Scale Ruins Everything

https://coldwaters.substack.com/p/scale-ruins-everything

by drc500free • 2 years ago

175 240 2 years ago

coldwaters.substack.com

Comical to suggest that AirBnB "ruined communities" or "destroyed the dream of home ownership" as if decades of federal, state, and local government policy had not already guaranteed those outcomes.

api• 2 years ago

Yeah I'm tired of this too. Real estate hyperinflation is almost entirely the fault of chronically under-building real estate due to regulatory capture by landlords, legacy homeowners, and speculators. The real estate market is more or less a cartel in quite a few places.

AirBnB is a small factor. I suppose it drives up prices, but only because supply is so absurdly tight.

Blackthorn• 2 years ago

100% of code uses 100% of resources. Let's not downplay the role of Airbnb as both a company and a phenomena for causing inflation. But more than that, remember that a lot happens at the margins in these markets: what's actually liquid or in play is a small part of the overall stock. So anything that messes with that will have an outsized effect.

robertlagrant13• 2 years ago

You can define it as under-building, but that's only one side of the political effect. E.g. the UK net immigration rate has been pretty enormous, and it seems lopsided to call it under-building to have not built homes for a giant number of people coming from their previous homes elsewhere in the world to the UK.

Speaking as the son of an immigrant, married to an immigrant, for the people who can only think tribally, and must assume I am doing the same.

sgdfhijfgsdfgds9• 2 years ago

Airbnb has in fact ruined communities and destroyed the dream of home ownership for an entire class of people: those who would already be buying at the limits of their budgets to stay where they were brought up.

This happened even in areas where holiday home ownership and rental was common as a business.

The failure of government to grapple with the negative effects of Airbnb is a separate thing. Airbnb are, in fact, in control of their own morality.

robertlagrant13• 2 years ago

You need to explain why AirBnB did this as opposed to other factors. Renting your house out predates AirBnB.

etothepii3• 2 years ago

As a home owner that was only able to afford to buy a house because we were able to rent out the spare rooms on AirBnb I find fault in your logic.

I think you'll find that zoning/planning permission is the real bad guy here. That and a failure to understand Adam Smith and implement the ideas of Henry George.

Hammershaft3• 2 years ago

AirBnB rentals are not making it criminal to build supply, local zoning regulations that benefit incumbents at the expense of everyone else are what make it criminal to build supply.

It's a defect at the intersection of capitalism, property ownership, and democracy.

lacy_tinpot4• 2 years ago

AirBnB destroyed home ownership?

As far as I can remember AirBnB didn't cause the 2008 financial disaster that really sealed the fate of homeownership in America for the next decade for a lot of Americans.

AirBnB has provided an avenue to generate income for small business owners in rural communities. Urban areas are struggling because they aren't building more.

BUILD MORE. How difficult is it to understand that?

TrainedMonkey• 2 years ago

Airbnb has in fact ruined communities and destroyed the dream of home ownership for an entire class of people

That is fair, but also misses the point. The issue with AirBnB is not that they are evil company and must be regulated. It's that they operate in a system where housing is an investment vehicle due to artificially constrained supply and tax system that is riddled with well intentioned and widely abused property ownership cuts. At worst they have accelerated the issue rather than caused it.

Airbnb are, in fact, in control of their own morality.

Not entirely, they are a publicly listed company and will get sued if they do anything that will hurt the stock price.

kelnos9• 2 years ago

Oh please. NIMBYs ruined home ownership. Airbnb certainly hasn't had zero contribution to higher home prices, but abolishing short-term rentals hasn't fixed affordability issues anywhere it's been done.

eddd-ddde• 2 years ago

Honestly I'm not convinced when an airbnb is cheaper to me than renting some other place. It even includes furniture!

EasyMark• 2 years ago

There are many factors, and Abnb can be one of them, but it’s not the only read. Zoning laws, economic landscape of the town, etc all play into to the lack of affordable housing. I would posit NIMBYism and zoning are likely the biggest ones.

01HNNWZ0MV43FF• 2 years ago

As an aside, I own a home and now merely dream that renting should be as cheap as owning. Having equity in something that needs constant repair, loses heat on all sides, and has a bunch of fucking grass around it, is only equivalent to a certain amount of cash.

I suspect the real reason owning is cheap is not that it's inherently better, but because everything is cheaper when you have lots of money.

Joel_Mckay• 2 years ago

Sure, but if someone started running heavy industrial concrete equipment in a residential zoned block 24/7, than the city wouldn't be blaming poor people for the issues.

The fact is you can go to travel websites, and the first 70k listings in some cities are for commercial hotel/share services running out of residential zoned homes.

Low-income people are easier to squeeze, and "with a computer" convenience doesn't make it an ethical securitization model. =3

fire_lake• 2 years ago

AirBnB has been shown to raise residential house prices.

It’s not the only factor, or even the biggest, but still…

kelnos9• 2 years ago

It’s not the only factor, or even the biggest, but still…

But that's the key, really. In most places, banning short-term rentals will not move the needle on housing affordability.

It's like trying to optimize the thing that's causing 3% of the slowdown when things that are responsible for 40%, 30%, and 25% are right there, staring you in the face.

Spivak2• 2 years ago

But getting rid of it doesn't lower them or even slow the increase.

https://medium.com/chamber-of-progress/new-nyc-data-shows-th...

nonameiguess2• 2 years ago

When I read stuff like this, I'm left wondering if I'm the only person who actually lives in a place that has been infested with Airbnb. On paper, my neighborhood is the Hacker News dreamland. Nobody has a yard. There is train service. Many people don't have cars. There is no mandatory parking allowance. There is no zoning restriction against multifamily housing. Virtually every unit is at least attached. Multi-use is fine. Plenty of buildings contain both housing and businesses. There isn't a lot of traffic. It's walkable. The only major restriction is you can't build higher than five stories. And we've been in a construction boom for nearly a decade.

But much of that boom has been tearing down multifamily apartment complexes and replacing them with luxury townhouses and condos instead. Almost nobody is actually moving into those places. They're 90% being purchased by investors, mostly out of state investors, to be used as Airbnbs. There is a significant categorical difference between investment property today and investment property before Airbnb. Before Airbnb, you rented via long-term leases, or you bought hotels and apartments in really shitty neighborhoods to use as weekly or even daily rentals for homeless people with jobs. Now you can buy as little as a single unit and the infrastructure to rent it out daily as a hotel room to much wealthier travelers exists without you needing to do anything extra.

With predictable results. Even in neighorhoods with little to no zoning restrictions, with virtually nonstop construction of new housing, almost nobody lives here, the neighborhood is completely hollowed out, and all of these new luxury homes are mostly party houses used by rich college students and bachelorette parties.

jovial_cavalier• 2 years ago

That should drive your property value down, not up.

FooBarBizBazz• 2 years ago

If anything, there is a housing cartel that we need an Uber-like blitz (times a million) to destroy. In the same way that Uber ignored local taxi regulations, you would need to ignore local zoning regulations. Just "build, baby, build", become valuable, and then, with your fait-accompli in hand, bribe the various local governments -- just like Uber.

Except -- if it took the combined might of Uber's VCs, and the disposable human battering ram that was Travis Kalanick, just to disrupt the puny little taxi industry, imagine what it would take to change housing. Ain't never gonna happen.

RiverCrochet• 2 years ago

I thought the original idea of Airbnb was to open a spare room in the house you already own to guests. I've used it only in this way and it really helped with a financial crunch, and given that I lived there and was present while guests where there, there was no negative impact to the community at all. I know people have been buying houses just for Airbnb rental, but that's not everyone.

insane_dreamer4• 2 years ago

Comical to suggest that AirBnB "ruined communities"

it has absolutely done so in the same way that a bunch of motels springing up in your neighborhood would completely change it and not necessarily for the better

it also greatly constrained the availability of housing for locals, therefore pushing up prices, so that people not living in the city could visit for cheaper; probably ok if you're in the tourism business, otherwise not

remyp• 2 years ago

I live in Lisbon. Over 80% of housing units in the historic Alfama neighborhood are now vacation rentals. This is the most historically Portuguese neighborhood in the capital. It was the only neighborhood to survive the earthquake in 1755. Fado was born there.

Yes, it's a failure of government policy, but I don't think it's hyperbole to say that AirBnB and its ilk destroyed that community. That is, assuming you define "community" as a group of people and not a group of buildings.

daxfohl2• 2 years ago

Given that we've been throwing cash at every conceivable idea for the last ten plus years, yet when speaking of unicorns we still have to refer back to airbnb and uber, seems like we're well past "peak unicorn" and well into the "horse with a mild concussion" era.

Terr_2• 2 years ago

It's also disconcerting how much their success seems to hinge on using technology as a lever to break laws or social expectations, as opposed to technology as something that itself empowers humans to be more productive.

robertlagrant13• 2 years ago

Er no, they totally transformed things through technology as well. Their product was fantastic. Hail a cab in the 2000s in the UK and tell me Uber had no improvement for its customers.

CalRobert3• 2 years ago

Getting a taxi in my college town in 2005 was agony. Make a phone call from a loud bar and shout at some guy who can barely tell what you're saying that you want a taxi and then maybe if you're lucky they show up in an hour and cost 3 times as much as you expected (and that's on a good night!) vs. "press a button, get a ride" (and have a feedback mechanism for horrible drivers or gross cars, etc.).

Uber has issues but honestly it's night and day compared to what taxis were like. And they decrease DUI's.

ahmeneeroe-v25• 2 years ago

Pretty hard for me to lament laws being broken when the laws boil down to "you're not allowed to compete with this monopoly".

agumonkey• 2 years ago

it was social cocaine, a lot of shiny results that made a lot of people high on numbers and progress fantasy

old is new, 2.0

kelnos9• 2 years ago

I'm not sure if this counts as being "empowered to be more productive", but both Airbnb and Uber are (to me, at least) still miles ahead of what were the only options pre-Airbnb and pre-Uber.

The hotel experience of course was (and is) not universally bad, but I still prefer an Airbnb in most cases, for most trips I take. And when it comes to taxis... no thanks. Unless I have foreknowledge that taxis are significantly cheaper than Uber/Lyft in a place I'm visiting, I will take that Uber/Lyft every single time.

Airbnb is certainly more fraught, given the problems for communities that rampant short-term rentals can cause. And I won't claim that Uber/Lyft is fair to their drivers. But I don't really care if they had to break laws to get where they are. Sometimes laws are wrong. Sometimes laws are the result of corruption and lobbying that isn't in the interests of the actual constituents. "Social expectations" is a bit of a weird thing to bring up, since it's so amorphous and hard to pin down. I don't think I ever had any "social expectation" that people can't rent out their house or apartment for a few days or a week. I don't think I ever had any "social expectation" that the only way to hire a car was to call a number that often doesn't pick up, and then wait 30-60 minutes for a car that often doesn't ever arrive.

akira2501• 2 years ago

we've been throwing cash

I think you find most of the answer you want if you simply examine who "we" is in this context.

It certainly wasn't "us."

MichaelZuo3• 2 years ago

That’s a pretty good point.

Are there any, at least somewhat credible, unicorns that have appeared over the last 5 years?

al_borland• 2 years ago

Does OpenAI count? Founded 8 years ago, but have completely blown up in the last couple years.

reissbaker• 2 years ago

Zepto is the largest grocery delivery service in India and was YC Winter 2021, and currently is valued at $5B.

Realistically people were making these kinds of points back in 2015, and now a large percentage of the lists of unicorns were from somewhere around 2015. It just takes time for most of these companies to become well-known unicorns. The last five years is always the worst five years, until you wait another five years and in hindsight consider it a golden era.

Edit: although I do think that the couple years of high interest rates will slow the growth of startups from this era, since it has a meaningful impact on how much cash VCs can spend. The AI boom at the tail end of high interest rates will probably cover a bit of that though; OpenAI is the first runaway success but I'm pretty sure it's not going to be the last.

__alexs• 2 years ago

This is purely an artifact of our cultural myopia rather than a lack of unicorns. There are tens of companies hitting >$1B valuations every year.

CM30• 2 years ago

To be honest, you could say this about capitalism in general. Everything has to be huge no matter what industry it's in or what the product is, just because shareholders demand that impossible infinite growth.

robertlagrant13• 2 years ago

It's not capitalism. It's government bonds. If you can get a guaranteed return from bonds, then any risk must beat the bond market. That increases the cost of capital for businesses, so they have to produce greater returns.

vladms2• 2 years ago

Human nature in most big culture seems to be trained to demand more (even if not always money). If there was any group of people that were "content with what they had", they were outpaced in development by the ones that "want more" so there will be minor (or inexistent) now.

I do wonder if there is any smart solution to this issue.

begueradj• 2 years ago

Good observation.

The answer is at the beginning of your statement: "human nature".

In plain English: there's no solution to that.

f1yght• 2 years ago

I think this could largely be an issue with public or VC/PE funded companies. There's plenty of private companies of small/mid size that make plenty of money but don't feel a need to grow excessively. You could think of the local plumbing company, or a small boutique consulting firm. They want to grow, but there's a natural barrier that's hard to cross without becoming a very large company and changing the nature of the company that the owner may be enjoying.

I have always wondered how that would apply to software companies though. If you make something that works really well and everyone wants to buy it, you could grow fairly large financially without needing a ton of people if you just focus on that one program that makes you successful. I imagine it's hard to not feel a need to scale up dramatically when you have millions of users/customers asking for new features.

BlueTemplar5• 2 years ago

Valve Corporation is one of such private companies, mostly known these days for its Steam game updates and store platform.

Being private didn't prevent it turning into a monopsony, ironically for the discussion, maybe because its competitors were mostly public companies (and so didn't care enough to do a good job) ?

They are not immune to walled garden issues though (SteamWorks), but maybe their private structure helped enshittification to proceed much slower ?

kayo_20211030• 2 years ago

Any advance, early industrial revolution; late nineteenth century industrialization; twentieth century vertical integration; globalization; internet disintermediation etc. will cause some dislocation. Often unintended, and rarely foreseen. Ultimately it all settles down to a new equilibrium, until the next perturbation. It's a bit disingenuous blaming VC's, or scale, or anything exogenous. The system's capacity for change will always outstrip the current institutions' abilities to fully buffer the change. If we focused on improving the institutions responsible for that function we'd be performing a more useful function than trying to limit the change.

elevatedastalt• 2 years ago

I misread the title as "Scala Ruins Everything" and was very confused by the comments.

jelling• 2 years ago

So did I and having chosen it once, I still thought "well, I'll hear this out..."

tantalor• 2 years ago

I'm halfway through reading this and still not discovered what the point is.

rpigab• 2 years ago

Startups and incubators are actually ruining everything while telling everyone they're improving everything.

I think it's kinda true, but govt regulations should have prevented it, which is not happening anytime soon because politicians act like startups and lobbies act like incubators.

rKarpinski2• 2 years ago

Odd piece. It highlights some hyper-scalers but it needs to work on justifying 'how they ruin everything'.

"At scale, they would ruin communities, put restaurants out of business, destroy the dream of home ownership, and eventually undermine democracy itself."

Uh what now?

jaggederest• 2 years ago

airbnb, doordash, airbnb, facebook - did those things, respectively, with plenty of hard evidence (does anyone still remember cambridge analytica)

Spivak2• 2 years ago

You have to stretch to get even one of those claims to be true.

Has DoorDash put some restaurants out of business, probably. Have they put restaurants out of business, absolutely not.

Has Airbnb raised home prices, yes by around ~1%. Have they destroyed the dream of home ownership, lol no. We're talking about ~$5k on the loan which isn't making or breaking anyone. And claims on destroying communities are dubious because they're just not that dense in places where people actually live.

Has Facebook increased political polarization and sent people down the right-wing pipeline, yep. Would this have happened anyway with a constellation of smaller social media sites, it already has.

rKarpinski2• 2 years ago

Ok let's look at "destroying the dream of homeownership" since that the most objective.

Homeownership rates are almost 66% now in 2024 [1], which is the highest it's been since 2011 [2].

[1] https://www.bankrate.com/homeownership/home-ownership-statis...

[2] https://en.wikipedia.org/wiki/Homeownership_in_the_United_St...

adamc2• 2 years ago

One of the questions all this raises for me is: what fraction of successful startups actually make society better?

I'm sure to get pushback here, but my suspicion is: most do not. Looking at companies like Facebook, Amazon, or Google, I'm kind of think they made it worse. Yeah, I know, some people benefited. But net-net, I preferred having more and better bookstores to Amazon. I don't like what google has become at all. And Facebook has never been good.

tremarley• 2 years ago

Google helps us lookup anything we want

Amazon helps us buy anything we want

Facebook helps us keep in touch with all of our friends easily

Their not as good a they used to be but how are they not good?

coldpie2• 2 years ago

Google & Facebook push the advertising/attention economy business model, which rewards spreading misinformation & extreme viewpoints, leading to the rise in conspiracy theories and breakdown in discourse & trust in public institutions we see today. Amazon has killed a lot of local retail, removing OK jobs and replacing them with low-paying/low-skill warehouse labor.

I think there's arguments for both sides, but personally I land on the net-evil side for all 3 of the listed companies.

kibwen2• 2 years ago

Google provided a useful lookup service at the expense of brainwashing society with consumerist propaganda and the complete destruction of personal privacy and the normalization of the surveillance state. It wasn't worth it.

Amazon inspired us to think we needed more cheap crap in order to inspire us to buy cheap crap that we didn't need. We aren't any happier than we were before we had the ability to buy cheap crap on a whim, but we sure do have a lot more cheap crap than before. That wasn't worth it.

Facebook is essentially as good at helping people keep in touch as any instant messenger that preceded it. But unlike those instant messengers, it's supported by invasive targeted ads, and consult the first paragraph for why this is a negative.

This has all been a waste. Society isn't any better as a result of these companies existing.

_DeadFred_3• 2 years ago

Google built a profit model on the original organic internet while facilitating that web's replacement with today's wonderful SEOable 'content'.

Ekaros• 2 years ago

I think those companies increased efficiency, which in general makes things better as long as there is sufficient competition in their markets... Sadly governments have failed in stopping them from hovering up startups and like. So now they in many cases have too much power.

dash22• 2 years ago

I like Airbnb, because it's made staying abroad much cheaper and nicer. I also like being able to rent a taxi on an app in a new town.

sausagefeet• 2 years ago

For awhile I'd been using AirBnb by reflex, but after a few pretty bad experiences I started indexing it against local hotels before committing, and my experience has been that if you just need a place to be (don't care about kitchen) then AirBnB is not nearly as competitive as it used to be. So yes, AirBnB has made staying places cheaper, but the industry is also catching up. Concrete example is nightly rate for a studio in Paris vs the hotel next to it were +/- euros difference when I was there last year.

dash22• 2 years ago

I agree and have had similar experiences. But note that the fact hotels have got cheaper/better is also part of AirBnB's influence. Competition makes incumbents up their game.

rightbyte2• 2 years ago

That was true like 5+ years ago. By now market prices of housing have gone up to match the tourism profit lure I guess. It seems common nowadays for the owner to own multiple apartments, like 8+, where as in the beginning it was one or two.

I prefer ordinary hotels nowadays. Especially when travelling with children.

wavemode• 2 years ago

"Cheaper" is questionable. I usually find that, after fees, I'm paying the same, or more, than I'd pay at a nicer Comfort Inn.

Maybe I'm just unlucky but the last several times I've traveled, staying at an AirBnB simply made no financial sense. Sometimes I feel like I'm crazy, hearing people talk about "cheaper".

bluGill6• 2 years ago

Comfort Inn is in the lower middle of hotel levels. Not roach infested, not tiny, but also not very luxury. It is about the cheapest hotel I'll let my family stay in. The rooms work, but they are tiny and everyone stays in the same room. For a similar price I find airBnB which has separate bedrooms for us and each kid, a full kitchen (this saves us a ton of money vs restaurants and is healthier), and generally some other rooms to play in. We don't (rarely) get a pool which the kids miss, but overall it is a much better value. I agree the price is similar though.

coldpie2• 2 years ago

I don't like using AirBNB, for all the usual reasons, but every time I travel it's no comparison. To Vancouver a couple years ago, it would be like $400-500/night for a decent hotel in the area I wanted to stay. The apartment we ended up renting through AirBNB was I think $150/night, and that included a fully stocked kitchen & in unit washer/dryer. Similar prices for a trip to San Francisco earlier this year. I don't like the societal effects, but it is massively cheaper for much better service.

_DeadFred_3• 2 years ago

Airbnb is great until there is an issue and then it is a nightmare.

I think it will be like Amazons coming doom, death by a thousand cuts. You can have this horrible model that can't handle edge cases and until you burn too many people, it seems to work. But once you have sold fakes, or ruined (or added thousands in expense) vacations to enough people I know, your business is dead to me.

cbsmith• 2 years ago

Uber & Airbnb were really exploring a time-honoured model that has predictable effects. Taking underutilized resources and shifting to a "rental" model increases utilization of assets, broadening accessibility, and thereby increasing wealth... while simultaneously increasing the value of the underlying asset (making it less affordable). This isn't a new thing, or a surprising thing, nor is the scale of it the problem.

Where we get into a problem is when, due to lack of competition, you start extracting almost all (or perhaps even somewhat more than all) of the value that you're adding. That leaves everyone else in the same boat they were in before the rental model showed up, except comparatively worse off because there's a ton of wealth in there that has been concentrated in the hands of a few.

This is the kind of thing that having more competition would help with.

smitty1e• 2 years ago

Those were the innocuous founding ideas behind DoorDash, AirBnB, Uber, and Facebook. At scale, they would ruin communities, put restaurants out of business, destroy the dream of home ownership, and eventually undermine democracy itself.

Impossible to assess. These things happened, but as a chemistry experiment. You'd need to be some sort of $Diety to track the individiual atoms in the solution and judge the alternatives.

Quit this fruitlessness while you're behind, say I.

joony527• 2 years ago

Nice Artice!

osigurdson• 2 years ago

I'm grateful for VCs throwing money around at various things that may or may not work. We would not be in a better world if all money went into low risk investments.

efitz4• 2 years ago

It’s not that scale ruins everything, it’s the pursuit of scale that ruins everything.

I have thought a lot about antitrust recently and realized that it’s an overlapping problem with the VC unicorn problem. People get so hung up with being bigger/biggest, faster/fastest, that they minimize or ignore pathological side effects.

What if we have a progressive tax structure on business based on scale? Partly on size, partly on market power?

For example, what if corporate income tax were tied to the logarithm of the number of employees+contractors? What if the corporate income tax increased with the market share in markets served?

These kind of ideas have very low impact at small scales, but after a certain scale they start to have such a huge effect on bottom line that they disincentive growth for its own sake.

And they’re self-regulating and largely objective, unlike our current antitrust laws in the US.

Dalewyn2• 2 years ago

For example, what if corporate income tax were tied to the logarithm of the number of employees+contractors?

Unemployment would increase.

What if the corporate income tax increased with the market share in markets served?

More companies would register in Panama or some other tax haven.

I would be wary of the Law of Unintended Consequences.

azemetre• 2 years ago

You're making it sound as if registering in Panama is some "gotcha" that can't also be easily closed via legislation.

efitz4• 2 years ago

Uh, I doubt it.

At the companies that would be affected, they would simply divest. Shareholders would not tolerate the destruction of value so new companies would be created, spinning off parts of the original company (products and employees) into new companies.

In fact employment might increase as these new companies would need administrative functions that were previously shared in the larger original company (HR, accounting, etc)

userabchn• 2 years ago

what if corporate income tax were tied to the logarithm of the number of employees+contractors? What if the corporate income tax increased with the market share in markets served?

Is there a reason for choosing those rather than the simpler alternative of the corporate income tax rate increasing progressively with revenue (as it does for individuals)?

efitz4• 2 years ago

I dunno. I have a natural affinity for continuous vs discrete functions. But I also think thresholds cause bad behavior when you are near a threshold; you try to game the system by exceeding the threshold while trying to appear to be below it.

Corporate accountants are sophisticated enough to deal with formulae, and small businesses would be unaffected as the function changes very slowly at small numbers so even an error would likely not materially affect your return.

Calculation of market share would be more problematic.

And of course if you don’t like logarithms then choose your favorite exponential function.

skybrian• 2 years ago

Do you have revenue confused with income? VC-funded startups don’t pay income tax when they don’t have income (expenses exceed revenue).

Though, that’s less often true recently, now that they can’t expense software engineering salaries the same year.

6510• 2 years ago

A funny alternative: If a company is deemed large (and stale) enough the government prints money against and purchases it. If you buy a 100 bl company you can write the 100 bl IOU no problem. Innovative departments should be split off into separate companies that start out with a good size government contract.

Government can then immediately start "mis"-managing the company to make it less profitable (while theoretical profit stays the same)

You would get for example a government google search and a government adsense department.

feoren• 2 years ago

A single human is a non-fungible entity, but a corporation is a wibbly-wobbly entity whose boundaries can shift at will. Any progressive tax scheme on a corporation will be immediately met with 100,000 smart accountants figuring out how to optimize against it. Expect lots of crafty maneuvering to turn one giant corporation into a thousand tiny corporations, yet somehow all under the same umbrella, all anti-competitive, and all benefitting the same original owners.

That doesn't mean we shouldn't try, but these are very difficult issues to address.

BobbyTables2• 2 years ago

Large corporations would become a constellation of tiny independent companies who agree to provide goods/services in exclusive agreements with the “controlling” company.

Absolutely nothing would change except for an increase in paperwork and a few more lawyers.

_1tem• 2 years ago

I’ve been thinking a lot about this. There seems to be an “optimal” scale for tech — Google used to be amazing and wonderful about a decade ago, until it reached a certain scale. So were Facebook, etc. And even the positive effects of darling unicorns like Uber and Airbnb are actually more in the business model they pioneered, rather than the app itself. In Eastern Europe I use Uber alternatives which are usually about as good as Uber or better. Only Airbnb is a “naturally” global company by its very nature, because it is for travel.

Maybe the natural limit to scale should be state sovereignty (i.e. protectionism). I actually believe that consumers benefit if countries ban or tax the likes of Uber and promote a homegrown alternative. (Imagine if each country had its own Google customized to the local language and culture, it might actually be a better experience for everyone). I’ve heard that Baidu and Yandex are better than Google for local content.

Too bad the EU didn’t catch on with this. Europe could’ve outcompeted the US by playing a different game on quality and boutique charm instead of scale. Instead of pathetically trying to become a large homogeneous market like the US (and then failing badly and then regulating “privacy” out of spite), the EU should’ve actually been protectionist in favor of its members and it would’ve been interesting to see what marvels could originate.

robertlagrant13• 2 years ago

The bump in interest rates has cooled things down

This is the actual issue. When ZIRP was introduced (and then RE-introduced, sigh), it makes money appear to be worth almost nothing. Which means everything looks valuable.

insane_dreamer4• 2 years ago

Actually, it's more like the pursuit of large profits (and VC exits) through scaling ruins everything.

Night_Thastus• 2 years ago

And the way publicly traded companies are so beholden to shareholders.

What, have a profitable, efficient business with happy customers and workers? Well, we NEED to see growth, so better find a way to cut the operating costs - no matter how much worse it makes the product, how unhappy the workers are, etc. Better try to capture more of the market even if it makes 0 sense in context and will end up being a massive waste of resources.

It may run the business into the ground, but as long as there's a quarter of growth they can't see anything else.

svilen_dobrev• 2 years ago

"society-bending hyper growth"

i like that phrase. Like black holes' hyper-gravity bending the fabric of space-time..

the article also reminds me of that book "The Limits to Growth" (from the 70ies?)..

dgraph_advocate• 2 years ago

    "People just submitted it. I don't know why. They 'trust me'. Dumb fucks."

- Mark Zuckerberg (when asked about how he obtained the information for his newly launched social network.)

almararajaded• 2 years ago

091 2898 185

musicale2• 2 years ago

Mark tried to think of the most harmless thing: keeping track of your friends, and organizing group photos. With comments!

Regarding "Facemash":

Zuckerberg faced expulsion and was charged with breaching security, violating copyrights and violating individual privacy. Ultimately the charges were dropped.

https://en.wikipedia.org/wiki/Facebook

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