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It’s definitely more than just private ownership. In fact I’d say that’s the least part of it. Look at all the horror stories about businesses that were bought

It’s definitely more than just private ownership. In fact I’d say that’s the least part of it. Look at all the horror stories about businesses that were bought by PE firms; those are all privately held too.

bigstrat2003 11mo ago
Private ownership is a necessary, but not sufficient, condition to have a business which has a healthy relationship with its customers. You also need the owners to be people of reasonably good character who understand that the best way to run a business is a win-win approach on both sides, not people who see nothing wrong with extracting maximum profit from the business no matter whom it hurts. The PE horror stories you hear are cases where the owners are in the latter group.
- tehjoker 11mo ago
  Could also consider: employee ownership and public ownership People complain about the latter because they have higher expectations because the institution is supposed to serve them and often has all the diseases of true scale without being able to pick and choose customers. Private industry skates by because people assume it's out to screw them and they can cherry pick.
- kasey_junk 11mo ago
  You hypothesis then is that there is not a _single_ public company that has a healthy relationship with its company? Not one, in the entire global public space? When does this relationship with customers happen? Is it at the IPO? When they file the paperwork? When they contemplate going public for the first time? Or is it that any founder who might one day decide to contemplate going public was doomed to unhealthy customer relations from birth? The obvious next thing we in society should do is abolish public equity as a concept as a customer protection mechanism?
  - MobiusHorizons 11mo ago
    > Not one, in the entire global public space? It is genuinely hard to think of one. I treat all companies as adversarial relationships, where I fully expect them to treat me as disposable at least over any time horizon greater than 1-2y. There are certainly some companies that are more likely to find a mutually beneficial equilibrium. I think of Target, IKEA, sometimes Apple. But I don’t trust any of those companies to take care of me in the future. But I also wouldn’t be the least bit surprised if my next interaction with any of those companies was bad. I just typically expect it to be more mutually beneficial than Comcast, Hertz, or Verizon.
    - tomrod 11mo ago
      Fortune 500 companies are particularly neurotic example of 'all' companies.
      - kilna 11mo ago
        Sure, but very modestly due to scale, not core institutional morals. Go to your average small business with 10 or so people and ask the staff how they are treated and paid, and you'll get an answer not much different than the level of employee satisfaction for Fortune 500 companies. Look a their customer reviews... are small restaurants for instance an order of magnitude different that megacorp chains? In an economy with regulatory capture and highly unequal distribution of wealth, the wealthy set the tone across the board.
    - Qwertious 11mo ago
      Costco is public, according to wikipedia.
      - MobiusHorizons 11mo ago
        That is a good point. I wonder how they have managed not to succumb to the pressure to squeeze their users more.
  - Miraste 11mo ago
- tomrod 11mo ago
  Theory of abundance, you could classify your approach as. Rather than artificial scarcity to exercise market power.
blargey 11mo ago
If you want to be specific that general idea could be elaborated as "private ownership by people that only need the C-suite salary, instead of needing a C-suite plus a fat % RoI on the company's entire valuation because that's how much they just put down as a sunk cost." In that regard "bought by PE firm" (or most any prospective buyer, really) is functionally equivalent to an IPO. Selling out is, in fact, selling out.
- ethbr1 11mo ago
  Furthermore, PE ownership generally means (a) achieving ROI as quickly as possible (including by dismantling the company and/or mortgaging its assets), (b) installing leadership who has no ties to the business, and (c) cutting costs to the bone. It's not just functionally equivalent to an IPO... it's an IPO if all the buying new shareholders were sociopaths. (Yes, there are the PE companies who run businesses better like Berkshire, but that's far from the most common type of PE)
groby_b 11mo ago
The difference is that PE firms own firms as investment vehicles, while Valve is owned by people who see making games as their calling. No, I don't think Gabe's averse to the nice checks, but he is in a business he deeply cares about on an emotional level. He doesn't just want to milk it to the last drop, he wants to leave his mark on gaming. Passion matters.
- nottorp 11mo ago
  But does he have a plan for when he retires? Is it good enough or should we be monitoring his health and hoard torrents of our steam collection just in case?
  - Macha 11mo ago
    This is the problem of governance by “the good king”, and no, there isn’t a clear succession plan, so things will probably get worse in a post-gaben world

bigstrat2003 11mo ago

Private ownership is a necessary, but not sufficient, condition to have a business which has a healthy relationship with its customers. You also need the owners to be people of reasonably good character who understand that the best way to run a business is a win-win approach on both sides, not people who see nothing wrong with extracting maximum profit from the business no matter whom it hurts. The PE horror stories you hear are cases where the owners are in the latter group.

tehjoker 11mo ago
Could also consider: employee ownership and public ownership People complain about the latter because they have higher expectations because the institution is supposed to serve them and often has all the diseases of true scale without being able to pick and choose customers. Private industry skates by because people assume it's out to screw them and they can cherry pick.
kasey_junk 11mo ago
You hypothesis then is that there is not a _single_ public company that has a healthy relationship with its company? Not one, in the entire global public space? When does this relationship with customers happen? Is it at the IPO? When they file the paperwork? When they contemplate going public for the first time? Or is it that any founder who might one day decide to contemplate going public was doomed to unhealthy customer relations from birth? The obvious next thing we in society should do is abolish public equity as a concept as a customer protection mechanism?
- MobiusHorizons 11mo ago
  > Not one, in the entire global public space? It is genuinely hard to think of one. I treat all companies as adversarial relationships, where I fully expect them to treat me as disposable at least over any time horizon greater than 1-2y. There are certainly some companies that are more likely to find a mutually beneficial equilibrium. I think of Target, IKEA, sometimes Apple. But I don’t trust any of those companies to take care of me in the future. But I also wouldn’t be the least bit surprised if my next interaction with any of those companies was bad. I just typically expect it to be more mutually beneficial than Comcast, Hertz, or Verizon.
  - tomrod 11mo ago
    Fortune 500 companies are particularly neurotic example of 'all' companies.
    - kilna 11mo ago
      Sure, but very modestly due to scale, not core institutional morals. Go to your average small business with 10 or so people and ask the staff how they are treated and paid, and you'll get an answer not much different than the level of employee satisfaction for Fortune 500 companies. Look a their customer reviews... are small restaurants for instance an order of magnitude different that megacorp chains? In an economy with regulatory capture and highly unequal distribution of wealth, the wealthy set the tone across the board.
  - Qwertious 11mo ago
    Costco is public, according to wikipedia.
    - MobiusHorizons 11mo ago
      That is a good point. I wonder how they have managed not to succumb to the pressure to squeeze their users more.
- Miraste 11mo ago
tomrod 11mo ago
Theory of abundance, you could classify your approach as. Rather than artificial scarcity to exercise market power.

blargey 11mo ago

If you want to be specific that general idea could be elaborated as "private ownership by people that only need the C-suite salary, instead of needing a C-suite plus a fat % RoI on the company's entire valuation because that's how much they just put down as a sunk cost." In that regard "bought by PE firm" (or most any prospective buyer, really) is functionally equivalent to an IPO. Selling out is, in fact, selling out.

ethbr1 11mo ago
Furthermore, PE ownership generally means (a) achieving ROI as quickly as possible (including by dismantling the company and/or mortgaging its assets), (b) installing leadership who has no ties to the business, and (c) cutting costs to the bone. It's not just functionally equivalent to an IPO... it's an IPO if all the buying new shareholders were sociopaths. (Yes, there are the PE companies who run businesses better like Berkshire, but that's far from the most common type of PE)

groby_b 11mo ago

The difference is that PE firms own firms as investment vehicles, while Valve is owned by people who see making games as their calling. No, I don't think Gabe's averse to the nice checks, but he is in a business he deeply cares about on an emotional level. He doesn't just want to milk it to the last drop, he wants to leave his mark on gaming. Passion matters.

nottorp 11mo ago
But does he have a plan for when he retires? Is it good enough or should we be monitoring his health and hoard torrents of our steam collection just in case?
- Macha 11mo ago
  This is the problem of governance by “the good king”, and no, there isn’t a clear succession plan, so things will probably get worse in a post-gaben world