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> Advertising is a PURE competitive move I think "competition" has to be directed towards a useful end, like improving the product, else it's at danger of just

by Ukv 2y ago

> Advertising is a PURE competitive move I think "competition" has to be directed towards a useful end, like improving the product, else it's at danger of just causing enormous waste disproportionate* to any value it is creating, like rigs for Bitcoin mining or microsecond trading. Say you're playing a game where every minute you can either create a new cube or steal two from your opponent. The direct optimal strategy is for both players to just repeatedly steal - "competing" in a sense, yet wasting time for no progress. The meta-strategy, if we as a society want to increase the number of cubes, would be to punish stealing so that players instead compete by doing useful work (creating cubes). To me the problem with marketing looks the same. It could make business sense for both Coke and Pepsi to double their marketing budgets to push flyers through every door to take each other's market share back and forth, but doing so wastes disproportionate* resources for little to no gain. Also seems as though it's one factor making it more difficult for potential new competition that has a legitimately better product but doesn't have billions to spend on ads, exclusivity deals, etc. *: There can be some value created, like slightly faster Bitcoin transactions, or people being very slightly more informed about some products. Just that the zero-sum game aspect allows resources wasted to be far in excess of the value gained (if any at all), even without externalities.

neom 2y ago
Well here, I'll show you the paradox if you're curious. I do this stuff for a living right? I mean this is my world for the last 20 years, I literally teach it. But, I'm speaking out of 3 sides of my mouth? How can I say on one hand: advertising is a tool in the GTM playbook and a useful one. Say: advertising most useful as competitive tool, And also say: competition is for losers. Here is how: You have to admit and understand you are competing, you have to have a sense of where your competition is, and then you have to find out how to put yourself around them like chess, so they wake up and realized they lost. Once you have a monopoly, you immediately become susceptible to competition from startups, because realistically monopoly required you to have a product that is generally applicable to very many people. Your horizons and timelines at that scale are 5-10 years into the future, you can't wiggle around easily, you pre-paid $100MM of ads in airport skyways. If you rest on your laurels, you will die, apple is a good example of a business that doesn't compete it just ever-iterated itself with consumer insight, blackberry the other side of that. That is why late stage business is so complex, you're being attacked everywhere, so you need 10 product lines, 250 features, 300 geographies, localization, etc etc. Say Starbucks totally loses Canada to Tim Hortons, what do they do? Spend $500MM to outcompete Tim Hortons in a market that they can't win or just leave and focus on new markets. This is business, outside of a few lux brands who have it as a strategy, nobody is spending money just to piss people off and annoy them, people who don't want to buy have ALWAYS been annoyed by sales, but that isn't necessarily a sales thing, and it is why targeting matters.
- Ukv 2y ago
  > Here is how: You have to admit and understand you are competing, you have to have a sense of where your competition is, and then you have to find out how to put yourself around them like chess, so they wake up and realized they lost. Once you have a monopoly, [...] I don't claim that advertising is an illogical move from a business's self-interest perspective, but that it involves a zero-sum game that allows the resources wasted on it to greatly exceed any value it produces for society. It's a way to "compete" without doing useful work, and as a society we'd typically want businesses to compete by doing useful work instead of, for instance, building bigger and bigger Bitcoin-mining rigs.
  - neom 2y ago
    I use a pretty clinical definition for what I consider a business: a business is simply a collection of systems and processes that work together to create a condition for a fair and safe exchange of value between parties. I think any real business person would agree that is true. That is to say some things that look like businesses are not, and they go away pretty quickly. Then some societies say "what fits into that bucket but we want to hedge out edge cases" and then you exclude stuff, say healthcare. In a perfect system, the utility would have responded to the bitcoin miners by spinning up a huge solar farm that not only solved the BTC but helps everyone else too, an unfair capitalist will tell you a totally deregulated market will create those conditions over time, I'm skeptical of that aspect of capitalism hence I say it's an unfair point, but I don't firmly take a position because we don't have perfect systems so it's hard to know.

by Ukv 2y ago

neom 2y ago

Well here, I'll show you the paradox if you're curious. I do this stuff for a living right? I mean this is my world for the last 20 years, I literally teach it. But, I'm speaking out of 3 sides of my mouth? How can I say on one hand: advertising is a tool in the GTM playbook and a useful one. Say: advertising most useful as competitive tool, And also say: competition is for losers. Here is how: You have to admit and understand you are competing, you have to have a sense of where your competition is, and then you have to find out how to put yourself around them like chess, so they wake up and realized they lost. Once you have a monopoly, you immediately become susceptible to competition from startups, because realistically monopoly required you to have a product that is generally applicable to very many people. Your horizons and timelines at that scale are 5-10 years into the future, you can't wiggle around easily, you pre-paid $100MM of ads in airport skyways. If you rest on your laurels, you will die, apple is a good example of a business that doesn't compete it just ever-iterated itself with consumer insight, blackberry the other side of that. That is why late stage business is so complex, you're being attacked everywhere, so you need 10 product lines, 250 features, 300 geographies, localization, etc etc. Say Starbucks totally loses Canada to Tim Hortons, what do they do? Spend $500MM to outcompete Tim Hortons in a market that they can't win or just leave and focus on new markets. This is business, outside of a few lux brands who have it as a strategy, nobody is spending money just to piss people off and annoy them, people who don't want to buy have ALWAYS been annoyed by sales, but that isn't necessarily a sales thing, and it is why targeting matters.

Ukv 2y ago
> Here is how: You have to admit and understand you are competing, you have to have a sense of where your competition is, and then you have to find out how to put yourself around them like chess, so they wake up and realized they lost. Once you have a monopoly, [...] I don't claim that advertising is an illogical move from a business's self-interest perspective, but that it involves a zero-sum game that allows the resources wasted on it to greatly exceed any value it produces for society. It's a way to "compete" without doing useful work, and as a society we'd typically want businesses to compete by doing useful work instead of, for instance, building bigger and bigger Bitcoin-mining rigs.
- neom 2y ago
  I use a pretty clinical definition for what I consider a business: a business is simply a collection of systems and processes that work together to create a condition for a fair and safe exchange of value between parties. I think any real business person would agree that is true. That is to say some things that look like businesses are not, and they go away pretty quickly. Then some societies say "what fits into that bucket but we want to hedge out edge cases" and then you exclude stuff, say healthcare. In a perfect system, the utility would have responded to the bitcoin miners by spinning up a huge solar farm that not only solved the BTC but helps everyone else too, an unfair capitalist will tell you a totally deregulated market will create those conditions over time, I'm skeptical of that aspect of capitalism hence I say it's an unfair point, but I don't firmly take a position because we don't have perfect systems so it's hard to know.