When you're a startup, you do something new and (hopefully) do it well. You get customers and you grow.
Eventually you become an established company. You do your thing really well, and customers are happy to pay you the price you ask. You make a healthy profit margin and times are good. Competition takes notice.
You keep doing things well, but your competition has a second-mover advantage. They get to work with newer tooling, no legacy codebase, all the benefits of a fresh start. They start to win your customers away from you.
You're doing things well, but it no longer really feels well, because your success in the marketplace no longer correlates with the maturity and quality of the product you're offering. You may have an incredibly mature and well-supported product, but it feels stale. It turns out that customers appreciate qualities like "refreshing" and "modern" that your product seemingly lacks.
As you start to lose customers, your declining revenue forces you to lay off employees and your stock starts to decline. Without a big change, you go out of business and shutter your doors for good. The executives are forced to sell the IP for pennies on the dollar to some patent troll as part of the company's bankruptcy and liquidation proceedings, and might open-source the IP if no buyer can be found.
... so you're saying the first-mover begins coasting and fails to invest in its product, while the plucky upstart puts in novel research and development.
That might be common, but it hardly seems inevitable. If anything the 'old guard' should have a relative advantage from better know-how, including knowledge of what pitfalls to avoid.
The true underlying issue might be the false assumption that market position is durable, rather than purchased with a depreciating investment in tooling, process, and technology.
You have circularized the discussion. Solatic's post is not suggesting that it is inevitable, as it is a response to the question "what's wrong with doing one thing well?"
What ever happened to just doing well enough to pay the bills, your employees, and a touch saved for a rainy day? Thousands of companies operate like this: restaurants, shops, trades, nothing you'd find on the NYSE of course. Why do you need to double in value every few years? Expand exponentially like a cancer? As your company grows and you wrangle more engineering talent into your directionless product, how much innovation are you stifling in the process? These engineers could be founding their own private companies instead of working for your public monstrosity, they could be working on products that are good on merit and bad on profit. We could be years ahead if corporatism didn't invade engineering and silo the best talent into contracts of secrecy, shattering open communication on technology in the process.
Take self driving cars. Quite a few companies are working on the same goal, repeating the same work. In an ideal world these engineers would all be in the same building, sharing notes, running joint experiments, and the end product would be sponsored by all the companies funding the endeavor. But instead we live in a world that values getting there first and 'beating' your colleagues in other companies, even if it takes longer than if everyone was collaborating. We value the dollar more than the technology.
We all learn about collaborating and helping people with their issues——really just teaching each other, the best way to learn imo——with capstone projects in engineering schools, then we forget it all when we enter the workforce and sign our NDAs and suddenly gag ourselves from talking about our work to other people in the field.
It's simple: no company wants to pour money into bugfixes. Managers / PMs / "product owners" who advocate for big, new changes (something like "integrate services" to "drive user engagement") get funding.
In a business view, if you're standing still you're at risk of being left behind. As long as software is tied to a company, it will never remain simple and do just one thing. The incentives are simply not aligned.
On a related but perhaps off topic note; Is that wrong?
I agree with everything you've said. Yet, I do wonder, is that business decision wrong? I've not spent much effort on the business side in my life, but from the outside I feel like I agree with their statement. Maybe not so much as in the "left behind" mantra, but more specifically I feel once a business reaches "success" (however you want to define that), your next objective should be maintaining/expanding the core product, and diversifying entirely.
It seems to me that being a one product company runs a risk of another company choking you out in various ways.
As an end user I of course love my products to say solely focused on the thing I want. I want Spotify to be my music app, nothing more. But I can sympathize with the decisions to diversify a companies offerings even if unrelated to the original core product.
Thoughts?
In fact I'd go a bit further, and say that if every company seems to become a conglomerate, that's a sign that something is broken in how a country works. If it's advantageous for two companies doing completely different things to be under one name, one roof, then it's likely that their real skill is in something else, like political connections, not in making whatever products it is they make. And that's unhealthy.
Just spitballing, but it's incredibly non-trivial to both aggregate skilled labor and organize them into an effective entity. Being eager about tearing down and spinning up these organizations to keep each entity single-purpose seems like it would be a lot less efficient (and competitive) than taking advantage of an existing well-run organization to do things that are somewhat related.
One possible solution then is to change your company to be a multi-product company, instead of adding new-product features into your one product.
I hope you're wrong, or at least wrong enough to leave room for a few "small is beautiful" outliers.
In my view a lot of products could be frozen once they are mature . MS Office could have stopped most development a decade or more ago, Gmail could have stopped years ago. Windows could have stopped UI changes with XP or 7. But what are all these people supposed to do if not tweaking their product?
Investor demands for growth. Dropbox already did one thing well. But they took money on the promise that they'd do more things and make more money than they could with that one thing they did well.
The constant demand for growth is not a good thing. You can only sell so many eyePhones or Intel CPUs before people just would rather keep old things working longer or recycle or not consume things and save their money for travel/experiences.
Craigslist won big early on because they took the personals and ads business away from broadsheet newspapers. That's pretty much it; they didn't try to go beyond that, and they're completely justified in not wanting to. Airbnb came in and pretty much took all of CL's short-term rentals business. CL is a small company and Craig Newsom (sp?) probably didn't even care.
He had the advantage of getting there first, and making a ton of money as a result. That is not the case today, so to expect newer companies to follow in CL's footsteps is unrealistic.
Growing the company is one way to achieve that. Other ways include paying out a share of the profit the company is making via a dividend or using share buybacks to reduce the number of outstanding shares.
There are plenty of examples of companies doing all of the above on various public exchanges. For example, utility companies often don't grow very much (if at all) but they do have consistent cash flow which they pay out as dividends.
In the Caden of dividends, wouldn’t they also need to increase over time to act in the best interest of shareholders?
Yes, you are correct. Most utility companies do grow to some extent, just very slowly. You also have to compare the rate that they grow against other metrics like GDP. If a company is growing slower than GDP you could make an argument that they're actually shrinking.
> In the Caden of dividends, wouldn’t they also need to increase over time to act in the best interest of shareholders?
Yup. In theory, if a company does not grow sales at all then their dividend should be able to grow at the same rate as inflation. Most companies do grow sales to some extent and thus are able to grow their dividend more than inflation.
For example, Coca-Kola has grown their dividend on average 7.46% per year. AT&T on the other hand has only grown theirs 2.26% per year which is closer to inflation.
https://seekingalpha.com/symbol/KO/dividends/dividend-growth
There is no "fiduciary duty", it's just unwitting HN folk pretending to be business savvy.
Publicly traded companies are controlled by whoever wants to buy them. If a company has assets that could produce a profit of $N, but it's currently not doing so and only making $M (and its share price reflects the lower revenue), it will be in someone's interest to buy the company and rework its priorities so it makes them more money.
So... the grandparent was effectively right. Over time, all public entities will act to maximize profit.
https://www.nytimes.com/roomfordebate/2015/04/16/what-are-co...
The flipside of that is that I don't think your original linked piece makes much of a case at all either.
[1] https://www.nytimes.com/roomfordebate/2015/04/16/what-are-co...
We aren’t talking about corporations, but rather publicly traded companies. As the previous article pointed out you do have an obligation to your shareholders, and that obligation is to somehow act in their best interest.
Certainly the stock market price goes down if you aren’t growing. And prices going down means you’re not doing right by your shareholders.
I’m happy to be wrong here (I hope it’s true) but whether law or not it seems to be an immutable force.
Like what you might end up with with this approach and selecting best of breed: Dropbox, Slack, Zoom, Office 365 desktop, Google Apps (email), Some CRM solution, Github, client security solution, VPN solution, Jira, Confluence (wiki), Zendesk (helpdesk).
If you want things like single-sign-on and some additional security and management capabilities then you typically need to pick some higher pricing tier for each service. The price per user per month adds up. And as a added bonus, you also need to spend time managing all these and handle the monthly invoices/receipts.
What Dropbox is now doing is of course not solution to my problem. The only solution to the issue I'm having is consolidation of the services or smaller players teaming up and giving me unified package (like Dropbox+Slack+Zoom). Fully integrated packages like Microsoft 365 are quite tempting, even though I know the individual pieces are not "best of breed".
(Don't believe the 2018 annual numbers; something like $450M of that "loss" is the result of accounting issues where RSUs converting to stock at IPO is considered an expense)
Perhaps those original comments on the DropBox launch people keep referring to were right all along.
But Microsoft and Google are creeping up. Their file sync is almost there with Dropbox.
OneDrive works on Mac and Windows, supports Files on Demand (similar to Dropbox Infinite - essentially placeholder files, very useful for small SSDs), and are working on differential sync for 2019.
The kicker is that OneDrive costs $99 as part of Office 365 Home, and gives you + 5 family members each 1TB storage, GBs of Outlook storage, the desktop Office apps for all devices including Android (they run really well on Android-enabled Chromebooks). And access to phone-based support. What's more, many people can get Office 365 discounted to $70 via the new Home Use Program, or even free if they're students or teachers[1].
Google One (one.google.com) is also a pretty formidable offering where available. File storage via Google Drive, a great photo storage service, tons of Gmail space, and access to Google's support teams.
So yes -- file storage is becoming a feature and the Google & Microsoft offerings will end up tempting many customers. Dropbox still does sync really well and has the best app, in my opinion -- including the only one that works on Linux, but I'm not sure that'll be a massive concern for the average customer.
[1] https://www.microsoft.com/en-us/education/products/office
For those who haven't looked at Office 365 in a while, it should be noted that Office 365 Personal was upgraded a few months ago. It used to be that Personal was for 1 person, with at most 1 Mac, 1 PC, and one mobile device. If you wanted to put the Office applications on more devices than that, you needed Home.
They removed that limit a few months ago. Now Personal lets you install on an unlimited number of computers and mobile devices, with the only limit being at most 5 can be signed in at the same time.
So now it essentially is if you have more than one person in your household who would like an Office 365 account, get Home. That covers 6 people, each of whom gets 1 TB of OneDrive, and can be signed in on up to 5 devices simultaneously. If it is just you, get Personal, which is $30/year less.
I've not figured out if it is possible to buy additional OneDrive storage if you need more than the 1 TB that is included.
That used to be true, but Dropbox decided they no longer wanted that market-advantage.
I’ve uninstalled Dropbox from all my Linux machines because it no longer supports ZFS (or any other file-systems except ext4).
Dropbox had a great idea, but it's not hard for a large company to copy it like microsoft did. Apple just does a lot of things half assed if it's not a priority to them. Nothing stopping iCloud from being better than dropbox in a couple years if apple one day decided they gave a damn about it.
We have a mix of iOS and Android, and some physical and virtual Windows 10 PCs.
The macOS sync client is generally very fast and keeps out of the way. It gets tripped up occasionally, but no more so than any other. It was really clunky when we first started using it for Sharepoint, but they seem to be iterating fast these days and we see very few issues at all.
For Sharepoint365 the sync client means our people just treat it as our “cloud network drive” with selective folder sync options (we don’t use any of the other Sharepoint stuff).
If you’re an Office365 shop, the integration is incredibly nice. I can start work on a Word doc on a PC and save it in OneDrive or Sharepoint365, and then on my iPad open Word and the document is sitting right there as the last file I worked on in the File>Open screen, with a “Go to where you left off” marker when the file is open.
We tried Box and liked it initially, but it became hard to justify it in the face of easy functionality and pricing from Office365+OneDrive. iCloud isn’t flexible enough for most of our business use cases. DropBox performance was always an issue and we didn’t want to saddle our dev laptops with that performance hit.
They're really competing hard in this space, and I suspect they're trying to get ahead of Google One here. They've already left Dropbox far behind.
https://9to5mac.com/2019/06/11/share-icloud-drive-folders-ip...
Perhaps it won't be as polished as Dropbox, perhaps it will. Either way, Dropbox is playing defense versus Apple/Google/Microsoft.
I'd be curious if, due to cloud prices/etc, Dropbox didn't feel they could actually sustain a competitive price and become profitable. So they're trying to expand to other avenues and find something that works.
[0] https://techcrunch.com/2017/09/15/why-dropbox-decided-to-dro...
There's always something along that process that is poor and holding back the rest of the process. An increase in throughput = increased sales.
This relies on composability, integrating together several such components into a coherent whole.
Users don't understand composability or want to do it. They want the integration to already exist and just work.
You could also compare wechat to traditional isolated apps, and in my opinion well integrated platforms trump collections of tools almost always.
I work at a place with enterprise O365. When you've got things like Teams, well, you might argue that Teams isn't as good as Slack, you think Dropbox is a bit better than OneDrive, and so on, but it's really hard to argue paying for all those things is worth it when you've got something that e.g. lets you record your Teams meeting, run it through voice recognition, and turn it into a OneNote transcript to sit alongside your repo of project docs for the same meeting.
Sometimes well-integrated solutions are more than the sum of their parts, and that's the problem Dropbox is facing.
Turns out that it dies if you try to grow it near walled gardens. The soil doesn't suit it.
Do you ever right-click a file on your desktop and expect to be able to do an “Open With” action to open it in a Zoom meeting?
Dropbox is trying to recreate/recapitulate that functionality—the functionality of OS file-explorer GUIs, and how they act as a launchpad for feeding files to third-party intent providers.
It was seldom the thing users wanted and could use, and ended up being relegated to the dev-oriented UNIX userland.
I use Slack and Zoom often, but I have never once thought — gee I really wish I could just open up this presentation in Dropbox directly into my Zoom meeting. I just don’t see the integration working in that direction.
Sure, Dropbox should make sure that it’s available as a provider to save/open files for other programs — that make sense. The integration with MS Office makes sense — where Office is aware when you’re working on files that are stored in Dropbox.
This just seems like they are trying to do too much. I can’t see the strategy...