3 ms·

And why is a large monopoly a net negative? I read his book and he says that monopolies are 10x better products, and if monopolies are 10x better then why are t

And why is a large monopoly a net negative? I read his book and he says that monopolies are 10x better products, and if monopolies are 10x better then why are they bad? Are you arguing that it would be better to keep using 10x worse products, for the sake of there not being any monopolies?

fabian2k 1y ago
How can a company make delivery 10x better? The expected result of a monopoly are rising prices and at best indifferent service and quality.
- miki123211 1y ago
  > How can a company make delivery 10x better? By improving the consumer experience. Better optimizations of which couriers go where and by what routes, faster delivery times (and hence warmer food), menus and restaurant directories optimized to show you what you actually want, better delivery time estimation, no need to talk to a human or re-enter your details for each new restaurant, that sort of thing. At Uber scale, you have people working on improving metrics, and those improvements translate across all the restaurants that exist across the world. "John's Chicken" won't hire their own guys to do A/B testing on which pictures of their food generate more sales.
teddyh 1y ago
A monopoly could be 10 times as good, but what is their incentive to be 10 times as good?
- miki123211 1y ago
  We have to distinguish between monopolies that keep their status by being great versus monopolies that have something else going on. Google (search) is an example of the former. Search is a very expensive business to be in, but most of the costs are in scraping, indexing and software development, not actual query execution. The more users you have, the more you can spend while still keeping margins constant, and the more you spend, the better your engine is, which gives you more users. This leads to the situation where you only have two competing search engines[1], one of which sucks and only exists because it's propped up by Microsoft. However, this is only true as long as Google keeps their quality up. If Bing suddenly became significantly better than Google, people would gradually start switching. 20th century AT&T is an example of the latter phenomenon. It was a monopoly because of US regulations, which made the barriers to entry insanely high. This meant AT&T could set almost whatever prices they wanted, as consumers didn't have a choice anyway. [1] Engines like Kagi or DDG don't count, as they still fundamentally rely on Google's or Bing's indexes.
  - teddyh 1y ago
    > monopolies that keep their status by being great What I am asking is what incentive those monopolies have to continue being great. Even if Google did not use Chrome to steer people to Google Search, Google Search is an established habit for most people, and it would have to become significantly worse than any competitor in order for people to consider switching. You pointing out that a competitor to Google can only exist because Microsoft is pumping huge amounts of money into it, is not the great argument you seem to think it is. If Microsoft does not have a good chance of making money with Bing, what chances does a startup search company have?
paulryanrogers 1y ago
Large and dominant companies can be a net good, at least in theory. In practice they become corrupted because of incentives to maximize profit by any means possible, with few who can oppose them. When well regulated one can have most of the benefits without many of the downsides. Sadly, even the regulators become captured.
nomadygnt 1y ago
Monopolies are anti-competitive. Without competition there is no incentive for innovation, lowering prices, not price-gouging etc. Is a 10x better product really 10x better if it is also 10x more expensive and there is no alternative?
- cjbgkagh 1y ago
  Not innovating, maintaining high prices, and price-gouging are unstable activities for a monopoly, as in it would open up a void for effective competition. The real anti-competitive actions is that it becomes cost effective to do regulatory capture / pay bribes to politicians. A monopoly can pay to play in a way that fledging competitors cannot. Once the industry has been captured then they can do rent seeking behaviors without worrying about competition.
  - A1kmm 1y ago
    If allowed, an incumbent monopoly will do the minimum innovation or tactical pricing necessary to keep out competitors - even if it means they suffer a temporary loss. This can effectively create a barrier to entry high enough that no small company has a chance to beat them. Since insolvency before overcoming the barrier is foreseeable, no one even tries, and the monopoly gets to keep high prices (compared to a competitive market if they weren't there).
  - Herring 1y ago
    > Not innovating, maintaining high prices, and price-gouging are unstable activities for a monopoly Depends how good their moat is. Or how deep their pockets are, because they can often bribe to keep their competitors out (Intel vs AMD). Or just buy their competitor outright.
  - vlovich123 1y ago
    How many desktop OSes can you choose from walking into BestBuy? And this is decades after MS was convicted of being a monopoly and illegally paying computer manufacturers money to keep competitors off.
  - lozenge 1y ago
yoyohello13 1y ago
Man who believes monopolies are good says they are 10x better? Color me shocked…
astrange 1y ago
Five companies in an industry isn't a monopoly. That's very competitive actually.
- dinfinity 1y ago
  Depends on the geographic distribution of the companies. Meituan is huge, but they don't do shit in Europe or the US. There are probably areas where these companies operate as effective monopolies or two-company oligopolies.
- bravesoul2 1y ago
  Split the world us/china/other and ignore minor players and there are 1/3/1. In a given are there is competition but the local competition is likely to be pushed out by Uber Eats who could undercut them out of business for a while. Or just have better tech / customer experience due to scale (looking at you Menulog)
- coffeebeqn 1y ago
  It’s more of a cartel if anything. Each owns a certain geography
- folkrav 1y ago
  How? Do these 5 companies even operate in the same places? Around here we have DoorDash, Uber Eats, and that’s pretty much it. We have SkipTheDishes, which was present before the other two outside urban areas, but I don’t even bother talking about them, most restaurants in the area have switched away from them. The other alternatives just never existed outside highly urban areas or have simply been pushed out by the bigger players. Where are the effects of this highly competitive market, exactly?
  - pbh101 1y ago
    Without more context this is silly to say. It isn’t as if we know the natural or correct construction of this market a priori and that 5 is clearly a distortion from that. Consolidation can sound bad in the abstract but in this relatively immature market you could still expect major shifts to get to a steady state. Just a little bit ago people were remarking on VC-subsidized delivery; as that goes away, consolidation is not unreasonable. Edit: ‘this’ in the original parent comment was along the lines of ‘five out of potential thousands of actors’
RamblingCTO 1y ago
he didn't produce any proof of that statement and I figure neither can you. so let's assume this as false, shall we? we see lot's of examples of how monopolies (or similar) tend to do rent extraction. that's why we're talking about enshittification so much. it's because they only care about profit (and on a small time frame as well), not the product, not the customers, nor the planet.
- koakuma-chan 1y ago
  How do you become a monopoly without a superior product?
  - RamblingCTO 1y ago
    be the first, buy competitors, lobby for regulatory capture, dominate the resource (see rockefeller/standard oil: https://www.investopedia.com/articles/investing/071515/how-why-companies-become-monopolies.asp https://www.investopedia.com/articles/investing/071515/how-w...)

fabian2k 1y ago

How can a company make delivery 10x better? The expected result of a monopoly are rising prices and at best indifferent service and quality.

miki123211 1y ago
> How can a company make delivery 10x better? By improving the consumer experience. Better optimizations of which couriers go where and by what routes, faster delivery times (and hence warmer food), menus and restaurant directories optimized to show you what you actually want, better delivery time estimation, no need to talk to a human or re-enter your details for each new restaurant, that sort of thing. At Uber scale, you have people working on improving metrics, and those improvements translate across all the restaurants that exist across the world. "John's Chicken" won't hire their own guys to do A/B testing on which pictures of their food generate more sales.

teddyh 1y ago

A monopoly could be 10 times as good, but what is their incentive to be 10 times as good?

miki123211 1y ago
We have to distinguish between monopolies that keep their status by being great versus monopolies that have something else going on. Google (search) is an example of the former. Search is a very expensive business to be in, but most of the costs are in scraping, indexing and software development, not actual query execution. The more users you have, the more you can spend while still keeping margins constant, and the more you spend, the better your engine is, which gives you more users. This leads to the situation where you only have two competing search engines[1], one of which sucks and only exists because it's propped up by Microsoft. However, this is only true as long as Google keeps their quality up. If Bing suddenly became significantly better than Google, people would gradually start switching. 20th century AT&T is an example of the latter phenomenon. It was a monopoly because of US regulations, which made the barriers to entry insanely high. This meant AT&T could set almost whatever prices they wanted, as consumers didn't have a choice anyway. [1] Engines like Kagi or DDG don't count, as they still fundamentally rely on Google's or Bing's indexes.
- teddyh 1y ago
  > monopolies that keep their status by being great What I am asking is what incentive those monopolies have to continue being great. Even if Google did not use Chrome to steer people to Google Search, Google Search is an established habit for most people, and it would have to become significantly worse than any competitor in order for people to consider switching. You pointing out that a competitor to Google can only exist because Microsoft is pumping huge amounts of money into it, is not the great argument you seem to think it is. If Microsoft does not have a good chance of making money with Bing, what chances does a startup search company have?

paulryanrogers 1y ago

Large and dominant companies can be a net good, at least in theory. In practice they become corrupted because of incentives to maximize profit by any means possible, with few who can oppose them. When well regulated one can have most of the benefits without many of the downsides. Sadly, even the regulators become captured.

nomadygnt 1y ago

Monopolies are anti-competitive. Without competition there is no incentive for innovation, lowering prices, not price-gouging etc. Is a 10x better product really 10x better if it is also 10x more expensive and there is no alternative?

cjbgkagh 1y ago
Not innovating, maintaining high prices, and price-gouging are unstable activities for a monopoly, as in it would open up a void for effective competition. The real anti-competitive actions is that it becomes cost effective to do regulatory capture / pay bribes to politicians. A monopoly can pay to play in a way that fledging competitors cannot. Once the industry has been captured then they can do rent seeking behaviors without worrying about competition.
- A1kmm 1y ago
  If allowed, an incumbent monopoly will do the minimum innovation or tactical pricing necessary to keep out competitors - even if it means they suffer a temporary loss. This can effectively create a barrier to entry high enough that no small company has a chance to beat them. Since insolvency before overcoming the barrier is foreseeable, no one even tries, and the monopoly gets to keep high prices (compared to a competitive market if they weren't there).
- Herring 1y ago
  > Not innovating, maintaining high prices, and price-gouging are unstable activities for a monopoly Depends how good their moat is. Or how deep their pockets are, because they can often bribe to keep their competitors out (Intel vs AMD). Or just buy their competitor outright.
- vlovich123 1y ago
  How many desktop OSes can you choose from walking into BestBuy? And this is decades after MS was convicted of being a monopoly and illegally paying computer manufacturers money to keep competitors off.
- lozenge 1y ago

yoyohello13 1y ago

Man who believes monopolies are good says they are 10x better? Color me shocked…

astrange 1y ago

Five companies in an industry isn't a monopoly. That's very competitive actually.

dinfinity 1y ago
Depends on the geographic distribution of the companies. Meituan is huge, but they don't do shit in Europe or the US. There are probably areas where these companies operate as effective monopolies or two-company oligopolies.
bravesoul2 1y ago
Split the world us/china/other and ignore minor players and there are 1/3/1. In a given are there is competition but the local competition is likely to be pushed out by Uber Eats who could undercut them out of business for a while. Or just have better tech / customer experience due to scale (looking at you Menulog)
coffeebeqn 1y ago
It’s more of a cartel if anything. Each owns a certain geography
folkrav 1y ago
How? Do these 5 companies even operate in the same places? Around here we have DoorDash, Uber Eats, and that’s pretty much it. We have SkipTheDishes, which was present before the other two outside urban areas, but I don’t even bother talking about them, most restaurants in the area have switched away from them. The other alternatives just never existed outside highly urban areas or have simply been pushed out by the bigger players. Where are the effects of this highly competitive market, exactly?
- pbh101 1y ago
  Without more context this is silly to say. It isn’t as if we know the natural or correct construction of this market a priori and that 5 is clearly a distortion from that. Consolidation can sound bad in the abstract but in this relatively immature market you could still expect major shifts to get to a steady state. Just a little bit ago people were remarking on VC-subsidized delivery; as that goes away, consolidation is not unreasonable. Edit: ‘this’ in the original parent comment was along the lines of ‘five out of potential thousands of actors’

RamblingCTO 1y ago

he didn't produce any proof of that statement and I figure neither can you. so let's assume this as false, shall we? we see lot's of examples of how monopolies (or similar) tend to do rent extraction. that's why we're talking about enshittification so much. it's because they only care about profit (and on a small time frame as well), not the product, not the customers, nor the planet.

koakuma-chan 1y ago
How do you become a monopoly without a superior product?
- RamblingCTO 1y ago
  be the first, buy competitors, lobby for regulatory capture, dominate the resource (see rockefeller/standard oil: https://www.investopedia.com/articles/investing/071515/how-why-companies-become-monopolies.asp https://www.investopedia.com/articles/investing/071515/how-w...)