4 ms·

I think there is the potential for a beautiful correction here; the general narrative over the last 5-10 years is PE buying up good businesses, enshittifying th

by theptip 7mo ago

I think there is the potential for a beautiful correction here; the general narrative over the last 5-10 years is PE buying up good businesses, enshittifying them and loading up debt to improve margins, and driving down quality. But this leaves an opportunity for anyone that cares to build a business that is higher quality (and even better if it’s possible to build it efficiently too). I think with AI lowering the barrier to entry we should expect to see a lot of new small businesses appear, and perhaps if we are lucky this trend can drive a reversal in the enshittification.

floatrock 7mo ago
I like the story, I struggle to see how to outplay PE. Yes, PE enshittifies the experience. You can be a better human and win customers that way. The headwinds are the usual david-v-goliath going up against scale/consolidation stories: - consolidation gives more purchasing power. When all the PE-controlled pest control vendors in the state are negotiating as one, they get bigger cost breaks - PE has a bigger war chest. They'll enshittify eventually, but they'll undercut you longer than you can stay solvent. At that point, they'll happily buy you for pennies. - The end-game is always monopolization. A PE firm bought up something like all the concrete mills in Georgia or one of the southern state. Any building or municipal project in the state effectively buys from that one company, even though it looks like a bunch of different local concrete mills. - Any AI you throw at the problem presumably PE can handle more efficiently at scale. What's the strategy that outcompetes?
- christoff12 7mo ago
  Service businesses win on service, which notably degrades over time with PE firms. So you win by taking the long view and building incrementally and opportunistically jump in as the incumbent falters.
- theptip 7mo ago
  In this toy model, the strategy that (may) outcompete is delivering a better service. > The end-game is always monopolization This is one happy end state of PE but let’s be clear that for large swathes of human history it has not been the goal of most participants in local economies. If PE’s edge is diluted they may find themselves less able to achieve this on the margin.
- tezclarke 7mo ago
  Where there's a consolidated critical asset like the concrete plant, they can monopolize the area. Different with PC when the work is being done by individual techs on their routes. Also I'm starting with the goal "Be the best pest control company" and building up from there, rather than to monopolize it.

by theptip 7mo ago

floatrock 7mo ago

I like the story, I struggle to see how to outplay PE. Yes, PE enshittifies the experience. You can be a better human and win customers that way. The headwinds are the usual david-v-goliath going up against scale/consolidation stories: - consolidation gives more purchasing power. When all the PE-controlled pest control vendors in the state are negotiating as one, they get bigger cost breaks - PE has a bigger war chest. They'll enshittify eventually, but they'll undercut you longer than you can stay solvent. At that point, they'll happily buy you for pennies. - The end-game is always monopolization. A PE firm bought up something like all the concrete mills in Georgia or one of the southern state. Any building or municipal project in the state effectively buys from that one company, even though it looks like a bunch of different local concrete mills. - Any AI you throw at the problem presumably PE can handle more efficiently at scale. What's the strategy that outcompetes?

christoff12 7mo ago
Service businesses win on service, which notably degrades over time with PE firms. So you win by taking the long view and building incrementally and opportunistically jump in as the incumbent falters.
theptip 7mo ago
In this toy model, the strategy that (may) outcompete is delivering a better service. > The end-game is always monopolization This is one happy end state of PE but let’s be clear that for large swathes of human history it has not been the goal of most participants in local economies. If PE’s edge is diluted they may find themselves less able to achieve this on the margin.
tezclarke 7mo ago
Where there's a consolidated critical asset like the concrete plant, they can monopolize the area. Different with PC when the work is being done by individual techs on their routes. Also I'm starting with the goal "Be the best pest control company" and building up from there, rather than to monopolize it.