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When you make the industries best software and pretty much have a monopoly on the market, the only place left to go is adding markup to your product.

by alt227 2y ago

callalex 2y ago
That’s not true, you can also expand to new markets. For example Adobe doesn’t really have many offerings for musicians.
- gabeio 2y ago
  > That’s not true, you can also expand to new markets. For example Adobe doesn’t really have many offerings for musicians. Ah yes, the google style of offerings. https://killedbygoogle.com/ https://killedbygoogle.com/ LoopStart: Expand into so many markets to then be unmaintainable, then randomly decide to focus on your main stream of revenue again and kill off the side offerings GOTO LoopStart.
- alt227 2y ago
  > Adobe doesn’t really have many offerings for musicians. I dont know about that, Ive made many songs in Adobe Flash in my time! /s
- chaosite 2y ago
  It's more for sound engineers than musicians, but Adobe Audition exists.
CobrastanJorji 2y ago
Having a monopoly like this is like having a goose that that lays golden eggs. The right thing to do is nothing except to guard the goose and keep it happy and well fed. But what Adobe has done is a series of aggressive egg laying hormonal supplements and force feeding. Yes, it might get them even more eggs for a bit, but it's also a big risk for killing the goose for not a whole lot more eggs, with the side effect of definitely making everyone angry with you. But I think Adobe, and most companies, would inevitably make this decision. If you give a medium-sized public corporation a faucet that spews money at a constant rate forever and a button that has a 60% chance to double the money and a 40% chance to destroy the faucet, I suspect that most corporations would push that button at least once every few years.
- TeMPOraL 2y ago
  > If you give a medium-sized public corporation a faucet that spews money at a constant rate forever and a button that has a 60% chance to double the money and a 40% chance to destroy the faucet, I suspect that most corporations would push that button at least once every few years. That pretty much sums up all of what business and investment is. Play with money to get more money to play with.
- eru 2y ago
  > If you give a medium-sized public corporation a faucet that spews money at a constant rate forever and a button that has a 60% chance to double the money and a 40% chance to destroy the faucet, I suspect that most corporations would push that button at least once every few years. If the shareholders, who management has a fiduciary duty to, are well-diversified, this might even be the right decision. Basically, if it's mostly index funds and mutual funds holding your stock, you probably should push that button every so often.
  - jamesknelson 2y ago
    That assumes that once a golden goose dies, there’s an infinite supply of replacements. There’s a reason we’re comparing these companies to a mythical creature after all: if sustainable businesses producing valuable things were easy to create, this website wouldn’t exist. The thing is, the people who own these companies also happen to live in a word powered by the products they produce. If you kill a bunch of golden geese in pursuit of profits, they will see bigger numbers in their broker accounts, but it’ll be because everything we all use has become scarcer and more expensive. Sure, the owners will look richer - at least in comparison to everyone else. But would you rather be rich in a world of scarcity? Or middle class in a world of abundance?
    - eru 2y ago
      You seem to be making a bunch of somewhat odd assumptions? Eg that investors are idiots, and that it's easy to beat the market? I was answering the hypothetical example of one company having this magic button. With the rest of the world operating as normal. If you want to figure out the optimal approach to many companies having such magic buttons, that's a slightly different question. You are right that creating companies isn't easy nor trivial. That's why the market so richly rewards creating successful companies from scratch. But that's nothing that a well-diversified investor needs to worry about for this particular decision. You just look at market prices. > The thing is, the people who own these companies also happen to live in a word powered by the products they produce. If you kill a bunch of golden geese in pursuit of profits, they will see bigger numbers in their broker accounts, but it’ll be because everything we all use has become scarcer and more expensive. > Sure, the owners will look richer - at least in comparison to everyone else. But would you rather be rich in a world of scarcity? Or middle class in a world of abundance? You seem to assume zero competition? And also that the stock market is really bad at evaluating business decisions (at least worse than you)? If the latter is the case, you should become an investor and make a killing! Especially if you are living in a world where everyone else is stupidly slaughtering their golden geese, you should be able to pick up some disgruntled ex-employees for cheap and just run a steady ship! Another important consideration: at some level of abstraction a company is just a legal shell. 'Killing' a company might just mean that the old equity (another legal abstraction) is deleted, and the former creditors turn into equity holders. The operations don't even need to be affected by this at all. Of course, you can also 'kill' a company by shutting it down. But again, that doesn't necessarily remove any of the demand for its (type of) products, nor does it remove the experience of the people working there, nor does it break any of the machinery and hardware. So if Adobe goes belly up, there are already plenty of other companies willing to fill their former niche.
lmm 2y ago
You could cut costs and let the money roll in. But unfortunately even if that's the smart move for the company, it's unlikely to be the smart move for the individual decisionmakers.
- eru 2y ago
  Empire building is fun! And the press you get for hiring more people is infinitely nicer than when you announce layoffs and other cost cutting measures.
  - marcosdumay 2y ago
    It looks like the US software companies replace all of their employees every 6 years without any action, whether they want it or not. You don't need a layoff to migrate a product into minimum maintenance.
    - eru 2y ago
      Natural attrition is unlikely to leave you with the kinds of people you want for effective maintenance.

When you make the industries best software and pretty much have a monopoly on the market, the only place left to go is adding markup to your product.

by alt227 2y ago

When you make the industries best software and pretty much have a monopoly on the market, the only place left to go is adding markup to your product.

callalex 2y ago

That’s not true, you can also expand to new markets. For example Adobe doesn’t really have many offerings for musicians.

gabeio 2y ago
> That’s not true, you can also expand to new markets. For example Adobe doesn’t really have many offerings for musicians. Ah yes, the google style of offerings. https://killedbygoogle.com/ https://killedbygoogle.com/ LoopStart: Expand into so many markets to then be unmaintainable, then randomly decide to focus on your main stream of revenue again and kill off the side offerings GOTO LoopStart.
alt227 2y ago
> Adobe doesn’t really have many offerings for musicians. I dont know about that, Ive made many songs in Adobe Flash in my time! /s
chaosite 2y ago
It's more for sound engineers than musicians, but Adobe Audition exists.

CobrastanJorji 2y ago

Having a monopoly like this is like having a goose that that lays golden eggs. The right thing to do is nothing except to guard the goose and keep it happy and well fed. But what Adobe has done is a series of aggressive egg laying hormonal supplements and force feeding. Yes, it might get them even more eggs for a bit, but it's also a big risk for killing the goose for not a whole lot more eggs, with the side effect of definitely making everyone angry with you. But I think Adobe, and most companies, would inevitably make this decision. If you give a medium-sized public corporation a faucet that spews money at a constant rate forever and a button that has a 60% chance to double the money and a 40% chance to destroy the faucet, I suspect that most corporations would push that button at least once every few years.

TeMPOraL 2y ago
> If you give a medium-sized public corporation a faucet that spews money at a constant rate forever and a button that has a 60% chance to double the money and a 40% chance to destroy the faucet, I suspect that most corporations would push that button at least once every few years. That pretty much sums up all of what business and investment is. Play with money to get more money to play with.
eru 2y ago
> If you give a medium-sized public corporation a faucet that spews money at a constant rate forever and a button that has a 60% chance to double the money and a 40% chance to destroy the faucet, I suspect that most corporations would push that button at least once every few years. If the shareholders, who management has a fiduciary duty to, are well-diversified, this might even be the right decision. Basically, if it's mostly index funds and mutual funds holding your stock, you probably should push that button every so often.
- jamesknelson 2y ago
  That assumes that once a golden goose dies, there’s an infinite supply of replacements. There’s a reason we’re comparing these companies to a mythical creature after all: if sustainable businesses producing valuable things were easy to create, this website wouldn’t exist. The thing is, the people who own these companies also happen to live in a word powered by the products they produce. If you kill a bunch of golden geese in pursuit of profits, they will see bigger numbers in their broker accounts, but it’ll be because everything we all use has become scarcer and more expensive. Sure, the owners will look richer - at least in comparison to everyone else. But would you rather be rich in a world of scarcity? Or middle class in a world of abundance?
  - eru 2y ago
    You seem to be making a bunch of somewhat odd assumptions? Eg that investors are idiots, and that it's easy to beat the market? I was answering the hypothetical example of one company having this magic button. With the rest of the world operating as normal. If you want to figure out the optimal approach to many companies having such magic buttons, that's a slightly different question. You are right that creating companies isn't easy nor trivial. That's why the market so richly rewards creating successful companies from scratch. But that's nothing that a well-diversified investor needs to worry about for this particular decision. You just look at market prices. > The thing is, the people who own these companies also happen to live in a word powered by the products they produce. If you kill a bunch of golden geese in pursuit of profits, they will see bigger numbers in their broker accounts, but it’ll be because everything we all use has become scarcer and more expensive. > Sure, the owners will look richer - at least in comparison to everyone else. But would you rather be rich in a world of scarcity? Or middle class in a world of abundance? You seem to assume zero competition? And also that the stock market is really bad at evaluating business decisions (at least worse than you)? If the latter is the case, you should become an investor and make a killing! Especially if you are living in a world where everyone else is stupidly slaughtering their golden geese, you should be able to pick up some disgruntled ex-employees for cheap and just run a steady ship! Another important consideration: at some level of abstraction a company is just a legal shell. 'Killing' a company might just mean that the old equity (another legal abstraction) is deleted, and the former creditors turn into equity holders. The operations don't even need to be affected by this at all. Of course, you can also 'kill' a company by shutting it down. But again, that doesn't necessarily remove any of the demand for its (type of) products, nor does it remove the experience of the people working there, nor does it break any of the machinery and hardware. So if Adobe goes belly up, there are already plenty of other companies willing to fill their former niche.

lmm 2y ago

You could cut costs and let the money roll in. But unfortunately even if that's the smart move for the company, it's unlikely to be the smart move for the individual decisionmakers.

eru 2y ago
Empire building is fun! And the press you get for hiring more people is infinitely nicer than when you announce layoffs and other cost cutting measures.
- marcosdumay 2y ago
  It looks like the US software companies replace all of their employees every 6 years without any action, whether they want it or not. You don't need a layoff to migrate a product into minimum maintenance.
  - eru 2y ago
    Natural attrition is unlikely to leave you with the kinds of people you want for effective maintenance.