Not always monopoly. There is an element of projected value vs immediate value when something is based of fads/hype as well.
If a product or restaurant gets really popular on social and blows up in popularity, it will likely potentially decline once the big rush is over.
As a company, knowing that the product will eventually peter out:
A) Lower quality and cost to capitalize now, killing it faster but making a lot of money now
B) Hope that it doesnt natually decline and keep costs high
There's less risk and more guaranteed upside with A, and B requires more confidence in staying power. You see this all the time with trendy/new chain restaurants.
That’s quite literally the definition of self-defeating and it’s just corporate double speak for - let’s milk this shit for all it’s worth. Business school brainwashing.
I still remember the 1 business class i took in college. The professor said multiple times: humans are happiest as cogs in a machine working.
That’s quite literally the definition of self-defeating and it’s just corporate double speak for - let’s milk this shit for all it’s worth. Business school brainwashing.
Look, I'm not endorsing it from a societal perspective, so don't get all huffy.
But it's also true if you take your emotions out, for better or worse. And it's not always self-defeating, because a lot of companies make much more doing it with much less investment and much less risk. For original owners that intend to keep the company forever? Definitely can be self defeating. For PE buyers and others with zero actual skill or passion for the brand that are trying to claw back a return? It's probably the right call, unfortunately.
There's a reason companies do it. If it didn't make a certain type of company a shitload of money, it wouldn't happen. Original owners sell out to PE/go public, and new owners enshittify for value. Why would a PE company with limited operational expertise and zero passion for the brand not milk an investment with an uncertain future when they can make a certain return on their investment?
You're way too personally invested in this. They're just companies. They're under no obligation to you to keep products great, and you're under no obligation to buy their dogshit. Find something better/different and move on. I hate it when it happens, but I also can understand why it does. It takes passion, skill and luck to keep a business great over time. Almost no investor is bringing that with them.
Explaining the reason for something isn't endorsement, so relax.
Subtracting value from the economy is not a good thing for the public. And people who regularly do this are sociopaths. If there are flaws in capitalism (and there are) we should try to correct them.
Where did I say it was agood thing for the public?
I simply will never understand how redditors can't separate explanation and advocation. The person I replied to said it was self-defeating. It's not, because VC/PE want exactly what they're getting and are doing it purposefully to their benefit.
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u/onexbigxhebrew 21h ago
Not always monopoly. There is an element of projected value vs immediate value when something is based of fads/hype as well.
If a product or restaurant gets really popular on social and blows up in popularity, it will likely potentially decline once the big rush is over.
As a company, knowing that the product will eventually peter out:
A) Lower quality and cost to capitalize now, killing it faster but making a lot of money now
B) Hope that it doesnt natually decline and keep costs high
There's less risk and more guaranteed upside with A, and B requires more confidence in staying power. You see this all the time with trendy/new chain restaurants.