that's who I was referring to - they get criticized

it's pretty hard to be innovative and not be illegal somewhere. Difference is many today see being illegal in China, Turkey, Iran, or wherever as a good thing while being illegal or borderline illegal in the USA is a bad thing

The USA has regulatory capture that is just as bad as ideological or dogmatic religious capture is in those other nations. It just happens that the largest markets with monopolies or cartels that are super profitable and ripe for tech disruption also usually/sometimes also markets that have built a moat via government regulation.

I think the criticism lobbied against AirBnB and Uber is for a reason, and the reason isn't the same "up-yours" attitude of past maverick tech companies. It's a little easier to buy the maverick attitude of something like gnutella when the author isn't getting close to billion dollar revenue yearly. It may seem a little strange, but the ethos is a bit easier to believe when you stay outside the system and benefit everyone instead of just looking out for yourself alone.

The reason Uber and AirBnB are the subject of scrutiny is simply because the difference between them and any other business is non-discernable except that they have the money to stall out legal issues. Just from a "feel" perspective, they don't really feel like they're fighting the fight for everyone, they're just trying to line their pockets. There's a world of difference between what they do (offer a service at cost) to something like bit torrent or gnutella.

I can't really say where or what the limit is on something like this, when a software maverick stops being a maverick and starts playing the game, but admittedly I haven't really carefully analyzed it beyond just "here's why I see a difference". Uber and AirBnB (and quite frankly, many other SV start ups) don't really have that hacker feel to them like we'd see with older projects - instead it feels much more like they're rooted in business and business alone.

Making a billion dollars a year revenue is pretty much the definition of "benefiting everyone", except when you're a part of regulatory capture (which AirBnB and Uber are not... yet).

> Making a billion dollars a year revenue is pretty much the definition of "benefiting everyone",

No, no it is not. One party making lots of money is not the same as something benefitting everyone.

Companies ignoring environmental regulations could make more money, but it wouldn't benefit everyone, as an example.

Before even talking about externalities like the environment it's worth noting that revenue isn't profit. So who benefits from revenue depends on profit margins.

If a startup disrupts a high margin industry, especially if that industry is also inefficient (which often goes together) and replaces it with a more efficient lower margin business model, then consumers will benefit.

If a startup disrupts an industry by finding loopholes in government regulations, the question of who benefits is much more complicated. I do believe that finding loopholes or even breaking the law to some degree is a necessary part of the democratic process. It's also unavoidable given the global nature of some businesses.

But whether or not regulatory arbitrage benefits anyone other than founders and investors very much depends on the specific business model and local circumstances. It's extremely complicated and varied. Finding out what all the effects are will probably produce a couple of nobel laureates in economics.

>If a startup disrupts a high margin industry, especially if that industry is also inefficient (which often goes together) and replaces it with a more efficient lower margin business model, then consumers will benefit.

If before you had independent smaller businesses or individuals, and now all that has been captured by a single company, then a job has just gone down the drain, and the road is open for monopoly.

That is always a danger. But I think history has shown that monopolies or oligopolies are often less stable than they appear.

The assumption, beginning with Marx I think, was that monopolies have a self reinforcing element. That's true, but there is also a self defeating element. The more a monopoly absuses its power, the more complacent it becomes and the greater the incentive to disrupt it.

The problem is that governments sometimes collude with monopolists instead of making sure that markets are actually functioning as they should.

I'm not sure I follow.

I didn't explain my point well now that I've re-read it but the idea is more than the early maverick hacker projects felt more like just a project, something that was made to make sure everyone's lives got better. Uber, AirBnB, et. al., were business from the beginning. Their interests look to be making money, not providing a service or making it better. The focus isn't on making transportation or hospitality better, it's about controlling a market with their system and earning a profit. Motive matters, and it just doesn't strike that they are really benefitting anyone but themselves.

This isn't saying their services can't be useful - heck, I have an AirBnB reservation for my holiday the next 3 weeks. But I also don't doubt that if AirBnB would change their service in an instant if it suited them. They're only doing hospitality because there's money in it. That's not really the same spirit and it's not really with our benefit in mind, it's with our wallets in mind.

> I'm not sure I follow.

So, thinking out loud... a billion dollars at $10 a ride, so lots of transactions, lots of customers. Theory says a transaction will only happen if both sides feel they will profit, so lots of people must have benefited, right?

But no, because you were talking about the total benefit, not total number of people who benefit.

Trivially, if the customers got a ride plus a share of a billion dollars, they'd be better off than if they just got the ride. More benefit would be delivered to customers if Uber had zero revenue, so using a massive revenue figure as a measure of value delivered to customers is meaningless.

But, the guy might still be on to something, since Uber benefiting lots of people only a little may still be more total benefit than some free software that hardly anyone uses, he just needs to back that idea up with something more substantial.

Uber and AirBnB made a billion dollars by having a lot of satisfied customers. Being satisfied is a benefit. In other words, they benefited a lot of people.

The fact that I have to explain this makes me wonder...

> Making a billion dollars a year revenue is pretty much the definition of "benefiting everyone"

This is by far the strangest thing I've ever heard.

How do you think revenue is generated? People give you money because they rather have your good/service than the money. Selling something to someone is benefitting them.

> Selling something to someone is benefitting them.

This is so myopically capitalist. It's like the argument for the free market distilled into a single sentence.

People would not just rather have the good or service than the money; people have no use for money. Money isn't a real thing. It's an artificial construct designed to allow us to exchange goods and services freely and to avoid loss.

Exchanging money has nothing to do with a benefit for the consumer. It is simply an exchange. There is no law of nature that says all exchange is fair, or a benefit. Quite often, the buyers are at a disadvantage. The entire idea of providing for a "need" precludes that someone can be taken advantage of.

If you sell me cancer drugs at $800 a bottle, it benefits me in that my cancer is staved off for a month. But then I have no more money, and can't buy the drugs, and die. Who did it really benefit?

>Exchanging money has nothing to do with a benefit for the consumer. It is simply an exchange.

Why are you making the exchange if it doesn't benefit you?

>There is no law of nature that says all exchange is fair, or a benefit.

Fair has nothing to do with anything. I never used that word. Don't put it in to my mouth.

Sure there's no law that says an exchange has to be beneficial to you. Do what you want. But most people choose their actions based on self interest and make trades that are beneficial to them.

>if you sell me cancer drugs at $800 a bottle, it benefits me in that my cancer is staved off for a month. But then I have no more money, and can't buy the drugs, and die. Who did it really benefit?

You benefited by a month of life. How is that not incredibly obvious?

... And then died due to the loss of money from the transaction. A transaction with a short term benefit that results in long term disaster is not really a benefit. It's like being sold slow poison.

A benefit is a profit or an advantage. People often have no choice in what they buy, or are forced to buy something. Like with the cancer drugs, if their only other option is to die, it really isn't a choice.

People can also be sold things that are bad for them that they need, like heroin. Buying heroin is not a benefit. Then there's buying things that are more unintentionally harmful, like blankets full of smallpox sold to American Indians, or overpriced half-faulty weapons sold to resistance fighters. Sometimes nations are forced to buy and sell goods at an inflated price only to later be accused of not supporting local goods more for political gain, making their transactions only beneficial to the banks that hold their money or the multinational corporations that provide the goods and services in the first place. At the far end, a grocer paying protection money to gangsters results in losing money, but no benefit.

In the real world, people do things for a variety of reasons, and not always good ones. I believe your argument is a facile generalization that completely ignores the reality of trade.

>... And then died due to the loss of money from the transaction. A transaction with a short term benefit that results in long term disaster is not really a benefit. It's like being sold slow poison.

Extending their life by a month doesn't result in the long term disaster though. They already have cancer. I don't follow extending life = slow poison at all.

>People often have no choice. Like with the cancer drugs, if their only other option is to die, it really isn't a choice.

So the benefit to performing the trade is so great that they wouldn't even consider not making it is somehow an argument against the trade being a benefit?

The rest of your argument appears to just boil down to "there are exceptions". Cool, checkmate on that one. You found exceptions. Bravo.

I look at plenty of companies that make billions of dollars yet benefits very few.

Do you have any examples where they did that purely on the market, without benefiting from regulatory capture?

Typical 'vice' companies? Gambling and cigarettes, oil? 'Big Pharma'? Does heath insurance count as 'regulatory capture'?

Gambling and cigarettes - lots of satisfied customers.

Big pharma - regulatory capture. Health insurance - mostly regulatory capture in the US.

If millions of people want to pay you money, you bet you're benefiting someone. Or else they wouldn't pay.

Wikipedia benefits just about everybody with an internet connection and they sure don't make a billion dollars a year. The same could be said of open source devs who contribute to core projects running our internet.

You're talking about the opposite of what I said. My implication was

1 billion USD revenue => benefiting everybody

Yours is

Benefiting everybody => 1 billion USD revenue

I stand by the first but not by the second.

You said: "A is the definition of B"

I said: "Here are some Bs that are not A"

If you had said the definition of a kangaroo was "a big marsupial from Australia" and I pointed out many kangroos that weren't actually big marsupials from Australia, It would suggest that the definition was flawed.

> You said: "A is the definition of B" > I said: "Here are some Bs that are not A"

Yes, and I pointed out that the two are unrelated.

> If you had said the definition of a kangaroo was "a big marsupial from Australia" and I pointed out many kangroos that weren't actually big marsupials from Australia, It would suggest that the definition was flawed.

If I had said that the definition of an A (kangaroo) is a B (big marsupial), and you pointed out that many As (kangaroos) aren't Bs (big marsupials), I would have been proven wrong.

However, I said A (companies making a billion dollars in revenue) implies B (they benefit a lot of people) and you pointed out some Bs (companies benefiting everyone) that aren't As (companies making a billion dollars in revenue), which is irrelevant.

This is basic logic, I learned it in fifth grade. A => B is not a commutative operation.

Because that money are spread around to people?

Old companies needed 1000s of workers to make that money, so money were indeed somewhat distributed.

Automation and computing means a company can make that with 50-100 people even, and huge profit margins on that billion dollars.

And then with the right schemes, you can also avoid paying taxes.

> Making a billion dollars a year revenue is pretty much the definition of "benefiting everyone"

Is this satire?

Travis?

>that's who I was referring to - they get criticized

Well, it's not like breaking laws is enough to make you both disruptive AND a good guy.

One, like Uber, can break laws and be a petty, exploiting, company.