Comment on [deleted]
deadsuperhero@lemmy.ml 7 months ago
While I think shareholders can be a driving factor, I see it way more often with VC-funded companies. The “2.5x year over year” growth mantra that places like YCombinator stipulate have disastrous effects on small tech companies. Often, these startups have an incentive to keep taking additional funding rounds, which appears to tighten the grip the VC has over them.
Try growing the next Microsoft or Google or Amazon out of that model. I’m not convinced that it’s possible. At least if you bootstrap your own company, you don’t have the same binding obligations…even if it takes way longer to get to a place that’s self-sustaining.
exocortex@discuss.tchncs.de 7 months ago
IIRC most successful VCs invest very early and get out often early-ish too. The real enshittification that dangers the actual position of the company often happensuch later. At that point the company is traded publicly And there’s a large anonymous body of shareholders. They only care about profits. VCs are actually a little smarter and care about longer time frames ad in that stage often much larger (relative) growth rates are possible. At a late stage (think Google, Twitter, Facebook, Reddit etc today) growth is much more difficult. How could Google grow today? They’ve saturated the search market years ago. So the only way of making more money is by sucking mire money out of their existing user base. And they absolutely need to to it, because there’s a huge pressure on the managerial class to do it, because the shareholders demand it. And if the managerial class doesn’t do do it, or isn’t capable of doing it they get replaced by people who are more willing or capable - even if it’s detrimental for the company when viewer long tee term. VCs i would argue care all about profits, “but”. (they are smart enough to see the big picture. That’s why they often get out once most of the possible (easy) growth has been achieved. The shareholders of large publicly traded companies are not that coordinated as the agree on anything other than just “growth”. There isn’t enough nuance in the wants of the masses as to want any more sophisticated strategy than simply “growth”. That’s why only short term growth can be thought.
Of course sometimes also large companies can grow 2.5x or something like that. But it’s rare and takes more time. The exception makes the rule here. Early stage growth that VCs bank on is much more explosive i think. More like 10x or 100x.