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I was a senior person at a company best remaining nameless that trained all new executives to never use the words “monopoly,” “fix prices,” “dictate prices,” de
by fnordpiglet 3y ago
I was a senior person at a company best remaining nameless that trained all new executives to never use the words “monopoly,” “fix prices,” “dictate prices,” despite the fact we had a required pricing schedule for retailers, bought back all excess inventory at cost to prevent a grey market, and dropped retailers that ran promotions. Their products were never on sale and accounted for 80% of retailers revenues, and they controlled 75% of their market segment. Whenever a new upstart brand came along they simply acquired them. Everyone sold their brands because it was known unless you were owned by this company you had no long term future in the market.
These sorts of market controlling companies are weird to work for. On the one hand they have a certain excellence that keeps their market lock year over year. On the other there’s a strangulating incestuous monoculture that self perpetuates a view of brilliance. You see this internally at other companies with these locks - google for one, googlers, especially hey day googlers, walk out with an ego the size of their market share. I’ve scrupulously avoided working there despite many chances over the years because of the smugness - not that I couldn’t work with that environment, I’m afraid I would adopt it as well.
- ars 3y agoResMed and Luxottica are like that. Luxottica is a straight up abusive monopoly - they actually sell the insurance that they themselves take! ResMed simply has better technology than others, and is a de-facto monopoly.
- deepsun 3y agoYes, but there's also a problem is customers really believe it's worth paying $300 for the simplest type of near-vision glasses in 2023. And they're ready to pay for that, so why not take their money?
- Firmwarrior 3y agoIt's so nuts that Facebook was able to put a computer and cameras into sunglasses without increasing the price Prescription glasses are basically just chunks of not-too-special plastic that you can buy online for $20 or less, but people refuse to believe that the whole industry is a scam when I try to tell them about it
- NavinF 3y agoThat's because those $20 glasses are objectively worse than $200 Costco glasses. You might not think that the latter is worth the increased price, but for the vast majority of Americans it is. Btw Zeiss (known to HNers for making EUV lithography hardware) also makes glasses and you can buy them online. Some of their lenses are $700. Not worth it for me, but I can definitely see how someone would be willing to pay even more for those optical specs
- throwmeout123 3y agoI have zeiss lenses on my glasses, they’re terrible. Full of scratches in 1.5 years. Worst money I’ve ever spent, my last no name €80 lenses went for years without a single scratch! Anecdata obviously
- NavinF 3y agoWhat model? High index or polycarbonate?
- throwmeout123 3y agoI have no idea, but i can copy some data from the package: One is SV AS +2.5 sphere 0 cyl duravision platinum uv 1.60 index (guess this is what you’re talking about) uvprotect The other is the same but 1.25 sphere Hope it helps
- zx8080 3y agoThey probably did not come with scratches, did they? Don't scratch them. It's simple as that. Wash lens with soap. It's as simple as that.
- Dylan16807 3y agoWhat, do you think they scratched them on purpose? Avoiding scratching for thousands of hours isn't actually simple, and if some brand is less scratchable then that's a real benefit.
- lotsofpulp 3y ago> Luxottica is a straight up abusive monopoly - they actually sell the insurance that they themselves take! What is wrong with this? Apple does it, lots of managed healthcare organizations like Kaiser Permanente and UnitedHealth and CVS do it, auto manufacturers do it, etc.
- ars 3y agoIt's not actually insurance, it's a payment plan. Insurance is meant to cover unexpected events, with this you pay a monthly fee for "insurance" which gives you the right to buy the glasses later for a normal price. The other companies you mention are actual insurance: They cover rare, and unexpected events. As opposed to covering once every two year glasses, on a schedule.
- lotsofpulp 3y agoThen what is wrong with a business offering a payment plan?
- ars 3y agoBecause you end up paying around 50 times as much as what the glasses actually cost. But because of how they do it they hide that. $40/month for 2 years = $960 "for insurance" which gives you the right to buy glasses worth around $20 or so. All the number are inflated leaving people with the impression that glasses cost $400 - they don't.
- lotsofpulp 3y agoSo now we are talking about profit margins being bad? We have the internet now, with plenty of other vendors willing to sell eyeglass frames and lenses for cheaper.
- Dylan16807 3y agoProfit margins that make a price more than double are pretty bad, yeah. High profit margins are also bad when it's something people need. The competition isn't working right, for a variety of reasons, and so the mere existence of competition does not make those problems disappear.
- Clubber 3y ago>On the one hand they have a certain excellence that keeps their market lock year over year. Would it be unreasonable to say a lot of potential excellence isn't actualized because: >Whenever a new upstart brand came along they simply acquired them. and they don't ever actually compete with a near peer?
- fnordpiglet 3y agoI’d say they do a good job of acquiring and learning and teaching. When they take on a brand they don’t subsume them but let them be fairly autonomous, but take on certain commoditized aspects such as supply chain, distribution, and marketing placement. The core of the brand stays independent and some of the learning of that brand comes back into the core company. They also are very self critical and internally striving. But, yes, they could certainly be better and healthy competition would help.
- throwmeout123 3y agoWould it be possible to identify those companies and then build new companies just to be acquired? Nice chunk of change every 3 years…
- discodave 3y agoThis is what many 'serial entrepeneurs' already do.
- throwmeout123 3y agoAnd what is their algorithm? How to identify those industries?
- fnordpiglet 3y agoIt’s not obvious to me. “Make a compelling product that speaks to an unfulfilled desire with pitch perfect marketing, relentless quality, and flawless execution” seems to be what differentiates who we acquired. There were a lot of startup brands and only a few were acquired in my time. Most just died.
- throw__away7391 3y ago> an ego the size of their market share Oh man, I worked for a long time on the east coast in industries that didn't give me much exposure to startups during the 90s-00s, so one day I met an ex-Google developer at a meetup who dropped into the conversation that he once worked for Google and then waited for me to be impressed. It was a long awkward wait because I didn't realize at the time that that was supposed to impress me, and instead just said something like "oh cool" and the conversation just abruptly stopped in the weirdest way you can imagine.