I've been thinking about how enshittification, venture capital, shareholders and the life cycle of a company are in some ways related. Any company that has external investors is bound to go through this cycle of
- building a great product
- taking in external funding money
- growing and then either being acquired or going public (or more commonly shutting down)
- then all the head scratching decision making starts
It's head scratching to users and outside observers, but the incentives are such that there is pressure to grow on a quarterly basis, get those charts looking good and individuals in the management chain are doing what they can to optimize their career growth leading to short term decision making at the cost of users and customers.
The big picture thinking and long term decision making are incredibly hard. Very few companies are able to do this over the long term. Micosoft and apple are doing great currently and it will be interesting to see how stripe and openai navigate this process.
My current opinion is that only small founder owned companies or foss organizations can avoid this trap over the long term and it involves not trying to squeeze out every last bit of value. Both of these require a certain level of financial security + there's the opportunity cost vs just going the vc route.
VC funding is incredibly valuable and it opens up a lot of possibilities that small orgs can never hope for. I guess what I'm saying is: expect enshittification and enjoy the ride while it lasts and then jump ship when trouble starts. Jumping ship becomes incredibly hard with network effects, so that's the challenge we are seeing with social media companies now. Also once companies become too big to fail, it's a drag on society.
Personally I would still go the VC route since I don't have a few million lying around and tell myself this is just the cycle of life (for corporates) to avoid existential questions and going down the rabbit hole of questioning everything around me. Sorry about the disconnected thoughts.
It's head scratching to users and outside observers, but the incentives are such that there is pressure to grow on a quarterly basis, get those charts looking good and individuals in the management chain are doing what they can to optimize their career growth leading to short term decision making at the cost of users and customers.
The big picture thinking and long term decision making are incredibly hard. Very few companies are able to do this over the long term. Micosoft and apple are doing great currently and it will be interesting to see how stripe and openai navigate this process.
My current opinion is that only small founder owned companies or foss organizations can avoid this trap over the long term and it involves not trying to squeeze out every last bit of value. Both of these require a certain level of financial security + there's the opportunity cost vs just going the vc route.
VC funding is incredibly valuable and it opens up a lot of possibilities that small orgs can never hope for. I guess what I'm saying is: expect enshittification and enjoy the ride while it lasts and then jump ship when trouble starts. Jumping ship becomes incredibly hard with network effects, so that's the challenge we are seeing with social media companies now. Also once companies become too big to fail, it's a drag on society.
Personally I would still go the VC route since I don't have a few million lying around and tell myself this is just the cycle of life (for corporates) to avoid existential questions and going down the rabbit hole of questioning everything around me. Sorry about the disconnected thoughts.