaurants are barely profitable, most stores bringing in less than $100k profit per year. For how widespread they are, the restaurants themselves really aren’t a great business to be in.

Rapzid 3y ago
Franchise owner makes 150k average on a store. Everything is purchased through corp so a tremendous amount of store revenue flows through them. The money for any land leasing comes from the fast food revenue. That is to say, it's an overly reductive assessment that McDonald's is not in the fast food business.
- deleted 3y ago
  [deleted]
tracker1 3y ago
Not only that, but their Board seems to make much of their money on adjacent business as well (such as required equipment).

whynotmaybe 3y ago

Because long term companies in tech are seen as "not innovating" or "evil". Ex : Microsoft (evil), Oracle (not innovating and evil), IBM (not innovating), Apple (evil) Being a startup is seen as "good" by many people because you're seen as "trying", if you stay long and raise your prices, you're seen as "milking". Microsoft is creating a lot of innovation by trying and failing (Windows phone) or succeeding (Office 365) but many people here see them as evil because they ask for money.

feoren 3y ago
Ehh ... is Wikipedia seen as "not innovating" or "evil"? Craigslist? They haven't really changed their core model (except for Wikipedia's recent more minimal look, I guess, but that's a pretty small change in the last decade). Wikipedia went the direction that once they had more money than they needed to run it, they started to do other stuff. I think that's great. Once your killer app is hugely successful, stop messing with it. Focus on running it efficiently and reliably with a small crew, and take the ongoing income from that to try other things. Yes, the companies you listed are viewed negatively, but that's not because they have a sustainable business model. Don't underestimate the many perfectly valid reasons those companies earned their reputations.
- gottorf 3y ago
  > Craigslist? They haven't really changed their core model For what it's worth, in my local (smaller city, not a tech hub) market, Craigslist is basically dead, killed by Facebook Marketplace; and I'm assuming my market isn't the only such one. So it's possible that they will need to change their model, or at least how they execute upon it. Funny: Craigslist isn't even loading for me at the moment, and DownDetector shows it's not just me.