Ah yes, the google style of offerings.
LoopStart: Expand into so many markets to then be unmaintainable, then randomly decide to focus on your main stream of revenue again and kill off the side offerings GOTO LoopStart.
I dont know about that, Ive made many songs in Adobe Flash in my time! /s
But what Adobe has done is a series of aggressive egg laying hormonal supplements and force feeding. Yes, it might get them even more eggs for a bit, but it's also a big risk for killing the goose for not a whole lot more eggs, with the side effect of definitely making everyone angry with you.
But I think Adobe, and most companies, would inevitably make this decision. If you give a medium-sized public corporation a faucet that spews money at a constant rate forever and a button that has a 60% chance to double the money and a 40% chance to destroy the faucet, I suspect that most corporations would push that button at least once every few years.
That pretty much sums up all of what business and investment is. Play with money to get more money to play with.
If the shareholders, who management has a fiduciary duty to, are well-diversified, this might even be the right decision.
Basically, if it's mostly index funds and mutual funds holding your stock, you probably should push that button every so often.
The thing is, the people who own these companies also happen to live in a word powered by the products they produce. If you kill a bunch of golden geese in pursuit of profits, they will see bigger numbers in their broker accounts, but it’ll be because everything we all use has become scarcer and more expensive.
Sure, the owners will look richer - at least in comparison to everyone else. But would you rather be rich in a world of scarcity? Or middle class in a world of abundance?
I was answering the hypothetical example of one company having this magic button. With the rest of the world operating as normal.
If you want to figure out the optimal approach to many companies having such magic buttons, that's a slightly different question.
You are right that creating companies isn't easy nor trivial. That's why the market so richly rewards creating successful companies from scratch. But that's nothing that a well-diversified investor needs to worry about for this particular decision. You just look at market prices.
> The thing is, the people who own these companies also happen to live in a word powered by the products they produce. If you kill a bunch of golden geese in pursuit of profits, they will see bigger numbers in their broker accounts, but it’ll be because everything we all use has become scarcer and more expensive.
> Sure, the owners will look richer - at least in comparison to everyone else. But would you rather be rich in a world of scarcity? Or middle class in a world of abundance?
You seem to assume zero competition? And also that the stock market is really bad at evaluating business decisions (at least worse than you)? If the latter is the case, you should become an investor and make a killing!
Especially if you are living in a world where everyone else is stupidly slaughtering their golden geese, you should be able to pick up some disgruntled ex-employees for cheap and just run a steady ship!
Another important consideration: at some level of abstraction a company is just a legal shell. 'Killing' a company might just mean that the old equity (another legal abstraction) is deleted, and the former creditors turn into equity holders. The operations don't even need to be affected by this at all. Of course, you can also 'kill' a company by shutting it down. But again, that doesn't necessarily remove any of the demand for its (type of) products, nor does it remove the experience of the people working there, nor does it break any of the machinery and hardware.
So if Adobe goes belly up, there are already plenty of other companies willing to fill their former niche.
I can tell you that many people would choose the first.
Yet, that time is frequently cited as the golden age that people harken back to.
You don't need a layoff to migrate a product into minimum maintenance.
There's another way I like to think about what you said: cutting fat. If cutting fat is the easiest way to get stock price up (on a quarterly evaluation) then that's probably what most people will do. But how frequently can you cut fat before you start cutting limbs? The more effectively you did it previously (or the person before you) the less you have available to you. Not to mention that some fat is necessary for big businesses. I suspect this is connected to the trend of enshitification we see.
> "I keep the money pipe flowing and did not actively make it worse" does not get you a promotion.
It's actually quite sad that it doesn't. Or that the money pipe flowing is by far the main metric used for evaluation. Especially when the market is cornered. Your strategy should change when your environment does. I just wonder what these people are doing with this money and why they want it so much. $1bn is essentially unspendable. But we see 200 people with 10x that and 15 people with 100x that. I just don't get why they care anymore. But I guess people really care about points?
Money is relative. I bet there are things $1bn can buy that we aren't even aware of because we were never exposed to it. Some of those things are probably non-tangible, like the ability to influence politics and change the world.
Of course this doesn't mean everyone is aware of these things but they're still publicly known.
After all, money is nothing else but a token of work. The more money you have, the more work you can make other people do.
I think you're reaching. The things you're talking about have physical impacts. You can't run computers without building chips, developing power systems, and so on. Yes, things of value need not be inherently physical but there are no things that are not connected to the physical world in some form or another.
It's a me problem alright, but I'm in no way unique in refusing to put up with the mountain of grief that the Gimp UX is.
> I've been using it productively for photo editing and web design for two decades+.
I know Gimp must have its share of long term users but they're a miracle to me and I don't know what to say to that. I suppose it's good people reading these threads who are open to giving Gimp a go see there are users for whom it's working out.
I personally learned Paint Shop Pro first, after baby steps of Mac/MS Paint. Later on didn't find Photoshop particularly intuitive... although liked 3.0 on the Mac. It's even worse now according to professional friends.
I've used many others over the years and never had a problem with basic to medium features. They all work roughly the same—WIMP. Point, click.
Gimp works similarly to every other graphics program, so using it for common tasks is not hard. It's not "full of grief." If you can't do it, you either never learned how to use a GUI program properly[1], proceed by rote, or refuse to consult the manual for more specific tasks.
For one thing, it's a helluva lot easier to learn than Blender, which has no chronic troll posts that I've seen.
[1] Not uncommon in web times. The original Apple HIGs might help.
Blender being harder to learn has pretty much zero to do with how great or poor the experience of using it is. On top of missing the point, you're also missing the connection between the lack "troll posts" and what the user experience is like.
But since you're muttering to yourself about troll posts and how it's really just a skills issue, I might as well go and mutter to myself about how great Gimp could be if it had users who had standards instead of being chronic enablers who just cheerfully whistle through the wart fair it is.
I've had my yearly share of discussing Gimp I think. I'll just keep to my routine: see an update, install it in hopes of finding it has changed, and quit it ten minutes later kicking myself for being dumb enough to allow myself to hope.
I think the dark patterns here are garbage, but Adobe has provided a ton of value for those subscriptions.
Make a serious dent in their business and they will damn sure try. Typically with lawfare.
Is it common for people to upgrade LR or similar software every year?
Or the subscription made LR more accessible to people
The Lightroom CC is the mobile/desktop product. That is and always has been a separate "more accessible" product. Moving Lightroom "Classic" (the desktop only product) to a rental only model simply makes profits more accessible to Adobe.
That may not matter to you, but that is the market now.
And the subscription turned out to be about the same cost as
upgrading every year.
Lightroom upgrades cost about $80. According to the wiki page Adobe rents Lightroom for $10/mo. That upgrade would only get me eight months of access.
Adobe has provided a ton of value for those subscriptions.
And yeah I paid for two upgrades before Adobe moved Lightroom to rental only. The pricing was quite steady. Keep in mind Lightroom had no DRM baked in. No licensing checks, perpetual three seat cross-platform license, etc., etc. That $10/mo is for one seat only.
If the cost to the consumer were close Adobe wouldn't have spent the engineering effort to integrate Lightroom with all of their licensing software and incur the cost of having to keep the rental servers running. You can't predict the future but based on the steady pricing (both rental and perpetual licensed) the rental software is unambiguously more expensive for the consumer.
Maybe Adobe's worried about AI making Photoshop irrelevant. Here's the cautionary note from its latest quarterly report: "While we have released new generative artificial intelligence products, such as Adobe Firefly, and are focused on enhancing the artificial intelligence (“AI”) capabilities of such products and incorporating AI into existing products, services and solutions, there can be no assurance that our products will be successful or that we will innovate effectively to keep pace with the rapid evolution of AI across our Creative Cloud, Document Cloud and Experience Cloud. If we do not successfully innovate, adapt to rapid technological changes and meet customer needs, our business and our financial results may be harmed."
> If other companies don't do it yet it's just because they don't have the level of market dominance that Adobe has - once they reach it, they all behave in the same way.
Google has never charged for search, nor has Facebook charged for their social network.
They arguably have bigger reach and market dominance than Adobe has.
There are good reasons Google and Facebook behave in different ways, of course. They aren't stupid, nor do they lack greed.
I am here just arguing that your comical assertion of mono-causality.
'If other companies don't do it yet', perhaps they have good reasons?
> If other companies don't do it yet it's just because they don't have the level of market dominance that Adobe has - once they reach it, they all behave in the same way.
was wrong. Clearly, there's more than one reason that determines how companies behave.
However, I understand your point, it's the truth of many businesses that if you're not paying, you're the product not the customer.
No, that wasn't my point. My point was that the mono-causal point
> If other companies don't do it yet it's just because they don't have the level of market dominance that Adobe has - once they reach it, they all behave in the same way.
is wrong.
So yeah, they behave exactly the same - towards their actual customers, which are advertisers, not you.
How did we end up in situation were anyone would be paying in this case? Seems like just pure exploitation of their position having combination of add network and popular search engine...
Ostensibly Adobe's customers are paying for continual improvement and support of its product and maintenance costs associated with whatever cloud features they offer. That's not rent-seeking.
They usually gain market share based on merit. Over time, structural factors such as network effects allow them to grow the rent-seeking part of their income while the merit based part declines.
Rent-seeking is a very entrenched idea though. Even the tiniest bit of merit in the distant past is enough to justify renting out inherited land for instance.
It doesn't really apply to any SaaS.
https://www.counterpointresearch.com/insights/services-reven...
And they will need access to all of your data to provide those services.
Which doesn’t require any of your data.
There is nothing I am aware of that Apple has done indicating this and plenty to show they are not (e2e cloud backups, on device llm) they continually find ways to provide services without needing access to your data or keeping your data on device
If you want to make any meaningful statement at all, I guess you'd need to look at the performance of Adobe stock compared to eg the S&P500 index. (Oh, and be sure to look at the total performance, ie with dividends re-invested. Don't look just at the share-price.)
So why not just comment with exactly this?
Here is a comparison of ADBE and SPY, which ADBE correlates very strongly to SPY, and also in this analysis is AAPL which severly outperformed the SP500:
2003 -> 2013 https://www.portfoliovisualizer.com/backtest-portfolio?s=y&s...
2013 -> 2023 https://www.portfoliovisualizer.com/backtest-portfolio?s=y&s...
See the difference?
Thanks for providing the data. Sorry, I was on mobile, so had a harder time finding the numbers in a way that I can share.
> See the difference?
For anyone following at home, here's the important bit for the earlier period:
> The risk adjusted return of the portfolio [Adobe], measured by the Sharpe Ratio, was 0.57. Whereas the Sharpe ratio of the benchmark [S&P500] was 0.57.
And for the later period:
> The risk adjusted return of the portfolio [Adobe], measured by the Sharpe Ratio, was 0.93. Whereas the Sharpe ratio of the benchmark [S&P500] was 0.69.
Thanks!
Guess I’m a Toyota subscriber as in 10 years I’ll be buying a new Tacoma
For me I got a 14 for upgraded GPS and satellite, no plans for a 15. My dad is on a 12 and my mom a 10 and totally content. I think my brother has an 11. Most people I know don’t obsessively buy upgrades and those I know who do are actually split between Apple and android- and do it with other things too ie it’s the personality behind it not the company “tricking” them. Some ppl even do it with cars wanting the latest
Thank you Harvard Business School.
1. https://teknikveckan.se/det-krisar-hos-viaplay-over-25-proce...
2. See comments - https://twitter.com/ViaplaySportSE/status/180153322166384670...
3. https://omni.se/sparkade-vdn-jobbade-fem-manader-far-18-milj...
https://web.archive.org/web/20240118204920/https://www.fastc...
See https://en.m.wikipedia.org/wiki/Boiling_frog under the Experiments header.
Fortunately they fell into financial troubles before the deal became active.
They massively overpaid for showing all of the matches, to force everyone interested in football to get a subscription. But probably most people just watch it on tv, because "hey, why not, national team of x country (or our own team, for whom winning a match is a miracle) is playing, lets watch it". Not "I will happily pay tens of € each month to some company to watch stuff".
For better or worse, I agree. If you aren't ripping them off you're leaving money on the table, but if you go too far and piss them off they're going to take away all the money on the table with them.
You're leaving money in their pocket that you might get later
How do you quantify loyalty? Because it seems to me that it's very easy for individuals to prioritise short term gains at the cost of medium and long term losses due to trust erosion
I wonder how much client satisfaction and trust would be worth on the quarterly report, if it could be calculated. I think it would be immense for most companies
The most effective business is getting all the money on the table and making your client happy. Thusly the art of business, ripping off your client without pissing them off.
Absolutely nobody gets ahead in business by selling wares cheaper than what they could have gone for, unless you are deliberately underselling the market to gain share by sheer force of will. Likewise by selling wares higher than what they could have gone for, clients will just look elsewhere because you're just another one of many merchants.
Explain Costco then.
I've seen the same numbers in multiple articles state that 72% of Costco's profits came from the membership fee in a year that they saw record sales.
Reminds me of the "men only want one thing and it's disgusting" meme but with executives.
If Photoshop would cost 5€ a month, then everyone would buy it because it is the best.
If Photoshop costs 50€ a month, they make more money, but they are leaving a huge opportunity for competitors to make a 5€ a month product.
I actually think the latter is better for the ecosystem. There's going to be multiple products, with Adobe at the top, but also a lot of apps from smaller developers. On the Mac there are for example Acorn, Pixelmator, Affinity Photo -- none of them are a full replacement for Photoshop, but they are decent options for people who just need to edit a photo.
Back when pirate Photoshop copies were ubiquitous, there just weren't any opportunities for smaller developers like there are now.
Most (all?) arguments that depend on competition depend on a fair market.
However, no industry or government lives in a vacuum.
Firm X develops enough market dominance to constantly collect vast sums of money to build their war chest.
This war chest is used to buy out competitors, and kill off competing ideas.
Firm X creates clones of lower priced alternatives, then outcompetes the smaller firm.
Firm X uses war chest to fob off or weaken regulators (if any exist), extending the time they can extract rents.
——
Little guys have to survive by getting enough money fast enough to beat the Big guy. Why bother? Get moderately sized, get bought out, and live with your wealth.
PS: I have butchered economics somewhere, forgive me.
Best of all, if the competitor becomes a threat, the company with 50€ a month product can just buy them out.
If microchip producers had done what Adobe has done, computers would be developed by adding a few vacuum tubes each year and bumping the cost by 5%.
There are inexpensive stocks yielding close to 10% from dividends, but you are told not to expect an increase in share price. Instead, people go after stocks that yield far less (0-3% dividend with a much higher stock price) but which may experience a growth in share price.
[1] https://portfolioslab.com/tools/stock-comparison/ADBE/SPY
The point of this discussion is that Adobe is essentially stealing from its future self by making short-sighted decisions. To a significant extent, they're cashing out their customer loyalty, and that loss of loyalty makes them much more vulnerable to attrition. Gradual attrition will slow their growth; a major attrition event, which they're now making possible, could rapidly reverse it.
Hello, Autodesk
I just purchased affinity suite this year because I’m done with adobe for good now. I don’t see them doing anything to ever win me back as a customer
Compare that to the Affinity suite, which is an amazing collection of programs, especially for the price. They're currently running a sale where you can get everything for $83. If my daughter becomes interested in digital design, I'd be happy to spent that kind of money to encourage her. I'd be very hesitant to subscribe to the Adobe suite, even though that's what I use at work.
When you have complete market dominance, you have little opportunity for growth. If your employees and investors have an insatiable need for growth, you have to try anyway, and that's where things fall apart. The #1 threat to your magical money faucet is something replacing your product as the photo editor of choice, and you should be 100% focused on making sure that doesn't happen. To do that, you need to be focused on keeping up quality, periodically adding the latest features, and making absolutely sure that the next generation of artists is coming up using your tool.
That Adobe rep 25 years ago was 100% correct, but "I keep the money pipe flowing and did not actively make it worse" does not get you a promotion.